National Trucking & Storage Co. v. Pennsylvania R. Co.

• Citation: 97 US App. DC 52,228 F.2d 23
• Decision Date: 29 September 1955
• Docket Number: No. 11989,12519.,11989
• Parties: NATIONAL TRUCKING & STORAGE COMPANY, Inc., Appellant, v. The PENNSYLVANIA RAILROAD COMPANY, Appellee. NATIONAL TRUCKING & STORAGE COMPANY, Inc., a Corporation, Appellant, v. The UNITED STATES of America, and The Pennsylvania Railroad Company, a Corporation, and The Interstate Commerce Commission, Appellees.
• Court: United States Courts of Appeals. United States Court of Appeals (District of Columbia)

97 US App. DC 52, 228 F.2d 23 (1955)

NATIONAL TRUCKING & STORAGE COMPANY, Inc., Appellant, v. The PENNSYLVANIA RAILROAD COMPANY, Appellee.

NATIONAL TRUCKING & STORAGE COMPANY, Inc., a Corporation, Appellant, v. The UNITED STATES of America, and The Pennsylvania Railroad Company, a Corporation, and The Interstate Commerce Commission, Appellees.

Nos. 11989, 12519.

United States Court of Appeals District of Columbia Circuit.

Argued May 20, 1955.

Decided September 29, 1955.

Mr. Malcolm D. Miller, Washington, D. C., for appellant in both cases.

Mr. William F. Zearfaus, Philadelphia, Pa., of the bar of the Supreme Court of Pennsylvania, pro hac vice, by special leave of Court, with whom Mr. Paul F. McArdle, Washington, D. C., was on the brief, for appellee Pennsylvania R. Co. in both cases.

Mr. C. H. Johns, Assistant General Counsel, Interstate Commerce Commission, with whom Mr. Edward M. Reidy, General Counsel, Interstate Commerce Commission, was on the brief, for appellee Interstate Commerce Commission in No. 12519.

Before FAHY, DANAHER and BASTIAN, Circuit Judges.

FAHY, Circuit Judge.

These two appeals were consolidated for hearing in this court. Although the litigation involved in No. 11989 was instituted earlier, our disposition of the cases makes consideration first of No. 12519 more logical.

I. In No. 12519 the National Trucking & Storage Company, Inc., appellant, usually referred to herein as the Trucking Company, filed suit in the District Court to set aside an order of the Interstate Commerce Commission.¹ The Commission's order had the effect of upholding demurrage charges against the Trucking Company made by the Pennsylvania Railroad Company, appellee, in the amount of $26,667.30, which charges the Trucking Company had attacked before the Commission as unjust, unreasonable, and inapplicable, and thus in violation of Sections 1 and 6 of the Interstate Commerce Act, 49 U.S.C. §§ 1, 6 (1952), 49 U.S.C.A. §§ 1, 6. Proceedings before the Commission resulted in its Reports of July 7, 1948, 270 I.C.C. 539, of February 23, 1950, 277 I.C.C. 109, and of October 23, 1951, 283 I.C.C. 395, and in Commission orders of October 23, 1951, id. at 400, and of July 21, 1952. These Reports and orders were in evidence in the District Court. The court in its findings, however, stated that all the evidence before the Commission was not before the court. It therefore assumed that the Commission findings were sustained by the evidence, an assumption not contested on this appeal. The questions for decision were whether the findings supported the Commission's conclusions, or error of law appeared. Holding that the computation of demurrage made by the Commission accorded with the applicable tariff and was not invalid, the court dismissed the Trucking Company's complaint. We shall affirm.

The Trucking Company has a warehouse in the District of Columbia with a capacity of from 200 to 250 carloads of merchandise. Six cars may be unloaded onto or through the warehouse at the same time. The demurrage charges allegedly accrued on about 600 cars held by or for appellant from October, 1945 through February, 1946. The Trucking Company and Railroad had entered into a "car-demurrage average" agreement which provided inter alia for the earning by the former of credits on cars released by it before the expiration of the first twenty-four hours after placement, and for the incurring of debits against it on cars held for specified days beyond a two-day "free time" period. Additional charges accrued for cars held beyond the debit days. The charges in dispute involved principally cars on "constructive placement." A car is considered constructively placed when actual delivery to the consignee cannot be made "on account of the inability of the consignee to receive it."² Demurrage time runs on a car constructively placed just as if it had been actually placed.

