Boston & Maine Railroad v. Lehigh & New England Railroad

188 F. Supp. 486, 1960 U.S. Dist. LEXIS 4323
CourtDistrict Court, S.D. New York
DecidedJune 23, 1960
StatusPublished
Cited by12 cases

This text of 188 F. Supp. 486 (Boston & Maine Railroad v. Lehigh & New England Railroad) is published on Counsel Stack Legal Research, covering District Court, S.D. New York primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Boston & Maine Railroad v. Lehigh & New England Railroad, 188 F. Supp. 486, 1960 U.S. Dist. LEXIS 4323 (S.D.N.Y. 1960).

Opinion

MacMAHON, District Judge.

Plaintiffs in these companion eases move for summary judgment against defendant under Rule 56 of the Federal Rules of Civil Procedure, 28 U.S.C.A. or for alternative relief described later. Defendant cross-moves for leave to serve amended answers and for a stay of further proceedings pending the completion of pre-trial hearings in other litigation now pending in this court. All of the parties are railroad carriers subject to the Interstate Commerce Act, 49 U.S. C.A. § 1 et seq., but jurisdiction is based on diversity of citizenship.

The question presented is whether the plaintiffs are entitled to summary judgments for liquidated net balances of interline freight revenues claimed by them, notwithstanding defendant’s denials, counterclaims and set-offs based upon disputed and unliquidated claims for per diem car hire which are the subject of a controversy now pending before the Interstate Commerce Commission.

Plaintiffs seek to recover a sum of money only upon an account stated for [488]*488interline freight balances, in the amount of $235,841.03 in the case of The New York, New Haven and Hartford, and $39,814.76 in the case of Boston and Maine. The case grows out of a controversy between the parties respecting adjustment of interline accounts resulting from the movement of freight in interstate commerce.

Interstate transportation of freight usually requires that through shipments be hauled over more than one railroad line before the freight can be delivered to the ultimate consignee. This interline operation is conducted under the jurisdiction of the Interstate Commerce Commission. 49 U.S.C.A. §§ 1(2) and 15(3) (6). Depending upon the shipper’s method of payment, either the first or the last carrier will receive payment for the entire haul although the collecting carrier is entitled to only a portion of the revenue received. The •division of the interline revenue among the participating carriers is established by voluntary agreements or tariffs on file with the Commission. The net amount due each carrier for interline revenue is computed at the end of each month by giving effect to mutual debits and credits, striking a net balance, and .settling the account in accordance with •the rules of the Association of American Railroads (AAR). The adjustment of the interline account thus created is ■commonly referred to as “interline freight balances”.

Plaintiffs and defendant are members of the AAR and have settled their interline freight balances for many years on the basis of procedures prescribed under its rules. Thus, each month, in accordance with Rule 149 1, a sight draft was presented by each of the plaintiffs to the defendant for net balances representing such plaintiff’s share of the interline freight revenue for the preceding month, and the sight draft was accepted and paid by the defendant. There came a time set forth in the complaints, however, when the defendant refused to honor the sight drafts. The defendant’s refusal to pay such interline freight balances forms the basis of plaintiffs’ claims.

Although defendant neither disclaimed liability, nor disputed the accuracy of the account rendered, it refused to honor the plaintiffs’ sight drafts because it asserted that each of the plaintiffs was indebted to it on another mutual account for per diem car rentals which it set off over plaintiffs’ protests against the net balances claimed for interline freight.

Efficient handling of freight and economic use of equipment require that carriers use freight cars belonging to other railroads to avoid needless loading and unloading and to minimize wasteful hauling of empty cars. See Chicago, R. I. & P. Ry. v. United States, 1931, 284 U.S. 80, 90 et seq., 52 S.Ct. 87, 76.L.Ed. 177; St. Louis Southwestern Ry. v. State of Arkansas, 1910, 217 U.S. 136, 30 S.Ct. 476, 54 L.Ed. 698. This use of cars belonging to another railroad on the line of non-owners results in an obligation on the part of the user to compensate the owner railroad for the use of its equipment. See Louisville & Nashville R. R. v. Central Stock Yards Co., 1909, 212 U.S. 132, 29 S.Ct. 246, 53 L.Ed. 441. Since the turn of the century, the basis for compensation has been a flat sum per day called “car hire per diem” or “per diem balances”.2

[489]*489Long haul trunk-line railroads, like the defendant, originate more traffic than they terminate and, therefore, own most of the freight cars in the country. Conversely, short haul terminal lines, like the plaintiffs, terminate more traffic than they originate and, consequently, hire cars owned by the long haul roads.

Prior to 1946 the per diem charges for a non-owner’s use of freight cars were fixed by a car service and per diem agreement among the carriers acting through the AAR, and there was no dispute as to the reasonableness of the rates.

Commencing in 1947, however, per diem charges were progressively increased, resulting first in modification agreements and ultimately in litigation regarding the reasonableness of the rates. Litigation on that issue is presently pending before the Interstate Commerce Commission.3 It is such disputed and unliquidated per diem balances which form the basis of certain denials, affirmative defenses, set-offs and counterclaims alleged in the defendant’s proposed amended answers.

Plaintiffs are met at the threshold of their motions for summary judgment with the classic assertion that the facts are in dispute and that “a litigant has a right to a trial where there is the slightest doubt as to the facts”. Doehler Metal Furniture Co. v. United States, 2 Cir., 1945, 149 F.2d 130, 135. I find such doubt here.

The initial and basic question involved is whether there is an account stated between the parties on interline-freight balances alone. The very meaning of an account stated is that the parties have come together and agreed upon a sum certain as the balance of indebtedness due upon past transactions between them. Acquiescence in the stated sum plus lapse of a reasonable time usually gives rise to an implied promise of payment upon which an action may be founded. The debtor and creditor,, however, must mutually agree as to the allowance or disallowance of their respective claims and as to the balance struck upon the final adjustment of the accounts and demands on both sides. There must be a manifested mutual assent to a stated sum as the amount due. Assent need not be direct or express but may be implied from circumstances. Daube v. United States, 1933, 289 U.S. 367, 370, 53 S.Ct. 597, 77 L.Ed. 1261; Newburger-Morris Co. v. Talcott, 1916, 219 N.Y. 505, 512, 114 N.E. 846, 3 A.L.R. 287; Eames Vacuum Brake Co. v. Prosser, 1898, 157 N.Y. 289, 300, 51 N.E. 986; Volkening v. DeGraaf, 1880, 81 N.Y. 268, 271. In the words of the Restatement of Contracts, § 422(1):

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188 F. Supp. 486, 1960 U.S. Dist. LEXIS 4323, Counsel Stack Legal Research, https://law.counselstack.com/opinion/boston-maine-railroad-v-lehigh-new-england-railroad-nysd-1960.