B-145860, OCT. 4, 1961

B-145860, OCT. 4, 1961

TO THE ATCHISON, TOPEKA AND SANTA FE RAILWAY COMPANY:

REFERENCE IS MADE TO YOUR LETTER OF FEBRUARY 14, 1961, FILE G 632616, REQUESTING REVIEW OF THE DISALLOWANCE OF YOUR CLAIM FOR $55.63 IN ADDITIONAL FREIGHT CHARGES ON THE SHIPMENT OF EIGHT INTERNAL COMBUSTION ENGINES TRANSPORTED FROM INDIANAPOLIS, INDIANA, TO MARCH AIR FORCE BASE, CALIFORNIA, WHICH WAS ACCORDED TRANSIT PRIVILEGES AT MIDWEST CITY, OKLAHOMA, UNDER EXECUTIVE COMMITTEE--- WESTERN TRAFFIC ASSOCIATION SECTION 22 QUOTATION NO. 60.

THE RECORD HERE SHOWS THAT THE SHIPMENT TO MIDWEST CITY WAS PERFORMED UNDER BILL OF LADING AF-2989741 WHICH COVERED THE TRANSPORTATION OF EIGHT ENGINES WEIGHING 36,000 POUNDS. THE OKLAHOMA CITY--- ADA--- ATOKA RAILWAY COMPANY CLAIMED AND WAS PAID CHARGES OF $751.16 FOR SUCH INBOUND SHIPMENT ON THE BASIS OF A RATE OF $1.68 PER HUNDRED POUNDS (PLUS 15 PERCENT) ON A MINIMUM CARLOAD WEIGHT OF 38,880 POUNDS. THE OUTBOUND SHIPMENT WEIGHED 35,240 POUNDS AND YOU BILLED AND WERE PAID CHARGES OF $632.20 BASED ON A THROUGH RATE OF $3.12 PER HUNDRED POUNDS (PLUS 15 PERCENT) SUBJECT TO A 34,000 POUND MINIMUM CARLOAD RATE, PLUS A TRANSIT CHARGE OF 12 CENTS PER 100 POUNDS (PLUS 15 PERCENT) ON THE WEIGHT TRANSITED, 35,240 POUNDS--- $1,313.04 LESS A CREDIT OF $680.84 FOR THE INBOUND CHARGES COMPUTED AT THE INBOUND RATE OF $1.68 PER HUNDRED POUNDS (PLUS 15 PERCENT) ON 35,240 POUNDS. IN OUR AUDIT, CREDIT FOR THE INBOUND PAYMENT WAS COMPUTED ON 38,120 POUNDS AT THE $1.68 RATE PLUS APPLICABLE PERCENTAGE INCREASE ON THE TRANSITED WEIGHT OF 35,240 POUNDS, PLUS THE 2,880 POUNDS REQUIRED TO MAKE UP THE MINIMUM WEIGHT ON THE INBOUND FREIGHT MOVEMENT. BASED THEREON IT WAS DETERMINED THAT THE THROUGH CHARGES HAD BEEN OVERPAID IN THE AMOUNT OF $55.63 AND A NOTICE OF OVERPAYMENT WAS ISSUED TO YOUR COMPANY. SUCH AMOUNT WAS RECOVERED BY DEDUCTION UPON YOUR REFUSAL TO REFUND, AND YOUR SUBSEQUENT RECLAIM OF THAT AMOUNT WAS DISALLOWED.

IT IS OF SUCH DISALLOWANCE THAT YOU REQUEST REVIEW, ASSERTING THAT YOU ARE UNABLE TO FIND ANY AUTHORITY IN THE QUOTATION FOR SETTING ASIDE THE INBOUND MINIMUM WEIGHT. APPARENTLY, IT IS YOUR CONTENTION THAT CREDIT FOR THE PAID-IN CHARGES SHOULD BE COMPUTED ON THE APPLIED WEIGHT AT THE INBOUND RATE OF $1.68 (PLUS APPLICABLE PERCENTAGE INCREASE) AND THAT THE WEIGHT ADDED TO MAKE THE INBOUND MINIMUM WEIGHT SHOULD NOT BE TAKEN INTO CONSIDERATION IN THE ADJUSTMENT OF THE THROUGH CHARGES. IN SUPPORT OF YOUR POSITION, YOU INVITE ATTENTION TO ITEM NO. 13 OF THE QUOTATION WHICH PROVIDES:

