Galveston, H. & S.A. Ry. Co. v. Lykes Bros.

• Citation: 294 F. 968
• Decision Date: 24 August 1923
• Docket Number: 615.
• Parties: GALVESTON, H. & S.A. Ry. CO. v. LYKES BROS.
• Court: U.S. District Court — Southern District of Texas

294 F. 968

GALVESTON, H. & S.A. Ry. CO. v. LYKES BROS.

No. 615.

United States District Court, S.D. Texas, Galveston Division.

August 24, 1923

W. T Armstrong and W. E. Cranford, both of Galveston, Tex., for plaintiff.

Maco Stewart, of Galveston, Tex., A. J. De Lange, of Houston Tex., and Brantly Harris, of Galveston, Tex., for defendants.

HUTCHESON District Judge.

This is a suit brought by plaintiff, the delivering carrier, to recover from Lykes Bros., a partnership doing business in Texas, certain moneys claimed by the plaintiff to be due on account of a shipment of freight originating at Kissimee Fla., a point on the Atlantic Coast Line Railway. The case is submitted on an agreed statement of facts, the substantial matters in which are:

Lykes Bros., a corporation of the state of Florida, applied to the Atlantic Coast Line for a rate on cattle from Kissimee, Fla to New Orleans, La., and were advised that the rate was $112 per car. At that time, to wit, June, 1914, there was no through rate in force from Kissimee to New Orleans, and the quoted rate of $112 was arrived at by the application of a combination of the class rates in force on the Atlantic Coast Line for distances between 550 and 560 miles. (The distance from Kissimee to Montgomery, Ala., was 555 miles.) A rate of $56, and the lawful established rate on cattle per car from Montgomery, Ala., to New Orleans was $56.

At that time, however, there had been adopted and were in force commodity rates per car of cattle as follows: Kissimee to Jacksonville, $31; Jacksonville to Montgomery, $66.60-- all over the Atlantic Coast Line; and from Montgomery to New Orleans, over the Louisville & Nashville, $56. There were also in force in June, 1914, the following lawful rates over the following routes: Kissimee to Jacksonville, over the Atlantic Coast Line, $31; Jacksonville, over the Atlantic Coast Line and Central Georgia, to Macon, $29.50; Macon to New Orleans, $62.

The question of what route the cattle should move over was not discussed between the carrier and the shipper. The bill of lading did not designate the route, but merely recited:

'Received by the A.C.L.R.R. Co. of Lykes Bros., Inc., 564 head of cattle. Consignee, Lykes Bros. Destination, La Porte, Texas,'

-- together with the other usual stipulations in such bills. The cattle were actually carried by the Atlantic Coast Line from Kissimee to Montgomery, Ala., where they were unloaded and watered, and thereafter were delivered to the Louisville & Nashville Railroad, which transported them to New Orleans.

If the shipment had been routed by Macon, the Atlantic Coast Line would have gotten a shorter haul and a less proportion of the freight than if the shipment had been sent by Montgomery. Lykes Bros., in disposing and selling their cattle thus shipped, made their sale price based on the quoted rate of $112 per car to New Orleans. If Lykes Bros. had known that the route over which the cattle actually moved took a higher rate than the route by Macon, they would have instructed the routing of the shipment by Macon, which was a reasonable, convenient, and available route.

When the shipment was delivered to La Porte, the delivering carrier, plaintiff in this cause, demanded and collected $189.24 per car, made up as follows:

From Kissimee, Fla., to New Orleans . . . $128

New Oreleans to La Porte . . . $52

Freed at Montgomery . . . $4

Feed at New Orleans . . . $5

Thereafter Lykes Bros. made a claim for refund on the basis of the quoted rate from Kissimee to New Orleans, and after long drawn out negotiations, in the course of which the divisional freight agent of the Atlantic Coast Line on September 4 1915, wrote Lykes Bros.:

'The present rate on cattle from the point named in your letter, from Kissimee to New Orleans, is $112.'

Plaintiff on April 7, 1916, made a refund to Lykes Bros. on the basis of $112 from Kissimee to New Orleans; the refund basis, however, adjusting the claim from New Orleans to La Porte to $57, which was the proper charge, and about which in this case there is no dispute.

This suit is brought by plaintiff on the claim that, after it had made the refund, it discovered that the refund was made in error, and instead of $128.24, the original basis figured from Kissimee to New Orleans, or $112, the basis on which the refund was made, the true rate which it should have collected and charged was $155.60, and they seek to recover the difference between $112, which defendants have paid, and $155.60 per car, on 15 cars composing the shipment. The original petition was filed June 13, 1918; the first amended petition, June 19, 1918; and its second amended petition June 15, 1920.

