Case: UNION PACIFIC RAILROAD COMPANY v. THE UNITED STATES
Abbreviation: Union Pacific Railroad v. United States
Decision Date: 1961-03-01
Docket Number: No. 278-54
Citation: 152 Ct. Cl. 523
Volume: 152
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: Reed, Justice {Bet.), sitting by designation; Durfee, Judge; MaddeN, Judge, and Jones, Ohief Judge, concur.
Pages: 523–545

Head Matter:
UNION PACIFIC RAILROAD COMPANY v. THE UNITED STATES
[No. 278-54.
Decided March 1, 1961.
Plaintiffs motion for new trial denied July 19, 1961]
Raymond A. Negus for plaintiff. Lawrence Calce and John Cuandolo on the brief.
Pauline B. Heller, with whom was Acting Assistant Attorney General Geo. 8. Leonard, for defendant.

Opinion:
Laeamoke, Judge,
delivered the opinion of the court:
Plaintiff sues for amounts which the defendant recovered from the plaintiff on account of alleged overpayments of freight charges. Plaintiff's claim is that the original charges were correctly determined and the deductions made by the General Accounting Office were unjustified.
The issue to be decided is whether the applicable charges are to be determined by applying TCFB Section 22 Quotation 13-A, as plaintiff contends, or whether that quotation may be used in combination with NPCFB Section 22 Quotation 47, as the defendant contends.
The facts are these: During the years 1947, 1949, and 1950, plaintiff, as the destination carrier, in conjunction with the Northern Pacific Railway Company, performed transportation services for the defendant by transporting shipments of smoke pots, bombs, ammunition, detonating fuses, explosive projectiles and smokeless powder. The carrier's bills were paid by the United States, prior to audit, in accordance with the provisions of Section 322 of the Transportation Act of 1940, 49 U.S.C. 66. Section 322 provided that payment for transportation of property for or on behalf of the United States by any common carrier subject to the Interstate Commerce Act as amended, or the Civil Aeronautics Act of 1938, will be made upon presentation of bills there for, prior to audit or settlement by the General Accounting Office, but that the right is reserved to the United States Government to deduct the amount of any overpayment to any such carrier from any amount subsequently f ound to be due such carrier.
Subsequently the General Accounting Office audited the bills, as provided for in Section 322, supra,, and determined that a lower rate was applicable to said shipments. Using Northern Pacific Coast Freight Bureau Section 22 Quotation 47 (hereinafter referred to as Quotation 47), the General Accounting Office applied the rate prescribed thereunder in Item 3. This rate consists of 5 cents per 100 pounds between Bangor and Tacoma, plus the rate between Tacoma, Washington and destination as computed under Quotation 13-A.
Plaintiff was notified by the General Accounting Office of the overpayments so determined and directed that deduction might be made from other bills of plaintiff unless prompt refund was made. In some instances plaintiff made refunds and in other instances the General Accounting Office made deductions from other bills of plaintiff. The total amount recovered by the General Accounting Office by way of refund and deduction is $30,645.38.
It is agreed between the parties that a Section 22 Quotation is a rate, charge or privilege tendered under Section 22 of the Interstate Commerce Act which offers to perform transportation services at rates intended to be lower than those provided in the published tariffs of a transportation company. There is no claim by either side that any published tariff applies.
During World War II, the Government constructed on Government land a rail line which connected the Navy facilities at Bremerton-Bangor with the Northern Pacific Railway terminus at Shelton. This provided an all-rail route for the transportation of Government property, particularly explosives, to or from the Bangor naval magazine, the Bremerton Navy Yard, and other facilities. Prior to this construction, the Navy facilities at Bangor, Ostrich Bay and Bremerton were served by car barge. Due to objections raised against the concentration of explosives in the Seattle area and their transportation by car barge, the construction of the Government railway was undertaken.
In order to meet the Navy's request for a rate that would be lower than the rail-barge rate for services to the facilities in the Bangor-Bremerton area, the Northern Pacfic issued a Section 22 Quotation (Quotation 36) providing for a nominal arbitrary of 5 cents per 100 pounds over the rates to and from Tacoma. Section 22 Quotation 36, issued to be effective from April 10, 1945, reads in pertinent part as follows:
Item, No. 1 Traffic Covered.
The traffic covered by and subject to this quotation is the property of the Government, originating at or destined to Portland, Oregon, or points south, east or west thereof, also points east of Easton, Washington, and west of transcontinental territory. The traffic must move via the Northern Pacific Railway between Shelton, Washington and Portland, Oregon or between Shelton, Washington and Easton, Washington to obtain the benefit of the rate quoted in Item No. 3.
*
Item No. 3 Rates to be Applied
On explosives described in Item No. 2 a rate of 5$ per one hundred pounds, minimum. 50,000 pounds, will be applied between Tacoma, Washington and Shelton, Washington. It is understood that shipments will not necessarily move via Tacoma, Washington, but the rate authorized by this quotation will apply only on shipments moving via authorized tariff routes of the Northern Pacific Railway applicable to and from Tacoma, Washington.
