Source: http://www.law.cornell.edu/supremecourt/text/320/356
Timestamp: 2014-10-26 00:42:25
Document Index: 78073343

Matched Legal Cases: ['§ 16', '§ 582', '§ 604', '§ 85', '§ 51', '§ 16', '§ 16']

MIDSTATE HORTICULTURAL CO., Inc., v. PENNSYLVANIA R. CO. | LII / Legal Information Institute
Supreme Court aboutsearch liibulletin subscribe previews MIDSTATE HORTICULTURAL CO., Inc., v. PENNSYLVANIA R. CO.
320 U.S. 356 (64 S.Ct. 128, 88 L.Ed. 96)
MIDSTATE HORTICULTURAL CO., Inc., v. PENNSYLVANIA R. CO.
Argued: Oct. 21, 22, 1943.
[HTML] Mr. Theo. J. Roche, of San Francisco, Cal., for petitioner.
The case is here on certiorari to the Supreme Court of California. Respondent sued to recover the full amount of freight charges on twenty-one carloads of grapes shipped by petitioner over its own and connecting carriers' lines from California to stated destinations in New York and New Jersey. The ultimate question is whether the action was brought in time under Section 16(3)(a) of the Interstate Commerce Act. This provided: All actions at law by carriers subject to this Act 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 application presented by this record, the question turns on whether the section's limitation can be waived by express agreement made before the period ends. The agreement was made, at petitioner's request, three days before the term expired for suing on account of the first shipment. By its terms, in consideration of respondent's forbearance to sue for a specified time, petitioner undertook not to 'plead in any such suit the defense of any general or special statute of limitations.'
Two months later, but within the extended time, petitioner finally declined to pay and respondent began this action.
In classical statement, the question has been posed as whether the section operates, with the lapse of time, to extinguish the right which is the foundation for the claim or merely to bar the right which is the foundation for the claim or merely to bar the remedy for its enforcement;
and in this case, consistently with the pattern, the debate has moved back to whether the cause of action is one created by the statute or one arising from the common law,
with the attributed consequence in the one case that the bar is absolute and invariable by any act of the parties, in the other that it may be waived by contract or otherwise.
Petitioner urges that the carrier's common law right to collect transportation charges from the shipper, which was strictly contractual, no longer exists, but has been replaced with one prescribed by the Act. This, it says, now fixes the character and dimensions of the carrier's recovery, including the time within which it may be had. Respondent however insists the Act has not superseded, but has merely modified its common law contractual right; and in this respect it asserts a distinction between cases, like this one, in which the carrier seeks the full amount of the transportation charges and others in which the suit is for only a part of them
or in which the shipper sues the carrier to recover excess charges paid or damages for the charging of unreasonable rates.
We do not think the decision should turn on refinements over whether the residuum of freedom to contract which the Act leaves to the parties or the quantum of restriction it imposes
constitutes the gist of the action. Origin of the right is not per se conclusive whether the limitation of time 'extinguishes' it or 'merely bars the remedy' with the accepted alternative consequences respecting waiver. Source is merely evidentiary, with other factors, of legislative intent whether the right shall be enforceable in any event after the prescribed time, which is the ultimate question.
The test of creation may aid when origin is clear.
It is not conclusive when the source is hybrid, as is true of the carrier's contract, which has become a complex or resultant of the former freedom of contract and statutory restrictions. It does not follow from the survival of the common law elements, as respondent maintains, that Congress did not intend the limitation to be absolute. And this seems impliedly conceded when the debate shifts, as it has to whether the policy of interstate commerce legislation contemplates the one result or the other. This is the controlling question. Respecting it the consistent patterns of legislation followed in the Act and of judicial decision in treating problems of time limitation and related questions arising under it furnish the more persuasive indicia of Congress' intention.
Section 16 is an integral part of the Interstate Commerce Act and of the comprehensive scheme of regulation it imposes. The Act is affected throughout its provisions, with the object not merely of regulating the relations of carrier and shipper inter se, but of securing the general public interest in adequate, nondiscriminatory transportation at reasonable rates.
Accordingly, in respect to many matters concerning which variation in accordance with the exigencies of particular circumstances might be permissible, if only the parties' private interests or equities were involved, rigid adherence to the statutory scheme and standards is required. This 'obviously may work hardship in some cases, but it embodies the policy which has been adopted by Congress in the regulation of interstate commerce in order to prevent unjust discrimination.' Louisville & Nashville R.R. v. Maxwell, 237 U.S. 94, 97, 35 S.Ct. 494, 495, 59 L.Ed. 853, L.R.A.1915E, 665.
