United States v. Kansas City Southern Ry. Co.

• Citation: 116 F. Supp. 484
• Decision Date: 17 November 1953
• Docket Number: Civ. A. No. 5254.
• Parties: UNITED STATES v. KANSAS CITY SOUTHERN RY. CO.
• Court: U.S. District Court — Western District of Missouri

116 F. Supp. 484

UNITED STATES v. KANSAS CITY SOUTHERN RY. CO.

Civ. A. No. 5254.

United States District Court W. D. Missouri, W. D.

October 5, 1953.

Motion for New Trial and to Set Aside Order Dismissing Complaint Denied November 17, 1953.

Sam M. Wear, U. S. Atty., David A. Thompson, Asst. U. S. Atty., Kansas City, Mo., G. H. Penstone, Regional Atty., Office of Solicitor, U. S. Dept. of Agriculture, Chicago, Ill., for plaintiff.

Richard S. Righter, William E. Davis, Kansas City, Mo., for defendant.

RIDGE, District Judge.

During the period from April 20, 1945, to August 2, 1946, Commodity Credit Corporation shipped on commercial bills of lading, via the lines of defendant, 5,519 carloads of wheat (totaling 10,100,965 bushels) from Kansas City, Mo.-Kan., to Port Arthur, Texas, for export. The plaintiff, through the C.C.C., paid the rates as legally published in applicable tariffs for said shipments. All of the grain moved through an elevator owned by the Port Arthur Canal and Dock Company, which prior to the transportation in question was under lease to defendant. April 15, 1945, defendant subleased said elevator to Houston Milling Company, Inc., for a term of one year. Said elevator remained under that or other subleases throughout the period of time here considered.

A tariff of defendant which plaintiff contends was applicable to the major portion of the above shipments is defendant's Tariff 10-R, I.C.C. No. 5054, effective December 5, 1939. That tariff, as modified by various supplements and circulars, was continued in effect during the period of all the shipments involved. Item 210-B, in Supp. No. 11 thereto, effective February 15, 1942, provided, in part, as follows:

"Port Arthur, Texas, elevator charges, as shown in Items Nos. 110, 115 and 125 of K.C.S. Lines Circular No. 32-H, I.C.C. No. 5132, for the handling of export grain from cars through the elevator to shipside are included in rates."

Such provision only applied, however, to grain for export to points other than Mexican Gulf Ports, Central and South America, Cuba and Puerto Rico.

Item No. 110 of K.C.S. Lines Circular No. 32-H (Ex. G) referred to in Supp. No. 11, supra, covered cleaning and fanning charges of one-fourth cent per bushel; Item No. 115 covered turning charges of one-fourth cent per bushel; and, Item No. 125 covered elevation charges for handling export grain from cars to the elevator, thence to the vessel, including thirty days' free storage, of one cent per bushel at defendant's Port Arthur, Texas, elevator. As to the latter charge, the tariff provided that "export grain moving through Kansas City, Mo.-Kan., on through rates, or export grain moving from Kansas City, Mo.Kan., on proportional rates, varying proportional rates, or balance of through rates on which the Kansas City Southern Railway secured entire line haul from Kansas City, Mo.-Kan., to Port Arthur, Texas, free-time allowance will be thirty days." It was also provided by Item 140 of that circular that insurance was included with the elevation charges provided in Item No. 125.

In connection with the transportation of the grain above, the C.C.C. never made any demand of defendant to perform any elevation and storage services at Port Arthur, Texas, as provided for in defendant's published tariffs, supra. Instead, it entered into its usual form of "Uniform Grain Storage Agreement" with the Houston Milling Company, Inc., and certain other elevator companies who from time to time were in possession, pursuant to sublease, of the elevator at Port Arthur, Texas, and paid said companies for performing the services necessarily required for the handling of the grain from cars through that elevator to shipside. It was at the instigation of the C.C.C. that said sublessees subleased said elevator from defendant, and entered into "Uniform Grain Storage Agreements" with it; all as a part of the storage and export program of the C.C.C. The Uniform Grain Storage Agreements C.C.C. entered into with such sublessees were substantially different as to services, rates and charges to be paid for handling its export grain through the elevator at Port Arthur, Texas, than those contained in defendant's tariffs which defendant published as being included within the applicable freight rate.

Plaintiff's theory of claim is alleged in alternative counts in the complaint. Under the first count, the claim as made is one for "overcharge", premised in the fact that defendant did not provide elevator service for cleaning, fanning and turning, in and out elevation from cars to ship, with free storage up to thirty days as to each shipment of grain involved, as defendant was required to do by its tariff. As a consequence, plaintiff asserts defendant "overcharged" C.C.C. for the shipments of said grain. Recovery for such overcharge is sought to the reasonable value of the elevator service C.C.C. was necessarily required to furnish and pay to move such export grain through the Port Arthur, Texas, elevator. The second count of the complaint is one for damages as for breach of contract resulting from defendant's failure to comply with its duly published tariffs under the above circumstances.

