Source: https://www.legalcrystal.com/case/98384/chicago-etc-vs-acme-freight-inc
Timestamp: 2017-05-29 18:33:22
Document Index: 799977471

Matched Legal Cases: ['§ 1013', '§ 1013', '§ 1013', '§ 20', '§ 20', '§ 1013', '§ 20', '§ 20', '§ 20', '§ 20', '§ 1013', '§ 20', '§ 1013', '§ 1004', '§ 1013', '§ 1013', '§ 1013', '§ 1002', '§ 1013', '§ 1004', '§ 20', '§ 1013', '§ 20', '§ 20', '§ 20', '§ 20', '§ 20', '§ 1001', '§ 1013', '§ 20', '§ 2', '§ 71', '§ 322', '§ 386', '§ 320', '§ 20']

Chicago Etc Vs Acme Freight Inc - Citation 98384 - Court Judgment | LegalCrystal
Save as PDF Add a Tag Add a Note Semantics Visualize Chicago, Etc. Vs. Acme Freight, Inc. - Court Judgment	LegalCrystal Citationlegalcrystal.com/98384CourtUS Supreme CourtDecided OnApr-04-1949Case Number336 U.S. 465AppellantChicago, Etc.RespondentAcme Freight, Inc.Excerpt:
chicago, etc. v. acme freight, inc. - 336 u.s. 465 (1949)
under part iv of the interstate commerce act, and specifically 49 u.s.c. § 1013, a freight forwarder is a shipper (rather than an initial carrier)
the railroads, and must file loss or damage claims against them within the nine-month period specified in the railroad bill of lading. pp.
336 u. s. 466
1. the language and legislative history of § 1013..... Judgment:
1. The language and legislative history of § 1013 clearly indicate that forwarders were not given the right over under 49 U.S.C. § 20(12) against the railroads. Pp.
336 U. S. 470
2. A contrary construction would be out of harmony with the previously existing relationship between forwarders and carriers regulated by Parts I, II, and III of the Interstate Commerce Act, which relationship Part IV accepted and continued. Pp.
336 U. S. 476
3. The factors which make the Carmack Amendment workable as between carriers are totally absent when the right over given by 49 U.S.C. § 20(12) is sought to be extended to freight forwarders. Pp.
336 U. S. 479
4. Equitable considerations do not require a different result. Pp.
336 U. S. 483
(a) The Act leaves freight forwarders of the kind regulated by Part IV in substantially the same position they previously held with respect to their liability to shippers and their rights against underlying carriers. Pp.
336 U. S. 484
railroads within the same period is not sufficient to require a different result. The Interstate Commerce Commission has the experience and authority to prescribe the proper corrective for this inconsistency. Pp.
336 U. S. 488
In a suit for a declaratory judgment, a federal district court held that, under 49 U.S.C. § 1013, a freight forwarder must file loss or damage claims against a railroad within the nine-month period specified by a railroad bill of lading. The Court of Appeals reversed. 166 F.2d 778. This Court granted certiorari. 335 U.S. 807.
336 U. S. 489
In 1942, Congress enacted what is popularly known as the Freight Forwarder Act. This legislation, which appears as Part IV [
] of the Interstate Commerce Act, was designed to define freight forwarders, to prescribe certain regulations governing forwarder operations, and to bring this essential transportation business within the control of the Interstate Commerce Commission. The legislative and judicial history culminating in the Act need not now be detailed.
See United States v. Chicago Heights Trucking Co.,
30 F.Supp. 968,
309 U.S. 638 (1940).
Freight forwarders consolidate less than carload freight into carloads for shipment by rail, truck, or water. Their charges approximate rail less-than-carload [l.c.l.] rates; their expenses and profits are derived from the spread between the carload and l.c.l.. rates. Forwarders are utilized by l.c.l.. shippers because of the speed and efficiency with which they handle shipments, the unity of responsibility obtained, and certain services which forwarders make available. [
Section 1013 of the Act [
] provides that the Carmack Amendment, 34 Stat. 593, as amended, 49 U.S.C. § 20(11) [
(12), [
] shall apply to freight forwarders "in the case of service subject to this chapter" (Part IV), and that the freight forwarder shall be deemed both the receiving and delivering transportation company for the purposes of such § 20(11) and (12). Incorporation of the Carmack Amendment requires, as has been noted, that the forwarder issue bills of lading to its shippers, covering transportation of the individual shipments to their ultimate destinations. There can be no question but that, under § 20(11), the forwarder is liable to its shipper for loss or damage to the freight exactly as if it were an initial carrier subject to Parts I, II, and III. We are now asked to decide whether the right over given by § 20(12) to an initial carrier against its connecting carriers applies in the case of forwarders who have paid loss and damage claims to their shippers and seek recompense from the carrier responsible for the loss.
