Union Wire Rope Corporation v. Atchison, T. & SF Ry. Co.

• Decision Date: 20 July 1933
• Docket Number: No. 9468.,9468.
• Citation: 66 F.2d 965
• Parties: UNION WIRE ROPE CORPORATION v. ATCHISON, T. & S. F. RY. CO.
• Court: U.S. Court of Appeals — Eighth Circuit

66 F.2d 965 (1933)

UNION WIRE ROPE CORPORATION v. ATCHISON, T. & S. F. RY. CO.

No. 9468.

Circuit Court of Appeals, Eighth Circuit.

July 20, 1933.

Harry L. Donnelly, of Kansas City, Mo. (Phil D. Morelock, Perry W. Shrader, and William M. Cave, all of Kansas City, Mo., on the brief), for appellant.

Dean Wood, of Kansas City, Mo. (Cyrus Crane and George J. Mersereau, both of Kansas City, Mo., and E. E. McInnis, of Chicago, Ill., on the brief), for appellee.

Before STONE and KENYON, Circuit Judges, and REEVES, District Judge.

STONE, Circuit Judge.

This is an action by appellee for interstate freight undercharges. Of the forty-three counts, one was for a shipment of wire and the others for separate shipments of wire rope from Kansas City, Mo. From a judgment upon all counts, aggregating $3,024.49, defendant brings this appeal.

The sole substantial issue here is whether these shipments were entitled to be made under a stoppage in transit through rate tariff in force by the Wabash Railway Company, the initial connecting carrier. That issue arises as follows: Appellant bought steel rods at Chicago and shipped them via the Wabash to Kansas City, where it operated a wire rope factory. At Kansas City, the rods were subjected to a heating process and certain chemical treatment to prepare them for drawing into wire. Then they were, in repeated operations, drawn through dies of lessening sizes into steel wire. This wire was woven into strands which were woven about a central core of manila rope so as to form wire rope, the finished product. It is this wire and wire rope which were shipped to various interstate destinations over the line of appellee that are the subject of this action. The Wabash had in force a tariff (I. C. C. No. 6286) governing "Transit Privileges on Iron or Steel Articles." Under the subheading "Rates," this tariff provides as follows: "(a) When the unfabricated material covered by the inbound billing matched against outbound shipments originates at a point from which a joint through rate is in effect via the transit point, the rate to be charged will be the lawful through rate on the unfabricated or fabricated material, whichever is higher from origin point to final destination, in effect at the time of shipment from such origin point, plus fabrication charge of two (2) cents per 100 pounds."

In each of these shipments there was a "joint through rate" on the Wabash and appellee via "the transit point," Kansas City. It was this through rate which was paid to the appellee. This action is for the difference between the through joint rate and the local rate from Kansas City. Under the subheading "Application of Tariff" is the following: "Articles of Iron and Steel, viz.: * * * rods * * * May be Stopped at * * * Kansas City, Mo. * * * For the purpose of Reworking or assembling (called fabrication herein)." There is no dispute that the conditions of the above tariff were complied with in all except the disputed respect, which is whether what appellant did to the rods in Kansas City is "reworking," within the meaning of this tariff.

A rate tariff is in essence a statement by the carrier to possible shippers that it will furnish certain services under certain conditions for a certain price. When a tariff has become legally promulgated, it is binding upon both the carrier and any shipper taking advantage of it, and its terms (in essence) become, in such respects, the only contract between the two allowed by law. Since the tariff is written by the carrier, all ambiguities or reasonable doubts as to its meaning must be resolved against the carrier. Not only is this simply an application of the general rule as to construction of written contracts and instruments, but, when the place occupied by transportation and the situation of shippers are considered, it is particularly useful in application to tariffs. The construction should be that meaning which the words used might reasonably carry to the shippers to whom they are addressed. If the tariff is addressed to a special class of shippers and uses words which have a particular or customary import among such class of shippers, that meaning should be given to such words, for that is how they reasonably would understand them. For example, if a tariff provided a lower rate upon "culls" in apple shipments, that word must find its definition in what apple shippers honestly regard and treat as "culls." When the carrier addresses a word to a class, it must abide by the established or customary meaning of that word in that class. This rule works out justice. Always the carrier can avoid such words or it can make clear the meaning it intends them to have. On the other hand, the shipper would naturally and reasonably understand the words in their customary meaning, and to hold him to something else after he had become obligated through reliance thereon would result in deception and loss caused by the carrier to its advantage.

