Dayton Coal & Iron Co. v. Cincinnati, New Orleans & Texas Pacific Railway Co.

Background

A Georgia iron shipper (the Dayton Coal and Iron Company) paid a reduced 60-cent freight charge but was billed by a connecting railroad (the Southern Railway) at 70 cents per ton. The Southern Railway sued in federal court for the $4,933.08 difference. The shipper went to a Tennessee chancery court seeking to stop that federal suit and argued the true rate was 60 cents. The initial carrier, the Nashville, Chattanooga & St. Louis Railway, had filed a joint tariff with the Interstate Commerce Commission that showed a 70-cent through rate effective March 5, 1907.

Reasoning

The central question was whether the 70-cent tariff filed with the Interstate Commerce Commission was the lawful rate for those shipments. The Court found the tariff was filed to take effect on March 5, 1907, that the connecting carrier accepted and acted on that schedule by receiving and routing freight, and that those actions made the 70-cent charge a joint, enforceable rate. The Court explained that informal payments at 60 cents did not change the published legal rate. It also noted that at the time acceptance without formal notice was recognized by the Commission, although a later Commission order required explicit acceptance.

Real world impact

The ruling lets a railroad enforce a tariff it filed with the Interstate Commerce Commission against a shipper. Shippers who paid lower informal rates cannot rely on those payments to override a filed joint rate. The decision affirms the state court’s dismissal of the shipper’s bill and leaves the filed 70-cent rate in effect for these shipments.