Missouri Pacific Railroad Company v. Austin

• Decision Date: 28 July 1961
• Docket Number: No. 18780.,18780.
• Citation: 292 F.2d 415
• Parties: MISSOURI PACIFIC RAILROAD COMPANY, Appellant, v. Clyde AUSTIN, d/b/a Southern Shippers Association, and W. R. Flocks and J. A. Smith, a partnership, d/b/a Western Wood Products Company, Appellees.
• Court: U.S. Court of Appeals — Fifth Circuit

292 F.2d 415 (1961)

MISSOURI PACIFIC RAILROAD COMPANY, Appellant, v. Clyde AUSTIN, d/b/a Southern Shippers Association, and W. R. Flocks and J. A. Smith, a partnership, d/b/a Western Wood Products Company, Appellees.

No. 18780.

United States Court of Appeals Fifth Circuit.

June 27, 1961.

Rehearing Denied July 28, 1961.

Carroll R. Graham, Houston, Tex. (Hutcheson, Taliaferro & Hutcheson, Arterbury, Hoover & Graham, Houston, Tex., Roy L. Arterbury, Houston, Tex., of counsel), for appellant.

Kenneth H. Aynesworth, Jr., Houston, Tex. (Aynesworth & Mann, Houston, Tex., of counsel), for appellees.

Before JONES and BROWN, Circuit Judges, and DE VANE, District Judge.

JOHN R. BROWN, Circuit Judge.

This appeal by the Railroad from a judgment entered on a reparation award made by the Interstate Commerce Commission presents three questions. The first is the matter of the statute of limitations. Second, there is the problem of whether the traffic consultant Austin (one of the plaintiff-appellees) had an assignment of a 50% interest in the award as distinguished from a mere contingency. The third, and most serious, concerns the admissibility under the Federal Business Records Act, 28 U.S.C.A. § 1732, of a Dun & Bradstreet report either as a basis for impeachment of the witness or as an admission of the party (Flocks, a plaintiff), or both.

The shipper was Western Wood Products Company, a Texas partnership. The partners were Flocks, J. A. Smith, and another who subsequently withdrew. The shipments giving rise to the claim occurred in 1952. The co-plaintiff Clyde Austin was a traffic consultant. Without presently determining the legal significance of such evidence it was uncontradicted that he served Western Wood in that capacity for a number of years and that it was agreed that he was to receive 50% of whatever savings or recoveries were achieved by his efforts. Without a doubt it was his efforts here which produced the reparation award in suit. The record is vague on details, largely because this was all washed out in the agreed ICC award. But it warrants the conclusion that when Austin brought the facts to the attention of the carriers, two things resulted. There was, first, a suitable correction of the tariffs to prevent a problem as to future shipments. And second, it was acknowledged that some reparation should be made as to prior shipments. After negotiation it was agreed that the carriers would file with the ICC a proceeding in the customary form for permission to pay reparations in the specific sum of $2,659.92. The ICC, on this application, entered an award against the carriers finding a discriminatory overcharge entitling the shipper to reparation in the claimed sum and then ordered formally that the carriers "are * * * authorized and directed to pay * * * Western Wood * * * on or before September 27, 1955, the sum of $2,659.92 as reparation."¹ As reflected on its face this order was issued on and "dated at Washington, D.C. Jul 25, 1955."

The suit to enforce the award under 49 U.S.C.A. § 16(2) was filed September 27, 1956, within one year of the date required for payment (September 27, 1955), but more than a year from the "date of the order" (July 25, 1955) as 49 U.S.C.A. § 16(3) (f) literally specifies.² The carriers strenuously urge the plea of limitation which we discuss shortly. But alternatively a further defense was urged. The carriers³ by formal answer did not dispute the validity of the ICC award as such. On the contrary they formally admitted its issuance and validity. The defense was essentially one of payment or set-off. This plea was really that of the defendant Missouri Pacific Railroad Company. The answer alleged that Western Wood had assigned all of its assets, including this reparation claim, to Aviation Corporation of Texas and that Missouri Pacific had obtained a final judgment on February 13, 1956 against Aviation Corporation for $5,320.88 for unpaid freights. Consequently, the answer claimed, Missouri Pacific was "entitled to set-off against any amount due the plaintiff's herein, the sum * * * awarded in the judgment * * *" against Aviation Corporation.⁴

The case therefore turned into a controversy whether Western Wood had assigned this reparation claim to Aviation Corporation. The Railroad's further contention that Austin's 50% fee interest was a contingency, not an assignment in the claim itself, likewise acquired some significance.