Item No. Ip Land Grant Deductions
The rate provided under this quotation is a special rate not avauable to commercial shippers and is, therefore, not subject to deduction account of land grant, but nothing in this quotation shall deprive the Government of the rights to avail itself of any published tariff rate to which it is lawfully entitled less any lawfully applicable land grant deduction.
After denying appeals by the Union Pacific Railroad Company and the Chicago, Milwaukee, St. Paul and Pacific in Docket 14797, the Interstate Commerce Commission ordered common carrier rates to be effective 30 days from July 18, 1946, for points on the Government railroad. Special Supplement No. 85 to Tariff 65-F vacated, as of August 17, 1946, the postponement in Supplement No. 80. The tariff rates authorized under Supplements 79 and 85 became effective August 17, 1946. This made available a combination through rate between points on the Government railroad and points in the territory west of trans-continental. A through rate is a rate applicable through from point of origin to destination. A through rate may be either a local rate, a joint rate, or a combination of two or more rates.
On September 18, 1946, a conference was held between representatives of the United States Navy and the Northern Pacific Bailway with respect to North Pacific Coast Freight Bureau Section 22 Quotation 36. Since Quotation 36 had expired with the issuance of the Certificate of Public Convenience and Necessity, the Navy requested the Northern Pacific to reissue Quotation 36 in order to provide a 5 cent arbitrary over Tacoma rates on explosives to and from points on the Government-owned railroad beyond Shelton. The Northern Pacific acknowledged the Navy's need for the reissue of Quotation 36 and agreed to the Navy's request for a change in Item 3 of Quotation 36.
On October 25, 1946, the North Pacific Coast Freight Bureau on behalf of the Northern Pacific Bail way offered to the United States Navy NPCFB Section 22 Quotation No. 47, effective for all shipments moving on and after August 17, 1946. This quotation applied to the commodities involved herein and was in effect during the time the shipments were made and contained the following items:
Item No. 1 Traffic Covered
The traffic covered by and subject to this quotation is the property of the Government, originating at or destined to Portland, Oregon or points south, east or west thereof, also points east of Easton, Washington, and west of transcontinental territory on the one hand, and destined to, or originating at, points north of Shelton, Wash., to and including Bremerton-Bangor, Wash., on the other hand. The traffic must move via the Northern Pacific Bailway "between Portland, Oregon or between Easton, Washington, and points north of Shelton, Washington, to and including Bremerton-Bangor, Washington, to obtain the benefit of the rate quoted in Item No. 3. ❖ *
Item No. § Bates to be Applied
(a) On explosives described in Item No. 2, moving as provided in Item No. 1, the rate shall be 5‡ per 100 lbs., minimum 50,000 lbs., higher than the rate applicable to or from Tacoma, Washington on the one hand, and points in the origin-destination territory described in Item No. 1, on the other hand, on the same commodity.
Item No. I Land Grant Deductions
The rate provided under this quotation is a special rate not available to commercial shippers and is, therefore, not subject to deduction account of land grant, but nothing in this quotation shall deprive the Government of the rights to avail itself of any published tariff rate to which it is lawfully entitled less any lawfully applicable land grant deduction during the period the land grant deduction is in force.
‡ ‡ $
Item No. 8 Termination of Quotation
This quotation is intended for application pending the establishment of through tariff rates between points north of Shelton, Washington, to and including Brem-erton-Bangor, Washington and territory west of transcontinental. It is not operative where through rates are in force. It may be canceled by written notice of not less than sixty (60) days mailed by either party to the other except as to shipments made from point of origin before the effective date of such notice and except as to any accrued rights and liabilities of either party.
Quotation 47 was amended three times between 1947 and 1951 to provide increased rates; and was canceled, effective April 20,1951.
On July 8,1943, the Transcontinental Freight Bureau had promulgated TCFB Section 22 Quotation No. 13-A offering to the Government on behalf of all carriers specific rates predicated on mileage basis for shipments of ammunition and explosives originating at and consigned to points within Mountain Pacific and Pacific Coast territory. It provided through rates but not through tariff rates. This quotation and amendments thereto applied to the coimnodities involved herein and was in effect during the time the shipments herein were made and contained the following items and Exhibit A:
Item No. 3. Bates To Be Applied
Subject to compliance with all the terms and conditions of this quotation on each carload shipment of the kind referred to in Item No. 2, the railroads will apply rates as shown in Exhibit "A" attached hereto, subject to minimum weight of 50,000 pounds.
Item No. 1¡- Routing and Gircuity- Limitations
The rates as provided herein apply to short-line mileage via routes authorized in current class rate tariffs and subject to all circuity and other restrictions applicable to such class rate tariffs.
Item No. 5. Land-Grant Deductions
No rate or charge applicable on any shipment moving under this quotation shall be subject to any land-grant deduction.
