Petition for Writ of Certiorari — Knox Glass, Inc. v. Bowser

_ SUPREME COURT. U. &

- Supreme Court 4 the Uni

OCTOBER TERM, 108% 5

coe ä

* GLASS, N, a corporation,

Petitioner,

V.

BOWSER AND CAMPBELL, a partnership, ani

LLOYD H. BOWSER and STELLA CAMPBELL, -

doing business as BOWSER AND CAMPBELL, a

partnership,

wees 1

nron FOR WRIT or CERTIORARI TO THE

UNITED STATES COURT OF APPEALS FOR

IH THIRD CIRCUIT

THomas W. POMEROY, In., Esq.

Jupp N. POFFINBERGER, IR., Esq.

J. RICHARD LAUVER, ESWC. 7

1100 Oliver Building

Pittsburgh, Pennsylvania 15

Counsel for Knox Glass, Inc.

Of counsel, 2 ä

KIRKPATRICK, POMEROY, LOCKHART

& JOHNSON

1100 Oliver Building

Pittsburgh, Pennsylvania 15222

SMITH BROS. CO. inc., LAW PRINTERS, 620 SECOND AVENUE, PITTSBURGH, PA. 18219

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TABLE OF CONTENTS

PAGE

Citation to Opinions Below V *

Jurisdiction ....... a} iseeseewa . b

The Questions Presented „ F

Statute Involved „„ el —*. 3

Statement ae 1 r ½·r 5 e oan

Reasons for Granting the Writ E — 9

. ̃ ⅛ dee kG —T—Ä—Ä———— . chain Kuk eiuu 22

Appendix A — Opinion of Court of 3 covce A

Appendix B — Judgment of Court of Appeals. BI

Appendix C — Findings of Fact, Conclusions 7

Law and Order of United States District Court

Dated February 20, 1967 ..............0... C1

Appendix D — Statute Involved ........2....... D1

AUTHORITIES CITED

: Cass

a4 * Coie. « Liggett Drug Co., 258

F. Supp. 699 (SDNY. 3 19

Applicability of Rates on Household Goods, 315

I. C. C. 857 J 16

Bottemueller v. Wilson & Co. * 57 F. ‘Supp. 766

(// AA 19

Church of The Holy Trinity v. United States, 143 —

. K ˙ pe . oes 20 b

Ex Parte MH. C. 12, G of Contract Carriers,

. 1 M. C. C. 628 (1937) 3 W —L[ͤ— 2 2 12, 13

5 Faweus Mach. Co. v. United States, 282 U.S. 375. 12

Hawaii v. Mankichi, R „

Helvering v. Hammel, 311 U.S. re rrr . 21

| Louisville & Nashville R. R. v. Maætoell, 237 U.S. 94 9

Authorities Cited.

CASES ‘PAGE

McDonald v. Thompson, 305 U. 8. 263, rehearing

an, 0 GG 205000865 2¹

Minton v. General Shale Products Corp., 52 Tenn.

App. 60, 371 S. W. 2d aue) 19

National Van Lines, Inc. v. United States, 355 F. 2d

326 (7th Cir. 1966). Seb Ous CeNesuedeceses 9, 15, 17

Pennsylvania R.R. v. International Coal Mining Co.,

bbb 10

Perry v. Commerce Loan Co., 383 U.S. 392, rehear-

ing denied, $84 US. 8 20

Sorrells-v v. — States, 287 us 8. 8 20

United States v. Carolina Freight Carriers e be

: „*

United States v. Kirby, 74 U.S. (7 Wall.) 482 9, 20

White v. United States, 305 U.S. 211. „ ae

Srarurs 18 —

28 USC. . . 1

28 U.S. C. 5133777. e e eS

Interstate Commerce Act, Pt. 1, 24 Stat. 319

(1887), as amended, 49 U.S. C. 55127 10

$6, 49 U.S. C. 66 — . . 4. . .0, 10, 11, 18

A Commerce Act, Pt. 11, added by 49 Stat.

543 (1935), as amended, 49 U.S. C. 53301.327

Reese sees — 3, 9, 11, 21

11

Statutes.

ee ä „ i

8203 (a) (15), 49 U.S.C. 3303 (a) (155) 11,17

5204 (a) (2), 40 U.S. C. 3804 (a) (2 14

3217 (b), 49 U.S.C. 6317 (b 15

5218 (a), 49 U.S.C. 8318 (aa 2, 3, 5, 6

"9, 10; 11, 13.18, 20. 21. 22

Motor Carrier Act, 49 Stat. 543 (1935), (now In-

terstate Commerce ‘Act, Pt. 11), as amended,

49 US. C. rr 10, 11

**

Supreme Court af the United States.

OCTOBER TEEM, 1967

_ KNOX GLASS, INC., a corporation, f

V. :

BOWSER AND CAMPBELL, a partnership, and

LLOYD H. BOWSER and STELLA CAMPBELL,

* business as BOWSER AND CAMPBELL, a

n

Respondents.

PETITION FOR WRIT OF CERTIORARI TO THE

UNITED STATES COURT OF APPEALS FOR

Petitioner, Knox Glass, Inc., prays ‘that a writ of.

certiorari issue to review the judgment of the United

States Court of Appeals for the Third Circuit, entered

February 5, 1968, reversing judgment in favor of peti-

tioner against respondents, Bowser and Campbell, a

partnership, and Lloyd H. Bowser and Stella Campbell,

doing business as Bowser and Campbell, a partnership,

and remanding the case to the United States District

Court for the Western District of Pennsylvania for

further ee consistent with their opinion.

The Questions Presented.

CITATION TO. OPINIONS BELOW |

The opinion of the District Court is reported at 264

F. Supp. 522 and is printed in Appendix C hereto. The

opinion of the Court of Appeals is printed in Appendix

A — and is not yet t reported i in the official reports.

_ JURISDICTION

‘The judgment of the Court of Appeals, printed in

Appendix B hereto, was entered February 5, 1968. On

March 4, 1968, the Court Appeals stayed its man-

date to enable petitioner to a for certiorari.

The jurisdiction of this Court is invoked under 28

oe 81254 (1).

U

THE ; QUESTIONS PRESENTED |

1. Should the rule of construction adopted by this

Court for those sections of the Interstate Commerce Act

which prohibit discrimination in rates charged by com- |

mon carriers be applied in determining the liabilities .

of a shipper to a contract motor carrier for additional

charges where the Schedule of Charges filed by such

carrier contains an inadvertent omission affecting the

amount of charges to be collected?

2. Should not Section 218 (a) of the Interstate

Commerce Act, being a remedial statute, be construed

to give primary e emphasis and ect te the private con-

tract rights of the parties as against a literal construc-

tion which produces an unconscionable and absurd

result?

f

“x

Statement.

STATUTE INVOLVED

Ĩ) e statute involved is Section 218 (a) of the Inter-

state Commerce Act, Pt. II, added by 49 Stat. 561

(1935), as amended, 49 U.S.C. §318(a). It is printed in

Appendix D hereto. ae

' STATEMENT .

ö This is an action brought by respondents, a con-

tract motor carrier, against petitioner-shipper to collect

additional freight charges based on the alleged failure

of the respondents to collect, and the petitioner to pay,

charges in accordance with a Schedule of Charges filed

by the respondents with the Interstate Commerce Com-

mission. (Applts’ App. 3a), The amount of the charges

claimed was stipulated by the parties. (Applts’ App.

38a) The jurisdiction of the District Court was invoked

under 28 U.S.C. §1337 as an action arising under an Act

of Congress. e

The respondents, Bowser and Campbell, a partner-

ship, and Lloyd H. Bowser and Stella Campbell, doing

business as Bowser and Campbell, a partnership (“Bow-

ser and Campbell“), were at all times relevant herein

a contract niotor carrier regulated by the applicable pro-

visions of the Interstate Commerce Act, Pt. I, added by

49 Stat. 543 (1935), as amended, 49 U.S.C. §§301-327.

(Applts’ App. 19a). ae

Petitioner, Knox Glass, Inc. (“Knox”), is 4 cor-

poration organized under the laws of the Common-

wealth of Pennsylvania and has its principal office in

Knox, Pennsylvania. (Applts’ App. 3a) At fll times

Statement.

relevant herein, petitioner was a manufacturer of glass-

ware with manufactaring plants located at Knox, Mar-

ienville and Parker, Pennsylvania, and warehouse fa-

cilities at Kane and Sheffield, Pennsylvania. ( Applts’

App. 19a) :

For over thirty years prior to the institution of

this action in January, 1966, Bowser and Campbell had

served Knox and its predecessor, Knox Glass Associates,

Inc., as a contract motor carrier in connection with the

shipment of glassware manufactured by Knox. (Applts“

App. 83a) During the period of time here involved,

January, 1960 to January, 1964, Bowser and Campbell

had performed these services under a written transpor-

tation agreement dated May 14, 1958. ‘(Applts’ App.