With setting in such a statute, Section 16 expresses the specific policy of the Act with reference to the assertion of stale claims. On the section's face, this policy is one of uniformity and equality of treatment, as between carrier and shipper. The section contains not one, but several limitations. All are of short duration.
They apply to various kinds of relief allowed in relation to matters governed by the Act. These include proceedings before the Commission and in the courts, by both shippers and carriers. The several provisions are cast in uniform terms.
Not all were brought into the section at the same time. But the legislative history shows a constant tendency toward making them uniform in time and the purpose of placing the carrier and the shipper on equal terms in this respect.
Upon the face of the section nothing suggests that the limitations are to be given other than identical effects, except as the language specifies variations. In particular, contrary to respondent's contention, there is no indication that, in applying the section, the carrier shall be given an advantage not allowed to the shipper or one, in some instances, when the carrier is plaintiff, which it cannot enjoy in others. Rather, the section's terms, particularly in subdivision (a),
their uniformity in all the limitations, its legislative history, and its setting in a statute designed certainly as much for the shipper's as for the carrier's benefit and in so many respects to avoid discriminatory practices and effects, all point to uniform construction of the limitations imposed. And this, we think, is the effect of the decisions which have construed them or predecessor provisions.
With the one exception, the decisions have fixed the pattern, in respect to a variety of issues relating to application of the limitations, that lapse of the statutory period 'not only bars the remedy, but destroys the liability.' That is true of this Court's decisions
and those of the inferior federal courts.
It is true of suits by shippers against carriers and of suits by carriers against shippers.
It is true with respect to every limitation imposed by Section 16, unless that of subdivision (a) in favor of the carrier is to be excepted when its suit is for the full amount of its charges, though not when it is for only part of them.
The purport of the decisions is that Congress intended, when the period has run, to put an end to the substantive claim and the corresponding liability. The cause of action, the very foundation for relief, is extinguished. Thus, in A. J. Phillips Co. v. Grand Trunk Western Ry., this Court held the objection to the timeliness of the shipper's suit properly was raised by demurrer, and said that 'the lapse of time * * * destroys the liability * * * whether complaint is filed with the Commission or suit is brought in a court of competent jurisdiction.' 236 U.S. 662, 667, 35 S.Ct. 444, 446, 59 L.Ed. 774. And is assigned as a reason for this view 'the requirements of uniformity which, in this, as in so many other instances, must be borne in mind in construing the commerce act,' including the carrier's obligations to adhere to the legal rate, make only lawful refunds, and refrain from discriminating among shippers 'by silence or by express waiver, to preserve to the Phillips Company a right of action which the statute required should be asserted within a fixed period.' Ibid. In United States ex rel. Louisville Cement Co. v. Interstate Commerce Commission, 246 U.S. 638, 38 S.Ct. 408, 62 L.Ed. 914, the conception of the Phillips case was applied to proceedings before the Commission, as the Phillips opinion had forecast. The Court held that the limitation goes to the Commission's jurisdiction, so that on the one hand it has no power to act when the time has expired, on the other mandamus will lie to compel exercise of the jurisdiction when the period has not passed.
The argument is ingenious, but not convincing. In the absence of explicit direction, it cannot be assumed or inferred that Congress intended to adopt one policy for the carrier and another for the shipper, to give the former an absolute shield, the latter one penetrable by all the devices and occasions which interrupt or extend the period of an ordinary general statute of limitations. Still less can it be implied that Congress intended the identical provision, subdivision (a), to work one way when the carrier sues only for part, another when it sues for the whole of it charges. That it is prohibited to discriminate among shippers, in applying the section's limitations, does not mean that in adopting them Congress intended to discriminate against all shippers in favor of the carrier. Nor does it mean the carrier may discriminate among shippers when it sues for all, but may not do so when it sues for only part of its charges. The fallacy is in assuming, first, that the section reflects only the Act's general policy against discrimination in respect to rates, rebates, etc.; and, second, that this would be made effective by treating the limitation as absolute to cut off the carrier's liability, but variable when the shipper's is involved. Neither assumption is true.
