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FARRELL LINES INC. v. TITAN INDUS. CORP.

April 15, 1969

FARRELL LINES INCORPORATED, Plaintiff,
v.
TITAN INDUSTRIAL CORPORATION, Defendant


MacMahon, District Judge.


The opinion of the court was delivered by: MACMAHON

MEMORANDUM

MacMAHON, District Judge.

 Plaintiff carrier sues defendant shipper for ocean freight, plus interest, on three shipments of steel from Baltimore to Africa, carried on board two of plaintiff's vessels in February and March 1964. The case was tried to the court, without a jury, on January 31, 1969.

 The parties agree that the shipments were booked on board the carrier by a forwarder, Baltimore Dispatch Corporation, *fn1" and that the shipper paid the forwarder for the freight. *fn2" The forwarder, however, did not pay the carrier and, eventually, went bankrupt. *fn3" The carrier commenced this action against the shipper to collect the full freight due.

 The carrier claims that the shipper is obligated to the carrier for the freight, despite the shipper's payment to the forwarder. The carrier relies on the Shipping Act of 1916, 46 U.S.C. §§ 812, 814-817, and the Transportation Act, 49 U.S.C. §§ 6(7), 906(c), which compel the carrier to collect a full freight charge, in accordance with its filed tariffs, as well as the bills of lading used in these transactions which provide that the shipper is responsible for the payment of freight. We will first consider the carrier's statutory argument.

 The carrier interprets the statutory requirement that full freight be collected as imposing a mandate on the shipper to pay the freight in accordance with the carrier's filed tariffs, regardless of whether the shipper has already paid the forwarder. *fn4" The carrier's statutory obligation to collect full freight was not intended, however, to impose absolute liability on a shipper, but rather to prevent price discrimination by the carrier. As long as someone is liable for the full amount of the freight, so that there is no overcharge or undercharge, the public interest is protected and the statutes are satisfied. *fn5"

 Absent any suggestion of price discrimination, we conclude that the statutes have no application to the facts of this case.

 The carrier also relies on the bills of lading used in these transactions which provide in pertinent part:

 
"The shipper and consignee shall be jointly and severally liable to the carrier for payment of all freight. * * *"

 The carrier argues that this provision obligates the shipper to pay the carrier, regardless of the shipper's payment to the forwarder. *fn6" The shipper, on the other hand contends that the forwarder was the carrier's agent for receipt of payment and that payment to the forwarder constituted payment to the carrier. *fn7" We must, therefore, examine the underlying transactions and determine whether the forwarder was actually the carrier's agent.

 Whenever the shipper had freight to send overseas, it would communicate with the forwarder *fn8" and advise as to the quantity of cargo to be transported, the number of the box car in which the cargo was located and the cargo's destination. *fn9"

 The forwarder would, thereafter, make all preparations necessary for the transportation of the cargo, without direction or instruction from the shipper. *fn10" The forwarder would select the carrier, book passage for the cargo, arrange for delivery to the carrier's vessels and prepare the bills of lading for the carrier's signature. *fn11" The forwarder was paid for these services by the carrier, based on a percentage of the freight charges, *fn12" in addition to a nominal payment by the shipper for clerical services. *fn13"

 Neither the shipper nor the carrier, however, had any control over the manner in which the forwarder performed these services. *fn14" Moreover, the forwarder would deal with many other carriers and shippers besides the parties. *fn15"

 Absent the critical elements of control and exclusivity, we find that the forwarder was neither the carrier's agent for receipt of payment, nor the shipper's agent in transactions with the ...


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