
    UNION PACIFIC RAILROAD COMPANY v. THE UNITED STATES
    [No. 171-55.
    Decided March 5, 1958]
    
      
      Mr. Raymond A. Negus for the plaintiff. Mr. Lawrence Cake was on the brief.
    
      Mr. Paris T. Houston,. with whom was Mr. Assistant Attorney General George Cochran DouT), for the defendant.
   Opinion

per curiam;

This case was referred by the court pursuant to Rules 45 and 46 to C. Murray Bernhardt, a commissioner of the court, with directions to make findings of fact and recommendations as to the legal conclusions to which the court should arrive, considering such findings of fact, applicable statutes, and legal principles.

Accordingly, Commissioner Bernhardt has submitted his findings of fact and opinion of law which, with slight change, we approve and adopt as our own.

Based thereon, judgment will be entered for plaintiff in the sum of four thousand ten dollars ($4,010).

It is so ordered.

OPINION OP COMMISSIONER

The plaintiff railroad is claiming unpaid demurrage on flatcars allegedly ordered and/or appropriated by defendant for its use at the Marine Corps Supply Annex, Nebo, California. The defendant contends that the cars were voluntarily supplied by plaintiff without a valid order from defendant, and were not used or appropriated for use by defendant, although their use had been intended prior to a change in plans causing the equipment to be shipped by truck. The controversy depends upon the construction of freight tariff number 4 relating to car demurrage rules and charges, and its application to the following facts:

The circumstances giving rise to the claim occurred in October and November 1952. On October 22 the Marine Corps Supply Depot in San Francisco instructed the Marine Corps Supply Annex at Nebo, California, to ship 102 surplus unserviceable 105 mm. howitzers as soon as possible from their storage site at Nebo to the Tooele Ordnance Depot in Utah. Standard prescribed procedure in such situations called for the issuance of a route order by the Commandant of the Marine Corps specifying the mode of transportation, followed by the issuance to the carrier selected of a written order to provide required transportation services at a definite time and place. As a matter of practice, however, when the defendant’s agent at Nebo would receive information of a large shipment pending he would alert the carrier in advance of either obtaining a route order from higher authority or issuing a formal written car order to the carrier, whereupon the carrier would commence to assemble the necessary transportation equipment for the move. No written car order was issued to plaintiff in the instant case. Normally this informal alert procedure performed a useful function and served the mutual convenience of both carrier and shipper, in that the former could accumulate the necessary equipment and the latter would have the equipment available when needed. In the instant case it was a particularly justifiable expedient, since not only were freight cars in short supply at that time, but also material comparable in dimensions and character to the surplus howitzers had always moved in that area by rail and never by truck.

On October 29 or 30 the defendant’s traffic manager at Nebo notified the plaintiff’s agent at nearby Barstow that about 60 flatcars would be needed promptly at Nebo to commence loading the howitzers on November 3 for shipment to Warner, Utah, which apparently was the nearest rail point serving the Tooele Ordnance Depot. The plaintiff’s agent at Barstow immediately notified his superiors that 65 flatcars were needed at Nebo by November 3, and on the same day, October 30, defendant’s traffic manager at Nebo requested the Commandant of the Marine Corps to issue the necessary route order, fully expecting the route order would specify a rail shipment. The howitzers were ultimately transported by truck.

In response to defendant’s alert the plaintiff made available to defendant 35 flatcars between November 3 and 10, placing them on trackage belonging to defendant inside the Marine Corps Supply Annex at Nebo where they would be accessible for loading.

Meanwhile, on November 7, the Commandant of the Marine Corps issued a route order directing the shipment of the howitzers by truck. On November 12 for the first time the plaintiff was orally notified of this change in plans and removed its flatcars from defendant’s premises, thus terminating the accrual of demurrage charges. Uncertainty still prevailed on the part of defendant’s traffic manager at Nebo as to whether the indicated movement by truck instead of rail was to stand, for on November 13 the Commandant canceled his previous instruction to ship by truck, directed shipment by rail instead to be shared by three carriers including plaintiff, and later the same day canceled the change and reverted to his original route order direction to move the howitzers by truck. Until November 12 at the earliest, and perhaps as late as November 14, defendant’s traffic manager at Nebo confidently expected the shipment to be made by rail, not only because it had been the undeviating practice to ship such equipment by rail but also because the size and weight of the howitzers would require special state permits for them to be moved by truck over state highways.

