Court Opinion

ID: 8594910
Source: CourtListenerOpinion
Date Created: 2022-11-23 16:01:59.382522+00
Date Added: 2024-06-11T16:54:50.313564
License: Public Domain

Seeuton, Judge,
dissenting:
I respectfully dissent. The railroad cars in this case were not delivered to the defendant consignee in Denver, Colorado, due to the fault of the plaintiff railroad in failing to have sufficient trackage in Denver to accommodate the oars. A number of cases have held that the lack of trackage or other facilities to handle cars is the fault of the railroad. This identical question was decided by the Interstate Commerce Commission (ICC) in the case of Holding of Loaded Grain Oars — Texas Gulf Ports, Export, 321 I.C.C. 328 (1963). In that case the railroad lacked sufficient facilities at Galveston, Texas, to accommodate railroad cars consigned to such city. The question involved was whether or not the railroad could *381collect demurrage on cars held short of destination because of the lack of facilities of the railroad at Galveston. The ICC held that such demurrage charges could not be made because that would allow the railroad to profit through its own fault. The IOC opinion states:
* * * [T]o allow the collection of demurrage charges by * * * respondents as a result of their own disability at these ports would be to permit them to profit through their own fault. * * * [Id. at 330.]
See also, Staten Island Rapid Transit Ry. v. Marshall, 136 App. Div. 571, 121 N.Y.S. 82 (N.Y. Supreme Ct. 1910) where the court held that demurrage could not be collected on cars held short of destination because of the fault of the railroad in having its tracks congested at the point of destination.
These cases show clearly that in the instant case the lack of trackage at Denver was the fault of the railroad and consequently, its failure to deliver the cars to Denver was also its fault. Certainly, no one could argue that the lack of trackage in Denver was the fault of the consignee.
The fault of the railroad in failing to deliver the cars at destination having been established, the controlling question in this case is whether or not the railroad can charge and collect demurrage on cars held by it at points short of destination sometimes as far away as 55 miles, due solely to the fault of the railroad. The correct rule under these circumstances is set forth in the case of St. Louis, Southwestern R.R. v. Mays, 177 F. Supp. 182 (E.D. Ark. 1959), where the court said:
* * * In order for a liability for demurrage to exist, however, the failure to load or unload the cars within the free time must be the fault of the shipper or consignee; and, conversely demurrage cannot be charged where such failure was due to the fault of the carrier. 9 Am. Jur., supra, [Carriers] § 606; Southern R. Co. v. White, supra [6 Cir., 284 F. 560, 26 A.L.R. 1429]; Southern Ry. Co. v. Aluminum Co. of America, D.C. Tenn., 119 F. Supp. 389, affirmed 6 Cir., 210 F. 2d 139. [Id. at 184.]
This rule is also set forth in the case of Southern Ry. v. Aluminum Co. of America, 119 F. Supp. 389 (E.D. Tenn.
*3821951), aff'd 210 F. 2d 139 (6th Cir. 1954), where the court said:
No demurrage can be exacted by a carrier unless the delay in loading is clearly attributable to the fault of the shipper or consignee. United States Fidelity & Guaranty Co. v. Central of Georgia R. Co., supra [226 Ala. 606, 147 So. 891,87 A.L.R. 1028.] [Id. at 396.]
This rule is also stated in 13 C.J.S. Carriers § 345 (1939) as follows:
§ 345. Excuses for Nonpayment
Payment of demurrage is usually excused or avoided if the detention or delay in unloading for which the charge is sought to be made was due to the fault of the carrier rather than a default or breach of duty of the consignee or shipper; * * *. [/¿.at 810.]
See also, 13 Am. Jur. 2d Carriers §§ 484, 485 (1964); Louisville & Nashville R.R. v. Camody, 203 Ala. 522, 84 So. 824 (1919); Granger v. Davis, 2 F. 2d 695 (6th Cir. 1924) ; Staten Island Rapid Transit Ry. v. Marshall, supra; Pennsylvania R.R. v. Moore-McCormack Lines, Inc., 370 F. 2d 430 (2d Cir. 1966), aff'g 246 F. Supp. 143 (S.D.N.Y. 1965) ; and Port Terminal R.R. v. Connell Rice & Sugar Co., 387 F. 2d 355 (5th Cir. 1967).