The concession destroys its case. The consequences for discrimination are the same, whether the carrier or the shipper sues, since in the one case it may create a preference by foregoing suit, in the other by failing to defend. And it is as much an answer, in the one case as in the other, that the carrier's failure to assert its rights would violate its duty to collect.
49 U.S.C. 16(3)(a), 49 U.S.C.A. § 16(3)(a), 43 Stat. 633. Other pertinent parts of Section 16, as it was in force when this cause of action arose, were as follows:
As to the section's legislative history, including changes made since this suit arose, see note 15 infra.
'Now, therefore, in consideration of the forebearance (sic) of The Pennsylvania Railroad Company to bring such a suit against the Mid State Horticultural Company, Inc. prior to October 28, 1935, the said Mid State Horticultural Company, Inc. hereby agrees that if and when The Pennsylvania Railroad Company may find it necessary to bring such an action, it, the said Mid State Horticultural Company, Inc., will not plead in any such suit the defense of any general or special statute of limitations. * * *'
The time for suing on account of the first shipment expired October 28, 1935. Some time before this respondent apparently threatened to sue petitioner and the latter requested time to investigate. Respondent acceded, and on October 25, 1935, petitioner executed the agreement not to plead the statute.
The inquiry traditionally is cast in this mold regardless of whether the ultimate question concerns such varied problems as the propriety of invoking the lex fori rather than the lex loci, of waiving the defense or estopping the defendant from asserting it, or of extending the period of limitation after it has once lapsed. See, e.g., Story, Conflict of Laws (8th ed.) § 582; Beale, Conflict of Laws (1935) §§ 604, 605; Goodrich, Conflict of Laws (1927) §§ 85, 86; Ailes, Limitation of Actions and the Conflict of Laws, 31 Mich.L.Rev. 474; Bement v. Grand Rapids & Ind. Ry., 194 Mich. 64, 160 N.W. 424, L.R.A.1917E, 322; Gauthier v. Atchison, T. & S.F. Ry., 176 Wis. 245, 186 N.W. 619; McLearn v. Hill, 276 Mass. 519, 177 N.E. 617, 77 A.L.R. 1039; Danzer & Co. v. Gulf & Ship Island R.R., 268 U.S. 633, 45 S.Ct. 612, 69 L.Ed. 467.
Characteristically the inquiry follows this course too, however diverse the ultimate questions, in actions under wrongful death statutes, the Federal Employers' Liability Act, 45 U.S.C.A. § 51 et seq., or directors' liability statutes, whether the limitation is imposed in the act creating the liability or a different one. See note 4 supra and cf. Davis v. Mills, 194 U.S. 451, 24 S.Ct. 692, 48 L.Ed. 1067.
Compare, e.g., Bement v. Grand Rapids & Ind. Ry., 194 Mich. 64, 160 N.W. 424, L.R.A.1917E, 322, with McLearn v. Hill, 276 Mass. 519, 177 N.E. 617, 77 A.L.R. 1039.
E.g., Wisconsin Bridge & Iron Co. v. Illinois Terminal Co., 7 Cir., 88 F.2d 459; cf. Button v. Atchison, T. & S.F. Ry., 8 Cir., 1 F.2d 709; Galveston, H. & S.A. Ry. v. Webster Co., D.C., 527 F.2d 765.
E.g., A. J. Phillips Co. v. Grand Trunk Western Ry., 236 U.S. 662, 35 S.Ct. 444, 59 L.Ed. 774; Kansas City Southern R.R. v. Wolf, 261 U.S. 133, 43 S.Ct. 259, 67 L.Ed. 571.
Cf. Louisville & N.R.R. v. Central Iron & Coal Co., 265 U.S. 59, 44 S.Ct. 441, 68 L.Ed. 900; Alton R.R. v. Gillarde, 379 Ill. 308, 40 N.E.2d 727; Pennsylvania R.R. v. Lord & Spencer, 295 Mass. 179, 3 N.E.2d 231, 105 A.L.R. 1211; Galveston, H. & S.A. Ry. v. Webster Co., D.C., 27 F.2d 765.
Davis v. Mills, 194 U.S. 451, 454, 24 S.Ct. 692, 693, 48 L.Ed. 1067; see also Gregory v. Southern Pacific Co., C.C.D.Ore., 157 F. 113; Osborne v. Grand Trunk Ry., 87 Vt. 104, 88 A. 512, Ann.Cas.1916C, 74.
