Louisville & Nashville Railroad Co. v. Knox Homes Corp.

• Decision Date: 01 April 1965
• Docket Number: No. 21507.,21507.
• Citation: 343 F.2d 887
• Court: U.S. Court of Appeals — Fifth Circuit
• Parties: LOUISVILLE & NASHVILLE RAILROAD COMPANY and Atlantic Coast Line Railroad Company, Lessees of the Georgia Railroad and Banking Company, Operating under the trade name of Georgia Railroad, Appellant, v. KNOX HOMES CORPORATION, Appellee.

343 F.2d 887 (1965)

LOUISVILLE & NASHVILLE RAILROAD COMPANY and Atlantic Coast Line Railroad Company, Lessees of the Georgia Railroad and Banking Company, Operating under the trade name of Georgia Railroad, Appellant, v. KNOX HOMES CORPORATION, Appellee.

No. 21507.

United States Court of Appeals Fifth Circuit.

April 1, 1965.

J. Walker Harper, Augusta, Ga., for appellant. Fulcher, Fulcher, Hagler & Harper, Augusta, Ga., of counsel.

John Bell Towill, Augusta, Ga., for appellee. Hull, Willingham, Towill & Norman, Augusta, Ga., Robert E. Knox, Thomson, Ga., of counsel.

Before BROWN and BELL, Circuit Judges, and SPEARS, District Judge.

JOHN R. BROWN, Circuit Judge.

Immediately involved here is the question whether the District Court properly directed a verdict for the Shipper¹ and against the Carrier² in the Carrier's claim for undercharges. The underlying issue is whether, under the applicable tariff, the Shipper was entitled to substitute carloads of Georgia-South Carolina lumber for the West Coast shipments of fir admittedly entitled to Transit privileges. Upon the completion of the Carrier's evidence before a jury whose presence seemed on all hands to have been a superfluous affectation, the Shipper moved for a directed verdict, and the Carrier followed suit, each party proceeding on the assumption that in the final analysis it was a question of law for the Court. The Trial Court granted the motion of the Shipper on two grounds. The first was on the construction of the Tariff. It seems to have run on a double track, either one of which was sufficient: (a) the tariff justified the Shipper's practice, or (b) if it did not, then the tariff was so ambiguous that the Shipper was entitled to the construction most favorable to it. The second ground was that the Carrier by identified Carrier records of waybills, freight bills, and the like had not sufficiently established the correct weight of the shipments involved to make out a prima facie case. We reverse the judgment in part and in effect render that portion for the Carrier. But as to the more troublesome question of tariff construction, we vacate the judgment and return that aspect to the District Court for initial determination by the Interstate Commerce Commission under the doctrine of primary jurisdiction.

The Transit Point is the Shipper's plant at Thomson, Georgia, situated on the Georgia Railroad. The initial inbound transit shipments came from the West Coast presumably under Transit Rates and billing for ultimate delivery to the Miami, Florida area. There is no question that the West Coast shipments fully qualified for the Transit Privileges if the lumber (or its products) after being held at the Transit Point had moved on to ultimate Destination Points. The problem arises, however, because the West Coast lumber did not move on. What the Shipper did was to substitute 119 cars of Georgia-South Carolina lumber. Of these shipments 107 cars moved via rail to Thomson, Georgia, from various points of origin,³ and the remaining 12 cars moved to Thomson from the mills⁴ by motor truck.

There is agreement that substitution is permitted. The dispute revolves around the tariff restrictions on substitution, what it is that makes a shipment eligible either as a substitute or to be substituted for, and the tariff consequences, rate adjustments, etc. to make a shipment partially eligible for Transit Privileges.⁵

Although, as a sort of reflex to the proposition that merely because Judges can understand the operation of a device does not necessarily establish lack of invention, Hughes Tool Co. v. Varel Mfg. Co., 5 Cir., 1964, 336 F.2d 61, 63, n. 8, citing, Florence-Mayo Nuway Co. v. Hardy, 4 Cir., 1948, 168 F.2d 778, 781, we run a considerable risk that simplicity may sacrifice accuracy, we think it aids such understanding as is within our competence to consider the tariff broadly in a general way apart from each of the particular, and frequently confusing, parts. As thus sublimated, the tariff⁶ provides substantially the following. Transit privileges⁷ which consist of the forwarding to a specified Transit Point of carload shipments of lumber and forest products (including veneer, plywood and built-up wood) for storage, dressing, resawing, drying, sorting, inspection or conversion into specified wood products, and the forwarding of carload shipments to a subsequent and farther destination will be permitted⁸ at the specified Transit Points⁹ for such lumber originating at the specified Origin Territory Points¹⁰ and reshipped to specified Destination Territory Points.¹¹ On shipments from Origin Points not within specified Origin Territory,¹² Transit may be granted on the basis of the local rate to the nearest Point within the specified Origin Territory plus the rate from such Transit Point to Destination.¹³ Although a movement into, and a subsequent movement out of, the Transit Point is required to permit these special rates,¹⁴ it is not necessary to preserve the identity of the lumber and substitution is permitted under the tariff rules.¹⁵ The tariff rules restrict substitution to lumber entitled to transit privileges.¹⁶

