The opinion of the court was delivered by: DICKINSON
This rule should be set down for reargument.
The significant facts in this cause have been reduced to few, indeed to one. One of the defendants is a railroad carrier; the other a public warehouseman. They made between them a contract, the purpose of which was that the carrier should have all the freight shipments controlled by the warehouseman, and the latter should be made a freight agent and its warehouse a freight station of the carrier. The inducement to the carrier was that it expected to get freight shipments which might otherwise go by some other line. The inducement to the warehouseman was that it was benefited in several ways in its struggle with its competitors for warehousing business. The most important of these were that it received (1) large sums of money which its competitors did not; it received (2) this pay from the carrier for services, the cost of which its competitors had themselves to bear; and (3) it was enabled to offer its patrons relief from the payment of demurrage charges which the patrons of other warehouses must incur. The carrier was compensated for the moneys paid the warehouseman and for demurrage charges not received, by having a share in the profits of the warehouseman. Beyond all doubt this arrangement was not only directly profitable to the favored warehouseman, but it gave it possession of a weapon for use in its fight with its competitors for business. The carrier and the warehouseman were both selfishly interested in extending the business of the latter to the point, if possible of attainment, of an absolute monopoly of the whole warehousing business. The weapon thus supplied might or might not be used in the commercial welfare. If it were not, the warehouseman was directly benefited by the agency compensation received and by being able to increase its warehousing rates measured by the value of the demurrage charges saved to its patrons, but this benefit to it was no damage to others. If the weapon were used, one use made of it could be to cut rates below the cost price of its competitors and thus secure a monopoly. This was a damage to its competitors. The distinction between a benefit to the favored warehouseman and an injury to others is worthy of being kept in mind.
Appeal to the Commission.
An appeal was made to the Interstate Commerce Commission. This appeal had a three-fold purpose: (1) To have the agreement found to be and denounced as unlawful; (2) to obtain a "cease and desist" order; and (3) to be awarded reparation in damages. The appellants reached the first two objectives but damages were denied. The plaintiff was an active party to this proceeding.
We may interpolate here several comments. One is that a complaint is directed wholly against the carrier; another is that no action for damages because of the practice of a carrier can be entertained until the commission has first declared it to be illegal, and the third is that the party damaged has the election to apply to the commission for reparation or to the courts and an appeal lies to the courts from the ruling of the commission except where purely negative. This means that the practice of a carrier can be made a cause of action only by a finding of illegality by the commission, but when the practice has been thus condemned, reparation in damages can be made by the commission or the courts at the election of the injured party. This it will be again noted applies only to a traffic charge or practice of the carrier. Independently of this remedy the injured party has another. The legislation known as the Sherman Anti-Trust Act (15 USCA §§ 1-7, 15 note) denounces as unlawful all conspiracies in restraint of trade or to monopolize trade or business and gives a cause and a right of action to any one injured thereby.
This presents the main question raised by this rule. The defendants have strenuously and confidently urged that the plaintiff having invoked the powers of the commission to award it, the damages sustained because of the agreement between the defendants complained of an illegal, are bound by the finding of the commission and cannot resort to another form of action to recover the same damages. This question was first raised by a demurrer. It was ruled against the defendants because, as a question of pleading, the two causes of action were wholly different. An unlawful conspiracy is as unlawful when an unlawful end is reached by the employmen of lawful means as it is when a lawful end is reached through the employment of unlawful means. As we have seen, no damages can be awarded by the commission nor by the courts because of some practice of a carrier unless and until such practice was found by the commission to be unlawful. It is this commission found illegality which gives the right of action for damages under the Interstate Commerce Act (49 USCA § 1 et seq.). It is because of this that it has been held that no action can be maintained against a carrier because of any practice as such without this preliminary finding of unlawfulness. Keogh v. Chicago & N.W.R. Co., 260 U.S. 156, 43 S. Ct. 47, 67 L. Ed. 183.
Is a judgment in one case against one defendant for one cause of action a bar to another action against other defendants for another cause of action? Such a question likewise admits of easy answer.
To squarely face the question submitted, it may be presented in this form:
(1) An unlawful contract between a warehouseman and a carrier under which the favored warehouseman received preferential shipping treatment.
(2) A proceeding before the Interstate Commerce Commission by a warehouseman not so favored for his damages ...