Item No. 6. Charges and Allowances
Shipments made under this quotation are subject to all charges and all allowances for or in respect of diversion, re-consignment, arbitrarles, demurrage, inspection, switching, and to all other privileges, charges and rules which in any way increase or decrease the amount to be paid on any shipment or which increase or decrease the value of the service, without, in any case, any land-grant deduction.
$ $ ‡
Item No. 8. Termination of Quotation
This quotation may be cancelled by written notice of not less than sixty (60) days mailed by either party to the other except as to shipments made from original point of shipment before the effective date of such notice and except as to any accrued rights and liabilities of either party hereunder.
The parties have agreed that Quotation 47 was available at the time the shipments moved, covered the commodities shipped, and the territory in which the shipments moved. The plaintiff claims, however, that Quotation 47 is inapplicable because of certain language in Item 8 thereof entitled "Termination of Quotation" which reads: "It is not operative where through rates are in force." Plaintiff further claims that both Quotation 13-A and Quotation 47 prohibit their use in combination, and that the lowest applicable rate for the shipments herein are those rates offered by the railroads in Quotation 13-A for shipments involving hauls by two or more rail carriers.
No through tariff rates were in effect on the date of issuance of Quotation 47 or at the time of the shipments in suit between points of origin and destination of such shipments.
In our opinion, the resolution of this case necessarily must depend upon what we believe to be the intent of the parties. The following reasoning, we believe, will demonstrate the intent of the parties.
Because of the objections raised against the concentration of explosives in the Seattle area and objections to transportation by car barge, the Government went to great expense in the construction of a railway which connected the naval facilities with the Northern Pacific Railway terminus. As a result thereof, the Northern Pacific was installed as the operator of the Government-owned railroad. In order to meet the Navy's request for a lower rate than the rail-barge rate, and in return for the long haul benefit to the railroad, and for the additional reason that the Northern Pacific would acquire all the business in spite of a competing railroad, the Northern Pacific issued a Section 22 Quotation (Quotation 36).
After Quotation 36 had expired, negotiations were begun to reissue the quotation or to issue another quotation so as to give the Government the benefit of at least a rate as low as that contained in Quotation 36. It mattered not whether that rate be more or less than the combination barge-railway rate, but whether a negotiated rate could be effected which was lower than Section 22 Quotation No. 13-A. This is so because Quotation No. 13-A was already in effect, and any advantage thereunder was always available to the Government. Therefore, negotiations were entered into between the Navy and the Northern Pacific and Quotation 47 resulted.
To say, as the plaintiff contends, that the second sentence of Item 8 of Quotation 47 makes the Quotation inoperative would be to say that Quotation 47 was stripped of any meaning or application even at its inception as there was a through rate in force for all the territory covered thereby before not only Quotation 47 but before its predecessor, Quotation 36. The parties agree that Quotation 13-A was in effect prior to the issuance of Quotation 47 and provided a through rate for the entire territory covered by Quotation 47.
Therefore, since Quotation 47 was a negotiated quotation, in order to give any meaning thereto, the second sentence of Item 8 thereof must necessarily be read in context with the entire Item. In other words, the Quotation was obviously intended for application pending the establishment of through tariff rates, and when the through tariff rates were established the quotation would no longer be applicable and would be terminated. As a matter of fact, plaintiff's witness H. Eay Henderson, assistant general freight agent in charge of freight tariffs, testified on direct examination to the same effect.
If, on the other hand, Quotation 13-A defeats the operation of Quotation 47, then we must again say that Quotation 47 was void at its inception since Quotation 13-A was effective long before Quotation 47. Then, too, the parties did amend Quotation 47 three times to increase its rates, which under plaintiff's theory were never available anywhere. In this respect, the plaintiff's expert rate witnesses testified that under plaintiff's construction of Item 8 of Quotation 47, the Quotation would not provide the Government with any rates. In fact, some of plaintiff's witnesses testified that this was the intention of plaintiff. If so, it was certainly a unilateral intention and not binding upon the defendant, inasmuch as it is quite apparent that the Navy had an entirely different thought in the matter, and common sense teaches us that it was intended that Quotation 47 have some meaning. It could have no meaning other than to afford the Government a lesser rate than that which was effective at and prior thereto. As we stated previously, Quotation 13-A was already available, so something less than the rates therein must have been intended.
Therefore, we believe under the facts and circumstances of this case, that the only way to give meaning to Quotation 47 is to say that the Quotation was meant to and does give to the Government the lowest applicable rate, which can only be a combination of Quotation 47 and Quotation 13-A. Consequently, the General Accounting Office was correct in its determination that Quotation 13-A could be used in conjunction with Quotation 47.
