Kanotex Refining Co. v. Atchison, T. & S.F. Ry. Co.

• Decision Date: 08 June 1935
• Docket Number: 32330.
• Citation: 142 Kan. 139,46 P.2d 16
• Parties: KANOTEX REFINING CO. v. ATCHISON, T. & S. F. RY. CO.
• Court: Kansas Supreme Court

46 P.2d 16

142 Kan. 139

KANOTEX REFINING CO. v. ATCHISON, T. & S. F. RY. CO.

No. 32330.

Supreme Court of Kansas

June 8, 1935

Syllabus by the Court.

Where carrier agreed with shipper to "immediately" file lower rate, shipper commencing shipments two days after agreement was chargeable with notice of fact that carrier had not had time to file new schedule and that, unless notice was waived, new rate could not be established in less than 30 days (Interstate Commerce Act, 49 USCA § 1 et seq.).

"Immediately" does not mean instantly, but without delay.

Legal rights existing between shipper and carrier as to rates on interstate shipments are controlled by rates published and on file with Interstate Commerce Commission (Interstate Commerce Act, 49 USCA § 1 et seq.).

Agreement for deviation from published rates on file with Interstate Commerce Commission at time of shipments, effect of which is to permit collection of charges at other than published rates, is void (Interstate Commerce Act, 49 USCA § 1 et seq.).

Carrier cannot be estopped from enforcing payment of full amount of freight charges due computed according to published rates on file with Interstate Commerce Commission at time of shipment (Interstate Commerce Act, 49 USCA § 1 et seq.).

Alleged fact that shipper bought oil with understanding with carrier that carrier would immediately file lower rate with Interstate Commerce Commission did not preclude carrier from enforcing full rate in effect at time of shipment (Interstate Commerce Act, 49 USCA § 1 et seq.).

Failure of carrier to allege illegality of contract entitling shipper to freight rate less than that filed with Interstate Commerce Commission held not to preclude carrier from relying on such defense when sued for difference between published rate and alleged agreed rate.

1. Legal rights existing between a shipper and a carrier as to rates in interstate commerce are measured by the tariffs or rates published and on file with the Interstate Commerce Commission.

2. No deviation from such published rates can be made on any pretext, and an agreement, the purport of which is to permit the collection of charges at other than the published rates is of no binding force or effect.

3. No act or omission of the carrier can estop it from enforcing payment of the full amount of the charges due computed according to the published rates on file with the Interstate Commerce Commission at the time of the shipment.

4. Where, in a suit by the shipper to recover a difference between the published rate paid by it and a claimed lesser contract rate, the carrier failed to plead specifically the illegality of the contract, held, not to avail the shipper.

Appeal from District Court, Cowley County; Oliver P. Fuller, Judge.

Action by the Kanotex Refining Company against the Atchison, Topeka & Santa Fé Railway Company. Judgment for plaintiff, and defendant appeals.

Reversed.

Bruce Hurd, C. J. Putt, and R. M. Clark, all of Topeka, and J. A McDermott, of Winfield, for appellant.

Albert Faulconer, of Arkansas City, and James F. Lawrence, of Tulsa Olk., for appellee.

THIELE Justice.

This was an action to recover damages growing out of a contract for the establishment of a freight rate.

