Southern Railway Co. v. St. Louis Hay & Grain Co.

Background

A hay seller who handled and sold hay in East St. Louis disputed extra charges the railroads imposed when a car of hay was stopped, unloaded, and reconsigned through the seller’s warehouse. The Interstate Commerce Commission found the railroads’ actual extra cost was $2.00 to $2.50 per car (about one cent per hundred pounds). The federal trial court adopted the commission’s findings, and the Court of Appeals affirmed.

Reasoning

The Court examined whether a railroad that stops a shipment for treatment or reconsignment must limit its charge to the carrier’s mere cost. The Interstate Commerce Commission had said the carrier could charge only its actual cost. The Court disagreed, explaining that when a carrier provides a service outside ordinary transportation it may receive compensation beyond bare cost, much like adding paid accommodations for passengers. The Court therefore rejected the commission’s view that charges must be limited to actual cost and concluded further fact-finding was needed.

Real world impact

The Court reversed the lower courts and sent the case back to the commission for more investigation and a new report, because the record did not preserve all testimony needed to fix a reasonable charge. The decision means railroads may seek greater compensation for stopping and handling goods, but the precise lawful fee must be determined after further fact-finding. This is not a final toll-setting on all reconsignments; the commission must reexamine the facts and state a new conclusion.