Case: UNION PACIFIC RAILROAD COMPANY v. THE UNITED STATES
Abbreviation: Union Pacific Railroad v. United States
Decision Date: 1913-02-03
Docket Number: No. 23459
Citation: 48 Ct. Cl. 99
Volume: 48
Reporter: United States Court of Claims Reports
Court: United States Court of Claims
Jurisdiction: United States
Parties: UNION PACIFIC RAILROAD COMPANY v. THE UNITED STATES.
Judges: Howey, J., was not present at the trial of this case and took no part in its decision.
Pages: 99–109

Head Matter:
UNION PACIFIC RAILROAD COMPANY v. THE UNITED STATES.
[No. 23459.
Decided February 3, 1913.]
On, the Proofs.
This is a suit to recover $30,163 for tlie transportation of armor plate. Tbe question involved is simply at what rate per hundredweight is the claimant entitled to recover. In 1890, armor plates being a new article of commerce, the freight rate was fixed at “ the rate on forgings, $1.50 per one hundred pounds.” Subsequently the rate on forgings is reduced to $1 per hundredweight, being placed in the published tariff and described as “ forgings, rough, not in any manner machine finished,” no change being made in the rate for armor plates. Still later it is placed in the third class at the rate of $2.20 per hundredweight. Armor plate is an alloy of steel and nickel, of eom- ' plicated manufacture, machine finished, and face hardened.
I.A freight rate once fixed can not be considered as only temporary. A rate so fixed is an established rate until changed in some manner allowed by law.
II.The action of the freight committee of the Trans-Continental Association November 29, 1890, established a commodity rate upon armor plate at $1.50 per hundred pounds; and the rules of the Interstate Commerce Commission do not allow a rate so established to be changed by placing the articles in another class. A commodity rate once established remains in force until changed as a commodity rate.
III.The action of the freight committee subsequently in reducing the rate on forgings, rough, not in any manner'machine finished, did not affect the commodity rate theretofore fixed on armor plate.
The Reporters’ statement of the case:
The following are the facts as found by the court:
I. The claimant, Union Pacific Railroad Co., is a corporation, duly organized under and by virtue of the laws of the State of Utah, and was such corporation at the time of performing all the services embraced in this suit; and now is, and during all the times hereinafter mentioned was, engaged as a common carrier in the carriage and transportation of passengers and freight in and through various of the States of the United States, and, in conjunction with other railroad companies, between the points hereinafter set forth. Claimant is the sole owner of the claims sued on herein, and has made no transfer or assignment thereof.
II. That claimant, at 12 o’clock, midnight, on the 31st day of January, 1898, took possession of, and then and thereafter operated, the line of railroad, with its appurtenances, formerly of the Union Pacific Railway Co., extending from Council Bluffs, Iowa, to its western terminus at or near Ogden, Utah; and, at 12 o’clock, midnight, on the 31st day of March, 1898, claimant took possession of, and then and thereafter operated, the line of railroad, with its appurtenances, formerly of the Union Pacific Railway Co., extending from Kansas City, Mo., to Denver, Colo.; from Leavenworth, Kans., to Lawrence, Kans.; from Denver, Colo., to Cheyenne, Wyo.; and from Brighton, Colo., to Boulder,.Colo.
III. During the years 1899 and 1900, claimant, at the instance and request of defendant, and upon its promise to pay so much as was reasonably and properly due therefor, transported for defendant divers shipments of armor plate and one shipment of armor tube from Munhall, Pa., to Ogden, Utah, and one shipment of armor plate from South Bethlehem, Pa., to Ogden, Utah, all en route to San Francisco, Cal., the same being destined for use in the construction of the United States battleship Wisconsin, then being built for defendant at the Union Iron Works, in San Francisco, Cal.
The details of said several shipments are correctly set forth in Schedule “A,” attached as an exhibit to the original petition herein.
