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Southern Pacific Co. v. United States.

filed: November 19, 1951.

SOUTHERN PACIFIC CO.
v.
UNITED STATES.



Author: Goodrich

Before GOODRICH, KALODNER and HASTIE, Circuit Judges.

GOODRICH, Circuit Judge.

This litigation represents an attempt on the part of the Southern Pacific Railroad to collect some unpaid freight charges from the United States. Suit is brought under the Tucker Act.*fn1 Plaintiff won in the District Court and the government here seeks to persuade us that the decision is wrong. There is no controversy as to what happened. The disagreement comes as to the legal consequences of the stipulated facts.

In 1946 Army authorities declared obsolete a group of truck trailers known as "Athey-Wagons" which were located at the Army's Mount Rainier Ordnance Depot. These were then sold by agents of the War Assets Administration to Kritzer Equipment Company of Oakland, California. The terms of this sale were "f.o.b., cars, common carrier, Mobase, Washington," and provided for shipping expenses to be paid by the buyer who was to furnish specific shipping instructions. It was stipulated that title to the trailers passed to the buyer at the time the sales contract was completed.

The buyer then notified the War Assets Administration to ship the trailers to him at Oakland by railroad freight. They were loaded aboard freight cars and delivered to the Northern Pacific Railroad (original carrier) at Mobase. This delivery was in charge of Lt. Robert W. Wilson, Army Transportation Officer at Mobase, to whom War Assets Administration had forwarded the buyer's shipping instructions.

Lt. Wilson executed a bill of lading known as Uniform Domestic Straight Bill of Lading with the Northern Pacific Railroad, signing it as "Lt. Wilson, T.O." He did not use a government bill of lading. Nothing was said on the bill of lading to the effect that the government disclaimed any liability for the freight charges.

At destination the buyer refused to pay the freight charges because of a dispute concerning the applicable rate. The trailers were then sold by the Southern Pacific Railroad (delivering carrier) pursuant to terms of the bill of lading. The difference between the freight earned and the proceeds of the sale is the claim in this suit and for which the carrier recovered in the District Court.

The government's position is that Lt. Wilson had no authority to bind the War Assets Administration by use of the commercial bill of lading which did not disclaim government responsibility for freight. We need not consider the question of apparent authority or authority by estoppel*fn2 in this case because the Tucker Act has been interpreted to cover only contracts implied in fact and not those implied in law.*fn3 We assume that a contract based on apparent authority is one "implied in law."

Our view is that Lt. Wilson's authority to make this particular contract may be properly described as "incidental authority." This is defined in the Restatement of Agency ยง 51 in the following language:

"Unless otherwise agreed, authority to make a specified contract includes authority:

"(a) to make it in a usual form and with usual terms or, if there are no usual forms or terms, in an appropriate way; and

"(b) to do other acts incidental to its making which are usually done or which, if not usually done, are reasonably necessary for making it."

Apparently, War Assets and no representative at the somewhat isolated depot where these trailers were loaded so that it became necessary for Army transportation officers to prepare bills of lading and arrange shipments for War Assets. Army regulations provided that at such installations as this transportation officers "will prepare and sign commercial bills of lading or other shipping documents on written delegation of authority from the disposal agency." (War Dept. Commercial Traffic Bulletin No. 27)

Did Lt. Wilson get a "written delegation from the disposal agency" so as to come within this directive? The record before us shows that War Assets forwarded to Lt. Wilson the shipping instructions it had received from the buyer. These consisted of a printed form containing appropriate blanks to be checked in order to indicate by what form of transportation the ...


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