The majority opinion cites the case of Chrysler Corp. v. New York Cent. R.R., 234 I.C.C. 755 (1939) in opposition to the foregoing rule. Actually, the case is inapposite because there the railroad was unable to deliver its cars to the consignee, the Chrysler Corporation, because of a strike of Chrysler’s employees. There was no fault whatever on the part of the railroad and consequently it was entitled to charge demurrage because of the strike of Chrysler’s employees. That decision has no application to the instant case.
The majority also cites Pennsylvania R.R. v. Moore-McCormack Lines, Inc., supra, as being contrary to the general rule stated above. That case also involved a strike of the consignee’s employees which prevented the railroad from delivering the cars. There was no fault on the part of the railroad and it was entitled to collect demurrage. The decision of *383the court is actually authority for the defendant in the instant case, because the court stated in its opinion 'as follows:
The general rule is that demurrage is extended freight and, where there has 'been an excess of lay days over those stipulated, the consignee is liable to pay demurrage for those excess days regardless of what brought about the delay except * * * (2) where the delay is the fault of the earner or those for whom he is responsible; * * * [Id. at 432.] [Emphasis supplied.]
The majority also cites the case of Port Terminal R.R. v. Connell Rice & Sugar Co., supra, as being against the general rule. Actually it supports the general rule and is definitely authority in favor of the defendant in the instant case. In that case, the railroad was unable to deliver 21 cars because of a strike of its own employees. The court held that this was the fault of the railroad and by reason thereof, it was not entitled to charge demurrage on the cars held short of destination. In this regard, the court stated:
Turning now to the 21 cars that arrived in plaintiff’s yards in December, I am of the opinion that the defendant is not liable for demurrage on these cars. While the consignee normally is liable for demurrage regardless of what brought about the delay, there are some exceptions. One of the exceptions is applicable here; namely, where the delay is the fault of the carrier or those for whom the carrier is responsible. See, Pennsylvania R.R. Co. v. Moore-McCormack Lines, Inc., supra. [310 E. 2d 430 (2d Cir. 1986), aff’g 246 F. Supp. 143 (S.D.N.Y. 1965)]. [Emphasis supplied.] [Id. at 357.]
As can be seen from the decision of the court, that case is definite authority for the defendant in the instant case. The court in the case last cited went on to discuss the strike cases so heavily relied on by the majority in the instant case which seems to me to show that this reliance by the majority on the strike cases is misplaced. In this regard, the court said:
The parties have not cited nor has the Court found any cases involving facts similar to those involved here. All of the “strike delay” cases are concerned with only one strike by employees of the consignee or a third party. See, e.g., Heading Co. v. Dexter-Carpenter Coal Co., 96 F. Supp. 650 (S.D.N.Y. 1951); Chicago, B. & O. R. Co.
*384v. Blunk, 101 F. Supp. 219 (S.D. Iowa 1951). These cases are easily distinguishable from the instant case in that the primary cause of the delay here was the action taken by plaintiff’s employees. Piad plaintiff’s employees not struck, it is obvious that the cars could have been unloaded long before the longshoremen began their strike. The defendant should not be penalized for the delay caused by the longshoremen’s strike when there would have been no delay at all had it not been for the strike of plaintiff’s employees. [Id. at 357.]
The case of Houston Belt & Terminal R.R. v. Connell Rice & Sugar Co., 411 F. 2d 1220 (5th Cir. 1969), cert. denied, 397 U.S. 908 (1970), cited by the majority is not in point in the instant case because it involves the constructive placement of cars short of destination due to the fault of the consignee. The railroad was not at fault. Consequently, demurrage was allowed. Those facts do not exist here. There is no fault on the part of the consignee; there was no constructive placement by the railroad; and all of the fault lies with the railroad.
Turning now to a consideration of the tariffs in the instant case, it should be pointed out that all of the provisions of a tariff must be considered in determining the meaning of each of its provisions. See Southern Pacific Transportation Co. v. United States, 197 Ct. Cl. 143, 454 F. 2d 740 (1972), where we held:
* * * A corollary rule of tariff and document interpretation, equally axiomatic, is that all provisions of a tariff or document are to be considered in determining the meaning to be ascribed to one provision thereof, and that meaning should be given which will give reasonable meaning to all provisions and not render a part thereof mere surplusage or create conflicts. Container Transp. Int'l v. United States, 194 Ct. Cl. 320, 437 F. 2d 1365 (1971); Southern Ry. v. United States, 140 Ct. Cl. 413, 416, 156 F. Supp. 740, 742 (1957); United States v. Missouri-Kan.-Tex. R.R., 194 F. 2d 777, 778 (5th Cir. 1952). [Id. at 151, 454 F. 2d at 745.]