The aboye reasoning is compatible with the decision of the U.S. Court of Appeals, 8th Circuit, in the case of A. E. West Petroleum Co. v. Atchison, T. & S. F. Ry. Co., 212 F. 2d 812, 816, wherein that court used the following language with reference to rules of construction:
A published carrier rate is in the nature of an offer by the carrier to shippers of a contract for carriage under the terms and conditions contained in the tariff. Therefore, a tariff is to be construed as having the meaning which it would reasonably have to such shippers. Where words in a contract, if construed literally, would produce an unfair, unusual or improbable result, such construction is to be avoided if possible. All pertinent parts of a contract are to be construed together so as to give effect to them.
The above case also holds that in interpreting tariff schedules made under the Interstate Commerce Commission tariff rules, rules would be construed as to carry out the intention of the parties, resolving any doubts, as to meaning, in favor of the shipper, and construction would be fitted to and controlled by the fact situation presented. See also Alcoa S. S. Co., Inc. v. United States, 338 U.S. 421, 424-425.
This is quite apparently the maimer in which the Northern Pacific, at least once treated the matter as is disclosed by defendant's exhibits 22a and 22b introduced in evidence in the trial of this case. Exhibit 22a is a telegram sent to one F. A. Cleveland, asking for advice on the question of whether Quotations 13 and 47 on a carload of bombs could be used. Exhibit 22b is the reply from Cleveland advising that the Quotations could be used. Plaintiff attempts to explain away the force of these exhibits by testimony that a Mr. Myers and not F. A. Cleveland actually formulated the reply (exhibit 22b). However, Mr. Myers was also a qualified rate man as far as Section 22 Quotations were concerned.
For the foregoing reasons, plaintiff is not entitled to recover, and its petition will be dismissed. Defendant is entitled to recover $6,277.91 on its counterclaim.
It is so ordered.
Reed, Justice {Bet.), sitting by designation; Durfee, Judge; MaddeN, Judge, and Jones, Ohief Judge, concur.
FINDINGS OF FACT
The court, having considered tbe evidence, the report of Trial Commissioner C. Murray Bernhardt, and the briefs and argument of counsel, makes findings of fact as follows:
1. Plaintiff is a corporation organized and existing under the laws of the State of Utah and is a common carrier by railroad in interstate commerce over its own lines and jointly with other carriers.
2. In 1941, 1949 and 1950 the Northern Pacific Railway Company (hereinafter referred to as the Northern Pacific), a common carrier by railroad over its own lines and jointly with other common carriers, accepted for transportation from the United States Government at Bangor, Washington, certain shipments of smoke pots, bombs, ammunition for cannon, detonating fuzes, explosive projectiles and smokeless powder. The Government facilities at Bangor are Navy facilities operated and manned by the United States Navy. The rail facilities are operated by the Northern Pacific. These shipments were delivered to the Northern Pacific by the Navy and were routed via the Northern Pacific and the Union Pacific Railroad Company. The Northern Pacific turned them over to plaintiff at Portland, Oregon. Plaintiff performed transportation services for the defendant over its own lines by carrying the aforesaid shipments from Portland, Oregon, to destinations in Clover, Utah, and Ordnance Oregon.
3. Plaintiff states its bills for said services on the basis of Trans-Continental Freight Bureau Section 22 Quotation No. 13-A (hereinafter referred to as Quotation 13-A) and was paid by defendant, prior to audit by the General Accounting Office, as provided in Section 322 of the Transportation Act of 1940 (49 U.S.C. 66). Subsequently, the General Accounting Office audited these bills, as provided in Section 322 of the Transportation Act and determined that a lower rate was applicable to said shipments. Using North Pacific Coast Freight Bureau Section 22 Quotation No. 47 (hereinafter referred to as Quotation 47), the General Accounting Office applied the rate prescribed thereunder in Item 3. This rate consisted of 5 cents per 100 pounds between Bangor and Tacoma, plus the rate between Tacoma, Washington, and destination as computed under Quotation 13-A. Plaintiff was notified by the General Accounting Office of the over-payments so determined and that, unless promptly refunded, deductions might be made from other bills of plaintiff, as provided in Section 322 of the Transportation Act. In some instances, plaintiff made refunds as requested and in other instances the General Accounting Office made deductions from other bills of the plaintiff. The total amount recovered by the General Accounting Office by way of refund and deduction is $30,645.38. Plaintiff seeks to recover $30,627.48. Defendant has counterclaimed for $6,277.91.
4. The parties have agreed, for the purpose of resolving the issue herein, that the following bills, bills of lading, and their supporting payment records are representative of all the shipments in suit:
Bill No.
Bill of Lading No.
W-205815
N-17828507
N-17828508
N-17828505
W-238632
WW-1302905
WW-1302939
W-244794
WV-2968329
W-245090
WV-2968813
WV-2968817
WV-2968814
5. During World War II, the Government constructed on Government land a rail line which connected the Navy facilities at Bremerton and Bangor with the Northern Pacific railway terminus at Shelton. This provided an all-rail route for the transportation of Government property, particularly explosives, to or from the Bangor Naval Magazine, the Bremerton Navy Yard and other facilities. Prior to construction of the said Government railway, the Navy facilities at Bangor, Ostrich Bay and Bremerton were served by the Puget Sound Navigation Company by car barge from Seattle and by the Foss Launch and Tug Company from Tacoma. Due to objections raised against the concentration of explosives in the Seattle area and their transportation by car barge, the construction of the Government railway and the all-rail route was undertaken.
