Marquette Cement Manufacturing Co. v. Louisville and Nashville Railroad Co.

• Decision Date: 05 September 1967
• Docket Number: Civ. A. No. 4565.
• Citation: 281 F. Supp. 944
• Parties: MARQUETTE CEMENT MANUFACTURING COMPANY and Chattanooga Rock Products Division of Vulcan Materials Company v. The LOUISVILLE AND NASHVILLE RAILROAD COMPANY.
• Court: U.S. District Court — Eastern District of Tennessee

281 F. Supp. 944

MARQUETTE CEMENT MANUFACTURING COMPANY and Chattanooga Rock Products Division of Vulcan Materials Company v. The LOUISVILLE AND NASHVILLE RAILROAD COMPANY.

Civ. A. No. 4565.

United States District Court E. D. Tennessee, S. D.

September 5, 1967.

Witt, Gaither, Abernathy & Wilson, Chattanooga, Tenn., for plaintiffs.

Spears, Moore, Rebman & Williams, Chattanooga, Tenn., for defendant.

OPINION

FRANK W. WILSON, District Judge.

This is an action for damage brought against a common carrier under the provisions of 49 U.S.C. § 20(11), which provision is sometimes referred to as the Carmack Amendment. The case is before the Court for decision upon a stipulation of facts. Marquette Cement Manufacturing Company is engaged in the business of manufacturing cement and has a plant at Cowan, Tennessee. Chattanooga Rock Products Division of Vulcan Materials Company is, as the name indicates, a division of Vulcan Materials Company. Rock Products' place of business is located at 2001 Rossville Boulevard in Chattanooga, Tennessee, where it engages in the manufacture of Ready-Mix concrete. Another division of Vulcan Materials Company is the Concrete Pipe Division, whose place of business is located at 1111 Oak Street in Chattanooga, Tennessee, where it engages in the manufacture of concrete pipe. Both the Rock Products Division and the Concrete Pipe Division buy cement from Marquette, but each uses a different type of cement. The Concrete Pipe Division purchases only "air entrained" cement, that is, cement to which has already been added an air entraining agent. This type of cement is appropriate for use in the manufacturing of concrete pipe. On the other hand, the Rock Products Division never purchases "air entrained" cement from Marquette, but rather mixes its own air entraining agent to obtain a ready-mix concrete having the desired qualities. Previous to the shipment here involved, Marquette had always shipped cement to the Rock Products Division by way of the Louisville and Nashville Railroad Company and the Central of Georgia Railway Company. On the other hand, Marquette had always shipped an "air entrained" cement to the Concrete Pipe Division by way of the Louisville and Nashville Railroad Company and the Southern Railway Company.

Upon March 27, 1964, Marquette shipped L & N Hopper Car No. 38,454 containing bulk "air entrained" cement. A bill of lading had been prepared at Marquette. It directed that the car would be shipped to the Concrete Pipe Division at 1111 Oak Street, Chattanooga, Tennessee, and the routing was shown as the L & N Railroad and the Central of Georgia Railway. Because of the layout of the track system, the Central of Georgia Railway does not have track connections for delivery from Marquette to the Concrete Pipe Division. When Car No. 38,454 arrived in Chattanooga on or about March 29, 1964, the defendant, Louisville and Nashville Railroad Company, through one of its switching clerks, issued an inter-load switching order whereby Car No. 38,454 was directed to be delivered to Rock Products Division at 2001 Rossville Boulevard by way of Central of Georgia, rather than to the Concrete Pipe Division at 1111 Oak Street, as called for on the bill of lading. The carload of "air entrained" cement was delivered to the Rock Products Division and was used by it in its ready-mix cement plant. At the time Rock Products Division had under order from Marquette more than one carload of cement. However, Rock Products Division did not expect to receive "air entrained" cement and it is not possible to determine merely from appearance whether cement already contains an air entraining agent or not. Accordingly, the Rock Products Division added an air entraining agent to the cement after it had been unloaded and before receiving the notice of delivery from the L & N Railroad which would show that the cement was already air entrained. On March 31st the cement was processed by Rock Products Division and delivered to certain job sites in and around Chattanooga. The majority of it went to the construction site of the Calsted Nursing Home in Chattanooga to be used by the H. E. Collins Contracting Company in the structural floor system thereof. Another portion of the concrete went to the J. C. Miller Construction Company for the purpose of constructing a small cement floor in a garage. The concrete used in both of these jobs showed deficiencies and it was necessary that the same be removed in each instance.