There is no dispute as to the facts. The petition disclosed that plaintiff operated an oil refinery at Arkansas City, and in July, 1931, it had an opportunity to purchase 368 carloads of crude oil at Oklahoma City, Okl. Although not disclosed fully by the pleadings, it seems conceded that there was a published rate on file with the Interstate Commerce Commission under which it was determinable the rate from Oklahoma City to Arkansas City was 10 cents per hundredweight. Before purchasing the oil, plaintiff entered into negotiations, partly oral and partly written, with employees of the railway company, as a result of which it is alleged that if plaintiff would purchase the oil and transport it over defendant's road, the railway company "would immediately file and make effective a rate of six cents (6¢) per cwt. to apply on the transportation of said crude oil from Oklahoma City, Oklahoma, to Arkansas City, Kansas, via defendant's railroad," etc., the railroad company well knowing plaintiff would not purchase the oil and transport it unless the 6-cent rate should be made effective and apply on the transportation. Relying on the agreement, plaintiff purchased the oil and tendered it to defendant for shipment to Arkansas City and it was so shipped. the agreement seems to have been concluded by a letter from the plaintiff's traffic manager to the railway company freight agent at Topeka, dated July 15, 1931, in which it was said: "We have already arranged for shipments Oklahoma City to Arkansas City and beginning today will move ten cars per day, which may shortly be considerably increased." The petition alleges that sixteen cars were shipped July 17, 1931, and that thereafter the remainder was tendered and shipped. It appears from one of defendant's exhibits the shipments were between July 19 and September 26, 1931. The petition further alleged the railway company failed to publish the 6-cent rate as agreed and demanded and collected at the 10-cent rate, and that plaintiff had been damaged in the sum of $9,629.45, as shown by a tabulated list attached to the petition. The abstract does not show details of this list but does show total charge, $24,073.57; amount had 6-cent rate been applied, $14,444.12; overcharge, $9,629.45. In a second cause of action, the allegations of the first cause are included by reference, and it is further alleged that in order to mitigate damage the plaintiff shipped the oil to Arkansas City by the cheapest available method, paid the 10-cent rate, and by reason of the failure of the railway company to file the 6-cent rate, it had been damaged in the amount of $9,629.45.

The defendant answered that the petition failed to state a cause of action, that the court had no jurisdiction of the subject-matter, and admitted the material allegations of the petition except as they were denied. It then denied it had failed to publish the rate or to cause the same to become effective of that it had failed to take any steps to that end, but alleged that following the usual and customary course of procedure, which was well known to plaintiff, it did on July 15, 1931, request F. A. Leland, its duly authorized tariff agent and the duly authorized agent of the Southwestern Railroads, being all the railroads operating in Oklahoma, to submit an emergency proposal for the rate and the filing of a tariff covering the same with the Interstate Commerce Commission; that Leland submitted the proposal to the Southwestern Railroads and to interested chambers of commerce and shippers for approval, which approval was refused, and thereafter the proposal was submitted to the executive committee of the Southwestern Railroads for approval, which was refused; that on August 5 Leland notified the Southwestern Railroads of the defendant's intention to independently establish said 6-cent rate, and notice of said intention was by Leland issued August 31, 1931, announcing the publication of said 6-cent rate; that said rate was published in Supplement 36 SWL Tariff 79-L, Agent J. E. Johansen's I. C. C. 2170, under special permission of the Interstate Commerce Commission, the supplement bearing issuing date of October 6, 1931, and effective date of November 17, 1931; that from the time of the first conversation as to the rate until the issuance and publication of August 31, 1931, there was no delay. It is also alleged that an application to the Interstate Commerce Commission for reparation to the shipper was made by defendant, the application being denied. There is also an allegation that on July 1, 1933, the plaintiff filed an action before the Interstate Commerce Commission for reparation in the amount of $9,629.45, which was still pending.

Plaintiff moved to strike that part of the answer in which defendant gave the history of its efforts to get the 6-cent rate promulgated, and that part setting up plaintiff's action before the Interstate Commerce Commission. Upon hearing, the court sustained the motion. At the same time, the parties agreed that motion for judgment on the pleadings could be presented, which was done, and upon consideration the court found the answer did not state facts sufficient to constitute a defense; that the defendant's answer admitted the contract and the failure of the defendant to perform the conditions imposed in said contract, and the amount of the damages, and judgment was accordingly rendered in favor of plaintiff, from which the defendant appeals, assigning as error the sustaining of the motion and the rendering of the judgment.

As has been noted, there is no dispute as to the facts, and it is possible to dispose of the case on its merits, and without discussion separately of the motion to strike and the motion for judgment on the pleadings. The appellant's principal contention is that a railroad cannot be held legally liable for its failure to carry out an agreement to have put into effect in the future a lesser rate than was lawfully in effect at the time of the promise and at the time the shipments were moved. Appellee's answer is that its action is not a rate case nor for reparation, but is one for failure of performance of the contract to file and publish a rate and not violative of any statute.

In substance, the alleged contract was that if plaintiff would buy oil and ship it over defendant's lines, defendant would immediately file and make effective a lower rate than was in effect. The facts are that plaintiff bought the oil and within two days started shipments which were concluded in thirty-eight...