The first two questions may be quickly disposed of. We are clear that the suit to enforce the award was timely filed. It is a literalism in its most artificial extremity to regard — as the Railroad contends — only the literal words of § 16(3) (f) that fixes the period of suit as "within one year from the date of the order, and not after," note 2, supra. That approach on statutory construction is, at best, far from decisive. United States v. American Trucking Ass'n, 1940, 310 U.S. 534, at page 543, 60 S.Ct. 1059, 84 L.Ed. 1345; Florida Citrus Exchange v. Folsom, 5 Cir., 1957, 246 F.2d 850, at page 857; Fulford v. Forman, 5 Cir., 1957, 245 F.2d 145, at page 149. Subparagraph (3) (f) relates directly to § 16(1) and (2) which specify that the reparation order shall direct "the carrier to pay * * * the sum * * * on or before a day named"⁵ and permits a suit against the carrier if the "* * * carrier does not comply with an order for the payment of money within the time limit in such order * * *."⁶

It is perfectly plain that Congress intended to do three things. First, the Commission was to prescribe a time by which the reparation order was to be paid by the carrier.⁷ Second, the carrier was not required to pay prior to that time. And third, the person obtaining the award was to have a year in which to secure enforcement through judicial means if the carrier did not voluntarily comply. These policies would be frustrated were the time for suit measured by the initial date. The actual time available for filing suit would be something less than a year depending on the interval between the date of the issuance of the order and the prescribed date of payment. More than that, this would run counter to all notions of limitations which treats the beginning point as the time the judicially enforceable cause of action accrues. Concededly, suit could not have been filed prior to September 27, 1955. § 16(2). No right of judicial action having come into being prior to that time, the one-year period commenced on that date. That is the "date of the order." § 16(3) (f). Chesapeake & O. Ry. Co. v. Walton, 4 Cir., 1938, 99 F.2d 270; Standard Oil Co. of Cal. v. Davis, D.C.N.D.Cal.1925, 6 F.2d 236; Acheson Graphite Co. v. Mellon, D.C.N.Y.1927, 21 F.2d 562.

On the issue of Austin's 50% interest, the Railroad has not met the burden of F.R.Civ.P. 52(a), 28 U.S.C.A., of demonstrating that the Trial Court's finding was clearly erroneous.⁸

It is important to bear in mind that there is no dispute between Austin, on the one hand, and anyone or all of the partner-assignors. It is attacked by an outsider whose interest admittedly arose long after this engagement was undertaken. The evidence certainly did not, as was true in Central National Bank v. Latham & Co., Tex.Civ.App.1929, 22 S.W. 2d 765, compel a finding that it was the intention of the parties that the award would first be paid directly to Western Wood with the payment subsequently of 50% thereof by Western Wood to Austin. It warranted the finding that Austin did — and was entitled to — look at the award itself for payment. Davis & Goggin v. State National Bank, Tex.Civ.App.1913, 156 S.W. 321.

But there is an additional basis for finding an assignment. Austin, as an ICC practitioner, not a licensed attorney, legitimately could render a service. But it was limited in nature and in point of time. He could prosecute the claim, as he did, before the ICC. But he could go no further. That means his work was finished. More than that, his work was well and successfully done. When the award was formally issued on July 25, 1955, effective September 27, 1955, the prior agreement to pay him 50% ripened into an equitable assignment of the award itself. The situation is comparable to that of an attorney's contingent fee which changes from an executory contract to an equitable interest upon performance of the engagement by the recovery of a judgment.⁹ This right became fixed in the fall of 1955 and prior to the time the judgment was obtained by Missouri Pacific Railroad Company in February 1956. On the Court's findings Austin was the owner of 50% of the award and the judgment as to his 50% interest must be affirmed in any event.

A more serious problem is presented on the evidence question. As we pointed out briefly, the Railroad asserted that Western Wood had assigned all of its assets to Aviation Corporation who had in turn assumed all liabilities. This was claimed to have occurred in June 1953. Neither Flocks nor Smith appeared on the trial, but their depositions were available and that of Flocks was offered. In a large measure it substantiated the basic contention of the Railroad that Western Wood had concluded an inter-company transaction by which assets were transferred. There was no formal written contract of assignment nor was there any formal transfer. Flocks denied categorically, however, that this reparation claim was assigned. Flocks' testimony, taken as it was in 1958 five years after the occurrence, long after the partnership had any active business dealings, and with records of the partnership, Aviation Corporation, or both, scattered, incomplete, lost or of little help, was, at best, confusing and uncertain. But apart from the proffered exhibit excluded by the Court, the Railroad did not offer any evidence of its own. If Flocks' testimony was vague and confusing, the Court was nonetheless permitted to draw the inference against the Railroad since it asserted the assignment and assuredly had the burden of establishing...