WS Dickey Clay Manufacturing Company v. Corder

Decision Date15 January 1963
Docket NumberNo. 19364.,19364.
Citation310 F.2d 764
PartiesW. S. DICKEY CLAY MANUFACTURING COMPANY, Appellant, v. William H. CORDER, d/b/a W. H. C. Trucking Company, Appellee.
CourtU.S. Court of Appeals — Fifth Circuit

Frank A. Leffingwell, Carl L. Phinney and Sam Dawkins, Jr., Dallas, Tex., Phinney, Hallman & Pulley, Dallas, Tex., Leffingwell, Dawkins & Oehmann, Dallas, Tex., of counsel, for appellant.

James P. Hart, Austin, Tex., James F. Gardner and Dibrell, Gardner & Dotson, San Antonio, Tex., Hart & Hart, Austin, Tex., for appellee.

Before TUTTLE, Chief Judge, and RIVES and JONES, Circuit Judges.

RIVES, Circuit Judge.

This appeal is from a judgment for $483,292.51, plus interest and costs, in favor of the appellee, Corder, against the appellant, Dickey. The action was filed March 1, 1958, and the claim was for undercharges on shipments of clay pipe transported by Corder from Dickey's plant at Saspamco, Texas, to various points in Texas from March 3, 1952 to November 2, 1956. Upon the theory that the Texas four-year statute of limitations applied, Corder eliminated from his claim all shipments originating prior to March 2, 1954.

Corder claimed that the Railroad Commission of Texas had prescribed rates applicable to the shipments substantially greater than the rates charged to and paid by Dickey. Dickey denied that the Railroad Commission of Texas had prescribed rates applicable to the hauling of the clay pipe. In the alternative, Dickey urged that if any such rates had been prescribed they were lower than those paid to Corder. Dickey further insisted that the Texas two-year statute of limitations applied.

The case was tried to the court without a jury. The district court made extensive findings of fact and conclusions of law in the form of a 28-page unreported memorandum decision, and entered a judgment for Corder against Dickey, which, with interest and costs, now amounts to over half a million dollars.

On this appeal there is no attack upon the following findings of fact made by the district court:

