Director General of Railroads v. Peoples Express, Inc.

De Courcy, J. This bill in equity is brought by Walker D. Hines, Director General of Railroads, now operating the Boston and Maine Railroad under federal control, and asks that the defendants be enjoined from conducting a local express business between Boston and Newburyport, Amesbury or elsewhere on that railroad. The defendant Pike has no interest in the proceedings. The defendant McCarthy is manager and sole stockholder of the corporation. By reason of their identity of interest the defendants will be referred to collectively as “the defendant.” The only traffic involved is that carried in passenger trains. Among the rules and regulations established by the railroad corporation governing the conduct of local express business is the following: “Express Messenger must accompany each shipment and present an Express Ticket to cover his personal transportation.” This differs from the.ordinary season ticket only in the respect that it may be used by any person acting as messenger. The rule has been in effect for more than forty years, is well known, and is observed by all of the eighteen local express companies operating on this line or system.. In May, 191-9, the plaintiff’s officials discovered that the defendant was not complying with this rule, but was making shipments unaccompanied by a messenger, and they notified said McCarthy of the fact. He steadily refused to comply; and on May 29 notice was duly served on the [205] defendant, to become effective July 1, terminating all the privileges of doing express business on the plaintiff’s passenger trains. Since that time the plaintiff has refused to recognize the defendant, and to sell messenger tickets to it. The defendant McCarthy has insisted on transporting express shipments of the company without complying with the rule as to a messenger; and he and its employees have placed its express matter in the cars by force and in defiance of the plaintiff’s agents, who have tried to prevent them from so doing. Since July 1, 1919, McCarthy and employees of the defendant corporation also have been riding on the plaintiff’s passenger trains without paying any fare, tendering a promise to pay on receipt “ of the so called Expressman’s ticket.” At the hearings before the master, the defendant contended that it was not required to comply with the rule, because it had acquired “vested rights” by purchasing certain “express franchises,” so called, that had been granted prior to St. 1894, c. 469. If this contention is now pressed, it is'disposed of by the findings of the master, one of which is that the purchaser of a business with a “franchise,” when recognized by the railroad corporation, was given a franchise “ subject to the requirements as to compliance with the rules and regulations,” and another, that “. . . the 'rights’ existing prior to the Act of 1894 were individual rights, granted upon condition that the rules and regulations were complied with, terminable upon failure to comply.” The main contention of the defendant seems to be, that the ‘ plaintiff is violating the letter and spirit of St. 1906, c. 463, Part II, §§ 196, 197, 201, in the making and enforcement of said rule, and for that reason cannot compel the defendant to comply with it. The statute (§ 197) contemplates that local expressmen who obtain the recommendation of the commissibners shall be provided with terms, facilities and accommodations that “shall not be unreasonable or unequal, having regard to the amount and character of the service and also to such reasonable regulation of said business as may be for the public interest and the efficient operation of the railroad.” Plainly it is proper to provide that shipments of express matter on passenger trains should be in charge of a messenger, for the protection of the goods themselves, and for the prompt and convenient transportation of the passengers and their baggage, to which the express business on passenger trains is sub [206] ordinate. Sargent v. Boston & Lowell Railroad, 115 Mass. 416. Express Cases, 117 U. S. 1, 23. The master «reports: “If it is proper for me to pass upon it as matter of fact, I find and report that the rule is a reasonable one, and is based on the proposition that the railroad is to be protected from damage to the express matter of others in the same car by the express matter of the defendant, or by the negligence of the defendant’s agents, and is not to be held liable to shippers of goods by express for anything except its own negligence, or held to have assumed any such liability.” And manifestly the defendant cannot compel the railroad corporation to make its baggagemen act as messenger employees of the express company. The alleged discrimination made by the plaintiff affords no justification for the defendant’s refusal to comply with the long established rule as to messengers. The American Railway Express Company is not “engaged only in a local express business,” but embraces the four large interstate express companies. Further, its contract with the plaintiff is an elaborate one of eight printed . pages; it has large express cars attached to trains in which no express matter but its own is carried; and when it is permitted at times and on light runs to use the train baggagemen as its messengers, it