the carrier responsible for the loss or damage, the nine-month period is not applicable. If, however, the forwarder is still a shipper
the railroads, it must file its claims within the period specified in the railroad bill of lading. [
] The District Court held, on an agreed statement of facts, that the forwarder must file its claims within the nine-month period. The Court of Appeals for the Second Circuit reversed, holding that, for the purposes of § 1013 alone, forwarders are to be considered carriers, and, as such, are entitled to the right over given by § 20(12). We granted the petition for a writ of certiorari, 335 U.S. 807, to resolve this important question under Part IV of the Interstate Commerce Act.
The railroads contend that Part IV of the Act was not intended to change the shipper-carrier relationship that had for many years existed between forwarder and railroad. Their position is that, while the previously prevailing duties and responsibilities owed by the forwarder to the public were changed by the Act, the language of the Act and its legislative history negative the forwarder's claim to carrier status. They read the language of § 1013, that
in "service subject to this chapter" --
in the business of forwarding freight. Thus, limited, the right over would apply as against other freight forwarders with whom joint loading agreements authorized by § 1004(d) were in effect, and against motor carriers who are permitted by § 1013 to issue bills of lading on behalf of the forwarders. The right over would not, however, apply against railroads, water carriers, and line-haul motor carriers.
"the term used throughout Part IV when referring to the business or operations of freight forwarders which it is proposed to regulate. The definition is intended to be broad enough to cover
everything the freight forwarder
does, in connection with the forwarding by surface facilities, in the course of carrying out his undertaking to the shipper whom he serves. On the other hand it is not broad enough, of course, to bring under regulation, under Part IV, the services performed by the carriers whose services the freight forwarder utilizes in performing his undertaking. [
"in case the loss or damage to the property transported occurs on the line of a carrier whose service the freight forwarder utilizes, the freight forwarder will have the right of subrogation against the carrier under section 20(12). [
"In some respects, the report which accompanies this bill is not as complete as it might be. Due to limitations of time, the report was not submitted to the members of the committee or subcommittee, and therefore it may not be out of place to include in these remarks some further explanations which may be helpful to the Members in their consideration of the measure. In a few instances, which will be mentioned later, the report may not be so phrased as to convey fully the sense of what was intended. [
in this sense that the forwarder is to 'be deemed both the receiving and delivering transportation company.' If damage to a shipment occurs on the line of a common carrier whose services are being utilized by the forwarder, the forwarder has no right of subrogation under section 20(12), since its own shipper never had any right of action against such carrier. The forwarder's recovery against the carrier would be upon the bill of lading issued to it by such carrier and under the provisions of law applicable thereto. The reference to paragraph (12) of section 20 was included in section 413 [§ 1013] to cover a combination of services performed directly for the owner of the goods, such as would occur when two or more forwarders were involved. [
In weighing the relative importance of this statement and the committee report, a number of additional facts assume importance. The bill under consideration was reported unanimously by the House Committee on Interstate and Foreign Commerce. [
] Congressman Wolverton, who was the ranking minority member of the committee, spoke in behalf of the bill and presented the only extended exposition of its provisions. His explanation of its meaning was not challenged or contradicted by any member of the committee. On the contrary, his part in its drafting
was recognized by the chairman of the committee, [
] and his remarks have been quoted as authority by the Interstate Commerce Commission. [
In this posture of events, the committee report can be given little weight. A report not previously submitted to members of the committee and expressly contradicted without challenge on the floor of the House by a ranking member of the committee can hardly be considered authoritative. The Committee of Conference, of which Representative Wolverton was a member, adopted § 1013 exactly as it appeared in the House amendment. It bore at that time the gloss placed upon it on the floor of the House. [
] Under those circumstances, we cannot construe
Such a construction would, moreover, be out of harmony with the previously existing relationship between forwarders and carriers regulated by Parts I, II, and III of the Interstate Commerce Act, a relationship which Part IV unquestionably accepted and continued. Prior to the enactment of the Forwarder Act, this Court held in a number of cases that forwarders are shippers insofar as carriers are concerned, and that the latter cannot discriminate in favor of or against forwarders, nor enter into joint or proportional rates with them absent legislative authority.
