Pennsylvania R. Co. v. Wm. H. Muller & Co.

• Decision Date: 19 October 1926
• Docket Number: No. 2424.,2424.
• Citation: 15 F.2d 535
• Parties: PENNSYLVANIA R. CO. v. WM. H. MULLER & CO., Inc.
• Court: U.S. Court of Appeals — Fourth Circuit

15 F.2d 535 (1926)

PENNSYLVANIA R. CO. v. WM. H. MULLER & CO., Inc.

No. 2424.

Circuit Court of Appeals, Fourth Circuit.

October 19, 1926.

Ralph Robinson and Shirley Carter, both of Baltimore, Md., for plaintiff in error.

R. E. Lee Marshall, of Baltimore, Md., for defendant in error.

Before WADDILL, ROSE, and PARKER, Circuit Judges.

ROSE, Circuit Judge.

W. H. Muller & Co., Inc., the defendant in error, is a New York corporation. It was the plaintiff below. The plaintiff in error, the Pennsylvania Railroad Company, is a body corporate of the state whose name it bears. They will be referred to as the shipper and the railroad, respectively. The suit was originally brought in a state court of Maryland and was removed by the railroad to the court below. The shipper sought to recover the damages it said it had suffered by the failure of the railroad seasonably to carry its wheat from Buffalo to Baltimore. The jury gave it $119,206.64.

The railroad relies upon a score or more of assignments of error. In form these attack various rulings upon evidence and the action of the learned District Judge in giving and refusing instructions. In substance they raise three major questions, one of which has several branches. These are: Was the shipper entitled to recover at all (1) upon the pleadings; (2) upon the merits; and if it was, (3) what was the measure of its damages?

In the light of the verdict of the jury, the facts may be taken to be that, prior to September 9, 1922, the shipper had bought or had arranged to buy 2,000,000 bushels of Manitoba wheat and had planned to have them brought by lake steamers to Buffalo. It intended all of this grain for export. It had already sold some of it c. i. f. various European ports and was in treaty for the sale of more. It had chartered a number of ocean-going steamships to carry this wheat across the Atlantic and purposed to hire others. It preferred to make its shipments from Baltimore, but as, in its charter parties, it had reserved the option of directing the vessels to report at any one of a number of ports on our Eastern coast, it sought, before giving any of them their orders, to make sure that the railroad would be able to bring the wheat from Buffalo to Baltimore in time to put it upon the ships during their respective lay days.

Accordingly on September 9th, the shipper, in conformity with the established usage of the trade and of the railroad, sought the railroad's representative in Baltimore and told him the situation in which it was, as that has already been described. He was informed of the dates, or of the approximate dates, at which the chartered ships would be entitled to demand their cargoes, and that, if the grain did not arrive in time "to liquidate" the shipper's "contracts," default and consequent liability would follow. The shipper asked to be told if the railroad was not in a position to handle the grain, so that it might in that event order the ships to some other port than Baltimore. The railroad's agent replied that he thought the railroad could do what was required, but that he would have to take up the matter with its headquarters at Philadelphia. This he did at once, and on the 11th of September wrote the shipper that, referring to conversations relative to "your 2,000,000 of bushels of Manitoba wheat to move from Buffalo late September or early October, which you advise will have prompt ocean clearance upon arrival at Baltimore, we will gladly arrange to book this freight upon advice as to lake steamers. Thanking you for the business, we remain," etc.

Thereafter, the shipper ordered five of its chartered ships to Baltimore. Before the time for giving like orders to others, it became apparent that the railroad would not have the wheat for them, and they were put to other uses. From time to time and in due season the shipper furnished the railroad with the names of the lake steamers bringing its grain to Buffalo. On October 4th, the first of the shipper's vessels to arrive at Baltimore reported herself ready to load. The second made a like report on the 11th, the third on the 13th, the fourth on the 18th, and the fifth on the 23d of the same month. More than sufficient wheat to furnish full cargoes for all of them had been brought by the shipper to Buffalo long enough in advance of these dates to have enabled the railroad to have had it in Baltimore ready for the ships as soon as they were prepared to receive it, provided the railroad had moved it from Buffalo to Baltimore with anything like usual dispatch. As it was however, the railroad did not start the movement from Buffalo of any part of the shipper's wheat until some time in November, and none of it arrived until after all the ships had gone on demurrage, and not sufficient of it reached Baltimore before the end of November to enable the shipper to fill all of its foreign contract of sale for November shipment from a North Atlantic port, upon two of which it consequently defaulted.

