Source: https://supreme.justia.com/cases/federal/us/265/59/
Timestamp: 2019-04-23 02:04:58+00:00

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Justia › US Law › US Case Law › US Supreme Court › Volume 265 › Louisville & Nashville R. Co. v. Central Iron Co.
Louisville & Nashville Railroad Company v.
1. No contract of a carrier can reduce the amount of charges legally payable to it under its tariff for an interstate shipment, or release from liability a shipper who has assumed their payment, nor can 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 the person liable. P. 265 U. S. 65.
2. But, in the absence of a governing tariff provision, delivery of the goods for shipment does not necessarily import an obligation of the shipper to pay the freight charges, and the carrier and shipper are free to contract as to when and by whom payment shall be made, subject to the rule against discrimination. P. 265 U. S. 66.
shipper did not assume the primary obligation to pay the freight charges was justified. P. 265 U. S. 67.
4. To enforce payment of freight charge by a shipper only secondarily liable, the carrier must first make effort to collect from those primarily liable. P. 265 U. S. 69.
5. A consignee, by accepting the shipment, becomes liable as a matter of law for the full amount of the tariff charges, whether they are demanded at the time of delivery or later. Pittsburgh, etc. Ry. Co. v. Fink, 250 U. S. 577. P. 265 U. S. 70.
Error to a judgment of the circuit court of appeals affirming a judgment by the district court for the defendant coal company in an action by the railroad to recover the difference between the amount chargeable under its tariff for an interstate shipment and a less amount collected.
f.o.b. cars at the seller's plant in Holt, Alabama. Before delivery by the seller, the purchasers sold the coke to the Great Western Smelters Corporation of Mayer, Arizona. 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.
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.
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, 254 U. S. 539-540.
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.
"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 § 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 I.C.C. 671, 721; 64 I.C.C. 347; id., 357; 66 I.C.C. 63.
Compare Hocking Valley Ry. Co. v. United States, 210 F. 735, 741; Boise Commercial Club v. Adams Express Co., 17 I.C.C. 115, 121.
Pollard v. Vinton, 105 U. S. 7, 105 U. S. 8; St. Louis, Iron Mountain & Southern Ry. Co. v. Knight, 122 U. S. 79, 122 U. S. 87; In the Matter of Bills of Lading, 52 I.C.C. 671, 681. Compare Mobile & Montgomery Ry. Co. v. Jurey, 111 U. S. 584.
Union Freight R. Co. v. Winkley, 159 Mass. 133; Thomas v. Snyder, 39 Pa. 317, 322; Wayland's Adm'r v. Mosely, 5 Ala. 430; Chicago, Rock Island & Gulf Ry. Co. v. Floyd, 161 S.W. 954. See Barker v. Havens, 17 Johns. 234, 237; Grant v. Wood, 21 N.J.Law, 292, 300. Compare Cincinnati, N. O. & T. P. Ry. Co. v. Vredenburgh Sawmill Co., 13 Ala.App. 442.
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.
In Chicago, Indianapolis & Louisville Ry. Co. v. Peterson, 168 Wis.193, the bill of lading contained an express agreement that the charges were guaranteed by the shipper. See also Chicago & Northwestern Ry. Co. v. Queenan, 102 Neb. 391, 393, 398. In New York Central R. Co. v. Federal Sugar Refining Co., 235 N.Y. 182, New York Central R. Co. v. Philadelphia & Reading Coal & Iron Co., 286 Ill. 267, and Portland Flouring Mills Co. v. British & Foreign Marine Ins. Co., 130 F. 860, the goods were deliverable to the shipper's order. In New York, New Haven & Hartford R. Co. v. Tonella, 79 N.H. 464, the goods were deliverable to a named consignee, but the shipper was described as consignor and owner. In Coal & Coke Ry. Co. v. Buckhannon River Coal & Coke Co., 77 W.Va. 309, Northern Pacific Ry. Co. v. Pleasant River Granite Co., 116 Me. 496, 498, and Montpelier & W. R. Co. v. Bianchi & Sons, 95 Vt. 81, the goods were deliverable to a named consignee, but the bill of lading was signed by the shipper in his own name. In Boston & Maine R. Co. v. National Orange Co., 232 Mass. 351, the goods were deliverable to a named consignee, but he was the agent of the shipper, who was also the owner. Atlas S.S. Co. v. Colombian Land Co., 102 F. 358. In Wooster v. Tarr, 8 Allen 270, and Great Northern Ry. Co. v. Hocking Valley Fire Clay Co., 166 Wis. 465, the consignee was named, but there was not in the bill of lading (or otherwise) any indication to the carrier that the shipper was not acting on his own behalf. In Jelks v. Philadelphia & Reading Ry. Co., 14 Ga.App. 96; the consignee was named, but refused to accept the shipment. In New York Central R. Co. v. Warren Ross Lumber Co., 234 N.Y. 261, Chicago, Milwaukee & St. Paul Ry. Co. v. Greenberg, 139 Minn. 428, and Waters v. Pfister & Vogel Leather Co., 176 Wis. 16, it was the consignee who was held liable. In Georgia R. Co. v. Creety, 5 Ga.App. 424, 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, Atchison, Topeka & Santa Fe Ry. Co. v. Stannard & Co., 99 Kan. 720, 725, Yazoo & M. v. R. Co. v. Picher Lead Co., 190 S.W. 387, Baltimore & Ohio Southwestern Ry. Co. v. New Albany Box & Basket Co., 48 Ind.App. 647, and Wells Fargo & Co. v. Cuneo, 241 F. 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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