Transconex, Inc. v. Jefferson Industries, Inc.

538 N.E.2d 738, 182 Ill. App. 3d 893, 131 Ill. Dec. 363, 1989 Ill. App. LEXIS 580
CourtAppellate Court of Illinois
DecidedMay 1, 1989
DocketNo. 1—88—0986
StatusPublished
Cited by1 cases

This text of 538 N.E.2d 738 (Transconex, Inc. v. Jefferson Industries, Inc.) is published on Counsel Stack Legal Research, covering Appellate Court of Illinois primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Transconex, Inc. v. Jefferson Industries, Inc., 538 N.E.2d 738, 182 Ill. App. 3d 893, 131 Ill. Dec. 363, 1989 Ill. App. LEXIS 580 (Ill. Ct. App. 1989).

Opinion

JUSTICE O’CONNOR

delivered the opinion of the court:

The principal issue in this appeal is whether the trial court erred in failing to find that, as a matter of law, plaintiff, Transconex, Inc., was required to collect its full tariff charges for the transportation services rendered to defendant, Jefferson Industries, Inc., regardless of an alleged misquotation initially given. We reverse and remand.

The plaintiff, Transconex, Inc. (Transconex), is an interstate freight forwarder and non-vessel-operating common carrier which makes both interstate and international transportation arrangements on behalf of its customers. Defendant Jefferson Industries, Inc. (Jefferson), is a manufacturer of carpets and mats with plants located in Chicago, Illinois, and Chatsworth, Georgia.

In August of 1983, Jefferson sought to ship two quantities of carpets to a customer in Trinidad, West Indies. In arranging for the shipments, Jefferson used the services of I.EC. Corporation (IFC), a freight forwarder. On or about August 13, 1983, at the request of IFC, Transconex accepted two sealed 40-foot trailers, alternately described as containers of goods, for delivery to Trinidad. One shipment originated at Chicago, Illinois, and the other at Chatsworth, Georgia.

Prior to shipping the goods, Jefferson received a quotation for the freight charge. The bills of lading show that the freight charges from Chicago to Trinidad were $6,000 and the charges from Chatsworth to Trinidad were $6,300. The information on the bills of lading indicated that the containers held 800 cubic feet of goods, although one of the containers had a capacity of 2,686 cubic feet of freight and the other had a cubic capacity of 2,373 feet. According to Transconex, the freight charges were computed based upon the information received from IFC.

Subsequent to transporting the goods, Transconex discovered that the charges originally assessed and collected were erroneous. Although Jefferson had sealed up the containers, in effect using the entire capacity of the containers, Transconex testified that the original charges were based upon the use of only 800 cubic feet. Transconex then issued corrected bills of lading reflecting what it believed to be the correct tariff charges. The revised charges were approximately $13,319.25 greater than the charges initially assessed and collected.

Jefferson refused to pay the revised rates and Transconex filed suit on March 14, 1986. Following a bench trial, judgment was entered in favor of defendant and pláintiff now brings this appeal.

Plaintiff contends that the trial court’s decision was contrary to law in that plaintiff was required to assess and collect its full tariff charges regardless of any initial misquotations of the rate. Plaintiff points out that the decision of the trial court was not based upon the tariffs introduced at trial, but was based upon purported quotations given to defendant as to what the charges would be and that reversal is warranted as the trial court improperly decided the case based upon contract principles. We agree.

As an interstate freight forwarder and non-vessel-operating common carrier, Transconex was operating pursuant- to authority issued by the Interstate Commerce Commission (ICC) and Federal Maritime Commission (FMC). At the time Transconex agreed to transport the shipments in issue, both the ICC and FMC required that a party subject to the jurisdiction of the respective commissions publish tariffs and assess only those rates contained in said tariffs. See 49 U.S.C. § 10761(a) (1982); 46 U.S.C. §817 (1982).

Once the tariff is published, the rate is no longer merely the rate imposed by the carrier; it becomes the rate imposed by law. (Southern Pacific Co. v. Brown, Alcantar & Brown, Inc. (5th Cir. 1969), 409 F.2d 1331, 1332.) Tariffs have the force and effect of statutes (American Ry. Express Co. v. American Trust Co. (7th Cir. 1931), 47 F.2d 16, 18), and a shipper is conclusively presumed to know the tariff (Aero Trucking, Inc. v. Regal Tube Co. (7th Cir. 1979), 594 F.2d 619, 622).

It has long been held that a carrier has not only the right, but the duty to recover the correct charges under the applicable tariff. (See, e.g., Louisville & Nashville R.R. Co. v. Central Iron & Coal Co. (1924), 265 U.S. 59, 65, 68 L. Ed. 900, 902, 44 S. Ct. 441, 442.) Moreover, the carrier has the duty to collect and the shipper the obligation to pay the correct charges regardless of whether there was a misquotation of the rate through mistake or otherwise. Louisville & Nashville R.R. Co. v. Maxwell (1915), 237 U.S. 94, 97, 59 L. Ed. 853, 855, 35 S. Ct. 494, 495.

The schedule of rates and charges set forth in the tariff is both conclusive and exclusive; it may not be added to through reference to outside contracts, agreements, understandings or promises. Southern Ry. Co. v. Prescott (1916), 240 U.S. 632, 638, 60 L. Ed. 836, 839, 36 S. Ct. 469, 472.

While defendant Jefferson acknowledges the absolute rule generally imposed in tariff cases, it urges that, based upon equitable principles, it should not be applied here, because Jefferson had no alternative but to rely upon the carrier’s interpretation of its own tariff and had no way to check the quoted rates against the actual tariff.

In this regard, we note that it is well established that whether a deviation from the lawful tariff charges was intentional or not is wholly without significance. (F. Burkhart Manufacturing Co. v. Fort Worth & D.C. Ry. Co. (8th Cir. 1945), 149 F.2d 909, 910.) As the United States Supreme Court noted in Kansas City Southern Ry. Co. v. Carl (1913), 227 U.S. 639, 653, 57 L. Ed. 683, 688, 33 S. Ct. 391, 395, no action or omission of the carrier can estop or preclude it from enforcing payment of the full amount of the legally applicable tariff charges. Nor will equitable considerations serve to justify failure of a carrier to collect any part of lawful tariff charges. Baldwin v. Scott County Milling Co. (1939), 307 U.S. 478, 485, 83 L. Ed. 1409, 1414, 59 S. Ct. 943, 948.

The only defenses which can be asserted against a carrier’s suit for freight charges are that the services were paid for; that the services were not rendered; that the services were charged under an inapplicable tariff schedule; or that the rates were not reasonable.

Free access — add to your briefcase to read the full text and ask questions with AI

Related

Consolidated Freightways Corp. of Delaware v. Peacock Engineering Co.
628 N.E.2d 300 (Appellate Court of Illinois, 1993)

Cite This Page — Counsel Stack

Bluebook (online)
538 N.E.2d 738, 182 Ill. App. 3d 893, 131 Ill. Dec. 363, 1989 Ill. App. LEXIS 580, Counsel Stack Legal Research, https://law.counselstack.com/opinion/transconex-inc-v-jefferson-industries-inc-illappct-1989.