252a) According to that agreement, respondents were

to be compensated for their services according to “‘MC

1218, MF-LC.C. No. 3, Schedule of Charges for Trans-

portation, as a Contract Carrier,’ supplements there-

to and reissues thereof.” That Schedule of Charges

(Applts’ App. 236a) became effective May 1, 1958, and

was in effect until January 25, 1964. ( Applts’ App. 245a)

During the parties’ long period of association, it

was the practice of the carrier to stop its trucks at one

or more Knox plants, as necessary, to complete the

loading of glassware begun at another Knox plant.

(Applts’ App. 87a) Similarly, Bowser and Campbell

would stop a shipment in transit at various points for

partial unloading. This practice had been in effect prior-

to the date that contract motor carriers came under

federal regulations in 1935 and continued thereafter.

Statement. ö

This case arose because in 1958 the carrier for the

first time adopted a minimum load charge in its Sched-

ule of Charges. Unfortunately, when the carrier pub-

lished the Schedule of Charges, which was filed with

the ‘Interstate Commerce Commission under Section

218(a), it inadvertently and mistakenly omitted a rule

affording shipper the privilege of stopping to complete

loading, although the Schedule did contain a rule for

stopping for partial unloading. (Applts’ App. 241a)

The Schedule as published assumed that each shipment

had a minimum weight. The absence of a rule affording

the privilege of stopping to complete loading made

each stop for loading a new shipment subject to the

minimum weight requirement. Thus, as written, the

- Schedule did not permit the aggregation of weights of

individual loadings in computing freight charges. This

could and did result here in claims for charges for

hauling phantom freight.

Notwithstanding the erroneous omission from the

Schedule of a rule permitting stopping in transit to

complete loading, Knox paid Bowser and Campbell,

and they accepted, an agreed charge of $6.00 (later

510.00) for the privilege of such stopping, in addition

to the applicable hauling charges computed on the ag-

gregate weight of the shipment. (Applts“ App. 19a)

There was no dispute that the parties had agreed that

in computing freight charges Knox was to have the

_ privilege of stopping to complete loading. That this

privilege was part of the transportation agreement was

admitted at the trial by Mr. Harold R. Bowser, respond-

ents’ principal witness. (Applts’ App. 74a) Moreover,

mis was admitted by respondents in the agreement

Statement.

executed between the parties dated August 21, 1964.

(Applts’ App. 256a) Furthermore, as discussed below,

the omission in the Schedule was promptly : ratified when

called to the carrier 's attention.

Durin ne period involved in these proceedings,

two common carriers, W. I. Womeldorf & Sons and

- Motorway Corporation, offered the same transportation

service with stop-off for loading privileges at compar-

able and competitive rates and charges as were actually

paid by Knox for the services provided by Bowser and

Campbell. (Applts’ App. 271a, 282a) =

During an investigation by the Interstate Com-

merce Commission during the fall of 1963, the Com-

mission's inspectors found that respondents’ billings

were. computed by using the aggregate weight of loads

regardless.of the number of points where loading was

accomplished. As a result of this investigation, Bowser _

and Campbell claimed that they were “ordered” by the

Commission to collect undercharges from Knox. Very

shortly after the investigation, Bowser and Campbell

amended the Schedule, effective January 25, 1964, to

reflect the actual agreement and practice of the par-

ties. (Applts’ App. 245a) Despite this amendment, sepa-

rate criminal actions were brought by the Commission

against Bowser and Campbell in March, 1964, and

against Knox in June, 1964, alleging violations of Sec-

tion 218 (a) of the Interstate Commerce Act. (Appits’

App. 90a, 110a)

Because of these criminal charges, Knox consulted

S. Sidney Eisen, a transportation consultant, who after

meeting with respondents’ representative and the In-

7 Statement.

terstate Commerce Commission, prepared: an . agree-

ment wherein respondents acknowledged that the.

freight charges collected were the charges agreed upon

‘and, in addition, released Knox from further claim for

such charges. (Applts’ App. 256a) At a later meeting

in Washington, D.C., in the fall of 1964, Mr. Bowser

and his counsel were informed by representatives of

the Interstate Commerce Commission. that the Com-

mission was not concerned whether respondents pursued

a claim for the alleged undercharges. (Applts’ App.

123a) ö n a

The District Court, after a trial without a jury,

entered judgment for petitioner. (Appendix C, p. C13)

The District Judge, sitting as the finder of fact, stated:

“By clear, precise and convincing evidence it:

was proved that Carrier, which seeks to enforce

the Schedule of Charges, a part of the written

agreement, has admitted and acknowledged that

it did not express in the Schedule of Charges what

the parties intended, and that what the parties

intended was omitted from the Schedule of Charges

by inadvertence and mistake.” (264 F. Supp. at

526) |

In view of his findings, Judge Marsh concluded that to

permit respondents to recover would “unduly and un-

conscionably enrich” respondents and that such a re-

sult would be contrary to the provisions. of the Inter-

State Commerce Act which regulate contract motor

carriers. | n 5

Upon appeal by respondents to the Court of Ap-

peals for the Third Circuit, the judgment in favor of

Statement.

petitioner was reversed and the cause remanded for

further proceedings consistent with the opinion. (Ap-

pendix B, p. BI) The majority opinion recognized the

distinctions in policies underlying regulation of con-

tract motor carriers as opposed to common motor car-

riers, but nevertheless held that such policy distinctions

must give way “in order to preserve the integrity of

the filed rates.” (Appendix A, p. Ar) In a concurring |

opinion, Judge Van Dusen emphasized the unusual cir-

cumstances presented, including the admissions by the

respondents and the absence of any destructive com-

petitive practices, and said that petitioner may well. file

a petition for a writ of certiorari to this Court in order

to “reach the fair and just result achieved, by the opin-

ion of the able district judge... (Appendix A, p. All)

Hence this petition.

Reasons for Granting the Writ.

_. REASONS FOR GRANTING THE WRIT

The decision of the Court of Appeals, in holding

that common carrier tariff principles ought to be ap-

plied to permit a contract carrier by motor vehicle. to

recover undercharges based on an erroneous Schedule

of Charges, raises important and substantial questions

concerning the private contractual rights of parties

subject to Part Hof the Interstate Commerce Act.

Although this Court has interpreted Section 6 of Part

I of the Interstate Commerce Act on nunierous ‘occa-

_ gions, it has not heretofore considered the correlative.

and equally important section, 218(a), of Part II reg-

ulating the filing of schedules of charges by contract

motor carriers. The decision of the Court of Appeals

was based solely on the application of the decisions by

this Court in Louisville & Nashville R. R. v. Maxwell,

237 U.S. 94, and Pittsburgh, C., C. & St. L. Ry. v. Fink,

250 U.S. 577, wherein it was held that no deviation from

tariffs filed by common carriers under Section 6 would

be permitted under any pretext.

In reaching its conclusion, the Court of Appeals

also placed itself in conflict with the recent decision

by the Court of Appeals for the Seventh Circuit in

National Van Lines, Inc. v. United States, 355 F. 2d

326 (1966). Moreover, the decision ignored the teach-

ings of this Court commencing with United States v.

Kirby, 74 U.S. (7 Wall.) 482 that the reason of the

law should prevail over its letter in those cases that

would otherwise result in unjust, oppressive, unrea-

sonable or absurd conclusions. |

10 ' . | t

Reasons for Granting the Writ:

L

The Decisions of This Court Relating to the

‘Enforcement of Tariffs Filed by Common Carriers

Under Section 6 of the Interstate Commerce Act

Do Not Necessarily Apply to Civil Actions Arising

Under an Erroneous Schedule of Charges Filed by

a Contract Carrier Under Section 218(a) of This

- .. In 1887, . enacted the Interstate e |

; Act to combat discriminatory practices by the rail- |

roads. To secure compliance with the Act, Section 6

provided that common carriers were to file their tariffs |

with the Interstate Commerce Commission. Within a |

few years following its enactment, this Court handed |

down a series of decisions interpreting that section of |

the Act. In Pennsylvania R.R. v. International Coal

‘ Mining Co., 230 U.S. 184, it was held that a tariff filed’ |

ee

gtatute, and therefore unaffected by any private agree-

ment between the shipper and carrier. Similarly, it

was held in Pittsburgh, C., C. & St. L. Ry: v. Fink, 250.

U.S. 577, that the only legal charge which could be

collected by a common carrier was the rate duly filed

with the Commission. Thus any collection by a com- |

mon carrier of a greater or lower rate than that filed 1

under the tariff was viewed as „* and in

violation of Section 6.

ö This was the state of the law concerning the col- :

lection of overcharges or undercharges when the |

Motor Carrier Act was enacted in 1935. The Motor

Carrier Act, 49 Stat. 543, as amended, 49 U.S.C. § §'301-

RP

Reasons for Granting the Writ.

327, renamed Part II of the Interstate Commerce Act

in 1940, brought motor vehicles operating in interstate

commerce under federal regulation for the first time.

In so doing, however, Congress recognized the need

for specialized and individualized motor carrier service

in addition to common motor carrier service. Thus it

created in Section 203 (a) (15) a new class of carrier

known as a contract carrier by motor vehicle. This

class was intended to include those carriers who, fur-

nished transportation services under individual con-

tracts of carriage designed to meet the distinct needs of,

shippers.

