Pacific Portland Cement Co. v. Western Pac. R. Co., 12327

• Decision Date: 11 December 1950
• Docket Number: 12328.,No. 12327,12327
• Citation: 184 F.2d 34
• Parties: PACIFIC PORTLAND CEMENT CO. v. WESTERN PAC. R. CO.
• Court: U.S. Court of Appeals — Ninth Circuit

184 F.2d 34 (1950)

PACIFIC PORTLAND CEMENT CO. v. WESTERN PAC. R. CO.

Nos. 12327, 12328.

United States Court of Appeals Ninth Circuit.

August 25, 1950.

Rehearing Denied October 9, 1950.

Writ of Certiorari Denied December 11, 1950.

Marshall P. Madison, Eugene Prince, Eugene D. Bennett, Francis R. Kirkham, James Michael, all of San Francisco, Cal. (Pillsbury, Madison & Sutro, San Francisco, Cal., of counsel), for appellant.

C. W. Dooling and E. L. Van Dellen, San Francisco, Cal., for appellee.

Before MATHEWS, ORR and LINDLEY,^* Circuit Judges.

Writ of Certiorari Denied December 11, 1950. See 71 S.Ct. 282.

ORR, Circuit Judge.

Appellee received judgments in the district court for demurrage charges alleged to have accrued on cars furnished appellant to make shipments of gypsum products. From 1924 through the two-year period covered by this suit, ending in December 1946, appellant operated a gypsum plant situate approximately five miles south of Gerlach, Nevada, a station on appellee's main line between San Francisco, California, and Salt Lake City, Utah. The plant was connected with appellee's tracks at Gerlach by a private railroad owned by appellant. Because the private tracks of appellant would not sustain a regular freight locomotive, a switch engine owned by appellant was used to haul cars between its plant and Gerlach.

From 1924 to 1926 appellant's practice was to take onto its tracks only the number of empty cars which it was in a position to return loaded within the next six to eighteen hours. Orders for the cars were given to appellee's Gerlach station agent before appellant removed the cars from the Gerlach yard. In 1926 the Gerlach agent requested appellant's plant superintendent to take cars from the Gerlach yard in advance of the time they were needed for loading in order to relieve congestion on the tracks in appellee's yard. The agent explained to the plant superintendent that "the cars at the plant would be the same as in the Gerlach yard, and when we appellant took them to load, it would be the same as taking them from Gerlach." Pursuant to this request it was arranged that appellant's engine should remove empty cars regularly from the yard and store them on appellant's tracks until needed for loading at appellant's plant. This arrangement was carried out during the ensuing twenty years. Regular car order forms were filled out and delivered to the Gerlach agent listing the cars as having been "ordered" at the time they were removed from storage on appellant's tracks and spotted for loading at the plant. All cars which appellant removed to its tracks were returned loaded. Demurrage was charged to appellant only when such charges were warranted by the time elapsing between the moment each car was spotted for loading, as shown on the car order, and the moment the car was returned loaded to appellee's tracks.

This arrangement was set up primarily for the benefit of appellee. It relieved congestion which would otherwise have been placed on the limited trackage available at Gerlach. The alternative to the use by appellee of appellant's tracks for storage would have been the construction of additional trackage by appellee. A difficult situation confronted appellee in the furnishing of the cars required by appellant to fill its needs of some 15 to 20 cars a day. The empty car supply was 400 miles from Gerlach. A storage reserve was necessary. This could not be accomplished without adequate tracks. Appellee did not have them. Its tracks at Gerlach were congested much of the time as a result of the practice of appellee of servicing trains there. It was a meeting place for trains and trains were held at that point in order to permit crews to eat. The congestion was aggravated by the greatly increased traffic during the war years.

In 1946 an agent of the Pacific Car Demurrage Bureau, originated by Pacific Coast railroads for the purpose of administering demurrage charges, investigated the situation at Gerlach and recommended that appellant be charged for demurrage from the time cars were taken to its tracks rather than from the time they were spotted for loading. Following this recommendation a series of letters was written to the manager of the Bureau by agents of appellee. These, together with oral testimony, conclusively establish the agreement and arrangement under which the parties operated for so many years. Excerpts from the letters appear in Note ¹.

On June 12, 1946, appellee for the first time notified appellant that demurrage was to be computed from the time empty cars were removed from the Gerlach yard onto appellant's tracks. On October 26, 1946, the first of these two actions was commenced for unpaid demurrage alleged to have accrued within the two-year period of limitations.

