Dexter & Carpenter, Inc. v. Davis

KNAPP, Circuit Judge. In September and October, 1919, Dexter & Carpenter, Inc., plaintiff below and herein so called, shipped from certain mines in West Virginia a large quantity of coal, aggregating 23,508.05 tons, over the Baltimore & Ohio Railroad to Baltimore, Md., for export. All this coal was confiscated for railroad use before arriving at destination, some of it prior to October 31st, but the greater portion on or after that date. Plaintiff was paid for the coal the cost to it at the mines, and this suit is brought to recover the difference between that amount and the “just compensation” which it claims as a constitutional right. In the court below, where by stipulation the case was tried without a jury, judgment was rendered for defendant, and plaintiff brings the case here on writ of error. [387] That the coal in suit was intended for export is not disputed. Indeed, counsel for defendant stated at the trial: “In this case there is no suggestion on our part at all that Dexter & Carpenter were not trying all they knew how to get the coal abroad.” When this coal moved from the mines, the Baltimore & Ohio Railroad was under operation by the government, and coal for export could be shipped only on permits and in accordance with rules established by the Tidewater Coal Exchange. Rule 15 required the coal to be consigned to the Exchange for account of the shipping member, who received credit therefor in designated “pools”; and this credit was at once available to him for loading vessels or making deliveries at tidewater. At that time plaintiff had two contracts for the sale of export coal, one with G. & R. Beijer, Mahno, Sweden, for 15,000 tons of pool 33 coal, f. o. b. steamer at Baltimore, and one with the Netherlands government for 75,000 tons of pools 36 and 37 coal, c. i. f. Rotterdam, and the larger part of the confiscated coal was intended to apply on those contracts, which were then unfilled. For this portion plaintiff claims the contract price. There was also a contract with the Coal Trading Association of Rotterdam for a quantity of pool 34 coal, of which 2,375.60 tons were confiscated, but which contract was after-wards filled. For* this coal plaintiff claims $4.31 a gross ton, the government price at the mine plus the export allowance, which is slightly less than the market value shown by the testimony. [1] As to the coal confiscated prior to October 31st, the defense relied upon is that plaintiff’s compensation is fixed and limited by the following provision in the tariff under which the coal was transported: “Tbe amount of any loss or damage for which the carrier is liable shall be computed on the basis of the value of the property at the time and place of shipment.” As plaintiff was paid on that basis the question to be determined is whether the tariff provision is controlling. The confiscation of plaintiff’s coal was the taking by the government of private property for public use, and that may not be_ done, under the Fifth Amendment, “without just compensation.” Even if it be conceded that the phrase “loss or damage” includes confiscation, which seems at least doubtful, it is manifest that a tariff provision cannot serve to destroy or diminish a constitutional right. We see no escape from the conclusion that plaintiff, whose coal was taken for government use, is entitled to recover therefor on the basis guaranteed by the Constitution. Monongahela Navigation Co. v. United States, 148 U. S. 312, 13 Sup. Ct. 622, 37 L. Ed. 463; Filbin Corporation v. United States (D. C.) 265 Fed. 354; National City Bank v. United States (D. C.) 275 Fed. 855; United States v. New River Collieries Co. (C. C. A.) 276 Fed. 690. In the last-named case the United States requisitiqned a large quantity of coal belonging to the Collieries Company, and tendered payment at a price named by the Navy Department. This was refused and suit brought. The court says: “At tbe trial, both parties offered evidence in support of what they respectively regarded as the true measure of compensation, fully realizing that in providing that compensation be made for private property taken for public [388] use tbe Congress intended compensation of a character that would conform with the ‘just compensation’ prescribed, in like event, by the Fifth Amendment to the Constitution. United States v. Cohen Grocery Co., 255 U. S. 88.” National City Bank v. United States, supra, was also a suit under the Never Act (Comp. St. 1918, Comp. St. Ann. Supp. 1919, §§ 3115%e—3115%kk, 3115%!—3115%r). The opinion of Judge Mayer, in which numerous authorities are cited, leaves little to be said. It is sufficient to quote the following: “To carry out the purposes of the act, the President could make regulations in the way, inter alia, of fixing prices in ordinary trading or commercial transactions; but when the United States itself took foods—i. e., property—it was bound to award just compensation, and what is just compensation under, the Constitution is determined by the same legal principles in war as in peace.” [2] The same measure of damages would apply if the railroad company itself had converted the coal. The limitations of value in the ordinary bill of lading have no application to loss due to the conversion of the property by the carrier. 4 R. C. L. pp. 792, 793; Adams Express Co. v. Berry, 35 App. D. C. 208, 31 L. R. A. (N. S.) 309, and note; Ann. Cas. 1913D, 990; Central of Georgia Ry. Co. v. Chicago Portrait Co., 122 Ga. 11, 49 S. E. 727, 106 Am. St. Rep. 87. [3] We agree with defendant that the Cummins Amendment to the Carmack Amendment (paragraph 11, section 20 of the Act-to regulate commerce. [Comp. St. § 8604a]) has no application, because, in a word, the amended section is confined to transportation which is wholly interstate, “or from any point in the United States to * * * an adjacent foreign country,” while the transportation here in question was to a foreign country not adjacent. The Interstate Commerce Commission has so held in Re Cummins Amendment, 33 Interst. Com. Com’n 682, 693, and so has the Court of Appeals of Maryland, in Fahey v. Baltimore & O. R. Co., 139 Md. 161, 114 Atl. 905. [4] As to the coal appropriated on or after October 31st, the defense set up is that plaintiff is entitled only to the mine price, which it has received, because of certain orders of the United States Fuel Administrator. It appears