Court Opinion

ID: 9456852
Source: CourtListenerOpinion
Date Created: 2023-08-04 20:04:06.009551+00
Date Added: 2024-06-11T17:35:07.108085
License: Public Domain

SWYGERT, Chief Judge
(dissenting).
My reading of section 223 of the Motor Carrier Act, 49 U.S.C. § 323, and the cases decided under it and under 49 U. S.C. § 3(2), the counterpart statute pertaining to railroad carriers, makes Admiral as the consignee liable for the freight charges which Rogers failed to pay. This liability is clearly stated in the bill of lading under which the shipments were transported, the pertinent part reading: “The owner or consignee shall pay the freight and average, if any, and all other lawful charges accruing on said property. * * * ” Only if he is an agent with no beneficial interest in the property which was shipped and has notified the carrier of that fact may a consignee avoid his liability for payment of the freight charges.
Pittsburgh, C. C. & St. L. Ry. v. Fink, 250 U.S. 577, 40 S.Ct. 27, 63 L.Ed. 1151 (1919), established that the policy of the Interstate Commerce Act demands that the carrier receive full payment in every case. To effectuate that policy, Fink established the rule that regardless of contract and equitable principles, a consignee who accepts delivery cannot avoid liability for freight charges. Unlike the majority, I believe that Fink, and the legion of cases following it, do “suggest that Congress intended to impose absolute liability upon a consignee.” As Mr. Justice Brandéis stated in Louisville & N. R. R. v. Central Iron & Coal Co., 265 U.S. 59, 70, 44 S.Ct. 441, 444, 68 L.Ed. 900 (1924):
[I]f a shipment is accepted, the consignee becomes liable, as a matter of law, for the full amount of the freight charges, whether they are demanded at the time of delivery, or not until later. His liability satisfies the requirements of the Interstate Commerce Act.
The liability of the consignee is statutory. It is irrelevant that the consignee may have demanded that the consignor agree to pay freight charges, or that the bill of lading provided that the freight was to be paid by the consignor. If the consignor, for whatever reason, fails to pay the charges, the carrier may proceed directly against the consignee. Boston & Me. R. R. v. Hannaford Bros., 144 Me. 306, 68 A.2d 1 (1949); Central Warehouse Co. v. Chicago, R. I. & P. Ry., 20 F.2d 828 (8th Cir. 1927); see Southern Railway System v. Leyden Shipping Corp., 290 F.Supp. 742, 744 (S.D.N.Y. 1968).
A consignee who has accepted delivery of goods cannot raise the defense of es-toppel to avoid his statutory duty to pay the freight charges. “Estoppel could not become the means of successfully avoiding the requirement of the act as to equal rates, in violation of the provisions of the statute.” Fink, supra at 583, 40 S.Ct. at 28. Mr. Justice Bran-déis reiterated this principle in Central Iron, supra at 65, 44 S.Ct. at 442:
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) es-top or preclude it from enforcing payment of the full amount by a person liable therefor.
The majority rules that the carrier’s illegal action in extending credit for a period in excess of the seven-day maximum provided by the regulations under section 323 prevents its recovering any freight charges. Permitting this defense allows consignees to assert a species of estoppel against carriers. I believe Fink intended to preclude this possibility. In that case, the Supreme Court recognized that the carrier’s ac*65tion in failing to collect the entire freight charge before it released the goods was a violation of the Act; but the Court did not allow this illegal action by the carrier to be used by the consignee as a means of avoiding his statutory obligation to pay the full freight charge.
I believe the correct rule was stated in East Texas Motor Freight Lines v. Franklin County Distilling Co., 184 S. W.2d 505, 507 (Tex.Civ.App.1944):
The consignor of freight under bill of lading, such as is here in question, failing to sign the nonrecourse provision, is liable for the legitimate freight charges on the shipment. This is true, even though the carrier makes delivery in violation of Section 323 of Title 49, U.S.C.A., and violates the Rules of the Commission as to extending credit to the consignee. * * *
Nothing in the Motor Carrier Act provides that a carrier’s failure to comply with section 323 or the Interstate Commerce Commission’s credit regulation should result in the carrier’s forfeiting its right to collect freight charges. Indeed, the conclusion that a violation of the credit regulation results in a forfeiture appears to be inconsistent with the Act’s policy of assuring that no consignee can avoid the ultimate responsibility for paying the full freight charges provided for in the carrier’s tariff. A consignee is always primarily liable to the carrier regardless of any contractual liability of others.
I would reverse.