United States v. Kansas City Southern Railway Company

217 F.2d 763
Court of Appeals for the Eighth Circuit·Decided January 10, 1955·No. 15013_1·Published·Cited by 20 cases

Opinions

JOHNSEN, Circuit Judge.

Commodity Credit Corporation, 15 U.S.C.A. § 713 et seq., shipped, between April 20, 1945, and August 2, 1946, over Kansas City Southern Railway Co., from Kansas City, Mo.-Kan., to Port Arthur, Texas, 5915 cars of wheat, designated for export to European, Asiatic and African ports.

The rate fixed by the carrier’s tariff for a line-hauling of such export grain from Kansas City to Port Arthur was 24% cents, with a statement in the tariff that this included charges for unloading, cleaning, fanning, and turning of the grain at Port Arthur, storage of it there for 30 days, fire and explosion insurance thereon during that period, and transfer of it from the elevator to the export vessel.

Commodity Credit had in effect at the time, at all of the Gulf ports used by it for the exporting of grain, a standard terminal-elevator program of its own, for the handling, conditioning, storing, and loading of its export grain, resting upon arrangements entered into by it under the Uniform Grain Storage Agreement of the Department of Agriculture. The record contains a stipulation that no Commodity Credit grain was stored at any Gulf port, during the period involved, except under these Uniform Grain Storage Agreement relationships.

Each of the cars of wheat involved was taken over, as it arrived in Port Arthur, and handled under this existing program, without any request upon the Railway to furnish the terminal services included in its tariff rate, and without any indication, so far as the record shows, of a desire or willingness on the part of Commodity Credit at the time to allow the Railway to retain control of and handle the grain at Port Arthur, as an exception to or departure from Commodity Credit’s establishd Gulf-port program.

The tariff contained no provision for any allowance or deduction from the rate applicable to such export grain, in the event that a shipper did not need, or chose not to avail himself of, whether in whole or part, the included terminal services at Port Arthur. Also, it might incidentally be observed that the record shows that the existing tariff rates for a line-hauling of such export grain from Kansas City to any of the other Gulf ports located on or west of the Mississippi River, used by Commodity Credit (Galveston, Houston, Texas City and New Orleans), were as high as the tariff rate to Port Arthur and had no such terminal services as were agreed to be provided at Port Arthur included in the rates to those ports, nor was there any provision in the tariffs that the carrier should absorb any part of the cost of a shipper’s obtaining such services there.

The Railway billed Commodity Credit, and Commodity Credit made payment, for the shipments involved, on the basis of the tariff rate. Later, however, on July 28, 1948, the Government sued the Railway in the District Court,1 to recover [766] the amount of the cost to Commodity 'Credit of the terminal services provided by it for the wheat under its own program, on the theory that, since the carrier had not actually furnished the terminal services, Commodity Credit legally had been overcharged in the amount of the cost of its own terminal services.2 To this count for the recovery of statutory overcharges as such, there was subsequently added by amendment another •count, seeking alternatively to recover the amount of its terminal-program cost for the wheat as damages for breach of •contract, on the theory that the carrier liad failed and neglected to perform the service obligations resting on it under 'the tariff.

In neither cause of action was it claimed that the Railway had been requested •or had refused to furnish the terminal services covered by the tariff, but the allegation made was simply that the carrier had “failed and neglected” to furnish such services.3

The case was tried to the court, sitting •without a jury, on the merits of all the issues raised by the pleadings. The ^court’s consideration, however, did not reach to the merits generally of the controversy, for it concluded that the action •was properly entitled to be dismissed as .a matter of law, on the grounds (1) that, .since the carrier admittedly had charged Commodity Credit the fixed tariff rate, there was no basis for claiming that any “overcharges” as such had been made, within the meaning of that term under the statute;4 and (2) that, since the tariff rate was in legal form a unitary charge, the attempt to recover the value of the terminal services not furnished by the carrier amounted simply, under either count of the complaint, to a question of resolving what allowance or deduction, if any, should be made from the tariff rate, on the basis of stripping down the componeney of the carrier service covered by the tariff and the general charge provided therefor, and placing a separable value on a part of the elements involved — which the court felt that under the statute only the Interstate Commerce Commission, and not a court, had the power and competence to do.5

After the court’s dismissal of the suit on these grounds, 116 F.Supp. 484, the Government filed a motion for reconsideration, or alternatively, if that motion should be denied, a motion to set aside the order of dismissal and hold the case in abeyance until a resolution of the administrative question regarded by the court as being excludingly involved could be obtained from the Interstate Commerce Commission. The court denied both of these motions.

[767] On appeal here, the Government first contends that the trial court erred in not granting it a recovery on the basis of overcharges having in fact been made by the carrier under the tariff itself. It says that, while the tariff in form purported to provide an integrated or unitary rate of 24% cents for the line-hauling of such export grain from Kansas City and the furnishing of terminal services therefor at Port Arthur, 1% cents of this composite amount actually represented a separable charge made by the carrier for the furnishing of the terminal services and was entitled to be so regarded in relation to the tariff rate.

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United States v. Kansas City Southern Railway Company, 217 F.2d 763 (8th Cir. 1955).

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