Trial Judge George Willi correctly applied this rule in interpreting the tariff in the instant case. In this regard, it should be noted that the ICC Second Revised Service Order No. 975, as amended, provides in paragraph (1) (i) that *385loaded cars will be subject to demurrage after placement following arrival at destination.
Paragraph (1) (ii) provides that actual placement means placing of a car on industrial interchange tracks or other than public delivery tracks serving the consignee or on public delivery tracts.
Paragraph (1) (iii) provides that where the railroad is unable to deliver a car because of the fault of the consignor or consignee, it can make a constructive placement at a hold place short of destination.
The trial judge correctly interpreted the foregoing paragraphs of the service order as meaning that cars are subject to demurrage when actual placement is made at destination or where a constructive placement is made at a hold point short of destination due to the fault of the consignor or consignee.
Paragraph (1) (iv) of the service order mentions cars set off and held short of destination by the railroad, but says nothing about the right of the railroad to collect demurrage when it holds cars short of destination due to its own fault. It is axiomatic and well-established that a railroad can only collect charges that are provided for and authorized in the tariff which it has filed with the ICC. The trial judge correctly decided that since the tariffs here do not provide that a railroad can charge demurrage on cars held short of destination due to its own fault, the railroad is not entitled to collect such charges. Of course, that is exactly the situation in the instant case.
It is well settled that a tariff must be given a reasonable interpretation, and if there is any ambiguity, it must be resolved against the carrier and in favor of the shipper or consignee. See C & H Transportation Co. v. United States, 193 Ct. Cl. 872, 436 F. 2d 480 (1971) and Hughes Transportation, Inc. v. United States, 169 Ct. Cl. 63 (1965).
According to these authorities, if there is any vagueness or ambiguity in the tariff, it must be resolved in favor of the defendant. We held in the Hughes Transportation Inc. case, supra:
We must give the tariff a fair reading, and cannot impart any unreasonable ambiguities. * * * \Id. at 68.]
*386In my opinion, it is clearly unreasonable to interpret the tariff in tbe instant case in sucli a way as to authorize the railroad to hold cars as far away as 55 miles from destination due to its own fault and recover demurrage when it does so. By way of illustration, this is equivalent to saying that if a car had New York City as its destination, the railroad could hold it in the vicinity of Philadelphia and collect demurrage even though the holding of such car is due to its own fault. Such a procedure is contrary to our established rules governing the charging and collecting of demurrage by railroads, and is a strained and unreasonable interpretation of the tariffs in the instant case.
The reliance by the majority on Section D of Item 905 of Freight Tariff 4-C, applicable in July and August 1966, providing as follows, is misplaced:
On cars of grain * * * held in transit and placed for inspection or grading, including reconsignment or other disposition orders, the free time for disposition will expire at 6:00 p.m. of the day following notice. [Emphasis supplied.]
This provision clearly means and applies to cars held for these purposes on orders of the consignor or consignee. There were no such orders in this case. If this tariff is interpreted to mean that the railroad can arbitrarily hold a car at a point as far from destination as 55 miles because it lacks trackage facilities at destination and thereafter charge demurrage, what is to prevent it from holding the car 75 or 100 miles short of destination or even further ? This cannot be the law. Also, I emphasize that there is nothing in this part of the tariff, or any other part, that authorizes the railroad to collect demurrage when it holds a car short of the destination due to its own fault.
Finally, it is significant that the majority has not cited a single case, and I have not found one, holding that a railroad can collect demurrage on a car it held short of destination due solely to its own fault. On the other hand, the cases uniformly hold, as shown above, that demurrage cannot be collected under these circumstances.
Accordingly, I would enter judgment in favor of the defendant and would dismiss the plaintiff’s suit. I would also allow defendant to recover on its counterclaim.
