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Indiana Harbor Belt R.r. Co. v. Budd Co.

OPINION FILED OCTOBER 29, 1982.

INDIANA HARBOR BELT RAILROAD COMPANY, PLAINTIFF-APPELLANT,

v.

THE BUDD COMPANY, DEFENDANT-APPELLEE.



Appeal from the Circuit Court of Cook County; the Hon. Louis Wexler, Judge, presiding.

PRESIDING JUSTICE SULLIVAN DELIVERED THE OPINION OF THE COURT:

Plaintiff appeals a judgment against it in an action to collect additional demurrage charges *fn1 based upon a recomputation of the charges previously made.

Initially, it should be noted that because the facts have been set forth in a prior appeal in this matter, *fn2 they will be repeated only insofar as they are pertinent here. In this regard, it appears that since 1950, plaintiff has supplied empty railroad cars needed by defendant for the loading and transportation of its products. Cars assigned for defendant's exclusive use were stored at plaintiff's freight yard six miles from defendant's industrial plant, and plaintiff — upon receiving an order for cars — would deliver them to one of defendant's five interchange tracks located adjacent to its plant where they would remain until defendant's switching crews took them from the interchange tracks and brought them inside its plant for loading. After the cars were loaded, defendant's crews returned them to one of the interchange tracks and released them to plaintiff for delivery to defendant's customers.

Prior to October 1973, the parties had always treated the cars as subject to demurrage from the time defendant placed them in its plant for loading until they were released to plaintiff for delivery, but plaintiff concluded that it had improperly interpreted the tariffs governing demurrage, and it notified defendant that as of October 1973, demurrage would be assessed from the date empty cars were placed on the interchange tracks until they were released under load to plaintiff. Thereafter, all demurrage bills were assessed consistent with the new method of calculation and have been paid by defendant. Plaintiff, however, also issued corrected bills to defendant, pursuant to section 16(3) of the Interstate Commerce Act (49 U.S.C. § 16(3) (1976)) (current version at 49 U.S.C.A. secs. 11705, 11706 (1982)), for the period from March 1, 1971, to September 30, 1973, based upon a recomputation under the new method. Defendant, having already paid the charges that were assessed during that period, refused to pay the additional amount.

Plaintiff then brought this action, seeking $425,685 *fn3 from defendant for the additional demurrage charges for the stated period. Defendant counterclaimed for $40,000 — the amount of the increase in charges it had paid to plaintiff from October 1973 through the date of the filing of the amended complaint — and it later moved for and was granted summary judgment, which this court reversed and remanded in the prior appeal. The ensuing trial resulted in a finding for defendant on plaintiff's claim for the additional demurrage charges and for plaintiff on defendant's counterclaim. This appeal is brought by plaintiff from the denial of its claim. *fn4

OPINION

The sole question presented here is the propriety of the trial court's finding that plaintiff may not recover additional demurrage charges from defendant for the period from March 1, 1971, through September 30, 1973.

Initially, we note that the demurrage tariffs pertinent here include Freight Tariff No. 4-1, I.C.C. No. H-36, effective June 1, 1968, and Freight Tariff No. 4-J, I.C.C. No. H-59, effective April 1, 1973, which replaced and is phrased identically to Tariff No. 4-1, and in Section 1, Rule 3, Item 910 thereof, there are two relevant sections which are set forth as follows:

"SECTION D. — * * * on cars to be delivered on other-than-public-delivery tracks, time will be computed from the first 7:00 A.M. after actual * * * placement on such tracks.

Time computed from actual placement on cars placed at exactly 7:00 A.M. will begin at the same 7:00 A.M.; actual placement to be determined by the precise time the engine cuts loose. * * *

NOTE. — `Actual Placement' is made when a car is placed in an accessible position for loading or unloading or at a point previously designated by the consignor or consignee. * * *

SECTION E. — * * * on cars to be delivered on interchange tracks of industrial plants performing the switching service for themselves or other parties, time will be computed from the first 7:00 A.M. after actual * * * placement on such interchange tracks until return to the same or another interchange track. Time computed from actual placement on cars placed at exactly 7:00 A.M. will begin at the same 7:00 A.M.; actual placement to be determined by the precise time the engine cuts loose."

• 1 The law conclusively presumes that shippers are aware of lawful tariff rates (Kansas City Southern Ry. Co. v. Carl (1913), 227 U.S. 639, 57 L.Ed. 683, 33 S.Ct. 391; Illinois Central Gulf R.R. Co. v. Tabor Grain Co. (N.D. Ill. 1980), 488 F. Supp. 110), and where error or misrepresentation of a proper rate is made by a carrier, a shipper may not invoke the doctrine of waiver or estoppel against the right of a carrier to enforce legally applicable rates (Illinois Central Gulf R.R. Co. v. Tabor Grain Co.; Illinois Central Gulf R.R. Co. v. Golden Triangle Wholesale Gas Co. (N.D. Miss. 1976), 423 F. Supp. 679, aff'd (5th Cir. 1978), 586 F.2d 588; Illinois Central Gulf R.R. Co. v. Sankey Brothers, Inc. (1979), 78 Ill.2d 56, 398 N.E.2d 3; see generally 13 Am.Jur.2d Carriers sec. 109 (1964)). To hold otherwise would undermine the general purposes of tariffs to promote uniformity and to avoid rate discrimination among shippers. (Illinois Central Gulf R.R. Co. v. Tabor Grain Co.) However, where an ambiguous tariff is drafted by the carrier and its construction is in doubt, the tariff should be construed in favor of the shipper since the carrier is presumed to have used language necessary to protect its interest. Further, railroads which drafted tariffs and acquiesced in the shipper's interpretation over a long period of time are deemed to have given the tariff the same interpretation as the shipper. Illinois Central Gulf R.R. Co. v. Tabor Grain Co.; Norfolk & Western Ry. Co. v. Continental Grain Co. (E.D. Mo. 1979), 473 F. Supp. 1093, aff'd (8th Cir. 1980), 620 F.2d 307; Kansas City Southern Ry. Co. v. Kansas City Power & Light Co. (W.D. Mo. 1976), 430 F. Supp. 722, aff'd (8th Cir. 1977), 551 F.2d 1134; Calcium Carbonate Co. v. United States (S.D. Ill. 1966), 256 F. Supp. 99.

In Calcium Carbonate Co., two railroads submitted revised tariff rates to plaintiffs, who were in the business of selling and shipping ground limestone, contending that the rates collected and charged during the preceding three years were inapplicable and that a higher scale was controlling. The controversy involved a dispute over the meaning ...


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