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LOUISVILLE & NASHVILLE RAILROAD COMPANY v. UNITED STATES

decided: March 2, 1925.

LOUISVILLE & NASHVILLE RAILROAD COMPANY
v.
UNITED STATES



APPEAL FROM THE COURT OF CLAIMS.

Taft, Holmes, Van Devanter, Brandeis, Sutherland, Butler, Sanford

Author: Butler

[ 267 U.S. Page 396]

 MR. JUSTICE BUTLER delivered the opinion of the Court.

This action was brought in the Court of Claims to recover the amount by which tariff-rate freight charges on certain coal were reduced by government land-grant deductions; and also to recover certain charges for switching and handling. The court made findings of fact, and gave judgment for defendant. 57 Ct. Cls. 268. One of the lines of appellant's railroad enters Alabama from the north and extends southerly through Decatur, Birmingham and Flomaton to Pensacola, Florida, and thence easterly to River Junction, Florida. This is a land-aided

[ 267 U.S. Page 397]

     line. Appellant has another line extending southwesterly from Flomaton to Mobile. At Mobile and Pensacola, it owns wharves and hoists for transferring coal from cars to boats, and has constructed switches from its main line to the wharves. All of these were built without government aid. The wharves and hoists at Mobile are operated by a coal company and those at Pensacola by appellant.

All the coal in question came from mines in the Birmingham district and was purchased by the United States for engineering work at Mobile, Pensacola and other places on or near the Gulf, except 250 tons bought for the use of the U. S. S. Tonopah. It was transported on government bills of lading and was carried in whole or in part by the use of such land-aided railroad. The coal was furnished to the United States under a contract with the Gulf States Coal Company of March 15, 1915, a contract with the Imperial Coal and Coke Company of August 21, 1916, advertisements, specifications, bids and acceptances without formal contracts between November 2, 1914 and September 10, 1917, and a bid and acceptance as of April 8, 1915, for the Tonopah.

The Court of Claims held that all shipments, except those made under the contract of March 15, 1915, were subject to land-grant deductions. Appellant maintains that none was subject to the reduced rates. We are of opinion that all the coal, except that furnished the Tonopah, was delivered to and became the property of the United States before it was hauled by appellant, and was entitled to the reduced rates.

The general rule is that, if a consignee accepts a shipment, he becomes liable as a matter of law for the full amount of freight charges. Louisville and Nashville R. R. v. Central Iron Co., 265 U.S. 59, 70; Pittsburgh, & C. Ry. Co. v. Fink, 250 U.S. 577, 580. Under the land-grant acts, the United States was entitled to the reduced

[ 267 U.S. Page 398]

     rates if the coal when hauled was its property. Acts of May 17, 1856, June 3, 1856, and March 3, 1857, 11 Stat. 15, 17, 200; Acts of April 10, 1869, and March 3, 1871, 16 Stat. 45, 580; Act of March 3, 1875, 18 Stat. 509. Illinois Central R. R. v. United States, 265 U.S. 209. But the mere use of government forms of bills of lading is not conclusive on the question of ownership of property at the time of transportation, and does not give the United States the right of transportation at land-grant rates. See Transportation Involved in Furnishing Articles by Contractor, 20 Comp. Dec. 721, 723.

The contract of March 15, 1915, was made pursuant to advertisement and specifications. The specifications, which were attached to and made a part of the contract, show that, in order to permit the United States to take advantage of land-grant rates, the form of proposal contemplated either "delivery of the whole quantity at the mine, from which shipment will then be made on Government bill of lading to Mobile, Pascagoula, or Gulfport, as may be necessary, or delivery of about 7,000 tons at Mobile, Ala., about 5,000 tons at Pascagoula, Miss., and about 6,000 tons at Gulfport, Miss." And it was specified: "The United States will select the method of delivery which under the proposals received proves to be most economical and advantageous. If mine delivery is selected, the coal will be ordered in carload lots for shipment on Government bills of lading to be furnished by the contracting officer, but the contractor will be required to transfer it from cars to barges belonging to the United States and will therefore include in his price his cost for so transferring the coal at all three points of ...


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