*387FINDINGS OF FACT
The court, having considered the evidence, the decision of Trial Commissioner [now Trial Judge] George Willi, and the briefs and arguments of counsel, makes findings of fact as follows:
1. Plaintiff, Union Pacific Railroad Company, a Utah corporation, operates as an interstate common carrier by rail.
2. Plaintiff filed this suit on October 16, 1968, to recover unpaid demurrage charges of $5,385 that it had billed on carlot shipments of wheat which it hauled from various Kansas points of origin to Denver, Colorado, during July and August 1966. The subject shipments were consigned to the Commodity Credit Corporation (an agency of the United •States hereinafter referred to as the CCC) at Denver for inspection there by its agent, the Denver Grain Exchange, and reconsignment to a final destination, the particular location of which was largely dependent upon the protein content and general quality of the wheat involved. The disputed demurrage charges were imposed on cars stopped by plaintiff for inspection at various so-called hold points short of Denver, the cars’ billed destination.
3. In the context of this litigation a hold point is any stretch of trackage, single or multiple, whether or not a siding, located in the general outlying vicinity of the Denver terminal area, on which rolling stock was placed for an indeterminate period without obstructing the flow of through •rail traffic.
4. On January 17,1969, defendant filed its answer, denying liability on the claim asserted by plaintiff and, in addition, setting up a counterclaim of $7,880, plus interest, relating to demurrage paid in respect to CCC wheat hauled by plaintiff to Denver in July and August 1964.
5. The facts respecting defendant’s counterclaim are substantially identical to the facts respecting plaintiff’s claim, except that the shipments involved in defendant’s counterclaim were in July and August 1964, and the demurrage charges, totaling $7,880, were paid by the CCC. The Interstate Commerce Commission (IOC) service order in effect in July and August 1964 was ICC Service Order No. 947, which *388is 'identical, as here pertinent, to ICC Second Revised Service Order No. 975 in effect in July and'August 1966.
6. For tbe years in question, unprocessed wheat was valued in the market place on the basis of its federal grade and protein content. In a given transaction, these value indices were determined by a laboratory analysis of a sample drawn from the bulk quantity of wheat involved. Since laboratory facilities under authorized management and supervision are essential to these determinations, trade practice has found rail carriers typically affording carlot shippers of unprocessed wheat in-transit inspection privileges so that official grade and protein analysis can be conducted at relatively ■few focal points of rail movement rather than at myriad points of origin and final destination. Denver, Colorado, served as such a point for much of the large volume of wheat that was grown in Kansas during the years in question.
7. Because of its route structure, plaintiff carries the bulk of the wheat that comes into Denver by rail. Peak movement each year occurs during July and August, in the wake of harvest. The temporary congestion of rail facilities inherent in this seasonal pattern of wheat traffic was increased in the particular years in suit because in July and August of both 1964 and 1966 OCC was routing approximately 10 million bushels of wheat through Denver to Portland, Oregon, for export sale to Japan. Most of that grain originated along plaintiff’s lines.
8. In the Denver terminal area for the years in suit plaintiff had an inspection yard with a capacity of approximately 200 cars. 'Under normal traffic conditions plaintiff’s cars carrying CCC wheat under a Denver billing were brought into the terminal and placed on plaintiff’s inspection tracks. Plaintiff would notify the Exchange of the arrival of each individual car. The Exchange would then send one of its inspectors to the yard to draw a grain sample for grade and protein analysis at the Exchange’s Denver laboratory. When the test results were available the Exchange would telephone them to the CCC office in Kansas City and that office would telephone disposition instructions to plaintiff at Denver. Thereafter, the car would proceed to its final destination. In due *389course, the OCC Kansas City office would confirm in writing its telephone advice to plaintiff.
9. In the months of July and August 1964 and 1966, plaintiff’s grain traffic into Denver was so great that its inspection yard was unable to accommodate all of the incoming CCC cars. In these circumstances plaintiff placed many cars at hold points at distances ranging from 3 to 5'5 miles short of the Denver terminal area. In some instances these cars overstayed the free time allotted by tariff for inspection purposes. It is CCC’s liability for payment of demurrage thereon that is the ultimate issue in this suit.
