Davis v. Timmonsville Oil Co.

• Decision Date: 21 December 1922
• Docket Number: 2054.
• Citation: 285 F. 470
• Parties: DAVIS, Director General of Railroads, v. TIMMONSVILLE OIL CO.
• Court: U.S. Court of Appeals — Fourth Circuit

285 F. 470

DAVIS, Director General of Railroads, v. TIMMONSVILLE OIL CO.

No. 2054.

United States Court of Appeals, Fourth Circuit.

December 21, 1922

F. L Willcox, of Florence, S.C. (S. M. Wetmore, of Florence, S.C on the brief), for plaintiff in error.

R. E Whiting, of Florence, S.C. (Whiting & Baker, of Florence S.C., on the brief), for defendant in error.

Before WOODS and WADDILL, Circuit Judges, and GRONER, District Judge.

GRONER District Judge.

This is an action at law, brought by the Director General of Railroads against the defendant, an oil company located in Timmonsville, S.C., for the recovery of demurrage charges, amounting to $2,890, on a number of cars of cotton seed oil delivered to, and accepted by, the oil company during the month of October, 1918. At the conclusion of the evidence the District Judge directed a verdict for the defendant, and entered judgment on the verdict thus rendered. So much of the facts as are necessary to an understanding of the case are as follows:

The plant of the oil company was located on a special delivery track, with room for three cars at one time. Just prior to the arrival of the cars in question its unloading conveyor was broken, making it impossible to unload shipments of cotton seed. It at once notified the railroad, and requested that an embargo be placed on all shipments of seed to its mill, until it was in a position to handle the same, and likewise gave notice to its regular customers to discontinue shipments until notified. In spite of these precautions, however, shipments of a number of cars were made, accepted by the railroad, and, before the broken conveyor could be repaired, were received at Timmonsville. The usual post card notice of arrival was given by the railroad to the oil company, and these notices, presumably, were received by it in the regular course of mail. There being no room on the siding adjoining the mill property for more than three cars, the others were held in Timmonsville, on the tracks of the railroad company, on demurrage from date of arrival. After the repairs to the conveyor, and the resumption of operations, the cars were delivered on the siding to the oil company, accepted, unloaded, and released.

In directing a verdict for the defendant, the District Judge said:

'Ordinarily a consignee, by accepting and converting to its own use a shipment, accepts and becomes responsible for these transportation and demurrage charges; and in this case ordinarily the defendant would have been responsible after the acceptance and conversion to its own purposes of these shipments for the transportation and demurrage charges thereon, and should have deducted the amount of these demurrage charges, at least, if not the transportation charges, according to the contract of purchase, from the proceeds of the cotton seed to be by the defendant paid to the original shipper; and ordinarily he would be presumed at law to have accepted the shipment with these burdens, and to have, out of the proceeds of the cotton seed, protected himself against these demurrage charges against the shipment.'

But he also held that the present case did not fall under the rule thus announced, because no demand was immediately made upon the defendant for the payment of demurrage charges, and that it, in good faith, having subsequently settled with its customers without deducting these charges from the purchase price of the cotton seed, and without knowledge that it would itself be called upon by the carrier to pay them, the Director General is estopped, by reason of his negligence in not having sooner demanded the charges, from now looking to defendant for payment. In so holding we think the District Judge was in error.

Demurrage charges are part and parcel of the transportation charges and are covered by the same rules of law. They are a part of the tariff, and must be collected from the shipper or the consignee of the freight to the same extent as the charge for carriage. A penalty is imposed on the carrier for failure to collect (Union Pacific Ry. v. Goodridge, 149 U.S. 690, 691, 13 Sup.Ct. 970, 37 L.Ed. 986); the purpose of the law being, of course, to secure absolute equality between shippers. The fact that the shipments in this case were unauthorized, and the further fact that the oil company did everything in its power to prevent such shipments, would not, in our opinion, have justified its declining to pay the demurrage charges, if it accepted and unloaded the cars. It had presented to it the alternative of declining to accept the cars-- in which event the railroad would have had a remedy by sale-- or, having accepted them, to deduct the demurrage at the time of its remittances to consignors. The fact that the carrier failed to make present demand for such payment...