United States v. Chicago Heights Trucking Co., supra; Acme Fast Freight, Inc. v. United States, supra.
It is clear that this relationship was not altered by the enactment of Part IV. Nowhere in the Act are freight forwarders referred to as carriers. Congress defined the term, "freight forwarder" in § 1002(a)(5) to mean any person which "otherwise than as a carrier subject to part I, II, or III of this title" consolidates goods for shipment, etc. In one section where, by inadvertence, forwarders were referred to as carriers, an amendment was passed less than two months later striking out "carrier" and substituting "freight forwarder." [
] The statements by
committee members on the floor of the House [
] leave no doubt that it was not the intent of Congress to alter the forwarders' status as shippers
carriers by rail, highway, and water.
that forwarders occupy a different position in their dealings with the carriers whose services they utilize. [
] For that reason, they refused to sanction the joint rates that forwarders had established with certain motor carriers.
See Acme Fast Freight, Inc. v. United States, supra.
According to Representative Wolverton's statement on the floor of the House,
"it would be illogical and anomalous to permit the making of so-called joint rates in such a situation. The maintenance of a joint rate by a carrier and a shipper would be an absurdity. If nevertheless permitted, it would enable such shipper to receive rebates through the medium of divisions of the joint rate. [
and distribution" rates, which were designed to give the forwarder the benefit of rates lower than those available to other shippers, because of savings to the carriers effected by some services performed by the forwarder. This was thought to be consistent with the position of the forwarder as shipper, however, and such rates could not be lowered beyond an amount which would reflect the savings. It is significant, too, that these rates were not applicable to line-haul or carload freight, but only to the services performed by carriers in bringing less than carload shipments from off-line points to the forwarder's concentration point and from break-bulk point to final destination. [
] It is therefore clear beyond argument that Congress intended to preserve the existing shipper-carrier relationship between forwarders and those carriers regulated by Parts, I, II, and III of the Act.
The Court of Appeals, while conceding that forwarders are still shippers
carriers under the Act, held that, for the purposes of § 1013 alone, they are to be regarded as initial carriers, while the railroads, motor vehicles, and boats whose services are utilized by forwarders are to be considered connecting carriers. Respondent goes farther. It contends not only that the liability provisions of the uniform rail bill of lading issued to the forwarder for his carload shipment may be disregarded, but that the railroad need not issue its bill of lading at all. In its view,
R. Co. of Texas v. Ward,
(1917), which struck down conditions in the bill of lading issued without consideration by a connecting carrier, is decisive of the invalidity of the conditions imposed by the rail bill of lading here in controversy.
We do not agree, nor can we believe that the contention is seriously made. The underlying carrier's haul involves a different shipment, a different consideration, a different origin, a different destination, and a different consignor and consignee than are involved in the forwarder's undertaking. Furthermore, respondent's contention leads to the conclusion that railroads, whose bills of lading have long been prescribed by the I.C.C. and filed with rail tariffs, must transport freight on bills of lading subject to change at will by the forwarder and possibly different in many respects from the uniform rail bill.
See e.g., Chain Deliveries Express, Inc.,
260 I.C.C. 149, 151 (1943). That certainly has not been the position taken by the I.C.C. since enactment of Part IV, [
] nor was the contention accepted by either of the courts below in this case.
The real issue is whether, granting that both forwarder and underlying carrier must issue bills of lading, the liability provisions of bills issued by the latter are to be considered null and void when forwarder freight is being hauled. We think that the whole scheme of the Act, its language and history, negative that proposition. As has been noted, the forwarder remains a shipper in its relations with underlying carriers under the Act. It is a shipper to whom carriers are forbidden to give any undue or unreasonable preference
in any respect whatsoever,
under the specific provisions of the Act. § 1004(c).