Relevant portions of Freight Tariff No. 4 governing car demurrage rules and charges in effect at times here material, provided:

Rule No. 3 — Computing Time — Item No. 510 *****
Section D. * * *
Note 1. — “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. If such placing is prevented from any cause attributable to consignor or consignee and car is placed on the private or other-than-public-delivery tracks serving the consignor or consignee, it shall be considered constructively placed without notice.
‡ ‡ ‡ ‡ ‡
Rule No. 6 — Cars for Loading — Item No. 525
Section A. — Cars for loading will be considered placed when such cars are actually placed or held on orders of the consignor. * * *
Section B. — When empty cars placed on orders are not used in transportation service, demurrage will be charged from actual or constructive placement until released, with no free time allowance. When a car so ordered and placed on a public track is not used, and no advice from the party who ordered the car has been received within 48 hours (2 days) (exclusive of Saturdays, Sundays and holidays (see Item No. 7)) from the first 7:00 A. M. after placement, the car may be removed and treated as released at the time of removal. * * *
* $ $ $ $
Section D. — 1. If any empty car is appropriated without being ordered, it shall be considered as having been ordered and actually placed at the time so appropriated. If not loaded outbound, such car is subject to Section B of this Rule.

The questions posed are — one, whether the cars in question were ordered by defendant and, two, whether, if not so ordered, they were appropriated by defendant so as to incur demurrage liability pursuant to Section I). 1. of Rule 6, Freight Tariff No. 4, quoted above. An affirmative answer to either of these tests would be fully dispositive of the claim in plaintiff’s favor. Comment on the first question, therefore, will be restricted to the observation that, even if the absence of a formal written order for the cars were to prevent the. existence of an enforceable formal contract between the parties, the circumstances surrounding the representations pursuant to which plaintiff supplied the cars, including the defendant’s vacillation in the issuance of a route order, could bring into existence an implied contract under which recovery would lie, assuming the subject matter to be within the scope of the authority of defendant’s traffic manager. Plaintiff’s position rests more solidly, however, on the second of the two grounds of recovery, for the facts provide strong evidence of appropriation of the cars by defendant for which, even without an order, the applicable tariff provision offers reimbursement for demurrage.

The Marine Corps Supply Annex at Nebo was a military installation surrounded by a wire fence and having two gates for ingress and egress of freight cars, both of which were guarded by Marine Corps personnel. The admitted placement of the flatcars in question on Marine Corps track-age inside the reservation creates a rebuttable presumption that it was done with the knowledge and consent, if not at the specific request, of defendant’s personnel. The fact that the tracks upon which the cars were placed were particularly accessible to defendant’s anticipated loading of howitzers, coupled with the natural assumption from the facts already given that plaintiff was to perform the transportation services, creates a strong inference that the cars were brought into the reservation at defendant’s instance as a routine step in the processing of a normal shipment. It is rather clear that the placement of cars within the reservation was not to suit the convenience of plaintiff by providing it with free storage facilities for its rolling equipment, for plaintiff had the use of its own storage track outside the reservation with ample room to accommodate the cars in question until the moment arrived for their loading. Had the cars been left on plaintiff’s storage track no liability for demurrage would have accrued to defendant and, when defendant’s agents permitted the cars to enter the reservation for placement, they impliedly acquiesced in any resulting liability, whether or not it was actively considered by them at the time. ■ This was an act of appropriation by defendant which, under the terms of the quoted tariff, entitled the carrier to compensation for demurrage even in the absence of an order or of ultimate use.

Such a holding is in harmony with the following reports of the Interstate Commerce Commission in comparable cases which have been cited by the parties: American Smelting and Refining Company v. Lehigh Valley Railroad Company, 56 I.C.C. 195; Gammill Lumber Co. v. Alabama & Vicksburg Ry. Co., et al., 87 I.C.C. 41; Eppinger & Russell Co. v. Atlantic Coast Line R.R. Co., 272 I.C.C. 510; Spencer Chemical Co. v. Missouri-Kansas-Texas R.R. Co., 284 I.C.C. 41.

The parties have stipulated that, if plaintiff prevails, it will be entitled to judgment in the amount of $4,010.

FINDINGS OF FACT

1. The plaintiff, a Utah corporation, is a common carrier by railroad over its own lines and in connection with other carriers.

2. On October 22, 1952, the United States Marine Corps Supply Depot at San Francisco issued a shipping order to the Marine Corps Supply Annex, Barstow, California, to ship 102 unserviceable carriage motor 105 howitzers M7B1 to the commanding officer at Tooele Ordnance Depot, Tooele, Utah, with delivery to be at the “soonest date.”

