Transcript of Record — Pennsylvania Railroad Company, Plff. In Err. v. Keystone Elevator & Warehouse Company
Supreme Court brief1915
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SUPREME COURT OF THE UNITED STATES.
OCTOBER TERM, 1914.
No. 683.
THE PENNSYLVANIA RAILROAD COMPANY, PLAINTIFF
IN ERROR,
v8.
KEYSTONE ELEVATOR AND WAREIIOUSE COMPANY.
IN ERROR TO THE SUPREME COURT OF THE STATE OF
PENNSYLVANIA.
INDEX.
Original. Print
Transcript from the court of common pleas, No. 5, of Vhila-
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ee er oo) uuivacxvec kee 600s 06 hu RAP eee a eke 5 2
i Oe Ms. cis eae pas ens Seba ssh bent eaboe wees 6 3
Affidavit of defense—deposition of George D. Dixon........ 13 11
i OS obs Wenn b.on Weds hn sued) 090406 db 0500's > 0 H0% 14 11
WE stews chseunenvne pie phe sPakeb cages sei us sxeweh owas 15 13
MD OR WURis o.n0 5 5660 c cbs ceases edscckosersens 16 13
Acceptance of appointment and oath as referee........... 17 13
re Pe cons eer tite eeh ener dreer nest weredales 18 15
DO OE Scan dba res ceonerantbacdeobov ss aroeen 36 33
PN UE BW od basco ahead ooh eeee prove Adare dees 39 26
Exceptions of Pennsylvania R. R. Co. to report....... 40 37
Jupp & DetTwriter (INc.), PRINTERS, WASHINGTON, D. C., NoveMBER 20, 1914,
INDEX.
Original. Print
weetamnny Of Wane! TA, ON... os ccc cc vccccsensesses 47 44
EE IE Soo od ox ne n'b oe nbbe on 6s vs S| |
Richard M. Richardson................. 5S DD
TE I ss cc cbev bis kb chhnw ween 61 58
Robert Clinton Wright..........ccce.0% 42 69
Pe ae es cop nk baw ns das daseuse> 86 83
Stipulation as to WERGPNNEB s 5 coc seesrercrcsesvercces 95 ?
Testimony of Harvey C. Miller (recalled)............ 97 a4
Robert Clinton Wright (recalled)... ... 115 liz
Harvey C. Miller (reealled)............ 119 116
Ce. OE SI sac rescheenvccaeve 122 liy
Robert Clinton Wright (recalled)... ... 131 128
Harvey C. Miller (recalled)............ 132 1-y
Exhibit A—Statement, I. C. C., G. No. 2953........... 136 133
Se Ae I aks sobs oO SS + b.eb es Obie nob oes os 5% 138 35
Order for judgment and assessment of damages........... 140 136
SE NE oe caches etwas nee es ROKR Fb Ud xbb'e on awd oa eae 141 136
i ee tkncs WS oro okU beens HO SAD rebcerbeobeowre 142 sr
eS S52 Leb ick 56 Sse eS be es seh adeeb abs beeps ees 145 138
Ss ese pk bine wiki es os bee by 6 bo Cx kane 145 13)
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i Sot see re sk ioe reesei SENSE bkG ese Ch Dace 152 142
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Citation and service........... ever hinbrereber vaeke inshore we 155 144
I NO cht kw ph no den RE dvb vv 00 6% xe de 156 144
Sa ee NOUNS OC SUNN, 005 locas vces os cvccvssocutcce 157 145
I I sn ok oss} oe bax onder 6 oadebad.ow rds 158 146
ee Eee a eee eee TN oe ee 164 150
OAT ON ee ET EET PPLE TR 165 Il
Serer ry rr Ty Sey ep ae ee 165 1]
uae Ree aoe yeahs FES eh el > rte wikwh kb ke wawe 166 151
THE PENNA. R. R. CO. VS. KEYSTONE ELEVATOR & WAREHOUSE CO. 1
1 Copy of Docket Entries.
Abstract of the Record, Showing the Question Presented for the
Decision of the Court and How Disposed of.
Il. Copy of Docket Entries.
M. Hampton Todd, John Hampton Barnes.
April 8, ’11.—Statement and rule to file aff’t of defence filed.
May 5, °11.—Aff’t of defence filed.
May 6, °11.—Rule to plead filed.
May 9, 711.—Plea filed.
June 21, '11.—Acceptance of appointment as referee and oath
filed.
Feb. 10, 1914.—Referee’s report with exceptions and disposition
of same and testimony filed showing that there is due and owing by
the def’t to the pl't’ff the sum of 17,507.04 with int. thereon from
Jan’y 24, 1911, filed.
Ko die.—Referee’s bill filed.
Summons Assumpsit.
Exit April 1, 1911.
Ret. 1st Monday April, 1911.
Served April 3, 1911.
Feb. 21, 1914. __Exceptions dismissed,
Report of Referee confirmed..
20 die.—Opinion filed.
March 5, 1914.—Judgment in the amount 20,827.27 the excep-
tions to the Report having been dismissed,
March 5, 1914.—Damages ass’d at 20,827.27.
March 12, 1914.—Certiorari from Supreme Court of Jan’y T.,
1914, No. 123, &¢., brought into office.
Eo die.—Appeal Bond filed.
2 C. P. No. 5, March Term, 1911.
No. —.
Keystone ELEVATOR AND WAREHOUSE COMPANY
vs.
PENNSYLVANIA RAILROAD CoMPANY.
To the Prothonotary :
Issue summons assumpsit as above. Returnable first Monday of
April, 1911.
M. HAMPTON TODD,
Attorney for Plaintiff.
Erskine, April 1st, 1911.
Endorsement: Noe. 2319 March Term 1911—C. P. No. 5—Key-
— Elevator and Warehouse Company vs. Pennsylvania Railroad
ProhyTo ee for summons. Filed Apr. 1-1911 Hunter Pro
2 THE PENNSYLVANIA RAILROAD COMPANY VS.
3 Summons.
CounTyY OF PHILADELPHIA, 88:
The Commonwealth of Pennsylvania to the Sheriff of the County
of Philadelphia, Greeting:
[ SEAL. ]
We command you that you summon Pennsylvania Railroad Com-
pany late of your County, so that it be and appear before our Judges,
at Philadelphia, at our Court of Common Pleas, No. 5 of the County
of Philadelphia, to be holden at Philadelphia, in and for the said
County on the first Monday of April next, there to answer Keystone
Elevator and Warehouse Company of a plea of Assumpsit And to
have you then and there this writ.
Witness the Honorable J. Willis Martin President of our said
Court, at Philadelphia, the Ist day of April in the year of our Lord,
one thousand nine hundred and eleven (1911).
J. U. L. HUNTER,
Prothonotary.
Served the Pennsylvania Railroad Company the within named
defendant company by handing April ard 1911 personally a true
and attested copy of the within writ to G. A. Walker the Asst. Treas-
urer of said defendant company, in the County of Philadelphia,
State of Pennsylvania.
So answers, GEORGE H. RATIN,
Deputy Sheriff.
JOSEPH GILFILLAN,
Sheriff.
4 Endorsement: 2319 March Term, 1911—Court of Com-
mon Pleas, No. 5—Keystone Elevator and Warehouse Com-
pany vs. Pennsylvania Railroad Company—Summons. Assumpsit—
M. Hampton Todd. Sheriff's Appearance Docket 24998 4-3-11—
G. A. Walker Asst. Treas.—Leedin.
5 Common Pleas No. 5, March Term, 1911.
No, 2319.
Keystone Evevator & WaREHOUSE Co.
vs.
PENNSYLVANIA RarLroap CoMPANy.
Enter my appearance in this case for the defendant.
JOHN HAMPTON BARNES.
JOHN HAMPTON BARNES,
Attorney for Defendant.
Franklin Bank Building, April 5th, 1911.
To the Prothonotary Common Pleas.
Endorsement: No. 2319, March Term, 1911—Common Pleas, No.
5—Keystone Elevator & Warehouse Company, vs. Pennsylvania
Railroad Company—Order for Appearance—Filed Apr. 5 1911—
Browning Pro Proth’y.—John Hampton Barnes.
bzia aed
‘2
Statement of Claim
STATEMENT OF CLAIM
COMMONWEALTH OF PENNSYLVANIA \
County oF PHtLaveLrnta }
The plaintiff. the Keystone Elevator and Warehouse
Company, claims to recover from the defendant, The Penn-
sylvania Railroad Company, the sum of Seventeen thousand
five hundred fifty-one dollars and four cents ($17,551-04)
with interest thereon from January 24th, 1911, upon a
cause of action of which the following is a statement.
On to-wit. March ist, 1gog, at the County aforesaid,
the defendant rented by oral agreement to the plaintiff for
the term of at will the elevator and warehouse owned by
it and located on the line of its railroad at the southeast
corner of Clearfield street and Park avenue, in the City
of Philadelphia, County aforesaid, at the annual rental
of Six thousand dollars, payable in equal quarterly pay-
ments, which rent the defendant agreed to pay.
And thereupon, on to-wit, the day and year aforesaid,
at the County aforesaid. it was further orally agreed he-
tween the plaintiff and the defendant that the defendant
would do the necessary shifting to enable cars to reach the
elevator and warehouse aforesaid for the purpose of taking
from and delivering to the same all freight shipped there-
from or destined thereto and should and would take and
deliver the same over its lines at the same rates, except
in case of traffic hauled short distances upon which it was
customary for the defendant to apply rates varying with
respect to different station deliveries in the City of Phila-
delphia, in the same manner and with the same promptness
that it delivered and received traffic at any other terminal
point controlled by it in the City of Philadelphia.
And at the same time and place it was further agree:
letween the said parties that the defendant would move,
free of charge, from the elevator aforesaid to its water front
terminals all grain received over its lines after receiving
a om LORIE OO wae RE Ie
— —
122a
4 ,
<* Statement of Claim
treatment at said elevator and would move free of charge
from the export elevators on its lines in Philadelphia to the
elevator of the plaintiff, as aforesaid, all shipments of re-
jected grain, provided, however, that the plaintiff was not
to receive any compensation from the defendant for any
services rendered on shipments of said rejected grain.
And the plaintiff, on its part, agreed to use all reason-
able efforts to secure to the lines owned, leased, controlled
and operated by the defendant all traftic controlled by it or
destined to or from the elevator and warehouse aforesaid,
and that the traffic passing over said lines should at all times
have the preference in the use of the facilities furnished by
the plaintiff over traffic passing over other lines, and that
without the consent of the defendant the said facilities
should not he extended to traffic passing over other lines,
and the plaintiff further agreed to furnish at its own cost
all manual labor that should be required to promptly load
and unload the cars of the defendant at the elevator aml
warehouse aforesaid and to handle promptly and effectively
all traffic delivered to it by the defendant and to pay all
running and operating expenses of said elevator and
warehouse.
The plaintiff further agreed to act free of charge as
the agent of the defendant for the collection of freight and
charges upon all such traffic as should be transported to
and delivered at said elevator and warchouse as aforesaid,
and that such delivery at said elevator and warehouse was
not intended to be a relinquishment of possession of such
traffic or a lien for freight or charges by the defendant, but
such possession was to he held by the plaintiff acting as
agent for ie defendam for the enforcement of such lien
and of all other rights of the defendant: and the plaintiff
further agreed to protect and indemnify the defe:dant from
all manner of liability on account of any acts of omission
or commission on the part «f the plaintiff in respect to the
grain and merchandise received by it at said elevater and
123a oO
Statement of Claim
warehouse and also from all manner of liability on account
of receipts for grain and merchandise issued by it.
And the said plaintiff further agreed with the defend-
ant to keep all property contained in said elevator and
warehouse for which the defendant might be held responsi-
ble properly insured against fire for the benefit of all parties
who should have an interest therein, and it further agreed
to perform the general duties incident to such agency.
And in consideration of the performance of the fore-
going agreement on the part of the plaintiff to be kept and
performed, the said defendant agreed with the plaintiff to
pay it a just and reasonable sum for each ton of grain
and merchandise handled by it through said elevator and
warehouse except that no payment was to be made upon
traffic for the movement of which the said defendant should
only receive a switching rate. And the said defendant
further agreed that in addition to such amount to be paid
by it to the plaintiff, the plaintiff should have the right to
charge the public, consignee, shipper or owner of the traf-
fic reasonable and customary rates for the services per-
formed or facilities furnished, but such charges so made
should be subject to the approval of said defendant.
And it was further agreed between said parties that
said agreement should remain in force and binding upon
both until either party gave the other notice of a desire to
terminate the same, whereupon it was to absolutely cease
and end.
And the said plaintiff says that relying upon the said
promise and undertaking of the defendant that it would
pay the plaintiff at the end of each month a reasonable and
just compensation for the performance and keeping of the
terms and conditions of said agreement on its part to be
kept and performed, it on to-wit, March Ist, 1909 at the
County aforesaid, entered upon the performance thereof
and faithfully kept and performed all the terms of said
agreement on its part to be kept and performed until the
thirtieth day of April 1910, when the said agreement was
124a
Statement of Claim
terminated and ended by mutual agreement between the
said parties plaintiff and defendant. And the said plain-
tiff says that the reasonable and just value of its perform-
ance of the terms and conditions of said agreement on its
part so kept and performed as aforesaid, and the services
rendered to and benefits conferred on the defendant thereby
from March tst, 1g09 to April 30th, 1910, is thirty-five
cents per ton for each ton of grain and other merchandise
handled by it through said elevator and warehouse upon
which, under the terms of said agreement, it was entitled
to compensation; and the said plaintiff further says that
in the performance of said agreement it actually handled
at the times and in the amounts hereinafter set forth the
following tonnage of grain and other merchandise,
namely —
In the month of March 1909, 13.732,-
040 pounds of grain and other merchan-
dise, which at the rate of thirty-five cents
per ton of two thousand pounds amounts
SG Ne OE ivi oa cease dean nexs $2,403.11
In the month of April 1909, 12,153.-
295 pounds of grain and other merchan-
dise, which at the rate of thirty-five cents
per ton of two thousand pounds amounts
to the sum of ...... neice veda Pye 2,126.83
In the month of May 1tgog, 11,635.-
770 pounds of grain and other merchan-
dise, which at the rate of thirty-five cents
per ton of two thousand pounds amounts
> OP CEE i concise eciei ATT Te 2,036.26
In the month of June, 1909, 12,975.-
660 pounds of grain and other merchan-
dise, which at the rate of thirty-five cents
per ton of two thousand pounds amounts
to the sum of ......... savevteseesesos
1254
Statement of Claim
In the month of July, 1909, 15,908,-
610 pounds of grain and other merchan-
dise, which at the rate of thirty-five cents
per ton of two thousand pounds amounts
to the sum of ......... errr eey PPer ere
In the month of August, 1909, 20,-
354.150 pounds of grain and other mer-
chandise, which at the rate of thirty-five
cents per ton of two thousand pounds
amounts to the sum of ................
In the month of September, 1909, 22.-
124,595 pounds of grain and other mer-
chandise, which at the rate of thirty-five
cents per ton of two thousand pounds
amounts to the sum of ................
In the month of October 1909, 16,-
749.795 pounds of grain and other mer-
chandise, which at the rate of thirty-five
cents per ton of two thousand pounds
amounts to the sum of ......... reer
In the month of November, 1909, 19-
927,607 pounds of grain and other mer-
chandise, which at the rate of thirty-five
cents per ton of two thousand pounds
amounts to the sum of .................
In the month of December. 1909,
21,538,400 pounds of grain and other
merchandise, which at the rate of thirty-
five cents per ton of two thousand pounds
amounts to the sum of ................
In the month of January, 1910, 21,-
912,845 pounds of grain and other mer-
chandise, which at the rate of thirty-five
cents per ton of two thousand pounds
amounts fo the sum of ........... os
2,784.01
3.507.23
3.871.80
2.929.04
3487.33
3-709.23
3834-75
RO Pann. oe eee eee
SLAP DLE GET AE
Q 126a
Statement of Claim
In the month of February, 1910, 17,-
441,625 pounds of grain and other mer-
chandise, which at the rate of thirty-five
cents per ton of two thousand pounds
amounts to the swum Of ........02 50000: 3,052.28
In the month of March, 1910, 19,123,-
o10 pounds of grain and other merchan-
dise, which at the rate of thirty-five cents
per ton of two thousand pounds amounts
0 CRE SNE OE on os oko choke te eee eens 3,340.53
In the month of .\pril, 1910, 19,121,-
475 pounds of grain and other merchan-
dise, which at the rate of thirty-five cents
per ton of two thousand pounds amounts
ics Ce NE ce eased se cas 3,340.26
Amounting in the aggregate to the
Se, eee Tee re re ere ee Se $42,820.00
And the said plaintiff further says that afterwards, to-
wit, at the County aforesaid, on to-wit, January 24th, tot,
the defendant paid to the plaintiff on account of its afore-
said indebtedness and liability to it the sum of $28,420.19.
the said sum being the actual amount of the cost to it of
keeping and performing its said agreement with the defend-
ant, as aforesaid, which payment was made by the defend-
ant and accepted by the plaintiff without prejudice to the
plaintiff's right to sue for and recover from the defendant
in addition thereto such just and reasonable compensation
as in equity and right it was entitled to receive and be
paid for keeping and performing the terms and conditions
of the aforesaid agreement on its part kept and performed.
And the said plaintiff further says that it is justly and
equitably entitled to recover from the said defendant the
said balance of $17,551.04 with interest thereon from Janu-
ary 24th, 1911, and the said defendant is liable for and
justly indebted to it for said sum and being so liable did
PDP REIS OE LIES LO EI NOR UL INTE BS TITER ILLES OLED INDUS SE RELIES
127a
Statement of Claim
on, to-wit, January 24th, 1¢11, at the County aforesaid,
undertake and promise the jlaintiff to pay the same; never-
theless being so liable it failed and neglected to pay the
same, wherefore plaintiif claims to recover the same in this
action.
KEYSTONE ELEVATOR & WAREHOUSE CO..
(Sgd) Watrer F. Hacar.
President.
