MICHIGAN CENT. R. CO. v. UNITED STATES, 246 F. 353

DENISON, Circuit Judge (after stating the facts as above). [1] The question chiefly argued before us was that upon which the case turned below, viz., whether the cartage tariff applied at ■ all to these shipments. Another form of this question is whether the Eerguson Company, in the team delivery of the contents of the 12 cars to which this case was finally reduced, acted as the agent of the railroad pursuant to its- táriff designation as cartage agent, or whether it acted as agent of the consignee pursuant to the bargain between them as to the price of hauling.

We have concluded that the record does not present this broad question so as to -require its decision. The provision of the cartage tariff is: « * * * Shipments so handled, will not be subject to ear service or stor- ' age charges, accruing through failure on part of this company to make delivery within specified free time.” It is plain that the exemption from demurrage does not reach either all goods subject to the cartage tariff or even any goods subject to that tariff, unless the failure to make delivery within the specified free time was the failure of the company.

For the purposes of this opinion, and without any decision to that effect, we assume that the railroad, through its cartage agent, had, pursuant to filed and published tariffs, contracted to deliver these shipments, by team or truck-hauling, to and at the building where the consignee was to use them, and hence there would seem to be the further assumption that the company had failed to make the agreed delivery; but, for the reasons to be stated, this further apparent assumption must be rejected.

We first observe that, since paragraph 5 in the cartage tariff, from which we have quoted, and since the demurrage tariff, which is thus brought into consideration, both have reference solely to the failure to unload a car for -more than 48 hours after notice that the car has been placed on the delivery tracks, it necessarily follows that, when this paragraph 5 refers to the “failure on the .part of this company to make delivery within specified free time,” the “delivery,” to the making of which this clause refers, is the cartage delivery to be made by the company’s cartage agent from the car duly placed and to the terminal cartage .point.

This- clause, in this situation, cannot refer to any other kind of delivery. .

The undisputed testimony shows that, as fast as the cars were placed upon the team tracks, the consignee was notified; that thereupon the consignee, knowing by the number of the car the particular material which it contained, instructed the Ferguson Company what car to unload and deliver; that the Ferguson Company was constantly willing and ready to unload and deliver every car so placed, and within 48 hours after placement; and that the only reason why the 12 cars finally involved were allowed to stand more than 48 hours was that the consignee was not ready to use that particular material, and either had no place to store it or did not wish to handle it twice.

In view of the daily conduct of the Ferguson Company and of the consignee, the situation is just the same as if the Ferguson Company had expressly offered to unload and deliver each one of tírese 12 cars within the specified free time, and as if the consignee had expressly said: “We refuse to accept it; you must hold this car on the tracks until we are ready.” (Such a situation does not disclose failure on the part of the company to make delivery, within the proper meaning of paragraph 5.

Of course, in a certain broad sense, since it was the duty of the company to make delivery (under our assumption), and since delivery was not made, it may be said that the company failed; but the question here must be as to the relative duties o f the two parties. Demurrage is assessed for the default of the consignee in not unloading.

This exemption from such assessment becomes reasonable only upon the theory that it was intended to exempt where the nondelivery was due to the fault of the company rather than to the fault of the consignee; and although this comparative standard is not expressed in words, we have no hesitation in deciding that it must be implied, and that the demur-rage and the cartage tariffs, considered together, are open to no other reasonable construction. Our conclusion that the undisputed testimony shows the situation above recited has been reached after some preliminary doubts.

The record contains considerable evidence by which the consignee undertakes to put the blame upon the railroad and by which the railroad undertakes to assume that blame; but all this evidence, upon analysis, resolves itself into a claim that the railroad was at fault for placing these cars upon the delivery track in a consecutive order so vitally different from the consecutive order of original shipment that the consignee was under no obligation to unload them in even approximately the order of their placement.

The consignee’s evidence showed — indeed, it is practically undisputed — that there were some 20 different sizes and shapes of these tile required for this building, that it was essential to use them in the building in a certain order, that they were shipped from the factory in this order, but that they were so placed upon the team track that, e. g., tile for the tenth floor were thus delivered before tile for the first floor, which had been shipped 90 days before the other.