The bill of lading showed that the cement was air-entrained, but the train clerk at the L & N who re-routed the shipment from Concrete Pipe to Rock Products had not noted that the cement was air-entrained, and in fact was uninformed as to what the designation meant. He was likewise uninformed as to what use the Vulcan Materials Company made of the concrete it received at either of its two divisions or as to any difference in the concrete received at the two divisions.

The value of the carload of cement was $1,408.16 and the freight charges amounted to $91.10. The cost to the plaintiffs for replacing the Calsted Nursing Home floor slab was $9,558.30 and the cost of replacing the floor slab in the garage was $167.00. The plaintiffs incurred additional costs of $197.00 to a concrete testing laboratory. The plaintiffs seek to recover damages in the total sum of $11,416.56, being the total of the above items of cost, plus interest.

First, there can be no doubt that the defendant is liable unto the plaintiffs for breach of contract by virtue of its misdelivery of the carload of cement. It was the duty of the carrier to deliver the freight at the destination designated in the contract of shipment. 13 C.J.S. Carriers Sec. 164, p. 322. The error in routing instructions would not relieve the carrier of the duty of making delivery to the destination designated on the bill of lading, nor permit the carrier to change the destination. 13 Am.Jur. 2d, "Carriers", Sec. 329. The real question with which we are here concerned is the damages to which plaintiffs are entitled by virtue of the breach. Before discussing the rules governing the measure of damage in a breach of contract action for misdelivery, it is appropriate to consider the plaintiffs' alternate contention that a negligence action would also lie for misdelivery. No authority is cited by the plaintiff in support of its tort theory. While a contract may create a state of affairs in which a general duty arises the breach of which may constitute actionable negligence, negligence will not lie where the only duty breached is one created by contract. It is only where there is a breach of a general duty, even though it may arise out of a relationship created by contract, that breach of duty may constitute actionable negligence. 38 Am.Jur., "Negligence", Sec. 621. Here the only duty breached was the duty to deliver under a contract of carriage. Accordingly, the Court need not consider the rules of law governing the measure of damage in a tort action.

Returning to the plaintiffs' claim for damage for breach of contract, the plaintiffs claim the following elements of damages: (1) the cost of shipping charges ($91.10), (2) the value of the carload of air-entrained cement ($1,408.16), (3) the cost of removing the adulterated concrete from the construction sites ($9,725.30), and (4) the cost of the tests performed by the laboratory ($197.00).

The Court had occasion to examine the rules with respect to damages for breach of contract in the case of Clark v. Ferro Corp. (D.C.Tenn., 1964), 237 F.Supp. 230. To summarize briefly the principles involved, the general purpose of the law is to place the plaintiff in the position he would have been in had the contract been fulfilled in accordance with its terms. More specifically, under the rule of Hadley v. Baxendale, (1854) 9 Ex. 341, 156 Eng. Reprint 145, 5 Eng.Rul.Cas. 502, damages recoverable for breach of contract are (1) such as may fairly and reasonably be considered as arising in the usual course of events from the breach of the contract itself or (2) such as may reasonably be supposed to have been in the contemplation of the parties at the time they made the contract. This is the rule in Tennessee. See Clark v. Ferro Corp., supra, 237 F.Supp. at p. 238. The rule has been stated in terms of "foreseeability" in the Restatement of Contracts (Sec. 330):

"In awarding damages, compensation is given for only those injuries that the defendant had reason to foresee as a probable result of his breach when the contract was made. If the injury is one that follows the breach in the usual course of events, there is sufficient reason for the defendant to foresee it; otherwise it must be shown specifically that the defendant had reason to know the facts and to foresee the injury."

The statement providing for "special" or "consequential" damages is merely a further extension of "foreseeability". McCormick, in speaking of the rule of Hadley v. Baxendale, observes:

"This standard is in the main an objective one. It takes account of what the defendant who made the contract might then have foreseen as a reasonable man, in the light of the facts known to him, and does not confine the inquiry to what he actually did foresee. It the loss claimed is unusual, then it becomes necessary to ascertain whether the defaulting party was notified of the special circumstances * * *" McCormick on Damages, p. 565, sec. 138.

Plaintiffs, in their briefs, argue at some length that the ordinary rule of damages for breach of contract should not be applied in the instant case because (1) the Carmack Amendment 49 U.S.C. 20 (11) has liberalized the common law rule of damages; (2) this is a case of mislabeling; and (3) this is a case of deviation, and the doctrine of deviation alters the rule of damages. The pertinent language of the Carmack Amendment reads as follows:

"* * * any common carrier, railroad, or transportation company delivering said property

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