*

Since a common carrier by motor vehicle anit offer

its services to the public on a nondiscriminatory basis

as in the case of other common carriers, the rationale

of the cases construing Section 6 as applied to the latter

group of carriers may well apply to common motor

carriers to achieve a uniform policy of nondiscrimina-

tion among shippers. However, the principle of pro-

tecting the public from discriminatory practices, in-

cluding. the lack of uniform rates, is the antithesis of

the purpose of regulating contract motor carriers, be-

cause such carriers are expressly permitted to discrim-

inate freely among shippers under Section 218(a).

Whereas the clear statutory intent in regulating com-

mon carriers was the prohibition of unjust discrimina-

tions in the rendition of services under similar circum-

stances and conditions, the statutory intent behind the

regulation of contract carriage was to protect common

carriers from cut-throat competition. In fact, the Court

of Appeals recognized this * distinction when *

stated:

.

12.

. Reasons for Granting the Writ.

“It is true that the regulation of contract cat-

riers is not designed to prevent discrimination

among shippers, as it is in the case of common car-.

riers. The purpose in regulating contract carriers

is to prevent destructive competition between con-

tract carriers and common carriers and among the

contract carriers themselves.” emphasis added)

(Appendix A, pp. A5-6) | O

Yet the Court of Appeals, in reversing the „ of

the District Court in favor of the petitioner, held that

the respondents could recover undercharges arising un-

der an erroneous Schedule of Charges despite the fact

that the rates actually paid by petitioner were competi-

tively comparable to those charged by common carriers

operating in the same vicinity as the respondents.

This Court has frequently said that interpreta-

tions of statutes by agencies charged with their admin-

istration are entitled to very great weight. E.g., Skid-.

more v. Swift & Co., 323 U.S. 134; Fawcus Mach. Co. v.

United States, 282 U. S. 375. Accordingly, even a cursory

examination of the decisions by the Interstate Commerce

Commission involving contract carriers will reveal an

interpretation not consonant with the inept approach

of the Court of Appeals. For example, in Ex Parte M.C.

12, Contracts of Contract Carriers, 1 M. C. C. 628 (1937),

the Commission stated that the purpose of contract car-

rier regulation was:

Tlo promote and protect adequate and efficient

common-carrier service by motor vehicle in the pub-

lic interest, and the regulation of contract 2

is designed and confined with that view. in end.

13

Sinise for Granting the Writ.

The patent objeet of Congress is to grotatt the

common carrier against cut-throat competition.”

Id. at 629.

E the intent of Congress in . online car-

riers was to promote and protect common carriers, chen

the policy inherent in common carrier regulation of pre-

serving the integrity of filed rates should not be con-

trolling in contract carriage. In contract carriage, the

individual contract between the ‘shipper and contract

carrier should control the private rights of the parties

as long as such contract does not violate the fundamen-

tal policies of Congress contained in Section 218(a)..

Therefore, although the Interstate Commerce Commis-

sion is understandably concerned with the enforcement -

of the filing provisions of Section 218 (a), neither the

Commission nor Congress ever intended that a shipper

. ghould be liable in a civil action for charges other than

those provided in the agreement. between the parties

unless common carriers will be injured thereby.

Furthermore, there is no need to enforce the rates

as filed i in the Schedule of Charges to prevent discrimina-

tion, since contract carriers are expressly permitted by

Section 218 (a) to discriminate among shippers. Thus,

— when the Court of Appeals speaks of its decision as nec-

essary in order to discourage “pressure by powerful

shippers for discounts”, it fails utterly to perceive the

theory of contract carrier regulation, particularly where

the alleged undercharge was admittedly a mistake and

not injurious to competing common carriers.

une Court of Appeals is simply declaring’ a fiction

to be policy when it states, after reviewing common and

contract motor carrier regulations, that:

contract carrier are unreasonable, the

14

pis "Reasons for Granting the Writ.

“This difference, however, reflects only a partial

factor and is not enough to justify a disregard of

the general policy that the rate filed must be ob-

served, a policy which pervades the regulation of

contract as well as common carriers and which is

‘enforced by permitting any undercharges to be re-

covered in order to preserve the integrity of the

filed rates.” (Appendix A, p. AT)

No such ied ae the . of contract motor

carriers.

Unless the decision of the Court. of Appeals is re-

versed, a shipper by contract. motor carriage will be

effectively denied any right to challenge unjust and un-

reasonable rates which may be intentionally or inad-

vertently published by a contract carrier in its schedule

of charges. By virtue of the decision, a contract shipper

will be bound by the published rates irrespective of the

actual agreement between the parties and the reason-

ableness of the rates as filed. Such a result is untenable

since even a shipper by common carriage has a right to

recover unreasonable and unjust charges paid in ac-

ä cordance with the tariff rates in an action for the re-

covery of reparations under Section 204 (a) (2) of the

Interstate Commerce Act. In contrast, shippers by con-

tract carriage enjoy no similar right. Since contract

carriers and shippers are free to bargain on rates, it is

only reasonable that any disputes between the parties

concerning rates would be settled in accordance with the

terms of their agreement. If the ra offered by the

enter into a transportation agreement. It

| . 15

Reasons for 632 the Wre. a

shippers the same right as. shippers by common car-

riers have to recover reparations if it had intended that

contract shippers would be bound by unreasonable and

unjust rates filed in an erroneous schedule of charges.

For these reasons, it is necessary for this Court to.

review the decision of the Court of Appeals in order to

relieve the uncertainty created by its wooden applica-

tion of common carrier principles to contract motor

carriers. 3

fa. 7 / . =

II.

The Decision of the Court of Appeals Is in

Conflict With the Decision of the Court of Appeals

for the Seventh Circuit in National Van Lines, Inc.

v. United States, 355 F. 2d 326 (1966).

In National Van Lines, Inc. v. United States, 355 F.

2d 326 (7th Cir. 1966), the Court of Appeals reversed —

a decision by the United States District Court for the

Northern District of Illinois upholding a declaratory

order by the Interstate Commerce Commission. The

Commission had held that a group of common motor

carriers had charged rates in excess of, or different

from, the tariffs filed with it by the carriers ‘and there-

fore violated Section 217 (b) of the Interstate Commerce

. . A 5

In 1959, the common motor carriers filed a new set

_of tariffs with the Commission replacing a set of similar

tariffs filed in 1957. In preparing the 1959 tariffs, how-

ever, the carriers inadvertently omitted a reference

note which had appeared in the 1957 tariffs at the end

of Section III which should have stated: er 500 miles,

16

Reasons for Granting the Writ.

apply rates shown in Section i. othwithstanding

this inadvertent omission, the carriers applied the rates

‘which gave effect to the omitted reference note.

In early 1960, a shipper noticed the omission and

immediately filed claims for overcharges. The shipper

contended that Rule 23 of the tariff controlled on ship-

ments in excess of 500 miles rather than Section II. Of

course, application of Rule 23 rates would have resulted .

in substantially lower charges than application of the

rates set forth in Section II. Thereafter, the Commis-

sion ordered an investigation to determine whether the

rates charged by the carriers were different from

the rates specified in 1959 tariffs. The Commission con-

cluded, five members dissenting, that the common car-

riers had in fact overcharged the shippers because of the

omitted reference note from the tariff. Applicability of

Rates on Household Goods, 315 J. C. C. 537 (1962). The

District Court upheld the declaratory order.

A three-judge panel ofthe Court of Appeals for

the Seventh Circuit unanimously reversed the decision

of the Commission and the District Court. Recognizing

that the reference note was omitted through inad-

vertence, as did the District Court in the case at bar,

the Court of Appeals refused to apply the strict and

harsh rule that a carrier, or a shipper, is absolutely

bound by the rates filed in the tariff. Instead, the Court

of Appeals found that the omission created an ——

or uncertainty in the tariff and stated:

“Under such circumstances, we think the tradi-

tional rules of construction of written instruments

are controlling in arriving at the proper application

of the tariffs. The intention of the framers and

7

)

os ay

Reasons for Granting the Writ.

other considerations thus become relevant.” 355

F. 2d at 332.

Upon consideration of the facts here, and noting that

contract carriers are involved rather than common car-

riers, we believe a fortiori that the Third Circuit has

placed itself in direct conflict with the Seventh Circuit

on: this. important issue. Therefore, we urge the Court

to resolve this unsatisfactory development in Federal

case law. |

An application of the criteria iit in National Van

Lines to resolve the ambiguity in the tariff to the instant

facts reveals the inherent unsoundness of the decision

of the Third Circuit. Among the criteria found to be

controlling were the following: O N

1. The intention of the parties;

.. The avoidance of unjust, * or improb-

able results;

3. A construction which avoids a possible vio-

lation of law; N

4. The practical application of the tariff by

the interested parties; and

5. The resolving of any doubts in favor of the

Shipper.” 0 N. i ,

Moreover, the case at bar requires an application

of these fundamental rules of contract law for several

other reasons. First, the application of contractual

principles to a contract carriage situation is inherent in

the concept of contract carrier regulation. The very

definition of contract carriers in Section 203 (a) (15)

mandates such a conclusion. Secondly, there is no dis-

18.