COMMONWEALTH OF PENNSYLVANIA eS
COUNTY oF PHILADELPHIA :
Water FP. HaGar being duly sworn doth depose and
say that he is President of the Keystone Elevator and
Warehouse Company, the plaintiff in the above action, that
he makes this affidavit on its behalf, and that the facts
therein set forth are true to the best of his knowledge,
information and belief.
(Sed) Watrer F. Hacar
Subscribed to and before me
this seventh day of April,
IQT I.
ROBERT G. ERSKINE
[SEAL] Notary Public
Commission expires February 27, 1913.
12 Endorsement: No. 2319 March Term 1911—C. P. No. 5—
Keystone Elevator and Warehouse Company vs. The Penn-
sylvania Railroad Company—Statement of Claim To Prothonotary
C. P. Enter Rule on Defendant to file an affidavit of defense in
fifteen (15) days or judgment sec. reg. M. Hampton Todd, At-
mar for Plaintiff—Filed Apr. 8-1911 Blair Pro Proth’y. M. H.
o aa rie oP. Br OFM SSL
PLP BLNEOI PD EV ILO ELE NIE AALS BITRE POP SOR
PPL PE . :
128a
10
lfidazit of Dejense
AFFIDAVIT OF DEFENSE
CoUNTY OF PHILADELPHIA,
COMMONWEALTH OF PENNSYLVANIA, hss
Georce D. Dixon, being duly sworn deposes and
| says: I am the Freight Traffic Manager of the Pennsyl-
vania Railroad Company, the defendant in the above en-
titled action and I have knowledge of the matters and things
referred to in the plaintiff's statement of claim filed therein.
The defendant has a full and complete defense to the
claim set out in said statement of claim, the nature and
character of which is as follows:
The agreement made by the defendant with the plain-
tiff under the circumstances and conditions set out in the
statement of claim for the payment to the plaintiff for its
services rendered to the defendant, has been fully and en-
tirely performed by the defendant by the payment by it to
the plaintiff of the sum of $28,420.19 on January 4th, tort.
payment whereof is admitted in the plaintiff's statement of
claim to have been made to it, and no agreement was 1t
any time made by the defendant whereby it became in-
debted to the plaintiff in any sum in excess of the said
amount of $28,420.19. The defendant is not indebted to
the plaintiff in the sum of $17,551.04 nor in any other sum
whatsoever, nor did the defendant on the said 24th day of
January, 1gi1 or on any other day widertake and promise
the plaintiff to pay the same.
All of which matters and things are true and defendant
expects to make proof thereof at the trial of this cause.
Geo. D. Dixon
Sworn to and subscribed before
me this 5th day of May,
IQi I.
H. E. Cain
Notary Public
Commissicn expires February 21, 1915.
PIE EM EPIL ERE SOR 2 LENGE NE EE CIOS IN ATE ts gga cy 8 96 ig
ww
”
oo
KEYSTONE ELEVATOR & WAREHOUSE COMPANY. 11
Iendorsement: No. 2319 March Term 1911—C. P. No. 5—
Keystone Elevator & Warehouse Co. vs. Pennsylvania Rail-
road Co,—Aflidavit of Defense—Filed May 5 1911 Pro Proth’y—
John Hampton Barnes Morris Building, Philadelphia.
14 C. P. No. 5, March Term, 1911.
No. 2319.
Keystone ELeEvaToR & WAREHOUSE COMPANY
Vs.
PENNSYLVANIA RAILROAD.
To the Prothonotary :
Enter a rule on Defendant to plead in fifteen days or judgment
sec, reg.
M. HAMPTON TODD,
Attorney for Plaintiff.
May 5th, 1911.
Endorsement: No. 2319 March Term 1911—C. P. No. 5——Key-
stone Elevator & Warehouse Company vs. Pennsylvania Railroad
Co.—Rule to Plead—Filed May 61911 Pro Proth’y.—Todd.
129a
Rule io Plead—Plea
To the Prothonotary:
Enter a rule on Defendant to plead in fifteen days or
judgment sec. reg.
M. Hampton Topp
Attorney for Plaintiff
May 5th, 191!
The defendant pleads Non ssumpsit, Payment, Pay-
ment with Leave, etc.
Joun Hampton Barnes,
May oth, 1911.
KEYSTONE ELEVATOR & WAREHOUSE COMPANY. 13
15 Endorsement: No. 2319 March Term 1911—C. P. No. 5—
Keystone FE. & W. Co. vs. Peansylvania R. R. Co.—Plea—
Filed May 9 1911—J. W. Hill Pro Proth’y.—John Hampton Barnes.
16 In the Court of Common Pleas No. 5 for the County of
Philadelphia, March Term, 1911.
No. 2319.
Keystone ELEVATOR AND WAREHOUSE CoMPANY
vs.
PENNSYLVANIA RAILROAD CoMPANY.
And now June 16th, 1911, it is agreed between the parties in the
above action that the same be referred to G. Heide Norris, Esquire,
as Referee under the provisions of the Act of Assembly entitled “An
Act to provide for the submission of civil cases by agreement of the
parties to a referee learned in the law,” approved May 14th, 1874,
P. L. 166, and the amendments thereto.
The parties further agree to waive notice of time and place of
hearing and to meet on notice from the Referee after his acceptance
of the appointment and qualifying as such.
The compensation of the Referee to be fixed by himself after con-
sultation with counsel for plaintiff and defendant, subject to the
approval of the court.
M. HAMPTON TODD,
Attorney for Plaintiff.
J. HAMPTON BARNES,
Attorney for Defendant.
Endorsement: 2319 M’ch Term 1911—C. P. No. 5—Keystone
Elevator & Warehouse Co. vs. Penna. Railroad Co.—Agreement to
refer under Act May 14th, 1874—June 16-’11—Todd for plaintiff
Barnes for defendant.
17 C. P. No. 5, March Term, 1911.
No. 2319.
Keystone ELEVATOR AND WAREHOUSE Co.
vs.
PENNSYLVANIA RAILROAD CoMPANY.
The undersigned having been appointed as Referee under Act of
May 14th, 1874 by agreement of counsel for the parties, hereby
accepts the appointment as such Referee and appoints as the time
of first meeting, Fridey June 23d, 1911 at 11 a. m. at his office No.
439 Land Title Building in the City of Philadelphia.
G. HEIDE NORRIS.
June 21, 1911.
55 A LRP PIT DY eH
14 THE PENNSYLVANIA RAILROAD COMPANY Vs,
City AND CounTY OF PHILADELPHIA,
State of Pennsylvania, ss:
G. Heide Norris having been duly sworn according to law deposes
and says that he will perform his duties as Referee in the above case
according to law and to the best of his ability.
G. HEIDE NORRIS.
Sworn and subscribed to before me this 21st day of June, 1911.
JAS. W. FLETCHER,
Dep. Proth’y.
Endorsement: No. 2319 March Term 1911—C. P. No. 5—Key-
stone Elevator and Warehouse Co. vs. Pennsylvania Railroad Co.—
Acceptance of Appointment as Referee and oath—Filed, Jun- 21
1911 Jas. W. Fletcher Pro Proth’y.—G. Heide Norris, Attorney at
law, Rooms 437-439-441 New Land Title Building Philadelphia.
Referee’s Report {
~)
APPENDIX
IN THE
Court of Common Pleas, No. 5
March Term, 1911. No. 2319
KEYSTONE ELEVATOR AND WAREHOUSE CO.
VS.
PENNSYLVANIA RAILROAD COMPANY
REFEREEF’S REPORT
To the Honorable the Judges of said Court:
The undersigned Referee, appointed by agreement of
the parties under the Act of May 14, 1874, P. L. 176, filed
June 16, 1911, having accepted the appointment and filed
the required affidavit, notified counsel for the parties of a
meeting to be held for the purposes of his appointment at
his office No. 439 Land Title Building on June 23, 1911.
On the above date and at subsequent meetings on July 10,
1911, February 28, April 28, June 5, July 9, July 14 and
November 7, 1913, he was attended by M. Hampton Todd,
Esq., counsel for plaintiff, and by John Hampton Barnes
and George Stuart Patterson, Esqs., counsel for the
defendant.
The testimony of the, various witnesses who were
sworn by the Referee was taken stenographically and after-
wards reduced to typewritten form. The testimony is sub-
mitted with this report together with the exhibits.
U 62
2a
Referee’s Report
16
This is an action to recover on an oral contract
between the plaintiff and the defendant entered into on
March 1, 1909, at Philadelphia, for services rendered by
the plaintiff to the defendant for elevating, warehousing and
other services on certain grain and other merchandise in the
period from March 1, 1g0g, to April 30, 1g10. In the
agreement it was stipulated that plaintiff should perform
the services agreed upon from March 1, 1909, until either
party should give notice of a desire to terminate the same
and it was also stipulated that for the services rendered the
defendant should pay to the plaintiff a just and reasonable
sum for each ton of grain and merchandise handled by it.
The statement of claim avers that the plaintiff, in con-
sequence of said contract, entered upon its duties and per-
formed services from March 1, 1909, to April 30, 1gto,
when the contract was terminated by notice from the
defendant. It also claims that thirty-five cents a ton is a
just and reasonable value for services performed for the
defendant and claims the sum of $42,826, for the actual
tonnage handled by it under the contract. The statement
also admits the payment by defendant on January 24, 1911,
of the sum of $28,420.19. leaving on that date a balance
due, including interest on monthly balances of $17,551.04,
which sum is claimed by plaintiff from the defendant with
interest thereon from January 24, 1911.
The affidavit of defence filed by the defendant claims
that the sum of $28,420.19 was paid by it in full satisfac-
tion of the contract set forth in the statement of claim and
denies that there is owing to the plaintiff the sum of $17,-
551.04 or any other or further sum. The defendant also
filed a plea of “non assumpsit, payment with leave,” etc.
The matter having thus been brought to an issue and
no question having been raised as to the amount or char-
acter of the services performed, the plaintiff called the
following witnesses to prove that the just and reasonable
value thereof was thirty-five cents a ton as the compensa-
tion stipulated for in the contract.
34 i?
Referce’s Report
Samuel Bell, Jr., manufacturer of flour, with mills at
Thirty-first and Market streets, Philadelphia, in business
for thirty-five years, connected with the Merchants’ Ware-
house Company since 1890, one of the principal owners of
the Washburn and Crosby mills and familiar with the sub-
ject of compensation for terminal service, testified that
thirty-five cents a ton was a very reasonable charge in the
years 1909 and 1910.
Jacob Michel, superintendent of the Merchants’ Ware-
house Company for twenty-five years, testified that fifty
cents a ton was a fair compensation for these services in
receiving grain, elevating it, redelivering it, collecting
freight and being responsible for storage and warehouse
receipts. He did not think thirty-five cents a ton was
enough.
Richard M. Richardson, general superintendent of the
Keystone Warehouse Company, at Buffalo, N. Y., since
1go7, and acting for the Pennsylvania Railroad, New York
Central Railroad, The Erie Railroad, the Wabash Railroad,
the Michigan Central Railroad, thought that fifty cents a
ton was a fair compensation for the services rendered by
the plaintiff in the period from March 1, 1909, to April 30,
1910. He considered thirty-five cents per ton an unreason-
ably low charge.
Harvey C. Miller, principal stockholder in the Key-
stone Elevator and Warehouse Company, testified that he
had been engaged in the grain and elevator business since
1880 in Philadelphia and in a number of places in Western
Maryland. He considered thirty-five cents a ton a very
reasonable charge for the services rendered by the »laintiff
to the defendant in the period from March 1, 1go9, to
\pril 30, 1910. He thought the charge ought to be forty-
two and a half cents a ton.
The defendant offered no testimony to disprove the
reasonableness of the charge of thirty-five cents a ton
claimed by the plainiff as its proper compensation for the
work performed under the contract but offered to show :
-
GOT Pee PO Pe fe RYT Ss “ PLE I -
4a
i$ Referee’s Report
“The different methods of delivering grain and other
commodities by the plaintiff, the reason for the employment
of the Elevator Company by the defendant, the explanation
of the service performed by the plaintiff for the defendant,
for and on behalf of the consignees of grain and other
claims of property; for the purpose of establishing the
necessity for the employment of the Elevator Company by
the defendant, the function which the Elevator Company
periormed in connection with transportation and the rela-
tion of the defendant to the owners and consignees of grain,
etc., handled through the elevator and warehouse, this to he
followed by proof of the profits made by the Elevator Com-
pany by the operation of its elevator.”’
Objection was made to this offer, but it was not pressed
and testimony was permitted to be offered by the defendant
for the purpose of throwing light on the reasonableness
of the compensation claimed by exhibiting the amount and
kind of work done by the plaintiff.
Robert Clinton Wright, freight traffic manager of the
Pennsylvania Railroad, was then offered as a witness by
the defendait and testified at length on the subject covered
by the above offer. Incidentally tariff schedule of charges
by the plaintiff company was offered in evidence for
Tariff I. C. C—G. No. 2953. in effect April 17, 1907,
marked “Exhibit A.” Of this the witness said that it
covers a tariff of charges to the public and does not cover
the rate of payment by the railroad company to the ele-
vator company.
The defendant then made the following offers of proof :
1. That during the time embraced within the plain-
tiff’'s statement, to wit, from March 1, 1909, to May 1,
1910, the capital stock of the Keystone Elevator and Ware-
house Company, the plaintiff in this case, was Ten thou
sand (10,000) shares at Ten (10) dollars each, all of
which was issued and outstanding, and that during the said
time Nine thousand three hundred and sixty (9360) shares
~T
5a i9
Referce’s Report
of said stock, at a par value of $93,600 was the property
of Mr. Harvey C. Miller.
2. That during the period in question, the said
Harvey C. Miller was a member of the firm of L. P. Miller
& Sons, who were shippers, consignees and dealers in grain,
and that during the period in question go per cent. of the
business elevated, stored and handled through the elevator
and warehouse of the plaintiff company at North Phila-
delphia, as referred to in the statement of claim, was grain
elevated, stored and handled for and on account of the
said firm of L. F. Miller & Sons, and for compensation for
the elevation, storage and handling of which and the grain
and merchandise of other owners and consignees through
said elevator and warehouse this suit is brought, as is more
specifically detailed in plaintiff's statement.
3. That said grain, the property of L. F. Miller &
Sons and other owners, as aforesaid, and for the elevation,
storage and handling of which through the Keystone [le-
vator this action was brought, was grain which was shipped
(at the tariff freight rates) from points in States other
than Pennsylvania over the lines of the defendant com-
pany to said Keystone Elevator and delivered by the defend-
ant to the plaintiff company, who, in turn, elevated the
same into the elevator and performed various other services
with respect thereto, as more particularly detailed in the
tariff hereinafter referred to.
4. That other grain dealers and consignees of grain
competitors of L. F. Miller & Sons, located in the city of
Philadelphia, received grain transported over the lines of
the defendant from the same points as mentioned in para-
graph 3 of this offer, and on which they paid the same
freight transportation rate as that paid on grain of L. F.
Miller & Sons, and that said other grain dealers and con-
signees did not have any elevator nor perform any elevator
service in connection with such grain, and accordingly did
not receive any compensation therefor.
ET AO GO MS OEE > PLIES BM AIL, IGT AM OI PPPS PET
. Sa
20) Referee’s Report
These offers were objected to by the plaintiff as irrele-
vant and immaterial to the issue. The objection was sus-
tained and an exception noted for the defendant.
The defendant then offered to prove:
5. The defendant further offers to prove from the
hooks of the plaintiff company that the plaintiff company
and the said Harvey C. Miller, as the owner of 93.6 per
cent. of the capital stock of said company, have already
received by reason of the payment made by the defendant
to the plaintiff, as averred in the plaintiff's statement, and
the payments made to the plaintiff by consignees and owners
under the tariff (admitted in evidence) for the performance
by the plaintiff of the various services agreed to be per-
formed by the plaintiff for the defendant, and for the per-
formance of which this action is brought, the cost of such
performance, as well as a reasonable profit in addition to
said cost, and that the further payment demanded by the
said plaintiff company for the performance of said services
is forbidden by the provisions of the Act of Congress,
entitled “An Act to Regulate Commerce,” approved eb-
ruary 4, 1887, its amendments and supplements, as well as
the \ct of Congress entitled “An Act to further regulate
commerce with foreign nations and among the States,”
approved February 19, 1903, its amendments and supple-
ments.
Counsel for the defendant stated (as recited in the
offer) that the object was to show that the plaintiff had
already received by means of the payment made by the
defendant and by payments made to the plaintiff by con-
signees and owners under the published tariff, the full cost
as well as a reasonable profit for the services performed by
it under the contract with the plaintiff and that no further
amount could be recovered by it, the same being forbidden
by the Act of Congress February 4, 1887, and its supple-
ments and that the Referee must take into consideration the
payments made to the plaintiff »y the owners and con-
7a “21
Referce’s Report
signees of grain under the tariff in question, for perform-
ance of the services which the plaintiff agreed with the
defendant to perform and for which the defendant agreed
to pay a reasonable compens:tion.
Tn view of the mixed nature of the contract recited in
the statement of claim and with the thought (at the time)
that evidence of payments by other parties that the defend-
ant for services to be performed by the plaintiff, might
throw some light on the balance claimed to he due by the
defendant for the full amount of reasonable charges against
the defendant under the contract, the Referee overruled the
objection for the present and noted an exception for the
plaintiff.
The defendant then offered:
6. A duly authenticated copy of the opinion, report
and order of the Interstate Commerce Commission, decided
January 7, 1913, dealing with the operation of the said
Keystone elevator by the Keystone Elevator and Ware-
house Company during the period covered by this suit, as
well as the lease and contract with the defendant company
under which the plaintiff has operated the same, and mak-
ing an order against said defendant forbidding the leasing
of said elevator to the plaintiff or the payment of any allow-
ance for its services upon any property passing through
said elevator or warehouse belonging to a stockholder of
said plaintiff company, unless tariffs of the defendant should
embrace similar privileges to all other shippers using this
or any other elevator in the city of Philadelphia.
This offer was objected to by the plaintiff. The ob-
jection was overruled for the present and an exception
noted for the plaintiff.
Walter F. Sims was then called as a witness and testi-
fied to various matters covered by offers 1, 2, 3, 4 and 5.
