National Carloading Corp. v. Phœnix-El Paso Express

• Decision Date: 15 December 1943
• Docket Number: No. 8152.,8152.
• Citation: 176 S.W.2d 564
• Parties: NATIONAL CARLOADING CORPORATION v. PHŒNIX-EL PASO EXPRESS, Inc.
• Court: Texas Supreme Court

Page 564

176 S.W.2d 564

NATIONAL CARLOADING CORPORATION v. PHŒNIX-EL PASO EXPRESS, Inc.

No. 8152.

Supreme Court of Texas.

December 15, 1943.

Rehearing Denied January 19, 1944.

Error from Court of Civil Appeals of Eighth Supreme Judicial District.

Suit by Phoenix-El Paso Express, Inc., against National Carloading Corporation to recover certain undercharges in connection with motor freight transported by plaintiff. A judgment for plaintiff was reversed by the Court of Civil Appeals, 178 S.W.2d 133, and the cause was remanded, with directions to dismiss the suit, and both parties bring error.

Judgment of Court of Civil Appeals affirmed.

Robert E. Quirk, of Washington, D. C., P. J. Coughlin, of New York City, and Jones, Hardie, Grambling & Howell, of El Paso, for National Carloading Corp.

Robt. L. Holliday and Harold L. Sims, both of El Paso, for Phoenix-El Paso Express, Inc.

FOLLEY, Commissioner.

This suit was filed by the Phoenix-El Paso Express, Inc., against the National Carloading Corporation to recover certain undercharges in the amount of $1,045 in connection with motor freight transported in 1937 from El Paso, Texas, to Phoenix, Arizona, by Phoenix-El Paso Express, then a partnership and now incorporated as Phoenix-El Paso Express, Inc., the latter company having succeeded to the rights of the partnership. In the trial court the Phoenix-El Paso Express, Inc., recovered judgment for $999.68. The Court of Civil Appeals at El Paso reversed such judgment and remanded the cause and ordered the trial court to dismiss the suit. The opinion of the Court of Civil Appeals has not been published.

Both parties filed applications for writs of error and both petitions were granted. Since this is true, in order to avoid confusion we shall give the parties their trial court designations. In this connection, we shall make no further distinction between the partnership, Phoenix-El Paso Express, and the corporation, Phoenix-El Paso Express, Inc.

The plaintiff is a common carrier engaged in interstate commerce and at all times here material was a federal motor common carrier within the meaning of part II of the Interstate Commerce Act of 1935, 49 U.S.C.A. § 301 et seq., and was authorized to, and did, transport freight under a certificate of public convenience and necessity issued by the Interstate Commerce Commission.

The defendant, National Carloading Corporation, was incorporated in 1931 and continuously since that time has conducted a nationwide freight-forwarding business. It is engaged in the undertaking of collecting at its terminals parcels of freight from various shippers throughout the United States and consolidating the same into carload and truck load lots, and then shipping such bulk quantities to its other terminals where they are distributed locally in smaller lots. The defendant owns no motor vehicle equipment, except at certain of its distribution centers, but engages the services of motor, rail or water carriers to perform the actual transportation between terminal centers. It maintains terminals in 81 cities of the United States and employs a staff of 2,259 persons, including 227 solicitors. Through personal solicitation and advertising it holds out to the public a complete service in transportation of small shipments of general commodities. It accepts freight for transportation from store-door to store-door, issuing bills of lading in its name covering the through movement, and assuming responsibility for the safe delivery of the goods. It publishes tariffs naming through rates which are collected on its billing from shippers and consignees. Shipments are transported from points of origin to defendant's concentration terminals by motor carriers whose services are engaged by defendant through participating agreements. The carriers thus engaged are participants in defendant's tariffs and receive as compensation for their services a division of defendant's through rates.