88 Reasons ~ Granting the Writ.

— or doubt as to the intention of the Nenn The

respondents have expressly admitted that the Schedule

of Charges did not reflect the terms of the agreement

between the parties. Its amendment of the Schedule

of Charges immediately following discovery of thé

- omission confirms respondents’ intention. Finally, up-

holding the intention of the parties will not cause in-

jury to common carriers operating in the same area

because the tariffs of the two common carriers in com-

petition with the réspondents already provide for the

privilege of stopping in transit to complete loading.

: Accordingly, the Court should review the rigid oni

sterile opinion of the Court of Appeals in order to re-

move the uncertainty arising from the conflict between

the Third and Seventh Circuits. 3

III.

If the Body of Case Law Interpreting Section

6 of the Interstate Commerce Act Is Applicable to

the Contract Motor Carrier Provisions of Section

21805) of the Act, Then the Case at Bar Is Not

Within the Spirit of Section 218(a), Although It

May Be Within Its Letter.

Section 218(a) of the Act provides, inter alia, that

no contract carrier “shall demand, charge, or collect

compensation for such transportation different from the

charges filed” in the schedule of charges. (Appendix D,

p. D2) The Court of Appeals construed this language

to forbid absolutely any deviation, albeit an inadvertent

and harmless one, from the Schedule of Charges. By so

construing one narrow provision of Section 218 (a), the

Court of Appeals initially violated the cardinal rule of

ä 33 19

Reasons for Granting the Writ. :

statutory construction that all sections of an act in pari

materia are to be construed together and that no one

portion should be singled out for special emphasis. E. 9.

White v. United States, 305 US. 281.

Addressing itself to the inequity of holding the peti-

tioner liable for charges in a civil action where the ad-

mitted terms of the agreement explicitly prohibited such

charges, the Court of Appeals stated: |

“Such instances of hardship may not be per-

mitted to destroy the more far-reaching need to

maintain respect for the rates established under the

Commission's procedure and which other shippers

and contract and common carriers alike must be

able to rely upon as realistic facts rather than a

screen which conceals illegal private acme ei f

(Appendix A, p. A9)

Petitioner hastens to point out that there ‘is not one

scintilla of evidence in the record to support a conclu-

sion that the filing of the Schedule of Charges was a

screen to conceal illegal private practices. Moreover, as

Judge Van Dusen aptly states in his concurring opinion,

all of the cases cited by the majority in support of their

view, namely, A & F Trucking Corp. v. Liggett Drug

Co., 253 F. Supp. 699 (S.D.N.Y. 1966); Bottemueller v.

Wilson & Co., 57 F. Supp. 766 (W.D.Mo. 1944) and Min-

ton v. General Shale Products Corp., 52 Tenn. App. 60,

371 S.W.2d 808 (1963), involved deliberate attempts to

evade payment or collection of rates set forth in the filed

schedule of charges. Thus these cases are far from au-

thoritative precedents. ‘

It is fundamental that all laws should receive a

sensible construction. Moreover, a statute should be

20 : :

Reasons for Granting the Writ. |

. interpreted so as to further the intention of the enacting

body. This is especially vital where the language is

broad and far-reachirig. This Court, in the leading case

of United States v. ‘Kirby, 74 U.S. (7 Wall.) 482, cau-

‘tioned against bringing a situation within the letter f

a statute if it were not also within its spirit:

“General terms should be so limited in their ap-

‘plication as not to lead to injustice, oppression, or

an absurd consequence. It will always, therefore,

be presumed that the Legislature intended excep-

tions to its language, which would avoid results of

this character. The reason of the law, in such

cases, should prevail over its letter.” Id. at 486-87.

Likewise, in Sorrells v. United States, 287 U.S. 435,

and Hawaii v. Mankichi, 190 U.S. 197, this Court stated

it was entirely proper to imply exceptions in a statute

to obviate a construction which would otherwise be un-

just, unreasonable or absurd. This is especially true

where the circumstances surrounding the enactment of

the statute makes it unreasonable to assume that the

legislature intended such a situation to fall within the

statute. Church of The Holy Trinity v. United States,

143 U.S. 457. We believe that it is clear beyond a rea-

sonable doubt that Congress in enacting Section 218 (a)

of the Interstate Commerce Act was concerned solely

with protecting the competitive rights of common car-

riers. If so, the case at bar is certainly not within the

spirit of the Act.

In Perry v. r e On 383 U.S. 392, re-

‘hearing denied, 384 U.S. 934, this Court stated that

where the plain meaning of a statute will lead to a

result which is unreasonable and plainly at variance

2 for Granting the Writ. oy

with the legislative policy underlying the statute, it

will follow the purpose of the statute rather than its

literal words. Similarly, where an adherence to the

strict letter of a statute will lead to absurd conse-

quences, the spirit of the act should prevail over its

letter. Helvering v. Hammel, 311 US. 504.

Part II of the Interstate Commerce Act is a remedial

statute and, as such, should be construed liberally. Mc-

Donald v. Thompson, 305 U.S. 263, rehearing denied, 305

U.S. 676. The opinion of the Court of Appeals, how-

ever, is far from a liberal interpretation. A liberal con-

struction of Section 218 (a) should promote even-handed

justice and avoid a technical construction of language

which results in a windfall to the respondents. Cf.

United States v. Carolina Freight Carriers Corp., 315

U.S. 475. Furthermore, there is even a greater need

for a fair construction of Section 218(a) since the re-

sult reached by the Court of Appeals is in derogation

of the private contract rights of the parties.

Conclusion.

CONCLUSION .

The absence of a decision by this Court interpret-

ing Section 218 (a) of the Interstate Commerce Act and

‘the resulting conflict in the Circuits make it important

that the issue raised here be resolved.

For these reasons, this Petition for a Writ of Cer-

tiorari should be granted.

Respectfully ‘submitted,

THOMAS W. POMEROY, JR.

Jopp N. POFFINBERGER, JR.

J. RICHARD LAUVER

Counsel for Petitioner

ot Counsel,

KIRKPATRICK, POMEROY, LOCKHART

& JOHNSON

1100 Oliver Building

Pittsburgh, Pennsylvania 15222

APPENDIX A

Opinion of Court of Appeals -

UNITED STATES COURT OF APPEALS

For THE THIRD CIRCUIT

No. 16599 shes

1 November 21, 1967 Decided February 5, 1968

BOWSER AND CAMPBELL, a partnership, and

LLOYD H. BOWSER and STELLA CAMPBELL,

doing business as BOWSER AND CAMPBELL,

1 partnership, Appellants,

ze v.

| KNOX GLASS, INC., a corporation,

Appellee.

Appeal From the United States District Court for the

Western District of Pennsylvania

Before: Hastie,. Freedman and Van Dusen,

— Circuit Judges.

_ FREEDMAN, Circuit Judge.

| This appeal presents the question whether | a con-

tract carrier may collect from its shipper the difference

between its schedule of rates filed with the Interstate

Commerce Commission and the lower rates it actually

charged under its arrangement with the shipper which

were inadvertently omitted from the schedule. The dis-

trict. court held that the carrier was barred from re-

covery: 264 F.Supp. 522 (W. D. Pa. 1967):

a Plaintiff, a contract motor carrier regulated by the

Interstate Commerce Act, 1 performed services for de-

1. Interstate Commerce Act $$ 201, et seq., 49

U.S.C. §§ 301, et seq.

A2

. appendia 4.

fendant pursuant to contract. The contract —

involved was executed on May 12, 1958, and provided

that the carrier should be compensated in accordance

with the minimum rates fixed in a designated schedule

of charges, its supplements and reissues. The schedule

of charges, filed with the Interstate Commerce Commis-

sion, was issued on April 28, 1958, effective May 1, 1958,

and was in effect during the period here involved. In

practice the charges actually made and collected were

less than those required by the scheduled rates but

were what the parties had agreed upon. A small fee

was charged for stops in transit, instead of treating

each stop as an independent shipment and applying to

it the applicable minimum rate as the schedule re-

quired. The district court found that the carrier in-

advertently and mistakenly failed to file a schedule

which would accord with the actual practice.

An investigation by the Interstate Commerce Com-

mission disclosed the departures from the schedule of

charges, and in consequence the Commission instituted

successful criminal proceedings against the carrier and

the shipper for violation of the Interstate Commerce

Act. As a result of the investigation the carrier amended

its schedule of charges effective January 25, 1964, to

reflect the existing practice of the parties. Shortly after

the criminal proceedings were instituted the present

‘parties on August 21, 1964, entered into an agreement

in which the carrier acknowledged that the charges it

- had collected were what it had in fact agreed upon with

thé shipper and therefore promised that it would make

, Ro.claim for underchtarges. Ae |

_ Appendia A.

The carrier later brought the present action to re-

cover from.the shipper $26,978.32, constituting the

undercharges for the period from January 24, 1960,

which was free from the bar of the Pennsylvania stat-

ute of limitations.2 After a nonjury trial the district |

court entered judgment in favor of defendant on the

ground that it would be unconscionable to permit the.

carrier to recover. The court also reasoned that the

amount of the undercharges would be cancelled out by

the shipper’s right to an equal amount as damages for

the carrier’s failure to file the proper rate, although no

counterclaim for this had been pleaded by the shipper.