Counsel representing both sides then presented a stipu-
lation under date of July 9, 1913, showing receipts and
disbursements by the plaintiff company and by Harvey C.
ial. cael Ld al OOO IGT LOL LL LOOT I OP LOE ALG ODIO FE,
8a
Referee’s Report
SIP |
to we
Miller trading as the Philadelphia Cleaner Company dur-
ing the period covered by the contract in this suit.
This was objected to by the plaintiff as irrelevant
The objection was overruled and exception noted for the
plaintiff.
The stipulation appearing in full on pages 66 and 67
shows:
Expense Keystone Elevator & Warehouse Co.
March 1, 1909 to April 30, 1910. . .$36,935.69
Receipts Keystone Elevator & Warehouse Co.
March 1, 1909 to April 30, 1I910.... 42,922.43
Expense Philadelphia Cleaner Co.
March 1, 1907 to April 30, 1g10.... 3,169.00
Receipts Philadelphia Cleaner Co.
March 1, 1907 to April 30, I910.. 35,060.08
(Paid by Elevator Co. to Harvey C. Miller.)
Harvey C. Miller was recalled and asked by counsel
for the defendant, “Who performed the services under
item 1 of the tariff?” (Exhibit “A”) as follows:
“Receiving, weighing, storing freight cars, including
first ten days storage and delivering to cars or wagons?”
This and subsequent questions on the same line were
objected to by counsel for the plaintiff. The objections
were overruled and an exception noted for the plaintiff.
Mr. Miller was asked, on page 75, “What would be
the cost of duplication of the plant of the Cleaner
Company ?”
Objected to by plaintiff and objection overruled and
exception noted.
On page 88 the plaintiff moved to strike from the
record all testimony of Mr. Miller taken at the meet-
ga er
: ’ wt)
Referee’s Report
ing of July 9, 1913. Motion overruled and exception
noted.
Carroll M. Bunting, a witness for the defendant, was
asked, page 102: “What part of the gross receipts of the
Elevator Company account was ascribed to services per-
formed by the Elevator Company without the use of the
patented process of the Cleaner Company ?”
This was objected to by the plaintiff as irrelevant and
not the subject of expert testimony. Objection overruled
and exception noted.
The witness then went on as an expert to apportion
the division of earnings between the elevator company and
the cleaner company by comparison with his experience
of similar divisions of earnings between one railroad com-
pany and another.
A motion was made by the plaintiff to strike out the
entire testimony of the witness.
Robert C. Wright being recalled by the defendant,
he was asked, page 111: “At the time covered by this
suit, namely, between March 1, 1909 and April 30, 1910,
did the published tariffs of the Pennsylvania Railroad
Company authorize the payment of any allowance to any
shipper, owner or consignee of grain, using the Keystone
Elevator or any other elevator in the City of Philadel-
phia, upon grain owned by such shipper, owner or con-
signee?” and he was also asked, page 112: “During that
period, did the Pennsylvania Railroad Company, in point
of fact pay any such allowance to any shipper, owner or
consignee of grain, as just described?”
Both these questions were objected to by the plaintiff.
The objections were overruled and exception noted.
The action of the Referee in overruling practically all
of the objections of the plaintiff to the defendant’s formal
offers of proof and te the subsequent questions asked of
the defendant’s witnesses, has been here fully set out so that
no question can arise on the record as to the present view
MP a Pte FS PO Ores lm i NEEL ET EY LOR, ee MPTP Se
>. 10a
tw
Referee'’s Report
of the Referee in his proposed action in now sustaining
all of the objections made by the plaintiff and in striking
out the testimony covered by the requests of the plaintiff
to that effect.
Reference was made to the decision in the case of
Marr vs. Marr, 103 Pa. p. 463, as to the duty of the
Kereree to hear all testimony, material and pertinent to
the issue and to the report upon the same.
The Referee has never had any doubt, as evidenced by
his sustaining the original objection made by plaintiff,
that the only question material and pertinent to this case
is as to what is a just and reasonable compensation under
a quantum meruit for the services performed by the plain-
tiff for the defendant.
From the substance and manner in which some of the
defendant's offers were put, the Referee was of the opinion
however that perhaps they involved evidence which might
throw light upon this very question of reasonable com-
pensation. The contract itself called for so many things
and services to be done and performed by the plaintiff for
the defendant, that it might be possible, if the plaintiff
received payment from other parties for any of these serv-
ives so contracted for, the defendant might be relieved pro
fanto from part of its obligation to pay.
In other words, the language of the contract and of
the offers was to a certain extent confusing to the issue.
The testimony as taken threw no light whatever on
the just and reasonable compensation due to the plaintiff
by the defendant, but exhibited conclusively the purpose to
invoke the provisions of the Interstate Commerce Act to
defeat the plaintiff's claim for the balance due under the
contract.
In passing on the question here involved, the Referee
has not reviewed, and will not rev ew, the testimony of the
witnesses in extenso because the formal offers cover fully
the defendant’s contentions. In declining these offers and
sustaining the plaintiff's objections, the defendant is fully
Ifa ~
Ko)
Referce’s Report
protected, because on appeal, for the purposes of argument,
the subject matter of the offers must be taken as proven.
Let us now take up the consideration of the merits of
the case and the respective contentions of the parties.
The plaintiff claims that this is a common law action
to recover on a quantum meruit a just and reasonable com-
pensation, as stipulated for in the contract, for services fully
and faithfully performed.
The defendant does not deny that the services were
performed as contracted for, but alleges that the balance
claimed by the plaintiff, over and above the amount admit-
tedly received, cannot be recovered from it because, by
virtne of holding the contract, the plaintiff has, out of its
special facilities and by control through its principal stock-
holder of patented devices, made enormous profits out of
its customers, the consignees and owners of grain and mer-
chandise whose elevating and warehousing business it has
transacted.
The defendant has cited the Act of Congress of Feb-
ruary 4, 1887, Sections 2 and 15, known as the Act to
Regulate Commerce, and the Act of June 29, 1906, Section
1, known as the Elkins Act, and the following cases:
In re Allowance to Elevators vs. 1. C. C., 12
1. C. C., page 85.
Trafic Bureau of St. Louis vs. C. B. IW. R.
R., 14 I. C. C. page 317
Federal Sugar Refining Co. vs. B. & O.
R. R. Co., 17 1. C. C. pages 40-47.
Southern Pacific Terminal Co. vs. Interstate
Commerce Commission, 219 U. S. page
489.
Peavey & Co. vs. Union Pacific R. R. Co.,
76 Fed. Rep. page 409.
Interstate Commerce Commission vs. Diffen-
baugh, 222 U. S. page 42.
7
ici 12a
cK y ’
Referee’s Report
Interstate Commerce Commission vs. Key-
stone Elevator Co., Opinion 2114 and
order made thereon, January 7, 1913.
Also on the point that every contract is sub-
ject to the limitation of the Interstate
Commerce .\ct.
N. Y., N. H. and H.R. R. Co. vs. Interstate
C. C., 200 U. S. page 361.
Armour Packing Co. vs. United States, 209
U.S. page 56.
Section 2 of the Act to Regulate Commerce, approved
February 4, 1887, as amended and supplemented, provides:
“That if any common carrier subject to the pro-
visions of this Act shall, directly or indirectly, by any
special rate, rebate, drawback, or other device, charge,
demand, collect, or receive from any person or persons
a greater or less compensation for any service ren-
dered, or to be rendered, in the transportation of pas-
sengers or property, subject to the provisions of this
Act, than it charges, demands, collects, or receives
from any other person or persons for so doing for him
or them a like and contemporaneous service in the
transportation of a like kind of traffic under substan-
tially similar circumstances and conditions, such com-
mon carrier shall be deemed guilty of unjust discrim-
ination, which is hereby prohibited and declared to be
unlawful.”
Section 15 of the same Act provides:
“If the owner of property transported under this
Act directly or indirectly renders any service con-
nected with such transportation, or furnishes any in-
strumentality used therein, the charge and allowance
therefor shall be no more than is just and reasonable,
and the commission may, after hearing on a complaint
or on its own initiative, determine what is a reasonable
13a ‘)
3 OM 4
Referee’s Report
charge as the maximum to be paid by the carrier or
carriers for the services (service) so rendered or for
the use of the instrumentality so furnished, and fix
the same by appropriate order, which order shall have
the same force and effect and be enforced in like man-
ner as the orders above provided for (in) under this
section.”
Section 1, of the Act of June 29, 1906, provides:
“The willful failure upon the part of any carrier
subject to said acts to file and publish the tariffs or
rates and charges as required by said acts, or strictly
to observe such tariffs until changed according to law,
shall be a misdemeanor, and upon conviction thereof
the corporation offending shall be subject to a fine of
not less than one thousand dollars nor more than
twenty thousand dollars for each offense; and it shall
he unlawful for any person, persons, or corporation
to offer, grant, or give, or to solicit, accept or receive
any rebate, concession, or discrimination in respect to
the transportation of any property in interstate or
foreign commerce by any common carrier subject to
said act to regulate commerce and the acts amendatory
thereof whereby any such property shall by any device
whatever be transported at a less rate than that named
in the tariffs published and filed by such carrier, as is
required by said act to regulate commerce and the
acts amendatory thereof, or whereby any other advan-
tage is given or discrimination is practiced. Every
person or corporation, whether carrier or shipper, who
shall, knowingly, offer, grant, or give, or solicit, accept,
or receive any such rebates, concessions, or discrimina-
tion shall he deemed guilty of a misdemeanor, and on
conviction thereof shall be punished by a fine of not
less than one thousand dollars nor more than twenty
thousand dollars.”
I4a
> 5
= Referee's Report
The Referee has read and carefully considered the
statutes above referred to and the cases cited by the defend-
ant, but it does not seem to him that they have any bearing
on the point in issue under the facts of this controversy.
It is undoubtedly true that the acts of Congress have
been passed and the Interstate Commerce Commission has
been created and it and the Courts have acted upon a state
of affairs in the commerce of the United States, that
required strong measures for correction.
The cases referred to by the defendant mostly arose in
an endeavor to correct the result of the various devices
which were adopted to circumvent the law. There were
also other cases, where the machinery of justice has been
invoked, in which the alleged violations of law grew out
of a perfectly open and fair transaction not intended to
offend any statute.
The Referee is aware that the Interstate Commerce
Commission has undertaken to cut down compensation, for
services rendere | by shippers to railroads, to an infinitesimal
point and even refused to sanction any payment whatever
bevond the actual cost of the service.
The case of the Allowance to Elevators, 12 1. C. C.
page &5. and the so-called Peavey case, Traffic Bureau vs.
Railroad Co., 14 1. C. C. page 317, are illustrations of this
attitude.
The Supreme Court of the United States, however, in
the case of the /nterstate Commerce Commission vs. Diffen-
baugh, 222 U. S. page 42, has put an end to such drastic
action.
\ bill in equity was filed against the order of the
Interstate Commerce Commission in the Peavey case in the
Cirevit Court for the Western District of Missouri and an
injunction was granted restraining its execution.
Peavey ws. Railroad Company, 176 Fed.
Rep. page 409.
15a 2Q
Refercee’s Report
\n appeal was then taken to the Supreme Court of
the United States and the action of the Court below was
sustained.
I. C. C. vs. Diffenbaugh, 222 U.S. page 42.
In the opinion in this case delivered by Mr. Justice
Hoimes, the following appeared:
“The law does not attempt to equalize fortune,
opportunities or abilities. On the contrary, the Act
of Congress in terms contemplates that if the carrier
receives service from the owner of property trans-
ported or uses instrumentalities furnished by the latter,
he shall pay for them. ‘That is taken for granted in
Section 15, the only restriction being that he shall pay
no more than is reasonable.”
Now what more have we in the case before us than is
sanctioned by the statute and this language of the Court
of last resort?
The defendant, conducting a railroad and being the
owner of an elevator, a most useful adjunct in attracting
business to its lines, makes a contract with an acute and
experienced grain merchant to lease its elevator and carry
on and conduct the elevating and warehousing business and
agrees to pay him or his company a reasonable charge per
ton for so doing. The business is carried on successfully
and satisfactorily for a period of years antecedent to and
for the time covered by the claim here made and then the
defence is set up that it is against the law to pay the full
claim because the shipper, conducting the elevator, has made
large profits from other shippers out of the business.
It is true that Harvey C. Miller was a large majority
stockholder in the Keystone Elevator Company, that he, or
his firm, was a large shipper of grain, who used the ele-
vator; it is also true that he practically owned the Phila-
delphia Cleaner Company, which cleaned the grain passing
through the elevator and it is true that he made considerable
16a
Referce'’s Report
profit for the elevator company and for himself, as the
Philadelphia Cleaner Company, out of the business he
transacted, but wherein and how do these facts affect the
right of the elevator company to recover its compensation
under the contract with the defendant?
The law explicitly allows proper compensation under
such circumstances and the Courts have said also that it
does not attempt to equalize fortune, opportunity or
ability. How then can it be successfully contended that Mr.
Miller is to be deprived of what his business acumen has
enabled him to earn for himself or his associates? M1.
Miller is certainly entitled to the earnings of his industry
and skill without having them offset against what is due
to him or his company on this contract.
No case has been cited by the defendant which sus-
tains any conclusion to the contrary. If the plaintiff is
not to receive the compensation contracted for by reason
of the objection made by the defendant, then the benefit
of the plaintiff's ability will inure not to it but to the
defendant. There is no offer to prove any fraudulent de-
vice or arrangement, to secure an unfair advantage over
competitors and in the opinion of the Referee no such
fraudulent claim can be presumed or its effect produced
by the circumstances of this case.
On the subject of the reasonableness of the charge,
we must take into consideration the fact that a written
contract for similar services has been in existence between
the parties for a number of years prior to the period in
controversy and the compensation fixed in that contract
was thirty-five cents per ton. Moreover, the services re-
quired to be performed by the plaintiff under the previous
written contract and under the present verbal agreement
were many and varied, requiring technical skill and con-
stant attention and involving many duties and responsi-
bilities. As set out in the Statement of Claim, the plain-
tiff was required “to use all reasonable efforts to secure
17a
_
a
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Referee’s Report
to the lines owned, leased, controlled and operated by
the defendant, all traffic controlled by it or destined to or
from the elevator and warehouse, to prefer the traffic
of the defendant to that of other lines in the use of the
plaintiff's facilities; to furnish at its own cost, the manuai
labor required; to promptly load and unload all the cars
of the defendant; to handle promptly and effectively all
traffic delivered by the defendant; to pay all operating
and running expenses of the elevator and warehouse: to
act, free of cost, as agent of the defendant for collection
of freight; to protect and indemnify the defendant from
all liability on account of omission and commission on the
part of the plaintiff in respect to the grain and merchandise
received at the elevator and also on account of receipts
for grain and merchandise received by the plaintiff; to
keep all property, for which the defendant might be re-
sponsible, insured against fire and to perform the general
duties incident to such agency.”
The plaintiff's witnesses, Messrs. Samuel Bell, Jr.
Jacob Michel and Richard M. Richardson, previously re-
ferred to, all persons of great experience in the grain
elevator and warehouseing business, having been made
acquainted with the terms of the contract, all testified that
thirty-five cents per ton was a fair and reasonable com-
pensation for the services performed by the plaintiff for
the defendant.
Harvey C. Miller testified that the price ought to be
forty-two and a half cents per ton for the period in which
the services were performed, and some of the other wit-
nesses referred to said that even fifty cents a ton would
not be unfair in view of the duties of receiving grain,
elevating and redelivering, collecting freight receipts and
being responsible for storage and warehouse receipts. Mr.
Miller testified (p. 25) that thirty-five cents a ton about
represented the actual cost, and (on p. 113) that if the
U #2
18a
Referee’s Report
business brought by the Philadelphia Cleaner Co. was
excluded, the cost would have been $1.52 1/2 per ton.
As against this evidence, the defendant offered no
testimony or made any claim that the plaintiff was charg-
ing more than others in the same line of business, or that
the charge of thirty-five cents per ton was not entirely
reasonable.
The sixth offer of defendant (to which objection was
made and temporarily overruled), related to the decision
and order of January 17,1913, of the Interstate Commerce
Commission in the Keystone Elevator case. There the
Commission dealt with the particular parties to this case
under the contract, and the decision involved a considera-
tion of the operation of the elevator company during the
period covered by this contract, and an order was made
prohibiting the making of any similar contract under like
conditions for a period of two years from March 1, 1913.
Neither in the opinion of the Commission nor in its
order referred to (made nearly three years after the serv-
ices rendered had been performed), did it undertake to
adjudicate upon the right of the Keystone Elevator Com-
pany to recover from the Pennsylvania Railroad Com-
pany compensation for the services rendered between
March 1, 1909 to April 30, 1910. The order simply pro-
hibits future contracts or leasing under similar conditions
for two years from March 1, 1913, and in view of the
decision of the Supreme Court in the Diffenbaugh case,
that is probably as far as the Commission would now
undertake to interfere.
The Referee now sustains all of the objections of the
plaintiff and strikes out all the testimony as requested
by the plaintiff.
In the opinion of the Referee the plaintiff has proved
its case and the defendant has offered no legal defence
to the payment of the balance claimed. This case is gov-
erned by the rules of common law applicable to actions
19a ‘ey
Le Te )
Referee's Report
of assumpsit on a quantum meruit and the plea of noa
assumpsit, payment, etc., is not sustained by offers to prove
that the largest stockholder of the plaintiff company, who
was also a member of a firm of grain shippers, furnish-
ing a large portion of the business to the plaintiff and who
was also the owner of a patented grain cleaning ap-
paratus, made large profits for himself and the plaintiff
out of the elevator and warehousing business during the
period covered by the contract.
“Evidence as to the amount of profits earned by
the plaintiff in his own business while attending to
the defendant’s business is inadmissible.”
Wiley vs. Goodsell, 33 N. Y. App. Div., p.
