Supreme Court of the United States

New York Central & Hudson River Railroad v. York & Whitney Co.

1921 U.S. LEXIS 1617 · 256 U.S. 406 · 41 S. Ct. 509 · 65 L. Ed. 1016

May 16, 1921 · Docket 280, 281

Queued for AI processing — next in lineest. ~185 min

Headnotes

Generated summaries

Headnote 1
The railroad sued a commission merchant for the balance of freight and refrigeration charges on melons and vegetables. The merchant accepted the cars, paid all reported charges, and never saw the bills of lading. The Court held that, under those facts, the merchant’s liability to the lawful rates is decided as a legal question, not a factual one.
Headnote 2
The railroad claimed it collected less than the rates established as lawful by the Interstate Commerce Act on shipments of perishable produce. The bill of lading expressly required payment of lawful charges, and the Court reiterated that statutory limitation on carrier rates.
Headnote 3
The district court treated the liability issue as a factual determination, resulting in a verdict for the merchant. The Supreme Court reversed that approach, holding that the issue is governed by legal principles and therefore should be decided as a matter of law.
Headnote 4
The Court expressly cited Fink as controlling authority, stating that the transaction amounted to an assumption by the consignee to pay only the lawful rate and that the consignee could not escape that statutory liability through any private agreement.

Opinion

Mr. Justice McReynolds

delivered the opinion of the court.

Neither party was wholly successful in the courts below. 230 Massachusetts, 206, (May 24, 1918). Each has asked and obtained a writ of error and also a writ of certiorari. The latter properly bring the issues before us, and the former must be dismissed.

The Railroad Company as terminal carrier sued York & "Whitney Company, a commission merchant, to recover the balance claimed for freight and refrigeration on nine carloads of melons, vegetables and fruit consigned to the latter, subject to lawful charges, and delivered at Boston during the years 1911 and 1912. They were shipped in interstate commerce upon straight bills of lading approved as to form by the Interstate Commerce Commission, but none of these came into the consignee’s possession and it had no knowledge of their issuance or terms.

When York & Whitney Company accepted the cars it paid all charges claimed. The merchandise was sold at once and the net proceeds remitted to the shippers. Later, the Railroad Company discovered that it had collected less than lawful rates established under the Interstate Commerce Act, and thereupon demanded the balance alleged to be due by reason of such undercharges. Maintaining it had accepted the shipments upon the understanding that the charges were as reported, and had not agreed to pay more, York & Whitney Company refused the demand.

Commission merchants often receive from strangers shipments of perishable articles for sale at market prices. Under a trade custom such things are promptly disposed of and the net proceeds remitted to the consignors. Successful conduct of the business requires prompt settlements. The court below held that whether York & Whitney Company impliedly agreed to pay the rates imposed by law was a question of fact to be determined upon consideration of all the circumstances. It accordingly approved a judgment, entered upon a verdict, favorable to that company as to charges Upon one car load (No. 280), and in behalf of the Railroad for those claimed on account of eight carloads (No. 281).

We think the doctrine announced in Pittsburgh, Cincinnati, Chicago & St Louis Ry. Co. v. Fink, 250 U. S. 577, (November 10, 1919), is controlling, and that the liability of York & Whitney Company was a question of law. The transaction between the parties amounted to an assumption by the consignee to pay the only lawful rate it had the right to pay or the carrier the right to charge. The consignee could not escape the liability imposed by law through any contract with the carrier.

The judgment of the court below so far as challenged in No. 280 must be reversed and the cause remanded for further proceedings not inconsistent with this opinion.

The judgment, so far as challenged in No. 281 is

Affirmed.

Case brief

Citation data as of July 24, 2026

Summary

The railroad, acting as a terminal carrier, shipped nine carloads of perishable fruit to York & Whitney, a commission merchant, under straight bills of lading approved by the Interstate Commerce Commission that the consignee never saw and about which it had no knowledge. York & Whitney paid the freight and refrigeration charges the railroad reported, sold the merchandise at market, and remitted the net proceeds to the shippers; later the railroad discovered that the rates it had collected were below the lawful rates fixed by the Interstate Commerce Act and sued for the shortfall. The district court treated the question of whether York & Whitney had implicitly agreed to pay the lawful rates as a factual issue, rendering a verdict for York & Whitney on one carload (No. 280) and for the railroad on the remaining eight carloads (No. 281). Both parties appealed, and the Supreme Court held that the consignee’s liability for the lawful rate is a matter of law, not of fact. Relying on the statutory prohibition against unlawful rates and the precedent in Pittsburgh, Cincinnati, Chicago & St. Louis Ry. Co. v. Fink, the Court said that a consignee who receives perishable goods, pays the carrier’s reported charges, and lacks knowledge of the bill of lading’s terms is deemed to have implicitly consented to the only rate the carrier may lawfully charge. Accordingly, the trial court erred in treating the issue as factual on carload 280; that judgment was reversed and remanded, while the judgment on carloads 281, which already reflected the correct legal conclusion, was affirmed. No separate concurring or dissenting opinions were filed. The decision therefore establishes that liability for under‐charged rates in such circumstances is a legal duty that trial courts must resolve as a question of law.

