Albion Elevator Co. v. Chicago & N.W. Transp. Co.

• Decision Date: 25 May 1977
• Docket Number: No. 58020,58020
• Parties: ALBION ELEVATOR CO. et al., Appellants, v. CHICAGO AND NORTH WESTERN TRANSPORTATION COMPANY, Appellee.
• Court: Iowa Supreme Court

Page 6

254 N.W.2d 6

ALBION ELEVATOR CO. et al., Appellants, v. CHICAGO AND NORTH WESTERN TRANSPORTATION COMPANY, Appellee.

No. 58020.

Supreme Court of Iowa.

May 25, 1977.

Thoma, Schoenthal, Davis, Hockenberg & Wine, Des Moines, for appellants.

Gamble, Riepe, Burt, Webster & Fletcher, Des Moines, for appellee.

Heard before MOORE, C. J., and MASON, UHLENHOPP, HARRIS, and McCORMICK, JJ.

MASON, Justice.

On July 6, 1972, sixty grain dealers commenced an action in the Polk District Court against Chicago and North Western Transportation Company, a common carrier of grain, seeking to recover damages for grain lost between various points of departure and destination. Plaintiffs and defendant moved for summary judgment on one of the three theories of recovery asserted in the petition and the district court sustained defendant's motion. Plaintiffs appeal from that ruling and the judgment entered pursuant thereto.

In conjunction with their respective motions for summary judgment, the parties entered into a stipulation setting forth the relevant facts surrounding the controversy. It provides in pertinent part the following:

" * * *

"7. At all times material hereto, defendant and its predecessor in interest (Chicago and North Western Railway Company) have had on file with the Interstate Commerce Commission in the District of Columbia the tariffs, rates and classifications required by the provisions of 49 U.S.C.A. § 6.

" * * *

"9. The issues to be decided in the pending action at the present time are governed by the provisions of the Interstate Commerce Act, 49 U.S.C.A. §§ 1, et seq., particularly the provisions of 49 U.S.C.A. § 20(1) and the provisions of 49 U.S.C.A. §§ 2, 3(1) and 41.

"10. For the purpose of resolution of the issues to be decided in the pending action at the present time, plaintiffs and defendant stipulate and agree as follows with respect to each shipment at issue herein:

" * * *

"b. Each shipment was tendered by one of plaintiffs to defendant for transportation in interstate commerce with freight charges collect at destination.

" * * *

"g. The destination weight for each shipment was less than the origin weight.

"h. Freight charges for each shipment were paid by the consignee thereof.

"i. Freight charges * * * were paid * * *, at the election of the consignee, on the basis of freight rates applicable to minimum weights rather than freight rates applicable to actual destination weights.

"j. Freight charges * * * are the same for both the minimum weight and all weights below the minimum weight.

"k. The consignee * * * charged the consignor * * * a minimum weight penalty computed by subtracting the gross destination weight from the minimum weight and multiplying the difference by the freight rate applicable to the minimum weight.

"l. Plaintiffs, by their agent, filed a timely claim in writing with defendant for each shipment.

"m. The claim for each shipment contained both a claim for the value of grain allegedly lost and a claim for a minimum weight penalty.

" * * *

"q. The claim for the minimum weight penalty * * * was computed by subtracting the gross destination weight from either the origin weight or the minimum weight, whichever was less, and multiplying the difference by the freight rate applicable to the minimum weight.

"r. Defendant has paid, in whole or in part, the claim for the value of grain allegedly lost for each shipment.

"s. Defendant has timely declined in writing the claim for a minimum weight penalty for each shipment." (Emphasis in original).

The stipulation went on to set forth the factual situation surrounding one of plaintiffs' claims as representative of the group's claims. That example provided in part as follows:

"a. On March 16, 1972, plaintiff, L. H. Grain Company, as consignor, tendered to defendant's predecessor in interest * * *, a carload of soybeans * * *.

"b. The contract for sale of the soybeans between L. H. Grain Company, as consignor, and Continental Grain Company, as consignee, provided that it was the duty of L. H. Grain Company, * * *, to deliver 120,000 pounds of soybeans to Continental * * *, and to assume any loss resulting from noncompliance.

"c. The origin weight * * * was 120,000 pounds.

" * * *

"e. The destination weight * * * was 117,640 pounds.

"f. The minimum weight applicable to the shipment was 120,000 pounds. * * *

"g. The freight rate applicable to the minimum weight was $0.476625 per one hundred pounds. * * *

"h. The freight charges applicable under the minimum weight tariff were $571.95 (120,000 X $0.476625).