IV. During the year 1890, prior thereto, and until the early part of the year 1893, there was in existence an organization of divers carriers participating in the shipments of freight herein mentioned, known as the Trans-Continental Association. Said association was succeeded by the Transcontinental Freight Bate Committee, which was succeeded by the Trans-Continental Freight Bureau. These organizations were formed for the purpose of arranging and publishing freight rates, both class and commodity, between Pacific coast terminals and! defined territories on and east of the Missouri Eiver.
The rates are published in printed pamphlet form, each successive issue being identified by an appropriate number, and were known as eastbound tariffs and westbound tariffs.
The class rates published in these tariffs were made “ subject to the western classification,” or “subject to the current western classification.”
Class rates are rates that are based upon the ratings shown in the classification governing, as shown by the corresponding letter or number in the classification.
Commodity rates are specific rates for the named commodities between certain designated points or groups of points.
Prior to the taking over by claimant of the railroad and properties of Union Pacific Eailway Co., as set forth in the above finding 2, said predecessor company was one of the railroads participating in and governed by the certain classifications and tariffs aforesaid; and, subsequent to said time, and covering all the times embraced in this suit, claimant, Union Pacific Eailroad Co., was one of the railroads participating in and governed by said classifications and tariffs.
V. Prior to the year 1890 there were no freight rates, either class or commodity, on armor plates used in the .construction of armored battleships, said armor plates being a new article of commerce in the western territory.’
VI. Armor plate is an alloy of steel and nickel, carefully treated metallurgically and face hardened (harveyized), under secret process, to give it ballistic resisting qualities, as is also armor tube. Both armor plate and armor tube are completely machined products.
VII. At a meeting of the freight committee of the Transcontinental Association, held at Chicago, Ill., November 29, 1890, the following action was taken by it in respect of the charge for transportation of heavy armor plate, the same not having been previously provided for in either classifications or tariffs:
“ The ChaiRman. The chairman would like to know the sentiment of the committee in respect of the rate that should apply on heavy armor plate over 3 inches in thickness. Unless a rate is agreed upon the chairman will rule that the rate on forgings shall apply, $1.50 per 100 pounds.
“The sentiment of the committee was that the rate on forgings should apply.”
VIII. The ruling of the chairman of the Trans-Continental Association, approved by the freight committee, of November 29, 1890, was one of many similar rulings made necessary by reason of shipments of peculiar character being offered for transportation on which no rate had theretofore been specifically provided, either by commodity tariff or by classification rating.
IX. Subsequently the Trans-Continental Freight Rate
Committee, in its published Westbound Tariff No. T-3, effective July 16, 1894, reduced the former commodity rate on forgings of $1.50 per hundredweight (supra) to $1 per hundredweight, the same being found on page 25 thereof, under the general heading “ Iron and steel, articles of, as follows: * * * forgings, rough, not in any manner machine finished.”
Said Tariff No. T-3 contained, among others, the following provision:
“ 16. Bates on commodities. — Rates on commodities specified on pages 9 and 10 and 12 to 42, inclusive, are specific and must not be applied to analogous articles.”
Neither armor plate nor armor-plate materials were mentioned in said Tariff No. T-3, nor in any other tariff or classification until on or about January 1, 1898, as hereinafter set forth.
X. While no further action had been taken in either tariffs or classification as to armor plate or armor-plate materials since the temporary ruling of the chairman of the Trans Continental Association, of November 29, 1890 {supra), fixing a rate thereon of $1.50 per hundredweight, nevertheless defendant, from and after “said Westbound Tariff No. T-3 {supra) assumed to and did apply to armor plate the rate of $1 per hundredweight, the latter being the reduced commodity rate on iron and steel forgings, rough, not in any manner machine finished, defendant assuming to apply said rate to armor plate by analogy.
XI. Thereafter there was duly published and issued western classification No. 26, effective January 1, 1898, in which armor plate was placed at third class, the classification thereof being marked with an asterisk, being the mark or designation used in said publication (as therein explained) to indicate that the class of the particular article has been changed; and, thereafter, Trans-Continental Freight Bureau Westbound Tariff 1-C, effective June 25, 1898, and continued to January 18, 1900, quoted a rate of $2.20 per hundredweight on freight classified as third class between Munhall and South Bethlehem, Pa., and San Francisco, Cal.