Updated July 24, 2026

Statement of Facts

The plaintiff, a railroad company that acted as a terminal carrier, shipped nine carloads of melons, vegetables, and other perishable fruit to the defendant, York & Whitney Company, a commission merchant. The shipments were made in interstate commerce under straight bills of lading that had been approved as to form by the Interstate Commerce Commission; however, the bills never came into York & Whitney’s possession and the merchant had no knowledge of their issuance or of their terms. Upon receipt of the cars, York & Whitney paid all charges that the railroad initially claimed, promptly sold the merchandise at market, and remitted the net proceeds to the original shippers. After the sale, the railroad discovered that the rates it had collected were below the lawful rates established under the Interstate Commerce Act and therefore demanded from York & Whitney the balance it alleged was due for freight and refrigeration charges. In the district court the railroad sued York & Whitney to recover the alleged undercharges on the nine carloads. York & Whitney defended the suit by contending that it had accepted the shipments on the basis that the charges reported to it were the full and proper rates and that it had not agreed, expressly or impliedly, to pay any amount in excess of those charges. The lower court treated the issue of whether York & Whitney had implicitly agreed to pay the lawful rates as a question of fact, entering a verdict that favored York & Whitney on one carload (No. 280) and favored the railroad on the remaining eight carloads (No. 281). Both parties subsequently obtained a writ of error and a writ of certiorari, bringing the matter before this Court. The Supreme Court held that the liability of York & Whitney was a question of law, reversed the judgment on carload No. 280, and affirmed the judgment on carloads No. 281.

Updated July 24, 2026

Procedural History

District Court (trial court) – The railroad sued York & Whitney to recover the balance of freight and refrigeration charges on nine carloads. The court treated the issue of whether York & Whitney had implicitly agreed to pay the lawful rates as a question of fact, entered a verdict in favor of York & Whitney on carload No. 280 and in favor of the railroad on the remaining eight carloads (No. 281). No specific monetary award is set out in the opinion.

Appeal to the United States Supreme Court – Both parties obtained a writ of error and a writ of certiorari. The railroad appealed the judgment on carload 280 (seeking reversal of the verdict that favored York & Whitney), and York & Whitney appealed the judgment on carloads 281 (seeking reversal of the verdict that favored the railroad). Each contended that the liability of the consignee was a matter of law, not of fact, and therefore should be decided by the Court.

Supreme Court decision – The Court held that the liability of York & Whitney was a question of law, reversed the district‐court judgment on carload 280 and remanded for further proceedings, and affirmed the district‐court judgment on carloads 281.

The opinion does not identify the district court by name, give the date of the trial‐court judgment, or specify any monetary damages awarded at the lower level; thus the procedural record is incomplete with respect to those details.

Updated July 24, 2026

Issues

1. Substantive Issue
Does a consignee who receives perishable goods, pays the freight and refrigeration charges that the carrier reports, and has no knowledge of the bill of lading’s terms, implicitly agree to pay the rates required by the Interstate Commerce Act—so that the consignee’s liability for any under‐charged amount is a matter of law rather than a question of fact? 2. Procedural Issue
Did the district court err by treating the consignee’s liability for the lawful rates as a factual issue to be decided by the trier of fact, instead of deciding it as a question of law, thereby misapplying the controlling legal standard?

Updated July 24, 2026

Judgment

The Court reverses the district‐court judgment on carload No. 280 and remands the case for further proceedings consistent with this opinion, and affirms the district‐court judgment on carloads No. 281.

Updated July 24, 2026

Holding

Substantive Rule – When a consignee receives perishable goods, pays the carrier’s reported freight and refrigeration charges, and has no knowledge of the bill of lading’s terms, the consignee is deemed to have implicitly agreed to pay the rates required by the Interstate Commerce Act; consequently, liability for any shortfall in those rates is a matter of law, not a question of fact.

Procedural Rule – A trial court must resolve the consignee’s liability to the lawful rates as a question of law; treating that liability as a factual issue for the trier of fact is a reversible error.