Similarly, a shipper by freight forwarder might wish to contract for common law liability by paying the higher tariff to the forwarder, as he must be permitted to do under § 20(11).
Cincinnati, N.O. & T.P. R. Co. v. Rankin,
(1916). The forwarder, on the other hand, pays the lower declared value rate to the railroad for the carload shipment. If the shipment were lost or damaged, the shipper could undoubtedly recover its actual value from the forwarder, but, under ordinary circumstances, the latter would be confined to recovery from the railroad of a proportional part of the declared value of the carload shipment. Section 20(12) provides, however, that the right over is in the amount of the loss, damage, or injury as may be evidenced by any receipt, judgment, or transcript thereof. Under respondent's theory, its bill of lading would be controlling, and the forwarder would be entitled to full recovery despite the fact that it had contracted with the carrier at the reduced rate. This result is clearly contrary to
Great Northern R. Co. v. O'Connor, supra,
which was relied on by the Court of Appeals in the present case.
"The reasons for inducing us to [make the initial carrier liable for loss or damage] were the initial carrier has a through route connection with the secondary carrier on whose route the loss occurred, and the settlement between them will be an easy matter, while the shipper would be at a heavy expense in the institution of a suit. If a judgment is obtained against the initial carrier, no doubt exists but that the secondary carrier will pay it at once. Why? Because the arrangement, the concert, the cooperation, the through route courtesies between them would be broken up if prompt payment were not made. We have done that in Conference. [
219 U. S. 201
so. Furthermore, the forwarder will always be in the position of a receiving or delivering carrier seeking the right over against "connecting" carriers, never in the position of a carrier against whom the right over is asserted. A railroad against which a claim has been filed as receiving or delivering carrier will ordinarily represent the connecting carrier as if no right over existed, since it must depend in other cases upon similar representation by other roads. Details of such representation are, in fact, prescribed by the Freight Claim Rules, which are subscribed to by nearly all railroads. But the forwarder is always its own representative, and, as between its customer, the shipper, and an underlying carrier allegedly responsible for loss or damage, the forwarder's tendency would naturally be to placate the former at the expense of the latter if the right over existed and was applicable. These facts are, we feel, persuasive that Congress meant the right over given in § 1013 to extend no farther than to actions against those with whom forwarders are permitted to enter into cooperative arrangements --
against those to whom the forwarder does not bear the relation of shipper.
Two arguments are made as to the inequity that will result from requiring forwarders to comply with the requirements of § 20(11) without giving them the rights of initial carriers under § 20(12). It is said that Congress could not have intended to make the forwarder an insurer of freight while requiring at the same time that it file and prove claims against carriers as if it were an ordinary shipper. Secondly, it is argued that the forwarder must, under § 20(11), allow at least nine months for the filing of claims by shippers, and if the forwarder is subject to a similar limitation period, there will necessarily be some claims filed by shippers at the end of the period which the forwarder will not be able to refile against the carrier in time.
The first contention is the result of a serious misconception as to the liability of freight forwarders prior to enactment of Part IV. This misconception is based on a failure to distinguish between two very different kinds of "forwarders." [
] The term was originally applied to persons who arrange for the transportation by common carrier of the shipper's goods. The forwarder did not necessarily consolidate the individual consignments into carload lots, and its duties, as agent of the shipper, went no farther than procuring transportation by carrier and handling the details of shipment. Forwarders of this type charged fees for their services, which the shipper paid in addition to the freight charges of the carrier utilized for the actual transportation.
a carrier. [
] If, on the other hand, the shipment had been entrusted to a forwarder of the second type --
one who contracted to deliver the goods to the consignee at rates set by itself -- the forwarder was subjected to common carrier liability for loss or damage whether it or an underlying carrier had been at fault. [
] The fact that the forwarder did not own the carriers whose services it utilized was held to be immaterial. Its undertaking was to deliver the shipment safely at the destination. Common carrier liability was the penalty for failure of fulfillment of that undertaking.