6. On December 11, 1944, Contract No. NOY-11271 was executed between the Northern Pacific Eailway Company and the United States Government covering operation of the Government railroad between Shelton and Bangor-Bremer-ton. The contract provided that the company should apply to the Interstate Commerce Commission for a Certificate of Public Convenience and Necessity to extend its common carrier service to all stations via the railroad and the Government agreed to support such application.
Also, on December 11,1944, Supplemental Agreement No. 1 to Contract NOY-11271 was executed which provided for operation of the Government line by the Northern Pacific Eailway Company as a private contract carrier for the Government pending completion of the rail lines and issuance of Certificate of Public Convenience and Necessity by the Interstate Commerce Commission.
The Northern Pacific considered said Contract NOY-11271 to be a profitable arrangement for the carrier and expected to receive the long haul on transportation for the Government facilities in the Bangor-Bremerton area.
7. On April 14,1945, the first ammunition train (83 freight cars) traveled over the Shelton-Bangor section. The route from Shelton to Bangor covers 43.3 miles. Supplemental Agreement No. 1 was invoked and operations began. Other carriers were excluded from the Government railroad.
8. On December 26,1944, the Northern Pacific applied for a Certificate of Public Convenience and Necessity. On May 7, 1945, a hearing was held before the Interstate Commerce Commission on the said application. The Union Pacific Eailroad Company and the Chicago', Milwaukee, St. Paul and Pacific requested joint through rates on trans-continental traffic to points on the Government line.
9. On June 5, 1945, the Bremerton line was opened. The first car of freight traveled over the Shelton-Bremerton section of the Government railroad. The route from Shelton to Bremerton covers 36.6 miles. Total trackage on the Brem-erton-Bangor line covers 84.5 miles, including sidings.
10. Oil June 28,1945, a conference was held between representatives of the Navy and of the Northern Pacific in Chicago, Illinois, with respect to the establishment of rates to and from points on the Government railroad — Shelton to Bremerton, Naval Ammunition Depot, and Bangor, Washington.
On June 30, 1945, the Navy wrote to the Northern Pacific as follows:
It is understood that the Northern Pacific Railway Company will tender to the Navy Department a Section 22 quotation in the near future which will effect during the period of interim operation as maximum rates, rates which will not exceed rates presently applicable via the rail-barge route. These maximum rates, of course, can only be adjusted downward after the period of interim operation. .
It is also understood that the Northern Pacific Railway Company will consider the establishment of rates on explosives to and from points on the Government railroad which will be upon the basis of the land-granted rates to Tacoma, Washington plus non-land-granted arbitrary of 5 cents per 100 pounds.
It is understood also that the Northern Pacific Railway Company will initiate negotiations with the other interested earners in Mountain Pacific Territory toward the establishment of permanent tariff rates which will become effective upon the grant of a common carrier certificate to the Northern Pacific Railway Company. It is presently believed that rates should be established which will be on a basis lower than that presently applicable via the rail-barge route. What that basis will be, none of the parties to the referenced conference have made any committment, [sic] However, at the referenced conference it was suggested that these permanent rates might be upon the basis of the Tacoma land-granted rate plus a non-land-granted arbitrary. This Bureau, however, reserves the right to request rates to and from points on the Government railroad which will be upon the port-to-port basis.
11. In order to meet the Navy's request for a rate that would be lower than the rail-barge rates and would be based on a nominal arbitrary over the then rates to and from Tacoma, the Northern Pacific in July 1945 submitted to the Navy a Section 22 Quotation which named a proportional rate of 5 cents on explosives between Tacoma, Washington, and Shelton, Washington, and insured to the Northern Pacific its long haul by requiring the shipments to move through Portland on the Northern Pacific Eailway. In its letter of July 17, 1945, to the Northern Pacific, the Navy Bureau of Supplies and Accounts wrote as follows:
The proposed quotation covering local rates on inert materials to and from Mountain-Pacific Territory and points on the Government railroad requires some clarification. Under Item 2 it is noted that there is to be assessed a charge of $12.65 per car. This charge should be limited so that it will apply only in those instances where a similar charge is made for the use of the Seattle gridiron of the Milwaukee Kailroad. Item 2, as it is presently understood, makes applicable at Shelton, Washington the present land-granted Seattle rates plus the charges set forth in the item. It is believed that this was the intention of the Northern Pacific in suggesting the proposed quotation. It would seem, however, that Item 2 and Item 5 are somewhat in conflict. The two items read together might possibly be understood to deny the Government the benefit of land grant deductions on that part of the combination rate to Shelton, viz., the presently published tariff rates to Seattle. A possible solution would be the tender of a quotation to the Government which makes applicable specifically at Shelton, Washington the Seattle land granted rates plus the charges set forth in Item 2.
