Louisville Company v. United States (267 U.S. 395)/Opinion of the Court

This action was brought in the Court of Claims to recover the amount by which tariff rate freight charges on certain coal were reduced by government land grant deductions; and also to recover certain charges for switching and handling. The court made findings of fact, and gave judgment for defendant. 57 Ct. Cl. 268. One of the lines of appellant's railroad enters Alabama from the north and extends southerly, through Decatur, Birmingham, and Flomaton, to Pensacola, Fla., and thence easterly to River Junction, Fla. This is a land-aided line. Appellant has another line extending southwesterly from Flomaton to Mobile. At Mobile and Pensacola, it owns wharves and hoists for transferring coal from cars to boats, and has constructed switches from its main line to the wharves. All of these were built without government aid. The wharves and hoists at Mobile are operated by a coal company and those at Pensacola by appellant.

All the coal in question came from mines in the Birmingham district and was purchased by the United States for engineering work at Mobile, Pensacola, and other places on or near the Gulf, except 250 tons bought for the use of the United States steamship Tonopah. It was transported on government bills of lading and was carried in whole or in part by the use of such land-aided railroad. The coal was furnished to the United States under a contract with the Gulf States Coal Company of March 15, 1915, a contract with the Imperial Coal & Coke Company of August 21, 1916, advertisements, specifications, bids, and acceptances without formal contracts, between November 2, 1914, and September 10, 1917, and a bid and acceptance as of April 8, 1915, for the Tonopah.

The Court of Claims held that all shipments, except those made under the contract of March 15, 1915, were subject to land grant deductions. Appellant maintains that none was subject to the reduced rates. We are of opinion that all the coal, except that furnished the Tonopah, was delivered to and became the property of the United States before it was hauled by appellant, and was entitled to the reduced rates.

The general rule is that, if a consignee accepts a shipment, he becomes liable as a matter of law for the full amount of freight charges. Louisville & Nashville R. R. v. Central Iron Co., 265 U.S. 59, 70, 44 S.C.t. 441, 68 L. Ed. 900; Pittsburgh, etc., Ry. Co. v. Fink, 250 U.S. 577, 580, 40 S.C.t. 27, 63 L. Ed. 1151. Under the Land Grant Acts, the United States was entitled to the reduced rates if the coal when hauled was its property. Acts of May 17, 1856, June 3, 1856, and March 3, 1857, 11 Stat. 15, 17, 200; Acts of April 10, 1869, and March 3, 1871, 16 Stat. 45, 580; Act of March 3, 1875, 18 Stat. 509; Illinois Central R. R. v. United States, 265 U.S. 209, 44 S.C.t. 485, 68 L. Ed. 983. But the mere use of government forms of bills of lading is not conclusive on the question of ownership of property at the time of transportation, and does not give the United States the right of transportation at land grant rates. See Transportation Involved in Furnishing Articles by Contractor, 20 Comp. Dec. 721, 723.

The contract of March 15, 1915, was made pursuant to advertisement and specifications. The specifications, which were attached to and made a part of the contract, show that, in order to permit the United States to take advantage of land grant rates, the form of proposal contemplated either 'delivery of the whole quantity at the mine, from which shipment will then be made on government bill of lading to Mobile, Pascagoula, or Gulfport, as may be necessary, or delivery of about 7,000 tons at Mobile, Ala., about 5,000 tons at Pascagoula, Miss., and about 6,000 tons at Gulfport, Miss.' And it was specified:

'The United States will select the method of delivery which     under the proposals received proves to be most economical and      advantageous. If mine delivery is selected, the coal will be     ordered in carload lots for shipment on government bills of      lading to be furnished by the contracting officer, but the      contractor will be required to transfer it from cars to      barges belonging to the United States and will therefore      include in his price his cost for so transferring the coal at      all three points of delivery. * *  * If prices based on      delivery at Mobile, Pascagoula, and Gulfport prove to be more      advantageous, then these prices will be accepted and order      will be given for carload lots or less as may be required on      board United States barges or in bunkers' at the three places named.

'In conformity with the advertisement and specifications     hereunto attached, which form a part of this contract, the      said contractor shall furnish and have delivered on United      States barges, or in bunkers, from hoists, in carload lots,      at Mobile, Alabama, when requested, eighteen thousand short      tons, more or less. * *  * Coal to be shipped on government      bill of lading, to be furnished by the contracting officer,      the United States to pay railroad freight charges between      Dixiana [where the mines were located] and Mobile, and the      contractor to provide for transferring the coal from cars to      United States barges and to pay all demurrage charges that      may accrue.'

The United States reserved the option to call on the contractor to tow the coal from Mobile to Pascagoula and Gulfport, and agreed to make additional payments for that service, and also reserved the right to inspect and test the coal after transportation and to reject such as did not conform to specifications. The purchase price was to be paid after delivery and final acceptance.

