B-132228, SEP. 6, 1957

B-132228, SEP. 6, 1957

TO UNION PACIFIC RAILROAD COMPANY:

REFERENCE IS MADE TO YOUR REQUEST, FILE NO. GM-263292, FOR REVIEW OF THE DISALLOWANCE BY OUR TRANSPORTATION DIVISION OF YOUR CLAIM, SUPPLEMENTAL BILL NO. W-263292-C, FOR ADDITIONAL FREIGHT CHARGES IN THE AMOUNT OF $166.56, ALLEGED TO BE DUE FOR THE MOVEMENT OF GOVERNMENT-OWNED FREIGHT ORIGINATING AT BURLINGTON, VERMONT, ON DECEMBER 28, 1951, AND TRANSPORTED ON GOVERNMENT BILL OF LADING NO. BV 9450073, TO MEMPHIS, TENNESSEE, FOR TRANSIT UNDER THE PROVISION OF A.A.P. SECTION 22 QUOTATION NO. 16-F. THE INVOLVED FREIGHT WAS SHIPPED FORM THE TRANSIT STATION TO SEATTLE, WASHINGTON, ON GOVERNMENT BILLS OF LADING NOS. AF-T-24647 AND AF-T-24648 ON MAY 6, 1953, AND WAS IN STORAGE AT THE TRANSIT STATION FOR MORE THAN 12, BUT LESS THAN 24, MONTHS.

THE RECORD SHOWS THAT YOU ORIGINALLY CLAIMED AND WERE PAID $1,057.96 ON YOUR BILL NO. W-263292 FOR THE OUTBOUND TRANSIT SHIPMENTS, AND WERE SUBSEQUENTLY ALLOWED AN ADDITIONAL AMOUNT OF $141.97 ON BILL OF LADING NO. AF-T-24647 BY OUR CERTIFICATE OF SETTLEMENT NO. T-673214, DATED OCTOBER 3, 1956. IN COMPUTING THE THROUGH CHARGES IN OUR SETTLEMENT ACTION, WE USED A THROUGH RATE WHICH WAS IN EFFECT AT THE TIME THE SHIPMENT ORIGINATED AT BURLINGTON, VERMONT. THE ADDITIONAL FREIGHT CHARGES NOW CLAIMED ARE COMPUTED ON THE BASIS OF A THROUGH RATE WHICH BECAME EFFECTIVE WHILE MATERIALS SHIPPED WERE IN TRANSIT, PRIOR TO THE OUTBOUND MOVEMENTS. YOUR CLAIM IS BASED UPON THE PROVISION OF ITEM 5/B), QUOTATION NO. 16-F AS MODIFIED BY AMENDMENT 61, ISSUED WHILE THE SHIPMENTS WERE IN STORAGE AT THE TRANSIT STATION WHICH PURPORTED TO APPLY ON ALL SHIPMENTS ON HAND AT A TRANSIT POINT OR ON ROUTE TO A TRANSIT POINT ON DECEMBER 31, 1958.

THE CONTRACT OF CARRIAGE COMES INTO EXISTENCE, AND THE RIGHTS AND LIABILITIES OF THE PARTIES ARE DETERMINED WHEN THE COMMODITIES TO BE TRANSPORTED ARE DELIVERED TO AND ACCEPTED BY THE CARRIER FOR CARRIAGE AND THE BILL OF LADING IS ISSUED. SEE MISSOURI PACIFIC RY. V. MCFADDEN, 154 U.S. 155; IRON MOUNTAIN RY. V. KNIGHT, 122 U.S. 79; FOLLARD V. VINTON, 105 U.S. 7, 8; THE DELAWARE, 14 WALL. 579; CHARLES J. WEBB AND SONS V. CENTRAL R. CO., 36 F.2D 702. ARRIVAL OF THE SHIPMENT AT THE TRANSIT STATION DOES NOT COMPLETE THE CONTRACT OF CARRIAGE, SINCE THE TRANSIT PRIVILEGE IS BASED ON THE THEORY THAT THE CONTRACT OF CARRIAGE HAS NOT BEEN COMPLETED AND THAT THE ENTIRE SHIPMENT FROM ORIGIN THROUGH THE TRANSIT POINT TO FINAL DESTINATION IS THE SAME IN PRINCIPLE AS IF THE SHIPMENT HAD MOVED WITHOUT TRANSIT. SEE CENTRAL R. OF N.J. V. UNITED STATES, 257 U.S. 247, 257; LARABEE FLOUR MILLS CO. V. CHICAGO, B. AND O. R., 223 I.C.C. 55, 64; WHEELOCK AND BIERO V. AKRON C. AND W. RY., 179 I.C.C. 517.