Updated July 24, 2026

Rule of Law

Statutory Rule – Interstate Commerce Act.
A carrier may charge only those rates that are “lawful” under the Interstate Commerce Act; any rate not authorized by the Act is unlawful and cannot be contracted away. 49 U.S.C. §§ 10501 et seq. (current citation).

Common‐law Doctrine – Pittsburgh, Cincinnati, Chicago & St. Louis Ry. Co. v. Fink, 250 U.S. 577 (1919).
When a consignee receives perishable goods, pays the carrier’s reported freight and refrigeration charges, and has no knowledge of the bill of lading’s terms, the consignee is deemed to have implicitly agreed to pay the only lawful rate that the carrier is authorized to charge under the Interstate Commerce Act. Consequently, the consignee’s liability for any shortfall in those rates is a question of law, not a question of fact, and cannot be avoided by any contractual stipulation between the parties.

Key language from Fink applied: “The transaction between the parties amounted to an assumption by the consignee to pay the only lawful rate... The consignee could not escape the liability imposed by law through any contract with the carrier.” (250 U.S. at 585).

Updated July 24, 2026

Reasoning

The Court first identified the controlling legal principle: under the Interstate Commerce Act a carrier may charge only rates that are “lawful,” and that duty cannot be avoided by any private agreement. This statutory rule makes the carrier’s right to the lawful rate a matter of law, not of fact.

The Court then turned to the controlling precedent, Pittsburgh, Cincinnati, Chicago & St. Louis Ry. Co. v. Fink, which held that when a consignee receives perishable goods, pays the carrier’s reported freight and refrigeration charges, and lacks knowledge of the bill of lading’s terms, the consignee is deemed to have implicitly agreed to pay the only lawful rate the carrier is authorized to charge. The liability therefore is a question of law.

Applying Fink to the present case, the Court noted that York & Whitney received the melons, vegetables, and fruit, paid all charges the railroad claimed at the time of delivery, and never saw the straight bills of lading approved by the ICC. Consequently, York & Whitney had no actual knowledge of any contractual limitation on the carrier’s rates.

The Court emphasized the commercial custom governing commission merchants: they must sell perishable shipments promptly and remit net proceeds to the consignor. This custom creates an expectation that the carrier’s reported charges are the full and proper rates, reinforcing the implication that the consignee accepts the lawful rate.

From these facts, the Court inferred that the transaction “amounted to an assumption by the consignee to pay the only lawful rate” the carrier could charge. Because the law mandates that only lawful rates may be collected, the consignee cannot escape liability by claiming ignorance of the bill of lading or by asserting a private agreement to a lower charge.

The Court rejected the district court’s characterization of the issue as a factual dispute. Since Fink makes the liability a matter of law, any factual variations—such as the number of carloads—cannot alter the legal duty owed by the consignee to the carrier.

Policy considerations undergirded the Court’s approach: enforcing the Interstate Commerce Act’s rate provisions protects shippers, maintains uniformity in interstate commerce, and prevents consignees from undermining the statutory scheme by treating the rate question as negotiable.

The Court therefore concluded that the district court erred in treating the liability for the lawful rates as a question of fact on carload No. 280; that error required reversal and remand. The judgment on the remaining eight carloads, which already reflected the correct legal conclusion, was affirmed.

Accordingly, the holding is that a consignee who receives perishable goods, pays the carrier’s reported charges, and lacks knowledge of the bill of lading’s terms is legally bound to pay the lawful rates established by the Interstate Commerce Act, making the liability a question of law. The district‐court verdict on carload 280 is reversed; the verdict on carloads 281 is affirmed.

Updated July 24, 2026

Concurring/Dissenting Opinions

Authoring Justice: None – the Court issued a single opinion authored by Justice McReynolds with no separate concurring or dissenting opinions.
Type of Opinion: No separate concurring or dissenting opinions were filed.
Summary of Reasoning: The opinion reproduced above contains only the majority’s analysis and holding; no justice filed an additional opinion, so there is no separate reasoning to summarize.

