Illinois Central Railroad v. Henderson Elevator Co.
Headline: Court reversed a ruling for a local shipper, holding that published federal tariff rates — not a railroad agent’s incorrect lower quote — determine interstate freight charges and limit recovery for shippers.
Holding: The Court reversed, holding that a railroad’s published tariff on file with the federal regulator controls interstate freight rates and that an agent’s erroneous lower quotation does not establish a basis for damages against the carrier.
- Published tariffs filed with the federal regulator govern freight rates, not agent quotes.
- Shippers cannot recover damages just because an agent quoted a lower rate.
- Railroads’ published rates apply even if local offices failed to post them.
Summary
Background
The dispute began when a grain buyer at Henderson, Kentucky, sued a railroad after its local agent quoted a lower freight rate for shipping corn than the published rate filed with the federal regulator. The buyer said the mistaken quote caused a financial loss. At trial the judge instructed the jury to rule for the buyer if the loss was caused by the railroad’s failure to post or file rates locally and by the agent’s erroneous quotation. The jury returned a verdict for the buyer, and the Kentucky Court of Appeals affirmed that judgment.
Reasoning
The Supreme Court, speaking by direction of Chief Justice White, found the lower courts’ rulings in conflict with earlier decisions under the federal law that regulates interstate rail rates. The opinion explained that published tariffs on file with the federal regulator govern freight charges and cited prior cases that apply that rule. It also noted that a railroad’s failure to post rates locally does not avoid the settled rule that filed tariffs control. For those reasons the Court reversed the judgment for the buyer.
Real world impact
The decision emphasizes that shippers generally must rely on published rates filed with the federal regulator rather than on informal quotes from individual railroad agents. It limits the ability of buyers to recover damages when an agent gives an incorrect lower price, and it reaffirms that published tariffs control interstate freight practices under the federal regulatory scheme.
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