The tariff involved here is addressed to a class. That class is those who work upon "Articles of Iron and Steel, viz.: Angles, Bars, Beams, Bolts, Castings, Channels, Columns, Girders, Nuts, Plates, Rivets, Rods, Sheets, Tees, Tubular Iron or Steel (unfabricated from rolling mills) or Zees" (italics added). The tariff tells that class what they can do with the above iron and steel articles at the transit points and retain the tariff through rate. What they can thus do is stated as "Reworking or assembling (called fabrication herein)." These words "Reworking or assembling" are broad and general in ordinary meaning.

Our first search is to ascertain whether the carrier has given any guide, in the tariff itself, to the meaning it intends these words to convey. A designated note ("* * *") to this statement of the tariff calls attention to the fact that this tariff has changed an earlier one by eliminating (as to these transit points) the words, "and there fabricated into Iron or Steel framework or sections for bridges, buildings or cars." That is, the limitation of the former tariff as to the kinds of articles to be there made is withdrawn, and the shipper is permitted to do anything reasonably included in the words "Reworking or assembling." Since these words are "called fabrication herein" (meaning the entire tariff), we examine the use of the word "fabrication" in other parts of the tariff. It is frequently used therein, but the only use pertinent to our inquiry is "Rule 25," entitled "Consolidation," which reads as follows: "The fabricator is not required to preserve the identity of unfabricated material; it may be consolidated in the fabricating plant and applied in accordance with the provision shown on page 3 against the tonnage balances of each carrier without regard to the origin of the material."

From this it appears (a) that the identity of the shipped in material need not be preserved, and (b) that such may be "consolidated in the fabricating reworking or assembling plant." Obviously Rule 25 suggests a broad rather than a narrowed meaning of "Reworking or assembling."

We next turn to the ordinary meaning of these two words. They are used in the disjunctive, and are properly to be taken as meaning different things. "Reworking" is the important word here, and means working again. "Working again" necessarily refers to a prior working. It means that the articles have been "worked" before they reach the transit point, and that the tariff allows them to be there worked again. How had these rods been worked before they reached Kansas City? The evidence shows the only working to be the manufacture at the rolling mills of the rods. That process is described as follows: "The rod is made in the open hearth furnace; the steel is poured into moulds called `ingots.' These ingots are put in a soaping pit to become white hot throughout and are then rolled down in the blooming mill to bloom. These blooms are cut up into billets. These billets are reheated in another furnace in the rod mill and are rolled into the rods. These rods are formed into coils."

From this wording of the tariff and its application to actual conditions affecting the articles dealt with therein when initially shipped, it would appear that the shipper would reasonably and properly understand the tariff as giving him a wide range of change and treatment of the rods at the transit point.

In this connection it is pertinent to observe that more than 90 per centum of the steel rod tonnage produced annually is made into wire and wire products (Chain Iron and Steel, etc., 151 I. C. C. 83, 86), and the general classification of iron and steel articles for rate-making purposes includes rods and wire in closely related classifications as shown in the last-cited case at page 84, where the Commission says: "In a general way iron and steel articles for rate-making purposes are separated into three groupings; first, pig iron and articles taking pig-iron rates; second, steel billets, and articles taking billet rates, including rods, ingots, skelp, slabs, and waste materials; and third, the manufactured iron and steel list which embraces all other iron and steel articles which have progressed in manufacture beyond the billet stage, including bars, tank plates, structural shapes, wire, wire nails, wire fencing, bolts, nuts, car axles, beams, chain or link belting, corrugated or plain culverts (knocked down), locomotive frames, girders, and boiler plate. Articles in the billet list take sixth class or commodity rates slightly lower. Articles in the manufactured iron and steel list take fifth class or commodity rates slightly lower, minimum 36,000 pounds."

The third approach to a construction of this tariff is required by the contention of appellant that "working" and "reworking" have a customary meaning in the iron and steel trade. This contention is supported by evidence tending to show that such meaning covers what appellant did here. There is no evidence to the contrary.

From what has...