Terry Packing Co v. Southern Ex-press Co.

• Decision Date: 21 June 1927
• Docket Number: (No. 12226.)
• Citation: 141 S.E. 144
• Parties: TERRY PACKING CO. v. SOUTHERN EX-PRESS CO. et al. (four cases).
• Court: South Carolina Supreme Court

141 S.E. 144

TERRY PACKING CO.

v.SOUTHERN EX-PRESS CO. et al. (four cases).

(No. 12226.)

Supreme Court of South Carolina.

June 21, 1927.

Cothran, J., and Purdy, A. A. J., dissenting.

Appeal from Common Pleas Circuit Court of Richland County; M. S. Whaley, Judge.

Four consolidated actions by the Terry Packing Company against the Southern Express Company and American Railway Express Company. Judgments for plaintiff, and defendant last named appeals. Judgment affirmed in each case.

See, also, 125 S. C. 198, 118 S. E. 628.

The following is the report of the Interstate Commerce Commission, referred to in the opinion:

By application filed March 22, 1920, as amended, we are requested to approve and authorize the consolidation of the express transportation business. * * *

The application is made under paragraph 7 of section 5 of the Interstate Commerce Act, as amended by section 407 of the Transportation Act 1920 (49 USCA § 5; U. S. Comp. St. § 8567), and reading as follows: "The power and authority of the commission to approve and authorize the consolidation of two or more carriers shall extend and apply to the consolidation of four express companies into the American Railway Express Company, a Delaware corporation, if application for such approval and authority is made to the commission within thirty days after the passage of this amendatory act; and pending the decision of the commission such consolidation shall not be dissolved."

At the beginning of the period of federal control there were seven express companies operating over the railroads of the United States—the Adams, American, Weils Fargo, Southern, Great Northern, Western, and Northern Express Companies. Of these, the first four named operated over approximately 92 per cent. of the railroad mileage of the country, and transacted approximately 95 per cent. of the express business of the country. After the government assumed control and operation of the railroads, the Director General of Railroads declined to carry out the separate contracts between the railroads and express companies under which the express business had theretofore been conducted, but advised the express companies that if they would form a single corporation he would make a contract with that corporation to conduct the express business as his agent. In June, 1918, the Adams, American, Wells Fargo, and Southern Express Companies, which jointly had secured by lease the express business and the property devoted to that business of the other express companies hereinbefore mentioned, entered intoa contract with the Director General by which it was provided that the express companies would cause to be organized a corporation to carry on the express transportation business for the Director General. Thereupon the American Railway Express Company was organized under the laws of Delaware, and, under a contract with the Director General, took over the express business upon the railroads under federal control as agent of the Director General.

The Adams, American, Wells Fargo, and Southern Express Companies exchanged all the property devoted by them to the express transportation business, estimated by the Director General to be of the value of $30,000, 000, as of November 30, 1917, together with $3,000, 000 in cash for working capital, for the stock of the American Railway Express Company.

A number of protests against the approval and authorization of the consolidation, in the form of resolutions adopted by commercial organizations, letters, and telegrams, have been received by us. In most of these complaint is made that the service rendered by applicant was and is inadequate and unsatisfactory, and this is attributed largely to the lack of competition. In a number of others the policy of at least two of the predecessor companies with respect to the adjustment of claims which arose prior to the consolidation is criticized, and it is urged that if the consolidation is authorized suitable provision should be made to protect the rights of claimants.

The railroad commissions or other public utilities commissions of 33 of the states were represented at the hearing. Only 4 states voiced objections to granting the application on the ground other than the matter of old claims against the Adams and Southern Express Companies.

One of the objections to the unqualified approval of the consolidation which is most strongly urged upon our consideration arises from the policy of the Adams and Southern Express Companies in the settlement of loss and damage claims which accrued prior to the consolidation. When applicant took over the express business July 1, 1918, an arrangement was made between it and the predecessor companies whereby claims which had arisen against the latter were adjusted by applicant for account of the predecessor companies. On June 11, 1918, the predecessor companies issued a point circular signed by the president of each, addressed to their officers, agents, and employees, as follows: "We are beginning to find evidence of anxiety among patrons who have claims outstanding against our respective companies, the impression seeming to prevail that unless the claims are paid before July 1st, there would be difficulty in collecting them. We want to say to you that there is no need for any anxiety on the part of any patron or shipper, as an agreement has been entered into between our respective companies whereby the handling of these claims will be undertaken by the new company. No suits are necessary, as the new company will undertake to dispose of all of these matters with promptness and without unnecessary trouble or annoyance to our patrons. It is hoped through this notice that persons having claims against our several companies will more fully understand the conditions that obtain, and be willing to allow their claims to take the same course as has been followed in the past. The new company will be as anxious as the public to have all old claims disposed of and out of the way, and every energy will be put forth in that direction."

From the time it began business until the early part of 1919 applicant made settlement of the claims which had accrued against all the predecessor companies, and it still continues the adjustment of the claims which accrued against the American and Wells Fargo express companies.

In the early part of 1919 the Adams and Southern Express Companies withdrew from the former arrangement, and since have themselves conducted the adjustment of claims filed against them. Many protests have been received and evidence was offered at the hearing criticizing the treatment accorded claimants by these companies. It is said that their withdrawal from the former arrangement necessitated the presentation of claims at their offices in New York City; that they had no agents or property in states other than New York; and that legal service could be made upon them only in New York. It is further said that in many instances little or no attention was given to letters from claimants, and that in some instances, while in correspondence with the companies with respect to claims and before any declination of the claims, claimants were advised that their claims were barred by the two-year and one-day limitation clause contained in the express receipt. Even after offering assurances to those seeking adjustment of claims through correspondence that the limitation period would not debar claims until 30 days after declination claimants were advised, without prior declination, that such claims were barred by the limitation clause. They finally offered to settle claims on a basis of 60 per cent. provided the claims were prima facie valid. This offer, at first made to individual claimants, was given general publicity. It was testified by one of the protestants that the acceptance of this offer was without avail. The record indicates that not only have these two companies disregarded their moral obligation with respect to many claims, but that apparently they have endeavored by a studied plan to avoid even their strict legal liability.

While the methods of the Adams and Southern Express Companies in the settlement of claims against them merit the severest condemnation, we are not persuaded that the approval by us of the consolidation, if otherwise in the public interest, should be conditioned as urged by certain of the protestants so as to require the constituent companies to provide for the handling of claims and the service of legal process in the jurisdictions where they formerly operated ami to revive claims which may have been barred by the two-year and one-day limitation with respect to filing suit. We are not authorized under the Interstate Commerce Act to approve the maintenance of the existing consolidation and in connection therewith to prescribe terms as to the manner in which these claims shall be handled as a condition of the continuance of the consolidation. Nor are we authorized to require the resumption of operation by the constituent companies. We are merely empowered to approve and authorize the existing consolidation. The principal objections raised are that claimants must bring suit in New York and that many of the claims, while meritorious, are too small to justify the expense of suit. Under such circumstances hardship obviously results to theclaimants but that does not justify us in requiring the express companies, as a condition precedent to our approval of the consolidation, to waive any legal defenses which they may elect to make in the courts. We have repeatedly held that we have no jurisdiction over claims for loss and damage. However, we do have jurisdiction to determine the reasonableness and propriety of carriers' published rules and regulations relating to transportation, and in the National Industrial Traffic League v. Express Co., 58 Interst. Com. Com'n R. 304, following Decker & Sons v. Director General, 55 Interst. Com. Com'n R. 453, we found that the clause of the uniform...