McMAHON v. REPUBLIC VAN STORAGE CO (1963)

The major question in this case is whether the statute of limitation has barred the action and that question turns largely upon the further problem of whether the action is one for recovery of an overcharge within the purview of Part I of the Interstate Commerce Act, 49 U.S.C.A. § 16(3)(c).

The original complaint was filed on February 6, 1961, and the first amended complaint on August 21, 1961. Demurrer of defendants Republic Van & Storage Co., Inc. and Paul Smith to this latter pleading was sustained without leave to amend. From the judgment entered pursuant to said ruling plaintiff appeals.

Said first amended complaint runs against Majestic Warehouses, Inc., freight forwarding agent, Southern Pacific Railroad, also known as Southern Pacific Company, a freight carrier, Republic Van & Storage Co., Inc., a terminal warehouse, and Paul Smith, its president, who actively handled the pertinent transactions; also against certain employees of Northrop Corporation. The suit involved shipment from Chicago, Illinois, to Hawthorne, California, of household furniture and certain other equipment owned by plaintiff. The forwarding agent, Majestic Warehouses, Inc. (herein called Majestic), estimated the cost of shipping at a pool car rate to be $594.82, based upon a weight of 5,500 pounds, which was the weight estimated by Majestic's employee. Pursuant to a shipping order of June 30, 1953, the furniture and other equipment were shipped through Majestic. Part of it (apparently the major portion) arrived via Soughern Pacific Railroad on or about March 5, 1954, and was delivered to the warehouse of defendant Republic Van & Storage Co., Inc. (herein called Republic), where it was stored. About April 8, 1954, Republic billed plaintiff for $1,770 for ‘the then represented transportation and storage charges' of defendant Majestic in addition to $600 previously paid to said defendant. Plaintiff objected to said additional charge and was told by defendants Majestic, Republic and Smith that the total weight of the shipped goods was 16,780 pounds, and ‘that plaintiff would be required to pay the additional sum of $1,770.00, and storage charged by defendant REPUBLIC VAN & STORAGE CO., INC., at the rate of 4¢ per 100 pounds per day on said 16,780 pounds.’ It was known to said defendants (so plaintiff alleges) that said representation as to a weight of 16,780 pounds was false; that the true weitht was 5,500 pounds; and said representation was made with intent to defraud and to induce plaintiff to act thereon. Republic refused to permit plaintiff to examine his shipment for approximately 24 months after its delivery to its warehouse,—which would be until March 5, 1956, or thereabouts. Defendants Majestic, Republic and Smith induced defendants Zuetell, Reid and Moore, who were employees of Northrop Corporation, to ‘threaten plaintiff with dismissal from his employment with said NORTHROP CORPORATION unless all of said demanded shipping and storage charges were paid’; also, ‘defendants WILLIAM R. ZUETELL, JOHN REID and JOSEPH MOORE joined with the other hereinabove named defendants, with intent to deceive and defraud the plaintiff by knowingly misrepresenting to plaintiff that his said household furniture and equipment had been personally examined by two of the last named defendants at the warehouse of defendants REPUBLIC VAN & STORAGE CO., INC.; that everything was in order; that plaintiff owed the amount charged, based upon the weight of 16,780 pounds; and that plaintiff would be discharged if he did not pay the bill as presented.’ Final delivery of the goods to plaintiff's home was made on February 7, 1958. At some unspecified time before that date plaintiff paid to Majestic and Republic the sum of $5,288.60, of paid to Majestic; $2,700 went to Majestic paid to Majestic; $2,700 went to Majextic and Republic, and $1,988.60 to Republic. Plaintiff further alleges: ‘[T]hat within three years last past, on or about May 10, 1960, plaintiff learned for the first time that said representations were false and untrue.’

A second count of the complaint is directed at Southern Pacific Railroad alone, and asserts a claim for $400 damages to plaintiff's goods.

We have before us only the clerk's record pertaining to the demurrer of Republic and Smith. None of the other defendants is here as respondent, and for aught that we know the action has been dismissed as to them.

Respondents' position is that this is an action for recovery of an overcharge under Part I of the Interstate Commerce and (g).¹ It is apparent from the (c) and (g).1 It is apparent from the language of the statute that although such an action would lie against the carrier, Southern Pacific Railroad, and the forwarding agent, Majestic (see, 49 U.S.C.A. § 1002(5) and (7)), that is not true of Republic or Smith, for they were not carriers (49 U.S.C.A. § 1002(8)(c); 93 C.J.S. Warehousemen & Safe Depositaries, § 2c, p. 397) and the action will run only against the carrier or one whose status is declared to be the equivalent thereof, such as the forwarding agent. The federal statute of limitation therefore becomes inapplicable. was filed in the superior court says: ‘(b) Said Section 1 [of Title 49], in its definitions Said Section 1 [of Title 49], in its definitions of ‘common carriers' does not include the independent warehouseman who takes over possession for storage purposes after receipt of merchandise from the delivering railroad, as found in the instant case.’

Title 49, § 22, says in part: ‘* * * [A]nd nothing in this chapter contained shall in any way abridge or alter the remedies now existing at common law or by statute, but the provisions of this chapter are in addition to such remedies * * *.’ This rule has been applied in Hewitt v. New York N. H. & H. R. Co., 284 N.Y. 117, 29 N.E.2d 641, 643; Union Transfer Co. v. Renstrom, 151 Neb. 326, 37 N.W.2d 383, 386; Milne Lumber Co. v. Michigan Cent. R. Co., Mo.App., 57 S.W.2d 732, 736. It is in the common law field, thus reserved to litigants by the statute, that plaintiff would place his case.

