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District Court of Appeal, Second District, Division 2, California.

Ernest H. THAYER, Plaintiff and Respondent, v. PACIFIC RAILWAY CO., a corporation, Defendant and Appellant.*

Civ. 24230.

Decided: August 25, 1960

E. D. Yeomans, Walt A. Steiger and John H. Gordon, Los Angeles, for appellant. Dryden Harrington, Horgan & Swartz, Vernon G. Foster, Los Angeles, for respondent.

The plaintiff instituted suit against the defendant, an interstate rail carrier, to recover damages to a precision grinding machine had been shipped from Park Ridge, Illinois, to the plaintiff in Artesia, California, early in 1955. The parties agreed that the machine was damaged during the transit to the extent of $3,750 and judgment for that amount plus costs was awarded to the plaintiff. The defendant has appealed.

The sole issue raised by the defendant is whether or not, as a matter of law, the plaintiff satisfied the requirement of section 2(b) of the bill of lading1 that a claim in writing be presented to the carrier within nine months after delivery of the property.

The court below concluded that ‘[o]n or about April 20, 1955, plaintiff presented a written claim to defendant within the meaning of section 2(b) of the bill of lading’. In order to ascertain the merits of the defendant's assertion of error we must closely scrutinize the series of transactions occurring in March and April of 1955 between the plaintiff and the defendant's agent Hileman.

On March 30, 1955, the plaintiff discovered that the shipment was damaged, called the defendant by telephone and requested than an inspection be made. The defendant's agent, Hileman, made an inspection and filed a written report thereof in the normal course and procedure of the defendant's business. At that time Hileman handed to the plaintiff blank claim forms which were to be filled out by the plaintiff and returned to the defendant. Plaintiff stated that he ‘had no idea of the extent of the damages,’ and was told ‘to send [the claim] in when [he] obtained the information.’

Thereafter, on April 20, 1955, the plaintiff was contacted by Hileman regarding payment of the freight bill. Plaintiff was hesitant to make payment because of the damage to the machine, but Hileman informed him that it was a separate matter which had nothing to do with the freight charges. The plaintiff testified that he was still reluctant to pay the freight bill because he ‘thought it might be considered an overall settlement, and * * * didn't want to waive [his] rights to collect for the damages.’ Plaintiff further testified that Hileman made a notation on the delivery receipt ‘to the effect that the machine had been damaged in shipment’; that he thereafter paid the freight bill, and that he would not have paid it if Hileman had not made the notation. The notation read ‘Damage on this shipment’, followed by the date and Hileman's signature. This document became a part of defendant's files.

On January 27, 1956, nearly ten months after the delivery of the shipment, the plaintiff wrote to the defendant summarizing the costs of repair and requesting advice as to further steps. The defendant replied, enclosing claim forms which were filed thereafter. No writing initiated by the plaintiff reached the defendant within the required nine-month period. If we are to sustain the judgment below, it must be on the basis that either Hileman's inspection report of March 30, 1955 or his notation across the face of the delivery receipt on April 20, 1955 constituted a claim in writing to defendant required by section 2(b) of the bill of lading.

It is evident from the posture of the case and the agreement of the parties2 that (1) Federal Law, as enunciated by the Carmack Amendment to the Interstate Commerce Act (Title 49 U.S.C.A. § 20 (11)), controls the rights of the parties under the bill of lading; (2) the Carmack Amendment requires filing of a written claim within nine months as a condition precedent to suit upon the bill of lading; and (3) the question of ‘[w]hat constitutes a claim ‘in writing’ within the meaning of the bill of lading provision, and whether there may be a ‘waiver’ or an ‘estoppel’ dispensing with the necessity of compliance with such a condition, are federal questions on which the Supreme Court of the United States had the final word.' Insurance Co. of North America v. Newtowne Mfg. Co., 1 Cir., 187 F.2d 675, 680; Northern Pac. Ry. Co. v. Mackie, 9 Cir., 195 F.2d 641, 642; Georgia, Florida & Alabama Ry. Co. v. Blish Milling Co., 241 U.S. 190, 195, 36 S.Ct. 541, 60 L.Ed. 948.