‘ If plaintiff were a common carrier it clearly would

be entitled to recover the undercharges regardless of

the reason for the charge to the shipper of less than

the rate filed with the Commission. More than fifty

years ago Mr. Justice Hughes in announcing the right

of a common carrier to recover the undercharge from

an innocent customer said: “Deviation from [the filed

rate! . . . is not permitted upon any pretext. Shippers

2. Act of March 27, 1713, 1 Sm. L. 76, f 1, as

amended, 12 Purdon’s Pa. Stat. Annot. § 31.

3. Section 217(b) of the Interstate Commerce Act

— to common carriers by motor vehicle pro-

pay epee | :

8 “(b) No common carrier by motor vehicle

shall charge or demand or collect or receive a

greater or less or different compensation for trans-

rtation or for any service in connection therewith

tween the points enumerated in such tariff than

the rates, fares, and charges specified in the tariffs

in effect at the time.. . 49 U.S.C. § 317 (b).

See the substantially identical § 6 C) applicable to

8 and other common carriers. 49 U.S.C. §

4 cE Appendiæ A.

are charged with notice of it, and they as well as

the carrier must abide by it. . . . Ignorance or misquota-

tion of raf sis not an excuse for paying or charging

either less or more than the rate filed. This rule is un-

deniably strict and it obviously may work hardship in

some cases, but it embodies the policy which has been

adopted by Congress.. Louisville & Nashville Rail-

road Co. v. Maxwell, 237 U.S. 94, 97 (1915). Similarly,

Pittsburgh, Cincinnati, Chicago ck St. Louis Railway Co.

v. Fink, 250 U.S. 577 (1919). This. policy prevents the

application of the doctrine of estoppel.4

The problem is whether the same result is required

in the case’ of a contract carrier. The regulation of con-

tract carriers is a relatively new development arising

“out of the use of motor vehicles. Motor carriers became

. _ subject to federal regulation by the Motor Carrier Act

“of 1935 amending the Interstate Commerce Act.5 The

statute 2 requires contract carriers to file their rates with

the Interstate Commerce Commission and in language

* substantially the same as that relating to common

carriers proscribés.the charging of a rate different

from the filed rate.6 The shipper urges upon us, how-

ever, that a distinction exists because the Interstate

ee. Pités „ Cincinnati, Chicago & St. Louis

Railway Co. v. c, supra at 582-83.

8. Interstate Commerce Act §§ 201, et 260. 40

U.S.C. §§ 301, et seq.

G. Section 218 (a) of the Interstate Commerce Act

provides:

“No such [contract] carrier shall demand, — rt ae

or collect com tion for such on

different from the charges filed in 2 — with

this paragraph... . .” 49 U.S.C. §318fa).

. , all

> cr l N

AS

Appendiæ 4.

Commerce Act contains a specific provision condemning

discrimination among shippers by a common carrier?

but makes no similar provision in relation to a contract

motor carrier. It points to the Supreme Court’s

recognition that the policy against discrimination by a

common carrier among shippers is inherent in the pur-

pose of the statute.9 ; *

It is true that the regulation of contract carriers

‘is not designed to prevent discrimination among ship- |

pers, 06 it is in the cans of common carriers. The pur-

7. Section 216(d) of the Interstate Commerce Act,

applicable to motor carriers, provides:

“It shall be unlawful for any common carrier by

motor vehicle engaged i in interstate or foreign com-

merce to make, give, or cause any undue or un-

reasonable preference or advantage to any particu-

lar person, . or description of traffic, in any re-

spect whatsoever; or to subject any particular per-

son; . . . or description of traffic to any unjust dis-

crimination or any undue or unreasonable prejudice

or disadvantage in any respect whatsoever: Pro-

vided, however, That this subsection shall not be

construed to apply to discriminations, prejudice, or

disadvan to the traffic of any other carrier of

whatever ription.” 49 U.S.C. §316(d). See the

substantially identical §3, par. (1) applicable to

railroads and other common carriers.

8. Indeed, §218(a) of the Interstate Commerce

Act provides:

“Nothing herein provided shall be so construed as

to require . [contract] carriers to maintain the

same rates, rules and 1 — for the same

waste). for all en er. . 49 U.S. C.

a

9. Louisville & Nashville Railroad Company v

Maxwell, supra; Pi h, Cincinnati, Chicago & St.

Louis Railway Co. v. *

A6 |

Appendia 4.

pose in regulating contract carriers is to prevent de-

structive competition between contract carriers and

common carriers and among the contract carriers

themselves.19 The statute therefore originally au-.

- thorized the Commission to regulate only the minimum

rates filed by contract carriers. 11 In 1957 the statute .

was amended to require contract carriers to file their

10. See H.Rep. No. 895, 85th Cong., 1st Sess., 2

U.S. Code Cong: & Admin. News 1406 (1957) ; Ex Parte

No. MC-12, Contracts of Contract Carriers, 1 MCC 628,

. 629-31 (1937); Statement by Senator Wheeler, explain-

ing Motor Carriers Act, 79 Cong. Rec. 5657 (1935) ; Reg-

ulation of the Transportation Agencies, S.Doc. No. 152,

73d Cong., 2d Sess. 33-34 (1934); S. Rep. No. 482, 74th

Cong., 1st Sess. 2 (1935).

11. Section 218(b) of the Interstate Commerce

Act provides: * f :

“Whenever, after hearing, upon complaint or

upon its own initiative, the Commission finds that

any minimum rate or charge of any contract car-

rier by motor vehicle, or any rule, regulation, or

practice of any such carrier affecting such min-

imum rate or charge, or the value of the service

- thereunder, for the transportation of passengers

or property or in connection therewith, contravenes

the national transportation policy declared in this

Act, or is in contravention of any provision of this

chapter, the Commission may prescribe such just

and reasonable minimum rate or charge, or such

rule, regulation, or practice as in its judgment may

wde necessary or desirable in the public interest and

to promote such policy and not be in contra-

vention of any provision of this chapter. Such

minimum rate or charge, or such rule, regulation,

or practice, so prescribed by the Commission, shall

ve no advantage or preference to any such carrier

competition with any common carrier by motor

ao to this chapter. 49 U.S.C.

=

27

Appendiz A.

actual charges as well as their minimum rates.12 ia &

result, there was thus conferred on common carriers a

right of knowledge and surveillance of the actual com-

| petition from contract carriers.13 |

The fact that the policies underlying the 3

of common carriers do not coincide completely with

those relating to contraet carriers must be considered

in relation to the basis for permitting a carriers re-

covery of undercharges. A common carrier's recovery

of the preferential discount fully repairs the discrimina- _

tion among its shippers by the deviation from its pub-

lished tariff, whereas a contract carrier’s recovery of

a discount deviation from the published rate will not

retrospectively return the business which may have

been taken from a competing common carrier or retro-

spectively restore a common _carrier rate which may

have been depressed by the contract carrier’s unlawful

discount. }

This Sitterence, sai 8 only a Sane fac-

tor and is not enough to justify a disregard of the gen-

eral policy that the rate filed must be observed, a policy

which pervades the regulation of contract as well as

common carriers and which is enforced by permitting 7

any undercharges to be recovered in order to preserve

the integrity of the filed rates. In the case of both the

common and the contract carrier the refusal to validate

the economic distortion by such doctrines as agreement,

estoppel or unclean hands is a deterrent weapon in the

12. Act of 1 13, 1957, P. L. 85-124, 71 Stat.

343,49 U.S.C. § 318

oa 13. H.Rep. No. 895, 85th Cong., Ist Sess., 2 US.

Code — & Admin. News 1406, 1407 (1957).

A8 | |

Appendia 4.

enforcement of the statute and the public policy which

underlies it. In the case of contract carriers it discour-

‘ages pressure by powerful shippers for discounts, which

create competition destructive to common carriers as

well as to other contract carriers, by making it clear

that the undercharges will accumulate and may always

be recovered by the contract carrier within the period

of the statute of limitations. For the same reason it

also discourages the acceptance by shippers of discounts

on

from contract carriers in the ir tae course of com-

petition. 14

It is of no legal entities that the rate which the

parties agreed upon among themselves would probably

have been approved if it had been filed with the Com-

mission. The forum for dealing with the schedule of

charges is the Commission. Courts cannot in effect

validate illegal rates long after the event, especially

when in the interim the contract carrier’s competitors

other contract carriers and common carriers — have

relied upon the published charges.

The innocence of the shipper in relying upon the

carrier to obtain approval of the rate they had agreed

on is equally unavailing. The rate filed is a matter of

| — record of which the shipper must take notice at

his peril. The hardship which is urged upon us is one

which has already been dealt with in cases involving |

common carriers and has been found inadequate to

alter the policy underlying the integrity of the schedule

14. See Minton v. General Shale Products Corp.,

52 Tenn. A. 60, 371 S. W. 2d 808, 813 (1963); Johnston v.

L. B, Harts Stores, Ine. 202 Minn. 132, 2717 N. W. 414,

Appendiæ A.

of charges.15 Such instances of hardship may not, be

permitted to destroy the more far-reaching need to

maintain respect for the rates established under the

Commission’s procedure and which other shippers and

contract and common carriers alike must be able to rely

upon as realistic facts rather than a screen which con-

ceals illegal private practices.