Thereafter said freight bureau issued several different additional tariff schedules in all of which armor plate was put in said third class and quoted at a rate of $2.20 per hundredweight.
XII. For a time defendant applied the certain classification and tariff rate of $2.20 per hundredweight aforesaid on shipments of armor-plate materials, and in several instances allowed and settled its accounts with claimant upon that basis; but afterwards defendant declined to apply and allow said rate on the several shipments involved in this suit, as hereinafter stated.
XIII. From and after said date, November 5, 1900, the Trans-Continental Freight Bureau established a commodity rate on armor plate of $2.20 per hundredweight between the terminal points aforesaid (gross through rate), being the same rate, in amount, as theretofore fixed, during the years {supra), by classification and tariff. Said commodity rate on armor plate, so established as above, was published in supplement No. 14 to Trans-Continental Freight Bureau Westbound Tariff 1-D, effective November 5, 1900; and in that supplement changes in tariffs (as therein explained) are marked with an asterisk; but no asterisk is shown in connection with said commodity rate on armor plate, thus indicating that the tariff on armor plate had not been changed in amount.
XIY. The several consignments of freight embraced in this suit were shipped from Munhall and South Bethlehem, Pa., respectively, over the connecting lines of divers common carriers participating in the transportation thereof, to Ogden, Utah, all en route to San Francisco, Cal., the last such carrier, namely, from Council Bluffs, Iowa, to Ogden, Utah, being the claimant herein, Union Pacific Bailroad Co.; and, under the terms of said several shipments, the net cash rate to Ogden, Utah (i. e., proportional of the gross through rate to San Francisco, Cal.), was to be paid to the delivering carrier of the consignee at destination (Ogden, Utah), and settlement made by it with the preceding carriers.
Claimant made settlement with each of said preceding carriers, in respect of the several shipments for which recovery is sought herein, on the basis of a gross through rate of $2.20 per hundredweight on those shipments on which that rate is claimed herein, and on the basis of a net cash rate of $0.84 per hundredweight to Ogden, Utah, on the shipment wherein that special rate was made with defendant; said payments by claimant, however, being subject to adjustment with said carriers in the event such rates be disallowed.
XY. On the basis of a gross through rate on armor plate of $2.20 per hundredweight from Munhall and South Bethlehem, Pa., to San Francisco, Cal. (being the rate contended for herein by claimant), the net cash proportional thereof to Ogden, Utah (all land-grant and other deductions having been first made), and payable to claimant, Union Pacific Bailroad Co., as such last carrier, as above, is $1.17995 per hundredweight on said shipments from Munhall, Pa., and $1.22912 on said shipments from South Bethlehem, Pa.
XYI. If the temporary ruling of the chairman of the Trans-Continental Association of November 29, 1890, fixing a gross through rate of $1.50 per hundredweight on armor plate, was, in legal effect, the establishment of a commodity rate on armor plate, as claimed by defendant herein, then, and in such case, it results that the allowance by defendant to claimant for the several shipments embraced in this suit, at a gross through rate (Munhall and South Bethlehem, Pa., to San Francisco, Cal.) of but $1 per hundredweight, resulted in a short payment by defendant to claimant in the sum of $14,493.88.
If the claimant recovers the foregoing sum herein all short payments mentioned in the petition will be taken up and corrected. If claimant is entitled to recover a freight rate of $1.50 per hundredweight on armor plate from November 29, 1890, until January 1, 1898, and thereafter at the rate of $2.20 per hundredweight, then the claimant is entitled to recover the sum of $30,163.36.
XVII. Claimant has not, in any manner or way, assented to or acquiesced in the certain reduced compensation aforesaid ; but, on the contrary, all and singular the certain settlements and payments aforesaid were the subject of formal and repeated objection, protest, and appeal in the accounting departments of defendant where its said several accounts were audited for payment.
