21 Cal. 2d 243 | Cal. | 1942
— This is an appeal from a judgment in favor of the plaintiff for the sum of $13,678.86, representing unpaid freight charges. The defendant was the consignor of interstate shipments of grapes over the plaintiff’s and its connecting lines. The complaint was filed more than three years after the cause of action accrued. The plaintiff pleaded a written agreement of waiver of the statute of limitations executed by the defendant. The defendant interposed a demurrer on the ground that the action was barred by the provisions of section 16, paragraph (3) (a) of the Interstate Commerce Act. The demurrer was overruled. In its answer the defendant admitted the execution of the alleged agreement, but denied its validity as an effective waiver of the statute. The action was tried on the issues raised by the complaint and answer. On the findings of fact and conclusions of law judgment was entered in favor of the plaintiff for the amount of the unpaid freight charges and interest. If the court was correct in its ruling on the demurrer, the judgment is supported by the record.
The facts are undisputed. In October and November, 1932, the defendant consigned twenty-one carloads of fresh grapes from points in Fresno County, California, which ultimately were delivered to Jerome Distributing Company as consignee in the State of New York. The latter company on November 19, 21, and 22, 1932, issued to the plaintiff three cheeks which covered all of the freight items involved in this controversy and for which the consignee, referred to as the J eróme Company, received freight bills receipted by the plaintiff. The receipted bills were transmitted to the defendant who in turn credited the Jerome Company’s account.
In the meantime the checks of the Jerome Company were refused payment by the drawee bank because of insufficient funds. The plaintiff filed an action against the Jerome Company which proceeded to judgment, but nothing was collected thereon. Toward the close of 1935 the plaintiff made demand on the defendant for payment of the freight charges and threatened action in the event of nonpayment prior to the imminent expiration of the three-year statutory period of limitations. The defendant required time for investigation
The question is whether the written agreement of waiver of the statute of limitations is binding on the defendant. The sufficiency of the consideration for the agreement is not questioned.
The answer to the question is controlled by the federal statutes and the federal courts’ construction thereof as applied to similar facts. (See New York Central R. R. Co. v. Frank H. Buck Co., 2 Cal.2d 384 [41 P.2d 547] ; Adams Express Co. v. Croninger, 226 U.S. 491 [33 S.Ct. 148, 57 L.Ed. 314].)
Section 16(3) (a) of the Interstate Commerce Act (49 U.S.C.A. §16, par. (3)) reads: “All actions at law by carriers subject to this chapter for recovery of their charges, or any part thereof, shall be begun within three years from the time the cause of action accrues, and not after.” In the same paragraph of that section are similar provisions limiting the time within which shippers may file complaints with the commission for recovery of damages not based on overcharges (“within two years from the time the cause of action accrues, and not after”), and for recovery of overcharges (“within three years from the time the cause of action accrues, and not after”).
The only reported decision involving the validity of a written agreement by a shipper to waive such a statute of limitations is by a federal court and it supports the plaintiff’s position. (Pennsylvania R. Co. v. Susquehanna Collieries Co., 23 F.2d 499.) In that case, decided in 1927, the Same plaintiff, Pennsylvania E. Co., brought an action in
The defendant nevertheless contends that the decision in
Generally, a statute of limitations may be extended or waived. (Wells Fargo & Co. v. Enright, 127 Cal. 669 [60 P. 439, 49 L.R.A. 647]; Tebbets v. Fidelity & Casualty Co. of New York, 155 Cal. 137 [99 P. 501]; 37 C.J., p. 723, §41.) The general rule governs unless the action is created by statute and the language of definition requires a construction that the cause of action is destroyed by the lapse of the period of limitations provided by the statute. Under that exception to the rule the expiration of the time within which suit must be brought operates to terminate the obligation as well as to bar the remedy. (34 Am.Jur., p. 17.)
