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CONRAIL v. STANDARD MILLING CO.

February 18, 1981

CONSOLIDATED RAIL CORPORATION, Plaintiff,
v.
STANDARD MILLING COMPANY, Defendant



The opinion of the court was delivered by: ELFVIN

MEMORANDUM AND ORDER

Plaintiff ("ConRail") seeks to recover $ 69,691.00 in demurrage charges said to be owed by defendant ("Standard"). Standard has interposed the defense of accord and satisfaction and moved to dismiss the Complaint under Fed.R.Civ.P. rule 12(b). I am treating said motion as a motion for summary judgment.

Standard operates grain elevators and other milling facilities and receives shipments of grain via rail service provided by ConRail. Standard's rail yard is capable of holding approximately twenty-three cars. When grain shipments of more than twenty-three cars are received, ConRail delivers the maximum number of cars to Standard which unloads the cars and then requests ConRail to remove the empties and deliver more cars. This process is repeated until the entire shipment is unloaded by Standard.

 Under applicable tariffs, Standard is given a certain period of time in which to unload the cars after they have been made available to it. If Standard fails to unload the cars timely it becomes liable for demurrage charges for each day the cars are retained beyond the specified free time. Standard would not be liable for demurrage charges if the delay in unloading was caused by ConRail.

 In 1979, ConRail billed Standard for demurrage charges totalling $ 72,481.00. Standard refused to pay the charges because it considered that ConRail was responsible for the unloading delays. James Bahleda, a Vice President of Standard, sent a letter December 28, 1979 to W. E. Brown, ConRail's Manager of Demurrage, in which he stated that the demurrage charges were "improper" because ConRail's service had been "erratic at best" and that Standard could not be "responsible for ConRail's failure to provide promised service * * *." Bahleda's letter noted that Standard might be liable for some of the charges and concluded:

 
" * * * (W)e do not concede that any demurrage is owing on these trains. In order to resolve this entire dispute without further controversy, however, we are willing to make a payment of $ 2,790.00 for demurrage on the larger train of 62 cars in full settlement of all demurrage charges referred to in this letter.
 
"Therefore, I am enclosing our check in the amount of $ 2,790.00 which, if accepted, shall be in full payment for all demurrage charges incurred by us for the periods February 20-23, 1979 and August 7-October 1, 1979." (Emphasis added.)

 ConRail negotiated the check that had been enclosed with the letter.

 In March 1980, counsel for ConRail attempted to return Standard's payment on the grounds that ConRail had no authority to compromise the demurrage charges against Standard. Standard refused to accept return payment, its counsel explaining that ConRail's acceptance of Standard's check constituted "a valid accord and satisfaction which cannot be repudiated * * *." ConRail commenced this action to recover the demurrage charges less Standard's payment thereon.

 Standard's motion raises the initial question whether ConRail may legally settle a claim for demurrage charges. The Interstate Commerce Act, 49 U.S.C. § 10741(a), provides that a common carrier such as ConRail:

 
" * * * may not charge or receive from a person a different compensation * * * for a service rendered * * * in transportation the carrier may perform under this subtitle than it charges or receives from another person for performing a like and contemporaneous service in the transportation of a like kind of traffic under substantially similar circumstances."

 Under 49 U.S.C. § 10761(a), a carrier may not charge or receive a rate different than the rate prescribed in the applicable tariff. ConRail argues that these statutory provisions prevent it from compromising a claim for demurrage charges. I agree.

 Under the Interstate Commerce Act, filed tariffs have the force of law and therefore may not be modified by private agreement. Ill. Cent. Gulf R. Co. v. Golden Triangle, Etc., 586 F.2d 588, 592 (5th Cir. 1978); In re Penn Central Transportation Co., 477 F.2d 841, 844 (3d Cir. 1973). It is stated in L. & N.R.R. v. Central Iron Co., 265 U.S. 59, 65, 44 S. Ct. 441, 442, 68 L. Ed. 900 (1924):

 
"The amount of the freight charges legally payable was determined by applying this tariff rate to the actual weight. Thus, they were fixed by law. No contract of the carrier could reduce the amount legally payable; or release from liability a shipper who had assumed an obligation to pay the charges. Nor could any act or omission of the carrier (except the running of the statute of ...

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