Bynum v. Baggett Transportation Company

• Decision Date: 11 January 1956
• Docket Number: No. 15744.,15744.
• Citation: 228 F.2d 566
• Parties: Layman BYNUM, J. B. Johnson, E. A. Dillard, Irby Jackson, Leon C. Roe and Gwyn Crouse, Appellants, v. BAGGETT TRANSPORTATION COMPANY, Inc., Appellee.
• Court: U.S. Court of Appeals — Fifth Circuit

228 F.2d 566 (1956)

Layman BYNUM, J. B. Johnson, E. A. Dillard, Irby Jackson, Leon C. Roe and Gwyn Crouse, Appellants, v. BAGGETT TRANSPORTATION COMPANY, Inc., Appellee.

No. 15744.

United States Court of Appeals Fifth Circuit.

January 11, 1956.

COPYRIGHT MATERIAL OMITTED

Clifford J. Durr, D. N. Hamilton, Montgomery, Ala., for appellants.

James A. Simpson, Reid B. Barnes, Lange, Simpson, Robinson & Somerville, Birmingham, Ala., for appellee.

Before RIVES, JONES and BROWN, Circuit Judges.

BROWN, Circuit Judge.

Appellants, owner-lessors of motor trucks under an operating lease to appellee, Baggett Transportation Co., Inc., an interstate motor truck contract carrier, sought an accounting of their percentage share of the "earned revenue" or "revenue" fixed in the lease operating contract.¹

Obviously a proper action for accounting in both substance and procedure, involving hundreds of distinct shipments of countless commodities to and from numerous points, presenting thus the inevitable esoteric mysteries of application and interpretation of carrier tariffs, the court referred it all to a Master who heard extensive evidence and filed a detailed 115-page, analytical, well-organized report.²

The district court, on exceptions to the Master's report, sustained it in full, and, the testimony heard by the Master never having been transcribed and included as a part of the record, we must, in the very narrow review of a Master's Report, abide by his fact findings since there is no way to test them under the scrutiny of "clearly erroneous"³ and we reject the assertion that absence of the hearing record before the district court was a refusal by the Master to comply with the Rule⁴ or an abuse of the court's discretion in not requiring it.⁵

Our narrow inquiry is, therefore, to determine whether, as held⁶ by the district court, the Master's conclusions find adequate support and reason on the face of his report.⁷

The controversy, a factual one in the setting of the transportation business over the lawfulness of certain transportation charges and the inclusion of certain items in others, centered finally on five points: The lawfulness of (a) using Section 22 Quotations; (b) handling separate movements at lower rates under TS tied shipments or similar basis; and the inclusion of (c) dunnage charges, (d) 6% surcharge, and (e) stop-over charges.

The points were significant as rates charged shippers under (a), (b) if unlawful, and items (c), (d), (e) if not included in the accounting though collected from shippers, produced less revenue on which appellants' percentage would apply.

The (a), (b) category was of the greatest importance in volume of shipments and net dollars and, for our purposes, the operation was the same. These involved shipments for agencies of the United States Government, principally Army and Navy, under rates which were substantially less than the published minimum Contract rates on file with the Interstate Commerce Commission, 49 U.S.C.A. § 318. Shipments⁸ made under TS numbers were billed at actual weights rather than minimum weights under the tariffs, the Section 22 Quotations⁹ were preferential rates specifically agreed to with the Government, and in other cases shipments moved for the Army under rates specified in filed minimum schedules with the Navy.

The appellants contended that under the terms of the tariff classification separate, distinct shipments could not be tied together as one and to bill the shipper a lower rate in this way, even though it be the Government, was to violate the strict standard of the law requiring the filing and literal adherence to specified minimum rates and charges, 49 U.S.C.A. § 318. The Section 22 Quotations were, they contended, even worse, since Baggett as a Contract, not common, Motor Carrier, was ineligible to make Section 22 Quotations.¹⁰

They had to concede, and the findings clearly affirm, however, that these agencies of the United States Government had demanded (and which they could have obtained by the simple execution of contracts or the filing of amended minimum schedules) these favorable terms in the handling of these large, Korean defense shipments, and the General Accounting Office¹¹ had already obtained or demanded refunds and asserted credits against charges billed by Baggett in excess of these lower rates in sufficient typical shipments to reflect a settled pattern of administrative treatment in auditing all future items.