3. On October 29 or 80, 1952, Mr. Watha Justice, traffic manager for the Marine Corps at Barstow, California, orally informed Mr. R. D. Stiles, joint agent for the Atchison, Topeka and Santa Fe and Union Pacific Railroads (hereafter AT&SF, and UP), at Barstow, California, of the impending movement of a large quantity of Army surplus equipment from Barstow to Tooele, Utah, on the Union Pacific lines which would require the use of approximately 60 flatcars and that loading would start about November 3, 1952. It was the practice of the Marine Corps at Barstow to give the carrier advance notice of impending large shipments before placing formal orders for cars. This was done for the mutual convenience of the parties, so that the carrier could accumulate the necessary cars and the shipper would have the cars available when needed.

4. On October 30, 1952, plaintiff’s agent at Barstow wired his chief dispatcher and others of plaintiff’s officials essential in such movements that 65 empty cars were needed at Nebo by November 3 to commence loading equipment for transportation to Warner, Utah, which constituted a request by said agent to make such cars available at Nebo.

5. On October 30, 1952, the Marine Corps Supply Annex at Barstow notified the Commandant of the United States Marine Corps of the pending movement of 102 unserviceable motor howitzers 105 mm., commencing November 3,1952, requiring approximately 60 freight cars, and requested a routing order.

6. The Marine Corps Supply Annex is located at Nebo, California, six miles east of the AT&SF yards at Barstow, California. The Supply Annex is an area of almost 2,000 acres completely enclosed by a wire fence with ingress and egress gates controlled by Marine Corps personnel. The main line of the AT&SF runs parallel to and outside of the northern boundary of the Supply Annex, and its storage or holding track accommodating 90 to 100 freight cars is immediately adjacent to and outside of the northern boundary. Two tracks lead from the storage or holding track into the interior of the Supply Annex area where there are five classification tracks. In November 1952, the plaintiff shared the foregoing track facilities (not including Marine Corps track-age within the Supply Annex area) under an agreement with the AT&SF. When there was space available on plaintiff’s holding or storage track outside the Supply Annex area, as there was at all times here material, it was unusual if not unknown for the carrier to indulge its convenience by using defendant’s trackage within the Supply Annex area for the storage of empty freight cars.

7. On November 3, 4, and 10, 1952, necessarily either with defendant’s acquiescence or by its request, the AT&SF, as plaintiff’s agent, deposited, respectively, 17,16, and 2 empty 50' flat freight cars on the classification tracks within defendant’s Supply Annex area at Nebo. At no time did plaintiff receive written orders from defendant to deliver the freight cars. Prescribed procedures governing defendant’s agents required the issuance of a route order from higher authority specifying the mode of transportation as a prerequisite to the formal ordering of transportation equipment from the carrier on defendant’s car order form 61, as well as the issuance of the said form 61 at the time the equipment was ordered. However, as a matter of practice, car order forms 61 were customarily not issued to the carrier until the loading was completed or, at times, when the cars were subsequently relieved of their cargoes. Car order forms 61 were never issued to the carrier prior to issuance of route orders.

8. The first route order for the movement of the equipment in question was issued by the Commandant of the Marine Corps to the Supply Annex at Barstow under date of November 7, 1952, instructing that the equipment be forwarded to Warner, Utah, via the J. H. Rose Truck Line, Inc. On November 12, 1952, plaintiff was orally notified that the equipment was to be moved by motortruck rather than by rail, and on that date defendant released plaintiff’s freight cars and plaintiff removed them from the Supply Annex area. On November 14,1952, the Commandant of the Marine Corps notified the Supply Annex at Barstow to change previous instructions to ship via J. H. Rose Truck Line, Inc., and to ship 50 percent of the equipment via UP and the remaining 50 percent via AT&SF and the Western Pacific. However, later the same day the Commandant again canceled his instructions and directed the equipment be routed via J. H. Rose Truck Line, Inc. Up until November 12, 1952, defendant’s traffic manager at Barstow was confident that the equipment would be moved by rail and not by truck. It all moved by truck.

9. The low howitzers 105 mm., involved herein, were 9' 6" in width which precluded them from being shipped via the highways of California, Nevada, Utah, and Arizona without first receiving exceptions or permits waiving the 8' width, the legal limit in those states. Such permits were obtained for the J. H. Bose Truck Line, Inc., in connection with the shipment in suit. Prior to November 1952 all such shipments had moved by rail from the Marine Corps Supply Annex.