Although the question has not often been presented

under the federal statute, the view we take finds sup-

port in the few decisions which are reported. 18 In the

several states where statutes regulate intrastate car-

riers and contain provisions quite similar to those of

the Interstate Commerce Act, the unbroken trend of

decisions is to the same effect.17

The applicable rule cannot be 8 by the

reasoning, which the distriet court accepted, that the

failure to file the rate agreed on with the shipper

amounted to a breach of contract. for which the dam-

ages are to be measured at precisely the amount of the

15. Louisville & Nashville Railroad Co. v. Max-

well, supra at 97; Pittsburgh, Cincinnati, Chicago & St.

Louis Railway Co. v. Fink, supra at 582.

16. Minton v. General Shale Products Corp. supra.

See Bottemueller v. Wilson & Co., 57 F.Supp. 766 ——

Mo. 1944) ; A & F Trucking Corp. v. Liggett Drug-Com

pany, 253 F.Supp 699 (S.D.N.Y. 1966).

17. Johnston v. L. B. Hartz Stores, Inc., supra;

tbe): B Alicandro, 317 Mass. 382, 58 N.

E. 2d 155

Butler v. Bell Oil & Refining Co., 70 Cal. App.

alls

$3728, 161 P. 2d 559 (1945); Hawley v. Little F

& Mercantile Co., 200 Minn. 165, 19 8 (1945

9 General Mills, Inc., 329 U.S. 433 (1947

W. S. Dicky Clay Mfg. Co. v. Corder, 310 F.2d 764

Cir.), oh Ss tye 908 (1963).

).

);

(5

A9

A10

Appendiæ A.

undercharges, thus eliminating the carrier’s claim. In

fact, ‘the shipper filed no counterclaim for such dam-

ages. But regardless of this procedural element, to

recognize a shipper’s right to such damages would be

to destroy the established principle by a change in form

of the defense. Such a defense would not be available

in an action by à common carrier,18 and since we have

determined that the same principle must be maintained

as to preferential charges by a contract carrier, it fol-

_lows that the defense must be equally unavailing in the

present action. |

The judgment of the district court in favor of the

defendant and against the plaintiff will be reversed and

the cause remanded for further proceedings consistent

with this opinion.

Van Dusen, Circuit Judge, concurring.

The schedule of rates filed with the LC. C. inad-

vertently omitted the provision, agreed to and followed

by the parties, granting the shipper the privilege to

stop a shipment to complete loading for an agreed

charge of $6, later $10, for each additional stop. (Find-

ings 8 and 9 on PP. 291A-292A and 24 on PP. 295A-

296A) These charges were paid to the appellee carrier

even though they were not specified in the filed tariff

(Findings 16 at P. 293A). The tariff of at least two

other common carriers in the area during the years in

18. Illinois Central Railroad Co. v. Henderson

Elevator Co., 226 U.S. 441 (1913) ; Pettibone v. Richard-

son, 126 F.2d 969 (7 Cir. 1942); T & M Transp. Co. v.

S. W. Shattuck Chemical Co., 148 F.2d 777 (10 Cir.

1945); F. Burkhart Mfg. Co. v. Fort Worth & D. C. Ry.

Co., 149 F. 2d 909, 910 (8 Cir. 1945). ;

%

©.

*

—— ͤ ÿUJ— rer ay

Ali

Appendiz A.

question (1960-1964) provided for the privilege of

stopping in transit to complete loading with a charge

of $10 for each stop. (Findings 12-15 on PP. 292A-

293A). :

No tete competition could have resulted in

this situation from charging the rates agreed to and

followed by the parties since they were identical to the

rates being charged by other common carriers. There

seems no reason why 49 USC 318 should not be con-

strued in accordance with the rule that a statute should

be interpreted in each case in the light of the mischief

congress sought to remedy and the object it wishes to

attain. See City of Newark v. United States, 254 F. 2d

93, 97-98 (3rd Cir. 1958), and U. S. ‘Supreme Court cases

there cited, where this court said at P. 97:

“A situation not. within the intention of the

_ enacting body, though it is within the letter of the

statute, is not within the statute.”

The cases cited in footnote 16 above 3 deliberate

attempts to evade the published tariffs.

In view of the unusual circumstances in this record,

the appellee may well seek by petition for a writ of cer-

tiorari authorization. from the Supreme Court of the

United States to reach the fair and just result achieved

by the opinion of the able district judge in spite of the

sweeping language of the Supreme Court of the United

States’ decisions cited in the opinion of this court,

which language I believe is binding on this court.

Appendiæ B.

‘APPENDIX B

Judgment of Court of Appeals

UNITED STATES COURT OF APPEALS

8 For THE THIRD CIRCUIT

| No. 16,50 99 5

BOWSER AND CAMPBELL, a partnership, and

- LLOYD H. BOWSER and STELLA CAMPBELL,

doing business as BOWSER AND CAMPBELL,

a partnership, | Appellant 8;

vs.

_KNOXx GLASS, INC., a corporation,

Appellee.

Appeal From the United States District Court for the

Western District of Pennsylvania |

Present: . HASTIE, Chief Judge, and FREEDMAN and

VAN DUSEN, Circuit Judges.

JUDGMENT

This cause came on to be heard on the record frgm

the United States District Court for the Western Dis-

trict of Pennsylvania and was argued by counsel.

On consideration whereof, it is now here ordered 2

and adjudged by this Court that the judgment of the

said District Court, filed February 20, 1967, be, and the

same is hereby reversed, with costs, and the cause is

remanded for further proceedings consistent with the

opinion of this Court.

| ATTEST: °

Tuomas F. QUINN

February 5, 1968 ,

Ane C.

APPENDIX O

Findings of Fact, Conclusions of Law and Order of

United States District Court Dated February 20, 1967

UNITED STATES DISTRICT COURT

WESTERN DISTRICT OF PENNSYLVANIA

Civil Action No. 66-106.

‘BOWSER AND CAMPBELL, a partnership, and LLOYD

H. BOWSER and STELLA CAMPBELL, doing business

as BOWSER AND CAMPBELL, a partnership,

4 Plaintiffs,

' KNOX GLASS, INC., a corporation,

Defendant.

3 February 20, 1967

Marsh, District Judge. 7 |

In this action the plaintiffs, Bowser and Campbell,

“individually and as a partnership, doing business as a

contract motor carrier, seek to recover $26,978. 321 ad-

ditional charges for transporting glassware and cartons

from the defendant, Knox Glass, Inc. After non-jury .

trial, the court makes the following :

FINDINGS OF Fact

1. Plaintiffs in this action are Bowser and Camp-

bell, a partnership, and Lloyd H. Bowser and Stella

Campbell, individuals, doing business as Bowser and

Campbell, a partnership, hereinafter called Carrier.

; 4, ‘The agreed amount of the claim (T., pp. 9-10;

plaintiffs’ Ex. 3). PTS ar bed re Seats of

—— January 24, 1 are barred by the Statute of

Eimi ons.

2. Defendant, Knox Glass, Inc. (Knox), is a cor-

poration organized under the laws of the State of Penn-

sylvania, and has its principal r in Knox, Pennsyl-

vania.

3. At all relevant times, Carrier was a contract

motor carrier regulated by the applicable provisions of

the Interstate Commerce Act, and as such contracted

with Knox to haul its products from Knox, Marienville,

Parker, Oil City, Kane and Sheffield, all points of origin

in Pennsylvania, to destination points in Ohio and New

York. Knox was a manufacturer of glassware with man-

ufacturing facilities located at Knox, Marienville and

Parker, Pennsylvania, and 66 facilities at Kane

and Sheffield, Pennsylvania.

4. The several shipments of glassware and empty

packing cartons shown on plaintiffs’ Exhibit 2 were

made by Knox\as shipper and hauled by Carrier as a

contract carrit =

5. During the ane of ue here involved, Car-

rier performed services as a contract motor carrier for

Knox pursuant to a written transportation agreement

dated May 14, 1958, executed by both parties, Carrier

and Knox (defendant's Ex. F).

6. The transportation agreement (Ex. E) pro-

vided that the Carrier. would be compensated for trans-

portation service in accordance with MC 1218, MF-

I. C. C. No. 3 Schedule of Charges for Transportation

as a Contract Carrier’, rg perc thereto and reissues

thereof.” <7 |

f

Roe C3

Appendia C.

7. “MC 1218, MF LC.C. NO..3 SCHEDULE OF

CHARGES FOR THE TRANSPORTATION, AS A

CONTRACT CARRIER” ‘was issued April 28, 1958,

effective May 1, 1958 plaintiffs’ Ex. 1; defendant's

Ex. C). This schedule was in effect during the period

of time here involved. The schedule did not contain a

written rule or; regulation affording Knox the privilege ©

of stopping a shipment to a loading. (See: Ex.

C, p. 4, Item 40 (A).) sheng

8. Despite the absence in the e Schedule of Charges

of a regulation allowing the privilege of stopping in

transit, the Carrier, as a contract motor carrier, during

the period of time here involved and prior thereto, had

afforded Knox and its predecessor, Knox Glass Asso-

ciates, Inc., stopping for loading and unloading privi-

leges in connection with the movement of the Knox

products.