10. It is undisputed that long prior to the periods in suit plaintiff’s representatives at Denver had reached a general working understanding with the management of the Denver Grain Exchange that in peak traffic periods when the inspection track facilities in the Denver terminal area were overtaxed, incoming grain cars could be placed for inspection at points short of Denver. This practice had been allowed for more than 20 years prior to suit. In agreeing to inspect cars at such outlying points, the Exchange officials expected that plaintiff’s resort to this procedure would be limited to those inbound cars for which no space was in fact available in the Denver terminal area. Though it appears that plaintiff did not always limit its use of this procedure to instances of actual yard congestion, neither the OCC nor the Exchange ever chose to make a formal complaint to plaintiff or the ICC regarding such deviations.
11. Within 24 hours of arrival at the Denver terminal or at a hold point short of the Denver terminal of a car on which the disputed demurrage was imposed, plaintiff mailed a written notice of arrival to “Commodity Credit Corporation, Denver, Colorado,” as required by Car Service Orders 947 and 975 and related demurrage tariffs 4-E and 4-G. Since CCC had no office or mailing address in Denver, all such notices were returned to plaintiff. Plaintiff also prepared a bulletin notice of arrival respecting every car of CCC wheat consigned to Denver, regardless of whether the car was placed in the Denver terminal area or held at an out-of-town hold point.
*39012. Plaintiff’s bulletin notices issued in July and August 1966 were issued pursuant to Freight Tariff 4-G issued September 18, 1964, by H.R. Hinscli of Chicago, Illinois, as agent for numerous carriers including the plaintiff. This demurrage tariff, along with various additional supplements, was in effect during July and August 1966. The tariff provided in pertinent part at page '57:
Section D. — On cars of grain, seeds (field or grass), grain screeings, soybeans, hay, straw, corn husks or corn shucks, or pummies, unground, subject to official inspection or grading; held in transit and placed for inspection or grading, including reconsignment or other disposition orders, the free time for disposition will expire at 6:00 p.m. of the day following notice. When the consignee has agreed with this railroad in writing for file at the station, to accept the bulletining of cars as due and adequate notice of arrival, the 'bulletins must 'be posted by 9:00 a.m. of each day showing receipts since the last previous bulletin, and the free time is to be calculated from the first 7:00 a.m. thereafter. Where there is no agreement for bulletining of cars the free time must be calculated from the first 7:00 a.m. after the notice of arrival is sent or given to the consignee or party entitled to receive same. A demurrage day under this Section consists of a twenty-four (24) hour period computed from 6:00 p.m.
13. Mr. George W. Long, an employee of COC, disclosed in a January 7,1954 letter that the CCC would consider bulletin notice of freight car arrivals to be sufficient notice of such arrivals:
This office has always accepted bulletining of cars of grain, seeds, or soybeans billed to OCC for inspection and disposition as due notice of arrival at stations in the states of Missouri, Kansas, Nebraska, Colorado and Wyoming, where bulletining and official inspection is provided. However, our attention has been directed to some instances where carrier agents cannot locate on file a written notice from this office of acceptance of bulletining as notice of arrival as prescribed in Rule 2 of Demur-rage Tariff 4 — A.
Therefore, in order to insure that the agents of the individual carriers at all stations concerned have a proper record on file, this letter shall constitute notification that this office accepts the bulletining of cars described above *391as due and adequate notice of arrival at stations where official inspection is performed.
Accordingly, it appears that the Denver Grain Exchange was OCC’s duly authorized agent for acceptance of bulletin notice of arrival at Denver during the period in suit.
14. The practice of the Denver Grain Exchange respecting receipt of grain bulletins, grain inspections and notification of consignees was as follows in July and August 1964 and 1966: a Denver Grain Exchange inspector would pick up the grain bulletin daily (except Saturdays and Sundays) between 6:16 and 7 a.m. at the railroad freight office. This grain bulletin listed the number and location of all cars received since the previous bulletin. When a car was at a hold point outside Denver, the inspector and the Exchange followed the same procedure as that employed in the case of OCC cars placed for inspection at plaintiff’s yard in the Denver terminal area.
15. Except for the limited additional travel time to and from the various hold points, the COO was not materially prejudiced by the fact that cars consigned to Denver were stopped short and inspected at various hold points away from the Denver terminal area.
CONCLUSION OP LAW
Upon the foregoing findings of fact and opinion, the court concludes as a matter of law that plaintiff is entitled to recover on its claim and judgment is entered for plaintiff in the amount of $5,385. Defendant’s counterclaim is dismissed.