"i. The freight charges applicable under the minimum weight tariff were the same based on either a destination weight of 120,000 pounds or a destination weight of 117,640 pounds.

" * * *

"k. The freight charges applicable under the actual destination weight tariff would have been $964.65. (117,640 X $0.82).

"l. Continental Grain Company, * * *, elected to pay freight charges based on the minimum weight tariff applicable to 120,000 pounds.

"m. Continental Grain Company, * * *, charged and collected from L. H. Grain Company, * * *, a minimum weight penalty of $10.97 computed by deducting the gross destination weight of 117,640 pounds from the minimum weight of 120,000 pounds and multiplying the difference (2,360 pounds) by the freight rate applicable to the minimum weight ($0.4650). (The consignee did not add the 2.5% surcharge * * * ) "n. On May 11, 1972, L. H. Grain Company, * * *, by its agent, * * *, filed a timely claim in writing with defendant.

"o. The claim contained a claim for $120.99 for the value of the soybeans allegedly lost and a claim for $10.97 for a minimum weight penalty.

" * * *

"r. On May 26, 1972, defendant timely declined in writing the claim for a minimum weight penalty.

"s. On June 9, 1972, defendant paid * * * (L. H. Grain's agent) $120.99."

The basic contentions of the parties were set forth in the stipulation as follows:

"12. For the purpose of resolution of the issues to be decided in the pending action at the present time, plaintiffs contend that the minimum weight penalty is a proper element of damages permitted under the provisions of 49 U.S.C.A. § 20(11). Defendant denies such contention.

"13. For the purpose of resolution of the issues * * *, defendant contends that the minimum weight penalty is a rebate of freight charges prohibited under the provisions of 49 U.S.C.A. §§ 2, 3(1) and 41. Plaintiffs deny such contention."

December 19, 1974, the district court granted defendant's motion for summary judgment and in so ruling concluded as follows:

"It is unlawful for a common carrier in interstate commerce to, directly or indirectly, by rebate or other device, collect or receive a less compensation for service rendered in transportation than it charges other persons for like service (49 U.S.C.A. sec. 2). In addition, the Elkins Act enjoins that a carrier strictly observe its tariffs, and makes it unlawful for any shipper or consignee to solicit or receive any rebate or other concession whereby property is transported at a less rate than that published in the carrier's tariffs (49 U.S.C.A. sec. 41).

"It will be seen from the foregoing that L. H. Grain Co. has been 'made whole' by defendant insofar as the actual disappearance of 2,360 pounds of soybeans is concerned. L. H. Grain Co.'s being charged a so-called 'minimum weight penalty' of $10.97 by Continental Grain Company is the result of a contractual arrangement whereby L. H. Grain Co. assumes a theoretical charge if Continental is not able to receive the maximum possible benefit, i. e., transportation of the maximum weight possible, from the minimum weight rate tariff provisions.

"If defendant would recognize and pay L. H. Grain Co.'s claims for the so-called 'minimum weight penalty' in the amount of $10.97, defendant would have transported 117,640 pounds of soybeans * * *, for a freight charge of $560.98, whereas the minimum lawful tariff charge for such transportation was $571.95. The Court is of the opinion that such would constitute a rebate and be unlawful."

January 17, 1975, the district court entered judgment for defendant, overruled plaintiffs' motion for summary judgment and dismissed the petition.

A summary of the pertinent stipulated facts gleaned from the statement of the case set forth in plaintiffs' brief may be helpful, particularly in view of the fact defendant makes no complaint of the statement.

The published tariff with respect to grain shipments which defendant must follow by law establishes certain freight rates applicable to minimum weights for the carriage of grain between two specific points. The minimum weight for soybeans as established by tariff is 120,000 pounds. The freight rate applicable to this minimum weight is .476625 per one hundred pounds and since the freight rate is based on the minimum weight rather than the actual destination weight, the railroad consistently collects a full charge of $571.95 (120,000 pounds X .476625 per one hundred pounds) regardless of the actual destination weight.

In the particular claim presented for illustration in the stipulated facts the consignor loaded 120,000 pounds but only 117,640 pounds were delivered by the carrier. Irrespective of this shortage the railroad collected the same freight charge ($571.95) on 117,640 pounds of soybeans as it would have received on 120,000 pounds of soybeans if that amount had been delivered.

The contractual relationship between the grain elevators (consignors) and the grain buyers (consignees) provides the contract purchase price of the grain is determined on the price or value of the grain at the shipping point and not at the destination point. Freight charges are to be paid by the consignee, collected at destination. The contract also requires the consignors to load and deliver minimum weights. The consignors agreed to assume any loss resulting from failure to deliver minimum weights of grain.

The...