While not conceding the agreement as to the disposition and use of cars to be as alleged by appellant, appellee contends that in any event such an agreement would be immaterial for the reason, first that appellee, as a common carrier by railroad in interstate commerce, was required by law to collect the full amount of demurrage due from appellant under appellee's tariffs on file with the Interstate Commerce Commission, irrespective of any agreements or understandings or of intended purpose or benefit. Second, that under appellee's tariff demurrage charges were applicable on all cars which were returned loaded by appellant from the time appellant took such cars onto its tracks, regardless of any other circumstances.

We agree that published tariffs are binding on both carrier and shipper and that the shipper's liability under such tariffs cannot be waived by any arrangement, understanding or course of conduct between the parties. 49 U.S.C.A. §§ 2, 3(1), 6(7); Lowden v. Simonds-Shields-Lonsdale Grain Co., 1939, 306 U.S. 516, 59 S.Ct. 612, 83 L. Ed. 953; Atchison, T. & S. F. Ry. v. Judson Freight Forwarding Co., D.C.S.D.Cal. 1943, 49 F.Supp. 789; Atchison T. & S. F. Ry. v. White, D.C.1943, 49 F.Supp. 797. It is no less true, however, that the tariffs themselves impose no liability for demurrage under the facts of the instant case.

The tariffs applicable here are found in "Car Demurrage Rules and Charges," published by the Tariff Bureau of the Association of American Railroads, of which appellee is a member. Item 500, Rule 1, Sec. A prescribes what cars are subject to the demurrage rules. It reads as follows: "Cars of either railroad or private ownership, held for or by consignors or consignees for loading, unloading, forwarding directions or for any other purpose * * * are subject to these demurrage rules. * * *"

There is a wide disagreement among counsel as to the proper construction to be placed on the phrase "or for any other purpose" as it is used in the rule. We find it unnecessary for the purposes of this decision to construe the phrase because it is clear from other applicable rules that the time on which demurrage charges are based did not commence to run until appellant spotted the cars for loading.

Under Item 505, Rule 2, a shipper is allowed a certain amount of free time, usually 48 hours, to load a car before he begins to be charged demurrage on that car. The method of determining the moment at which this free time begins to run is set out in Item 510, Rule 3.² Under this rule demurrage time cannot begin to run until there is actual or constructive "placement" of the car on a designated interchange track or at the loading point or at a point previously designated by the shipper. The question then posed is, when did such placement take place? With respect to empty cars being placed for loading the time of placement is determined by Rule 6, which reads in part as follows:

"Section A. Cars for loading will be considered placed when such cars are actually placed or held on orders of the consignor. In the latter case the agent must send or give the consignor written notice of all cars which he has been unable to place because of condition of the other-than-public-delivery track or because of other conditions attributable to the consignor. This will be considered constructive placement. (See Rule 3, Sections A, D and E * * *.)

"Section B. When empty cars placed on orders are not used in transportation service, demurrage will be charged from actual or constructive placement until released, with no free time allowance.

"Note. In the application of this section a demurrage day consists of a twenty-four-hour period computed from the hour of actual or constructive placement of the car. (See Section D.)

* * * * * *

"Section D. If an empty car is appropriated without being ordered, it shall be considered as having been ordered and actually placed at the time so appropriated. If not loaded outbound, such car is subject to Section B of this Rule."

It is not contended that the bringing of empty cars by appellant onto its track constituted placement within the meaning of Section A of Rule 6. Section A requires that the placement be "on orders of the consignor," and no such orders were given prior to the spotting of the cars for loading. Cf., U. S. Fidelity & Guaranty Co. v. Central of Georgia Ry., 1933, 226 Ala. 606, 147 So. 891, 87 A.L.R. 1028. Placement, and consequently the running of time for demurrage, must have taken place, therefore when the cars were "appropriated" within the meaning of Rule 6, Section D. The uncontradicted evidence establishes the appropriation to have taken place when the cars were removed from their storage positions onto appellant's tracks and spotted for loading at the plant.

Webster's New International Dictionary gives the following pertinent definitions of the verb "appropriate": "To take to one's self in exclusion of others; to claim or use as by an exclusive or pre-eminent right;" "to set apart for, or assign to, a particular purpose or use, in exclusion of all others." Appropriation of the cars could not take place until the cars were set apart for appellant's use to the...