Mr. A. A. Hoehling, jr., for the claimant.
Mr. J. Harwood Graves and Mr. Louis A. Bissell (with whom was Mr. Assistant Attorney General John Q. Thompson) for the defendants.

Opinion:
Barnet, J.,
delivered the opinion of the court:
This is a suit to recover the sum of $30,163.36 for the transportation by the plaintiff railroad company of certain shipments for the defendants during the years 1899 and 1900', one of armor tubes and the remainder of armor plate, from Munhall and South Bethlehem, Pa., to Ogden, Utah, en route to San Francisco, Cal., the same being destined for use in the construction of the United States battleship Wisconsin, then being built for the defendants at the Union Iron Works, at the latter city. Of this amount claimed $2,617.07 represents short payments by the defendants (which are ad mitted in defendants' brief) and $509.53 represents the difference between an alleged special contract price and the price paid the plaintiff upon a certain shipment. The remainder is the difference between the gross rate of $1 per hundredweight paid by the defendants for said shipments between the terminal points mentioned and the gross rate of $2.20 per hundredweight which the plaintiff contends it should have received. The short payments before mentioned are not considered in this opinion, as they are both taken up in the amount allowed by the court.
It is contended by the plaintiff that during the periods stated the gross through freight rate on armor plate bad been fixed by classification at $2.20 per hundredweight, with net cash proportionals to Ogden, Utah. On the other hand, it is contended by the defendants that the gross through freight rate for armor plate during said periods had been fixed as a commodity rate at $1 per hundredweight. It should also be stated that it is contended by the plaintiff, in the alternative, that in any event, and even under the theory of interpretation to be given to the fixing of rates contended for by the defendants, it is entitled to a rate of $1.50 per hundredweight on the freight mentioned.
The facts governing this case and necessary to be considered for its determination are as follows: Armor plates being then a new article of commerce, prior to 1890 no freight rate, either class or commodity, had been fixed on that article by the freight lines. But at a meeting of the freight committee of the Trans-Continental Association, held at Chicago, Ill., November 29,1890, the following action was taken in respect to the rate to be charged for the transportation of this article:
" The Chairman. The chairman would like to know the sentiment of the committee in respect of the rate that should apply on heavy armor plate over 3 inches in thickness. Unless a rate is agreed upon, the chairman will rule that the rate on forgings shall apply, $1.50 per 100 pounds. "
" The sentiment of the committee was that the rate on forgings should apply."
This proceeding is quoted in full, as its construction has much to do with the decision of this case. Subsequently the transcontinental freight rate committee before mentioned re duced the former commodity rate on forgings from $1.50 to $1 per hundredweight, this order taking effect July 16,1894, the rate on forgings at all times being placed in the published tariff under the general heading, " Iron and steel, articles of, as follows: forgings, rough, not in any manner machine finished." At this time no change was made in the rates to be charged for armor plate or armor-plate materials unless such change is to be implied by analogy from the changes upon the rates of forgings, etc., before mentioned.
Thereafter the said Trans-Continental Freight Committee readjusted its freight rates and issued a new tariff in which armor plate was placed in what was denominated the " third class," the rate upon articles in which was $2.20 per hundredweight. This classification by its terms became effective January 1, 1898. Said committee issued several statements of tariff rates thereafter and prior to November 5, 1900, in all of which armor plate was placed in the " third class " mentioned and at a rate of $2.20 per hundredweight. November 5, 1900, the Trans-Continental Freight Bureau established a commodity rate on armor plate at $2.20 per hundredweight. The freight rates established, or attempted to be established at the several times as above stated, were between the terminals for which rates are to be considered in the determination of this case. When the first change was made in the class rates affecting armor plates, the classification thereof was marked with an asterisk, which was' the mark used (as therein explained) to indicate that the class of that particular article had been changed. No such mark was used when the commodity rate was established upon armor plate November 5, 1900. The findings show, and perhaps unnecessarily, that armor plate is an alloy of steel and nickel, of complicated manufacture, machine finished, and face hardened, and hence can not be said naturally to belong to the class of " Iron and steel forgings rough," etc., and we do not understand that to be contended by the defendants. It should also, perhaps, be added that for a time the defendants acquiesced in said increased freight rate on armor plate, but subsequently declined to do so, and insisted that the plaintiff was only entitled to a through rate of $1 per hundredweight.