The Pleadings.

The declaration had but one count, which alleged that on September 11, 1922, the shipper had contracted with the railroad to ship its wheat from Buffalo to Baltimore for export to foreign destinations, and that on that date the railroad undertook and agreed to transport and carry the wheat, and to move it from Buffalo late in September or early in October, 1922, and to deliver it at Baltimore for export within a reasonable time from the commencement of the movement. The declaration further charged that such contract and agreement was entered into under and pursuant to the provisions of the then prevailing tariff governing export ex lake grain rates from Buffalo to Baltimore. Appropriate allegation followed to the effect that the shipper had done whatever it was required to do, and that the railroad had wrongfully and unreasonably neglected and refused to furnish necessary cars and equipment, and had wrongfully and unreasonably delayed the movement, transportation, and delivery of the wheat as a result of which it did not arrive in Baltimore in time to load it on board ships there waiting to receive it for transportation and delivery to foreign purchasers. There followed statements of the nature of the damage resulting and allegations that the railroad had been at all times informed of the nature and character of the shipper's obligations, both with respect to the timely shipment of the wheat from Baltimore for the purpose of meeting its engagements with foreign purchasers and with respect to the timely delivery to the ships to avoid liability for demurrage and of the special damages which delay would cause the shipper.

The railroad did not demur to this declaration, but instead pleaded the general issue, but by appropriate prayers for instructions to the jury and by objections to testimony it sought to raise the question of the right of the shipper to recover even if it proved all that it had alleged. The railroad's argument was and is that the shipper seeks to recover in assumpsit for breach of a contract to furnish cars and transportation within a limited time certain and that the carrier may not validly assume any such obligation. Chicago & Alton R. R. v. Kirby, 225 U. S. 155, 32 S. Ct. 648, 56 L. Ed. 1033, Ann. Cas. 1914A, 501; Davis v. Cornwell, 264 U. S. 560, 44 S. Ct. 410, 68 L. Ed. 848. There may well be a question whether all that was said in those cases has any application to the one at bar.

The allegation of the declaration that the agreement was made in accordance with the provisions of the published tariffs regulating the rates and conditions of the transportation in contemplation is based upon the fact that the tariffs themselves declare that the rates prescribed in them will "apply only when previous arrangements are made with the carriers" "in order to provide for the elevation, storage, insurance and necessary equipment." These tariffs deal with a situation which they describe as "when grain is contracted before elevation for immediate shipment and is placed in custody of carriers." Under such circumstances it is declared that the carriers will be responsible for loss by fire and will assume the cost of storage accruing after five days from date of elevation." It is said that, "when such contracts are made, the responsibility of the carrier will begin when grain is delivered into the elevator leg." Still another paragraph of these tariffs read: "When grain is contracted in the elevator for immediate shipment, the carrier" "will not accept custody until the expiration of five days (Sundays and legal holidays excepted) after date of contract." A fourth paragraph deals with what it describes as "grain contracted not for immediate shipment, or contracted for immediate shipment, but subsequently ordered held in elevator." The italics are ours.

It is expressly provided that the rates of transportation prescribed in these tariffs apply only to traffic for export to foreign countries. In the cases relied upon by the railroad and already cited the tariffs contained no provisions similar to those herein quoted or summarized. Specifically there was no requirement that in order that the tariffs should apply a "previous arrangement" must have been made with the carriers "in order to provide for the elevation, storage, insurance, and necessary equipment" nor when such...