The Carrier's case is simple, even though the simplicity is beguiling. Almost as though it were operated by automatic block signals to open and close specific tariff subdivisions, the contention runs this way. Each of the shipments began at a place, such as Four Holes, South Carolina,¹⁷ which was not in Origin Territory.¹⁸ Consequently, such shipment was "not entitled to Transit privileges."¹⁹ That being so, the carload of lumber could not be substituted for a carload of West Coast lumber previously received by the Shipper at the Transit Point (Thomson, Georgia). However, the shipment is not perpetually banished beyond the pale of Transit Privilege eligibility. It may acquire at least limited eligibility if — but only if — an additional rate is paid as a combination of the local rate from the point of shipment to the nearest place on the route which is within the specified Origin Territory,²⁰ plus the rate authorized "from such transit origin" to destination.²¹ Indeed, the suit was for this difference between the through-transit rate as actually paid by the Shipper and the higher combination rate for the two short hauls required under Item 1(b).²²

But we do not think it is that simple. And, contrary to the importunities of the Shipper, "we must resist the temptation to take the ambiguity route as an easy and quicker way out"²³ — and for the Shipper the cheaper way out.²⁴

Especially is this true when the claim of ambiguity rests essentially on the dubious proposition that from the strange terminology used, the traditional, highly sectionalized structure of the tariff, the result, resembling a mixture of a section of the Internal Revenue Code and a patent claim, Thermo King Corp. v. White's Trucking Service, Inc., 5 Cir., 1961, 292 F.2d 668, 675 n. 9, is simply impossible to understand. It rests on the doubtful basis that that which is not crystal clear to the judicial mind must perforce be ambiguous. This claims too much for the law, and certainly for Judges as its votaries. It ignores, too, the law's traditional approach which requires, both for the ambiguous and the unambiguous writing, that one seeking to ascertain the meaning must place himself as near as possible in the position of the parties.²⁵ And the record in our case is way too sketchy both in testimony as to railroad practices and as to the provisions of the tariffs for us — as non-railroading Judges — to divine with safety what was really meant. We must steel ourselves against easy interpretations which make sense. For whether one particular interpretation "makes sense is beside the point." Rather, it "all depends on what kind of sense is being made — abstract, contractual interpretation sense, or transportation-railroading sense," Strickland Transp. Co. v. United States, 5 Cir., 1964, 334 F.2d 172, 178.

A brief consideration of the specific terminology of these tariff provisions will bear out these difficulties. Thus, the Carrier's interpretation necessarily reads Item 1(a)²⁶ into Item 35-C(c)²⁷ to determine what lumber is entitled to Transit Privileges. And yet Item 35-C(a) is expressly subject to Items 5, 30, and 90. Item 5 (note 7, supra) is the general definition of the term "Transit Privileges" as referred to in Item 35-C(c). Yet it contains no limitation of the kind set forth in Item 1(a). On the contrary, it is Item 1 which incorporates Item 5, not Item 5 which incorporates Item 1. Unless Item 1(a) is read into both Item 35-C(c) and Item 5, there is no basis for applying Item 1(b) as the Carrier contends. On the other hand, that is putting a high premium on literalness.

At the same time a pretty good argument can be marshalled for reading Item 5 alone. The important thing is the forwarding of a carload of lumber to a Transit Point for storage, processing, or the like, and the forwarding of the carload (or its vicarious substitute) to a subsequent and farther destination. It is the planned movement in, the momentary stay at, and the movement out of the Transit Point which justifies these more favorable transportation privileges. This approach makes it difficult to accept the proposition as conceded by the Carrier (see notes 14 and 22, supra) that had the lumber been discharged and used in Thomson, the lower rate as originally billed (and paid) would be applicable. Particularly is this so since the question at issue here is transportation costs into Thomson, not the absence of transportation charges for the movement out of Thomson onto Miami.

Other factors are pertinent. One certainly worthy of at least some preliminary inquiry is the significance, if any, of the addition of subparagraph (c) in Item 35-C (note 16, supra) in contrast to the more simple provision in the original tariff (see note 15, supra). This is not just the ordinary legal question of the extent to...