In the cases relied on by the defendant the courts were applying the exception to the general rule. In the Phillips Co. case the shipper sought to recover an alleged overcharge— an amount paid pursuant to the contract, but which was in excess of an alleged reasonable rate. Other shippers had commenced a proceeding before the Interstate Commerce Commission to determine the reasonableness of the rate, and the commission had determined that the rate was unreasonable to a certain extent. The shipper, Phillips Co., which had not joined in the proceedings before the commission, brought an action to recover the excess four years after the cause of action accrued. The plaintiff contended that the state statute of limitations applied. It was held that the action should have been brought within the two-year period provided by the Interstate Commerce Act. In connection with the contention that under the conformity act and the Michigan practice the question could not be raised by demurrer the court said: “But that rule does not apply to a cause of action arising under a statute which indicates its purpose to prevent suits on delayed claims, by the provision that all complaints for damages should be filed within two years and not after. Under such a statute the lapse of time not only bars
In the case of Louisville & N. R. Co. v. Cory, the plaintiff recovered judgment against the railroad company for breach of the common law duty to furnish ears for interstate transportation of coal. Suit had been brought more than two years after the cause of action accrued. It was urged by the plaintiff that the limitation of the Commerce Act had no application, but that the state enactment applied where the declaration alleged a right of recovery at common law. The court held that the two-year period of the Commerce Act applied “to all actions involving subject-matter directly covered by the act and as to which the shipper is given the right to file _ a petition for reparation order with the Commission. . . . The enactment of the statute of limitations prescribing the time beyond which claims may not be asserted against interstate carriers is essentially a matter of regulation of interstate commerce, and the requirement of uniformity of treatment would be defeated by permitting one period of limitation where the complaint is filed before the commission, and the varying periods of limitations of the different states, where a suit is brought in a court of competent jurisdiction,” citing the Phillips Co. case.
In Wisconsin Bridge & Iron Co. v. Illinois Terminal Co. the carrier sought recovery of freight undercharges, that is, the amount over the contract rate which it was required to collect in compliance with the act. The action was brought more than three years after the cause of action accrued. The defendant pleaded the limitation. It was held that even if
None of the foregoing cases involved an express agreement by the shipper to waive the statute of limitations. The first two were actions by the shipper. The Wisconsin Bridge Co. case, in which the carrier sued for undercharges, involved a statutory cause of action, as distinguished from a contract right. The quoted language of the court was confined to a consideration of an assumed failure to plead the statutory limitation in such a case.
The case of Zang v. Railway Express Co. is of no material assistance to the defendant. There, as in the Phillips Co. and Louisville & N. R. Co. cases, the shipper sued for damages, and the court held that the three-year limitation of the Commerce Act in force at the time the cause of action accrued barred the right of recovery, even though in a later amendment the limitation was omitted. It was said: “There is a marked distinction between our statute of limitation affecting the remedy only which must be specially pleaded as a defense, and special statutory limitations taking away the right itself. In the latter class, time is of the essence of the right, and the lapse of the prescribed period in which an action may be commenced wholly extinguishes the right.” It was concluded that the alleged cause of action was of the nature of a right extinguished by the expiration of the statutory limitation.
Language in other eases following those cited is also relied on by the defendant, but none of them involved a written or any waiver of the applicable statute of limitations. Consequently, in no case, except the case of Pennsylvania R. Co. v. Susquehanna Collieries, did it become necessary to distinguish between a contract or common law right and a statutory right, for the purpose of considering the application of the general rule that a statute of limitation may be expressly waived.
The defendant contends that there can be no distinction between common law and statutory liability under the limitation clause of the Interstate Commerce Act. However, the Supreme Court of the United States has had occasion to note the distinction between causes whose existence is controlled by time limiting provisions and causes as to which the stat
In considering the remedies preserved by section 22 of the Interstate Commerce Act the Supreme Court in Pennsylvania Railroad Company v. Puritan Coal Mining Co., 237 U.S. 121, [35 S.Ct. 484, 59 L.Ed. 867], said that the act was both declaratory of existing common law and creative of new causes of action. It made the distinction between a common law right, such as a cause of action for damages for breach of duty to furnish cars of which state courts had concurrent jurisdiction, and created rights such as those which depended on administrative procedure and a preliminary finding by the commission. That case was followed in Pennsylvania Railroad Co. v. Sonman Shaft Coal Co., 242 U.S. 120, 124 [37 S.Ct. 46, 61 L.Ed. 188], where the court reiterated the statement that existing rights and remedies not inconsistent with the act were preserved.
