Southwestern Sugar & Molasses Company, Inc. v. River Terminals Corporation

PETITIONER:Southwestern Sugar & Molasses Company, Inc.
RESPONDENT:River Terminals Corporation
LOCATION:Union Station

DOCKET NO.: 155
DECIDED BY: Warren Court (1958-1962)
LOWER COURT: United States Court of Appeals for the Fifth Circuit

CITATION: 360 US 411 (1959)
ARGUED: Mar 03, 1959
DECIDED: Jun 22, 1959

Facts of the case

Question

  • Oral Argument – March 03, 1959 (Part 1)
  • Audio Transcription for Oral Argument – March 03, 1959 (Part 1) in Southwestern Sugar & Molasses Company, Inc. v. River Terminals Corporation

    Audio Transcription for Oral Argument – March 03, 1959 (Part 2) in Southwestern Sugar & Molasses Company, Inc. v. River Terminals Corporation

    Selim B. Lemle:

    This thing I’m talking about, the sea rates in the Folsom background.

    I said sea rate, a special rated commodity.

    This is the rate put in where a shipper insists on using his own barges and is a particular kind of carriage, one in which the carriage would prefer not to engage.

    They have to because the shipper permitted to furnish his barges and there’s a reason for that, any real reason.

    The carriers maintain many of them, fleets and barges, 400 to 600 barges and those barges are sitting there empty and available for use, they’re not tank barges in this case because the general rule with shippers — carriers in a — furnish special purpose barges.

    And a shipper gives you a barge.

    It gives you a barge under load.

    You have to take it.

    Literally, you’re getting a periodic boat, many of these barges, are really many of them are literally fugitive from a junk pile.

    Barges which some of them have been bought from carriers.

    Carriers retiring from service many years before and you get a barge, you get it on to load, you can’t see it.

    The standard barge is 11 feet deep.

    You got to put in there, a free board with 9.5 feet of the barge under water, you can’t look at it.

    You don’t know whether it’s loaded, rusted, scaly, leaking, rusted, scaly or what it is.

    You can’t go under the cargo compartments because they’re for cargo.

    You can’t go to direct compartments because they’re not gas free.

    And you have to take that barge and you have to tour it.So the carrier does the best thing he can.

    He said two things.

    He says, one, “Yes, I’ll take your barge, but it’s your risk because I don’t know what it is and I can’t see what it is when you give it to me under load.”

    And number two, “You’ll warrant me to me that this barge which you overloaded is properly loaded and is fit and proper for the transportation that we’re about to undertake.”

    He puts both loads of barges down.

    That second clause is quite material, the warranty of seaworthiness and proper load, I submit that it is not at all forbidden by Section 1 of the Harter Act or Section — or Section 2 of one of the Harter Act says that a carrier owns the vessel (Inaudible) to make it seaworthiness carried over into Section 3.

    The carrier is in this instance is not the owner of the barge, the shipper is the owner of the barge.

    Potter Stewart:

    Mr. Lemle, this is the — we call it the sea rate A, B and C, and this is the sea rate.

    Selim B. Lemle:

    Yes.

    The sea rate, as I say, is a special low rate.

    Potter Stewart:

    Now, cover — covering barges owned by the shipper.

    Selim B. Lemle:

    Only.

    Potter Stewart:

    Only.

    Selim B. Lemle:

    In barges only.

    Potter Stewart:

    Now is there an — an alternative rate available for the towage of a — of a barge owned by the shipper — a higher rate not containing these clauses?

    Is there any such rate as that?

    Selim B. Lemle:

    Not in this case.

    In all of the cases of ordinary commodities which are carried in standard barges, the answer is yes.

    This was a tank barge and the carriers do not supply tank barges.So in this — North Railroad, supply of tank car, supplied by the tank corporation.

    In this case, there was no alternative rate because the carrier did not afford any of the service in transportation in the shipper’s barge in this particular case, where it might be, again, use assembly that this case is a very short tail of a long dog and should not be permitted to wag the dog.