10. The following provisions of Freight Tariff No. 4 entitled “Car Demurrage Bules and Charges,” were in effect in October and November 1952:

Bule No. 1 — Cars Subject to Buies; also Exemptions Therefrom — Item No. 500
Section A. — Cars of either railroad or private ownership, held for or by consignors or consignees for loading, unloading, forwarding directions or for any other purpose (including cars held for loading company material unless, the loading is done by the railroad for which the material is intended and on its tracks or private sidings connecting therewith), and empty cars placed on orders which are not used in transportation service, are subject to these demurrage rules, except as provided in Section B.
* * * * *
Buie No. 3 — Computing Time — Item No. 510 * * * * *
Section D. — Except as otherwise provided in Section B, Paragraph 1, of this Buie, on cars to be delivered on other-than-public-delivery tracks, time will be computed from the first 7:00 A. M. after actual or constructive 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. (See Buie 4, Section C, page 47 and Buie 5, page 48 and Buie 6, page 49.)
Note 1. — “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. If such placing is prevented from any cause attributable to consignor or consignee and car is placed on the private or other-than-public-delivery tracks serving the consignor or consignee, it shall be considered constructively placed without notice.
Section E. — Except as otherwise provided in Section B, Paragraph 1, of this rule, 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 or constructive 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. (See Rule 2, Section A, Paragraph 2, page 44, Rule 4, Section C, page 47, Rule 5, page 48 and Rule 6, page 49.) Cars returned loaded will not be recorded released until necessary billing instructions are furnished.
* * Ijc * $
Rule No. 6 — Cars for Loading — Item No. 525
Section A. — Cars for loading will be considered placed when such cars are actually placed or held on orders of the consignor. In the latter case the agent must send or give the consignor written notice of all cars which he has been unable to place because of condition of the other-than-public-delivery track or because of other conditions attributable to the consignor. This will be considered constructive placement. (See Rule 3, Sections A, D and E, pages 45 and 46.)
Section B. — When empty cars placed on orders are not used in transportation service, demurrage will be charged from actual or constructive placement until released, with no free time allowance. When a car so ordered and placed on a public track is not used, and no advice from the party who ordered the car has been received within 48 hours (2 days) (exclusive of Saturdays, Sundays, and holidays (see Item No. 7)) from the first 7: 00 A.M. after placement, the car may be removed and treated as released at the time of removal. (See Rule 3 opening paragraph, page 45.)
Note. — In the application of this Section, a demurrage day consists of a twenty-four hour period or fraction thereof computed from the hour of actual or constructive placement of the car, except that on cars placed in advance of the date for which ordered for loading, time will be computed from 7:00 A.M. of the day for which so ordered. (See Section D.)
Section C. — Private cars which have been loaded on the tracks of their owners, received from such tracks and held by this railroad for forwarding directions, are subject to demurrage charges from the first 7:00 A.M. after they are received until proper forwarding directions are furnished, with no free time allowance and without notice, except that cars received between 4:00 P.M. and 7:00 A.M. will not be subject to demurrage if forwarding directions are received prior to the following 12:00 noon (exclusive of Saturdays, Sundays, and holidays (see Item No. 7)).
Section D.—
1. If any empty car is appropriated without being ordered, it shall be considered as having been ordered and actually placed at the time so appropriated. If not loaded outbound, such car is subject to Section B of this Buie.
2. When an empty car placed on an order of one party is appropriated by another party, without permission of this railroad, it shall be considered as having been initially ordered and placed on the order of the party appropriating the car.

11. During the period October 30 to November 15, 1952, there was a short supply of large size flatcars of the type necessary to move the 102 howitzers involved herein.

12. The parties have stipulated that, if plaintiff prevails in the case, it will be entitled to judgment in the amount of $4,010, and if defendant prevails in the case, plaintiff will recover nothing.

CONCLUSION OE LAW

Upon the foregoing findings of fact, which are made a part of the judgment herein, the court concludes as a matter of law that plaintiff is entitled to recover of and from the United States and judgment is therefore entered for plaintiff in the amount of four thousand and ten dollars ($4,010). 
      
       Since tie gates to the Supply Annex were guarded by Marine Corps personnel, It is reasonable to conclude that plaintiff could not have moved its cars inside the installation without defendant’s actual or constructive knowledge and consent. The record does not reveal whether defendant actuaUy requested the cars to be deposited inside the installation, but assuming the tona fideo of defendant’s prospective use of the cars, it would have been logical to place the cars on defendant’s classification tracks in one move, as was done, rather than leave them first on plaintiff’s holding track and then subsequently move them inside.
     