In resisting plaintiff's claims, defendant, along with other defensive matter questions our jurisdiction to entertain or determine the claims plaintiff here makes against it. The substance of the jurisdictional question so raised is that plaintiff's claims "constitute an attempt to enforce collection of a rebate of a portion of a regularly and lawfully filed and published railroad tariff rate, and that this Court is without jurisdiction to hear or entertain or act upon, or allow the same" in light of the provisions of the Interstate Commerce Act, 49 U.S. C.A. § 1 et seq. Thus, a proposition essential to our jurisdiction is presented which must be resolved before we are called upon to travel through the labyrinthian issues presented by the merits of the instant claims.

It is well settled that the right to maintain an action at common law to recover the excess of a freight charge, over the duly published or established rate of a carrier is not affected by any of the provisions of the Interstate Commerce Act. Macon D. & S. R. Co. v. General Reduction Co., 5 Cir., 44 F.2d 499, certiorari denied 283 U.S. 821, 51 S.Ct. 345, 75 L.Ed. 1436. Likewise, the common-law right to recover the difference between the amount of a reasonable charge and the amount of an exorbitant unpublished charge coercively exacted by a carrier still remains; Swift & Co. v. New York C. R. Co., 2 Cir., 16 F.2d 17; Cocke v. Morgan's L. & T. R. R. & S. S. Co., 5 Cir., 4 F.2d 961, certiorari granted 268 U.S. 685, 45 S.Ct. 639, 69 L.Ed. 1156, and rev. on other grounds, 273 U.S. 656, 47 S.Ct. 342, 71 L.Ed. 825; but, if the charges of an interstate carrier have been made in accordance with filed and published rates, as provided in the Interstate Commerce Act, supra, the common-law remedy for enforcement of such a right has been abrogated, and enforcement of a claim under such circumstances is dependent upon the injured party's first filing a timely complaint with the Interstate Commerce Commission and obtaining a finding by that body that the rate charged was unreasonable under the circumstances, and the amount such party was thereby overcharged. Cf. Texas & Pac. Ry. Co. v. Abilene Cotton Oil Co., 204 U.S. 426, 27 S.Ct. 350, 51 L.Ed. 553; Robinson v. Baltimore & O. R. R., 222 U.S. 506, 32 S.Ct. 114, 56 L.Ed. 288; U. S. v. I.C.C., 337 U.S. 426, 437, 69 S.Ct. 1410, 93 L.Ed. 1451; Goodbody v. Penn. R. Co., 6 Cir., 29 F.2d 67. In a common-law action for recovery of damages, or overcharge, as the consequence of a published rate exacted by an interstate carrier, the only question between a shipper and the carrier is what is, or was, the legal published rate for the shipment, and not what the rate should have been, Carson Lumber Co. v. St. L. & S. F. R. Co., D.C., 198 F. 311, affirmed 10 Cir., 209 F. 191, and, this is so where the alleged damage or overcharge is due to an alleged practice of the carrier. Cf. Northern Pac. Ry. Co. v. Solum, 247 U. S. 477, 38 S.Ct. 550, 62 L.Ed. 1221.

Under the Interstate Commerce Act, the legally published tariff of a carrier may not be avoided, enlarged, or varied by the shipper or the carrier by contract, express or implied, or by the tort of the carrier. Keogh v. Chicago & N. W. Ry. Co., 260 U.S. 156, 43 S.Ct. 47, 67 L.Ed. 183. So long as a published tariff rate remains operative, it is binding upon the shipper and the carrier alike, and must be enforced by the courts in fixing the rights and liabilities of the parties, where overcharge or damages are claimed as a consequence of its exaction. Cf. Robinson v. Baltimore & Ohio R. R., 222 U.S. 506, 32 S.Ct. 114, 56 L.Ed. 288; Great Northern R. Co. v. O'Connor, 232 U.S. 508, 34 S.Ct. 380, 58 L.Ed. 703. Accordingly, neither the shipper nor carrier may depart from the duly filed and published tariff rates in effect at the time an interstate shipment is made, and an interstate carrier has both a right and an absolute duty to charge and recover such scheduled rates until they are changed in the manner provided by law, even though they may, under particular circumstances, be excessive, unreasonable and unlawful. Davis v. Krauss Bros. Lbr. Co., D.C., 25 F.2d 888; North Am. Co. v. St. L. & S. F. R. Co., D.C., 288 F. 612, reversed on other grounds Spiller v. St. Louis & S. F. R. Co., 8 Cir., 14 F.2d 284, certiorari granted 273 U.S. 680, 47 S.Ct. 111, 71 L.Ed. 837, affirmed in part and rev. in part on other grounds, 274 U.S. 304, 47 S.Ct. 635, 71 L.Ed. 1060.

In the case at bar, the evidence establishes that defendant under certain tariffs duly filed and published with the Commission as required in Section 6(1) of the I.C. Act, 49 U.S.C.A. § 6 (1), exacted from the C.C.C. the precise amount of freight rates it was legally authorized to charge for the shipments of grain here involved....