Steele v. General Mills, Inc.
329 U.S. 433 (1947)

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U.S. Supreme Court

Steele v. General Mills, Inc., 329 U.S. 433 (1947)

Steele v. General Mills, Inc.

No. 79

Argued December 18, 1946

Decided January 6, 1947

329 U.S. 433

Syllabus

A motor carrier and a shipper entered into a written contract under which the carrier was to transport goods for the shipper by truck entirely within the Texas. On the basis of that contract, the carrier obtained from the Texas Railroad Commission a permit to operate as a contract carrier pursuant to rules promulgated by the Commission under Texas R.S., Art. 911(b), §§ 1-22(b), granting regulatory power over transportation. The rules required contract carriers to charge not less than the rate prescribed for common motor carriers. Later, pursuant to a prearrangement and without notice to the Commission, the parties entered into a supplemental agreement under which the shipper actually paid the carrier lower rates. About 3 1/2 years later, the carrier sued the shipper in a Federal District Court to recover the difference between the rate paid and the full rate fixed by the Commission.

Held:

1. This Court cannot say that the District Court sitting in Texas erred in holding that the cause of action was not barred by Art. 5526, Tex. R.S., which applies only to actions for debts not "evidenced by a contract in writing." P. 329 U. S. 438.

2. Nor can this Court say that the District Court and the Circuit Court of Appeals erred in interpreting the Texas law to render void and unenforceable the supplemental agreement designed to circumvent payment of the rates fixed by the Commission. P. 329 U. S. 438.

Page 329 U. S. 434

3. Nor will this Court disturb the interpretation placed upon purely local law by a District Court sitting in Texas in holding that the Commission's rate-fixing orders applied to the carrier's business, that they were not subject to collateral attack in such a suit, and that the carrier could not lawfully carry the shipper's goods at lower rates -- especially where these interpretations were well buttressed by state statutes and court decisions, and the Circuit Court of Appeals did not disagree with them. P. 329 U. S. 439.

4. Under Texas law, no doctrine of estoppel or pari delicto can be invoked to defeat payment of the full rate fixed by the Commission, and a different rule cannot be applied in the federal courts. Pp. 329 U. S. 439-441.

154 F.2d 367, reversed.

A carrier sued a shipper in a Federal District Court to recover the difference between the rate actually paid for the transportation of goods and a higher rate fixed by the Railroad Commission of Texas pursuant to Tex. R.S., Art. 911(b), § 1-22(b). The District Court gave judgment for the carrier. The Circuit Court of Appeals reversed. 154 F.2d 367. This Court granted certiorari. 328 U.S. 830. The judgment of the Circuit Court of Appeals is reversed, and that of the District Court is affirmed. P. 329 U. S. 441.

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