The proposed quotation covering the transportation of explosives likewise seems to be in need of some clarification. The list of the commodities which is contained in Item 2 should be broadened to include all of the Class A, Class B, and Class C explosives set forth in Agent Campbell's Freight Tariff 4. Item 3 limits the application of the quotation to shipments originating at or destined to stations in California or Nevada. This Bureau expects that shipments will move or will be destined to practically all these states which make up Mountain-Pacific Territory. This Bureau, therefore, does not believe that this origin and destination restriction should be contained in the quotation.
12. In response to the foregoing comment by the Navy the Northern Pacific letter dated July 26,1945, advised the Navy in part as follows:
With respect to the other Quotation, relating to the suggested rate of 50 cwt. on explosives between Tacoma,
Wash., and Shelton, Wash., to be added to the rates (subj ect to land grant in instances where the traffic wonld be lawfully subject to land grant) on which the Northern Pacific Railway will transport the traffic to or from Tacoma — we are having a little difficulty in re-drafting the Quotation. We want to get it on a basis that will 'be mutually satisfactory to the Navy and ourselves, and will appreciate your further suggestions in the light of what follows.
sfí sj: % %
Would it, in your opinion, meet the requirements if we made the territorial application on the south read, "Portland, Oregon, and points south, east or west thereof", referring, as I have said, to Easton, Wash., as indicating the territory east of which the 50 rate from Tacoma would apply in connection with rates to Tacoma, Trans-Continental territory being excepted?
13. The Navy approved of the revised Section 22 Quotation submitted by Northern Pacific and, on September 5,1945, North Pacific Coast Freight Bureau Section 22 Quotation No. 36 was issued, to be effective from April 10, 1945, and read in pertinent part as follows:
Item No. 1 Traffic Covered
The traffic covered by and subject to this quotation is the property of the Government, originating at or destined to Portland, Oregon, or points south, east or west thereof, also points east of Easton, Washington, and west of transcontinental territory. The traffic must move via the Northern Pacific Railway between Shelton, Washington and Portland, Oregon or between Shelton, Washington and Easton, Washington to obtain the benefit of the rate quoted in Item No. 3.
# # * # :}e
Item No. 3 Bates tobe Applied
On explosives described in Item No. 2 a rate of 5(4 per one hundred pounds, minimum 50,000 pounds, will be applied between Tacoma, Washington and Shelton, Washington. It is understood that shipments will not necessarily move via Tacoma, Washington, but the rate authorized by this quotation will apply only on shipments moving via authorized tariff routes of the Northern Pacific Railway applicable to and from Tacoma, Washington.
Item No. If, Land Grant Deductions
The rate provided under this quotation is a special rate not available to commercial shippers and is, therefore, not subject to deduction account of land grant, but nothing in this quotation shall deprive the Government of the rights to avail itself of any published tariff rate to which it is lawfully entitled less any lawfully applicable land grant deduction.
14. On May 14,1946, the Interstate Commerce Commission directed issuance to the Northern Pacific of a Certificate of Public Convenience and Necessity, effective August IT, 1946, in Finance Docket No. 14T9T, Northern Pacific Railway Operational I.C.C. 631.
15. Effective June 23, 1946, Supplement No. T9 to North Pacific Coast Freight Bureau Tariff No. 65-F, I.C.C. No. 6TT added Bangor, Washington and other points on the Government-owned trackage beyond Shelton, Washington, as stations on the Northern Pacific Bailway Company. Special Supplement No. 80 to said Tariff No. 65-F, effective the same day as Supplement No. T9, postponed the effective date of Supplement No. T9 until such effective date as might be authorized by the Interstate Commerce Commission in further orders.
16. After denying appeals by the Union Pacific Bailroad Company and the Chicago, Milwaukee, St. Paul and Pacific in Docket 14T9T, the Interstate Commerce Commission ordered common carrier rates to be effective 30 days from July 18, 1946, for points on the Government railroad. Special Supplement No. 85 to Tariff 65-F vacated, as of August IT, 1946, the postponement in Supplement No. 80. The tariff rates authorized under Supplements T9 and 85 became effective August IT, 1946. This made available a combination through rate between points on the Government railroad and points in the territory west of trans-continental. A through rate is a rate applicable through from point of origin to destination. A through rate may be either a local rate, a joint rate, or a combination of two or more rates.
IT. On September 18, 1946, a conference was held between representatives of the United States Navy and the Northern Pacific Bailway with respect to North Pacific Coast Freight Bureau Section 22 Quotation 36. Since Quotation 36 had expired with the issuance of the Certificate of Public Convenience and Necessity, the Navy requested the Northern Pacific to reissue Quotation 36 in order to provide a 5 cent arbitrary over Tacoma rates on explosives to and from points on the Government-owned railroad beyond Shelton. The Northern Pacific acknowledged the Navy's need for the reissue of Quotation 36 and agreed to the Navy's request for a change in Item 3 of Quotation 36.