and is conceded that all prior orders were suspended on January 31, 1919, except those mentioned in the order of that date. In consequence, the only order here involved which remained in force at the time plaintiff shipped its coal was the so-called “contract order” of January 17, 1919. That order required every contract for the sale of coal to provide that the coal deliverable thereunder should be subject to requisition by the Fuel Administrator, and “that such requisition shall be made at the going government price in effect at the date of shipment,” or, if on that date there was no government price, “then at the price at which such shipment has been consigned by the shipper thereof.” When the coal in suit was shipped from the mines there was no government price in effect, and defendant’s brief admits “that if the coal had moved on a European contract, and if the particular coal which was diverted had been consigned to a European consignee by the shipper thereof, the plaintiff would be entitled to such European contract price.” But “the price at which such shipment has [389] been consigned by the shipper thereof,” which was required to be included in the contract of sale, clearly means the selling price of the coal under that contract. And this meaning of the provision is not deprived of application, nor is the essential character of the shipment affected, by the circumstance that the coal was consigned, as it had to be, to the Tidewater Coal Exchange for plaintiff’s account. To hold otherwise would be to measure the transaction, not by its substance and evident intent, but by the particular form which superior authority compelled it to take. Under the conditions of modern commerce cases of this sort cannot fairly be decided on the identity of particular bushels of wheat or tons of coal. The test is: Did the possession of or contract for a certain quantity of coal permit the sale of a like quantity from a general place of storage or supply, like the terminal of this exchange? If it did, then the conversion of the coal in possession or under contract would defeat the sale from such place of storage or supply, and the value of the coal in that place for its intended purpose would be the measure of just compensation. It would seem plainly inequitable to allow the government to evade liability in this case on the sole ground that, under the rules of the exchange, plaintiff could not consign its coal directly to the foreign buyers with whom it had contracts, but was required to make the exchange the consigneeand especially so in view of the fact, which the testimony indicates, that the exchange itself was virtually controlled by the Director General of Railroads. In short, we are of opinion that plaintiff’s coal was moving on foreign contracts, and that the contract price in each case was the price at which its shipments were “consigned by the shipper thereof.” The order of January 18, 1919, which was restored by the order of October 31st, has no application, because there was no sale to the government and no request by the Fuel Administrator for a cancellation of the contracts. We therefore conclude, without expanding the argument, that plaintiff is entitled to recover its entire claim under the common-law rule laid down in the recent case of Chicago, M. & St. P. Ry. Co. v. McCaull-Dinsmore Co., 253 U. S. 97, 40 Sup. Ct. 504, 64 L. Ed. 801, as follows: “Tlie rule of the common law is not an arbitrary fiat, but an embodiment of the plain fact that the actual loss caused, by a breach of contract is the loss of what the contractee would have had if the contract had been performed, less the proper deductions.” The evidence shows that plaintiff did not fill its foreign orders, and so lost the profit it would have made on this coal, if the government had not prevented its delivery. It also shows that the government price for export coal was somewhat in excess of the contract price which plaintiff claims as the basis of damages. On this record the measure of just compensation is the contract price for so much of the coal as was intended to apply on the Beijer and Netherlands contracts, and the fair market value for the balance. [5] With reference to the position taken in the dissenting opinion, a position not taken by defendant in brief or oral argument, it seems sufficient to say that the facts established by plaintiff’s proofs are wholly undisputed, no evidence having been offered by defendant; that [390] on those proofs, recited in adequate and pertinent prayers, the trial court was asked to find and hold that plaintiff was entitled to recover the amount sued for; that these prayers were all rejected and exceptions duly noted; and that such adverse rulings are assigned as error. In our judgment this was the appropriate method of bringing up for review the question of law involved, namely, whether the court was right in deciding for defendant; that is to say, whether the evidence warrants the conclusion. The refusals to find as requested in the several prayers constitute the “special finding” provided for in Rev. St. §' 700 (Comp. St. § 1668), and authorize a “determination of the sufficiency of the facts found to support the judgment.” This subject is discussed at length and numerous authorities cited in the recent case of City of Cleveland v. Walsh Construction Co. (C. C. A.) 279 Fed. 57. The court says (page 61): “If there was a written waiver,” which is the case at bar, “a review may be had not only of all questions inherent in the primary record, but also of all the rulings on the trial which were imported into that record by the bill of exceptions, and which were properly challenged; but if the waiver is not written the'review brings up only the primary record. In the latter class, as in the former, special findings- of fact by the judge became a part of the record; and whether the findings support the judgment w.ill be considered by the reviewing court, even without exception taken. Whether there was error as to admitting evidence, or as to the burden, or whether there was no evidence to support a particular finding, or was no justification for refusing it, or any evidence to support the judgment—all should be deemed rulings on the trial, and if properly challenged can be reviewed, but only if section 700 has become applicable by a written stipulation.” The judgment will be reversed, and a new trial awarded. Reversed.