452; 38 N.Y. Suppl, p. 376:
Cyc, Vol 40, p. 2848 and 2849
The referee finds the following facts:
FINDINGS OF FACT
1. That the plaintiff at the special instance and re-
quest of the defendant agreed to render the service, de-
scribed in the statement of plaintiff's cause of action, to
the defendant for the term beginning the first day of
March, 1909, and ending the 30th day of April, 1910, for
the compensation of what the same should be reasonably
worth.
2. That the reasonable and just value of the services
rendered by the plaintiff to the defendant for the period
set forth in the first above finding is thirty-five cents per
ton for each ton of grain and other merchandise handled
by it through the said elevator and warehouse upon which,
under the terms of said agreement, it was entitled to
compensation.
. 20a
- Referee'’s Report
3. The plaintiff is entitled to compensation upon the
following tonnage of grain and other merchandise,
namely :
In the month of March, 1909, 13,
732,040 pounds of grain and other
merchandise, which at the rate of
thirty-five cents per ton of two
thousand pounds amounts to the
IS Eh ok ev ae so ie eh ea a $2,403.11
In the month of April, 1909,
12,153,295 pounds of grain and other
merchandise, which at the rate of
thirty-five cents per ton of two
thousand pounds amounts to the
WW i Wo nde ie eee bse caeaek 2,126.83
In the month of May, 1909,
11,635,770 pounds of grain and other
merchandise, which at the rate of
thirty-five cents per ton of two
thousand pounds amounts to the
GE ide bistenetadd teeer naan es 2,036.26
In the month of June, 1909, 12,-
975,660 pounds of grain and other
merchandise, which at the rate of
thirty-five cents per ton of two thou-
sand pounds amounts to the sum of = 2,270.74
In the month of July, 1909, 15,-
g08,610 pounds of grain and other
merchandise, which at the rate of
thirty-five cents per ton of two
thousand pounds amounts to the
EE ke hoe riko adored eiuceds 2,784.01
2ia
Referee’s Report
In the month of August, 1gog,
20,384,150 pounds of grain and other
merchandise, which at the rate of
thirty-five cents per ton of two
thousand pounds amounts to the
ey ey Pee er Te are
In the month of September, 1 goy.
22,124,595 pounds of grain and other
merchandise, which at the rate of
thirty-five cents per ton of two
thousand pounds amounts to the
ee ee mg Py aoe
In the month of October, tgog,
16,740,795 pounds of grain and other
merchandise, which at the rate of
thirty-five cents per ton of two
thousand pounds amounts to the
OE Ses axnéskadicessaddaaeeeces
In the month of November, 1909,
19,927,607 pounds of grain and other
merchandise, which at the rate of
thirty-five cents per ton of two
thousand pounds amounts to the
ok Seer err ore he ee rery
In the month of December, 1gog,
21,538,460 pounds of grain and other
merchandise, which at the rate of
thirty-five cents per ton of two
thousand pounds amounts to the
GEN ce uausbcisenssesdesnonee oy
In the month of January, 1910,
21,912,845 pounds of grain and other
merchandise, which at the rate of
thirty-five cents per ton of two thou-
sand pounds amounts to the sum of
>
ww
-
3,871.80
2,929.04
3,487.33
3,769.23
3834-75
36 22a
wv Referee’s Report
In the month of February, 1910,
17,441,625 pounds of grain and other
merchandise, which at the rate of
thirty-five cents.per ton of two thou-
sand pounds amount to the sum of 3,052.28
In the month of March, Ig1!0,
19,123,010 pounds of grain and other
merchandise, which at the rate of
thirty-five cents per ton of two thou-
sand pounds amounts to the sum of 3,346.53
In the month of April, 1910,
19,212,475 pounds of grain and other
merchandise, which at the rate of
thirty-five cents per ton of two thou-
sand pounds amounts to the sum of 3,346.28
Amounting in the aggregate to
oe ek Pre eee ee eee Te $42,826.00
4. That the defendant has paid to the plaintiff on
account of said services on the 24th of January, 1911, the
sum of $28,420.19.
CONCLUSIONS OF LAW
First—That the defence set up and offered to be
proved by the defendant is an insufficient answer to the
plaintiff’s claim.
Second.—That there is due and owing by the defend-
ant to the plaintiff the sum of $17,551.04, with interest
thereon from January 24, 1911.
The Referee therefore recommends that judgment shall
be entered accordingly in favor of the plaintiff and against
the defendant.
All of which is respectfully submitted.
G. Hebe Norris
Referee
January, 1914.
23a
.
Exceptions of Defendant to Report of Referee
EXCEPTIONS OF THE PENNSYLVANIA RAIL-
ROAD COMPANY, DEFENDANT, TO REPORT
OF REFEREE
First—The defendant excepts to the refusal of the
Referee to admit in evidence the defendant's offers as
follows:
“1. That during the time embraced within the
Plaintiff's statement, to wit, from March Ist, 1909,
to May Ist, 1910, the capital stock of the Keystone
Elevator & Warehouse Company, the Plaintiff in this
case, was Ten thousand (10,000) shares at Ten (10)
Dollars each, all of which was issued and outstand-
ing, and that during the said time Nine thousand
three hundred and sixty (9360) shares of said stock,
at a par value of $93,600 was the property of Mr.
Harvey C. Miller.”
“2. That during the period in question, the said
Harvey C. Miller was a member of the firm of L. F.
Miller & Sons, who were shippers, consignees, and
dealers in grain, and that during the period in ques-
tion go per cent. of the business elevated, stored and
handled through the elevator and warehouse of the
Plaintiff Company at North Philadelphia, as referred
to in the statement of claim, was grain elevated,
stored and handled for and on account of the said
firm of L. I. Miller & Sons, and for compensation
for the elevation, storage and handling of which and
the grain and merchandise of other owners and con-
signees through said elevator and warehouse this suit
is brought, as is more specifically detailed in plaintiff's
statement.”
a)
3. That said grain, the property of L. IF. Mil-
ler & Sons and other owners, as aforesaid, and for the
elevation, storage and handling of which through the
Keystone Elevator this action was brought, was grain
which was shipped (at the tariff freight rates) from
points in States other than Pennsylvania over the lines
of the Defendant Company to said Keystone Ele-
ee —
5 Ps eat ae ae ee bet dee RPE Es Poe
edad
Exceptions of Defendant to Report of Referee
vator, and delivered by the Defendant to the Plaintiff
Company, who, in turn, elevated the same into the
elevator and performed various other services with
respect thereto, as more particularly detailed in the
tariff hereinafter referred to.”
“4. That other grain dealers and consignees of
grain, competitors of L. I. Miller and Sons, located
in the City of Philadelphia, received grain transported
over the lines of the Defendant from the same points
as mentioned in paragraph 3 of this offer, and on
which they paid the same freight transportation rate
as that paid on grain of L. F. Miller & Sons, and
that said other grain dealers and consignees did not
have any elevator nor perform any elevator service
in connection with such grain, and accordingly did
not receive any compensation therefor.”
5. The Defendant further offers to prove from
the books of the Plaintiff Company that the Plaintiff
Company and the said Harvey C. Millcr, as the owner
of 93.6 per cent. of the capital stock of the said Com-
pany, have already received by reason of the payment
made by the Defendant to the Plaintiff, as averred
in the Plaintiff's Statement, and the payments made
to the Plaintiff by consignees and owners under the
tariff (admitted in evidence) for the performance by
the Plaintiff of the various services agreed to be per-
formed by the Plaintiff for the Defendant, and for
the performance of which this action is brought, the
cost of such performance, as well as a_ reasonable
profit in addition to said cost, and that the further
payment demanded by the said Plaintiff Company for
the performance of said services is forbidden by the
provisions of the Act of Congress, entitled ‘An Act
to Regulate Commerce,’ approved February 4, 1887,
its amendments and supplements, as well as the Act
of Congress entitled ‘An Act to further regulate com-
merce with foreign nations and among the States,’
approved February 19, 1903, its amendments and sup-
plements.”
“6. A duly authenticated copy of the opinion,
report and order of the Interstate Commerce Com-
mission, decided January 7, 1913, dealing with the
sy
25a oh
~
Exceptions of Defendant to Report of Referee
operation of the said Keystone Elevator by the Key-
stone Elevator & Wasehouse ‘Company during the
period covered by this suit, as well as the lease and
contract with the Defendant Company under which
the Plaintiff has operated the same, and making an
order against said Defendant forbidding the leasing
of said elevator to the Plaintiff or the payment of any
allowance for its services upon any property passing
through said elevator or warehouse belonging to a
stockholder of said Plaintiff Company, unless tariffs
of the Defendant shoukl embrace similar privileges
to all other shippers using this or any other elevator
in the City of Philadelphia.”
Second.—The defendant excepts to the refusal of
the Referee to admit in evidence the stipulation of coun-
sel set out on pages 66 and 67 of the testimony, as
follows:
“A\np Now, July gth, 1913, it is stipulated be-
tween the parties to this cause that the books of the
Plaintiff Company show the following for the period
between March Ist, 1909, and April 30, 1910:
[. Expenses.
ATs Wo es Sola Sc ahd ata Wels we eae Ae $5,012.68
Cees a kee eu bee h ees cave xe 2,847.62
SP EOE PEP Re T ore ee Pe eee ee eee 177
ese ees Lee ee hae os ee ote we 7,872.50
TT ET Ce eee ae Pe eee 17,975-00
EE oy Cok wad kn es FACE Rao ee De EE 3,050.00
MMiae ceUkECaa tyke va aku eie cadaee os $36,935.69
That during the same period of time the expenses
of the Cleaner Company were $3,169.00
II. Receipts.
eS errr ererrr eres 3,976.45
CERO rr. Kien Rou R Rs Cee wwe 2,300.55
EIN fs CS aa he Se eames wo 6,335-31
CE DD aw inne ha,gra bo nee e ke 22.14
wo ye es ree re err ree 22,818.59
SR oak 56k 65s ede Soke eee 919.26
40
Exceptions of Defendant to Report of Referee
26a
Sub-letting leased property.............. 415.00
Weighing on wagon scales.............. 156.72
Steam heat sold to Railroad Co........... 1,605.88
Warehouse Storage ( Not elevator)........ 919.80
Charges at 1-4¢ bushel................. 53-57
Received from wagons at 1-2¢ per bushel. . 3.19
“cs “ “ “c I “ “ fi 5,22
Transferring lading of car for Railroad Co. en
RUC Sg coca cia cuts 585.95
oe SO eer er er ree 7.05
EE 5 kc ws oo Nok a oe ee .. 2,110.46
RINE Cahier. Wank sal) cue ot be caletpene eS 9.77
SR RE AES ret en BUS ict 46.92
Ee AAS PRN nO PRT ARR ier 1.25
eg RO EE An aera 2,159.70
“s “ Be dua wr kb eo la bese alae es 511.14
7 7 dk. AE roe Pee 39.50
ss Mee Pica saw eid ames 23.00
CONE ass eg ork ceases (ees ie enh 852.01
NO ey cw alex ais 5 eae in eos $15,922.43
That during the same period of time the Elevator
Company paid Mr. Harvey C. Miller the sum of $35,-
060.08 for the right to use in said elevator certain
patented processes for cleaning and otherwise treating
grain, said payment being at the rate of 3-4¢ per bushel
on all grain so cleaned or treated.
July 9, 1913.
M. Hampton Topp,
Atty for Pitf.
Joun HAmpton Barnes
Atty. for Defendant.
Third.—The defendant excepts to the refusal of the
Referee to admit in evidence the testimony of Harvey C.
Miller in answer to the question:
“Who performed the services under item 1 of the
tariff?” (Exhibit A) as follows: “Receiving, weigh-
ing, storing freight cars, including first ten days stor-
age and delivering to cars or wagons.”
27a 44
Exceptions of Defendant to Report of Referee
to the refusal of the Referee to admit in evidence the testi-
mony of Harvey C. Miller in answer to the question:
“What would be the cost of duplication of the
plant of the Cleaner Company ?”
and to the ruling of the Referee striking out all the testi-
mony of said Harvey C. Miller taken at the meeting on
July 9, 1913.
Fourth—The defendant excepts to the refusal of
the Referee to admit in evidence the testimony of Carroll
M. Bunting, a witness called by the defendant, in answer
to the question:
“What part of the gross receipts of the Elevator
Company account was ascribed to services performed
by the Elevator Company without the use of the pat-
ented process of the Cleaner Company 7”
and to the striking out by the Keferee of the entire testi-
mony of the said witness Carroll M. Bunting.
Fifth—The defendant excepts to the refuasl of
the Referee to admit in evidence the testimony of Robert
C. Wright in answer to the question:
“At the time covered by this suit, namely, between
March 1, 1909 and April 30, 1910, did the publishe:|
tariffs or the Pennsylvania Railroad Company author-
ize the payment of any allowance to any shipper, owner
or consignee of grain, using the Keystone Elevator or
any other elevator in the City of Philadelphia, upon
grain owned by such shipper, owner or consignee?
During that period, did the Pennsylvania Railroad
Company, in point of fact pay any such allowance to
any shipper, owner or consignee of grain, as just
described ?”
Sixth.—The defendant excepts to the following state-
ment by the Referee:
“The Referee has never had any doubt, as evi-
denced by his sustaining the original objection made
42 28a
Exceptions of Defendant to Report of Referee
by plaintiff, that the only question material and perti-
nent to this case is as to what is a just and reasonable
compensation under a quantum meruit for the services
performed by the plaintiff for the defendant.”
Seventh—The defendant excepts to the express find-
ing of the Referee as follows:
“The Referee now sustains all of the objections
of the plaintiff and strikes out all the testimony as re-
quested by the plaintiff.”
Eighth—The defendant excepts to the finding by the
Referee as follows:
“In the opinion of the Referee the plaintiff has
proved its case and the defendant has offered no legal
defence to the payment of the balance claimed. This
case is governed by the rules of common law applicable
to actions of assumpsit on a quantum meruit and the
plea of non assumpsit, payment, etc. is not sustained
by offers to prove that the largest stockholder of the
Plaintiff Company, who was also a member of a firm
of grain shippers furnishing a large portion of the
business to the plaintiff and who was also the owner
of a patented grain cleaning apparatus, made large
profits for himself and the plaintiff out of the elevator
and warehousing business during the period covered
by the contract.”
Ninth—tThe defendant excepts to the following
finding of fact by the Referee:
a
2. That the reasonable and just value of the
services rendered by the plaintiff to the defendant for
the period set forth in the first above request is thirty-
five cents per ton for each ton of grain and other mer-
chandise handled by it through the said elevator and
warehouse upon which, under the terms of said agree-
ment, it was entitled to compensation.”
Tenth.—The defendant excepts to the finding by
the Referee in the third finding of fact that the plaintiff
is entitled to compensation upon the tonnage of grain and
merchandise therein set forth in the sum of $42,826.
yy
29a 4
Exceptions of Defendant to Report of Referee
less as a credit the payment made by the defendant to
the plaintiff of the sum of $28,420.19.
Eleventh.—The defendant excepts to the finding of
law by the Referee as follows:
1. That the defence set up and offered to be
proved by the defendant is an insufficient answer
to the plaintiff's claim.”
Twelfth—The defendant excepts to the finding of
law by the Referee as follows:
ss,
2. That there is due and owing by the defend-
ant to the plaintiff the sum of $17,551.04, with interest
thereon from January 24, 1911.
The Referee therefore recommends that judg-
ment shall be entered accordingly in favor of the plain-
tiff and against the defendant.”
Joun Hampton Barnes
Attorney for defendant.
Jany 28, 1914
The Referee has considered the foregoing exceptions
and sees no reason to change his report in any particular.
The exceptions are therefore dismisse’.
G. Hetpe Norris
January 29, 1914. Referee
LOLOL LOD
2 > a ee =
EP CT ee
iach iil
44 ”
Testimony
TESTIMONY
Meeting held before the Referee, G. Heme Norris,
Esg., at his office, No. 439 Land Title Building, Philadel-
phia, Pa., on Friday, June 23, 1911, at 11 a. m.
PRESENT:
G. Hetpe Norris, Esg., Referee.
M. Hampton Topp, Esg., Attorney for plaintiff.
Joun Hampton Barnes, Esg., Attorney for defend-
ant.
SAMUEL BELL, Jr., having been duly sworn, was ex-
amined as follows:
By Mr. Topp:
YQ. Where do you live?
A. 1314 Locust Street.
(). What business are you engaged in?
A. Manufacturer of flour, and flour mills.
(). Have you any interest in the elevator business ?
A. None except my own.
Q. Where is it?
A. Thirty-first and Market.
(). Known by what name?
A. Quaker City Flour Mills.
©. How long have you been engaged in the
grain and flour business?
A. About thirty-five years.
QM. Are you familiar with the operations of a grain
elevator 7
A. Yes.
Q. .\t one time, I believe, you were selected as an
arbitrator, were you not, by either the Keystone Elevator
or the Pennsylvania Railroad, to pass upon the reasonable-
3la
Samuel Bell, Jr.
ness of the allowance then made by the Railroad Company
to the elevator ?
A. Yes, sir.
by THe REFeree:
Q. In what case?
A. That was the case of Pennsylvania Railroad and
Keystone Elevator Company.
By Mr. Topp:
©. It was under the terms of the lease?
A. Under the terms of the lease.
©. Who selected you?
A. There was Mr. Kingston, of the Pennsylvania
Railroad, and myself and another gentleman; I forget who
that was.
By THe REFEREE:
©. Was your appointment in regard to the question
involved in this case?
A. It was the price of the terminal, you understand,
that the Pennsylvania Railroad Company was to pay to the
Keystone Elevator Company: at that time, in 1906, there
was a terminal to be charged.
3y Mr. Topp:
QO. Have you read the plaintiff's statement of his
cause of action in this case?
A. I have.
O. You also, by reason of your connection with the
Merchants’ Warehouse Company, are familiar or not with
the subject of compensation for terminal services?
A. Yes.
O. How long have you been identified with the
Merchants’ Warehouse Company ?
32a
Samuel Bell, Jr.
46
A. Since 1&go.
Q. You are also familiar with this subject in other
places besides Philadelphia, are you not?
my: Taree.
Q. Your business brings that subject up before you
continuously, does it not?
A. Yes, sir.
QO. You are a modest man, I know, but I would like
to show that you are one of the principal owners in the
Washburn & Crosby Mills, are you not?