    We’re talking here about one of the biggest transportation features in this country which would go in by leaps and bounds.

    There’s the Mississippi Valley Barge Line Company in 19 — which I happen to know, 18 billion tons of revenue traffic in one year, revenues of more than $20 million.

    That’s only one of the four big river carriers.

    So, that this is the principle which will come out of this case goes far beyond what is involved in this case, far beyond the case.

    Potter Stewart:

    One other question, Mr. Lemle, if I may.

    If the — if the shipper should go to the Interstate Commerce Commission under, whatever it is, Section 308, I’ve been told, and asked for reparations, of course the reparations wouldn’t at all be measurable by the — by the loss that he suffered of his molasses and of his barge, wouldn’t he?

    Selim B. Lemle:

    That’s true.

    Potter Stewart:

    How would that be measured?

    What — what would the reparations be if — if — if this clause —

    Selim B. Lemle:

    If —

    Potter Stewart:

    — if assuming ICC decided this clause was — was unreasonable.

    Selim B. Lemle:

    If the ICC —

    Potter Stewart:

    Unreasonable part of term.

    Selim B. Lemle:

    If the ICC — well, if Your Honor please, I — I’m frank to say I had not gone that far in my — even in my old mind.

    I’m going real quickly and I’m making — making a bad guess, and I’ll come to this just in a minute.

    I would say that if the ICC said that this rate was unreasonable and that we had required the shipper to do something that he couldn’t be required to do, he could then start an action of the law where you can’t —

    Felix Frankfurter:

    This — this suit is still pending, as I read this final (Inaudible)

    Selim B. Lemle:

    Your Honor, it’s correct.

    I stand corrected.

    Potter Stewart:

    So the ICC would just — would just expunge that provision and they can —

    Selim B. Lemle:

    I think it expunged (Voice Overlap) —

    Potter Stewart:

    — they — and the lawsuit would proceed to the District Court.

    Selim B. Lemle:

    (Inaudible)

    That’s absolutely correct.

    Felix Frankfurter:

    Reparations merely go — rep —

    Selim B. Lemle:

    That is —

    Felix Frankfurter:

    — reparations as to rate.

    That’s correct.

    That’s absolutely correct, if Your Honor please.

    And — while I’m — Mr. Justice Stewart, while I’m talking to you, I made a bad guess a while ago.

    You asked me how many years it’s been in effect and I guess it’s been in effect for 10 years before this action — the fourth year, the Interstate Commerce Act didn’t come effect until 1940.

    But this does necessarily must have been filed sometime between 1940 and 1944 but it was still in effect 15 years before this.

    Now, as I — as I — this — that brings you back to the question as we go to the ICC, I assume that the ICC will have to conduct a cost study.

    They conducted a cost study in the El Dorado Oil Company cases, quite a lengthy one, and — as Mr. — I think Mr. Justice Harlan was the author of the Court, in the — in United States against the Western Pacific Railroad Companies said, “There, the tariff was not an obstruction and that the Interstate Commerce Commission would have to look at the rates and would have to determine the rate.”

    Any rate that they would determine, I’d say would have to include the insurance if they decided to make the carrier insure, otherwise, it would be confiscatory.

    If Your Honor please, my time has elapsed.

    I’ve only touched on one point.

    Point one, I’ve never touched on the merits of this case.

    Hugo L. Black:

    Suppose they held the rates unreasonable, what effects would that have on this case, in this lawsuit?

    Selim B. Lemle:

    If they hold the rates unreasonable, it will go back to the Court of Appeals, pass on other features of this case.

    The Court of Appeals passed on one point in this case, passed on one assignment area out of four.

    The three assignments the Railroad passed pending before the Court of Appeals, the Court of Appeals never touched.

    Hugo L. Black:

    Well, would it — would the finding of unreasonable rates settle the question of liability?

    Selim B. Lemle:

    No.

    Hugo L. Black:

    It would have nothing to do with it.

    Selim B. Lemle:

    Correct.

    Because I envision this case, had nothing to do with it.

    Earl Warren:

    Thank you.