"ON EACH SHIPMENT FROM A TRANSIT POINT THE GOVERNMENT SHALL PAY THE THROUGH RATE APPLICABLE ON SUCH SHIPMENT AS SPECIFIED IN ITEM NO. 5, PLUS ANY OTHER CHARGES ACCRUING HEREUNDER IN ADDITION TO SUCH THROUGH RATE, MINUS THE LINE-HAUL RATE (OR RATES) PAID ON THE TRANSIT WEIGHT OF SUCH SHIPMENT INTO SUCH TRANSIT POINT, AND IF SUCH THROUGH RATE IS LESS THAN THE RATE (OR RATES) SO PAID, THE RAILROAD WILL MAKE APPROPRIATE REFUND TO THE GOVERNMENT. THE GOVERNMENT AGREES THAT IN THE EVENT SETTLEMENT WITH THE RAILROADS OF FREIGHT CHARGES ON THE INBOUND SHIPMENT (OR SHIPMENTS) HAS BEEN OR LATER IS EFFECTED ON A BASIS DIFFERENT FROM THAT INDICATED BY THE FREIGHT BILL SURRENDERED AGAINST THE OUTBOUND SHIPMENT, FINAL SETTLEMENT WILL BE MADE AS PROVIDED IN THIS ITEM ON THE BASIS OF THE ACTUAL FREIGHT CHARGES FINALLY PAID BY THE GOVERNMENT ON THE INBOUND PMENT.'

ITEM NO. 5 PROVIDES UNDER PARAGRAPH (A) THAT:

"EACH SHIPMENT MADE FROM ITS INITIAL POINT OF ORIGIN ON AND AFTER THE EFFECTIVE DATE OF THIS QUOTATION SHALL BE SUBJECT AND ENTITLED TO THE LOWEST APPLICABLE ALL-RAIL CARLOAD RATE THEREON, FROM SUCH POINT OF ORIGIN TO FINAL DESTINATION, APPLICABLE OVER THE ROUTE OF MOVEMENT VIA THE TRANSIT POINT (SEE NOTE), IN EFFECT BY TARIFF OR AS PROVIDED IN ANY APPLICABLE QUOTATION ON THE DATE OF SUCH SHIPMENT FROM INITIAL POINT OF ORIGIN, BUT IN NO CASE LESS THAN THE MINIMUM RATE (OR RATES) PROVIDED IN ITEM NO. 6 (NOT HERE APPLICABLE) . . .'

THUS BY THE PROVISIONS OF ITEMS 5 AND 13 THE GOVERNMENT IS GRANTED THE LOWEST APPLICABLE CARLOAD RATE ON THE THROUGH SHIPMENT FROM ORIGIN TO DESTINATION.

THE TRANSIT PRIVILEGE RESTS ON THE FICTION THAT THE INBOUND AND OUTBOUND TRANSPORTATION SERVICES, WHICH ARE IN FACT DISTINCT, CONSTITUTE A CONTINUOUS SHIPMENT FROM POINT OF ORIGIN TO FINAL DESTINATION. CENTRAL R.CO. OF NEW JERSEY V. UNITED STATES, 257 U.S. 247, 257; GREAT NORTHERN RY.CO. V. COMMODITY CREDIT CORP., 77 F.SUPP. 780, 787. IT IS A STOP-OVER PRIVILEGE BY WHICH A BREAK IN THE CONTINUOUS CARRIAGE IS DISREGARDED AND THE INBOUND AND OUTBOUND MOVEMENTS TREATED AS THOUGH NO INTERRUPTION HAD TAKEN PLACE IN THE THROUGH MOVEMENT. BALTIMORE AND O.R. V. UNITED STATES,24 F.SUPP. 734, 735. SEE ALSO WHEELOCK AND BIERD V. AKRON, C. AND Y.RY.CO., 179 I.C.C. 517, 520-521. UNDER THE PRINCIPLE ON WHICH THE VALIDITY OF THE TRANSIT ARRANGEMENT RESTS, THE INBOUND MOVEMENT LOSES ITS IDENTITY AS A COMPLETED OR SEPARATE MOVEMENT AND BECOMES A PORTION OF THE THROUGH MOVEMENT. SEE IN THIS RESPECT, SAWDUST SALES CO. V. BALTIMORE AND O.R.CO., 186 I.C.C. 265, 268; STALEY MANUFACTURING CO. TERMINAL ALLOWANCE, 245 I.C.C. 383, 392 (FOOTNOTE). SEE ALSO THE CASE OF DUCK RIVER GRAIN CO. V. NASHVILLE, C. AND ST.L.RY., 160 I.C.C. 28, 29-30, WHEREIN THE INTERSTATE COMMERCE COMMISSION, IN DENYING REPARATION ON THE SHIPMENT TO THE TRANSIT POINT, STATED THAT THE PRINCIPLES APPLICABLE TO THE THROUGH SHIPMENT GOVERNED THE TRANSPORTATION MOVEMENT, AND THAT IN THE ADJUSTMENT OF THE CHARGES THE CARRIERS WERE ENTITLED TO THE THROUGH RATE APPLICABLE ON THE SHIPMENT. IN THE CASE OF LULL CARRIAGE CO. V. CHICAGO, K. AND S.RY.CO., 19 I.C.C. 15, THE INTERSTATE COMMERCE COMMISSION (PAGE 16) AFTER REITERATING THE WELL ESTABLISHED PRINCIPLE THAT THE MINIMUM WEIGHT IS A PART OF A CARLOAD RATE, DIRECTED ATTENTION TO THE FACT THAT THE SHIPPER IS INTERESTED IN THE ULTIMATE CHARGE FOR THE TRANSPORTATION SERVICES. SEE ALSO HIGHLAND CORDAGE CO. V. SOUTHERN RY.CO., 179 I.C.C. 771, 774; J. F. SOLLEY AND CO. V. BALTIMORE AND O.R.CO., 178 I.C.C. 777, 781. ALTHOUGH THE WORD "RATE" IS NOT DEFINED IN THE INVOLVED QUOTATION NO. 60, THE TERM AS USED IN THE INTERSTATE COMMERCE LAW HAS BEEN DEFINED TO MEAN THE LOWEST NET COST TO THE SHIPPER FOR THE TRANSPORTATION OF HIS PROPERTY; THE NET AMOUNT THE CARRIER RECEIVES FROM THE SHIPPER AND RETAINS FOR THE TRANSPORTATION SERVICE. IN DETERMINING THIS AMOUNT, ALL MONEY TRANSACTIONS OF EVERY KIND OR CHARACTER HAVING A BEARING ON, OR RELATION TO, THAT PARTICULAR INSTANCE OF TRANSPORTATION WHEREBY THE COST TO THE SHIPPER IS DIRECTLY OR INDIRECTLY ENHANCED OR REDUCED MUST BE TAKEN INTO CONSIDERATION. SEE UNITED STATES V. CHICAGO AND A.RY.CO., 148 F. 646, 647, AFFIRMED 212 U.S. 563; GREAT NORTHERN RY.CO. V. ARMOUR AND CO., 26 F.SUPP. 964, 967; CLARK V. SOUTHERN RY.CO., 119 N.E. 539, 542.

