Western Transp. Co. v. Wilson and Co., Inc.

• Decision Date: 12 July 1982
• Docket Number: No. 82-1053,82-1053
• Citation: 682 F.2d 1227
• Parties: WESTERN TRANSPORTATION COMPANY, Plaintiff-Appellant, v. WILSON AND COMPANY, INC. and Wilson Foods Corporation, Defendants-Appellees.
• Court: U.S. Court of Appeals — Seventh Circuit

Page 1227

682 F.2d 1227

WESTERN TRANSPORTATION COMPANY, Plaintiff-Appellant, v. WILSON AND COMPANY, INC. and Wilson Foods Corporation Defendants-Appellees.

No. 82-1053.

United States Court of Appeals, Seventh Circuit.

Argued June 4, 1982.

Decided July 12, 1982.

Steven C. Weiss, Chicago, Ill., for plaintiff-appellant.

David L. Schiavone, Chicago, Ill., for defendants-appellees.

Before POSNER and COFFEY, Circuit Judges, and CAMPBELL, Senior District Judge. ^*

POSNER, Circuit Judge.

A common carrier regulated by the Interstate Commerce Commission may not receive a different compensation for its services from the rate specified in the applicable tariff, 49 U.S.C. § 10761(a), and if by mistake it charges a lower rate it may sue under 28 U.S.C. § 1337 to recover the undercharge. E.g., Madler v. Artoe, 494 F.2d 323 (7th Cir. 1974). The carrier's right to recover is quite unaffected by the usual limitations on contract actions based on mistake. "The shipment being an interstate one, the freight rate was that stated in the tariff filed with the Interstate Commerce Commission. The amount of the freight charges legally payable was determined by applying this tariff rate ... (and) thus, they were fixed by law. No contract of the carrier could reduce the amount legally payable; or release from liability a shipper who had assumed an obligation to pay the charges. Nor could any act or omission of the carrier (except the running of the statute of limitations) estop or preclude it from enforcing payment of the full amount by a person liable therefor." Louisville & Nashville R.R. v. Central Iron & Coal Co., 265 U.S. 59, 65, 44 S.Ct. 441, 442, 63 L.Ed. 900 (1924); see also Fry Trucking Co. v. Shenandoah Quarry, Inc., 628 F.2d 1360, 1361 (D.C.Cir.1980).

This is a harsh rule. Courts strain against it. A favorite device is to find that a tariff is ambiguous and then interpret it to reach a result that the court considers just. That is what the district court did in this case. The plaintiff, Western Transportation Company, is a motor common carrier regulated by the ICC. It went bankrupt, and in connection with its bankruptcy hired a consulting firm to comb through its invoices looking for undercharges-with results that are showing up with increasing frequency in the Federal Reporter. See, e.g., Western Transp. Co. v. Webster City Iron & Metal Co., 657 F.2d 116 (7th Cir. 1981). The defendants in this case, affiliated corporations that we shall refer to as Wilson, had between 1976 and 1978 shipped meats on Western under a tariff applicable "only when the shipment is loaded into or onto the truck by the shipper and unloaded therefrom by the consignee." There is no dispute that Wilson and its consignees complied fully with this requirement, but the tariff also provides that "the Bill of Lading and Shipping Order covering the shipment must contain a notation that cosignor is to load and/or consignee is to unload the shipment, as the case may be," and on a number of shipments the required notation was missing. Western is seeking in this action the difference between what it charged under this tariff and what it would have charged under the different tariff that would have been applicable if this one was not: about $124,000.

The district court held that the tariff was ambiguous because it allows the carrier to charge a higher rate if the shipper and consignee do not load and unload, even if the bill of lading notes that they intend to do so, but affords no "reciprocal opportunity for Wilson to look beyond the notation requirement" and pay the lower rate if it loads (and its consignee unloads) but fails to include the required notation in the bill of lading. Interpreting the tariff, the court concluded that the draftsmen would probably have wanted Wilson to get the lower rate, and dismissed the complaint. (There is a subordinate issue, relating to certain storage and pick-up charges, which we discuss at the end of this opinion and which the court below also resolved, though on other grounds, against Western.) Western has appealed.

We disagree with the district court. We find no ambiguity in the tariff, any more than we did in Western Transp. Co. v. Webster City Iron & Metal Co., supra, which involved the same carrier and very similar facts. The tariff imposes two requirements: the shipper and consignor must load and unload, and the bill of lading must contain a notation to that effect. That the notation requirement is pointless and a trap for the unwary, we grant; that allowing Western to collect for its "undercharge" will enrich it unjustly, by "compensating" it for services-loading and unloading the meats shipped by Wilson-that it did not perform, we also grant; that Western should as a matter of justice be estopped to claim a higher rate, since it was perfectly willing to allow Wilson to pay a lower rate without putting a notation to that effect on the bill of lading, we grant too. But these considerations do not make an unambiguous tariff ambiguous. If the duty to load and unload and the duty to say you will load and unload were contradictory, the tariff-construed, as every document must be construed, as a whole-would be ambiguous. They are not, and it is not.

If we were dealing with an ordinary contract we would have not the slightest hesitation in concluding that at the time the shipments were made the parties did not intend the noting of the shipper's intent to load (and the consignee's to unload) to be a condition precedent to the shipper's receiving the rate specified in the contract of carriage, provided the shipper and consignor actually did the loading and unloading, as they did here; and we would construe the contract accordingly. But the system of regulation created by Congress when it passed the first Interstate Commerce Act in 1887, a system unchanged (so far as is relevant to this case) to this day, limits the freedom of contract between shippers and carriers. Among other things that Congress was concerned with-at least ostensibly, and ostensible concerns are pretty much all a court can consider when construing a statute-was the "evil" of big shippers' getting secret discounts from railroads. See S.Rep.No.46, 49th Cong., 1st Sess. 181, 188-90, 198-200 (1886); New Haven R.R. v. ICC, 200 U.S. 361, 391-92, 394, 26 S.Ct. 272, 276-77, 278, 50 L.Ed. 515 (1906). To prevent this supposed evil Congress required the railroads (and later the motor carriers, when they were brought under the Interstate Commerce Commission's wing too) to charge only in accordance with published tariffs. See Act of Feb. 4, 1887, ch. 104, § 6(7), 24 Stat. 380, as amended, 49 U.S.C. §§ 10761, 10762. This goal would be subverted if a shipper and carrier could by agreement change the terms of the applicable published tariff. See S.Rep.No.46, supra, at 200. In effect Wilson received an off-tariff discount, because it was allowed to pay a low rate without complying with all of the terms of the tariff containing the rate.

Of course the facts of this case are remote from the concerns that moved Congress to set up the scheme we have described. There is no indication that Wilson is a powerful shipper or that not complying with the notation requirement saved it significant expense and so was the equivalent of a secret discount and hence a source of actual or potential advantage over competing shippers. But Congress did not create a flexible standard for the courts to apply in accordance with the facts, equities, and economic realities of the particular case. It forbade carriers to receive any different compensation from the rate in the applicable tariff. The tariff under which Wilson shipped its meats via Western was not the applicable tariff, because Wilson failed to comply with all of its terms; and...