The defendants resist the plaintiff's claim on the grounds: (1) That the true rate applicable is $112, the basis of the refund.

(2) That if this was not the true rate, under the circumstances of this case, where the Atlantic Coast Line originally quoted that rate, and upon the exaction of more thereafter voluntarily made a settlement on the basis of that rate, the delivering carrier is now without authority to go back of the settlement and recover more.

(3) They make, but rather feebly, the contention that there is no privity between the delivering carrier and the defendants, so as to enable them to maintain this suit.

(4) They assert that, if plaintiff can recover at all, it is on the basis, not of $155.60 per car, but upon the basis of $122.50, the rate over the Macon route; and

(5) They invoke the statutes of limitations of two and four years, asserting (1) that the suit of plaintiff is not upon a written contract, and therefore is barred in two years, and (2) that, if upon a written contract, the amended pleadings filed June 15, 1920, set up a new and different cause of action from that asserted in the original petition, and therefore the cause of action now asserted is barred, even under the four-year statute.

Taking up these contentions in their order, it must be admitted that the lawful charge on any shipment is the tariff rate via the route over which the shipment moves, and that the full tariff rate is the only rate which the carrier may lawfully receive, or the person liable properly pay, and this no matter what the circumstance of the particular case. Pittsburgh v. Fink, 250 U.S. 577, 40 Sup.Ct. 27, 63 L.Ed. 1151; N.Y.C. & H.R.R. v. York, 256 U.S. 406, 41 Sup.Ct. 509, 65 L.Ed. 1016; T. & P.R.R. v. Mugg, 202 U.S. 247, 26 Sup.Ct. 628, 50 L.Ed. 1011; L. & N.R. Co. v. Maxwell, 237 U.S. 94, 35 Sup.Ct. 494, 59 L.Ed. 853, L.R.A. 1915E, 665. Unless the circumstances involve a positive act of bad faith or neglect on the part of the carrier, the recognition for the responsibility for which will do exact justice in the case, without affecting the general binding obligation upon both the carrier and the shipper to observe the lawful tariff. St. Louis S.W. Ry. Co. v. Spring River Co., 236 U.S. 718, 35 Sup.Ct. 456, 59 L.Ed. 805.

Under the admitted facts in this case, the only lawful commodity rates in force via the route actually taken by the shipment was $155.60, and it is a matter too well settled by the rules of the Commission, affirmed by the courts, that where a commodity rate is made in the tariff such commodity rate is the lawful rate and the only rate that can be used; the class rates are by it superseded.

It follows, then, that the first contention of the defendant, that the lawful rate was $112, must be overruled.

To its second contention, that by the settlement the carrier had precluded itself from insisting on the payment of the true rate, the slightest reflection on the point will serve to show the incorrectness of this position, for, if the first contention has been answered correctly, that the only lawful rate which the carrier can charge and the shipper can pay is the lawful published tariff, it follows inevitably, under the same authorities, that the carrier and shipper cannot do indirectly by settlement what they cannot do directly by agreement, and the second contention of the defendant must also be rejected.

The third contention of want of privity is disposed of adversely to defendant by the authorities already cited, and to which may be added U.P.R.R. v. American Smelting & Refining Co., 202 F. 722, 121 C.C.A. 182; the authorities all declaring that the obligation of the consignee to pay the freight springs out of and is grounded validly on his receipt of the goods and the surrender of the railroad's possession and lien involved in the act of delivery.

With the fourth contention of the defendant I agree. It must, of course, be conceded, as plaintiff contends, that mere suits for reparation on account of unlawful exactions, through unreasonable tariffs or claims of discrimination, are triable and adjudicable by the Interstate Commerce Commission alone. T. & P.R. Co. v. Abilene, 204 U.S. 426, 27 Sup.Ct. 350, 51 L.Ed. 553, 9 Ann.Cas. 1075; Robinson v. B. & O. Ry. Co., 222 U.S. 506, 32 Sup.Ct. 114, 56 L.Ed. 288.

But here is not a case of the mere assertion of a reparation claim. Here is a case in which a carrier, having made a settlement in good faith (for this is the agreement of the stipulation), now seeks to recover from the shipper, not the rate which the shipper ought in justice to have been charged had the originating carrier acted in accordance with its obligation to the shipper, but a rate which under the circumstances is extortionate and unreasonable, through a practice so unjust and so contrary to the spirit and purpose of the Commercial Act (Comp. St. Sec. 8563 et seq.), that the Interstate Commerce Commission has by general order waived the ordinary rules requiring such...