BILL OF LADING RATES WHICH ARE LESS THAN PUBLISHED TARIFF CHARGES.

The importance of some statutory requirement which will make it the duty of carriers to observe their lawfully published rates in issuing bills of lading or shipping receipts is amply demonstrated by decisions rendered during the year by the Federal courts.

The United States Supreme Court has decided in Gulf, Colorado and Santa Fe Railway Company v. Hefley et al. (158 U. S., 98) that all railroads carrying interstate freight are subject to the provisions of the act to regulate commerce, and that the only rule of compensation which can be followed in regard to interstate shipments is the rate expressed in tariffs published at stations and filed with the Commission in accordance with the requirements of that act. The Texas law makes the bill of lading rate govern, and contains a provision for the recovery of cumulative damages in case of violation, while the Federal statute prohibits carriers from deviating from tariff rates published and on file, and provides penalties for any departure therefrom.

Hefley, the consignee in this case, did not eventually pay more than the bill of lading called for. A reduced tariff which had been established by the carriers had not yet been posted at the destination point when the freight arrived, and the agent insisted upon payment of the old rate which was published there and apparently still in force, but after communicating with the company's office he was instructed that the proper tariff rate was named in the bill of lading. The goods, however, were thereby withheld from Hefley for a day, and under the Texas law he was entitled to recover the full amount of the freight charges for each day the company withheld the goods and refused to accept the rate named in the bill of lading. The action, therefore, was to recover the full amount of freight charges because of the detention for one day.

The shipper obtained a judgment in the Texas county court, and the case was brought to the Supreme Court of the United States on writ of error. As stated in the opinion, both statutes might have been held operative on the facts of this case, for the bill of lading charge was really the rate specified in the interstate tariff actually in force. But the court went beyond this, and held that the real matter presented for decision was whether these two statutes, prescribing different rules on the same subject-matter do not expose a party to a conflict of duties. This was found to be the fact, and the court decided that in the case of an interstate shipment the State law must yield. The case was accordingly remanded to the county court of Milan County, Tex., for further preceedings not inconsistent with the opinion. No attention appears to have been paid to the failure of the defendant to post its joint tariff at the point of destination, and this was probably because the decision was directed only to the question of conflict between the Federal and State laws.

Besides the decision upon the main question, in the opinion of the court are found statements as to the law on other questions which, though not made prominent in this case, are important. It is declared that "all railroads carrying interstate freight are subject to the provisions of the act." It is also said that the St. Louis and San Francisco and the Gulf, Colorado and Santa Fe, separate corporations, are each of them bound to observe the joint tariff issued by them and filed with the Commission, and that, under section 10 of the act, the carrier, or any agent or person acting for the carrier, is subject to a fine not exceeding $5,000 for charging on transportation described in such tariff any greater or less compensation than is therein specified.

The decision in the above-stated case has recently been followed by the St. Louis court of appeals, where Charles Gerber, a St. Louis merchant, had been required by the Wabash Railroad Company to pay, under tariff rates in force, freight to the amount of $300 on a car of oranges from California, instead of $262, the amount called for by his bill of lading. Gerber declined to pay the excess, replevined his goods, and judgment was rendered in his favor by the circuit court, but the court of appeals reversed the decision on the ground that the courts can not enforce a contract made in violation of the interstate-commerce law. The discrepancy between the rate named in the bill of lading and that fixed by the tariff was caused by the failure of the California shipping clerk to take account of the fact that the oranges were to be kept iced or refrigerated in transit, for which a higher rate was in force over the line.

It may be said on reading the Gerber decision that the law already makes it unlawful for carriers to issue bills of lading containing rates different from those expressed in published tariffs, the court having distinctly held that

It is unlawful for a common carrier to issue bills of lading or receive or demand a rate of freight variant from the rates or terms for such shipment as shown by the schedules which are required to be posted and also filed with the Interstate Commerce Commission, and if such an offense is committed knowingly the offender subjects himself to severe penalties.

