Appeal and Cross-Appeal from the District Court of the United States for the Northern District of Illinois, Eastern Division; Charlcs E. Woodward, Judge.
Before ALSCHULER, EVANS, and SPARKS, Circuit Judges.
On July 8, 1921, Murray and the Omaha entered into three contracts which were identical except as to tonnage and the location of the mines from which the coal was to be taken. They provided for the sale by Murray to the Omaha over a period of nine months from July 1, 1921, to March 31, 1922, of certain amounts of coal at a price of $2.70 per ton for mine run, and $2.90 per ton for egg coal, f.o.b. Peoria, or Hollis, Illinois. Under these contracts mine run coal was shipped pursuant to regular orders placed from time to time by the Omaha, but no egg coal was ordered. The total contract price of the coal shipped, not including transportation charges, was $467,601.56. Invoices for these shipments were sent to the Omaha which in turn paid Murray therefor sums aggregating $444,038.82. The difference amounting to $23,562.74 represents certain transportation charges paid by the Omaha and withheld, as the Omaha contends, pursuant to provisions of the contracts which required Murray to pay therefor. The seventh paragraph of each contract provided that the Omaha was to pay Murray the prices above mentioned f.o.b. cars, Chicago and Northwestern tracks either at Peoria, Illinois, or at Hollis, Illinois. The eighth paragraph of each contract was as follows:
"It is understood that the Contractor assumes all charges for switching and freight from mine or mines to the C&NW Ry. tracks either at Peoria, Ill., or Hollis, Ill., and guarantees that the Railway shall not pay more than $2.191 per ton including war tax to the C&NW Railway Co., based on present freight rate of $3.04 per ton C&NW tracks Peoria, Ill. to Garden City, Minn., of which C&NW Railway receives 70%. Should the present freight rate of $3.04 be changed before the termination of this contract, this guaranty shall be increased or decreased on the same basis, and should any coal shipped under this contract to the Railway be billed on any different basis than above that will cause the Railway to pay more than $2.191 per ton, the Contractor authorizes the Railway to charge the Contractor with such difference by deducting same from face of Contractor's invoices covering said coal."
Each of the mines from which the coal was supplied was located on the tracks of a carrier other than the Omaha or the Chicago and Northwestern Railway, hereinafter referred to as the Northwestern; and in each contract reference was made to the road upon which the mine or mines were located. One contract provided for delivery of 35,000 tons from the La Marsh Mine No. 2, located at La Marsh, Illinois, on the Peoria, Hanna City and Western Railway. Another contract provided for the delivery of 70,000 tons from the Hanna and Empire mines, located respectively at Hanna, and Logan, Illinois, on the Minneapolis and St. Louis Railway, and the Peoria, Hanna City and Western Railway. The third contract provided for the delivery of 65,000 tons from La Marsh Mine No. 1, located on the Peoria, Hanna City and Western Railway. By consent of all the parties some coal was supplied under these contracts by the seller from the Glasford and Mapleton mines which were located on the Toledo, Peoria and Western Railway. The railways upon which the mines were located are herein referred to as the initial carriers.
There is no controversy concerning the amount of coal purchased. By order of the purchaser it was shipped as through freight by way of Peoria, or Hollis, Illinois, hereinafter referred to as Peoria, to Garden City, Minnesota, a point on its own lines. All the coal furnished under these contracts traveled from the several mines over the lines of the initial carriers to Peoria, and thence via the Northwestern to Blue Earth, Minnesota, the junction point with the Omaha, thence via the Omaha to its destination.
The joint through rate from each of these mines to Garden City, Minnesota, was $3.04 per ton. That also was the through rate from Peoria to Garden City. When a through rate is established over more than one railway, that rate may be, and is distributed between or among the several carriers affected, in such proportions as said carriers may agree upon, and with that distribution the Interstate Commerce Commission is not primarily concerned.
In the case of shipments between Peoria and Garden City, moving over the Omaha and Northwestern lines, the through rate of $3.04 per ton was divided by those carriers in the ratio of seventy per cent (or $2.128) to the Northwestern, and thirty per cent (or $.912) to the Omaha. However, in the case of shipments from the mines to Garden City, which were governed by the same rate, a different distribution was rendered necessary by reason of the fact that the initial carriers from the mines to Peoria must be compensated. Wherefore the rate of $3.04 was, during the period in question (except during March, 1922, when there was a special switching traiff of $7.00 per car in the case of shipments from the La Marsh mines), divided by agreement of all the roads affected in the following manner:
Mine Proportion Proportion Proportion Total
No. 1 and No. 2) .34 1.89 ...