Even if it were conceded that shipments might be delivered to the consignee in such gross inversion of the order of shipment by the consignor as to be a breach of the railroad’s contract for proper carriage, it would not follow that the consignee might therefore disregard the published demurrage tariffs, and refuse to accept and unload the cars in the order of their arrival or placement.

The whole body of demurrage rules and regulations is upon the theory that railroad tracks must not be used by shippers for warehouse purposes, and it cannot make any difference in the application of these tariffs that the shipper has no warehouse, or that a distorted order of delivery may make necessary a storage by the consignee or a handling otherwise unnecessary. If for this he may have a claim against the railroad, that would be another question. Darling v. Pittsburgh, etc., Ry., 37 Interst. Com. Com’n R. 401; and see Chicago, etc., R. R. v. Kirby, 225 U. S. 155, 166, 32 Sup. Ct. 648, 56 L. Ed. 1033, Ann.

Cas. 1914A, 501. There are two matters on the record which, while not controlling, yet tend to confirm the conclusion that there was nothing to go to the jury in dispute of the proposition that the final and vital delay was not because the Ferguson Company did not deliver, but was solely because the consignee would not receive.

The first is that, as soon as the matter came to the attention of that counsel for the railroad who had special supervision of matters connected with the interstate commerce law, he directed that demurrage be collected for these cars; but this was, concededly, at a time too late to' have any direct bearing upon the main question.

The other is that the trial judge, in his charge to the jury, assigned this as one of the reasons for his conclusion that the cartage tariff was not applicable; and to that portion of the charge which stated this fact as if it were undisputed the railroad took no' exception, nor did it in any way call the attention of the trial judge to a claim that there really was an issue of fact on this point. Rule 8 of the demurrage tariff, when extended to clause (e), says, in effect, that no demurrage charges shall be assessed for detention of cars through railroad errors or omissions.

Just as with reference to clause 5 of the cartage tariff, we observe that, since no de-murrage can be assessed until after placement and notice, this clause (

e) must refer to railroad errors and omissions occurring after that time; and, accordingly, the clause can have no substantial effect upon the situation here. It is urged that both the railroad traffic officials and the consignee acted in good faith in not assessing or paying demurrage charges, and took this course in the belief that the cartage tariff applied to these shipments, and that where the cartage tariff applied there could be no demurrage. It is therefore said that the railroad did not “knowingly” commit the offense alleged.

If the tariff had been one open to two constructions, and the traffic officials in good faith had adopted that construction which the courts finally decided erroneous, the contention of the railroad in this particular would require further consideration; but here the traffic officials did not merely reach an erroneous conclusion as to whether the cartage tariff affected such shipments as these— indeed, we are assuming that they reached the right conclusion on that subject.

What they did was to ignore the plain declaration of the cartage tariff that even as to those shipments to which it applied demurrage must be collected unless the failure to make terminal delivery was the failure of the railroad company.

It is of the essence of the railroad company’s position that the Ferguson Company was its agent in the matter of this delivery, and in that'matter and to that extent stood in the place of the railroad company; The Ferguson Company had full knowledge of the fact that the cars were held on the track merely because the consignee would not accept unloading; and we conclude that the case was one, as the trial judge thought, for- the application of the rule that the sum of the knowledge of the railroad agents, within the scope of their respective functions, is sufficient to satisfy the statutory ■condition that an offense exists only when the forbidden act is done “knowingly.” Grand Rapids, etc., Ry. v.

United States (C. C. A. 6) 212 Fed. 577, 586, 129 C. C. A. 113. The instructions of the court upon the subject of “bunching,” as covered by demurrage rule 8, were without substantial error. Clause (b) 2 contemplates a claim by the consignee for more free time; but where the free time is allowed without claim, and the only question is whether the allowance was erroneous, the absence of claim is not material.

The substance of this rule, as it must be applied to so much of this case as was finally submitted to the jury, is that if the cars were placed on the delivery track in accumulated numbers and in excess of daily shipments, and if this was the direct result of the act or neglect of the carriers, the consignee was entitled to a specified extension of free time, and that for detention within such extended time no de-murrage should be assessed.