A similar distinction was noted by the Circuit Court of Appeals, Eighth Circuit, in Button v. Atchison, T. & S. F. Ry. Co., 1 F.2d 709, which was an action by the carrier for undercharges. The action was filed more than three years after the cause of action accrued and the statute of limitations was relied upon by the defendant. The state statute provided for a three-year period of limitation. More than two years after the cause of action accrued the federal three-year statute was enacted. The plaintiff contended that the federal statute enlarged the right. The court stated that at common law the carrier could not have recovered from the shipper any additional sum as freight; that the carrier’s right to maintain the action was created by the Commerce Act; and that the right “was not created for its enrichment, but to protect the public against secret rebates and discriminations. It is not a right of contract or of property. ... As to such a right the time limited for its enforcement is a constituent part of the right itself. The lapse of time not only bars the remedy, but destroys the liability,” citing the Phil
The defendant urges that judicial recognition of the waiver agreement would invite discriminatory preference by carriers, an evil which it was the purpose of the Commerce Act to avoid. Sections 2 and 6 of the act prohibit special rates, rebates, refunds and remissions. Section 3(1) provides that it shall be unlawful for any common carrier to make, give, or cause any undue or unreasonable preference or advantage in any respect whatsoever. However, the present problem cannot be resolved by a consideration of the question of unreasonable preference granted by the carrier to the shipper.
If we assume that the forbearance by the carrier under the written waiver of the shipper was a preference, and that the question is pertinent in this case, it does not follow that the forbearance under the circumstances was either forbidden or unreasonable. The main purpose of the agreement was not to extend credit to the defendant, but was to preserve the rights of the carrier. There is no justification for a conclusion that under the facts in this ease the purpose was abused as a cover for extending an unreasonable preference. Moreover, the remedy for the giving of an unreasonable preference is the recovery of damages by the person discriminated against and who has been injured thereby. (§8, Interstate Commerce Act, 49 U.S.C.A.) An example is Gamble-Robinson Commission Co. v. Chicago, N. W. Ry. Co., 168 F. 161 [94 C.C.A. 217, 16 Ann. Cas. 613, 21 L.R.A. N.S. 982], where an action was brought by a shipper who had not received the same credit terms accorded other shippers. The court said in that case that the Commerce Act left the carrier free to exercise all the rights and privileges under the common law insofar as they were not rendered unlawful by the act; that the act did not make all preferences or advantages unlawful, and that there was nothing unreasonable in requiring prepayment of freight in the ease of one shipper and in extending credit to another. If in the present case the defendant’s contention in this respect were to prevail, the result would be that the shipper who has been the recipient of the preference would be deemed injured thereby. Certainly he should not be heard to contend that injury to him has resulted because he is compelled to discharge his liability to pay lawful
The defendant finally contends that if its waiver of the statute be held sufficient and binding, its defense of estoppel against the carrier should not have been stricken by the court. The alleged estoppel was based on the act of the carrier in receipting the bills for freight when the Jerome Company’s checks were delivered to it, and the subsequent crediting of the Jerome Company’s account by the defendant on the faith of the receipts sent to it by the Jerome Company. It is the carrier’s duty to collect all lawful freight charges. Under the contract here it was the consignor’s obligation to pay them. It has been decided that the carrier cannot waive defenses and cannot be estopped (except by the running of the statute of limitations) from performing its duty to collect the charges. (See New York Central R. R. Co. v. Frank H. Buck Co., 2 Cal.2d 384, 389 [41 P.2d 547] ; Texas & Pacific Railway Co. v. Leatherwood, 250 U.S. 478, 481 [39 S.Ct. 517, 63 L.Ed. 1096] ; Georgia, Florida & Alabama Ry. Co. v. Blish Milling Co., 241 U.S. 190, 197 [36 S.Ct. 541, 60 L.Ed. 948] ; Chesapeake & Ohio Ry. Co. v. Martin, 283 U.S. 209 [51 S.Ct. 453, 75 L.Ed. 983] ; Chicago & N. W. Ry. Co. v. J. I. Case Plow Works, 173 Wis. 237 [180 N.W. 846] ; Chicago, I. & L. Ry. Co. v. Peterson, 168 Wis. 193 [1619 N.W. 558]; New York, N. H. & H. R. Co. v. California Fruit Growers Exchange, 125 Conn. 241 [5 A.2d 353], citing Louisville & N. R. Co. v. Central Iron & Coal Co., 265 U.S. 59 [44 S.Ct. 441, 68 L.Ed. 900], and other cases; Spartan Mills v. Davis, 126 S.C. 312 [119 S.E. 905] ; L. M. Kirkpatrick Co. v. I. C. R. Co., 190 Miss. 157 [195 So. 692].)
However, as we have noted, a contract to preserve the carrier’s right and duty to collect lawful freight charges as against the running of the statute of limitations, when reasonably exercised, serves to prevent rather than create discrimination among shippers, and in our opinion, should not
The judgment is affirmed.
Gibson, C. J., Curtis, J., Edmonds, J., Carter, J., Traynor, J., and Spence, J. pro tem., concurred.
Appellant’s petition for a rehearing was denied December 22, 1942.