Berwind-White Coal Mining Co. v. Chicago & Erie Railroad

Background

A shipper sent carloads of coal from West Virginia to Chicago where the cars were to be reconsigned. A lower court awarded the railroad demurrage charges for holding the cars. The shipper argued to the Court that the charges violated a federal railroad law because no formal tariff or public posting authorized the charge. The railroad had filed tariff sheets, had earlier filed a book of rules from the Chicago Car Service Association about demurrage, and had written the federal Commission that the demurrage would be one dollar per day; the Commission received and filed those documents without objection.

Reasoning

The main question was whether those filings and the long-standing practice gave proper notice and authorized demurrage. The Court noted the Commission had placed the documents on file and found them adequate to give notice, rejecting the shipper’s claim that formality or proof of public posting was lacking. The Court also rejected the second argument that demurrage only applied at the final terminal, because the railroad’s storage tracks at Hammond, Indiana, were used for cars billed to Chicago and were connected to the city by a belt line. Holding cars on those tracks had been customary for more than twenty years, so charging demurrage under the filed rules was proper. The Court called the shipper’s objections frivolous and affirmed the judgment.

Real world impact

The decision confirms that filed tariffs and carrier rules accepted by the Commission can justify demurrage charges. Shippers should expect demurrage when cars are held on customary storage tracks outside a city for reconsignment. The ruling upholds long-standing industry practice.