It has been long settled that such a time limitation upon the filing of a claim is reasonable (Chesapeake & Ohio Ry. Co. v. Martin, 283 U.S. 208 212, 51 S.Ct. 453, 454, 75 L.Ed. 983; Northern Pacific Ry. Co. v. Mackie, supra, 195 F.2d at page 642), and that mere oral notice cannot be deemed compliance with the requirement that a written claim be filed with the carrier. Georgia, Florida & Alabama Ry. Co. v. Blish Milling Co., supra; see also St. Louis, Iron Mountain & Southern Ry. Co. v. Starbird, 243 U.S. 592, 605, 37 S.Ct. 462, 468, 61 L.Ed. 917. The plaintiff's contention that the transactions between himself and the defendant's agent Hileman constituted a substantial compliance with the requirement of a written claim must be examined in the light of the controlling Federal decisions.

First, we must examine the written inspection report of March 30th, which was made by Hileman in the normal and routine course of the defendant's business. This report was not made by the plaintiff. At this point plaintiff did nothing more than give Hileman oral notice that the grinding machine had been damaged and request him to inspect the same. The cases have uniformly held that such notice is not compliance with the statute. Georrgia, Florida & Alabama Ry. Co. v. Blish Milling Co., supra; East Texas Motor Freight Lines v. United States, 5 Cir., 239 F.2d 417. In Northern Pac. Ry. Co. v. Mackie, supra, the court stated: ‘A study of the federal decisions, including those of the Supreme Court, makes it clear that some sort of written notice of claim is essential. It is not enough that the carrier had actual knowledge that damage occurred, or that an oral claim for damages was made.’ In Penn State Laundry Co. v. Pennsylvania Railroad Co., D.C., 134 F.Supp. 955, the claimant gave oral notification of the claim and made affirmative efforts to obtain payment within the nine-month period and the defendant prepared a written damage report as a result of the notice. The court, citing Chesapeake & Ohio Ry. Co. v. Martin, supra, and Northern Pacific Ry. v. Mackie, supra, among others, answered the claimant's contention that this was substantial compliance by stating at page 956 that ‘the decided cases are squarely opposed’. The same conclusion applies with equal force to Hileman's report of March 30, 1955. In addition, at that very time the defendant's agent gave the plaintiff claim forms which were to be filled out and filed. There is nothing in this phase of the case which would indicated a compliance with the provisions of section 2(b).

Likewise, the contention that the transaction of April 20, 1955, constituted a written claim by the plaintiff is unmeritorious. The plaintiff testified that he had no idea of the extent of the damages on March 30th. He did not file his written claim until the following January. It is apparent that he did not have the damage information on April 20th and he did not have any intent to file a claim at that time. His testimony indicated that he wanted the notation made on the freight delivery receipt in order that his payment of freight charges would not constitute a waiver of his right to file a claim and collect damages in the future. The cases have uniformly held that a written claim must be filed by the person damaged. Delphi Frosted Foods Corp. v. Illinois Cent. R. Co., 6 Cir., 188 F.2d 343, 345, certiorari denied 342 U.S. 833, 72 S.Ct. 53, 96 L.Ed. 630. In the Delphi case, supra, the assertion of damage made by persons who had contracted for the goods, title to which had not passed and who were not agents of the owner did not constitute the written claim required by section 2(b). So, in the case at bar it cannot be successfully argued that the written notation on the delivery receipt which was made by the agent of the defendant for purposes other than the filing of a claim, constututes compliance with the requirement that the claimant file a written claim with the carrier.

The case of Hopper Paper Co. v. Baltimore & O. R. Co., 7 Cir., 178 F.2d 179, requires consideration. In that case the loss occurred in a wreck between two of the defendant's trains. After disposing of the shipment for salvage value, the defendant telegraphed the plaintiff the information regarding the loss. Eleven months thereafter the plaintiff filed his claim which the court allowed. The decision in the Hopper case has been referred to as one involving unusual circumstances and based upon its own peculiar facts (Delphi Frosted Foods Corp. v. Illinois Cent. R. Co., supra; Northern Pacific Ry. Co. v. Mackie, supra, 195 F.2d 641, 643), and as ‘perhaps out of line with the other cases.’ Insurance Co. of North America V. Newtowne Mfg. Co., supra, 187 F.2d 675, 681. It is clearly distinguishable from the instant case in that (1) the railroad sent the plaintiff a writing admitting liability, and (2) the circumstances of both the loss and salvage were wholly within the knowledge of the railroad.