A. Yes, sir.
QO. Which make 45,000 barrels of flour a day, do they
not ?
A. Yes, sir; that is, in all their plants.
©. Based upon the information which you have ac-
quired in this way, from your ownership of the Quaker
City Milling Company, who own elevators, and having
familiarized yourself with the services alleged to have been
performed by the Keystone Elevator and Warehouse Com-
pany for the Pennsylvania Railroad Company, what would
you say would be a fair and reasonable compensation for
such services for the period from March 1, 1909 to April
30. 1910, payable monthly ?
A. Can I not just say what I base that on when I
answer it?
Q. You can say first what you think it should be and
then give your reasons for it afterwards.
A. I would say that 35 cents a ton would be a very
reasonable charge on grain.
Q. Now go on and just tell the Referee your reasons
for saying that.
A. We handle grain at the Quaker City Flour Mill
and our expense there of loading and unloading and doing
similar work, such as was performed by the Elevator Com-
pany, the cost was fully the amount I have named, 35 cents
a ton. On merchandise, basing it on my long experience
334 4“
‘
Samuel Bell, Jr.
with the Warehouse Company, I would say that, as that is
handled differently, a fair charge on that would be 50 cents
a ton. I am basing that on my connections with the costs
doing the business in my connection with the Merchants’
Warehouse Company.
Q. They handle about how many tons of merchandise,
would you say, a year, the Merchants’ Warehouse Com-
pany ?
A. In 1890 there was 120,000 tons handled. At that
time the terminal cost was 38.7 cents per ton. Owing to
the advance in labor, we find that in 1904, when we handled
208,838 tons, the cost was 61.1 cents per ton. Now we
go from 1904 to 1911, when we handled 83,513 tons for
five months—I am just giving that to take it up to date—
that cost 87.6 cents. That is the reason I am basing my
50 cents per ton on merchandise.
Q. Of course, merchandise such as you have de-
scribed as handled through your Merchants’ Warehousing
Company is more expensive than grain ?
A. A great deal.
Q. Was it more or less expensive to operate an ele-
vator and render the services such as were rendered in this
case in 1909-10 than it was prior to that time?
A. Yes, sir; more expensive.
QO. How much percentage would you say there had
been of an increase in the expense of operation of ele-
vators between, take the year 1903 and the year 1909? I
just take those two years for example; if there are any
other two years that illustrate it better, take them.
A. You said elevators; I do not know whether I can
answer that question, because I have not the statement of
the cost.
Q. Give us your approximation on that. Was it
more or less?
A. I should say, when I based 35 cents a ton charge
in 1906, that it is more costly to do the grain business
U 62
34a
Samuel Bell, Jr.
48
and handle it in the same way now than it was at that
time.
Q. In 1909?
A. Yes. That.is my reason for saying that; I in-
vestigated then and knew that was a low cost, therefore,
35 cents a ton today must be a very low cost.
By THe Rereree:
Q. Not today, but in 1909.
A. Yes.
By Mr. Topp:
©. By low cost you mean a reasonably low compen-
sation for the services ?
A. Yes, reasonably low compensation for the services
QO. You do not know, do you, directly what it has
cost the Keystone people to render this service ?
A. No, sir.
CROSS-EXAMINATION
by Mr. BARNES:
©. In the matter in which you were arbitrator in
1go6, you say it was under a lease. Was that the same
lease as is involved here?
A. Yes, sir.
Q. And you rendered a decision on that subject and
made an award on that subject?
A. Yes. The Referces all decided at that time that
that was the proper charge to make at that time.
. So this same question has been before you as ar-
bitrator about which you are now testifying as an expert
witness ?
A. Yes, sir.
Q. And your testimony as an expert, of course, is in
entire consistency with your report as an arbitrator ?
A. Yes, sir.
hs 49
Samuel Bell, Jr.
(At Mr. Barnes’ request, the following portion of the
witness’s direct testimony was read: “We handle grain at
the Quaker City Flour Mill, and our expense there of
loading and unloading and doing similar work, such as was
performed by the Elevator Company, the cost was fully the
amount I have named, 35 cents a ton.”)
By Mr. Barnes:
Q. By similar work, do you mean work in connec-
tion with the transportation of grain by any railroad ?
A. No, sir; that is just the loading and unloading.
©. From what?
A. From the cars. We have to unload it from the
cars, elevate it, weigh it and put it back into the bins.
(). With what railroad has your Company siding
connections 7
\. Pennsylvania Railroad.
(). In what way, then, does the work which you do
it that elevator differ from what you understand to be
that done by the Keystone Elevator and Warehouse Com-
any in this case?
\. [| would say that they did not have very much
service to do outside of that, without they collected
freights.
(Question repeated. )
By Mr. Topp:
©. How do the services rendered by the two com-
pare?
A. I should think they are about the same.
By Mr. Barnes:
Q. I understand you, then, to express an opinion that
the cost of that service is in excess of 35 cents, or is 35
cents ?
si 6a
.. {) 3
Samuel Bell, Jr.
A. Is 35 cents.
Q. And that includes no profit to the Elevator Com-
pany for doing the work?
A. In handling quantities, they may be able to make
a profit on that; I do not know.
©. What would be your judgment as to the percent-
age of profit in that transaction, that payment?
A. I should think 10 per cent, they ought to have
anyhow.
©. That is to say, that the 35 cents includes, in the
gross business on which such payment is made, the cost of
service plus 10 per cent on the gross?
A. That, I say, would be a reasonable charge.
©. I asked you whether the 35 cents includes that?
A. Yes, sir.
RE-DIRECT EXAMINATION
By Mr. Topp:
©. Does the Washburn-Crosby Company have any
elevators?
A. Yes, sir.
©. To what extent?
A. They have some four hundred, but they are run
under different management from the Washburn-Crosby
Company ; but they are owned by the Washburn Company.
©. They are operated in connection with the Wash-
burn-Crosby Company ?
A. Yes, sir.
©. Four hundred elevators?
A. We have what we call houses along the line of
the railroad.
©. That is where you receive grain from one car and
spout it into another?
A. Yes. That would be different from a terminal
elevator.
37a
4
Jacob Michel ee |
Q. The price which you have named for the Quaker
City Elevator; does it or not include responsibility for
freight collections and for warehouse receipts ?
A. No, sir.
Q. Or proper deliveries, right deliveries ?
A. No, sir.
(Adjourned until Monday, July 10, 1911, at 10.30
a. m.)
Meeting held at the office of the Referee, G. Heide
Norris, Esq., 437 Land Title Building, Philadelphia, on
Monday, July 1oth, 1911 at 10.30 a. m.
Present:
G. Herne Norris, Esg., Referee.
M. Hampton Topp, Esg., for Plaintiff.
Joun Hampton Barnes, Esg., for Defendant.
Jacos Micue , having been duly sworn, was examined
and testified as follows:
By Mr. Topp:
©. Where do you reside?
A. Philadelphia.
©. What is your business?
A. Superintendent of the Merchants’ Warehouse
Company.
©. How long have you been such superintendent ?
A. About twenty-five years.
©. The Merchants’ Warehouse Company is a freight
terminal station of the Pennsylvania Railroad, is it not?
A. Yes, sir.
Q. What is the character of the duties performed by
the Merchants’ Warehouse Company ?
A. We receive the freight from the Pennsylvania
Railroad Company in cars and unload it and store it and
deliver it.
38a
On Samuel Bell, Jr.
Q. Are you familiar with the duties performed by the
Keystone Elevator and Storage Warehouse Company for
the Pennsylvania Railroad at North Philadelphia?
A. No, sir. I am familiar with it to the extent that
they handle merchandise the same as I do. I am not
familiar with grain. We do not handle grain, and never
did handle grain.
Q. Don't you handle grain in sacks?
A. We might handle it, but very little.
Q. A limited quantity?
A. We don't get a car in five years, I guess.
©. You receive merchandise generally at the plat-
form, handle it and redeliver it?
A. Yes, sir.
Q. And that you say you have been doing for twenty-
five years?
A. Yes, sir.
Q. Assuming as a fact that the Keystone Elevator
and Warehouse Company received grain, elevated it, re-
delivered it, collected freights, was responsible for storage
and warehouse receipts, what in your judgment would you
say would be a fair compensation for such services per
ton during the period covered by the time from March Ist,
1909, to April 30th, 1910?
A. Fifty cents a ton.
By Mr. Barnes:
©. I understood you to say that you had not at your
place had anything to do with elevating and the storage
of grain?
A. That is right.
Q. Or services of that character?
A. Yes, sir.
By Mr. Topp:
Q. But you have handled hay ?
A. Yes.
“
39a e 2:3
Jacob Michel
Q. Which is also included in the services rendered by
the Keystone Elevator and Warehouse Company ?
A. Yes, sir.
Q. And straw?
A. Yes, sir.
Q. What would you say would be a fair compensa-
A. I should say fifty cents would be a fair com-
pensation.
Q. What would you say as to thirty-five cents a ton?
A. Well, I don’t think it is enough. That is, not
now. It might have been in former times, but things have
changed. Everything has gotten dearer, labor, and so
forth.
Q. What was the rate of allowance made to your
warehouse when you started in twenty-five years ago?
A. The first agreement was at twenty cents a ton,
and then they saw they could not operate the warehouse at
that price at all, and the Pennsylvania Railroad Board
authorized Henry D. Welsh, who was then a director, to
report as to what price they ought to compensate at, and
the price was then raised to thirty-five cents a ton on the
recommendation of Mr. Welsh, and it was that for a few
years, and then it was subsequently raised on the assorted
merchandise to forty cents.
©. What time was that raise made?
A. The raise from twenty cents to thirty-five cents
was made a few months after the warehouse was in opera-
tion. Say about six months. The next raise of five cents,
to forty cents, was made subsequently, in 1891.
©. Can you tell us the rate of wages for common
labor starting with 1886?
A. At that time we paid our laborers $41 a month.
At that basis, that would make it $1.33 a day. There were
subsequent raises—three of them, I think. I have the dates
all here. At the present time we pay them $2.06 a day.
i ei ahaa cs é . OEP
40a
Jacob Michel
Q. That is practically an increase of sixty percent ?
A. Yes, sir; sixty percent in wages alone.
Q. How about the materials that entered into the
work ? .
A. All materials have increased in price I should say
at least thirty-three percent. Possible some more.
Q. Comparing 1g03 with 1909 what would you say
had been the increase in wages and of the materials used?
I mention 1903, because that is the date of our prior con-
tract with the railroad.
A. I can give you the successive raises of the wages.
In 1886 we paid $41 a month. That is at the rate of $:.33
aday. The first advance was to $45 a month, in June 1902.
Then, after a few years there was a subsequent raise of ten
percent, and after a few years more another ten percent.
Then, there was a raise of six percent on April Ist, 1910.
So that we now pay $2.06 a day, as against $1.33 in 1886.
MQ. Was there or not, or have you any data which will
enable you to speak on it, an increase in the materials used
in and about an elevator or warehovse ?
A. Thave | + anything now except the general increase
in everything, which everybody knows.
QO. What do you know? We cannot examine every-
body. We are just asking you.
A. I know repairs of all kinds are higher, and oils,
and everything that enters into the operation.
Q. About how much percentage?
A. I should say at least thirty-three percent. Some
twenty-five percent.
By THe REFEREE:
Q. This merchandise that you handle, what is it?
Mr. Topp: He has testified assorted merchandise;
general merchandise.
By THE
QO.
A.
Mr.
4ia a
Richard M. Richardson
REFEREE:
You are speaking of general merchandise?
Yes, sir.
BarNEs: I do not understand that he has
handled any grain.
Mr.
Mr.
Tovp: Oh, yes; he handles grain in sacks.
BARNES: He said not often; once a year.
No cross-examination.
Ricuarp M. Ricnarpson, having been duly sworn,
was examined and testified as follows:
By Mr. Topp:
QO.
A.
Q.
A.
Where do you reside?
Buffalo, New York.
What is your employment there ?
General superintendent of the Keystone Ware-
house Company.
like that ;
Q.
there ?
A.
Q.
SLE EL Fe MEBSIO BRIE NED LG SE E P AVE SIC LMG LOT ORD TOAD IEA PELE SLE LO ALLS:
At what place?
At Buffalo.
How long have you been in that position?
Since 1907. Four years.
What kind of a business do you do there?
General merchandise warehouse work.
There is no elevaticn involved?
No, sir.
That is, grain elevation?
No, sir. No grain elevators or belts, or anything
no bulk grain.
Do you act for more than one railroad company
Yes, sir.
Who do you act for?
42a
06 Richard M. Richardson
A. The Pennsylvania, the New York Central, the
Erie, Wabash, and the Michigan Central.
Q. Your services include the receipt and discharge of
merchandise at the platform?
A. Yes, sir. F
Q. Flour in sacks?
A. Yes, sir.
(). And grain in sacks too, or not?
A. Oh, yes; occasionally corn comes in sacks, and
there are four days free storage with roads which we have
terminal arrangements with.
©. You are allowed a terminal charge for the serv-
ices thus rendered?
A. Yes, sir.
Q. What free storage period have you?
A. We give them four days free storage.
Q. Are you familiar with the services rendered by
the Keystone Elevator and \Varehouse Company at North
Philadelphia ?
A. Yes, sir; fairly so.
Q. Including the receipt of grain in bulk and the ele-
vation by machinery ?
A. Yes, sir.
Q. And delivery to bins?
A. Yes, sir.
Q. And delivering out?
A. Yes, sir.
Q. And collection of freights ?
A. Yes, sir.
Q. And the receipt of hay and straw in bulk?
A. Yes, sir.
Q. And also delivering it at the warehouse?
A. Yes, sir.
Q. The receipt of hay and straw is more directly in
accord with the business that you do at Buffalo?
A. The hay is, yes, sir. That would come under the
general merchandise.
= aay |
43a ; _*
Richard M. Richardson
Q. Based upon your knowledge of that service, and
in the line of the experience that you have had from ren-
dering terminal services generally, what would you say
would be a fair compensation for such services in the
period of time covered by March ist, 1909, and April 3oth,
1910?
A. Do you mean the actual cost with the percentage
of profit on there, and everything?
QO. Yes.
A. Offhand I should say fifty cents a ton.
Q. Would you or would you not consider thirty-five
cents a ton an unreasonable charge?
A. An unreasonably low charge, I should say.
©. Has there or not been any increase in wages
between the year 1903 and 1909 for the character of labor
employed in this kind of work?
A. Yes, sir.
Q. What about has been the percentage in increase?
A. From twenty to twenty-five percent.
Q. Before you went to Buffalo where were you em-
ployed, and in what capacity ?
A. I was superintendent of the Keystone Elevator
and Warehouse Company at North Philadelphia.
Q. The plaintiff in this action?
A. Yes, sir.
QO. How long had you been in that position?
\. I guess about two years.
Q. You are entirely, then, familiar with the very
business which is the subject of this controversy ?
A. Oh, yes. The elevator and handling, and all that.
Q. And also with the figures incident to the conduct
of the business?
A. Ihave no recollection of what those costs are now.
You see, it has gone out of mind.
Q. Based on the experience which you had obtained
while you were such superintendent, supplemented by your
experience in the terminal warehouse at Buffalo, are you
RPL ROLL IE MAILE AG EIGER LEE LIE ST BELG I! IOLEIE E LS LEA CTE ISLE LIS
i 44a
ate) Harvey C. Miller
still of the opinion that thirty-five cents a ton would be an
unreasonably low charge?
A. Decidedly so.
©. You were superintendent under the old agreement
of October 1903?
A. Yes, sir.
Q. Which provided for thirty-five cents a ton?
A. Thirty-five cents a ton elevation and the handling
that went through there.
CROSS-EXAMINATION
By Mr. BARNEs:
Q. In your estimate of the return per ton, you say
you include cost and profit. In what relative percentage do
those two elements enter into your computation?
A. I should say we ought to have twenty-five percent
profit.
Harvey C. MILvier, having been duly sworn, was
examined and testified as follows:
By Mr. Topp:
©. You are the principal stockholder in the Keystone
Elevator and Warehouse Company, are you not?
A. Yes, sir.
©. You are also the patentee of the drying process
which is in use in the elevator ?
A. Yes, sir.
©. The agreement between the Keystone Elevator
and Warehouse Company, which went into effect in October
of 1904, terminated when, according to its terms, first?
A. In 1908.
Q. From October 1908 on how long was it continued
in force and by what means?
45a 59
Harvey C. Miller
A. It was continued first by a resolution of the Board,
I think.
Q. The Board of the Pennsylvania Railroad?
A. Of the Pennsylvania Railroad Company, yes, sir.
Just an extension of a few months at a time.
©. Until what date?
A. I think March Ist, 1909.
Q. The resolution of the Board which extended it to
that date was not renewed? That is practically the situa-
tion, is it not? There was a resolution of the Board, of
which you had notice, extending it until that date?
A. Yes, sir.
Q. And there was no subsequent resolution renewing
it?
A. No, sir.
Q. How did you come to perform or continue to per-
form the services in connection with the operation of that
elevator ?
A. With an understanding that we would be paid.
©. Who was that interview with, and when and
where, and who were present?
A. Mr. John B. Thayer, Mr. George Dixon, Mr.
George Stuart Patterson, and yourself and myself.
©. How long prior was that to the first of March
1909 ?
A. I could not recall the exact date. It was sometime
prior to that. A short time possibly. I cannot recall the
exact date.
©. From October of 1908 until the first of March
1909 there had been negotiations on hand for a renewed
contract, had there not ?
A. Yes, sir.
©. The old contract was absolutely terminated on
March Ist 1909, and then this arrangement of which yeu
have spoken was entered into just shortly prior to that time ?
A. Yes, sir.
POR IDL LLL LIME ROO PS ER NEAR OL AILS IG MILI VELL IAI MYL GM
46a
Harvey C. Miller
60
Q. Just what was that arrangement?
Mr. Barnes: This was verbal, oral?
Mr. Topp: Oh, yes.
A. We were to continue the operation of the elevator
until such time as we could reach an agreement or an under-
standing or make a contract, and they were to pay us—-we
were to perform the same services that we had, and they
were to pay us.a reasonable compensation for our services.