9. For all of the shipments shown on Carrier’s

Exhibit 2, Knox paid Carrier an agreed charge of $6,

later $10, for additional stops at the Pennsylvania Knox

plants to complete loading of goods. The freight charges.

were always computed on the aggregate weight of the

shipment in Carrier’s truck as it proceeded to destina-

tion: (Pretrial Stipulation, p. 3; T., pp. 56-57; plaintiff's

Exs. 2, 4, 5, 6, 7.) A

| 10. ü ee en dne Uu 15

Harold R. Bowser, its authorized representative, and

K ,nox, dated August 21, 1964 (defendant’s Ex. G), Car-

rier admitted that the freight charges which it collected

from Knox during the period involved in this suit were

C4

9 Appendia 0.

thie en cet pen ly the paste a Ta edition, Mr.

Bowser, appearing as a witness for Carrier, admitted in

his testimony that the charges collected were the

charges which Carrier had intended to charge and which

the parties had agreed upon.

11. The Schedule of Charges MC 1218, MF I. C. C.

NO. 3 (defendant’s Ex. C) was supplemented effective

January 25, 1964, to provide a published rule permitting

defendant to stop a shipment to complete loading (de-

fendant’s Ex. D) in conformity with the long-existing

understanding, billing practice, and the actual contract

between the parties. |

12.. During the period involved in these proceed-

ings, there were other motor carriers, including W. I.

Womeldorf & Sons, a common carrier used by Knox

for the same type of transportation and in the same

areas for which Carrier’s services were employed by

Knox (T., pp. 71-73).

ee W. I. Womeldorf & Sons, according to its tar-

iff effective July 28, 1960, provided common carrier

truck service for hauling glass containers and cartons -

from points in Pennsylvania to points in Delaware,

Maryland, New Jersey and New York (defendant's

Ex. I).

2. 3 2: “[T]hat both

B&C [Carrier] cout Wnals anton that the chara an

and collected [for more than 30 years] were on

rates, rules and provisions mutually desired, intended

and agreed upon, and, accordingly, the charges so paid

are qqnsttered, by ‘bath: to have heen those: actually

contracted for?’

Cc

Appendiæ O. ;

14. The common carrier tariff of Womeldorf pro-

vided the same basic level of rates and resulting

charges as were paid by Knox to Carrier. In addition,

Womeldorf’s tariff provides the privilege of stopping

in transit to complete loading with a charge of $10

for each stop-off (defendant's Ex. I, Rule No. 8, Stop-

ping: in- Transit). :

15. The tariff of another common carrier, Motor-

way Corporation (defendant’s Ex. J), likewise pro-

vides a competitive rate to points in Ohio. The Motor-

way Corporation’s tariff (Ex. J, Item 50) provides a

stop-off privilege to complete loading at a charge of

$10 per stop. 2

16. Carrier ä $6, and later $10, for addi-

tional stops at the Knox plants to complete loading,

although this was not specifically ree in its filed

Schedule (Ex. C). :

17. During an investigation by representatives of

the Interstate Commerce Commission in the latter part

of 1963, Carrier was “ordered” to collect undercharges

from Knox, because the investigation disclosed that

Carrier's billings were based on aggregate weight, re-

gardless of the number of points of origin where addi-

‘tional stops to pick up freight were made, in disregard

of the.provisions in the Schedule of Charges (defend-

ant’s Ex. C, Item 40(A)). Subsequently, Carrier

amended its Schedule of Charges, effective January

25, 1964 (Ex. D) to reflect the actual contract between

and the existing conduct and practice of the parties.

Despite this amendment, separate criminal proceedings

were filed by the Interstate Commerce Commission

ce

Appendia C.

against Carrier in March, 1964, and against Knox in

June, 1964, alleging violations of the Interstate Com-

merce Act prohibiting collection and payment of less |

than published charges (T., pp. 94-110).

18, Because of the criminal actions, Knox con-

sulted S. Sidney’ Eisen, Esquire, a transportation con-

sultant, who after meeting with representatives of Car-

rier and the Interstate Commerce Commission prepared

an agreement wherein Carrier acknowledged that the

charges which had been collected were the charges the

parties had agreed upon and further released Knox

from any future claim for such charges (defendant’s

Ex. G; T., pp. 115-116).

19. Pursuant to the — with the 0

Commerce Commission and the terms of the agreement

(Ex. G), Knox entered a plea of nolo contendere in the

criminal action brought against it by the Interstate

Commerce Commission (T., pp. 111-112).

20. Because of alleged “pressures” for collection

of undercharges which Carrier claims were being ex-

erted by representatives of the Interstate Commerce

Commission, Mr. Eisen arranged a meeting with repre-

sentatives of the Interstate Commerce Commission in

Washington on November 10, 1964, where Mr. Bowser

and his counsel were informed that the Interstate Com-

merce Commission was not concerned with Carrier’s

pursuing a claim for the undercharges (T., pp. 119-122).

3 The only occasions that a representative of the

Interstate Commerce Commission made any statements

about collection of undercharges was in the latter part

ee

ee eee

C7

Appendiæ C.

criminal actions, prior to the time of the amendment

to the Schedule of Charges (Ex. D), and prior to the

time of the agreement between the parties (Ex. G), and

their meeting on November 10, 1964 with the repre-

sentatives of the Comission in Washington, D. C. Car-

rier seems to justify bringing this civil action because

of alleged threats of criminal penalties made in 1963 by

employees of the Interstate Commerce Commission

Motor Vehicle Bureau if Carrier did not institute suit

to collect the additional transportation charges. ‘

22. The criminal charges brought against Carrier

in March, 1964, referred to in Finding 17, were dis-

posed of in 1964. The complaint in this action was filed

on January 21, 1966, a time when there was no real-

istic threat of further criminal prosecution. We do not

give any credence to Mr. Bowser’s testimony indicating

that pressures of the representatives of the Interstate

. Commerce Commission were responsible for bringing

this civil action. (T., pp. 141, 143, 149-152.)

223. The freight charges involved in this action

billed by Carrier and paid by Knox, including the.

charges for stopping in transit at the Pennsylvania

Knox plants to complete loading were in accord with

the contract between the parties.

224. In the publication of Carrier's MC 1218, Mr

LC.C. NO. 3 Schedule of Charges in effect at the time

involved in this proceeding (Ex. C), Carrier inadvert-

. ently and mistakenly failed to iriclude or see to the

inclusion of a rule whereby shipments subject to truck-

load rates set out in the Schedule of Charges may be

stopped at points of origin for partial loading, and the

C8 f

Appendiæ C.

application rate on such shipments will be the truckload

rate provided in the Schedule. Cf. with the amendment

to the Schedule, Exhibit D, Item 40 (A), supplementing

Exhibit C. N ä Coe!

25. In the agreement between the parties dated

August 21, 1964 (Ex. G), Carrier agreed it would not

make any claim for alleged undercharges against Knox.“

3. The parties agreed, inter alia: “[T]Hat upon

of interstate motor carrier regulation, the oral

arrangements and agreements, as aforesaid, were

sought to be reduced to writing, and, as most pertinent

here, the rates and charges as well as the rules and

regulations applicable in connection with them were to.

be published by B&C [Carrier] in a Schedule of Mini-

mum Charges; that, in effecting such publication, B&C

inadvertently omitted complete provisions relating to

the ones = transit to complete loading at the vari-

ous Knox ts in Pennsylvania; that neither B&C nor

Knox were aware of such omission and both, respec-

tively, billed, received and paid freight charges based

upon arrangements and agreements that always were

intended and understood to be in effect; and, that both

B&C and Knox agree that the charges so paid and col-

lected were based on rates, rules and provisions mutual-

ly desired, intended and agreed Be pen and, accordingly,

the charges so paid are conside by both to have been

those actually contracted for.” (Ex. G.)

4. Paragraph “3” of Exhibit G provides: B&C

[Carrier] agrees that it will not, at any time, either

now or in the future, make any claim or charge of any

kind or nature that the inadvertently published Schedule

of Minimum Charges, rather than the mutual agree-

ments or arrangements, reflect the correct and P ed

rates freight charges and, accordingly, B&C er

agrees that it will not, at any time, either now or in the

future, make any claim for alleged unde with

respect to the ht charges assessed by it

Knox, and so paid by Knox, for the transportation of

Appendix 0.

DISCUSSION

It is clear that absent the Interstate Commerce Act,

§ 318(a), Title 49 U.S.C.A., this contract action would :

result in judgment for the defendant, Knox.

The evidence clearly shows that the written agree-

ment (Ex. F) and the Schedule of Charges incorporated

therein did not express what the parties intended, and

that what the parties intended was omitted therefrom

inadvertently and by mistake. By clear, precise and

convincing evidence, it was proved that Carrier, which

seeks to enforce the Schedule of Charges, a part of the

written agreement, has admitted and acknowledged that

it did not express in the Schedule of Charges what the

parties intended, and that what the parties intended

was omitted from the Schedule of Charges by inadver-

tence and mistake. See: Dunn v. Orloff, 218 A. 2d 314

(1966); In re Boyd’s Estate, 146 A. 2d 816 (1958) ;

Ward v. Zeigler, 132 A. 798 (1926).

