Johnson Machine Works, Inc. v. Chicago, B. & QR Co.

• Decision Date: 16 January 1962
• Docket Number: No. 16736.,16736.
• Citation: 297 F.2d 793
• Parties: JOHNSON MACHINE WORKS, INC., Defendant-Appellant, v. CHICAGO, BURLINGTON AND QUINCY RAILROAD COMPANY, Plaintiff-Appellee, and Chicago and Northwestern Railway Company, Third Party Defendant-Appellee.
• Court: U.S. Court of Appeals — Eighth Circuit

297 F.2d 793 (1962)

JOHNSON MACHINE WORKS, INC., Defendant-Appellant, v. CHICAGO, BURLINGTON AND QUINCY RAILROAD COMPANY, Plaintiff-Appellee, and Chicago and Northwestern Railway Company, Third Party Defendant-Appellee.

No. 16736.

United States Court of Appeals Eighth Circuit.

January 16, 1962.

Albert V. Hass, Chariton, Iowa, made argument for the appellant and was on the brief.

J. C. Pryor, Burlington, Iowa, made argument for appellee, Chicago, Burlington & Quincy Railroad Co. Pryor, Riley, Jones & Walsh, Burlington, Iowa, were with him on the brief.

Ray Johnson, Jr., Des Moines, Iowa, made argument for third-party appellee, Chicago and Northwestern Railway Co. Davis, Huebner, Johnson, Burt & Fulton and also Frank W. Davis, Des Moines, Iowa, were with him on the brief.

Before VOGEL, VAN OOSTERHOUT and BLACKMUN, Circuit Judges.

VAN OOSTERHOUT, Circuit Judge.

Plaintiff, Chicago, Burlington and Quincy Railroad Company (Burlington), brought this action against defendant Johnson Machine Works, Inc., to recover $10,077.81 alleged to be the balance due for freight charges for carriage of 34 carloads of fabricated steel over its lines from Chariton, Iowa, to Council Bluffs, Iowa, and thence over the lines of the Chicago and Northwestern Railway Company (Northwestern) to Box Elder, South Dakota. Defendant denied plaintiff's right to recover the additional freight charges, claiming the bills of lading and tariffs constituting the carriage contract did not as a matter of law entitle plaintiff to such relief. Defendant also, by leave of court, filed a third-party complaint against Northwestern, claiming in event defendant is held liable to plaintiff for undercharges, Northwestern is liable to it for misrouting the shipment, since a route was available over which the freight could have been carried at the rate set out in the shipping papers and which amount had been paid by the defendant.

Jurisdiction is established by reason of diversity of citizenship and the jurisdictional amount.

At the close of the evidence the trial court sustained separate motions for directed verdict made by Burlington and Northwestern. Final judgment was entered awarding plaintiff damages against the defendant in the amount of the undercharges claimed. Defendant's third-party complaint against Northwestern was dismissed and this timely appeal followed.

Defendant insists the trial court erred in sustaining each of the motions for directed verdict and in entering judgment pursuant to the ruling upon such motions. We shall first consider the motion directing the verdict on plaintiff's claim.

The crucial question presented upon the appeal from the judgment entered in favor of the plaintiff is whether under the facts here presented the defendant as a shipper can be charged with designating the routing of his shipment. If so, it is clear that under §§ 15(8) and 15(9) of the Interstate Commerce Act (49 U.S.C.A. §§ 15(8) and 15(9)) the carrier is bound to follow the shipper's routing.

It is well-established when the shipper designates the routing, the rate set out in the published tariff covering such route is the only lawful charge that can properly be made. Deviation from such route is not permitted. The applicable law is thus stated in Louisville & Nashville R. R. v. Maxwell, 237 U.S. 94, 97, 35 S.Ct. 494, 495, 59 L.Ed. 853, as follows:

"Under the Interstate Commerce Act, the rate of the carrier duly filed is the only lawful charge. Deviation from it is not permitted upon any pretext. Shippers and travelers are charged with notice of it, and they as well as the carrier must abide by it, unless it is found by the Commission to be unreasonable. Ignorance or misquotation of rates is not an excuse for paying or charging either less or more than the rate filed."

The principle just stated was fully considered and applied by this court in Silent Sioux Corp. v. Chicago & Northwestern Ry., 8 Cir., 262 F.2d 474. Numerous supporting authorities are there cited and discussed.

Defendant concedes that if only misquotation of rates is here involved, it cannot prevail. Defendant urges that a misrouting question is here presented. The law as to misrouting is not briefed. However, it is conceded that a carrier is responsible for damages in misrouting. It appears to be established law that where a shipper gives no routing directions and several routes carrying different rates are available, it is ordinarily the duty of the carrier to use the route in which it participates which carries the lowest rate, and that a carrier is liable to a shipper in a case of misrouting for the difference between the higher rate charged and the rate applying over the less expensive routing. Northern Pacific Ry. v. Solum, 247 U.S. 477, 483, 38 S.Ct. 550, 62 L.Ed. 1221; Galveston, H. & S. A. Ry. v. Lykes Bros., (D.C.Tex.) 294 F. 968, 972.

