Story Case

The Illinois Steel Company took a contract to furnish the structural steel for five skyscrapers to be erected in New York City. When the steel was ready for shipment, the company's representative called upon the New York Central Railroad to furnish two hundred flat cars within six days. The railroad company stated that it was unable to furnish this number of cars on such short notice, but would make an effort to do so. The company failed, and as a consequence, the steel arrived behind contract time. The Illinois Steel Company was compelled to reduce its selling-price considerably, on account of this delay, and now seeks to reimburse itself from a suit against the New York Central Railroad Company. Will the steel company succeed in its effort?

Ruling Court Case. Ayres And Another Vs. The Chicago & Northwestern Railway Company, Volume 71 Wisconsin Reports, Page 372

The Chicago and Northwestern Railroad Company, a common carrier engaged in the transportation of live stock, and accustomed to furnish cars for all live stock offered, was notified by the plaintiffs on or about October 13 to have in readiness four such cars at its station at La Valle, Wisconsin, and three at Reeds-burg, for loading on Tuesday morning, October 17, for transportation to Chicago. Two cars were furnished at Reedsburg, October 17, and one, October 19; four were furnished at La Valle, October 19. The plaintiffs received no notice until October 17 that the cars would not be furnished as ordered. If the cars had been furnished as ordered, the stock would have arrived at Chicago on October 18. The five cars did not arrive at Chicago on October 18, but on October 20. Ayres brought this action against the company for failure to reserve cars, and for failure to notify him of their delinquency. Mr. Justice Cassody gave the opinion, saying:

"For where a shipper makes application to a railroad company, as a common carrier of live stock, for cars to be furnished at a time and a station named, it is the duty of the company to inform him within a reasonable time, if it is unable to furnish cars, and if it fails to give such notice, and induces the shipper to believe that the cars will be in readiness, and, relying upon such conduct of carrier, the shipper is present with his live stock at the time and place named, the company is liable for damages. This, of course, is on the theory that the shipper, as in the present case, has given reasonable notice to the railroad company."

Judgment was given for Ayres for loss due to shrinkage, change of market price, and the expense of keeping the stock.

Ruling Law. Story Case Answer

When a shipper has an unusually large shipment of freight for transportation, he cannot expect that the mere delivery at the station will insure its immediate removal to its destination. If his business demands more cars than usual, he must give the railroad notice, prior to the time that the facilities will be actually needed, in order that it may have time to bring up the cars from distant points. It is the duty of the carrier, after receiving a request for cars, to notify the shipper within a reasonable time, whether it is able to furnish the equipment requested.

In the Story Case, the demand for cars was so unusual that the railroad company was entitled to ample time in which to furnish them. Having exercised due care to provide the steel company with facilities, it cannot be held for its failure, in the absence of a showing by the shipper that the company was given due notice to have the cars in readiness.