18. On October 25, 1946, the North Pacific Coast Freight Bureau on behalf of the Northern Pacific Railway offered to the United States Navy NPCFB Section 22 Quotation No. 47, effective for all shipments moving on and after August 17, 1946. This quotation applied to the commodities involved herein and was in effect during the time the shipments were made and contained the following items:
I tern No. 1 Traffic Gov ered
The traffic covered by and subject to this quotation is the property of the Government, originating at or destined to Portland, Oregon or points south, east or west thereof, also points east of Easton, Washington, and west of transcontinental territory on the one hand, and destined to, or originating at, points north of Shelton, Wash., to and including Bremerton-Bangor, Wash., on the other hand. The traffic must move via the Northern Pacific Railway between Portland, Oregon or between Easton, Washington, and points north of Shelton, Washington, to and including Bremerton-Bangor, Washington, to obtain the benefit of the rate quoted in Item No. 3.
♦{» & í}í ifc
Item No. 3 Bates tobe Applied
(a) On explosives described in Item No. 2, moving as provided in Item No. 1, the rate shall be 50 per 100 lbs., minimum 50,000 lbs., higher than the rate applicable to or from Tacoma, Washington on the one hand, and points in the origin-destination territory described in Item No. 1, on the other hand, on the same commodity.
Item No. I Land Grant Deductions
The rate provided under this quotation is a special rate not available to commercial shippers and is, therefore, not subject to deduction account of land grant, but nothing in this quotation shall deprive the Government of the rights to avail itself of any published tariff rate to which it is lawfully entitled less any lawfully applicable land grant deduction during the period the land grant deduction is in force.
‡ $ $ $ $
Item No. 8 Termination of Quotation
This quotation is intended for application pending_the establishment of through tariff rates between points north of Shelton, Washington, to and including Brem-erton-Bangor, Washington and territory west of transcontinental. It is not operative where through rates are in force. It may be canceled 'by written notice of not less than sixty (60) days mailed by either party to the other except as to shipments made from point of origin before the effective date of such notice and except as to any accrued rights and liabilities of either party.
Quotation 47 was amended three times between 1947 and 1951 to provide increased rates; and was canceled, effective April 20,1951.
19. On July 8,1943, the Transcontinental Freight Bureau had promulgated TCFB Section 22 Quotation No. 13-A offering to the Government on behalf of all carriers specific rates predicated on mileage basis for shipments of ammunition and explosives originating at and consigned to points within Mountain Pacific and Pacific Coast territory. It provided through rates but not through tariff rates. This quotation and amendments thereto applied to the commodities involved herein and was in effect during the time the shipments herein were made and contained the following items and Exhibit A:
Item No. 3. Bates To Be Afflied
Subject to compliance with all the terms and conditions of this quotation on each carload shipment of the kind referred to in Item No. 2, the railroads will apply rates as shown in Exhibit "A" attached hereto, subject to minimum weight of 50,000 pounds.
Item No. I. Routing and Circuity Limitations
The rates as provided herein apply to short-line mileage via routes authorized in current class rate tariffs and subject to all circuity and other restrictions applicable to such class rate tariffs.
Item No. 5. Land-Grant Deductions
No rate or charge applicable on any shipment moving under this quotation shall be subject to any land-grant deduction.
Item No. 6. Charges and Allowances
Shipments made under this quotation are subject to all charges and all allowances for or in respect of diversion, reconsignment, arbitraries? demurrage, inspection, switching, and to all other privileges, charges and rules which in any way increase or decrease the amount to be paid on any shipment or which increase or decrease the value of the service, without, in any case, any land-grant deduction.
‡ ‡ ‡ ‡
Item No. 8. Termination of Quotation
This quotation may be cancelled by written notice of not less than sixty (60) days mailed by either party to the other except as to shipments made from original point of shipment before the effective date of such notice and except as to any accrued rights and liabilities of either party hereunder.
Exhibit "A"
Explosives, Ammunition, etc.
Carloads, Minimum Weight 50,000 lbs.
Distance
Rates in Cents For Hauls Involving a Single Carrier
Per 100 Pounds For Hauls Involving Two or More Carriers
# *
The foregoing Quotation 13-A was the basis upon which the plaintiff stated its bills, as mentioned in finding 3, sufra.