The court properly charged that the jury must consider whether this bunching was the result of the act of the carrier or the result of the consignee’s previous fault in not accepting, and so in compelling the accumulation; and this fault of the consignee might be found with reference to the accumulation upon the Fourteenth street storage tracks as well as in other matters. These 12 cars were placed on the team track from July 12th to August 5th, and the conduct of the parties before or during this period was pertinent.

The embargo declared July 6th was a declaration or claim (in this case, an admission) by the railroad that the consignee was at fault. The demurrage rules contemplate, as to cars which had the history of these 12, a notice of arrival and a notice of placement.

We think the court correctly held that any notice of placement, which the parties agreed upon as sufficient, would be enough to set the time in motion, and that, as to these cars, placed upon that delivery track which had been agreed upon, the existence of a sufficient preliminary notice of arrival became immaterial when the superseding notice of placement was given. Except for the disputes that existed, and which were submitted to the jury, as to who was responsible for the bunching, and as to whether the parties had agreed upon a form of notice of placement, the controlling facts were undisputed.

It therefore becomes unnecessary to examine several complaints arising during the progress of the trial or concerning specific instructions. The court finally withdrew from the jury the whole theory of “constructive placement,” which phrase referred to a holding of the cars upon the storage tracks, as distinguished from “actual placement'’ upon the delivery tracks; and the court submitted to the jury only the two disputes just mentioned, as bearing upon the duty to collect demur-rage after actual placement.

The considerable body of testimony which had accumulated regarding constructive placement, and other issues which had become immaterial, was not withdrawn from the jury as directly and clearly as might well have been done; but we cannot see how its retention in the record was likely to prejudice the jury in deciding these two rather simple matters — the only two about which there was any room for more than one conclusion.

It is said that the fine imposed, $24,000, was excessive punishment for the failure to charge about $60 demurrage, and that the circumstances of the case and certain remarks by the trial judge sufficiently indicate that the greater part of this penalty was assessed, not for the offenses of which the defendant had been convicted, but for those of which it had been acquitted, or concerning which the indictment had been dismissed. There is superficial force in this complaint, but it is only superficial.

The testimony had disclosed an aggravated case of violation of the very often declared purpose and scope of the law forbidding discrimination or special concessions. As many as 50 cars at once out of these tile shipments had been held for days upon storage tracks, because the consignee was not ready for them, and this seemed to be one of the typical, if not one of the extreme, instances of the practices which had materially contributed to the congestion that had swamped the railroad service.

Even though this involved a discrimination for which- there could be no conviction until the Interstate Commerce Commission had passed upon it, or even if it did not violate the letter of any demurrage or other tariff, it was conduct which the trial judge could rightfully take into consideration when deciding what penalty to impose for those offenses upon which there had been a conviction; and, in the amounts which he fixed, he did not exceed the limits of discretion.

In this comment, we pass by the obvious consideration that, if the penalty imposed is within the statutory limits, it must be an extraordinary case — if, indeed, there could be any — which would justify an appellate court in interfering. The judgment of the court below is affirmed. Oartage Tariff. M. R. C. No. 766. I. C. C. 4005. Michigan Central Railroad Co. Local Freight Tariff of Cartage Charges at Detroit, Michigan, Issued March 20th, 1911, Effective April 24, 1911. 1.

The freight tariff rates of this company and its connections covering traffic to or from Detroit, Mich., are exclusive of the cost of cartage, but for the convenience of the public and for the purpose of securing uniformity of practice and to avoid unjust discrimination as between individuals, as required by law, this company has appointed the E. Ferguson Company, Limited, as its authorized cartage agents for the city of Detroit, and will be prepared to perform the cartage service from and to its freight houses and team tracks and the stores and warehouses of the public within the city limits. 2.

The following rates will be collected for cartage to or from store or warehouse door when cartage is performed by the E. Ferguson Company, Limited: Less than carload lots of 2<¡, per 100 pounds (subject to exceptions shown below), minimum charge for any one consignment 15^. Carload package freight (subject to exceptions shown below), at V/z^ per 100 lbs. Exceptions: [Here follows list of many articles, not including building tile, and ending with:] Any

article weighing over one thousand pounds. All freight rated sixth class and lower. Property named and referred to under head of “Exceptions,” will be carted by the E. -Ferguson Company, Limited, under their own arrangements with shippers or receivers. 3. The aforesaid charges as to carloads are to cover the collection and delivery of complete consignments only from one shipper to one consignee.