"Dickey, at all times pertinent hereto, was engaged in the operation of several manufacturing plants manufacturing burned clay products. One of these plants was located at Saspamco, Texas. The plant at Saspamco manufactured and sold clay pipe for use in Municipal, County and State projects, with about eighty to ninety per cent of its pipe being shipped direct to municipal organizations. Prior to 1949 all pipe manufactured at Saspamco was shipped by Dickey either by railroad in carload quantities or by private trucks.
"Early in 1949 M. E. Cage, President of the Cage Trucking Company, approached Dickey\'s San Antonio representative with a proposal to transport truck load shipments of clay products from Saspamco to Texas destinations at the then existing rail carload rates. After some negotiations the Cage Trucking Company, referred to hereinafter as Cage, and Dickey entered into a contract in writing on July 12, 1949, under the terms of which Cage, as a contract carrier, was to transport by truck Dickey\'s burned clay products from its plant at Saspamco to Dickey\'s customers at such locations or destinations in the State of Texas as Dickey might from time to time direct or require. That contract provided that the sole compensation for transporting the burned clay products by Cage should be `the same sum or rate per hundred-weight of quantity in such truckloads\' as published or charged by the rail carrier or carriers operating between manufacturer\'s said plant and the destinations of such deliveries. The contract further provided that Cage would comply with all lawful rules, regulations and orders required of a contract carrier by the Railroad Commission of the State of Texas. On July 28, 1949, Cage filed with the Railroad Commission of Texas an application for a contract carrier permit accompanied by the foregoing contract and other information. The Railroad Commission had a hearing on said application on September 26, 1949, after due notice of such hearing and granted said application and on October 24, 1949, issued its Contract Carrier Permit No. 10471 to Cage authorizing Cage to transport by motor truck Dickey\'s burned clay pipe from its Saspamco plant to any point in the State of Texas. The order of the Railroad Commission granting Cage\'s application contained the following provision:
"`The Commission Further Finds that the service rendered by applicant is more substantially similar to that of a common carrier motor carrier and the Commission orders that the minimum rate to be charged by the applicant shall not be less than that charged by common carrier motor carriers under the rates fixed by the Railroad Commission.\'
"The Contract Carrier Permit No. 10471 issued to Cage contained the following provision:
"`Service Rendered by Applicant is more substantially similar to that of a common carrier motor carrier and the Commission orders that the minimum rate to be charged by applicant shall not be less than that charged by common carrier motor carriers under the rates fixed by the Railroad Commission.\'
"The latter part of 1951 Corder, with knowledge that Cage was charging rail carload rates for the clay pipe he was transporting for Dickey, approached Cage with reference to purchasing Cage\'s contract with Dickey. On March 1, 1952, Cage, with the written consent and approval of Dickey, transferred and assigned its contract with Dickey to Corder, together with Contract Carrier Permit No. 10471 theretofore issued to Cage by the Railroad Commission of Texas. Cage filed an application with the Railroad Commission of Texas for approval of the sale and transfer of said permit to Corder. By order entered on March 4, 1952, the Commission approved the sale and transfer of said Permit No. 10471 to Corder, and on March 7, 1952, the Railroad Commission issued its Contract Carrier Permit No. 10471 to Corder. Said permit issued to Corder contained the identical language with reference to the minimum rates to be charged by the permit holder, above quoted, that was contained in the Permit No. 10471 issued to Cage. Corder immediately began transporting shipments of clay pipe from Dickey\'s Saspamco plant to various places in Texas at the rail carload rates.
"The original Corder-Dickey contract was to expire by its own terms on November 3, 1954. On or about June 1, 1954, Corder suggested a new contract with Dickey which was negotiated and made effective on that date. The new contract, which was also in writing, was still based on rail carload rates, but it provided for certain surcharges and a specific rate per hundred pounds to El Paso which was higher than the existing rail carload rate to that destination. This contract likewise contained the provisions to the effect that Corder would comply with all the lawful rules, regulations and orders required of a contract carrier by the Railroad Commission. After the new contract became effective Corder continued to transport truckloads of clay pipe almost daily from Saspamco to various destinations in Texas.
"Prior to November 1, 1956, no one ever raised a question as to the legality of the rates Cage and Corder charged for transporting Dickey\'s clay products. However on or about November 1, 1956, Guy E. Huddleston, Rate Inspector and Investigator of the Railroad Commission of Texas, conferred with Corder, examined his records and told him that he was not charging the correct rates. Corder had several truckloads of pipe already loaded and several more scheduled for the next day or two, so Huddleston agreed that if Corder would cease hauling under his Permit No. 10471 or charge the correct rate, he would permit him to continue operations for the next day or two in order to effect delivery of what was already obligated. The last clay pipe that Corder transported for Dickey under his Permit No. 10471 was transported on November 2, 1956.
"On November 2, 1956, Mr. Huddleston wrote Jim Gibson, Dickey\'s General Manager in San Antonio, Texas, relative to checking the records of Corder on the day before and advised Gibson that it was the contention of the Railroad Commission that the rates prescribed in Southwestern Motor Freight Bureau Tariff No. 25-E were the correct rates which a contract carrier should charge for hauling the clay pipe shipped by Dickey and that the rates being charged by Corder for the hauling of said clay pipe were below the rates prescribed in said Tariff No. 25-E. On November 14, 1956, Mr. Huddleston filed three complaints against Corder and three complaints against Gibson in the Justice Court of Travis County, Texas, charging Corder and Gibson with aiding and abetting in violation of the Motor Carrier Law of the State of Texas on October 1, 3 and 4, 1956, in violation of Article 1690b of the Penal Code of the State of Texas in that they failed to comply with the rules and regulations of the Railroad Commission of Texas as contained in Tariff No. 25-E. These charges obviously grew out of the fact that Corder was not charging the rates prescribed in said Tariff No. 25-E for transporting Dickey\'s clay pipe. Corder and Gibson were fined and each of them paid the fines assessed against him.
"Shortly after November 1, 1956, Corder purchased stock in Lone Star Trucking, Inc., a specialized motor carrier. That company then applied to the Railroad Commission to fix rates for it as a specialized motor carrier on vitrified clay pipe. On November 13, 1956, the Railroad Commission issued its Motor Freight Circular No. 7362, to become effective November 21, 1956, whereby it gave temporary approval, pending hearing on legal notice, to amending Railroad Commission of Texas Motor Freight Commodity Tariff No. 6-D, the tariff that fixed the rates to be charged by specialized motor carriers between points in Texas, so as to permit Lone Star Trucking, Inc. as a specialized motor carrier to transport by motor truck Dickey\'s clay pipe
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