Phoenix Insurance Company v. Monon Railroad

• Decision Date: 11 March 1971
• Docket Number: No. 20396.,20396.
• Citation: 438 F.2d 1403
• Parties: PHOENIX INSURANCE COMPANY, Appellee, v. MONON RAILROAD, Appellant.
• Court: U.S. Court of Appeals — Eighth Circuit

438 F.2d 1403 (1971)

PHOENIX INSURANCE COMPANY, Appellee, v. MONON RAILROAD, Appellant.

No. 20396.

United States Court of Appeals, Eighth Circuit.

March 11, 1971.

A. James Dickinson, Stringer, Donnelly, Allen & Sharood, St. Paul, Minn., for appellant.

H. A. Cousineau, Jr., Mordaunt, Walstad, Cousineau & McGuire, Minneapolis, Minn., for appellee.

Before GIBSON and BRIGHT, Circuit Judges, and McMANUS, Chief District Judge.

BRIGHT, Circuit Judge.

Plaintiff Phoenix Insurance Company (Phoenix) brought an action against the defendant Monon Railroad (Monon) for the loss of 165 cases of liquor which disappeared from a trailer-load shipment originating with the Calvert Distillers Company in Louisville, Kentucky, and destined for Old Peoria Company, Inc. (Old Peoria) in Minneapolis, Minnesota. Plaintiff Phoenix, Old Peoria's insurer, paid for the latter's loss and brought this action as its subrogee. The district court, Judge Larson, held the railroad responsible for the value of the lost merchandise. Monon appeals from the judgment entered against it. We affirm.

Monon operates its rail lines between Louisville and Chicago, Illinois. It contends that there is no proof that the loss occurred on its line and that it bears no responsibility beyond its Chicago terminal. As part of its defense, Monon asserts that it did not furnish rail transportation as an initiating carrier on a through bill of lading to Minneapolis.

The transportation in the instant case commenced at Calvert's distillery in Louisville, Kentucky. There, the shipper loaded 949 cases of its liquor into a trailer unit furnished by Monon and carried by Monon's contract draymen from the distillery to its railroad yards in Louisville. At that point, the defendant railroad placed the loaded trailer, piggyback style, on a flatcar. After sealing the trailer, Monon provided rail transportation for the cargo from Louisville to Monon's Chicago rail yards, which are located at Hammond, Indiana. Monon then removed the trailer from the flatcar, and following instructions from the consignee's representative, provided motor freight transportation of this trailer to the Milwaukee Road¹ at the latter's Chicago rail yards, located in Bensonville, Illinois. The Milwaukee Road furnished further railway transportation to Minneapolis. At this point, Old Peoria, as consignee, accepted delivery of the trailer. Upon opening the unit, the consignee discovered the shortage, although the original seals placed on the trailer by Monon remained intact when delivered to Old Peoria.

The bill of lading executed by Monon, in addition to describing the trailer and its contents and showing Calvert Distillers as shipper, bore the words:

Consigned to OLD PEORIA COMPANY INCORPORATED 701 STINSON BOULEVARD Destination MINNEAPOLIS State MINN

After the legend "Route", the face of the bill bore a typewritten notation: "MONON — PLAN 2 — CHICAGO C/O ITOFCA." The designation "ITOFCA" refers to Illinois Trailer on Flat Car Association, a non-profit shippers association which directs and coordinates trailer shipments by rail transportation so as to achieve savings in freight costs. The Milwaukee Road issued ITOFCA a separate bill of lading to cover the terms of transportation between Chicago and Minneapolis. ITOFCA, on separate bills, paid separate rail charges to each of the two carriers.

The crucial question in this case is whether Monon issued a through bill of lading, that is, one providing for transportation from Louisville to the consignee's destination at Minneapolis. If so, Monon, as the initiating carrier, is liable for the loss sustained anywhere en route pursuant to the provisions of the Carmack Amendment, 49 U.S.C. § 20(11).²

In support of its contention that the transportation between Louisville and Minneapolis was not on a through bill, Monon refers to the following facts: (1) the Milwaukee Road issued a separate bill of lading to ITOFCA covering a different category of service which it agreed to provide between Chicago and Minneapolis; (2) each carrier separately billed ITOFCA for the service provided; (3) the initial transportation consisting of two trailers placed on one flatcar at Louisville was broken at Chicago; (4) Monon provided Plan 2 piggyback service, which represents door-to-door services furnished by the carrier, including trucking and rail transportation, but the Milwaukee Road furnished a different plan, ramp-to-ramp only, under Plan 3;³ and (5) under through service, Monon would provide continuous rail movement over its lines or those of connecting carriers between Louisville and Minneapolis.

The district court deemed these circumstances to be immaterial in the light of the precise terms of the bill of lading, entitled "STRAIGHT BILL OF LADING", consigning the shipment to Old Peoria at Minneapolis, Minnesota. In an unreported opinion, Judge Larson commented on these contentions as follows:

Plaintiff\'s exhibit No. 2, the original bill of lading, manifests on its face that the destination of the shipment, initially transported by Monon, is Minneapolis. Because Monon does not have tracks to the Twin Cities there was no other alternative than for Monon to relinquish carriage of the trailer in Chicago. It would seem to this Court that a bill of lading with the ultimate destination noted on it, pursuant to which the cargo traveled, is a through bill within the meaning of 49 U.S.C. § 20 par. (11), regardless of the routing employed.

We agree with the district court's analysis on this issue. Although ITOFCA represents only shippers, the notation in Monon's bill of lading made it clear to the carrier that ITOFCA would provide rerouting and consolidation services on behalf of the shipper. The railroads in the instant case provided one continuous shipment from origin to destination, although utilizing truck transportation pursuant to ITOFCA's instructions in the Chicago area....