UNDER THE TERMS OF QUOTATION 60, THE LOCAL RATE APPLIES ON SHIPMENTS TO THE TRANSIT POINT, AND IN CONNECTION WITH THAT RATE IT IS PROPER TO ASSESS CHARGES ON THE 36,000 POUNDS OF ACTUAL WEIGHT ON A MINIMUM WEIGHT OF 38,880 POUNDS. WHEN THE TRANSIT PRIVILEGE IS EXERCISED, HOWEVER, THE INBOUND FREIGHT MOVEMENT LOSES ITS SEPARATE IDENTITY AND THE LINE-HAUL INBOUND CHARGES PAID THEREON BECOME BUT A PARTIAL PAYMENT ON THE THROUGH CHARGES FROM THE INITIAL POINT OF ORIGIN TO THE FINAL DESTINATION. BY THE PROVISIONS OF ITEM 5 AND 13 THE GOVERNMENT IS GRANTED AND ENTITLED TO THE LOWEST APPLICABLE THROUGH RATE ON THE TRANSIT TONNAGE, MINUS THE LINE-HAUL RATE PAID INBOUND. OBVIOUSLY, THE LINE-HAUL RATE PAID ON THE TRANSITED TONNAGE TO THE TRANSIT POINT IN THIS INSTANCE WAS GREATER THAN AN AMOUNT COMPUTED ON THE APPLIED WEIGHT OF 35240 POUNDS AT THE $1.68 RATE (PLUS EX- PARTE INCREASE). THEREFORE, IT IS OUR VIEW THAT A PROPER AND EQUITABLE CONSTRUCTION OF ITEM 13 OF THE QUOTATION REQUIRES THAT CREDIT FOR THE INBOUND CHARGES SHOULD BE BASED ON THE RELATIONSHIP OF SUCH TONNAGE TO THE CHARGES PAID ON THE ACTUAL INBOUND WEIGHT. OTHERWISE, THE CHARGES PAID ON THE DEFICIT WEIGHT TO THE TRANSIT POINT WOULD IN EFFECT CAUSE GREATER THROUGH CHARGES TO ACCRUE ON THE 35,240 POUNDS OF APPLIED TONNAGE.

THUS, THE USE OF THE INBOUND TARIFF RATE WITHOUT CONSIDERATION OF THE CARLOAD MINIMUM WEIGHT TO WHICH IT HAS APPLICATION DOES NOT SEEM TO BE CONTROLLING IN ARRIVING AT THE ALLOWANCE FOR THE AMOUNT PAID INBOUND ON THE APPLIED TONNAGE. ON THE TRANSITED WEIGHT OF 35,240 POUNDS IN THIS SHIPMENT, THE GOVERNMENT ACTUALLY PAID $2.08655 PER HUNDRED POUNDS (35,240/36,000 OF $751.16), OR $735.30. A CREDIT OF THAT AMOUNT AGAINST THE THROUGH CHARGES OF $1,313.04 RESULTS IN THE PROPER CHARGES ON THE THROUGH TRANSIT SHIPMENT. SINCE SUCH AMOUNT IS SLIGHTLY IN EXCESS OF THE NET AMOUNT ALREADY PAID TO YOUR COMPANY ($632.20 LESS THE $55.63) ON THE OUTBOUND MOVEMENT, A SETTLEMENT FOR SUCH BALANCE WILL ISSUE TO YOUR COMPANY IN DUE COURSE, IF OTHERWISE PROPER.