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District Court of Appeal, Second District, Division 1, California.

GARDNER et al. v. BASICH BROS. CONST. CO. et al.*

Civ. 20002.

Decided: July 06, 1954

Stephen Monteleone, Los Angeles, for appellants. Ernest W. Pitney, Los Angeles, for respondents.

In 1948, under a contract with the State Department of Public Works, Division of Highways, defendants constructed a public highway between El Centro and Brawley. This required the hauling of material by dump trucks.

Plaintiffs were licensed highway carriers under the Highway Carriers' Act, Chapter 223, Stats.1935, Deerings Gen.Laws, Act 5129a. They owned their own trucks, which they used to transport material for the construction of thirteen miles of the highway during the period from April 1st to early in July, 1948.

Section 10, Highway Carriers' Act, supra, gave to the Railroad Commission (now Public Utilities Commission) the power to make rules and regulations establishing schedules of rates for transportation services and the enforcement thereof.

The commission had established two rates which were applicable to the type of hauling here involved: (1) ton-mileage; (2) hourly.

Section No. 4, page 40, Highway Carriers' Tariff No. 7, issued by the commission on October 15, 1947, and still in effect on February 11, 1953, provided:

‘Rates in this section are Hourly Rates and * * * will apply only when notice in writing is given to the carrier, before the transportation commences, of the shippers' intention to ship under such rates. When such notice is given rates in Sections Nos. 2 and 3 will not apply.’ Section 2 has reference to the ton-mileage rates.

Plaintiff W. E. Gardner testified at the trial that he discussed the hauling job with defendant Nikola Basich and also with defendants' foreman, Cramer. In both instances he told them that he would haul a legal load or a small fraction over on the nine to ten mile rate which was $3.85 per ton; that he would not be willing to work on an hourly basis for less than $3.85 and would need a written requisition before starting the work. Otherwise, the hauling would be based on the commission's standard rate, to-wit: On the ton-mileage basis. This witness also testified that he received no written requisition or work order.

However, cards were furnished daily by defendants to plaintiffs' drivers to be filled out by them showing the number of hours worked. And on May 18, June 10, and July 9, 1948, defendants gave to plaintiffs a written schedule of the number of hours worked during the previous month. Attached thereto, in each instance, was a check payable to plaintiffs based on the hourly rate. The schedules and checks were accepted by plaintiffs without objection.

This action to recover undercharges (the difference between what was paid on the hourly rate and what would have been due on the ton-mileage basis) was initiated by plaintiffs on April 30, 1951.

The answer affirmatively alleged that defendants orally notified plaintiffs that the hourly rate prescribed by the commission would apply to the work performed. It also set up the Statute of Limitations as a defense. Subd. 1, sec. 338, and Subd. 1, sec. 339, Code of Civil Procedure.

From a judgment in favor of plaintiffs for the sum of $6,260.84, plus interest and costs, defendants appeal.

Appellants concede, and properly, that the reason for giving the written notice before transportation begins is ‘to apprise a carrier * * * as to what rate schedule shall apply beforehand, so that there can be no question at a later date; and to give the shipper the privilege of accepting the more favorable rate before shippment commences.’

It is here argued that the requirement that written notice be given before each haul during the operation would be impracticable and an absurdity.

The phraseology of the rule clearly contemplates that the required notice be given once: ‘before transportation commences', and not before each haul. And, as respondents point out, no such notice was given.

Appellants also assert that because respondents accepted payment based on the hourly rate and at no time notified appellants that they intended to claim the ton-mileage rate, they thereby waived their right to receive the required notice that the hourly rate would apply.

Written notice was a prerequisite to the application of the hourly rate. It was not incumbent upon respondents to notify appellants that they were relying on the ton-mileage rate. However, as hereinbefore mentioned, the witness Gardner testified that he told Mr. Basich he would not be willing to work on an hourly basis for less than $3.85; and ‘that I would have to have a written requisition before I started hauling in order to haul on the hourly basis.’