Moreover, the contract carrier was required by law

to file with the I. C. C. a rate schedule in conformity

with the actual contract made with Knox. Since the

filing of a correct tariff was its sole responsibility,

Carrier’s failure to do so was a breach of its contractual

duty to Knox. To the extent that Knox was damaged

thereby, it would be entitled to damages from Carrier,

thus negating any undercharges to which Carrier might

be entitled if the strict rule applicable to common car-

riers by rail — be applied.

its products and, more particularly, the stopping of |

shipments in transit at the Knox plants located in Penn-

sylvania to permit the completion of loads. 7

C10 ,

Appendiæ C.

Despite its admission and agreement not to make

any claim for alleged undercharges, and its unvarying

conduct over the years in billing Knox according to the

actual contract between the parties, and despite the

unconcern of the I. C. C., Carrier contends tHat it is

‘entitled to recover from Knox the difference between

the transportation charges actually paid and the charges

computed on the basis of the filed, albeit erroneous,

Schedule of Charges (Ex. C). It contends that under

the law no act or omission on its part may estop it

from collecting less than the filed charges. In short,

it insists that the law of contracts and equity must

give way to the statutory requirement as is the case

if Carrier were a common carrier.5 We do not agree.

Under the facts and circumstances of this case, we

think the intentions of the parties expressed by the

parol terms of their private contract, and the disclaimer

of Carrier, should prevail.

Contract carriage is grounded on individual con-

tracts between shippers and contract carriers. It is not

based on a continuing offer to provide service to the

general public, as is common carriage. Common carriage

5. Pittsburgh etc. Ry. Co. v. Fink, 250 U.S. 577

(1919); Louis. & Nash. R. R. v. Maxwell, 237 U.S. 94

(1915) ; py etn etc. Ry. Co. v. Robinson, 233 U.S.

173 (1914); Penna. R. R. Co. v. * — Coal Co.,

230 U.S. 184 (1913). We think it is probable that the

law settled as to common Age ag in interstate com-

merce by rail would a app rf to common carriers by.

motor vehicle. (Section (b), 49 U.S.C.A.) But see,

National Van Lines v. United States, 355 F. 2d 326 (7th

Cir. 1966), where contractual principles were —

in a common motor carrier case. a

1

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3

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1

Cll

Appendiz C. |

is regulated to protect the public from price discrimina-

tion; contract carriage is regulated to protect common

carriers from cut-throat competition by contract car-

riers (§ 318(b), 49 U.S.C.A.). Subject to that limita-

tion, contract carriage is special and individual; its

purpose is to meet the needs of the particular shipper.

Thus the shippers need not look at the rates filed by

the contract carrier, whereas the shipper by common

carrier is absolutely. bound al the filed tariff of the

common carrier.

Since the rates actually charged Knox by Carrier

were competitively comparable to those charged by

common carriers operating in the vicinity, it is obvious

why the I. C. C. expressed no concern in any action to

enforce collection of the alleged undercharges. No com-

mon carrier was injured competitively by Carriers mis-

take. On the other hand, if the rates mistakenly filed

by Carrier were enforced by this court, not only would

effect be given to Carrier’s mistake and omission; but

it would also enable Carrier to. collect exorbitant rates

for past services far in excess of those charged by

common carriers N similar services during the

same period.

It is our opinion that i in this action between ee

5 to contract carriage, as distinguished from common

carriage, contract principles should be applied in de- 5

termining their rights and liabilities and not the rates

filed in the erroneous Schedule of Charges. Accordingly,

judgment will be entered in ante of Knox. .

Appendia C.

CONCLUSIONS: OF LAW

1. This court has jurisdiction to hear and deter-

mine this action, which arises under an Act of Con-

gress regulating commerce, i. e., the Interstate Com-

merce Act, 28 U.S.C. § 1337. :

2. Carrier as a contract carrier was responsible

under the Interstate Commerce Act for preparing and

filing with the Interstate Commerce Commission a cor-

rect Schedule of Charges in accordance with = con-

tract with the shipper, Knox. is

3. The failure by Carrier to publish a correct

Schedule of Charges does not subject the defendant

Knox ‘to liability for payment of additional charges in

accordance with an erroneous Schedule where both the

shipper and the carrier agree that the Schedule does

not reflect the contract between the parties.

4. Although the Interstate Commerce Act pro-

vides that a contract carrier shall not charge less than

the rates specified in its schedule of charges, this pro-

vision does not subject a shipper “to liability to the con-

tract carrier for payment of schedule charges a

carrier admits are incorrect. :

5. Decisions of the Interstate Commerce iis

mission and legislative history of the Interstate Com-

merce Act clearly demonstrate that the purpose of con-

tract carrier regulation is to protect the common carrier.

6. So far as the purposes of economic regulation

of contract carriage are concerned they were completely

satisfied by the freight charges published by Carrier

—— ————— — — Wm

*

Appendiæ C.

(although incomplete by reason of the mistaken or in-

advertent omission of the stoppage in transit rule) in

view of the rates filed by the common carriers, W. I.

Womeldorf & Sons and Motorway Corporation.

7. In view of all of the facts in this case, to permit

Carrier, a contract motor carrier, to recover additional

hauling charges based upon its admittedly erroneously -

published Schedule of Charges would unduly and un-

conscionably enrich Carrier who is responsible for pub-

lishing such Schedule of Charges. Such a result would

be contrary to the purposes and principles of those sec-

tions of the Interstate Commerce Act which regulate

contract motor carriers. „

8. Judgment should be entered in favor of the

3 Knox.

order of Court

AND Now, to-wit, this 20th bay of February, 1967,

‘after trial to the court, Ir 1s ORDERED, ADJUDGED AND

DECREED that judgment be entered in favor of the de-

fendant, Knox Glass, Inc., and against the. plaintiffs,

Bowser and Campbell, a partnership, and Lloyd H.

Bowser and Stella Campbell, doing business as Bowser

and Campbell, a partnership; casts to be borne * the

plaintiffs.

/Signed/ Rage F. Mans ,

_ United States District Judge

1

SECTION 218 (a), INTERSTATE

ComMeERcE Act, Pr. I.

marr iy Stat. 561 (1935),

AS 49 U. S.C. § 318 (a)

§ 318. Schedules of contract carriers by motor vehicle

—Establishment, filing, and publication of

schedules and rules affecting rates; notice

of and hearing on 9 . undue

preferences

(a) It shall be the duty o every contract carrier

by motor vehicle to establish and observe reasonable

minimum rates and charges for any service rendered

or to be rendered in-the transportation of passengers

or property or in connection therewith, and to establish

and observe reasonable regulations and practices to be

applied in connection with said reasonable minimum

rates, farés, and charges. It shall bé the duty of every

contract carrier by motor vehicle to file with the Com-

mission, publish, and keep open for public inspection,

_in the form and manner prescribed by the Commission,

* schedules containing the actual rates or charges of such.

carrier for the transportation of passengers or property

in interstate or foreign commerce, and any rule, regula-

tion, or practice affecting such rates or charges and the

value of the service thereunder: Provided, That any

contract carrier serving but one shipper having rendered ö

continuous service to such shipper for not less than

one year may file’ reasonable minimum rates and

Apfindic D.

charges unless the Commission in any individual case,

after hearing, finds it in the public interest to require

the filing of actual rates and charges. No such contract

carrier, unless otherwise provided by this chapter, shall

| engage in the transportation of passengers or property

in interstate or foreign commerce unless the actual

rates or charges for such transportation by said carrier

have been published, filed, and posted in accordance

with the provisions of this chapter. Nothing herein

provided shall be so construed as to require such car-

riers: to maintain the same rates, rules and regulations

for the same services for.all shippers served. No re-

duction shall be made in any such charge either di-

rectly or by means of any change in any rule, regula-

tion, or practice affecting such charge or the value

of the service thereunder, nor shall any new charge be

established, except after thirty days’ notice of the pro-.

posed change or new charge filed in the aforesaid form

and manner but the Commission may, in its discretion

‘and for good cause shown, allow such change upon. less

notice, or modify the requirements of this subsection

with respect to. posting and filing of such schedules,

either in particulam instances, or by general order ap-

plicable to special or peculiar circumstances or condi-

ws tions. Such notice shall plainly state the change pro-

posed to be made and the time when such change will

take effect. No such carrier shall demand, charge, or

collect compensation for such transportation different

from the charges filed in accordance with this para-

graph, as affected by any rule, regulation, or practice

so filed, or less the minimum rate or charge as

may be prescribed by the Commission from time to

time, and it shall be unlawful for any such carrier, by

4

D3 ay 8 3

ö Appendiz D.

n turniahing of special services, facilities, or privi-

leges, or by any other device whatsoever, to charge,

accept, or receive compensation different from the ac-

tual rates and charges so filed, or less than the mini-

mum charges 80 prescribed: Provided, That any such

carrier or carriers, or any class or group thereof, may

apply to the Commission for relief from the provisions

of this subsection, and the Commission may, after hear-

ing, grant such relief to such extent and for such time,

and in such manner as in its judgment is consistent

with the public interest and the national transportation

policy declared in this Act. }

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