This goes for naught, however, unless the carrier, through its shipping agent, willfully inserted the illegal charge in the bill of lading or shipping receipt.

The court also decided in this case that the doctrine under which an illegal contract may be enforced where the parties, though particeps criminis, were in pari delicto, in order to protect the more innocent party, can only be invoked where it appears that a wise public policy would be advanced by allowing the more innocent party to succeed, and that such doctrine is not applicable here. The opinion states:

Considering the evils which the interstate-commerce law was intended to remedy, would it, under the circumstances, be good policy to allow contracts made in violation of it to be enforced specifically? We think not. Prior to its enactment the complaint was almost universal that common carriers were discriminating in their rates in

favor of favored shippers. To remedy this evil as to interstate shipments, Congress enacted the law, and it should be construed and enforced so as not in the least to thwart its purpose. Every shipper must be presumed to know of the existence of the schedules and that they are open for his inspection, and also of the terms of the act rendering invalid every contract of affreightment not made in accordance therewith. Therefore, where a contract for an interstate shipment has been made and is sued on, or property rights are made dependent thereon, the shipper must be held to have contracted with reference to and in accordance with the rates fixed by the schedules regardless of the terms of his contract. In other words, the rates of interstate shipments are not the subject of contracts, but are in effect fixed under the law. To hold differently would be subversive of good policy, as it would tend to nullify the law.

The foregoing decisions are apparently to the effect that carriers of interstate commerce not only have the right, but that under the requirements of the statute it is their duty to collect freight charges according to rates specified in published tariffs irrespective of any contract, agreement, or offer made by the carrier at the point of shipment.

That the shipper is entitled to rely upon rates quoted by an agent of the carrier as the rates actually in force, and is not required to verify by personal inspection of rate sheets the statements of such agent, who is in duty bound to be correctly informed, may be conceded; but it is clear that this does not alter the legal duty of the carrier to charge, demand, collect, or receive no more or less compensation than is expressed in the rate schedules in force over the road or line for the service rendered. Our rulings in the cases of Phelps (6 I. C. C. Rep., 36) and Duncan (6 I. C. C. Rep., 85) affirmed this duty of carriers, though notice was taken in the Duncan case of the tendency of the courts at that time to enforce shipping contracts providing for less than the tariff rate when entered into in good faith by innocent shippers As above shown this tendency has been arrested and the question settled by the supreme court in the case of Hefley.

And yet innocent parties, shippers, or consignees ought not, by reason of statutory provisions, to be made to suffer injuries through carriers' mistakes. Especially is this so where shippers have been forced to rely upon rates quoted by agents, either because no tariff showing through rates to the destination point is in force and the through charge is made by a combination of published rates to and from some intermediate point, as very frequently happens, or because the carriers' rate sheets are so intricate or unintelligible to the average shipper that he is unable to interpret them, as is the case with many freight tariffs on a large number of roads.

Whether, generally, a suit for damages, because of a shipment induced by a quoted rate less than was ultimately and properly collected, can be successfully maintained on other grounds that breach of the contract of shipment seems doubtful. Moreover, a consignee in Missouri can little afford to carry on litigation in California, or go to the expense of a suit in the Federal court of any district. This class of shippers and consignees are, in most cases, led to suffer damage through enforced

reliance upon the correct information and conduct of common carriers as represented by their authorized agents. Commercial transactions, large and small, are based upon rates stated by these agents to be in force, and it is not improbable that goods sold on the faith that such rates are lawful may be resold before delivery of the shipment and collection of charges raised according to standards specified in the tariffs. We have no hesitation in saying that the undercharge is productive of much greater evil than the overcharge, for, with the latter, the right of recovery is unquestioned. The ignorance or carelessness of agents in using less than the tariff rate in making shipping contracts has the same disastrous effect upon shippers as if the situation were deliberately brought about by the agents through deception or fraud.

