Chesapeake & Ohio Railway Co. v. Westinghouse, Church, Kerr & Co.
Headline: Court affirms that a railroad cannot charge extra above tariff rates for spotting service by renting an engine and crew, striking down a private contract that gave favorable treatment to one shipper.
Holding: The special engine-and-crew agreement was for service covered by tariff, so charging more than the tariff and privately guaranteeing special treatment made the contract void and unenforceable.
- Prevents carriers from privately charging more than published tariff rates.
- Stops railroads from promising special treatment to one shipper for extra pay.
- Makes side agreements for tariff-covered services unenforceable, even in congestion.
Summary
Background
A railroad company assigned an engine and crew to a construction contractor working for the Government at Newport News after wartime congestion made normal spotting service unreliable. The contractor used the engine and crew from September 1917 until April 1918. The railroad sued to recover unpaid charges for the earlier period, and the Director General sued for the later period. Lower courts ruled against the railroad, and the case reached this Court.
Reasoning
The central question was whether the private agreement to rent an engine and crew was enforceable. The Court found that the special engine-and-crew service was the same spotting service already covered by the railroad’s published tariffs. Federal law forbids carriers from charging more than those tariffs. Because the agreement sought extra payment for a tariff-covered service, the Court said the contract was both without consideration and illegal. The Court also held that guaranteeing special performance for one shipper amounted to an improper preference and made the agreement void.
Real world impact
The ruling means railroads cannot bypass published rates by making private side deals to charge some shippers more or promise special treatment. Even in abnormal wartime conditions, extra payment for services that tariffs already cover is unenforceable. The Court did not decide any separate state-law questions, and its decision rests on the federal prohibition against extra tariff charges.
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