As stated in Gardner v. Rich Mfg. Co., 68 Cal.App.2d 725, 730, 158 P.2d 23, 25: ‘The schedule of minumum rates thereby established and prescribed and the rules and regulations governing the same became a part of every contract between a highway contract carrier and the shipper. Pittsburgh, C. C. & St. L. R. R. Co. v. Fink, 1919, 250 U.S. 577, 40 S.Ct. 27, 63 L.Ed. 1151; Johnston v. L. B. Hartz Stores, 1938, 202 Minn. 132, 277 N.W. 414. The tariff applicable, on the facts, to any particular shipment cannot be changed by an agreement between the parties (New York Cent. & H. R. R. Co. v. York & Whitney Co., 1921, 256 U.S. 406, 41 S.Ct. 509, 65 L.Ed. 1016, and the carrier or its assignee is entitled to collect the proper rate. 13 C.J.S., Carriers, § 393, pp. 873–875; see also note, 83 A.L.R. 245 et seq., and cases there cited. Otherwise the statute would be ineffectual for the purpose for which it was enacted.’

Appellants next assert that the undisputed evidence failed to support the trial court's finding as to the amount of respondents' claim based on a ton-mileage basis.

Mr. Jess B. Young, Assistant Transportation Representative, Public Utilities Commission of the State of California, was presented as a witness by respondents. He testified that in the regular course of his duties with the commission, he made an investigation of the hauling job here involved. The records of the State Highway Division in the El Centro office were made available to him and also the payroll records of appellants. He checked the different mileages on the ground. During this time he discovered that ‘there was no signed agreement for hauling by the hour.’ His testimony was based on the data he prepared in making his investigation. After completing his survey, he made an audit and a computation of the amount due as an undercharge based on the rate applicable to this particular job, to-wit: ton-mileage.

The evidence is amply sufficient to sustain the trial court's finding as to the amount of respondents' claim based on the ton-mileage rate.

With respect to the statute of limitations, appellants urge that the obligation to pay on the ton-mileage rate was one not fixed by statute but was a contractual obligation and that the two-year statute, i. e., subdivision 1, section 339, Code of Civil Procedure, is applicable. Appellants also urge that in any event, a portion of the alleged claim is barred by the three-year statute: subdivision 1, section 338 of the same code.

The alleged undercharges here sued upon arise by virtue of the Highway Carriers' Act, supra. The purpose of that act, among other things, is to establish just and reasonable rates for the transportation of property by motor vehicle over the public highways of the state and to prevent discrimination among the shippers of this class. To this end the act confers jurisdiction on the Public Utilities Commission to hold hearings and establish and prescribe schedules for minumum rates for contract highway carriers and to make rules and regulations governing the same. It was pursuant to this authority that the Public Utilities Commission promulgated the tariffs establishing and fixing schedules of minumum rates upon which this action is based. Gardner v. Rich Mfg. Co., 68 Cal.App.2d 725, 730, 158 P.2d 23, 25, where it is stated: ‘The tariff applicable, on the facts, to any particular shipment cannot be changed by an agreement between the parties * * * and the carrier or its assignee is entitled to collect the proper rate.’ See, also, Sunset Pac. Oil Co. v. Los Angeles & S. L. Railroad Co., 110 Cal.App.Supp. 773, 782, 290 P.2d 434.

Accordingly, section 338, subd. 1, Code of Civil Procedure, which provides that ‘An action upon a liability created by statute, other than a penalty or forfeiture’, must be brought within three years, is applicable in the instant situation.

Appellants point out that while the work was performed beginning April 1, 1948, action was not commenced until April 30, 1951.

Section 338, supra, must be read in conjunction with section 312 of the same code, which provides that civil actions can only be commenced within the periods prescribed by this title, ‘after the cause of action shall have accrued’.

As said in Leahey v. Dept. of Water & Power, 76 Cal.App.2d 281, 286, 173 P.2d 69, 72: ‘The term ‘accrue’ means: ‘To come into existence as an enforceable claim; to vest as a right; as, a cause of action has accrued when the right to sue has become vested.’ Webster's New International Dictionary. A cause of action accrues when a suit may be maintained thereon, and the statute of limitations begins to run at the date of accrual.' (Emphasis included.)

The record herein discloses that payment for the hauling done by respondents in April of 1948 was not made by appellants until May 18, 1948. When on that day appellants failed to pay the legally prescribed rate, pursuant to the tariff promulgated by the Public Utilities Commission, respondents' cause of action accrued, and not before. As a result, the instant action was commenced in time and was not barred by the three-year statute of limitations.

For the reasons stated, the judgment is affirmed.

DRAPEAU, Justice.

WHITE, P. J., and DORAN, J., concur.

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