The same public exigencies which made it necessary to require the publication of rates and observance thereof in order that transportation charges should be open-capable of being accurately ascertained and not varied for like service-demand that the carriers' responsibility for the collection of equal charges shall be extended to the insertion of only the lawful charge in the shipping receipt or bill of lading. As was stated in our last report in an article on this subject and that of overcharges:

Patrons of railways should never find it necessary to bring suit for the recovery of damages growing out of the use by a carrier of rates not fixed according to law.

We desire to add now, in the light of these decisions, that the law regulating carriers and their charges should not be left in such a state that the carriers can find legal excuse for the damaging consequences of the ignorance or carelessness of their own agents in duties imposed upon such carriers by that statute.

CAN A COMMON CARRIER ENGAGED IN INTERSTATE TRANSPORTATION MAKE ITSELF A PRIVATE CARRIER AS TO SUCH TRANSPORTATION BY SPECIAL CONTRACT?

The cases of Hefley and Gerber, above discussed, distinctly hold that a shipping contract for less than the rate lawfully in force will not be upheld because of its illegality under the act to regulate commerce, and that the carrier is justified in raising charges so as to obtain published tariff rates, notwithstanding the contract at the time of shipment. It seems, however, according to the decision of the seventh circuit court of appeals in Chicago, Milwaukee and St. Paul Railway Company v. Wallace (66 Fed. Rep., 506), that an interstate common carrier may make itself a private carrier through different States by special contract with a shipper, and, by a suitable provision in such contract, free itself from responsibility for its own negligence. Wallace was propri.etor of a circus, and he also owned cars used for transporting the same from place to place. In 1892 he contracted with the railway company to transport his circus in a special train of such cars through different

States, between certain places from day to day, to arrive at each place at about 6 o'clock in the morning; and the contract contained clauses which, in substance, provided for reduced rates, and the release of the company from any and all claims for damages by accident or delay arising from any cause whatsoever. During the course of transportation under the contract certain of the shipper's cars were derailed and thrown down an embankment, which resulted in the killing of 28 horses and permanent injury of 40 others, as well as serious damage to the cars and other property, besides preventing performances at the two places next on the circus schedule. Under the charge of the trial court, that if the jury found the company guilty of gross negligence in not keeping its roadbed in proper condition, or not furnishing sufficient motive power, the release contained in the contract was contrary to public policy and void, a verdict was rendered in favor of the plaintiff for $8,000. This judgment was reversed by the court of appeals.

The opinion states that "the main question in this court, as it was below, is whether the railroad company, in carrying plaintiff's circus people, animals, and outfit, under the special contract in evidence, assumed the relation of a common carrier for hire." The court held that the railway company was not shown to have ever carried similar goods for Wallace before or for others in their own cars; that there is no presumption that railroad companies would do so, and that it is a matter of common observation that they do not hold themselves out as common carriers of wild and domestic animals to be transported in the private cars of the owners and loaded in a manner agreeable to the owners; that common carriers do not "undertake to carry every species of property in respect to which they have not held themselves out as common carriers;" that "they may contract as private carriers, and in that case may make any reasonable contract." The requirements of the act to regulate commerce do not appear to have been alluded to or considered in this case, although such requirements were held controlling in the Hefley case, above mentioned.

Our reference to this case is with regard to its effect upon the duties of carriers under the Federal statute. The authorities cited in the decision, in support of the conclusion that an interstate common carrier by railroad can by special contract make itself a private carrier, all appear to be cases prior to the passage of the act to regulate commerce, or to be decisions which, like this one, did not turn upon the requirements of that statute. Whether the railway company, confessedly a common carrier subject to the act to regulate commerce, had previously established rates for hauling circus property and performers in private cars belonging to the shipper or not, when it made the contract with Wallace it did then put in force over its route the rates mentioned in the contract, though it did not publish such rates nor file them with the commission.

It seems beyond question that since the passage of the act to regu