National Carloading Corp. v. Atchison, T. & SF Ry. Co.

• Decision Date: 29 June 1945
• Docket Number: No. 10756.,10756.
• Citation: 150 F.2d 210
• Parties: NATIONAL CARLOADING CORPORATION v. ATCHISON, T. & S. F. RY. CO.
• Court: U.S. Court of Appeals — Ninth Circuit

150 F.2d 210 (1945)

NATIONAL CARLOADING CORPORATION v. ATCHISON, T. & S. F. RY. CO.

No. 10756.

Circuit Court of Appeals, Ninth Circuit.

June 29, 1945.

Hugh Gordon, of Los Angeles, Cal., Robert E. Quirk, of Washington, D. C., and J. Edward Haley, of Los Angeles, Cal., for appellant.

William F. Brooks and Jonathan C. Gibson, both of Los Angeles, Cal., for appellee.

Before MATHEWS, STEPHENS, and BONE, Circuit Judges.

STEPHENS, Circuit Judge.

The Atchison, Topeka and Santa Fe Railway Company brought action in the district court against National Carloading Corporation to recover, under § 6(7), Part I, Interstate Commerce Act,¹ freight undercharges on shipments made by the latter, as freight forwarder, from California to various eastern points. From a judgment in favor of the plaintiff, the freight forwarder appeals.

Appellant-freight forwarder, as shipper, engaged the transportation facilities of the appellee-carrier and its connecting lines for the shipping of household goods. An understanding existed between the parties, and was followed by them, that upon appellant's ordering a 50-foot car, two 40-foot cars would be furnished by appellee. Orders for cars were usually handled over the telephone since no written orders were required by the carrier. With few exceptions shipments were made in two 40-foot cars, and they moved forward under Item 503 of Transcontinental Freight Bureau East-bound Tariff No. 3-M, Interstate Commerce Commission, No. 1431, which provides in part as follows:

"Except where specifically provided to the contrary in individual items of this tariff, carrier will furnish car of dimensions or weight carrying capacity ordered by shipper, but if carrier for its convenience furnishes car of different dimensions or weight carrying capacity, the following rules will govern. * * *.

"When car of smaller dimensions or less weight carrying capacity is furnished, actual weight applies provided it is loaded to its full visible capacity or as heavily as loading conditions will permit; the balance of the shipment will be taken in another car at actual weight and carload rate, and the entire shipment will be subject to carload minimum weight applicable to the car of dimensions or weight carrying capacity ordered * * * emphasis added."

Bills of lading, way bills and other shipping documents contained the recital, "50-foot car ordered, two 40-foot cars furnished at railroad company's convenience." Thus, appellant was enabled to use two 40-foot cars under rates chargeable and applicable to a single 50-foot car.

After an investigation by the Interstate Commerce Commission in 1941, the practice outlined was stopped, and appellee-carrier brought the within action to recover undercharges for the period May, 1939, to February, 1941. It should be noted here that conduct, intention, mistake and misunderstanding are no defense to such an action. McFadden v. Alabama Great Southern R. Co., 3 Cir., 241 F. 562. To the effect that it is not only the right but the duty of a carrier to bring suit see Pennsylvania R. R. Co. v. Fox & London, Inc., 2 Cir., 93 F.2d 669-671; Louisville & N. R. Co. v. Williamson, 5 Cir., 87 F.2d 34, 35; 13 C.J.S., Carriers, § 393, p. 873.

In holding for appellee-carrier, the District Court found in part that 50-foot cars were available during the period involved, that no genuine order was placed for a 50-foot car in any of the one hundred and five instances for which recovery of undercharges was being sought, and that the parties herein gave no consideration to the question of the carrier's convenience as required by the tariff. It took the view that the carriers' convenience rule is not operative or effectively invoked until the carrier has received from the shipper a genuine order for a car of a specific size, and that since under the facts no genuine order for a 50-foot car was placed by the shipper, and since no discretion was exercised by the carrier to determine the existence of its convenience, the "two for one rule" was not successfully invoked herein.

The district court construed the tariff rule to mean that "The substitution can be made only when the car ordered is not readily available, and it is not operatively advantageous for the carrier to furnish such car." Appellant thinks the construction too narrow and points out that the rule, when first adopted in 1910, allowed substitution of two cars for one only when the carrier was "unable" to furnish the larger car ordered, that by a later amendment the rule was relaxed to allow substitution "if practicable," and that in 1933 the rule was further relaxed to allow substitution as a matter of "carriers' convenience."² The district court's construction appears to us to be sufficiently broad. Furthermore, since the decision does not properly turn on the point, appellant was in no way harmed. According to the district court's opinion "* * * The evidence establishes the fact that under the circumstances indicated carrier's agent might have been justified in arriving at either conclusion in determining whether to furnish one larger or two smaller cars. In the absence of collusion, I would hold that the agent had not abused the discretion vested in him by substituting the smaller cars." Clearly on principle "carriers' convenience" cannot mean entering into an agreement with a shipper in opposition to the very purpose of the Interstate Commerce Act and the tariffs published thereunder.

We take appellant's position to be that if a carrier's convenience is in fact subserved by the substitution, the tariff rule applies, that is, that under the rule a carrier is permitted to furnish at its convenience two 40-foot cars in lieu of the single 50-foot car ordered by the shipper notwithstanding an invalid agreement to the same effect. It is well established that the acts of the parties herein affect not only themselves but also the welfare of the public. Although the tariff rule might be stretched to fit the instant situation, in its true meaning and purpose it was not the real motivation of the agreement. Rather, and as both parties realized, it was totally disregarded insofar as any actual exercise of discretion on the part of the carrier was...