pays them extra compensation, or reimburses the railroad corporation for their time. It competes with the defendant in the Newburyport business, but pays a rate of $.412 per one hundred pounds as against $.35 paid by the Peoples Express, Inc., for the same service. The other alleged violation of equality of treatment is in the case of Thompson’s Express. As to this the master reports: “A company called Thompson’s Express does a local business between Boston and Worcester. It does a very large business and has a contract with the railroad corporation under which it pays forty per cent of its gross receipts from its express business, instead of paying the railroad tariff per one hundred pounds. Its business is so large that it requires an express car of its own, which is placed in the station by itself, and into which the company loads its express matter directly without its being previously weighed or way-billed by the station baggage master. When loaded it is attached to a train and hauled to Worcester. It purchases a messenger’s ticket and the messenger accompanies its shipments. Its volume of business is such that it pays to the rail [207] road an average of eight hundred dollars ($800) a month, and the weight of its express matter is seven thousand (7000) to eight thousand (8000) pounds a day. The Peoples Express Company ships local express matter on passenger trains usually on Saturdays, although occasionally it ships on other days in the week; its average weight is less than five hundred (500) pounds and its average payment to the railroad varies from seventeen dollars ($17) to thirty dollars ($30) a month.” ' The statute does not require absolute equality, regardless of conditions. The terms and accommodations provided must not be unreasonable or unequal, “having regard to the amount and character of the service and also to such reasonable regulation of said business as may be for the public interest and the efficient operation of the railroad,” in the language of the statute. See Spofford v. Boston & Maine Railroad, 128 Mass. 326. The master has found: “31. In view of the comparative amount of business of the different expresses doing business on the Boston and Maine Railroad and all the surrounding circumstances, the plaintiff gives to all such expresses reasonable and equal terms, facilities, and accommodations.” Manufacturers Railway v. United States, 246 U. S. 457, 481. State v. Central Vermont Railway, 81 Vt. 463. On the findings of the master, the defendant’s contentions, both in its answer arid cross bill, might well be disposed of by saying that its only right to conduct a local express business was under its contract of January 2, 1918, and that this contract has been properly terminated. The agreement was “ signed by, one Howard I. Pike as president of the Peoples Express Company, on January 2,1918, and the company continued to do business under it.” As to the contention that Pike was not in fact president, the master finds that “he was held out by the company and had acted as president, and at the time he signed the contract was being so held out and acting.” Hartford v. Massachusetts Bowling Alleys, Inc. 229 Mass. 30. Beacon Trust Co. v. Souther, 183 Mass. 413. The contract was in the form previously easting, with the addition of a new provision, (inserted in the uniform contract prepared by the receiver, Mr. Hustis,) that it might be terminated by the receiver at any time upon thirty days’ written notice. This clause need not be considered, as it is not material in. the present case. One of the stipulations was, “That I will not ship or cause to be [208] shipped any articles . . . unless accompanied by a messenger having an express ticket, the form of which is attached hereto. ...” In view of the-deliberate and repeated breaches of this provision, the plaintiff was justified in terminating the contract as he did. Ballou v. Billings, 136 Mass. 307. What has been said disposes of the defendant’s material exceptions, aside from those taken to the master’s findings or refusal to find, which we cannot review in the absence of the evidence. The right to conduct a local express business between Boston, Hamilton, Wenham and stations on the Essex branch, and on the so called Georgetown branch, claimed in the cross bill, has been abandoned if it ever existed, — according to the master’s findings. Evidence as to the rules and regulations in force on the New York, New Haven, and Hartford system was rightly excluded as immaterial to the issues in this case. The bill is to be dismissed as to Howard I. Pike. In view of the conduct of the other defendants in persistently placing shipments on trains by force, and against the physical opposition of the x plaintiff, and in having the employees of the express company ride on trains without paying any fares, an injunction is to issue in conformity with the second and third prayers of the plaintiff’s bill, but confined to the Boston and Maine Railroad system, and with costs. Boston & Maine Railroad v. Sullivan, 177 Mass. 230. 13 L. R. A. (N. S.) 173, note. - The cross bill must be dismissed; but without prejudice to the right, if any, of said defendants to apply hereafter to the Department of Public Utilities, successor of the public service commission, if so advised. Ordered accordingly.