We will at this point summarize the facts bearing upon the misrouting issue. Defendant, a steel fabricator at Chariton, Iowa, located upon the Burlington line, had a contract to furnish steel to Weitz Company, prime contractor on a Government project near Box Elder, South Dakota. Defendant obtained its required steel for such project from Pennsylvania points. The steel was shipped by rail in carload lots to Chariton, Iowa, on a transit basis and was there unloaded and fabricated, and was thereafter delivered to Burlington for shipment to Box Elder, South Dakota. The finished product was rather bulky, extending to a height of some fifteen feet, presenting some clearance problems. Defendant sought and obtained information as to routes and clearances from both the Northwestern and Burlington. It would appear that proper clearance was available both upon the routing specifically designated and the available route carrying the lesser transit rate hereinafter discussed.

Defendant delivered 34 carload shipments of fabricated steel to Burlington during the period from February 1, 1957, to June 3, 1957. Shipping orders signed by the defendant and reshipping memoranda and credit slips, which identified defendant's inbound freight bills covering the shipment of steel from Pennsylvania to Chariton together with the inbound bills of lading, which were surrendered for credit on the outbound shipment, were given to Burlington. These reshipment memoranda clearly indicated that the transit rate was claimed and the purpose of surrendering the inbound bills of lading was to obtain the transit rate.

The shipping orders each described the carload of fabricated steel and as to routes stated, "C. B. & Q. to Council Bluffs, Iowa — C. N. W." and designated Northwestern as delivering carrier at Box Elder, South Dakota. All such orders contained the word "transit". Exhibit 1, one of the shipping orders, sets out the weight of the carload of fabricated steel, the word "transit", and the following:

"Bureau #25 P&LE Aliquippa Pa WB

908

March 24, 1956.

Pro 35 April 13 1956 paid in 46360 at 91¢

* * * * * *

                  Class or       Check
                    Rate         Column
                    130
                     91
                     39           18275
                      4½         2109
                                  ______
                                  20384"
                

The "130" represents the transit rate from Aliquippa, Pa., to Box Elder, South Dakota of $1.30. The "91" represents the 91¢ rate paid at the time of the shipment from Aliquippa to Chariton, Iowa. The "39" and the extension "18275" represent the balance of the transit rate due at the time of the completion of the shipment, and the "4½" and the extension represent the charge for the stopover privilege at Chariton. Most of the other shipping orders contain similar data.

It appears from the exhibits received in evidence by stipulation that the total paid on the 34 carload shipments from Chariton, Iowa, to Box Elder, South Dakota, is $9,069.40, and that the rate fixed by the tariff for such shipment over the Burlington to Council Bluffs and from there to Box Elder on the Northwestern is in the aggregate amount of $19,147.26. Thus, if the rate urged by the plaintiff applies, a balance remains due of $10,077.81 after allowing credit for the payments made at the time of shipment. Judgment was entered for this amount and interest. It is stipulated:

"There was a route available from Chariton, Iowa via C. B. & Q., Albia, via M. & St. L. through Dillon, to Marshalltown; then via Chicago and Northwestern Railway Company to Box Elder, South Dakota, with tariffs applicable thereto at the time the shipments covered by the bills of lading, Plaintiff\'s Exhibit 1 through Plaintiff\'s Exhibit 34, inclusive, were made; that if the shipments represented by said bills of lading, Plaintiff\'s Exhibit 1 through Plaintiff\'s Exhibit 34, inclusive, had been so routed and carried, transit would have applied, and if the same tonnage had been surrendered by Johnson Machine Works, Inc., as appears in each bill of lading and the papers attached thereto, including the Reshipping Memorandum and Credit Slips, the charges appearing under the heading `Charges As Paid\' in the corrected freight bills attached to each bill of lading would have been correct."

Thus, if the tariff rate on the transit route described in the above stipulation, which the evidence shows was an available route, is used, the amount collected by plaintiff from the defendant and listed in the shipping papers at the time of reshipment from Chariton would have covered in full the transportation charges from Chariton to Box Elder on the 34 carloads of fabricated steel. Defendant has paid the plaintiff the freight due in the amount computed and shown on the shipping papers at the time of the shipment.

If the increased charges here claimed are due to misrouting by Burlington, it cannot recover for the increased rates due to its misrouting. It is defendant's contention that the additional charges claimed were due solely to misrouting of the shipment by Burlington.

It would appear that the routing was inserted in the shipping order by defendant. It fairly appears...