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Union Pacific Railroad Co. v. Hall Lumber Sales Inc.

December 4, 1969

UNION PACIFIC RAILROAD COMPANY, A CORPORATION, PLAINTIFF-APPELLANT
v.
HALL LUMBER SALES, INC., DEFENDANT-APPELLEE



Knoch, Senior Circuit Judge, and Fairchild and Kerner, Circuit Judges.

Author: Fairchild

FAIRCHILD, Circuit Judge.

Plaintiff Union Pacific Railroad Company brought an action to recover freight charges from defendant Hall Lumber Sales, Inc. There are no issues of fact. The district court gave judgment for Hall, and Union Pacific appealed.

On July 3, 1964, at Pendleton, Oregon, Union Pacific received a carload of lumber for carriage pursuant to uniform straight bill of lading. United Alpine Lumber Co., the consignor, consigned the car to itself at Beloit, Kansas for furtherance. On July 8, United Alpine directed Union Pacific by telegram to divert the car to Hall at McFarland, Wisconsin, to show United Alpine as shipper, to "Sign Sec. 7" and protect 131 cent rate.

A new waybill was made out, in lieu of the original, showing Hall as consignee at McFarland, and showing consignor's signature on the section 7 non-recourse provision.

On July 10, Hall gave written direction to the Milwaukee Road, delivering carrier, to release the car on arrival at McFarland to Waubesa Lumber and to "Show Hall Lumber Sales, Inc. as shipper on the freight bill, all charges to follow the car, protecting the lowest through rate." We consider this a clear expression of Hall's desire that Waubesa Lumber be held liable for the freight charges.

The Milwaukee Road released the lumber to Waubesa Lumber Company July 15. Freight charges of $1,079.56 ($1.31 rate from Pendleton to McFarland) and a reconsignment charge of $7.72 were not paid. Waubesa is bankrupt.

Hall had bought the lumber from United Alpine July 8 and sold it to Waubesa July 13.

The question whether United Alpine, the original shipper, successfully avoided liability is not before us. Our question is whether Hall as consignee (or reconsignee) did so.

In 1939, this court decided a case which the district court considered indistinguishable: New York Cent. R. Co. v. Transamerican Petroleum Corp.*fn1 We agree. Unless there is a valid reason for not following it, Transamerican supports the judgment of the district court.

This court concluded in Transamerican that the freedom of the consignee and carrier to contract concerning the matter in issue was not limited by the interstate commerce act. It recognized that a consignee exercises a degree of dominion over the shipment when it reconsigns, but rejected the " Ross "*fn2 view that such act fixes liability upon the consignee. It concluded that by implication from the consignee's direction to deliver to another and collect freight charges from the other and the railroad's conduct in giving effect to such reconsignment the railroad agreed to accept the liability of the new consignee (if it accept the shipment) in place of the liability which the original consignee would sustain if it accepted the shipment.

Union Pacific argues, in part, that Transamerican was wrongly decided, but more particularly that changes in the interstate commerce act and in the provisions of the bill of lading have superseded the principle of that decision.

Union Pacific relies in part upon a 1965 fifth circuit Burchwell decision*fn3 which concluded that amendments adopted by Congress in 1940*fn4 "appear to have been designed to emphasize that the Transamerican case was wrongly decided."

Unfortunately no provision of the statute nor uniform bill of lading prescribed by the Interstate Commerce Commission deals specifically with the liability of a consignee-owner who sells the shipment while in transit and reconsigns to the buyer, making it evident to the railroad that the buyer is to be liable for the freight charges. We therefore examine the statute and bill of ...


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