course of its undertaking, (A) assembles and consolidates or provides for assembling and consolidating shipments of such property, and performs or provides for the performance of break-bulk and distributing operations with respect to such consolidated shipments, and (B)
assumes responsibility for the transportation of such property from point of receipt to point of destination,
and (C) utilizes, for the whole or any part of the transportation of such shipments, the services of a carrier or carriers subject to chapter 1, 8 or 12 of this title. [
(Italics added.) As to this group, as has been pointed out, the liability of common carrier to its shippers has always been the rule. By making § 20(11) applicable to these forwarders, Congress did two things: (1) required forwarders to issue bills of lading; [
] and (2) made a matter of federal law what had been uniformly adopted by the states as the rule of liability for loss or damage. As applied to railroads, the Carmack Amendment made a significant change, since it prevented the initial carrier from exercising the right given by decision is a majority of states to limit its liability to loss or damage occurring on its own lines. But that right had never been granted to forwarders of the type regulated by Part IV. Their liability has, from the beginning, been extended to loss or damage to the consignment
occurring at any time between pick-up at the point of origin and delivery at destination. As shippers, they have, of course, always had a right of action against the underlying carrier at fault. The defense that the goods are not those of the forwarder is not open to the carrier, since, as we have held, the carrier is not concerned with questions of ownership, but must treat the forwarder as shipper.
Interstate Commerce Commission v. Delaware, L. & W. R. Co., supra.
The Act thus leaves the freight forwarder in substantially the same position it had previously held with respect to its liability to shippers and its rights against underlying carriers. The hearings, committee reports, and debates are bare of any suggestion that forwarders needed relief from the requirement that they file their claims against carriers like other shippers. They have done so for over a century. They have continued to do so since enactment of the Freight Forwarder Act.
See, e.g., Merchant Shippers Assn. v. Kellogg Express & Draying Co.,
28 Cal.2d 594, 170 P.2d 923 (1946);
J. R. Kelly Freight Forwarder Application,
260 I.C.C. 315, 318 (1944);
Hugh F. Gannon, Inc. Freight Forwarder Application,
260 I.C.C. 219, 220 (1944). We would require a much clearer showing than has been made to find that Congress intended, without increasing the liabilities of forwarders regulated by the Act, to give them a right over against railroads, ship lines, and line-haul motor carriers as initial carriers under motor carriers as initial carriers under § 20(12). [
MR. JUSTICE BLACK, MR. JUSTICE DOUGLAS, and MR. JUSTICE RUTLEDGE would affirm the judgment for reasons stated by Judge Frank, writing for the Court of Appeals.
166 F.2d 778.
56 Stat. 284, 49 U.S.C. § 1001
For a full description of freight forwarder practices,
Freight Forwarding Investigation,
229 I.C.C. 201;
Bills of Lading of Freight Forwarders,
259 I.C.C. 277.
"§ 1013.
Bills of lading and delivery of property.
The provisions of section 20(11) and (12) of this title, together with such other provisions of chapter 1 of this title, including penalties, as may be necessary for the enforcement of such provisions, shall apply with respect to freight forwarders, in the case of service subject to this chapter, with like force and effect as in the case of those persons to which such provisions are specifically applicable, and the freight forwarder shall be deemed both the receiving and delivering transportation company for the purposes of such section 20(11) and (12). . . . When the services of a common carrier by motor vehicle subject to chapter 8 of this title are utilized by a freight forwarder for the delivery of property to the consignee named in the freight forwarder's bill of lading, shipping receipt, or freight bill, the property may, with the consent of the freight forwarder, be delivered on the freight bill, and receipted for on the delivery receipt, of the freight forwarder."
Liability of initial carrier for loss; limitation of liability; notice and filing of claim.
Any common carrier, railroad, or transportation company subject to the provisions of this chapter receiving property for transportation . . . shall issue a receipt or bill of lading therefor, and shall be liable to the lawful holder thereof for any loss, damage, or injury to such property caused by it or by any common carrier, railroad, or transportation company to which such property may be delivered or over whose line or lines such property may pass within the United States or within an adjacent foreign country when transported on a through bill of lading, . . . and any such common carrier, railroad, or transportation company so receiving property for transportation . . . shall be liable to the lawful holder of said receipt or bill of lading or to any party entitled to recover thereon, whether such receipt or bill of lading has been issued or not. . . .
That nothing in this section shall deprive any holder of such receipt or bill of lading of any remedy or right of action which he has under the existing law. . . ."
Recovery by initial carrier from connecting carrier.