THE CONTRACT OF CARRIAGE IN THIS CASE CAME INTO EFFECT WITH THE ACCEPTANCE OF THE GOODS FOR TRANSPORTATION AT BURLINGTON, VERMONT. THAT TIME THE GOVERNMENT OBTAINED THE RIGHT UNDER THE PROVISIONS THEN IN EFFECT OF QUOTATION 16-F TO SHIP THE GOODS TO THE TRANSIT STATION FOR STORAGE FOR A PERIOD NOT TO EXCEED 24 MONTHS AND TO RESHIP THE GOODS TO THEIR ULTIMATE DESTINATION AT THE LOWEST THROUGH RATE (JOINT OR COMBINATION) IN EFFECT FROM THE INITIAL POINT OF ORIGIN TO THE DESTINATION OVER A ROUTE VIA THE TRANSIT POINT IN EFFECT ON THE DATE OF SHIPMENT FROM THE INITIAL POINT OF ORIGIN. YOUR CLAIM FOR AN INCREASED FREIGHT RATE UNDER THE PROVISIONS OF THE SUBSEQUENTLY ISSUED AMENDMENT TO THE QUOTATION CONSTITUTES AN ATTEMPT TO REPUDIATE THE ESTABLISHED CONTRACTUAL ARRANGEMENT.

IT DOES NOT APPEAR THAT THE GOVERNMENT HAS RECEIVED ANY BENEFIT OR CONSIDERATION IN ADDITION TO THAT CONTEMPLATED AT THE TIME THE CONTRACT OF TRANSPORTATION WITH PROVISION FOR STORAGE IN TRANSIT WAS FORMED. IN ORDER TO SUPPORT THE RETROACTIVE INCREASE IN THE THROUGH RATE ATTEMPTED TO BE IMPOSED BY ITEM 6 (B), QUOTATION 16-F, AS AMENDED BY AMENDMENT 61. CONSEQUENTLY, THAT PROVISION CAN HAVE NO APPLICATION TO THE INVOLVED TRANSIT SHIPMENTS.

THE INTERSTATE COMMERCE COMMISSION HAS HELD THAT THE APPLICABLE RATE FOR A THROUGH MOVEMENT IS THE RATE IN EFFECT AT THE TIME THAT THE SHIPMENT MOVES FROM THE INITIAL POINT OF ORIGIN, SINCE THE RATE, EITHER JOINT OR COMBINATION, APPLICABLE TO A THROUGH MOVEMENT IS A SINGLE UNIT WHICH COMES INTO EFFECT AND BINDS THE PARTIES WHEN THE SHIPMENT COMMENCES, AND WHICH CANNOT BE CHANGED WITH RETROACTIVE EFFECT. SEE IN THE MATTER OF THROUGH ROUTES AND THROUGH RATES, 12 I.C.C. 163. THE COMMISSION HAS CONSISTENTLY APPLIED THIS RULE TO TRANSIT SHIPMENTS HOLDING THAT SINCE THE ENTIRE SHIPMENT FROM ORIGIN THROUGH THE TRANSIT POINT TO DESTINATION IS VIEWED AS IF THE SHIPMENT HAD MOVED CONTINUOUSLY WITHOUT TRANSIT THE APPLICABLE RATE IS THE RATE IN EFFECT WHEN THE SHIPMENT COMMENCES AT THE INITIAL POINT OF ORIGIN. SEE PACIFIC CHEMICAL AND FERTILIZER CO. V. PENNSYLVANIA R.CO., 270 W.C.C. 193, 195; GERRARD CO. V. BELT RY. CO. OF CHICAGO, 270 I.C.C. 59, 62; SOUTHWESTERN MILLING CO., INC. V. CHICAGO, B. AND C.B., 159 I.C.C. 372; BOARD OF TRADE OF THE CITY OF CHICAGO V. ANN ARBOR R., 39 I.C.C. 643, 651; ASSOCIATION V. ANN ARBOR R., 42 I.C.C. 76; IN RE MILLING IN TRANSIT RATES, 17 I.C.C. 113.

IN VIEW OF WHAT HAS BEEN SAID ABOVE IT APPEARS THAT THE DISALLOWANCE OF YOUR CLAIM WAS CORRECT, ..END :