The demurrer which was sustained without leave makes no mention of the statute of limitations (Code Civ.Proc. § 338, subd. 4),² and the question arises whether the point is now available to respondents. True, the prevailing rule seems to be that a general demurrer upon the ground of failure to state a cause of action is not sufficient to raise the claim of bar by limitation unless the demurrer specifically relies upon that statute (31 Cal.Jur.2d § 243, p. 659), but the record shows that the questions debated in the trial court were whether federal or state statute of limitations applied and whether the controlling one had operated to bar the action. The minute order says: ‘General demurrer sustained without leave to amend. Cause of action is basically not one of fraud but for overcharges on an interstate shipment of goods. As such it is controlled by the Federal Statute of Limitations in effect at the time of the delivery of the goods on February 7, 1958. The applicable period of limitation at that time was two years and the cause of action is barred. (49 U.S.C.A. Sec. 16 and sections 1005 and 1006a.) Counsel notified.’ The same questions are presented here and it is incumbent upon this court, having found the federal statute inapplicable, to determine whether respondents may prevail under the state statute of limitations notwithstanding the expressed basis of the trial judge's ruling. The correctness of the ruling, not that of the reasoning lying behind it, is the controlling factor. (4 Cal.Jur.2d, § 536, p. 391.)

It may be assumed that the substantive allegations of the fraud charge are sufficient, or at least susceptible to successful amendment, but the plaintiff's pleading is devoid of any explanation of the reason for delay in suing and such an explanation is essential to a fraud alleged to have occurred more than three years before filing of suit thereon. Discovery or means of discovery is the equivalent of knowledge in this field. The pleader contents himself with saying that ‘within three years last past, on or about May 10, 1960, plaintiff learned for the first time that said representations were false and untrue.’

“The word discovery as used in the statute is not synonymous with knowledge. And the court must determine as a matter of law when, under the facts pleaded, there was a discovery by the plaintiff, in the legal sense of that term. Consequently, an averment of lack of knowledge within the statutory period is not sufficient; a plaintiff must also show that he had mo means of knowledge or notice which followed by inquiry would have shown the circumstances upon which the cause of action is founded. Moreover, he must also show when and how the facts concerning the fraud became known to him. [Citations.]” (Teitelbaum v. Borders 206 A.C.A. 730, 735, 23 Cal.Rptr. 868, 871.) See also, 31 Cal.Jur.2d § 55, page 486.

As shown be the above summary of facts alleged in the complaint, the shipment arrived at defendant's warehouse on or about March 5, 1954; final delivery from warehouse to plaintiff's home was made on February 7, 1958; the goods had been withheld from plaintiff's inspection for 24 months, which suggests March 5, 1956, as the end of such denial. What was done by plaintiff between that date and February 7, 1958, does not appear from his complaint. Originally, plaintiff had been advised by Majestic that the correct weight was 5,500 pounds and he now alleges that such was the correct figure. So far as appears from the complaint he had not on or before March 5, 1956, made the payment alleged to be excessive. That was done on some unspecified date prior to final delivery on February 7, 58, presumably shortly before that date in order to procure delivery. It is consistent with the pleading to assume that on and after March 5, 1956, plaintiff was free to weigh or have the goods weighed and to establish to the satisfaction of his employer Northrop, as well as himself, that Republic's demand was fraudulent. That left plenty of time to sue before expiration of the three years from delivery of the goods to him. His original complaint was filed one day before expiration of that period. Plainly, the first amended complaint shows a cause of action barred by the state statute.

Section 472c, Code of Civil Procedure, provides that a request to amend is not essential to preservation for appeal purposes of the claim that such leave should have been granted.³ No such request was made in this instance. But § 472c has not changed the rule that ‘sustaining of a demurrer without leave to amend is not an abuse of discretion where the plaintiff does not indicate in what manner he desires to amend, does not show that any allegations were omittd from the complaint which, if inserted, would change its legal effect, and does not show how he could amend to plead a triable cause of action. The adoption of the statute providing that the question of abuse of discretion should be open on appeal though no request to amend was made did not change this rule.’ (39 Cal.Jur.2d § 172, p. 251.) No claim of ability to amend is made by plaintiff's counsel and it is presumed that he has stated his case as favorably as possible (Melikian v. Truck Ins. Exchange, 133 Cal.App.2d 113, 115, 283 P.2d 269; Hesse v. Vinatieri, 145 Cal.App.2d 448, 454, 302 P.2d 699). It therefore follows that the judgment must be affirmed.

It is so ordered.

FOOTNOTES

1.  49 U.S.C.A. § 16(3): ‘(c) For recovery of overcharges action at law shall be begun or complaint filed with the commission against carriers subject to this chapter within two years from the time the cause of action accrues, and not after, subject to subdivision (d) of this paragraph, except that if claim for the overcharge has been presented in writing to the carrier within the two-year period of limitation said period shall be extended to include six months from the time notice in writing is given by the carrier to the claimant of disallowance of the claim, or any part or parts thereof, specified in the notice.’ (Emphasis added.) ‘(g) The term ‘overcharges' as used in this section shall be deemed to mean charges for transportation services in excess of those applicable thereto under the tariffs lawfully on file with the commission.’

2.  Section 338 limits to a period of three years, ‘* * * 4. An action for relief on the ground of fraud or mistake. The cause of action in such case not to be deemed to have accrued until the discovery, by the aggrieved party, of the facts constituting the fraud or mistake.’

3.  Code Civ.Proc. § 472c: ‘When any court makes an order sustaining a demurrer without leave to amend the question as to whether or not such court abused its discretion in making such an order is open on appeal even though no request to amend such pleading was made * * *.’

ASHBURN, Justice.

FOX, P. J., and HERNDON, J., concur.