In 1936, 1937 and 1938 the defendant filed with the Interstate Commerce Commission its tariffs for through routes and joint rates attempting to comply with Secs. 216(c) and 217(a) of the Motor Carrier Act, 1935, 49 U.S.C.A. §§ 316(c) and 317(a). Sec. 216 (c) provides that "Common carriers of property by motor vehicle may establish reasonable through routes and joint rates, * * * with other such carriers * * * by railroad and/or express and/or water." Sec. 217(a) provides for the filing and publishing of tariffs by every common carrier showing all the charges for transportation between points on its own route and between points on its own route and points on the route of any other such carrier, or on the route of any common carrier by railroad, express or water, when a through route and joint rate shall have been established. The plaintiff and other participating carriers filed concurrences adopting and assenting to defendant's published tariffs and rates. It was under such published tariffs and concurrences that the plaintiff performed the services in 1937 which constitute the basis of this suit. Between July 28, 1937, and November 7, 1937, plaintiff transported for defendant nine truck load shipments from El Paso to Phoenix at defendant's published joint rate of forty-five cents per hundred weight. The parties stipulated that under the Arizona Motor Transport Association Tariff No. 1 the legal rate for such shipments was eightyfive cents per hundred weight, as shown by the tariffs of the plaintiff on file with the Commission. The rate of eighty-five cents was, of course, the local rate between El Paso and Phoenix and was not a joint or participating rate for a through route over a longer distance. Each of the shipments in question was made under a straight bill of lading or shipping order issued by the defendant which stipulated that the property was received subject to classifications and tariffs in effect on the date of its issue. For these nine shipments of goods, which had been concentrated at El Paso by the defendant and which were admittedly interstate commerce, plaintiff was paid by defendant the total sum of $1,123.16. This amount was based upon the rate of forty-five cents per hundred pounds. If the published local rates of the plaintiff had been charged for these shipments, rather than the joint published rates of the defendant for the through routes, the charges therefor would have been $2,122.84, which is $999.68 in excess of the amount actually collected. The latter amount, as above stated, was the recovery allowed by the trial court.

Sec. 217(b) of the Interstate Commerce Act, 1935, 49 U.S.C.A. § 317(b), provides that no common carrier by motor vehicle shall charge or demand or collect or receive a greater or less or different compensation for transportation than the rates, fares, and charges specified in the tariffs in effect at the time. It appears that the suit of the plaintiff is founded on the theory that at the time the shipments were made the defendant was not a common carrier by motor vehicle, or a contract carrier by motor vehicle, within the meaning of the Motor Carrier Act of 1935, and thus was not authorized to file tariffs or joint rates with the Commission, nor to participate in a joint rate or tariff with the plaintiff or other motor carriers. The plaintiff contends that under Sec. 217(b), prohibiting deviation from rates in published tariffs, and by reason of the above stipulation in the bills of lading that the property was "received subject to classifications and tariffs in effect," the defendant was obligated to pay, and the plaintiff to collect, the full legal tariffs in effect at the time, which, it asserts, was eighty-five cents per hundred weight. The basis for such contention arises from certain orders and rulings of the Interstate Commerce Commission, as will hereinafter appear.

On February 10, 1936, the defendant, for the first time, filed application with the Interstate Commerce Commission for a certificate of public convenience and necessity under the "grandfather" clause of Sec. 206(a) of the Motor Carrier Act, 1935, 49 U.S.C.A. § 306(a). Prior to such date the defendant had operated without any certificate of authority. Sec. 206(a) makes it unlawful for any "common carrier by motor vehicle" subject to the provisions of the Act to engage in interstate or foreign operation on any public highway unless there is in force with respect to such carrier a certificate of public convenience and necessity issued by the Commission authorizing such operations, subject to the following proviso, which contains the so-called "grandfather" clause: "Provided, however, That, subject to section 310, if any such carrier * * * was in bona fide operation as a common carrier by motor vehicle on June 1, 1935, over the route or routes or within the territory for which application is made and has so operated since that time, * * * the Commission shall issue such certificate without requiring further proof that public convenience and necessity will be served by such operation, and without further proceedings, if application for such certificate was made to the Commission as provided in paragraph (b) of this section and within one hundred and twenty days after October 1, 1935, * * *."

On January 4, 1940, the Commission entered its order denying the application of the defendant for a certificate of public convenience and necessity. The Report of the Commission, accompanying such order of denial, shows that the action of the Commission was upon the theory that the defendant was not a common carrier by motor vehicle under the provisions of the Motor Carrier Act, 1935, because its undertaking was not to transport property but merely to see to it that goods were transported, using for this purpose the services of carriers with whom it had contractual arrangements. The Commission concluded that the applicant was neither a common carrier by motor vehicle nor a contract carrier by motor vehicle under the...