The language, 'shall furnish and have delivered on United States barges, * *  * ' if it stood alone, might be taken to indicate that delivery was to made after transportation. But when read, as it must be, with the advertisement and specifications, and in the light for what was done, it appears with reasonable certainty that delivery at the mines was contemplated. The specifications distinctly show that if mine delivery should be selected, the coal would be ordered in carload lots and shipped on government bills of lading. In harmony with that provision, the contract required shipment in carload lots on forms of bills of lading furnished by the contracting officer, and bound the United States to pay freight charges from the mine to Mobile. This meant that the contractor was not to be concerned with or responsible for the transportation by rail. But, if delivery at Gulf ports had been selected, the contractor would have been bound to hire the carrier and to pay the freight. The provisions of the contract and specifications together amount to a declaration of the parties that there was to be delivery of the whole quantity at the mine, and the conduct of the parties was in harmony with that purpose and inconsistent with an intention that delivery to the United States should be made after transportation by rail was ended. The general rule is that title passes from seller to buyer with the delivery of the goods. All the coal except that furnished the Tonopah was delivered by the seller to the United States at the mines on board railroad cars of appellant, a common carrier designated by the United States by the furnishing of government bills of lading. It must be held that title passed at the time of such deliveries. See United States v. Andrews, 207 U.S. 229, 240, 243, 28 S.C.t. 100, 52 L. Ed. 185.

The contract contemplated service by the contractor, as well as the sale of coal. The contractor agreed to have the coal transferred from cars to government barges, his compensation therefor to be included in the price, and agreed for specified prices to tow it to points on the Gulf coast, if requested so to do, and also undertook to furnish and deliver at various places some 9,000,000 gallons of fresh water for steam and drinking purposes. The services were not essential to or part of the sale, and, as against the other facts found the agreements to transfer and tow the coal do not indicate that the parties intended that delivery by the seller to the purchaser should not be made until after transportation. Hatch v. Oil Co., 100 U.S. 124, 137, 25 L. Ed. 554; McElwee v. Metropolitan Lumber Co., 69 F. 302, 305, 16 C. C. A. 232; H. Baars & Co. v. Mitchell, 154 F. 322, 326, 83 C. C. A. 466.

The United States reserved the right to inspect and test the coal after transportation and to reject it, if found not to conform to specifications. None of the coal was rejected. This right was not inconsistent with transfer of title to the United States at the time of delivery of the coal on cars at the mine. Delaware, Lackawanna & Western R. R. v. United States, 231 U.S. 363, 371, 372, 34 S.C.t. 65, 58 L. Ed. 269; Illinois Central R. R. v. United States, supra.

By the contract of August 21, 1916, the seller expressly agreed to deliver the coal on railroad cars at the mines at Dixiana. Deliveries of the coal furnished without formal contracts were covered by specifications which were the same as those forming a part of the contract of March 15, 1915.

The conclusion that the coal furnished the Tonopah was to be delivered at the mine is not sustained by the facts found. Under the invitation to bid, proposal and acceptance, delivery was to be made alongside the vessel at Pensacola. The coal was transported on government bills of lading. The United States paid the freight less land grant deductions. The use of government bills of lading and the payment of reduced charges by the United States are not sufficient to sustain a finding that the coal was the property of the United States when hauled by appellant. There is nothing to indicate that title passed before delivery at the vessel.

We agree with the Court of Claims that acceptance of payment of the land grant rates concludes appellant. Its conduct was inconsistent with an intention to claim the amount of land grant deduction, as to any of the coal. Appellant rendered bills as to the coal furnished under the above-mentioned contracts of March 15, 1915, and August 21, 1916, upon which it stated the basic rate and the amount to be deducted on account of land grant, and claimed the net remaining after the deduction. There was no evidence tending to show that, in presenting its bills at land grant rates, appellant did not act with full knowledge of all the facts. Settlements for transporting some of the coal were made after the commencement of this suit, April 26, 1916, but before the amended and supplemental petition was filed, January 9, 1922. Appellant did not protest against any land grant deductions. It is bound by its acquiescence and consent and cannot recover the amounts deducted. Oregon-Washington R. R. Co. v. United States, 255 U.S. 339, 345, 41 S.C.t. 329, 66 L. Ed. 667; New York, New Haven & Hartford R. R. v. United States, 251 U.S. 123, 127, 40 S.C.t. 67, 64 L. Ed. 182; New York, New Haven & Hartford R. R. v. United States, 258 U.S. 32, 42 S.C.t. 209, 66 L. Ed. 448; Louisville & Nashville R. R. v. United States, 258 U.S. 374, 42 S.C.t. 337, 66 L. Ed. 668.

The Court of Claims was right in disallowing additional pay for switching cars to wharves or for transferring coal from cars to boats. The tariff rates on this coal for bunkerage and purposes other than export or coastwise traffic were $1.10 per short ton via Flomaton to Mobile or Pensacola. Under the tariff the cost of transferring such coal from cars to vessels at Mobile and Pensacola was assumed by appellant, where the road haul revenue was $1 per ton or more; but if such revenue was less there was an additional charge of 10 cents per ton, plus $2 per car for switching, subject to a maximum of $1 per ton. After land grant deduction, the balance to be paid in money was less than a dollar per ton. But the land grant, made many years ago, in aid of the railroad enterprise was not a mere gift or gratuity. See Burke v. Southern Pacific R. R. Co., 234 U.S. 669, 679, 34 S.C.t. 907, 58 L. Ed. 1527. The carrier's obligation to haul property of the United States at reduced rates was a part of the consideration for which the land grant was made. Part of appellant's compensation for hauling the coal was paid in land, and the balance was paid in money. It cannot be said that the total was less than a dollar per ton.

Judgment affirmed.