Q. The question of the amount being left open?
A. Yes, sir.
Q. Practically, then, you were to continue tc per-
form the same services ?
A. Yes, sir.
Q. The only question left open being the amoun of
compensation ?
A. Yes, sir. We were to continue. We were to pay
the same rent, and did pay the same rent.
©. That continued until what time?
A. That continued for fourteen months.
Q. Until the 3oth day of April 1910?
A. Yes, sir.
©. When a new agreement was negotiated, which
we have nothing to do with here?
A. Yes, sir.
Mr. Topp: In this connection I offer in evidence the
statement of our cause of action, filed in this case, so far
as it refers to the elements of charge, beginning at the foot
of page 4, under the date of “For the month of March
1909, 13,723,040 pounds of grain and other merchandise,
at the rate of 35 cents per ton of 2,000 pounds, the sum of
$2,403.11,” and so on through month by month until the
month of April 1910, when the charge was for $19,121.475
pounds, at 35 cents per ton, of 2,000 pounds, amounting in
the aggregate to the sum of $42,826.00. We acknowledge
47a
Harvey C. Miller
a credit having been paid on account of that sum, being paid
on January 24th, 1911, in the sum of $28,420.19.
Q. How long have you been engaged in the grain
business ?
A. Since 1880.
Q. How long in connection with the operation of an
elevator ?
A. Since the same date.
Q. In how many different localities?
A. Philadelphia, Western Maryland: a number of
places in Western Maryland.
Q. Are you familiar practically with the operations
of an elevator such as the one used at North Philadelphia?
A. Yes, sir: I think so.
©. You also are familiar with the services rendered
by your company to the Pennsylvania Railroad for the
period beginning March ist 1909 to April 30th 19107
A. Yes, sir.
©. Based upon your experience would you or not
consider thirty-five cents a ton a reasonable or an unreason-
able charge for the services rendered by your company to
the Pennsylvania Railroad for that time?
A. It would not be high enough, considering the cost
of labor and material, but considering it was a continuance
of the other contract, | should say it would be a reasonable
compensation for that time.
Q. I do not care anything about the continuance of
that contract. I want to bring it down to the services ren-
dered Letween those two dates.
A. Then, for the services rendered between those
dates it should be about forty-two and a half cents a ton.
QO.
A. Yes, sir.
). Why do you say that?
It ought to be seven and a half cents a ton more?
on
A. Iam adding the actual cost plu; twenty-five per-
cent profit.
48a
Harvey C. Miller
62
Q. You mean by “actual cost” the total cost of the
operation of the elevator and the total receipts therefrom?
A. Yes, sir.
CROSS-EXAMINATION
By Mr. Barnes:
Who owns the elevator ?
The Pennsylvania Railroad Company.
How do you occupy it?
Under a lease.
That is, up to March 1st, 1909, you had an agree-
ment in writing with the railroad company for the use and
occupation of the premises and for rendering certain
services there ?
A. Yes, sir.
Q. And thereafter that occupation continued and
those services were rendered under the arrangement which
you have spoken of in your direct testimony 7
A. Yes, sir.
©. What were those services that you rendered in
respect to grain at the elevator?
A. The receiving, the elevating and delivering to the
consignees, and collecting the freight, making proper deliv-
eries, and keeping the grain in proper condition, and seeing
that the same number of bushels were delivered as received,
and the same quality, and so forth, and quantity.
Q. And it is for those services that you make this
claim on the basis of thirty-five cents per ton?
A. Yes, sir.
©. What proportion of that thirty-five cents which
you regard as a reasonable compensation represents cost and
what proportion represents profit ?
A. I should say between thirty-three and thirty-five
cents a ton actual cost, and the difference between that and
forty-two and a half cents, I should say was the profit
49a «7
de>
Harvey C. Miller
(. In your thirty-five cents, which you claim here,
what proportion of that is profit?
A. If the actual cost was thirty-four cents, it would
be one cent a ton.
Q. I want to know, without going into the total of
your figures, what percentage of the thirty-five cents per
ton would represent profit over cost?
A. Very little.
Q. Can you tell us what?
A. Practically nothing, if we took into consideration
the fact that we are responsible for shortages and things
of that character.
(). That is risk?
A. Yes, sir: but that should be considered.
©. lLagree with you, but that is compensation. What
I want to know is what percentage of the thirty-five cents
per ton, as near as you can state it, would represent actual
cost ?
A. I should say about thirty-four cents a ton would
be actual cost, and if we got thirty-five cents that would
be a cent profit.
©. Your total claim, as shown by your statement of
claim for this period, was $42,826. The amount which
was paid to you, and for which you give credit to the rail-
road company, was paid to you on a statement that it was
the actual cost incurred by the Keystone Elevator and Ware-
house Company, was it not?
A. Not to my knowledge, it wasn't.
©. You received a voucher for the $28,420.19 which
was paid to you?
A. Yes; but I did not understand that that covered
the actual cost.
(). That voucher read, “For the actual cost incurred
by the Keystone Elevator and Warehouse Company” ?
A. That might be. I did not so understand it.
(). “As ascertained and certified by Vollem, Fernley,
U 62
i “sits . TO AT TS ee - ee Pe
50a
Harvey C. Miller
64
Vollem & Rorer, public accountants, in performing the
services which the railroad company was required to per-
form in receiving and handling grain and other traffic at the
railroad company’s elevator and warehouse, at its North
Philadelphia freight station, in the City of Philadelphia and
State of Pennsylvania, from March 1, 1gog, to and inclusive
of April 30th 1910, $28,420.19. This amount does not
include any increment of the claim made by the Keystone
Elevator and Warehouse Company for compensation for
said services in addition to actual cost, which claim, asserted
by the elevator company but not conceded by the railroad
company, remains open and unadjusted.” You gave the
railroad company credit in that amount for a claim which
you are now presenting here?
A. We gave them credit for what they paid us. This
audit was not made by us at all. It was made by them.
©. The statement which I have read to you was
made by the railroad company on its voucher, which you
signed in getting the money or was signed in your behalf
and you received the money, but you did not make the state-
ment at all.
A. No.
Q. And it was the zailroad company’s statement of
the amount which they paid on the basis of this voucher ?
A. I presume so. We ran along for thirteen months,
and we needed the money, and they finally paid us this
amount, and, as | understand, Mr. Todd got it and accepted
it as a payment on account.
Q. And Mr. Todd was authorized to receipt the
voucher on your behalf and get the money for you?
A. Certainly, or he would not have done it.
©. The balance between your claim and the amount
which was paid is $14,405.81. and the amount which you
now claim is $17,551.04, the difference being $3,145.23,
which is what?
A\. That is interest, | suppose.
5la
Harvey C. Miller
Q. The calculation of interest is made upon the
amounts due on the first day of each month during the
period in suit, which amounts in the aggregate to $42,826,
and that interest on that $42,826 is calculated up to the date
of the payment of the $28,420.19? Is that correct ?
A. Yes.
©. What part of the service which the Keystone
Elevator and Warehouse Company now claims compensa-
tion for in respect of this grain is done by the Philadelphia
Cleaner Company? What does the Philadelphia Cleaner
Company do?
A. Re-conditions the grain.
©. What do you mean by that?
A. I mean rejected grain that is treated and restored
to a higher grade.
Q. Tell us what actually is done. What does the
Philadelphia Cleaner Company do? What work does it do?
A. A car load of grain would be elevated, and it
would be dropped into this process, this machinery.
QO. Who does the elevation?
A. The elevator company. Then it goes through this
by gravity and down until it reaches the storage bins.
©. And then what happens to it?
A. Then it is treated and goes in the storage bins.
QO. Who does that?
A. The Philadelphia Cleaning Company.
©. That is its part of the services, is it?
A. Yes, sir.
Q. What is the Philadelphia Cleaning Company? Is
it a corporation ?
A. No, sir.
Q. What ts it?
A. It isa name under which [ conduct the business.
©. What does the Philadelphia Cleaning Company
get for that service ?
52a
Harvey C. Miller
A. It gets a royalty of three-quarters of a cent a
bushel.
Q. From the elevator company or from the con-
signees of the grain—which?
A. I should say they get it from the elevator com-
pany and the Elevator gets it from the consignee.
Q. All of that comes to you, does it not?
A. Yes, sir.
Q. Individually ?
A. Yes, sir.
©. And you are also, as you have testified, the larg-
est shareholder of the Keystone Elevator and) Warehouse
Company ?
A. One of the largest, ves, sir.
Q. I thought Mr. Todd asked you whether you were
the largest?
A. Well, I think I am, yes, sir. Yes, I am the largest.
Q. There is a difference between “one of the largest”’
and “the largest.”
A. I am the largest.
By Mr. Topp:
©. You hold a majority of the stock, and it is abso-
lutely under your control ?
A. Yes, sir.
By Mr. BArNeEs:
QM. Do you hold a very preponderating majority of
the stock ?
A. 1 should say yes.
(. \re there any other substantial shareholders in
the Keystone Elevator and Warehouse Company than your-
self ?
A. Yes, sir.
QM. Do you own seventy-five percent of the stock of
that company ”
A
3a
Meeting
A. I think so. I would not like to say exactly, be-
cause | am not sure.
©. We will say approximately? Is that right?
A. I think that is all right.
Adjourned to meet pursuant to agreement of counsel
and the Referee.
Meeting held at the office of the Referee, G. Heide
Norris, Esq., Land Title Building, Broad and Chestnut
Streets, Philadelphia, on Friday, February 28th, 1913, at
three o'clock p. m.
Present:
G. Hetpe Norris, Esq., Referee.
M. Hampton Topp, Esg., representing the Plaintiii.
GEORGE STUART PATTERSON, EsQ., representing the
Defendant.
After discussion between the Referee and counsel rep-
resenting the respective parties, the meeting adjourned.
Meeting held at the office of the Referee, G. Heide
Norris, lésq., Land Title Building, Broad and Chestnut
Streets, Philadelphia, on Monday, April 28th, 1913, at
eleven o'clock a. m.
Present :
G. Hetpe Norris, [Eso., Referee.
M. Hampton Topp, Esg.. representing the Plaintii.
GEORGE STUART Patrerson, EsgQ., representing the
Defendant.
Mr. Parrerson: Mr. Referee, as preliminary to the
introduction of evidence contained in the formal offer o/
proof, a copy of which has been submitted, I desire to call
Mr. Robert C. Wright, who is the freight traffic manager
of the Pennsylvania Railroad Company, and who is
68 a”
Meeting
familiar with the method of handling grain, and other
commodities, so far as the question of the delivery of the
Railroad Company is concerned, both at Philadelphia and
at other points, for the purpose of testifying as to the dif-
ferent methods of delivery of grain and other commodities,
which are, in point of fact, delivered through this elevator
and warehouse; the reason for the employment of the Ele-
vator Company by the Railroad Company and an explana-
tion of the services performed by the Elevator Company
for the Railroad Company, for and on behalf of the con-
signees of grain and the other classes of property. The
object of this offer is to establish, first, the necessity for
the employment of the Elevator Company by the Railroad
Company, the function which the Elevator Company bears
or performs in connection with transportation, and the
relation of the Railroad Company to the owners and con-
signees of grain and other commodities handled through the
levator and Warehouse. This all to be followed by thts
formal offer as to the profits which the Elevator Company
has received at the present time from the operation of the
elevator during the period in question.
Mr. Topp: The offer of the whole is objected to.
There are certain features in it, however, that I recognize
might aid the Referee in viewing the character of the sery-
ices rendered, and the plan through which such services
were rendered, and the necessity therefor, which possibly,
under a view of this case, might be relevant testimony.
With the Referee’s permission, however, I will withdraw
my objection, with leave, after the testimony is taken, to
move to strike out such parts of it as I think are not
relevant, and have any exceptions then reserved that may
protect my client's rights.
Tue Rereree: Very well. I will grant you that
permission.
554 GO
a | ‘
Robert Clinton Wright
Ropert CLinton WriGut, having been duly sworn,
was examined and testified as follows:
iby Mr. PATTERSON :
©. You are at the present time freight traffic mana-
ger of the Pennsylvania Railroad Company ?
A. Tam.
Q. During the period between March ist, 1909, and
Ist, 1910, what were your duties?
A. I was general freight agent.
Q. As general freight agent did you have any famil-
iarity with the operation of the Keystone Elevator at North
Philadelphia ?
A. I believe so; reasonable familiarity with its op-
erations, and a particular knowledge of its relation as a
terminal for the Railroad Company.
Q. Prior to your appointment as general freight
agent of the Pennsylvania Lines East had you occupied any
position with the Company at Baltimore?
A. Yes. I was special agent in the general agent’s
office for a number of years, ending in 1897, and I was
also soliciting agent for about two years.
Q. As such did you have any familiarity with the
handling of grain at Baltimore?
A. I did.
Q. When grain is transported from the point of
origin over a line of railroad to the point of destination,
in what way or ways is delivery made by the Railroad
Company to the consignees or owners of that grain?
A. Speaking of grain which is consigned for a rail-
road delivery, and not to a private siding, and left at that
private siding, and that, of course, is delivered to the ware-
house of the person and handled in his own way,—but
when grain is consigned for public delivery at a railroad
station, it can either be delivered direct from cars, the car
being placed, and turned over to the consignee for delivery
as 56a
0 ro .
Robert Clinton IWright
ot the freight, or it can be handled through an elevator,
the delivery being made to the consignee by the Elevator.
©. When you say that delivery is made by the Ele-
vator, what do you,mean by that?
A. If you would like me to go more fully into the—
Q. Ina very general way.
A. Simply that in order to release the cars, instead of
being placed on the track subject to the consignee’s option
cf unloading, they are delivered to an Elevator and un-
loaded at once into the bins of that Elevator, and there
subject to the consignee’s order; the Elevator, in turn,
aclivering it to the consignee or his order, at his wish
and desire, subject to the charges for the service performed.
©. Asa general proposition, does the Railroad Com-
pany have an elevator for local delivery and an elevator
for export delivery ?
A. We have at important places, like Philadelphia
and Baltimore.
©. What is the elevator which was employed by the
Pennsylvania Railroad Company to perform this local de-
livery at Philadelphia?
A. The Keystone Elevator, at North lhiladelphia.
©. What other facilities did the Keystone Elevator
and \Warehouse Company provide for the Railroad Com-
pany at North Philadelphia ?
\. Included in the lease to them of the Elevator was
part of an old warehouse at North Philadelphia, which rep-
resented that part of the contract referring to the ware-
house business. It represented it in a very small way.
(). That warehouse was used for what purpose ?
A. For a terminal of the Railroad Company. In
other words, the cars consigned to the warehouse are placed
there and unloaded at once into that. to release the cars.
Q. Unloaded by whom?
A. Unloaded by the Warehouse Company into the
warehouse, and through that warehouse delivery is made
te the consignees.
~?
ee
7a
mn
Robert Clinton Il right
©. As a general rule, carload freight is unloaded by
whom?
A. As a general rule, carload freight is unloaded by
the consignor, loaded by the shipper and unloaded by the
consignor.
Q. How is it that in this particular instance the car
load freight is handled by the Warehouse Company and not
by the Railroad Company ?
A. At certain large points, governed by different
competition, the Railroad Company undertakes to unload
certain classes of carload freight, and by our published
tariff that is the case in Philadelphia. We unload this car-
load freight for consignees.
©. And you employed the Elevator and Warehouse
Company to perform the service for you?
A. In this particular locality, that is our terminal
that performs it for us.
Q. Grain having been unloaded from the cars into the
elevator as described by you, what may or may not happen
to that grain?
A. Tf | understand your question, the grain unloade:!
into the Elevator is subject either to delivery without an
further handling or treatment, or it is subject to various
workings, as shown in the tariff of the Railroad Company.
That is to say, it can be turned or blown or dried, :nixed
before delivery, or bagged upon delivery. Various differ-
ent treatments are offered, at the proper charge. All of
which could not he given if the grain were delivered di-
rectly from the car to consignee. It is an additional at-
traction in the handling of grain, to have those privileges.
Q. When the grain is handled as you have described,
from the car into the Elevator, is the handling covered in
the ordinary freight rate, or is there a specific charge there-
for in addition to the freight rate?
A. The tariff of the Elevator shows the charge, which
does not mean simply the unloading, but includes receiving,
weighing and storing, including the first ten days storage
58a
ey . .
— Robert Clinton Wright
and delivery to cars or wagons, for which the charge is
one-half cent per bushel.
Mr. Patterson: I offer in evidence the Tariff re-
ferred to by the witness, being I. C. C.-G, No. 2953, taking
effect April 17th, 1907.
( Tariff marked, “Exhibit A, G. H. N.’’)
Q. Has this Elevator in it any machinery operated by
any company or concern other than the Elevator Company ?
A. Yes, sir. It has machinery in it operated by the
Philadelphia Cleaner Company.
Q. I direct your attention to the Tariff, Item No. 1,
being one-half cent per bushel for receiving, weighing and
storing from cars, including first ten days’ storage and de-
livery to cars or wagons. Is the service involved in that
item performed by the machinery of the Elevator Company ?
A. Yes. According to my understanding that service
is performed by the Elevator Company machinery.
©. Will you take each of those items.
A. Item No, 2, storage each succeeding ten days or
fraction thereof. That is, of course, stored in the Elevator.
Item No. 3, blowing, screening or mixing in store
(additional). I understand that to be the machinery of the
Elevator.
Item No. 4, turning in store (additional). I under-
stand that to be the Elevator.
Item No. 5, drying No. 2 grade of any kind of grain.
This I understand to be a function of the Philadelphia
Cleaner Company.
Item No. 6, stacking, in lots of 1,000 bushels or over,
including transfer through Elevator, and blowing, but no
storage beyond forty-eight hours after completion of
service. This I understand, is the function of the Elevator.
Item No. 7, drying other than No. 2 grades, including
transfer through the Elevator, and bagging, if desired, but
59a
Robert Clinton Wright
no storage beyond forty-eight hours after completion of
service. This I understand to be the work of the Philadel-
phia Cleaner Company.
