Source: https://caselaw.findlaw.com/us-supreme-court/265/59.html
Timestamp: 2019-04-19 11:27:14+00:00

Document:
LOUISVILLE & N.R. CO. v. CENTRAL IRON & COAL CO.
[265 U.S. 59, 60] Messrs. Homer W. Davis, of Chicago, Ill., and Alexander Britton, of Washington, D. C., for plaintiff in error.
[265 U.S. 59, 63] Messrs. Harry A. Jones, of Washington, Pa., and Allan C. Rearick and Albert Chester Travis, both of New York City, for defendant in error.
In January, 1917, the Central Iron & Coal Company sold Tutwiler & Brooks ten carloads of coke to be delivered [265 U.S. 59, 64] f. o. b. cars at the seller's plant in Holt, Ala. Before delivery by the seller, the purchasers sold the coke to the Great Western Smelters Corporation of Mayer, Ariz. Thereafter, under instructions from Tutwiler & Brooks, and upon their agreement to pay the freight, the Central Company delivered, at its plant, the cars of coke to the Louisville & Nashville Railroad, directed shipment thereof to Mayer over that railroad and connecting lines, and took bills of lading which it delivered immediately to Tutwiler & Brooks. That firm made a draft for the purchase price on the Smelters Corporation, with bills of lading attached. The corporation paid the draft, received the bills of lading, and, upon surrendering them to the delivering carrier and payment to it of the freight demanded, obtained possession of the coke. The amount of the freight then demanded and paid was $5,082.15. The freight legally payable, according to the tariff, was $ 8,545.61.
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 to the actual weight. 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. Pittsburgh, Cincinnati, Chicago & St. Louis Ry. Co. v. Fink, 250 U.S. 577 , 40 Sup. Ct. 27; New York Central, etc., R. R. Co. v. York & Whitney Co., 256 U.S. 406 , 41 Sup. Ct. 509. Compare St. Louis Southwestern Ry. Co. v. Spring River Stone Co., 236 U.S. 718 , 35 Sup. Ct. 456. But delivery of goods to a carrier for shipment does not, under the Interstate Commerce [265 U.S. 59, 66] Act (Comp. St. 8563 et seq.), impose upon a shipper an absolute obligation to pay the freight charges. 3 The tariff did not provide when or by whom the payment should be made. As to these matters carrier and shipper were left free to contract, subject to the rule which prohibits discrimination. 4 The carrier was at liberty to require prepayment of freight charges, or to permit that payment to be deferred until the goods reached the end of the transportation. Wadley Southern Ry. Co. v. Georgia, 235 U.S. 651, 656 , 35 S. Sup. Ct. 214. Where payment is so deferred, the carrier may require that it be made before delivery of the goods, or concurrently with the delivery, or may permit it to be made later. Where the payment is deferred, the contract may provide that the shipper agrees absolutely to pay the charges, or it may provide merely that he shall pay if the [265 U.S. 59, 67] consignee does not pay the charges demanded upon delivery of the goods, or the carrier may accept the goods for shipment solely on account of the consignee, and, knowing that the shipper is acting merely as agent for the consignee, may contract that only the latter shall be liable for the freight charges, or both the shipper and the consignee may be made liable. Nor does delivery of goods to a carrier necessarily import, under the general law, an absolute promise by the shipper to pay the freight charges. We must, therefore, determine what promise, if any, to pay freight charges was, in fact, made by the Central Company.
[ Footnote 1 ] The bills of lading also contained these clauses: 'If charges are to be prepaid, write or stamp here. Received $_____ to apply in prepayment of _____. To be prepaid, _____.' The blanks were not filled by writing or stamp. The form of bills of lading used was what is known as the standard form order bill of lading. But the goods shipped were made deliverable to the order of a named consignee. Compare Pere Marquette Ry. Co. v. French & Co., 254 U.S. 538, 539 , 540 S., 41 Sup. Ct, 195.
[ Footnote 2 ] The corporation was not then technically insolvent; that is, no proceeding in bankruptcy had been instituted by or against it, there was no outstanding unsatisfied execution, and the corporation was still in possession of some unencumbered property. If the error had been discovered within a few months after delivery of the coke, the delivering carrier might easily have obtained payment of the amount of the undercharge by applying to that purpose funds of the Smelters Corporation then on deposit with it.
