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INTERNATIONAL PAPER CO. v. DELAWARE & H.R. CORP.

November 21, 1938

INTERNATIONAL PAPER CO.
v.
DELAWARE & H. R. CORPORATION



The opinion of the court was delivered by: COOPER

This is a suit brought pursuant to Section 16(2) of the Interstate Commerce Act, 49 U.S.C.A. § 16(2), to recover a sum of money which the Interstate Commerce Commission by order directed the defendant to pay to plaintiff.

The Commission held that the defendant collected from the plaintiff more money than was permissible under its freight tariff and directed the defendant to pay to plaintiff the overcharge.

 The defendant asserts that there was no overcharge under a proper construction of this freight tariff and the law applicable thereto and that in any event the commission directed the defendant to pay interest at a rate of 6% which, the defendant asserts, is a greater rate than should have been allowed.

 It is agreed that if there was any overcharge the amount is $ 29,206.33.

 It is also agreed that the shipments upon which the overcharge is alleged to have been made cover a period of 19 months from June 1932 to the 29th day of December, 1933.

 It is further agreed that interest, if allowed at the rate of 6%, amounts to $ 7237.22 to April 15, 1937.

 A jury trial was waived.

 The evidence consists of the record before the Interstate Commerce Commission, the decisions and orders of the Commission, petition by defendant for reargument, a letter by one of defendant's counsel to the Chief Examiner of the Interstate Commerce Commission, the petition to the I.C.C. for hearing before the whole Commission and the order of the Commission thereon and a certified copy of the Commission's Tariff Circular No. 20, Rules to govern the construction and filing of Freight Tariffs. Defendant objected to some of this evidence.

 This case turns upon the consideration of the provisions of Rule 1 of Defendant's Tariff, I.C.C. No. 13870, relating to the minimum freight revenue for switching absorption purposes at Albany.

 The defendant's line haul tariff provided a rate of $ 1 per ton for shipments of pulp wood from waterline to destinations on defendant's railroad and applied to the petitioner's shipments herein which were transported to Corinth, N.Y.

 The defendant's line rate had been reduced from $ 1.13 per net ton to $ 1 per net ton at plaintiff's special request by reason of the volume of its freight. The normal rate permitting switching absorption was or had been $ 1.30 per net ton.

 The terms of I.C.C. 13870 provided for absorption of connecting line switching charges of $ 5 under certain conditions named applicable at stations on the D. & H. Railroad Corporation named therein.

 It contains this:

 General Application of Rule 1 to 14 Inclusive:

 'Except as otherwise specified herein and in the tariffs naming rates to and from points herein shown, the switching charges as published in tariffs of switching carriers lawfully on file * * * applicable at junction points on the Delaware & Hudson Railroad Corporation named herein, will be absorbed to the extent specified (see paragraph following) upon carload freight (and upon less than carload freight as specified herein) when originating at or delivered on tracks or sidings of connecting railroad at such junction points, destined to or shipped from points located on or reached by the Delaware & Hudson Railroad Corporation.

 'When switching charges at connecting railroads are in excess of the maximum absorption provided herein, such excess charges not absorbed will be in addition to the line haul rate.'

 The tariff then specifically provided that at Albany, N.Y.: 'The switching charge of the Albany Port District Railroad, will be absorbed upon carload freight (also upon less than carload freight in quantities as specified) received from or destined to points on or via the Delaware & Hudson Railroad Corporation, provided the freight charges for road haul of the carrier or carriers performing the service from point of shipment to destination are not less than the following minima; Switching Minimum Maximum Carrier. Revenue for road haul of the Switching charge carriers performing service to be absorbed. from point of shipment to destination. Albany $ 1.51 per ton, carloads $ 2.21 per ton (in quantities $ 5.00 per car Port of 20,000 lbs or more) $ 4.41 per ton (In quantities District as shown in Note A. (Note B). Railroad. 'Note B. -- When the freight revenue of carrier or carriers absorbing the switching charge of the Albany Port District Railroad is less than the minimum revenue specified in this tariff to entitle shipment to switching absorption purpose, the amount of switching that will be absorbed will be the amount by which the freight revenue plus switching charges exceeds the minimum freight revenue shown herein.' Illustration. Freight Revenue, (15 tons at $ 1.30 per ton) $ 19.50. Switching Charge 5.00. $ 24.50. Minimum freight revenue to absorb switching, (15 tons at $ 1.51 per ton) 22.65. Amount to be Absorbed $ 1.85.

 In this same tariff under 'Rules Governing Tariffs' the minimum weight to constitute a carload was shown as 30,000 lbs. prior to October 1, 1933, and affecting classification, the minimum weight was increased to 36,000 thereafter.

 The position of the parties in this controversy is well stated in the opinion of Division 3 of the Interstate Commerce Commission bearing date of January 9, 1936, (Plaintiff's Exhibit 1):

 'It is the position of complainant that based upon the foregoing absorption provisions, the minimum revenue requisite for absorption for a shipment of any weight is $ 22.65, which is the product of 15 tons (minimum weight) multiplied by $ 1.51 per ton, and that this is made certain by the illustration given. The position of defendant, on the other hand, is that the minimum revenue stated in the tariff is not $ 22.65 but is simply $ 1.51 per ton, which must be applied to the actual weight of each shipment where more than the minimum and that the minimum weight of 15 tons prior to October 1, 1933, or 18 tons on and after that date, has no effect upon switching absorption, except to designate the lowest weight to which the switching absorption test may be applied. For a carload typical of those under consideration, 54,300 lbs. or 27.15 tons, the charge for the line haul is $ 27.15 which, added to the switching charge, results in a total of $ 32.15. Under complainant's interpretation of the absorption provision this typical carload would be entitled to the maximum absorption of $ 5.00 because the total of $ 32.15 exceeds by $ 9.50 the minimum revenue of $ 22.65 necessary for absorption. Under defendant's interpretation, the minimum revenue requisite for absorption for a carload of 27.15 tons is $ 41.00, which is the number of tons multiplied by $ 1.51 per ton.

 'Defendant's interpretation would in certain instances produce absurd results. For example, if the line-haul rate were $ 1.30, used in the illustration given in the tariff, and the loading were 30 tons, nothing would be absorbed since the resulting total, $ 39.00 plus $ ...


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