Gulf, M. & N. R. Co. v. Riverside Brick & Mfg. Co.

• Decision Date: 25 January 1926
• Docket Number: 25379
• Citation: 141 Miss. 505,107 So. 193
• Parties: GULF, M. & N. R. Co. v. RIVERSIDE BRICK & MFG. CO. [*]
• Court: Mississippi Supreme Court

107 So. 193

141 Miss. 505

GULF, M. & N. R. Co. v. RIVERSIDE BRICK & MFG. CO. ^[*]

No. 25379

Supreme Court of Mississippi

January 25, 1926

Division B

On Suggestion Of Error, February 22, 1926.

1 CARRIERS. Railroad company, making mistake in charge for shipment, may recover difference from shipper; railroad company, making mistake in charge for shipment, has option of suing either shipper or consignee, in absence of binding contract to contrary.

Where a shipper ships goods to a consignee over a railroad whose rates are fixed by a public body, and such rates are made obligatory upon the railroad, and a mistake is made in the rate charged for such shipments, and the shipment is delivered to the consignee before such mistake is discovered the carrier may recover the difference in the rate paid and that required to be paid from the shipper. In such case it has the option to sue either the shipper or consignee, unless it has made a binding contract to the contrary.

ON SUGGESTION OF ERROR.

2. CARRIERS. Ordinarily consignor is liable for freight charges but agreement that consignee will be looked to for payment is permissible. Although ordinarily consignor of goods has primary obligation to pay the freight charges, the parties may agree that the consignee will be looked to for payment of freight, and it is permissible to so contract.

APPEAL from circuit court of Forrest county, HON. R. S. HALL, Judge.

Action by the Gulf, Mobile & Northern Railroad Company against the Riverside Brick & Manufacturing Company. Judgment for defendant, and plaintiff appeals. Reversed and judgment rendered.

Reversed, and judgment here. Overruled.

T. C. Hannah and Jas. Simrall, Jr., for appellant.

There are only two questions presented by this record. The first is whether or not the terminal carrier of freight shipments can by law collect all the freight charges due on freight shipments delivered by it, including both the amounts due to it and the amounts it has paid to the carrier or carriers from whom it receives the shipment. We think to ask this question will be to answer it. Under our present transportation system, it is firmly settled, not only by law and by the decisions of the courts, but also by the course and conduct of business, that this right of the terminal carrier becomes a part of each and every contract of shipment of goods by freight. As authorities we cite: 4 Elliott on Railroads, page 593, sec. 2191; 4 R. C. L., page 900, sec. 355.

The only other question presented by this record is the right of the carrier to collect what are commonly known as "under-charges." This question naturally divides itself into two other questions. The first question is the right of the carrier to collect the under-charge at all, and the second one is the right of the carrier to collect the under-charge from the shipper of the goods. It is the general rule of law that the carriers are all bound to collect the regularly published and established charge fixed in its tariffs. This question has been presented to the supreme court of the United States in a number of cases, and the supreme court has uniformly held that, under the uniform rates provision of the Interstate Commerce Act, the carrier is bound to collect and the shipper or consignee of the freight is bound to pay the legal rate, and that no act, omission or contract of either the carrier, or the shipper or consignee can relieve any of them from this duty which the law imposes upon them. Kansas City Ry. Co. v. Carl, 227 U.S. 639, 57 L.Ed. 683. See, also, T. & P. Ry. Co. v. Mugg, 202 U.S. 242, 50 L.Ed. 1011; Lexington Compress & Oil Mill Co. v. Y. & M. V. R. R. Co., 131 Miss. 49, 95 So. 92; and So. Ry. Co. v. Buckeye Cotton Oil Co., 126 Miss. 562, 89 So. 228. We invite attention to sections 4842, 4843, 4848, Code of 1906 (sections 7627, 7628 and 7629, Hemingway's Code) which require all carriers to charge and collect the regularly published rates. As to the question of the right of the carrier to collect the under-charge from the shipper of the freight, see Coal & Coke Ry. Co. v. Buckhannan River Coal & Coke Co., 87 S.E. 376, L. R. A. 1917 A. 663.

T. J. Wills and A. A. Hearst, for appellee.

The only question is whether the delivering carrier, the Gulf, Mobile and Northern Railroad, under the facts, can maintain this action against the original shipper.

In the first place, there was never any contract on the part of the shipper, to pay the freight; and, on the other hand, there was an implied contract between the shipper and the initial carrier that the freight would be collected on delivery and this released the shipper from any liability if any had ever existed. Not only this, but the delivering carrier, recognizing its duty under contract, to collect the freight from the consignee, undertook and tried faithfully to perform this duty by having its agent at destination calculate the amount of freight, and the amount calculated by him was paid by the consignees. We insist that this was a full release of the shipper for all liability for the freight if, in fact, there had ever been any liability.

Both the statutes of the state and acts of the interstate commerce commission fix the rate to be charged and in no wise undertake to provide who shall be liable for same and the law in this respect is left entirely to the contract and conduct of the parties as any other matter is. Inasmuch, therefore, as it was contracted and agreed in this case, the freight should be collected from the consignees, the delivering carrier cannot now hold the original shipper for an under-charge and this is especially true since it is not shown in the record that any effort has been made to collect from the consignees. L. & N. R. Co. v. Central Iron & Coal Co., 44 S.Ct. 441, controls.

OPINION

ETHRIDGE, J.

The appellant brought suit against appellee for freight charges on certain shipments of brick from the plant of appellee to points on appellant's line of railroad. There was an error in the amount charged for freight on the said shipments, and suit was brought for the difference between the proper rate and the amount actually paid.

During 1921 the appellee shipped certain cars of brick from its plant to its customers at Lucedale and Richton, Miss. The appellant collected from the consignees what was supposed to be the freight rates according to the amount indicated on the waybill. Afterwards it was discovered that the rates were incorrect, and the appellant made demand on the shipper, the appellee, for the difference, which it refused to pay, contending that it was not liable, but that the consignees of said shipment should pay such rates. The case was tried upon an agreed statement of facts, in which it was admitted that the amounts demanded were correct as to the amount of proper charge, but it was not agreed as to who was liable. The appellant contended that the shipper was liable, while the appellee contended that the appellant should sue the consignees. The court below held in favor of the shipper, holding that it was not liable under the facts above stated, but that the appellant should have sued the consignees.

It is settled that, where errors are made in rates of freight that the company may and must demand of the shipper, the true rates properly fixed by the rate-making bodies--the interstate commerce commission in case of interstate rates and the state railroad commission in case of intrastate rates. See Kansas City Southern Railway Co. v. Carl, 227 U.S. 639, 33 S.Ct. 391, 57 L.Ed. 683; Texas & Pacific Railway Co. v. Mugg, 202 U.S. 242, 26...