[ Footnote 3 ] See Interstate Commerce Commission Conference Ruling No. 314, Bulletin No. 7, issued August 1, 1917: 'The law requires the carrier to collect and the party legally responsible to pay the lawfully established rates without deviation therefrom. It follows that it is the duty of carriers to exhaust their legal remedies in order to collect undercharges from the party or parties legally responsible therefor. It is not for the Commission, however, to determine in any case which party, consignor or consignee, is legally liable for the undercharge, that being a question determinable only by a court having jurisdiction and upon the facts of each case.' This ruling, which was adopted May 1, 1911, and 'interpreted' May 4, 1918, was amended, on March 6, 1922, by calling attention to the provision inserted in the Uniform Domestic Bill of Lading prescribed October 21, 1921. By that provision the consignor may (see section 7 of conditions and clause on face of bill) relieve himself of all liability for freight charges. In the Matter of Bills of Lading, 52 Interst. Com. Com'n R. 671, 721; 64 Interst. Com. Com'n R. 347; Id., 357; 66 Interst. Com. Com'n R. 63.
[ Footnote 4 ] Compare Hocking Valley Ry. Co. v. United States, 210 Fed. 735, 741, 127 C. C. A. 285; Boise Commercial Club v. Adams Express Co., 17 Interst. Com. Com'n R. 115, 121.
[ Footnote 5 ] Pollard v. Vinton, 105 U.S. 7 , 8; St. Louis, Iron Mountain & Southern Ry. Co. v. Knight, 122 U.S. 79, 87 , 7 S. Sup. Ct. 1132; In the Matter of Bills of Lading, 52 Interst. Com. Com'n R. 671, 681. Compare Mobile & Montgomery Ry. Co. v. Jurey, 111 U.S. 584 , 4 Sup. Ct. 566.
[ Footnote 6 ] Union Freight R. R. Co. v. Winkley, 159 Mass. 133, 34 N. E. 91, 38 Am. St. Rep. 398; Thomas v. Snyder, 39 Pa. 317, 322; Wayland's Adm'r v. Mosely, 5 Ala. 430, 39 Am. Dec. 335; Chicago, Rock Island & Gulf Ry. Co. v. Floyd (Tex. Civ. App.) 161 S. W. 954. See Barker v. Havens, 17 Johns. (N. Y.) 234, 237, 8 Am. Dec. 393; Grant v. Wood, 21 N. J. Law, 292, 300, 47 Am. Dec. 162. Compare Cincinnati, N. O. & T. P. Ry. Co. v. Vredenburgh Sawmill Co., 13 Ala. App. 442, 69 South. 228.
[ Footnote 7 ] In most of the cases in the state courts and the lower federal courts, relied upon by the carrier, either the facts on which the shipper was held liable differed materially from those of the case at bar, or, because of the manner in which it was presented, the question of law was different.
Georgia R. R. Co. v. Creety, 5 Ga. App. 424, 63 S. E. 528, the shipper appears to have been also owner and consignee. In Cleveland, C., C. & St. L. Ry. Co. v. Southern Coal & Coke Co., 147 Tenn. 433, 442, 452, 248 S. W. 297, Atchison, Topeka & Santa Fe Ry. Co. v. Stannard & Co., 99 Kan. 720, 725, 162 Pac. 1176, L. R. A. 1917C, 1124, Yazoo & M. V. R. Co. v. Picher Lead Co. (Springfield, Mo., Ct. App.) 190 S. W. 387, Baltimore & Ohio Southwestern Ry. Co. v. New Albany Box & Basket Co., 48 Ind. App. 647, 94 N. E. 906, 96 N. E. 28, and Wells Fargo & Co. v. Cuneo (D. C.) 241 Fed. 727, 729, it is erroneously assumed that the mere fact of delivery of goods for shipment imports, under the Interstate Commerce Act, as matter of law, an absolute promise to pay the freight charges, and/or that an agreement to the contrary is void.

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