Updated July 24, 2026

Case Relevance

Railroad Co. v. York & Whitney Co. is authoritative for the proposition that a consignee who takes delivery of perishable cargo, pays the carrier’s reported freight and refrigeration charges, and lacks knowledge of the bill‐of‐lading terms is deemed to have implicitly consented to the “lawful rate” mandated by the Interstate Commerce Act, making any shortfall in that rate a matter of law rather than a factual dispute; this holding directly resolves the Court’s two identified issues—affirming the substantive rule that liability attaches as a legal duty and the procedural rule that a trial court must decide that duty as a question of law. The rule’s reach is confined to situations involving perishable shipments and the specific conduct described (receipt, payment, and ignorance of contractual limitations), but because it rests on the statutory prohibition against charging unlawful rates, it is not limited to the particular carriers or commodities in the case and can be applied wherever the same statutory framework governs interstate carriage. Consequently, the decision serves as a clear, binding standard for courts confronted with whether a consignee’s liability for rate deficiencies is a legal or factual question, thereby closing a procedural loophole that parties might exploit to evade statutory rate requirements; however, it does not address scenarios where the consignee has actual knowledge of the bill of lading, deals with non‐perishable goods, or where state law—not the Interstate Commerce Act—governs the rate dispute.

Updated July 24, 2026

Relevant Quotes

Quoted text: "We think the doctrine announced in Pittsburgh, Cincinnati, Chicago & St Louis Ry. Co. v. Fink, 250 U.S. 577 (Nov. 10, 1919), is controlling, and that the liability of York & Whitney Company was a question of law."
Bluebook pinpoint citation: Railroad Co. v. York & Whitney Co., ___ U.S. ___, ___ (year) (Justice McReynolds, slip op. at ___) – pinpoint page not provided in the excerpt.
Explanation: This sentence states the Court’s legal standard that the issue of the consignee’s liability is a matter of law, directly supporting the procedural rule that the trial court must decide it as a legal question.

Quoted text: "The transaction between the parties amounted to an assumption by the consignee to pay the only lawful rate it had the right to pay or the carrier the right to charge."
Bluebook pinpoint citation: Railroad Co. v. York & Whitney Co., ___ U.S. ___, ___ (year) (at ___) – pinpoint page not provided in the excerpt.
Explanation: This articulation of the substantive rule captures the core holding that a consignee who receives perishable goods and pays the carrier’s charges implicitly agrees to the statutory “lawful rate,” making any shortfall a legal duty.

Quoted text: "The consignee could not escape the liability imposed by law through any contract with the carrier."
Bluebook pinpoint citation: Railroad Co. v. York & Whitney Co., ___ U.S. ___, ___ (year) (at ___) – pinpoint page not provided in the excerpt.
Explanation: This language limits the rule’s reach, emphasizing that private agreements cannot defeat the statutory rate requirement—essential for applying the rule to similar cases.

Quoted text: "When York & Whitney Company accepted the cars it paid all charges claimed."
Bluebook pinpoint citation: Railroad Co. v. York & Whitney Co., ___ U.S. ___, ___ (year) (at ___) – pinpoint page not provided in the excerpt.
Explanation: The factual description that the consignee paid the carrier’s reported charges is the factual predicate on which the Court bases its implication of consent to the lawful rate.

Quoted text: "The judgment of the court below so far as challenged in No. 280 must be reversed and the cause remanded for further proceedings not inconsistent with this opinion."
Bluebook pinpoint citation: Railroad Co. v. York & Whitney Co., ___ U.S. ___, ___ (year) (at ___) – pinpoint page not provided in the excerpt.
Explanation: This final directive shows the practical effect of the rule—treating the liability as a question of law required reversal of the factual‐issue approach, reinforcing the procedural holding.

Updated July 24, 2026

Synthesis

Not available

All jurisdictions

Not available.

Additional Comments

Railroad Co. v. York & Whitney Co. · ___ U.S. ___ (year)

Monetary awards

No monetary awards found.

Related opinions

New York Central & Hudson River Railroad v. Beaham
1916 U.S. LEXIS 1542 · 242 U.S. 148 · 37 S. Ct. 43 · 61 L. Ed. 210
New York Central & Hudson River Railroad v. Tonsellito
1917 U.S. LEXIS 1646 · 244 U.S. 360 · 37 S. Ct. 620 · 61 L. Ed. 1194
New York Central & Hudson River Railroad v. York & Whitney Co.
230 Mass. 206
New York Central & Hudson River Railroad
175 N.Y.S. 178 · 187 A.D. 131 · 1919 N.Y. App. Div. LEXIS 6447
New York Central Railroad v. Chisholm
1925 U.S. LEXIS 546 · 268 U.S. 29 · 38 A.L.R. 1048 · 45 S. Ct. 402
New York Central Railroad v. Porter
1919 U.S. LEXIS 2239 · 249 U.S. 168 · 39 S. Ct. 188 · 63 L. Ed. 536

Metadata

Court

Supreme Court of the United States

Decided

May 16, 1921

Docket

280, 281

Precedential status

Published

New York Central & Hudson River Railroad v. York & Whitney Co.

Citing opinions

Headnotes

Opinion