Item No. 8, cooling, including transfer through the
levator, and bagging. if desired, but no storage beyond
forty-eight hours after completion of service. This I under-
stand to be the work of the Philadelphia Cleaner Company.
(J. Does the consignee, under that Tariff—I direct
your attention to it—pay anything for elevation in addition
to the charges specified therein ?
A. As I understand, the Tariff on these charges are
the entire charges made against the owner for the work
as shown.
Q. Item No. 3 and Item No. 4, take those.
A. It specifies absolutely that it is in addition to the
half cent paid for the receiving, weighing and storing.
(). Those are the only items on the Tariff which are
specified as additional ?
A. That is correct.
Mr. Patterson: Mr. Todd, you may cross examine
Mr. Wright.
Mr. Topp: Reserving the right of objection, as here-
tufore indicated, | will proceed with the cross examination.
CROSS-EX AMINATION
By Mr. Topp:
©. Ina general way, the situation is like this, is it
not: The Pennsylvania Railroad leases this Elevator to the
Keystone Elevator and Warehouse Company, the plaintiff
in this action ?
A. That is correct.
(). And charges them a rental therefor ?
A. Yes, sir.
QM. This case involves the question of what is a
“4 60a
Robert Clinton Il right
reasonable compensation for the services rendered by the
Elevator Company to the Railroad Company in connection
with the transportation services at that Elevator, does it
not ?
A. Lam not entirely familiar with the whole gist of
this case. That is my understanding, from what I have
heard.
Q. The charges to which you refer as being in the
Tariff are the charges that are made to the public, are they
not?
A. They are.
QO. They have nothing to do with the question of
what is or is not a reasonable compensation, as between the
Railroad Company and the Keystone Elevator Company
for the services rendered by that Company ?
( Objected to as a question of law. )
(Question withdrawn. )
Q. There is no provision in this Tariff, is there, for
what is compensation for the Elevator Company for the
services rendered to the Railroad Company ?
\. No rates on this Tariff as to a payment by the
Railroad Company to the Elevator Company.
Q. Prior to the first of February, 1g0g, there was a
contract subsisting between the Elevator Company and the
Railroad Company regulating that proposition, was there
not ?
\. There was.
©. And since the first of May, 1910, there has been a
contract regulating that?
A. There has.
Q. The period between the first of February, 1909,
and the first of April, 1910, the services were rendered but
there was no contract fixing the rate of compensation?
\. No contract alive during that period.
X
61a
Robert Clinton Wright
~?>
ww
©. No contract alive during that period?
A. No.
QO. What is Item No. 1 on that Tariff?
A. Receiving, weighing and storing from cars, in-
cluding first ten days’ storage and delivery to cars or
W agons.
Q. That is intended to cover, is it not, after the cars
have arrived at the Elevator Station, the charge made to
the public for unloading that car, for placing it in the bins,
for the free storage period, and the delivery of that grain
within the free storage period to the consignee or his order ?
A. That charge is the charge against the consignee
for those combined services.
Q. And that is a portion of the services that the Rail-
road Company has undertaken to do for the shipper or the
consignee, as the case may be.
A. Let me get clear on that. Do you mean that those
services would ordinarily be included in the transportation ?
©. No. I did not ask you that.
A. I do not want to get confused. You mean that
we have undertaken to furnish this to the consignee at the
proper charge and through the proper facility ?
QM. Yes. You have undertaken to do that as a por-
tion of your service to the consignee, or the consignor, as
the case may be?
A, With a proper charge therefor, not included in the
freight rate.
©. That service, the actual unloading of the car, put-
ting it in the bin, and the reloading of it out of the bin, has
to be performed by the Elevator Company ?
A. That is correct.
Q. And for that service, prior to the first of February
1909, the Railroad Company made a contractual allowance
to the Elevator Company ?
A. It did. I would not like to say it was for that
purpose exactly. My understanding is it was an allowance
76 62a
Robert Clinton Wright
made to the Elevator Company for whatever work the
Railroad would have had to perform itself if it had run the
Elevator, with due regard for what it might charge the
public. :
©. Would that include the treatment of sick grain?
A. No.
Q. That would be within the general language that
you have used a moment ago?
A. What I wanted to convey was that the payment
for a facility of that kind very often depends on what that
facility can collect itself. What it can collect is more or
less subject to the will of the Railroad carrier, because if
the facility so employed attempts to collect more than is fair
and proper, under the rules of the City, then it makes some
difference in what might be allowed by the carrier.
©. You mean by that expression, that the Railroad
Company attempts to control the charges of its tenant.
A. It has some supervision over it.
©. That is a supervision which would amount to a
certain amount of control over it? Is that it?
A. A certain amount of control over it, yes.
Q. With the view that the public might be treated
fairly? I presume that is the fundamental thought ?
A. Exactly so; that the interests of the carrier should
not be interfered with.
©. Which, if the public were not treated fairly, they
would be interfered with ?
A. That is correct.
QO. You have included in that tariff, to which you
have just called attention, services which you have desig-
nated as being performed by the Philadelphia Cleaner
Company ?
A. Yes, sir.
©. That is the service that is rendered after the grain
has been fully delivered into the Elevator, under paragraph
1 of the tariff, to which you have referred ?
63a 7
Mecting
A. That is my understanding of it.
Q. And rendered at the request of the owner?
A. Yes, sir.
(. It may or may not be rendered, just as the owner
requires ?
A. Yes, sir.
Q. The same thing may be said as to mixing, may it
A. Yes, sir.
). And clipping ?
A. Yes, sir.
(). And all the other various services rendered at the
owner's request for the purpose of marketing the article
that he has delivered to the Elevator ?
A. Yes, sir.
After discussion between the Referee and counsel rep-
resenting the respective parties, the meeting adjourned.
Meeting held at the office of the Referee, G. Heide
Norris, Esq., Land Title Building, Broad and Chestnut
Streets, Philadelphia, on Thursday, June 5th, 1913, at
11 o'clock A. M.
Present :
G. Heipe Norris, Eso., Referee.
M. Hampton Topp, Esg., representing the Plaintiff.
GEORGE STUART PATTERSON, Esy., and
Joux Hampton Barnes, Esq.. representing the
Defendant.
Mr. Patterson: The defendant offers to prove that
during the time embraced within the Plaintiff's statement.
to wit, from March Ist, 1g0g, to May Ist, 1910, the capital
stock of the Keystone Elevator & Warehouse Company, the
Plaintiff in this case, was Ten Thousand (10,000) shares at
Ten (10) Dollars each, all of which was issued and out-
standing, and that during the said time Nine Thousand three
O4a
Meeting
hundred and sixty (9360) shares of said stock, at a par
value of $93,600 was the property of Mr. Harvey C. Miller;
that during the period in question, the said Harvey C. Miller
Was a member of the firm of L. F. Miller & Sons, who were
shippers, consignees, and dealers in grain, and that during
the period in question go per cent of the business elevated,
stored and handled through the elevator and warehouse of
the Plaintiff Company at North Philadelphia, as referred
to in the statement of claim, was grain elevated, stored and
handled for and on account of the said firm of L. F. Miller
& Sons, and for compensation for the elevation, storage and
handing of which and the grain and merchandise of other
owners and consignees through said elevator and ware-
house this suit is brought, as is more specifically detailed
in plaintiff's statement; that said grain, the property of
I.. If. Miller & Sons and other owners, as aforesaid, and
for the elevation, storage and handling of which through
the Keystone Elevator this action was brought, was grain
which was shipped (at the tariff freight rates) from points
in States other than Pennsylvania over the lines of the
Defendant Company to said Keystone Elevator, and deliy-
ered by the Defendant to the Plaintiff Company, who, in
turn, elevated the same into the elevator and performed
various other services with respect thereto, as more particu-
larly detailed in the tariff hereinafter referred to; and that
other grain dealers and consignees of grain, competitors of
L. F. Miller & Sons, located in the City of Philadelphia,
received grain transported over the lines of the defendant
from the same points as mentioned in paragraph 3 of this
offer, and on which they paid the same freight transporta-
tion rate as that paid on grain of L. F. Miller & Sons, and
that said other grain dealers and consignees did-not have
any elevator nor perform any elevator service in connection
with such grain, and accordingly did not receive any com-
pensation therefor.
eee ee
65a =“Q
Meeting
Mr. Topp: I call upon counsel for the defendant to
state the purpose of these offers.
Mr. PAtrerson: The object of these offers is to show
that there is an identity of interest between the principal
stockholder of the Keystone Elevator Company, Harvey C.
Miller, and the firm of L. F. Miller & Sons, who are in the
grain business, and that being in the grain business, the
Railroad Company is, under the Interstate Commerce _\ct,
limited, with respect to the amount of compensation which
it is permitted to pay the plaintiff company for services per-
formed on behalf of the defendant company. This offer
to be followed by the subsequent offers, that the amounts
already received by the plaintiff company from the defend-
ant company and their consignees for the performance of
the services in question constitutes a reasonable compensa-
tion for those services.
Mr. Topp: I object to those offers of proof, because
the question which the Referee is called upon to try is what
is a reasonable compensation for the services rendered by
the plaintiff to the defendant, and that the proposed offers
of proof are irrelevant and immaterial, and furnish no
assistance to the Court in the determination of that ques-
tion.
Tue REFEREE: [| will sustain the objection.
(Exception noted for defendant, by direction of the
Referee. )
Mr. Patrrerson: The defendant also offers to prove
from the hooks of the plaintiff company that the Plaintiff
Company and the said Harvey C. Miller, as the owner of
93-6 percent of the capital stock of the said Company, have
already received by reason of the payment made by the
Defendant to the plaintiff, as averred in the Plaintiff's state-
ment, and the payments made to the Piaintiff by consignees
and owners under the tariff (admitted in evidence) for
U 82
60a
Meeting
the performance by the Plaintiff of the various services
agreed to be performed by the plaintiff for the defendant
and for the performance of which this action ts brought
the cost of such performance, as well as a reasonable profit
in addition to said cost, and that the further payment
demanded by the said Plaintiff Company for the perform
ance of said services is forbidden by the provisions of the
Act of Congress, entitled, “An Act to Regulate Commerce
approved February 4, 1887, its amendments and supple
ments, as well as the Act of Congress entitled “ \n \et t
further regulate commerce with foreign nations and among
the States,” approved February ty, 1go3, its amendmes
and supplements.
Mr. Topp: In connection with that offer, | ask cour
sel to state the purpose of it
Mr. Patterson: The purpose of that otter
stated explicitly in the offer, namely, an
from the books of the Plaintiff Company that the
Company has already received the costs of t!
of the services contracted for, plus a reasonal |
Dattwnad |
virtue of the payment made by the |
referred to in the Plaintiff's statement
the further payments made by consignesr
admitted in evidence to the plametrtt
formance by the plaintiff comp:
which, under the contract with the det
had agreed to perform
Mr. Topp ] understa
‘reasonable protit. u t
nelucle pavilicel
67a C3 ik
Meeting
Mr. Parrerson: You-are correct in understanding
that there is included in the above amounts paid by con-
ignees and owners of grain to the plaintiff. company,
under the terms of the tariff of the defendant company, for
the pertormance by the plaintiff company of services which
e plaintiff company agreed with the defendant to perform,
nd for the performance of which this suit is brought.
,
Min. Topp: | am not clear from counsel's statement
to the scope of their offer. It is true that the plaintiff
any agreed with the Railroad Company that it would
rvices to other shippers and consignees and charge
' ,
e taritt rates, but the payments made by shippers under
it agreement are no part of the compensation which was
reed to be paid he Railroad Company for the serv-
endere e benefit of the Railroad Company
eretore, | want, betore making my general
to know fron counsel whether i
ded their offer of proof.
The Plamtiff in its statement al-
ff agreed to furnish, at its own cost.
should be required to promptly load
the detendant at the elevator and
indle promptly and effectively all traf-
he defendant. For the performance
tiff has been paid by the defend-
e plaintiff's statement, and has
eceived certain amounts from = con-
ervices, the sum of these payments
f the performance of these
n is this The defendant contends
t the plaintiffs entitled to recover
ble compensation, the Referee must
payinents made to the plaintiff
| consignees of grain, under the
68a
%2¢ >
7 =~
Meeting
tariff in question, for the performance of the services which
the plaintiff agreed with the defendant to perform, and for
the performance of which the defendant agreed to pay the
plaintiff a reasonable compensation.
Mr. Topp: [| object to this offer of prcof, first, as not
stating with sufficient explicitness the conclusions of fact or
the facts from which the conclusions are drawn, to enable
the Referee to intelligently pass upon the question of the
relevancy of the facts therein set forth. I also object to it,
as immaterial and irrelevant, and as furnishing no assist-
ance to the Referee in determining the only question in
issue, which is pending before him for his determination,
namely, what is a reasonable compensation for the services
rendered by the plaintiff to the defendant, as set forth in
the statement of the pisintiff's cause of action.
Tue RerereE’ The objection is overruled for the
present.
(Exception noted for plaintiff. by direction of the
Referee. )
Mr. Patterson: The defendant offers in evidence a
duly authenticated copy of the opinion, report and order
of the Interstate Commerce Commission, decided January
7, 1913, dealing with the operation of the said Keystone
levator by the Keystone Elevator & Warehouse Company
during the period covered by this suit, as well as the lease
and contract with the Defendant Company under which the
Plaintiff has operated the same, and making an order
against said Defendant forbidding the leasing of said ele-
vator to the plaintiff or the payment of any allowance for
its services upon any property passing through said elevator
or warehouse belonging to a stockholder of said Plaintiff
Company, unless tariffs of the Defendant should embrace
similar privileges to all other shippers using this or any
other elevator in the City of Philadelphia.
WEIL LIER SE ELIA GILL EEE LEE INL LLP BES SOLE TI
6ga
Walter F. Sims
Mr. Topp: I object to that as irrelevant and im-
material.
Tue Rereree: I will admit the offer for the pres-
ent. The objection is overruled.
(Exception noted for plaintiff, by direction of the
Referee. )
WALTER F. Sims, heretofore sworn, recalled, and ex-
amined and testified as follows:
By Mr. PatTerson:
©. Have you had occasion to make an examination of
the books of the Keystone Elevator Company ?
A. I have.
Q. When was the examination made, and it covered
what period ?
A. The examination covered a period of some months.
It started in the latter part of August, 1911, and extended
on up, in connection with Mr. Fernley, until about the 15th
of January, 1912.
QO. What period in the books was examined ?
A. The pericd in the books examined covers the
period from March 1st, 190g, to April 30th, inclusive, 1g1o.
Fourteen months.
©. Have you from time to time on occasions since
examined the books of the Elevator Company ?
A. I have.
(). Are you familiar with the method of keeping their
accounts 7
A. Yes, sir.
Q. Are you engaged at the present time in co-opera-
tion with the Elevator authorities ?
A. IT am.
Q. In doing what?
A. In installing a new bookkeeping method.
—
70a
oh: Walter F. Sims
©. Have you made an examination of the plant and
equipment and facilities of the Elevator Company?
A. Yes.
Q. Are you familiar with the plant, equipment and
facilities of the elevators of the Railroad Company at other
points 7
A. Iam.
Q. What points?
A. Philadelphia and Baltimore.
©. How is grain unloaded from the cars of the Rail-
road Company into the Elevator at North Philadelphia?
A. The car is switched into the Elevator house by
an engine from the yard, taken from the yard and placed
in the house, and the grain door is opened, usually by cut-
ting it. The grain in the full car trickles through the
broken door until such time as the gravity will not take
it any further, and then men are placed in the car with
unloading shovels, and the grain is pulled out with these
unloading shovels, which work automatically from the
power of the Elevator Company, and it goes down, falls
down into the receiving pit, and from there it is elevated
by means of an endless belt, to which is attached buckets
holding a given amount, and taken up to the extreme top
of the elevator, where it is placed in a garner, which re-
ceives the grain from the unloading pit.
Q. That service of unloading cars for the Railroad
Company at North Philadelphia is performed by whom?
A. That service of unloading cars at North Philadel-
phia is performed by the Keystone Elevator Company.
Q. Is or is not that grain which goes into that ele-
vator elevated ?
A. It has to be, as it goes into the elevator.
Q. And elevated?
A. And elevated.
Q. That includes the grain coming from cars of the
Railroad Company ?
A. All cars coming from the railroad company. In
EEE ITI I LOL II BE MONEE ttl
71a Or
Walter F. Sims
connection with the elevation, it is then dropped down into
the weighing scales, one below the garner, and after the
weight is obtained it is then shot down, by gravity, through
the legs of the elevator, that is, the chutes of the elevator,
into bins provided, if it is not desired to perform other
service on that grain. If it is, it is simply diverted from
its course, and it still keeps on going down, by its weight
or gravity, through the other processes.
Q. Can any grain be treated by the machinery of the
so-called Philadelphia Cleaner Company without first being
clevated 7
A. It cannot.
©. Turn briefly to the question of handling property
through the Warehouse of the Keystone Elevator Company
at North Philadelphia.
A. What property? Flour or hay?
©. \ny commodity. Take flour.
A. We will take flour. Flour is unloaded from the
car by the Keystone Elevator and Warehouse men, and it
is trucked through the space and placed on wagons that
are sometimes awaiting to have the commodity of flour
placed thereon. Other times, when the wagons are not
awaiting, the flour is unloaded and placed in what they call
the storage room there, a small storage room.
QM. Mr. Wright testified that under the tariffs the
Railroad Company had obligated itself to shippers to unload
a carload of freight through the warehouse. Who per-
forms that service at North Philadelphia for the Railroad
Company ?
A. The Railroad Company at North Philadelphia has
its own agency, and also an agency which is hired. The
Keystone Elevator and Warehouse Company are the ac-
credited agents for the handling of certain commodities
there, which are flour, grain, hay, and so on.
Q. In other words, the Keystone Elevator Company
performs this service for the Railroad Company ?
A. Yes, sir.
72a
Walter F. Sims
Q. Which the Railroad Company, under its tariffs, is
cbliged to perform?
A. That is right.
Q. Are you familiar with the tariff of elevator and
other charges filed by the Railroad Company at North
Philadelphia ?