Cf. Pittsburgh, C., C. & St. L. Ry. v. Fink, 250 U.S. 577, 40 S.Ct. 27, 63 L.Ed. 1151; Louisville & Nashville R.R. v. Maxwell, 237 U.S. 94, 35 S.Ct. 494, 59 L.Ed. 853, L.R.A.1915E, 665; Arkansas Fertilizer Co. v. United States, Com.Ct., 193 F. 667.
All follow the formula 'within - years, but not after.' Respondent rightly says the formula itself, particularly as it includes 'and not after,' is not conclusive, since it has received different constructions in respect to the present issue. Thus, the phrase appeared in the earliest English general statutes of limitations, cf. 7 Chitty's English Statutes (6th ed.) 618619, 619625; and is found frequently in state statutes without having the effect to outlaw waivers. Cf. Bewley v. Power, Hayes & Jones Exch. Rep. 368 (1833); Crane v. Abel, 67 Mich. 242, 34 N.W. 658; In re Estate of King, 94 Mich. 411, 54 N.W. 178; Dickson v. Slater Steel Rig Co., 138 Okl. 238, 280 P. 817. On the other hand, special statutes employing the phrase have received opposing constructions. Cf. the state wrongful death statute involved in The Harrisburg, 119 U.S. 199, 7 S.Ct. 140, 30 L.Ed. 358. See generally 132 A.L.R. 292 et seq.
For the succession of enactments by which Section 16(3) assumed its present form see 34 Stat. 590; 41 Stat. 491-2; 43 Stat. 633; 54 Stat. 912-3; cf. 49 U.S.C.A. § 16(3), Historical Note. Briefly, Section 16(3)(a) was enacted first as part of the Transportation Act of 1920, 41 Stat. 491-2. Previously state statutes supplied limitations upon carriers' suits for their charges, cf. Button v. Atchison, T. & S.F. Ry., 8 Cir., 1 F.2d 709, and upon certain shippers' suits against cerriers (not based upon an order of the Interstate Commerce Commission), cf. Louisiana & W.R.R. v. Gardiner, 273 U.S. 280, 47 S.Ct. 386, 71 L.Ed. 644. Concurrently from 1906 the Hepburn Act (
34 Stat. 590) supplied limitations upon shippers' assertion of claims for damages before the Interstate Commerce Commission and in suits to enforce its orders. Section 16(3) assumed substantially its present form in the Act of June 7, 1924, 43 Stat. 633; although after this action was brought the Transportation Act of 1940, 54 Stat. 912-3, reduced the period for carriers' suits from three to two years to make it conform finally with the time allowed shippers for testing the reasonableness of the carrier's rate, etc. From 1920 to 1940 this conformity had been achieved by extending the time for shippers' proceedings where the carrier in due season began suit to recover its charges. Cf. 43 Stat. 633, § 16(3)(d).
The subdivision applies a single limitation to 'all actions at law by carriers,' whether 'for recovery of their charges, or any part thereof.' (Emphasis added.) Cf. note 1 supra.
Cf., e.g., A. J. Phillips Co. v. Grand Trunk Western Ry., 236 U.S. 622, 35 S.Ct. 444, 446, 59 L.Ed. 774; United States ex rel. Louisville Cement Co. v. Interstate Commerce Commission, 246 U.S. 638, 38 S.Ct. 408, 62 L.Ed. 914; Kansas City So. R.R. v. Wolf, 261 U.S. 133, 43 S.Ct. 259, 67 L.Ed. 571; Danzer & Co. v. Gulf & Ship Island R.R., 268 U.S. 633, 45 S.Ct. 612, 69 L.Ed. 467.
Cf. Wisconsin Bridge & Iron Co. v. Illinois Terminal Co., 7 Cir., 88 F.2d 459; Button v. Atchison, T. & S.F. Ry., 8 Cir., 1 F.2d 709; Pennsylvania R.R. v. Carolina Portland Cement Co., 4 Cir., 16 F.2d 760.
Cf. notes 18, 19 supra.
Cf. A. J. Phillips Co. v. Grand Trunk Western Ry., 236 U.S. 662, 667, 668, 35 S.Ct. 444, 446, 59 L.Ed. 774; Arkansas Fertilizer Co. v. United States, Com.Ct., 193 F. 667, 671.