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Knorr v. White Bros. Trucking Co.

FEBRUARY 21, 1967.




Appeal from the Circuit Court of Winnebago County; the Hon. FRED J. KULLBERG, Judge, presiding. Reversed.


Rehearing denied March 31, 1967.

This appeal involves an interpretation of terms used in eight equipment leases entered into over a period of years between White Brothers as the truck carrier and Knorr as the owner of the augmented equipment.

The first lease was entered into on November 9, 1959, for the one tractor-truck then owned by Knorr. The lease was a standard form and there was typed in the space governing payment: "determined by trip." Over the following three years Knorr added additional units and five new leases were entered into with identical language. A copy of the leases was kept in the respective trucks as required under Commerce Commission regulations. On June 4, 1963, after one of the trucks had been stopped by a Michigan Public Service agent who objected to the absence of specific payment terms in the lease, a new lease was entered into on the same form except that it provided, in place of "determined by trip" the language "75% of the revenue less trailer rental, if applicable." Thereafter, on January 1, 1964, another lease was executed with the same terms. Knorr discontinued operations for White in the early part of 1964.

Under the eight leases some 3,581 loads were hauled by Knorr to various points within Illinois and surrounding states, and payments totaling $286,776.26 were made by White to Knorr over the entire period of the leasing operations. These were by check from time to time, usually weekly, after billing shippers. The accompanying vouchers contained no breakdown as to any amounts deducted. However, there is no dispute as to any deductions except those for "unloading charges."

The evidence shows that over the entire period in question, beginning in 1959, payment was computed on the basis of 75% of the gross revenue, with a 15% of the 75% figure being deducted only for unloading of loads to a certain Lock Joint Company.

The dispute essentially concerns an interpretation of the leases to determine whether by the terms or by reason of a latent ambiguity, White properly deducted these unloading charges. The trial court ruled that the agreement was for 75% of the gross revenues throughout and that such deductions were improperly made. He awarded Knorr the sum of $38,933.71 on that basis. A claim for a setoff of $38,636.27 for alleged overpayments to Knorr arising from erroneous application of tariffs was denied.

White argues that the agreement at all times was to deduct the unloading charges on the Lock Joint shipments; that the acceptance of payment on that basis for some three and one-half years without objection determines the meaning of the language used in the leases by the practical construction of the parties. He further argues that if Knorr is entitled to disaffirm the acceptance of payments over the period, he must likewise account to White for any overpayment over the same period.

Knorr's position is that the evidence sustains the trial court's determination, particularly when interpreted with reference to provisions of the Interstate Commerce Act which he claims make it illegal to prefer a customer by not charging him for unloading.

We first consider the effect, if any, of the regulations of either the Federal or State Commerce Commission on this case. These acts (USCA, Title 49, c 8, §§ 302-304; Ill Rev Stats 1963, c 95 1/2, § 282.1-30, and tariff rules thereunder) do not purport to apply to a lease between a carrier and his augmenting equipment owner, and as between them they were free to enter into a lease providing for any mutually satisfactory arrangements and deductions. The acts are for the protection of the public in its dealings with carriers and provide for penalties for violations which could result in discrimination as between members of the public using the services of a carrier. See 4 ILP 266; 60 CJS 266.

In fact, there is no evidence in the record to show that Lock Joint was preferred. The evidence clearly shows that the reason for the carrier unloading these shipments was for the convenience of both the carrier and his lessor, Knorr, to avoid delays which would have made the equipment unavailable for considerable periods for continuance of other paying shipments, to the disadvantage of both parties. There is no evidence that Lock Joint requested the unloading service which would be a precedent under the terms of the Commerce Commission Acts to its being either obligated or preferred.

This court will review the evidence on the issue of a latent ambiguity in the leases, applying the usual standard that the trial judge's findings on the facts will not be reversed except for a clear abuse of discretion; or, in other words, except if the trial court's findings are clearly and manifestly against the weight of the evidence. Stevens v. Fanning, 59 Ill. App.2d 285, 294, 207 N.E.2d 136 (1965).

Carl Edward Berquist testified for Knorr. He was the branch manager of White in South Beloit. He spoke with Knorr and signed the November 9th lease which contained the terms "determined by trip." He had been told by his main office in Wasco that this phrase meant 75% of the revenue less trailer rental, if applicable. He had also been instructed by the main office that if there were any question of rates, the trucker should be referred to the main office. He kept daily records of the weights carried, the ticket number, the number of pieces and the identity of the commodity. He was told by the main office to change the leases of January 1, 1964, and June 4, 1963, to state "75% less trailer rental if applicable." He did not discuss any other charges or deductions with either Knorr or White. He had heard from other drivers that there was an unloading charge but never discussed it and always referred matters of pay to the home office. A few times Knorr discussed his checks with him if he thought there was a load that he hadn't been paid for, but Knorr never mentioned the rates or amounts he was paid. He was discharged on March 14, 1964.

Howard C. Krause testified for Knorr. He audited information furnished by Knorr only to assess the mileage rates and had no ...

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