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NORTON v. SHOTMEYER

June 6, 1947

NORTON
v.
SHOTMEYER et al.



The opinion of the court was delivered by: MEANEY

This suit was instituted initially by Henry K. Norton as trustee of the New York Susquehanna & Western Railroad Company, to recover unpaid demurrage charges and interest thereon arising out of the alleged detention by defendants of certain cars of fuel oil for unloading beyond free time as prescribed by the applicable railroad tariffs. Defendants in their answer denied liability and by way of defense asserted an agreement alleged to have been made by the parties hereto, under which plaintiff is alleged to have agreed not to sue for any demurrage charges if defendants would not bring suit for claimed losses alleged to have resulted from plaintiff's negligence in causing delay in delivery.

Defendants, by way of counterclaim, seek to recover for losses allegedly suffered as a result of delays in delivery of fuel oil, on the grounds that the plaintiff was negligent in failing to maintain adequate equipment for delivery of defendant's cars to their sidings and was further negligent in permitting their switches to become frozen so that cars could not be delivered to their sidings, causing delay in the delivery of such cars, and resulting in injury and loss to the defendants. In addition, defendants by way of counterclaim seek to recover for damages alleged to have been suffered through the erroneous delivery by the plaintiff to the defendants of an 8000 gallon tank car of oil, representing the same to be defendants' oil, when in fact it was a car of oil consigned to the United States Navy, which, when the contents were mixed by defendants with their own fuel oil, adulterated the oil in their tank, thereby causing a loss for which damages are sought.

 To defendants' answer and counterclaim, plaintiff filed an answer and counterclaim. In his answer he denied that defendants' counterclaim stated any cause of action and denied generally the allegations contained therein.

 In his counterclaim plaintiff sets up a count for the value of the oil belonging to the United States Navy which was mistakenly delivered to the defendants and thereafter alleged to have been converted by them.

 The matter is presently before the court on plaintiff's motion for summary judgment pursuant to Federal Rules of Civil Procedure, rule 56, 28 U.S.C.A.following section 723c and is submitted on the pleadings, affidavit and documentary evidence.

 In the oral argument and in the briefs filed on this motion, the plaintiff has urged the additional defense of improper joinder, on the theory that the defendant may not properly join by way of counterclaim any alleged cause of action arising out of negligence, delays, loss or damage to shipments, with a suit by a carrier, for the collection of transportation charges including demurrage or freight charges. This contention is without merit in view of the ruling in Chicago & N.W.R. v. Lindell, 281 U.S. 14, 50 S. Ct. 200, 201, 74 L. Ed. 670, wherein the Supreme Court, in holding that shippers might properly determine claims shippers might properly determine claims for loss or damage in suits brought by carriers to collect transportation charges, stated: 'The practice of determining claims of shippers for loss or damage in suits brought by carriers to collect transportation charges is not repugnant to the rule prohibiting the payment of such charges otherwise than in money. The adjudication in one suit of the respective claims of plaintiff and defendant is the practical equivalent of charging a judgment obtained in one action against that secured in another. Neither is to be distinguished from payment in money.'

 The plaintiff argues that the cited case must be strictly construed and restricted in its application to circumstances based on the law of procedure existing in the State of California. In this court's opinion the words of the Supreme Court in the Lindell case, supra, do not permit of so ; circumscribed or restricted an interpretation, but contrarily, effectively establish the right of the shipper to diminish or defeat the carrier's claim by means of counterclaim for loss or damage. To the same effect see 13 C.J.S., Carriers, § 318, page 759.

 The suit was originally filed by the plaintiff for the recovery of demurrage charges arising from the alleged detention of certain tank cars. In support of his motion for summary judgment, the plaintiff has submitted proof by way of affidavits, documents and records, with which he seeks to prove that there is no genuine issue as to any material fact. This asserted proof is met by the defendant with equally effective affidavits and with certain documents and calculations that purportedly are prepared from records maintained by the defendant, of fuel oil deliveries received from the plaintiff. The discrepancies in the proofs offered by the parties are at once apparent. The defendant has entered a general denial and, if the proofs are to be believed, has stated a good defense. The proofs offered are of equal probative value. This court may not conclude therefore that there is no genuine issue of fact, nor may we assume to decide issues.

 The court's function on this motion is solely to determine whether there is a genuine issue of fact, and, having concluded that there is such genuine issue as to material facts in so far as the alleged demurrage charges are concerned, summary judgment as a matter of law may not be entered. Toebelman v. Missouri-Kansas Pipe Line Co., 3 Cir., 130 F.2d 1016.

 The defense is without merit and will not be allowed. An agreement such as that asserted by the defendant is void as against public policy and is in breach of the inhibitions of the Interstate Commerce Act, which provides in section 6, paragraph 7, 49 U.S.C.A § . 6(7), in part, as follows: ' § 6(7) Transportation without filing and publishing rates forbidden; rebates; privileges. No carrier, unless otherwise provided by this chapter, shall engage or participate in the transportation of passengers or property, as defined in this chapter, unless the rates, fares, and charges upon which the same are transported by said carrier have been filed and published in accordance with the provisions of this chapter; nor shall any carrier charge or demand or collect or receive a greater or less or different compensation for such transportation of passengers or property, or for any service in connection therewith, between the points named in such tariffs than the rates, fares, and charges which are specified in the tariff filed and in effect at the time; nor shall any carrier refund or remit in any manner or by any device any portion of the rates, fares, and charges so specified, nor extend to any shipper or person any privileges or facilities in the transportation of passengers or property, except such as are specified in such tariffs.

 Neither may the agreement be set up by the consignee as an estoppel against the carrier, precluding the collection of the full amount of transportation charges. Thus, the Supreme Court in Pittsburgh etc. R. Co. v. Fink, 250 U.S. 577, 40 S. Ct. 27, 28, 63 L. Ed. 1151, in referring to the section above quoted said: 'It was, therefore, unlawful for the carrier upon delivering the merchandise consigned to (the defendant) to depart from the tariff rates filed. The statute made it unlawful for the carrier to receive compensation less than the sum fixed by the tariff rates duly filed. (The defendant) as well as the carrier, must be presumed to know the law, and to have understood that the rate charged could lawfully be only the one fixed by the tariff.'

 The court in the Fink case then stated further: 'Nor can the defendant in error successfully invoke the principal of estoppel against the right to collect the legal rate. Estoppel could not become the means of successfully avoiding the requirement of the Act as to equal rates, in violation of the provisions of the statute.'

 To the same effect and particularly apropos are the words of the Court in Louisville & Nashville R. Co. v. Central Iron & Coal Co., 265 U.S. 59, 44 S. Ct. 441, 442, 68 L. Ed. 900: 'No contract of the carrier could reduce the amount legally payable, or release from liability a shipper who had assumed an obligation to pay the charges. Nor could any act or omission of the carrier (except the running of the statute of ...


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