Munhall v. Pennsylvania Railroad

Mr. Justice Mercur delivered the opinion of the court, January 5th 1880. These two cases were argued together. They involve the same questions. The court below ordered a compulsory nonsuit in each case, and refused to take off the judgments. They are actions on the case against the defendants for conspiracy and injury to the plaintiffs respectively, in their business. The latter were engaged in the transportation of crude oil, in boats and barges down the Allegheny river, from the oil regions of Pennsylvania to Pittsburgh. The Allegheny Valley Railroad Company was engaged in transporting it by rail. The crude oil was brought to Pittsburgh by both modes, principally for the purpose of being there refined, and then sent to the seaboard for market. Competition was thus created. The railroad company had some advantages over the bargemen. At some seasons of the year there was an insufficiency of water in the river, at others it was frozen. The railroad could carry at all times. At first the crude oil was carried in barrels. As the quantity largely increased, tanks were substituted. This made transportation by railroad more desirable, and gave it an additional advantage. The cause of complaint is, that the Allegheny Valley Railroad Company entered into an arrangement with the Pennsylvania Railroad Company, the effect of which was to take from the plaintiffs that transportation of oil which they othei-wise would have obtained. It is not complained that the price of freight from Pittsburgh east was increased by this arrangement, nor that the public in any manner suffered thereby. Each party had an undoubted right to enter into a just and fair [156] arrangement with a corporation or association of men, whereby its business should be increased, although the effect of the arrangement may have been to take business from the other. Either party, with a view of increasing its business, may extend more favorable terms to all shippers, although others engaged in the same business may incidentally be injured thereby. The fact that the public patronize those lines of transportation which give the most favorable terms, constitutes no just ground of complaint. What then are the facts ? It is shown that each party carried crude oil from any point at which it was taken, to Pittsburgh and its vicinity, at one rate, without regard to the distance; and that refiners had a uniform through rate for refined oil to the seaboard via Allegheny Valley and Pennsylvania Railroads from any given point where the crude oil first reached the former road. The Allegheny Valley Road crosses the Western Pennsylvania Railroad at Allegheny Junction, and by means of the latter road connects with the main line of the Pennsylvania Railroad. In order to more successfully compete with the river transportation, the Allegheny Valley Road carried crude oil to the refinery at Pittsburgh, and its manufactured product to Allegheny Junction at one uniform rate, thus giving to all the refiners at Pittsburgh as favorable terms as if their refineries had been located at Allegheny Junction. They had one uniform rate on oil from the oil regions to the seaboard. We are unable to discover anything unjust of unfair in this. To deny this right to the Allegheny Valley Road would be an unwarranted interference with the management of its business, and would deprive the public of the benefit of the competition to which it is justly entitled. Then as to the action of the Pennsylvania Railroad Company, in the transportation of refined oil from Pittsburgh east. It was carried over the road of each company. Each was entitled to and received its share of the money thus earned. The fact that it was first all paid to one and afterwards adjusted between them, gives the plaintiffs no right to complain. These two companies had the right either for their own convenience or for the convenience of the refiners and shippers to require the whole freight on refined oil to be paid to the one that first carried it. The right of connecting railroad corporations to make contracts for through rates, is incident to their powers unless prohibited by their charters. 1 Redf. on Railways, sec. 146 : Perkins v. P. S. and P. Railroad Co , 47 Maine 573; Sussex Railroad Co. v. Morris and Essex Railroad Co., 4 C. E. Green 13; M. & E. Railroad Co. v. Sussex Railroad Co., 5 Id. 543. In the present case the right was not prohibited. It was exercised in a just and reasonable manner. It was not unconscionable. The Pennsylvania Railroad Company carried refined oil at no different rate, whether it was the product of crude oil brought to Pittsburgh by rail or by water. The same [157] rate was charged to each. The mode of receiving its pay was different. That carried by water paid in money only; that by rail partly in receipts showing money already paid. This was no rebate. It was no unjust discrimination. Neither company received a.ny share of the other’s earnings. Each received its own. \Ye see nothing unjust or unequitable in the arrangement proved on the part of either of the defendants. It is not a restraint on trade, as in Morris Coal Company v. Barclay Coal Company, 18 P. F. Smith 173; nor does it come within the principle condemned in Twells v. Penn. Railroad Co., 3 Am. Law Reg. (N. S.) 728. If the plaintiffs suffered thereby it is an incident often occurring to persons engaged in transportation, as new modes are adopted and reduced rates thereby established. Neither corporations nor individuals ought to be denied all reasonable benefits which flow from the active competition of trade. Having the right to adopt rates lower than crude oil could be earned in barges, the fact that the president of the railroad company expressed an intention of driving all the business away from the barges, cannot change the case. His object was to secure freight for his road. The fact that he foresaw the result of his efforts in so doing, and also declared it, matters not. Neither he nor the company which he represented was thereby compelled to relax all just and reasonable methods to increase the business of the road. It is unnecessary to refer specifically to other matters discussed. In view of the whole evidence, and the questions of law arising thereon, the learned judge committed no error. Judgment affirmed in each case.