The Trucking Company's principal contention is that the Commission utilized a legally invalid formula for computing certain deductions from the demurrage charges. These deductions were required by Rule 8-E-1 of the Railroad's published demurrage tariff. That Rule provides that demurrage charges shall be cancelled or refunded for any detention of cars proximately caused by a Railroad error which prevents proper tender or delivery, and that in such event "demurrage will be charged on the basis of the amount that would have accrued but for such error. * * *" The Commission found that the Railroad made errors within the meaning of the Rule in switchings and "run-arounds." A "run-around" is the placing of a recently arrived car ahead of one previously arrived. The Trucking Company does not complain of the allowances made for "run-arounds," but rather directs its attack at the method the Commission used in computing the deductions under Rule 8-E-1 for switching errors. The Commission considered a switching error to occur within the meaning of the Rule whenever the Railroad failed to fill completely the Trucking Company's siding by 8 a. m., the time of the Railroad's regular morning traffic check, unless the Railroad subsequently switched cars into the vacant spaces and the Trucking Company unloaded those cars that same day. Where such errors had occurred, the Commission's formula generally allowed the Trucking Company a credit of one day's demurrage time on the percentage of cars then under constructive placement equal to the percentage of unfilled space on the siding. Thus, for example, if a switching error occurred with reference to 2 of the 6 places on the siding, one day's demurrage time would be allowed on one-third of the cars being held under constructive placement. If 12 cars were being so held, 4 days' demurrage time would be credited to the Trucking Company. The Commission made certain adjustments in the allowances due under this formula before computing the final amount of demurrage. These adjustments were favorable to the Trucking Company.³

The basic thrust of the Trucking Company's argument is that its own method of calculating deductions due to switching errors should be substituted for that chosen by the Commission. The Trucking Company's formula, called the "funnel system," was rejected by the Commission as unreasonable. Under it the placement and release dates of all cars arriving after a switching error are revised, the new dates being chosen upon the assumption that there was no error, and that had the cars whose arrival dates are accelerated really arrived on those earlier dates, they would have been unloaded in the same amount of time as was actually later consumed in unloading them. This formula differs radically from that chosen by the Commission in that in effect it gives the Trucking Company an allowance on cars arriving subsequent to an error until no backlog of cars constructively placed remains, while the Commission's formula restricts the allowance to the cars held on constructive placement at the time of the error. Thus, for example, if 18 cars are held under constructive placement on a day when only 5 of the 6 unloading spaces are filled, if no cars arrive for another 3 days, and if on each of those 3 days the siding is completely filled and unloaded, either formula would give an allowance of 3 days. Under the "funnel system," the placement and release dates would be revised so that there would be only 17 cars constructively placed the first day instead of 18, 11 the next day instead of 12, and 5 the final day instead of 6, for a total of 3 days' credit. And under the Commission's system, one-sixth of 18 would equal 3 days' allowance. But if, in the same example, an additional 6 cars were to arrive the second day, the Trucking Company's system would produce an allowance of 4 days. One day's credit would be given each day until the backlog was eliminated, which would take 4 days. Thus, the theory would be that on the second day, had not the error occurred, 23 cars would be constructively placed instead of 24, etc. The Commission's formula, on the other hand, would not take into account the subsequently arrived cars, and hence would again allow only 3 days' credit. Since there were a great many subsequent arrivals after Railroad switching errors occurred, this difference between the two formulas resulted in a great disparity between the sum found due by the Commission and that admitted to be due by the Trucking Company.

The main attack levied by the appellant against the Commission's adoption of the modified percentage formula rests upon the contention that this formula is an erroneous interpretation of Rule 8-E-1. The Trucking Company contends that its formula reflects much more accurately the demurrage "which would have accrued but for" Railroad errors. To buttress this argument, the appellant refers to the principle that, in interpreting a tariff, doubts should be resolved in favor of the shipper. It cites United States v. Interstate Commerce Commission, 91 U. S.App.D.C. 178, 186, 198 F.2d 958, 966, certiorari denied 344 U.S. 893, 73 S.Ct. 212, 97 L.Ed. 691. See, also, Atlantic Coast Line R. Co. v. Atlantic Bridge Co., 5 Cir., 57 F.2d 654; Raymond City Coal & Transportation Corp. v. New York Cent. R. Co., 6 Cir., 103 F.2d 56. The Trucking Company also asserts that the percentage formula cannot be utilized consistently with Rule 5-A-1; but this contention simply presents the Rule 8-E-1 argument under a slightly different light. Rule 5-A-1 provides that cars may be constructively placed when they cannot be delivered because of the inability of the consignee to receive them. The headnote to the Rule states that any time "for which the railroad is responsible" will not be charged against the consignee. The Trucking Company infers from this note that the consignee's inability to receive cars cannot give rise to constructive placements if that inability is due to the fault of the railroad. And the Trucking Company maintains that in this case the Railroad was...