Where the consignee wishes his consignment delivered to other parties than himself, thus involving the separate accounting and collection of charges, then the cartage charge applicable to less than carload traffic will apply. This company will only make one expense bill for each consignment. 4. This company will not bill forward for collection from consignees the cartage charge at Detroit on outward traffic, but collect it from the shippers. 5.

Where standing orders covering all shipments or single orders covering particular shipments are placed with this company previous to arrival of shipments authorizing this company to deliver under above rules, shipments so handled will not be subject to car service or storage charges accruing through failure on part of this company to make delivery within specified free time; and where orders are given subsequent to arrival of shipment, same will be subject to ear service and storage rules as outlined in M. C. R. R. I. C. C. No. 3578, M. R. C. No. 574, R. C. O. No. 256, I. R. C. No. 275, C. R. C. No. 1357, G. F.

D. No. 7776, supplements thereto and subsequent issues thereof and free time will be computed same as shipments not handled under this tariff. Demurrage Tariff. Found in I. C. C. No. 3578, as follows: Oar service rules applicable to all Michigan Central railroad stations in the state of Michigan, on both interstate and intrastate business, effective May 1, 1010. Rule 1. Cars Subject to Rules. Cars held for or by consignors or consignees for loading, unloading, forwarding directions or for any other purpose are subject to these demurrage rules. * * * * * * * * * Rule 2. Tree Time Allowed, (

a) Forty-eight hours (two days) free time allowed for loading or unloading on all commodities. * #*#««** * * Rule 3. Computing Túrne. Note. — In computing time Sundays and legal holidays (national, state and municipal) will be excluded. When a legal holiday falls on a Sunday, the following Monday will be excluded. (

a) On ears held for loading, time will be computed from the first 7 a. m. after placement on public delivery tracks. (

b) On cars hold Cor orders, time will be computed from the first 7 a. m. after the day on which notice of arrival is sent to consignee. On cars held for unloading, time will be computed from the first 7 a. m. after placement on public delivery tracks and after the day on which notice of arrival is sent to consignee. ********** Rule 4. Notification, (

a) Consignee shall be notified by carrier’s agent in writing, or as otherwise agreed to by carrier and consignee, within twenty-four hours after arrival of cars and billing at destination, such notice to contain point of shipment, car initials and number's, and the contents, and, if transferred in transit, the initials and number of the original car. In case ear is not placed on public delivery track within twenty-four hours after notice of arrival has been sent, a notice of placement shall be given to consignee. * * * * * * * S * $ Rule 5. Placing Oar for Unloading. (

b) When delivery cannot be made on specially designated public delivery tracks, on account of such tracks being fully occupied, or from other cause beyond the control of the carrier, the delivery will be made at the nearest available point accessible to the consignee and the consignee so notified. ********** Rule 7. Demurrage Charge. After the expiration of the free time allowed, a charge of $i por car per day, or fraction of a day, will be made until car is released. Rule 8. Claims. No demurrage charges shall be assessed under these rules for detention of cars through causes named below.

If through error, demur-rage charges are assessed or collected under such conditions, they shall be promptly cancelled or refunded by the carrier. * ******* * (

b) Bunching. 2. Cars for unloading or roconsigning. — When as a direct result of the act or neglect of carriers, cars destined for one consignee, at one point, and transported via the same route, are bunched in transit and delivered in accumulated numbers in excess of daily shipments, claim to bo presented to the carrier’s agent before the expiration of the free time. The consignee shall be allowed such free time as he would have been entitled to had the cars been delivered in accordance with the daily rate of shipment. ********** (

d) Delayed or improper notice by carrier. Note. — When notice has been given in substantial compliance with the requirements as specified by the rules, the consignee shall not thereafter have the right to call in question the sufficiency of such notice unless within twenty-four hours after receiving the same he shall serve upon the delivering carrier a full written statement of his objections to the sufficiency of said notice. (

e) Kailroad errors or omissions.