The common carrier, railroad, or transportation company issuing such receipt or bill of lading, or delivering such property so received and transported, shall be entitled to recover from the common carrier, railroad, or transportation company on whose line the loss, damage, or injury shall have been sustained the amount of such loss, damage, or injury as it may be required to pay to the owners of such property, as may be evidenced by any receipt, judgment, or transcript thereof."
Petitioners also make the contention that, even assuming the forwarder is an initial carrier with right over under § 20(12), the limitation period provided in § 2(b) of the railroad bill of lading is effective to modify that right. They point to numerous modifications of the right over in the Freight Claims Rules applicable to railroads
Article I(a) of Principles and Practices for the Investigation and Disposition of Freight Claims. Under the view we take of the case, it is unnecessary to reach that question.
Pacific Coast Wholesalers' Association, Investigation of Status,
269 I.C.C. 504, 513.
88 Cong.Rec. 4065.
260 I.C.C. 315, 321.
And see Freight Forwarding Investigation,
229 I.C.C. 201, 297-304.
See e.g., Twin City Shippers Association Freight Forwarder Application,
260 I.C.C. 307, 309.
1 Hutchinson on Carriers (3d ed.) §§ 71, 80-84; Bunge, Law of Draymen, Freight Forwarders and Warehousemen, p, 111.
Krender v. Woolcott,
1856, 1 Hilt., N.Y. 223;
Heath v. Judson Freight Forwarding Co.,
47 Cal.App. 426, 190 P. 839 (1920);
Mansfield v. Chicago Title & Trust Co.,
199 F. 95.
1 Hilt. (N.Y.) 223 (1856).
See also Christenson v. American Express Co.,
15 Minn. 270, 2 Am.Rep. 122 (1870);
Barge v. American Forwarding Co.,
146 Ill.App. 388 (1909);
Kettenhofen v. Globe Transfer & Storage Co.,
70 Wash. 645, 127 P. 295 (1912);
Highway Freight Forwarding Co. v. Public Service Commission,
108 Pa.Super. 178, 164 A. 835 (1933).
For discussion of the problem of assumption of responsibility for the through transportation of property by freight forwarders,
see Judson-Sheldon Corp. Application,
260 I.C.C. 473;
Universal Transcontinental Corp. Application,
260 I.C.C. 521;
J. Nelson Kagarise Application,
260 I.C.C. 745.
Cf. United States v. American Union Transport,
327 U. S. 437
We do not so read that analysis. Of course, shippers by freight forwarder have for many years been permitted to sue underlying carriers for loss or damage occasioned by the latter.
6 How. 344 (1848);
232 U. S. 509
(1914). The theory of these actions was that the shipper is the undisclosed principal of its agent, the forwarder, in the latter's contract with the carrier. The forwarder, as agent of an undisclosed principal, could, of course, sue on the contract.
Merchant Shippers Assn. v. Kellogg Express & Drayage Co.,
28 Cal.2d 594, 170 P.2d 923.
Bunge, Law of Draymen, Freight Forwarders and Warehousemen, p. 117.
Restatement of Agency, §§ 322, 364. On the other hand, when a shipper sued a connecting for loss of goods delivered to an initial carrier by railroad, it did so as a disclosed principal. The initial carrier, like the forwarder, acted as agent to contract with the connecting carrier for carriage of goods on the latter's lines, but, since it acted for a disclosed principal, it was not a party to the contract.
See Bichlmeir v. Minneapolis, St. P. & S.S.M. R. Co.,
159 Wis. 404, 150 N.W. 508 (1915); 1 Roberts, Federal Liabilities of Carriers § 386.
Restatement of Agency § 320.
When the Carmack Amendment was passed, the theory of the liability imposed upon the initial carrier was that it became a principal and all its connecting carriers agents for the transportation of the goods.
Northern Pacific R. Co. v. Wall,
(1911). Since the initial carrier, unlike the forwarder, did not have a contract right of action against its connecting carriers (
was not a shipper), § 20(12) was passed to ensure that the burden would fall on the carrier responsible for the loss. The forwarder, however, is a party to the contract with the carrier. It has no need for subrogation to the shipper's rights, as Representative Wolverton indicated. Its recovery against the carrier has always been upon "the bill of lading issued to it by such carrier and under the provisions of law applicable thereto." That right remains.