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Consolidated Freightways Corp. v. Eddy

September 10, 1973


Appeal from Circuit Court, Marion County. Jena V. Schlegel, Judge. Argued and submitted June 4, 1973.

Robert G. Chidester, Portland, argued the cause and filed briefs for appellant.

Richard H. Williams, Portland, argued the cause for respondent. With him on the brief were James H. Clarke and James C. Dezendorf of Dezendorf, Spears, Lubersky & Campbell.

In Banc. McAllister, J.


Consolidated Freightways, a motor carrier, brought this action to recover from defendant, as consignee, unpaid freight charges for the interstate shipment of a printing press. Defendant appeals from a judgment for plaintiff. We affirm.

Plaintiff's complaint alleged that on September 29, 1970, it delivered to defendant a printing press which had been shipped to defendant "collect" by Graphic Machinery Co. from Oklahoma City, Oklahoma, and that the unpaid freight charges thereon were $1,960.19, which defendant had failed to pay.

Defendant's answer admitted plaintiff's corporate status and qualifications to do business in Oregon, but denied all the other allegations of the complaint. Defendant then alleged two affirmative defenses of estoppel. First, defendant alleged that he had no knowledge that the shipment was "collect," that plaintiff with full knowledge unconditionally relinquished possession of the shipment without making demand upon defendant for payment of freight charges and thereafter sought to collect the charges from the shipper, and that plaintiff's transaction with the shipper involved extension of credit beyond the seven-day limit imposed by the Interstate Commerce Commission.

For his second affirmative defense, defendant again alleged his lack of knowledge that the shipment was "collect," and that plaintiff unconditionally relinquished possession without demand for payment of freight charges. He further alleged that plaintiff unreasonably

delayed for two years to notify defendant of plaintiff's claim that defendant was liable for the freight charges, that defendant's contract with the shipper provided that the shipper was responsible for the freight charges, that defendant has paid the shipper the contract price in full, and that during plaintiff's two-year delay the shipper became insolvent.

We first take note of the unorthodox procedure in the trial court which apparently was based on an informal stipulation of the parties. Plaintiff demurred to both affirmative defenses on the following grounds:

"(1) no act or omission of a motor carrier will estop it from collecting the proper published rate for the service performed and (2) the Interstate Commerce Act imposes upon a consignee who accepts a shipment the liability for the payment of freight and other charges without regard to any contract and even though the consignee may have relied upon a promise made by a third party to pay for all such charges."

The only ground for demurrer to new matter in an answer recognized by ORS 16.250 is that "such new matter does not constitute a defense or counterclaim." Since the parties both in the trial court and in this court assumed that plaintiff's demurrer raised that basic issue, we will indulge in the same assumption.

The trial court file contains a copy of a letter from counsel for the plaintiff to counsel for the defendant confirming an oral agreement "that the outcome of the case would follow the ruling on the demurrer," that if the court sustained the demurrer to defendant's defenses plaintiff would be entitled to a judgment and if the court held that the "estoppel defenses are good defenses" then the complaint would be dismissed.

The trial court sustained plaintiff's demurrer to the defenses and allowed defendant time to further plead. When defendant failed to plead further the court entered a judgment for plaintiff for the amount demanded in plaintiff's complaint. This procedure overlooked the general denial by defendant of the allegations of plaintiff's complaint. However, since defendant's notice of appeal recites that the judgment was rendered "pursuant to stipulation of the parties prior to hearing on [the] demurrer" we will proceed to decide the issue of whether the new matter in the answer constitutes a defense to plaintiff's complaint.

Since this case involves an interstate shipment by motor carrier, part II of the Interstate Commerce Act, formerly known as the Motor Carrier Act, 1935, is applicable. ...

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