A. Iam. I have one in front of me.
©. Before turning to that tariff I ask you what do
the books of the Elevator Company show as to the cost
of the operation of the Plaintiff Company during the period
khetween March tst, 1909, and May Ist, 1910.
A. They show that the plaintiff Company's cost to
operate was $36,935.69.
(. Do the books of the Plaintiff Company separate
the items of expense applicable to the various services per-
formed by it? For example. are they kept separate?
A. No; they are bulked.
Q. Soas to show elevation, storage, etcetera ?
A. No.
©. In what way are the accounts kept, and what do
they show ?
A. Sundries, coal, oil, rents, labor, salaries of the
president and superintendent.
(). Does this item of expense, therefore, of $36,935.09
include every item of expense which the Elevator Company
has incurred during the period in question ?
A. Every item of expense, as appearing on their
hooks.
Q. I will ask you to turn to this tariff. I direct your
attention to Tariff Item No. 1, namely, “Receiving, weigh-
ing and storing from cars, including first ten days’ storage
and delivery to cars or wagons.” Is that the service of
elevation which you have just describe: ?
Mr. Topp: I object to that. It is not for him to say
what the service was, or to construe the tariff. It is for him
to tell what the books show for the receipts. I object to
>_-_
73a '.
Walter F. Sims
”
‘
his putting any construction upon this tariff, or as to what
services were included in it. He is now testifying to what
the books show were the receipts.
Mr. Patterson: Let me put the question in another
way.
By Mr. PATTERSON :
Q. Was the service which is embodied in this item
in the tariff performed by the machinery and the em-
ployes of the Elevator Company ?
Mr. Topp: | object to that. He is called as a witness
to prove accounts. I object to his competency to testify
to that. He has not been qualified as an expert.
Mr. Patterson: We will take his figures first.
By Mr. PATTERSON :
©. What was the amount of the payment made by
the Railroad Company to the Elevator Company for the
performance of the services rendered by the Elevator Com-
pany during the period covered by this suit?
A. We have paid $28,420.19.
©. What amounts did the Elevator Company receive
from consignees for the elevation of non-treated grain
under Tariff Item No. 1?
Mr. Topp: Let me cross examine him on that.
By Mr. Topp:
©. Is there any account on the books of the Keystone
Elevator and Warehouse Company showing the facts which
the question of counsel is directed to? I want to know
whether there is an account. Do vou know whether there
is or not?
A. I will tell you in a minute, and not before that
minute. I have a record—
Mr. Topp: T object, and [ insist upon a categorical
answer to my question.
- oa seen e ee re , RA EN es,
Pe ae nat aie, al i el ee
74a
Walter F. Sims
Tue REFEREE: Answer the question yes or no, and
explain it afterwards.
A. There is a record of grain not treated at North
Philadelphia in the Elevator records.
By Mr. Topp:
©. I ask for a specific answer to my question. Is
there an account on the books of the Keystone Elevator
Company set apart for the purpose of determining whether
it has been treated or not treated ?
A. I will ask you a question.
Q. No. You will answer my questions and not ask
me anything.
A. I do not understand your question. I cannot
answer it until I understand you.
©. I will repeat it again. I ask you if there 1s any
book in the Keystone Elevator and Warehouse Company or
any account in any book in which the details appear of
non-treated grain ?
A. There is a book up at North Philadelphia—
Q. Called what?
A. It won't be called a book. It is a weigh-master’s
sheet, made by the weigh-master, which shows non-treated
grain.
Q. And your figures are calculations made by you
and deductions made by you from those sheets ?
A. Those sheets made by the Elevator people.
Mr. Topp: I object to that. I want the originals of
that kind of thing here.
By Mr. PATTERSON :
©. State what the books show.
Mr. Topp: As to what point?
Mr. Patterson: As to this last point.
Mr. Topp: I object to that.
75a
Walter F. Sims
By Mr. PATTERSON :
Q. I ask you if there is any account, and what :t
shows ?
A. There is an account.
3v Mr. Topp:
Q. The weigh-master’s sheet, from which you have
made a calculation?
A. From which I made a calculation.
sy Mr. PATTERSON:
Q. Suppose you answer the question, and perhaps the
Referee can determine it.
Mr. Topp: I reserve the right to strike it out, if it
shows to be a calculation.
The following question read:
“Q. What amounts did the Elevator Company receive
from consignees for the elevation of non-treated grain
under Tariff Item No. 1?"
A. $3,976.45.
By Mr. Topp:
. Is that the result of a calculation?
A. Why, twice one are two.
©. This was the result of a calculation ?
By Mr. PAtrerson :
Q. Can't you state what the books show ?
A. The books show that the initial elevation charges
of half a cent were $26,795.04. But the books also show
that on the half cent grain there were 5.359.008 total
bushels, and of that amount 4,563.718 bushels their books
76a
90
: Walter F. Sims
show as treated. That can be sub-divided into the total
bushels handled.
Mr. Topp: That is what I object to.
By THe REFEREE:
Q. You say that can be sub-divided ?
A. No. That is sub-divided.
Mr. Topp: By his calculation. That is what I want
to get at.
Tue Witness: No. By the books.
By Mr. Topp:
(. It is a calculation made by you upon the books,
is it not?
A. Isn't that the same thing?
Mr. Topp: No; It is not. That is just the point I
have been trying to get you to say.
By THe REFEREE:
(). What do the books show ?
A. I will tell you what the books show, then. The
hooks show that there were 5,359,co8 bushels of half cent
grain handled. The books also show that 4,563,718
bushels were treated.
By Mr. ' ATTERSON:
©. What do you mean by “treated” and “not
treated” in your answer to that question?
A. I presume “treated” means drying. I know of no
other analysis of “treated” than drying.
Q. Will you read into the record what these other
receipts of the Elevator Company were, as shown by the
hooks ?
A. The initial charges at one cent were Sotg.20.
ee eee Sees ee ~y eee
77a (i 4
Meeting
. Topp:
Q.
a
Where have you made that correction ?
A. If you will look over Mr. Fernley’s subsequent
analysis to you, you will find it is in there.
©. That was a correction made by you and Fernley,
was it?
A. That was a correction made by Mr. Fernley and
niyself.
(Witness withdrawn for the present. )
Adjourned until Thursday, June 12th, 1913, at 11
o'clock A. M.
Meeting held at the office of the Referee, G. Heide
Norris, Esq., Land Title Building, Broad and Chestnut
Streets, Philadelphia, on Wednesday, July oth, 1913, at 11
o'clock a. m.
l’resent :
G. Here Norris, Esg., Referee.
M. Hampton Topp, Esg., representing the Plaintiff.
(;EORGE S. PATTERSON, Eso.. and
Jounx Hampton Barnes, EsqQ., representing — the
Defendant.
Counsel representing the respective parties presented
to the Referee a signed stipulation under date of July oth,
1913, showing receipts and disbursements by the Keystone
levator & Warehouse Company as per the respective items
set forth in the stipulation, covering the period embraced
in this suit, as well as the receipts and expenditures of
Harvey C. Miller, trading as the Philadelphia Cleaner Com-
pany.
Mr. Todd, on behalf of the plaintiff, objects to the facts
set forth in this stipulation on the ground that they are
78a
Stipulation
not relevant to any issue that is now being tried before
the Referee.
(Objection overruled. )
(Exception noted for plaintiff, by direction of the
Referee. )
The stipulation is as follows:
STIPULATION
Anp Now, July 9th, 1913, it is stipulated between
the parties to this cause that the books of the plaintiff com-
pany show the following for the period between March 1st,
:g09, and April 30, 1g1o.
I. EXPENSES
FORO ae ree $5,012.68
TT ere ees 2,847.62
SO erated aires aia 3 din'o- ga A ew 8 177.89
DAE ee ee 7,872.50 i
RN ae ia ya's os co clie cis ae 17,975.00
NEURO sss sive eres cae is 3,050.00
CC rr rer rrr a
That during the same period of time the expenses of
the Cleaner Company were $3,169.00.
Il. RECEIPTS
ee EE ads ore ain Ke Osa ad whe pas awa 3,970.45
ee RO a ty a aaa gla oe aeas 2,300.55
ee A ORC Cua es Asih Dee Oo bens 8 6.335-3
wane, Ft sek a ate seins ee 508 See 22.14
Met ey tie eng eh yk wade lee Nek ey 22,818.59
ena Gad fe ekg ees Wk dad No 919.26
oreere FN RAE APES OCR OSS GLEE LE OSs
Sesame Ae SLR ES PP LERNER MOPS IL INE) EIEIO GTO TNT ME Ae ca Be
79a
Stipulation ;
Sub-letting leased property ..,..............- 415.00
Weighing on wagon scales .................4. 156.72
Steam heat sold to Railroad Co. ............. 1,605.88
Warehouse Storage ( Not elevater) .......... gig.80
CRarges at 446 per bushel ..............2.... 53-57
Received from wagons at '4¢ per bushel ..... 3.19
% 3 7 APG” ali ecidede ie hhigie $6.22
Transferring lading of car for Railroad Co. .. 5.00
eR era? Oe re ee 585.95
EPSP Eee eee ere rer er 7.05
ow ec Oe be ke okey hein e 2,119.40
ST 0 Pre iho s ead & ow a eb ela Bete ee eee 9.77
Re ce aE CSS ulh ins py Winiee & bah we 40.92
EON Ms wh ete 6 eae a IO 644 Race 1.25
NE IE ba Ls ne op swe eee ok b we KY 2,159.70
2 ak 5.) Re ere ae se eee S1t.14
ye wie ey ae ee ee ee 39.50
- oo eee hee eee ee ee eee 23.00
Eee ea ee ae 852.01
Eee ae ie god toe en wie rg ees $45,922.43
That during the same period of time the Elevator
Company paid Mr. Harvey C. Miller the sum of $35,060.08
for the right to use in said elevator certain patentea pro-
cesses for cleaning and otherwise treating grain, said pay-
ment being at the rate of 3-4¢ per bushel on all grain so
cleaned or treated.
M. Hampton Topp,
Atty. for Pltff.
Joun Hampton Barnes
Atty. for Defendant.
July 9, 1913.”
os MGA FOLGER LL FORM ayes ukg
80a
. Harvey C. Miller
Harvey C. Mitter, heretofore sworn, recalled, as
under cross examination, was examined and testified as fol-
lows:
By Mr. Parrerson:
Q. Will vou turn to Tariff Item No. 1. being, “Re-
ceiving, weighing and storing from cars, including first ten
days storage and delivery to cars or wagons.” Who per-
forms that service ?
Mr. Todd objects to this examination, on the ground
that it is irrelevant and immaterial.
(Objection overruled. )
(Exception noted for plaintiff. by direction of the
Referee. )
It is agreed by counsel for the respective parties that
the subsequent examination on this line is taken subject to
Mr. Todd’s objection, without renewing the objection from
time to time.
A. The Elevator Company.
Q. Is that service performed in whole or in part by
the machinery or employes of the Philadelphia Cleaner
Company ?
A. Largely by the Elevator Company.
(). Is it performed at all by the Cleaner Company ?
i
In some instances it may be.
Please look at this tariff again.
I know what vou mean. Technically the tariff
does not show it. | want to illustrate that: When the chief
a a
Y a in
grain inspector orders the grain to grade a certain grade
under that item, it is blown.
©. Please look at the Tariff Item No. 1. You are
talking about something entirely different.
A. It is not here. I am trying to give you the actuai
facts that happen with grain.
(). Under Tariff Item No. 1 the consignee of grain
is entitled to what service ?
81a
Harvey C. Miller
A. He is entitled to the service that you have just
read, and in addition he is entitled to a blow if the chiet
grain inspector so instructs.
(). Does the Tariff say so there?
A. No; the Tariff does not.
(). Then, you mean that service was being given to
the consignee which was not comprised in the Tariff?
A. Yes, sir. It is a custom, and has been for twenty
years to my personal knowledge, to do it.
©. You mean that the service is given there free?
A. Yes, sir.
(). Have you got a separate tariff item there which
covers the service of blowing ?
A. Yes, sir: after it is installed.
©. Item No. 2, being, “Storage each succeeding ten
days or fraction thereof.” Who performs that service ?
A. There is no service to he done there. That is
simply to hold the grain in the bins of the elevator.
Q. Is the space for the storage furnished by the
Elevator Company or by the Cleaner Company ?
A. By the Elevator Company.
©. Item No. 3, being “Blowing, screening or mixing
in store (additional).”” Is that service performed by the
levator Company or by the Cleaner Company, or by both?
A. By both companies.
©. What is the nature of the service performed by
each ?
A. The machinery of the Philadelphia Cleaner Com-
pany will do the blowing and cleaning, as well as the mix-
ing, and the Elevator Company has machinery, under cer-
tain conditions, to do the same thing.
©. Then, you mean that that tariff item, “Blowing,
screening or mixing in store (.Additional)’’ may represent
either service performed by the Cleaner Company or service
performed by the Elevator Company ?
A. Yes, sir.
" 62
speech aad ade knee war Ht
a
SPILL LILO IEPA
82a
Harvey C. Miller
By THe REFEREE:
©. What does the word *\dditional” mean there?
A. It means in addition to the half-cent a bushel.
\fter it is in storage.
By Mr. Patrerson :
©. Does it mean that it is a charge additional to the
half cent charge which is imposed for elevation ?
A. Yes, sir. If grain on the half cent charge is or-
dered on the elevator and the chief grain inspector says,
“Blow that,” it is blown, and no charge is made, because
it is done at that elevation. This would require another
elevation, to do this work, and that is why the charge 1s
made as it is.
©. Item No. 4, being, “Turning in Store (A\ddi-
tional). That is done entirely by the Elevator Company's
machinery, and the charge there is additional to the half
cent charge for elevation ?
A. Yes, sir. Unless it is ordered by the chief grain
inspector for the purpose of examining the grain, and then
there is no charge made. But when the consignee makes a
request, then this charge is imposed on him.
QO. Which charge?
A. This turning charge of a quarter of a cent.
Q. Item No. 5 being, “Drying No. 2 grade of any
kind of grain.” That service is performed by whom?
A. That service is done largely by the Philadelphia
(leaner Company.
QO. How much of the service or what part of the
service is performed by the Elevator Company ?
A. There is none of that performed by the Elevator
Company.
Q. The entire drying of No. 2 grain is performed
by the Cleaner Company ?
83a 2 6
Harvey C. Miller
A\. No; not the entire amount of it, I should say. A
portion is done by machinery belonging to the Railroad
Company.
(). You mean by that, leased to the Elevator Com-
pany ?
A Yes, sir.
(9. What portion is that?
A. I could not answer that right.
©. In Tariff Item No. 5, “Drying No. 2 grade of any
kind of grain,” the elevation which is involved there is per-
formed entirely by the Elevator Company, is it not?
A. Yes, sir. The elevation that is involved is per-
formed, certainly, by the Elevator Company.
A. And there is no separate and distinct charge for
elevation in addition to this half cent ?
A. No. There is no charge made for elevation.
©. Item No. 6, being, “Sacking, in lots of 1oco
bushels or over, including Transfer through Elevator, and
Blowing; but no Storage beyond 48 hours after completion
of service.” Who performs that service ?
A. That is performed partly by the Elevator Com-
pany and partly by the Cleaner Company.
©. What is the nature of the service performed by
the Cleaner Company ?
A. The blowing.
©. The entire balance of the service, including eleva-
tion. is performed by the Elevator Company ?
A. Excepting the screening. It is possible that some
vf the screening might be done by the Cleaner Company.
QM. Item No. 7 being, “Drying other than No. 2
grades, including Transfer through the Elevator, and Bag-
ging, 1f desired; but no storage bevond 48 hours after com-
pletion of service.” Who is that service performed by ?
A. By both companies, the Elevator Company and
the Cleaner Company
cosets MA PERLE AAI
foe LEO AO SS
84a
2 } Harvey C. Miller
() How much of the service is performed by the
Cleaner Company ?
A. The drying.
©. The balance of the service is performed by the
Elevator Company?
A Yes, sir.
. The same question with reference to Tariff Item
No. &, being. “Cooling, including Transfer through the
Elevator, and Bagging, if desired; but no storage beyond
forty-eight hours after completion of service :”
A. That is performed jointly by the Elevator Com-
pany and by the Cleaner Company.
©. Flow much of it is performed by the Cleaner
Company and how much by the Elevator Company ?
\. The cooling is performed by the Cleaner Com-
pany
). The balance is performed by the Elevator Com-
pany ?
A Yes, sir.
() ‘Turning back to Tariff Item No. 1, being, “Re-
ceiving, Weighing and Storing from Cars, Gaia first
10 days storage and Delivery to cars or wagons.” The
receiving from the cars is performed by whom, the Elevator
Company or the Cleaner Company ?
\. The Elevator Company.
©. And the weighing is performed by whom?
A. By the Elevator Company.
(). And the storing is performed by whom?
\. That is performed by the Elevator Company.
(>. And storage and delivery to cars or wagons?
\. That is performed by the Elevator Company.
Q. I think you testified before, but perhaps my recol-
lection is incorrect, that all grain which is handled throug!
the elevator has to be elevated from the cars?
A. Yes, sir.
QO. That is correct, is it not?
er ee ee
85a .
Harvey C. Miller
A. Yes, sir.
©. And the elevation service is one of the services
which the Railroad Compan employed the Elevator Com-
pany to perform ?
A. Yes, sir.
Q. Ido not think it appears very clearly on the record
is to what is the relation between the [Elevator Company
and the Cleaner Company. Does the Elevator Company
employ the Cleaner Company to perform certain services to
the Elevator Company, or does the Elevator Company use
the patented processes of the Cleaner Company and pay a
royalty ?
A. They use the patented process and pay a royalty,
and they furnish some of the men.
QO. Who furnishes some of the men?
A. The Cleaner Company.
QO. The furnishing of those men, the charge for that
is included under the royalty of three quarters of a cent
a bushel ?
A. Yes, sir.
QO. What would be the cost of the duplication of the
plant of the Cleaner Company ?
(Objected to by Mr. Todd. )
(Objection overruled. )
(Exception noted for plaintiff, by direction of the
Referee. )
A. I could not answer that without going i
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