Plaintiff relies on Loveless v. Universal Carloading & Distributing Co., 10 Cir., 225 F.2d 637. In the Loveless case, the carrier noted the damage on the consignment memo and, more importantly, sent a letter acknowledging the damages and its own liability to the plaintiff. Additionally, there were extensive dealings between the parties concerning the shipment. It was the written acknowledgment of liability that was decisive in that case. We have no such acknowledgment or other equivalent circumstances in the instant case. Consequently, the Loveless case is not here applicable.

The plaintiff has not urged that the defendant's conduct amounted to a waiver of the nine-month requirement or that an estoppel was created. Nor could such argument prevail since the law is settled that there can be no waiver or estoppel regarding section 2(b). Georgia, Florida & Alabama Ry. Co. Blish Milling Co., supra, 241 U.S. 190, 197, 36 S.Ct. 541, 544, 60 L.Ed. 948; Northern Pacific Ry. Co. v. Mackie, supra, 195 F.2d 641, 642; Chesapeake & Ohio R. Co. v. Martin, 283 U.S. 209, 222, 51 S.Ct. 453, 75 L.Ed. 983. The court in the Blish Milling Co. case, supra, stated the rule and reason therefor as follows: ‘* * * the parties could not waive the terms of the contract under which the shipment was made pursuant to the Federal act; nor could the carrier by its conduct give the shipper the right to ignore these terms which were applicable to that conduct [estoppel], and hold the carrier to a different responsibility from that fixed by the agreement made under the published tariffs and regulations. A different view would antagonize the plain policy of the act and open the door to the very abuses at which the act was aimed.’ (241 U.S. at page 197, 36 S.Ct. at page 544.) (Emphasis added.) The above rule is based upon the requirement that carriers must avoid preferences and discriminations among shippers. Carriers of necessity must therefore decline to pay all claims which are not timely filed. To pay the claims of some and not of all would be obvious discrimination. The policy of the act is well stated in the Martin case, supra, where the court held that to allow carriers to pay claims not timely filed ‘would be to alter the terms of a contract, made in pursuance of the Interstate Commerce Act and having, in effect, the quality of a statute of limitation, and thus to open the door for evasions of the spirit and purpose of the act to prevent preferences and discrimination in respect of rates and services.’ 283 U.S. at page 222, 51 S.Ct. at page 458. See also A. J. Phillips Co. v. Grand Trunk Western R. Co., 236 U.S. 662, 35 S.Ct. 444, 59 L.Ed. 774.

We are bound by the principles of Federal Law herein cited. And, while the result may seem harsh, we cannot deviate from or ignore those principles which are here controlling. ‘The strictness with which the policy of the legislation is adhered to may sometimes make hard cases, and sometimes it is the carrier that suffers by the strictness.’ Insurance Co. of North America v. Newtowne Mfg. Co., supra, 187 F.2d 675, 681. Here the equities seem to favor the shipper but the result was caused by his own inaction. Moreover, equities alone are not enough to justify a departure from a clearly defined and long recognized legal principle and the plain provisions of the contract between the parties.

The judgment is reversed.


1.  Section 2(b) of the bill of lading is as follows: ‘As a condition precedent to recovery, claims must be filed in writing with the receiving or delivering carrier, or carrier issuing this bill of lading, or carrier on whose line the loss, damage, injury or delay occurred, within nine months after delivery of the property * * *. Where claims are not filed or suits are not instituted thereon in accordance with the foregoing provisions, no carrier hereunder shall be liable, and such claims will not be paid.’

2.  The plaintiff's brief p. 5 contained the following: ‘Respondent concedes that the filing of a claim is a condition precedent to suit upon the bill of lading * * * and that rights of the parties under the bill of lading is a matter of Federal Law.’

FOX, Presiding Justice.

ASHBURN, J., and RICHARDS, Justice pro tem., concur.