With this statement of the facts bearing upon the consideration of this case we come to the question in dispute between the parties, which, briefly stated, we understand to be as follows: The plaintiff contends that the first action of the freight committee, November 29, 1890, upon the question as to what freight rate should be charged' upon armor plate was but temporary in its character and can not be said either to have placed it in a class or to have given it a commodity rate, and that the action of the freight bureau making the change in freight tariffs effective June 25, 1898, and putting armor plate in a class for which $2.20 per hundredweight was to be charged was the first fixed freight rate for that article; hence that it was entitled to a freight rate on armor plate of $1.50 per hundredweight until June 25, 1898, and since that date $2.20 per hundredweight. On the other hand, it is contended by the defendants that the action of the freight committee November 29, 1890, fixed a commodity rate upon armor plate at $1.50 per hundredweight, which remained until the rate on iron and steel forgings was reduced to $1 per hundredweight, as found in Finding IX, and that that- rating remained the rate upon armor plate until November 5, 1900, when the freight bureau established a commodity rate on this article at $2.20.
As we understand the law governing this case we do not agree with either of these contentions. Eule f-a of Tariff Circular No. 18-A, issued by the Interstate Commerce Commission, provides as follows:
" In every instance where a commodity rate is named in a tariff upon a commodity and between specified points such commodity rate is the lawful rate and the only rate that may be used with relation to that traffic between those points, even though a class rate or some combination may make lower. The naming of a commodity rate on any article or character of traffic takes such article or traffic out of the classification and out of the class rates between the points to which such commodity rate applies."
This rule was construed by a ruling of the commission of June 9,1908, as follows:
"A carrier having a high class rate on furniture with a low minimum also had a lower commodity rate with a higher minimum. In response to an inquiry whether their privilege to use either rate as they desire: Held, that the only purpose of making a commodity rate is to take the commodity out of the classification. The commodity rate is, therefore, stated in rule †, Tariff Circular 15-a, the lawful rate. And if the carrier does not desire to apply it on all shipments it must be canceled."
We see no force in the contention that the rate first fixed on armor plate by freight rate committee November 29, 1890 (finding vii) was only a temporary rate, for the findings show that it remained in force at least until July 16, 1894 (finding ix), when the rate on iron and steel forgings, etc., was changed and if our view is correct, until November 5, 1900, when a commodity rate at $2.20 on armor plate was fixed. In either event, however, whether temporary only or not, we do not see how that affects this case, for all orders fixing freight rates are merely temporary. However fixed, it was the established rate until changed in some manner allowed by law. We think that the action taken by the freight rate committee November 29, 1890, established a commodity rate upon armor plate at $1.50 per hundredweight, and the rule quoted established by the Interstate Commerce Commission does not allow this rate to be changed by placing the articles in another class. In other words a commodity rate once established remains in force until changed as a commodity rate.
Neither do we think that the action of the freight committee reducing the former rate on iron and steel forgings, rough, etc. (finding ix), affected the commodity rate theretofore fixed on armor plate.
The findings show and it is a matter of common knowledge that it would be an unauthorized construction by analogy to place harveyized armor plate in the same class with " Iron and steel forgings rough, not in any manner machine finished."
It follows from the foregoing that the plaintiff was entitled to a freight rate upon armor plate at the rate of $1.50 per hundredweight from November 29, 1890, to November 5, 1900. This entitles the plaintiff to a judgment of $14,493.88 and a judgment in its favor in that sum is ordered.
Howey, J., was not present at the trial of this case and took no part in its decision.