Court Opinion

ID: 8804960
Source: CourtListenerOpinion
Date Created: 2022-11-26 14:45:03.434468+00
Date Added: 2024-06-11T17:04:03.870496
License: Public Domain

SMITH, District Judge
(dissenting). What appears to me the magnitude of the consequences that might follow from the erroneous conclusion of the court in this cause if generally applied to mercantile transactions of the character involved in the present case compels me to dissent. The evidence and admitted facts in the case were to the effect that the railroads, in order to obtain use for their cars at a dull season of the year, offered the shippers of coal by the tariff marked “Exhibit A” that if they would ship coal during certain months, they could have the privilege, so to say, of free storage, until navigation was opened up on the lakes and all opportunity given for the water transportation. By this tariff proposition no- demurrage was to be charged on such coal shipments between 1st January and 15th August in each year. This was a perfectly clear and understandable proposition. The railroads said to the shippers of coal that during the period when water navigation was closed, transportation and the use of railroad cars to ports on the laké necessarily ceased, and their cars would be useless. To remedy this and to offer an inducement to coal shippers to give employment to cars, the railroad company notified all coal shippers who would ship coal after the 1st of January that they should not be charged with demurrage until the 15th of August in each year, i. e., should have free storage. After that date, viz. 15th August, on all coal arriving, or remaining on hand, with the railroads for which water transportation had not been provided, shippers would be charged demurrage. This tariff or contract offer by its terms remained in force until due notice was given of its cancellation. Acting upon this tariff the plaintiff in error, defendant below, shipped coal after the 1st of January, 1911, which coal was in course of transportation and out of the defendant’s possession and on its way to the water port when the plaintiff below on 4th April, 1911, undertook to issue another tariff, Exhibit B, whereby this privilege of freedom from demurrage or free storage was canceled from and after the 15th day of May, 1911. The result of this change was that shippers who had already shipped their coal prior to notice of this change, which coal had passed from their possession into the hands of transporting carriers, and who had shipped it upon the hypothesis that they would be given storage without demurrage charges until the 15th of August under the tariff then in force, were notified, notwithstanding the arrangement made, that this agreement would be arbitrarily canceled and the coal which they had shipped already under and by virtue of the agreement, and (depending upon it, would be charged storage. This was a plain violation of the contract, and one which destroyed the power of the shipper desiring to make contracts to deliver, to make those contracts based upon any definite mathematical calculation of what the expenses would be as affecting the prices at which deliveries should be made. As, for instance, if a coal dealer on the 1st Eebruary desired to fill an order for coal to be delivered in, say October, in making his estimate of the price at which he could deliver, he would be justified under the existing tariff in estimating that if he could get his coal to the port and provide water freight room before the 15th August, he would not be called upon to pay demurrage. To allow the transportation company delivering the coal at the port to arbitrarily *922and suddenly cancel this agreement, after the coal has left the hands of the shipper, and gone into the possession, of the transportation company would not only disorder the channels and methods of trade, but might ruin the individual shipper. Assuming that there is an essential difference between the service of transportation which must be furnished and paid for and the accommodation of storage, which may or may not be provided, and that the former is a right which the carrier cannot deny or abridge, the latter a privilege which the carrier is at liberty to accord or refuse, and that the former is obligatory and the latter optional, then and in that case there is less justification in permitting the carrier arbitrarily to annul a contract in the shape of an offer which was not obligatory on him, but purely optional. If it was optional for him to make it, and it was made for consideration, and accepted and acted upon by the other party to it, then there is no question whatsoever of public service regulation which would interfere to hold the contract not binding between the two.
The learned judge who heard the cause in the court below was of the opinion that the tariffs were “seasonal,” i. e., of force only for the navigation season of lake transportation defined therein; which under the tariff set out as Exhibit A is defined as extending from August 15th to December 21st. That it expired on December 31, 1909, and must be presumed to have been again issued on July 12, 1910. There appears no sufficient ground for this hypothesis. This tariff was not again issued, but all parties seemed to have acted under it in 1910 as if it still continued in force. By its very terms the rules and charges therein are declared effective each year from August 15th to December 31st inclusive. It would seem that for all cars shipped prior to notice of the change in the tariff or storage charged, and which cars therefore had been placed out of the possession of the shipper in. reliance on the contract, the other party was not in a position to refuse the consideration, and as to all these cars the judgment of the court below was erroneous, and should be reversed.