Their claim, therefore, was essentially that the truck lease-operating contract fixing compensation in terms of a percentage of transportation revenues gave them a special status to police all shipments and require absolute and literal compliance with effective published minimums. The consequence of this would be to force on Baggett the Hobson's choice of acquiescing, at its expense, in the construction put on complex tariff problems by owner-drivers claiming added compensation or commencing and maintaining slow, cumbersome, expensive and discouraging litigation¹² probably in the distant Court of Claims against one of its best customers.

We think both Master and district court were right in rejecting any such course for a carrier. Disposition between owner-lessor and carrier-lessee is not to be tested by that which the carrier might ultimately force a shipper to pay. The test is one of good faith, business judgment and honest practice in billing shippers for the rate which the carrier considers to be properly due and, where genuine controversy arises on the proper charge, in the resolution of such differences by honorable, practicable compromise and adjustment or litigation as the circumstances indicate to be a wise and prudent course. This is not to open up the evils of preferential favoritism between carrier and special customers which tariff legislation, 49 U.S.C.A. §§ 318, 322(a), forbids for the carrier remains amenable to all such sanctions, civil and criminal. And, between it and its owner-drivers, what it finally retains it must share. In this way, the carrier will comply with its public obligation and satisfy its private duties as well.

As the report reflects prudent, vigorous action by Baggett in asserting its position with agencies of the United States Government with no indication that it has gratuitously relinquished any right to higher rates which would have increased both its and the owner-lessor's revenues, appellants are, therefore, entitled to share only in the revenues finally collected and retained in that process.

On (e) stopover charges, appellants claimed that this added charge of $6.06 payable by the shipper to permit partial delivery en route was a part of earned revenues. The Master considered that it was not for transportation and disallowed it. Since this involved necessarily the nature of this charge and its status in the transportation world, we have, with no record before us, no basis for redetermination of it.

On the remaining items (c) and (d) the Master found that under the applicable tariff rules dunnage charges should not have been billed the shippers and the ex parte 6% surcharge increase in tariff rates, granted by the Interstate Commerce Commission to common carriers only, should not have been billed or collected by Baggett, a Contract carrier. Accordingly he ruled that, it being plain that Baggett could not retain these items where charged and collected, appellants were not entitled to a percentage of them and where their percentage had erroneously been credited to appellants, they should refund the amounts to Baggett. We agree in principle with this.

The result is that we accept the rulings on all of the points (a), (b), (c), (d), (e) and decline to undertake ourselves or order the district court to reexamine them. We think, however, that since this is an equitable action for accounting, we must be certain that appellants do receive their percentage share in any portion of the four items (a), (b), (c), (d) and all related accounting items which are finally retained by Baggett. It is asserted by Baggett that with respect to (a), (b) and similar Tariff, Schedule and Quotation application problems, it either has or will reimburse the United States Government or reduce the invoices not yet paid to those amounts which the Master has found to be due by the shipper for the transportation, and that similar reimbursements or reductions have or will be made on items (c), (d). These accounting adjustments with the Government may well take years to complete. Consequently, we remand the case to the district court for appropriate continued supervision to make certain that appellants do receive their share in all of such amounts ultimately collected and actually retained. Baggett insists that when completed, it will have received and retained only that which the Master fixed as the basis for the percentage share. If it does, it should be discharged; but what it retains, if more than this, it must share.

While, subject only to the post-remand supervision provided for herein, we approve all that the Master found, we are of the opinion that the district court erred in affirming, without more, that portion of the report by which a claim for a total of 97 shipments "supported by incomplete evidence" was, in effect, dismissed.

It is undisputed and both Master and court found, that there were many errors, mistakes, and discrepancies in the accounts¹³ and records kept by Baggett.

This being so, the lease contract obligations and the existence of patent inaccuracies made it a proper case for a full accounting. But in the face of this necessity, the action of Master and court indicates that each felt it was on the appellants to bring forth all of the details as to the amounts charged by Baggett to shippers, that shown as the basis for owner-lessor's percentage, and also facts indicating that such amounts were incorrect and what the correct amounts would be.

We think this was wrong. We decline...