20. The controlling issue in the case is whether the term "through, rates" as it is used in the sentence in Item 8 of Quotation 47 reading "It [meaning Quotation 47] is not operative where through rates are in force.", means "through tariff rates" as the defendant contends, or any kind of a through rate such as provided by Quotation 13-A, as plaintiff contends. Item 8 of Quotation 47 contemplated the prospective issuance of single factor joint through tariff rates which would then make the Quotation inoperative for those areas where such tariff rates were in force. No through tariff rates were in effect at the date of issuance of Quotation 47 or at the time of the shipments in suit between the points of origin and destination of such shipments. The Union Pacific and the Chicago, Milwaukee, St. Paul and Pacific Railroad Company filed a request for the establishment of single factor joint through tariff rates with the Interstate Commerce Commission to apply in conjunction with the Northern Pacific, serving points on the Government-owned railroad, which request was opposed by the Northern Pacific and denied by the Interstate Commerce Commission in Northern Pacific Ry. Co. Operation, 261 I.C.C. 631. At no time did the Union Pacific, the Milwaukee Railroad or Northern Pacific publish in any tariff a single factor joint through tariff rate applicable on shipments of ammunition to or from the Northwestern territory and the Mountain Pacific territory. Quotation 47 applied to shipments carried by more than one carrier and was not limited to shipments moving solely by Northern Pacific. Under the Quotation the shipments were not required to move through Tacoma but were required to move through Portland on the Northern Pacific in order to qualify for the rate in Item No. 3 (finding 18, supra).
21. In auditing the charges for the shipments in suit, the Government applied the rates prescribed in Item 3 of N.P.C.F.B. Section 22 Quotation No. 47. This rate consisted of o cents per 100 pounds (subject to increases) plus the rate between Tacoma and destination as computed under Quotation 13-A, based on a distance of 319 miles via the Union Pacific direct applying the rate in Quotation 13-A for hauls involving a single carrier. The parties have stipulated that if the plaintiff should prevail it is entitled to $30,627.48, and if tli6 defendant should prevail then the plaintiff would be considered to have been paid in full and the defendant would be entitled to recover $6,277.91 on its counterclaim.
22. On December 6, 1946, Mr. P. E. Carlton, an employee of the Northern Pacific, sent the following telegram to Mr. F. A. Cleveland, Western Freight Traffic Manager of the Northern Pacific:
ADVISE IF POSSIBLE TO USE NPCFTB SECTION 22 QUOTATION 13 AND 47 ON ONE CARLOAD EXPLOSIVE BOMBS FROM SP&S LOCODA ORE TO BANGOR WASH VIA WILLBRIDGE NP E-19.
On the same day the following reply telegram was sent to P. E. Carlton under the name of F. A. Cleveland:
E-19. Your wire date regarding the use of Section 22 Quotations 13 and 47 on a carload of explosive bombs from Locoda, Oregon to Bangor, Washington via SP&S — Willbridge—NP. The quotations named may be used. D-l.
The evidence discloses that Mr. E. F. Myers, the tariff clerk of the Northern Pacific in fact was the author and sender of the reply. Mr. Myers is a qualified rate man as far as Section 22 Quotations are concerned.
GLOSSARY OF TERMS
23. The parties have stipulated the following definitions of technical terms used in the foregoing facts:
Local Bates: Eates applicable via a single carrier.
Combination Bates: Eates made by combining (or adding together) two or more rates.
Single Factor Bate: A rate published as a unit which applies over one or more lines.
Joint Bate or Joint Through, Bate: A rate applicable from a point located on one transportation line to a point located on another transportation line, published in a single tariff or offered in a Section 22 Quotation. These rates are offered or published as a unit.
Section 22 Quotation: A rate, charge, or privilege tendered under Section 22 of the Interstate Commerce Act which offers to perform transportation services at rates intended to be lower than those provided in the published tariffs of a transportation company.
Arbitrary: (a) A fixed amount which a transportation line agrees to accept in dividing joint rates; (b) A fixed amount added to a rate from or to one station to make a rate to or from another station.
Through Bate: A rate applicable through from point of origin to destination. A through rate may be either a local rate, joint rate or a combination of two or more rates.
Short Line Mileage: Mileage calculated along route over which class rates apply.
Glass Bates: Bates provided in a freight classification or exceptions thereto.
CONCLUSION OF LAW
Upon the foregoing findings of fact, which are made a part of the judgment herein, the court concludes as a matter of law that the plaintiff is not entitled to recover, and the petition is therefore dismissed.
The court further concludes as a matter of law that the defendant is entitled to recover from the plaintiff on its counterclaim, and it is therefore adjudged and ordered that defendant recover of and from plaintiff the sum of six thousand, two hundred seventy-seven dollars and ninety-one cents ($6,277.91).
At certain dates the rate increased to 7% cents.
The parties Rave stipulated that if the plaintiff should prevail, it is entitled to $30,627.48, and if the defendant should prevail, plaintiff ivould he considered to have paid in full and defendant would be entitled to recover $6,277.91 on its counterclaim filed herein.
The parties have stipulated that an arbitrary is (a) a fixed amount which a transportation line agrees to accept in dividing joint rates; (b) a fixed amount added to a rate from or to one station to make a rate to or from another station.
At certain dates the rate increased to 7% cents.