Central Wholesale Co. v. Chesapeake & O. Ry. Co.

• Decision Date: 19 March 1962
• Docket Number: No. 55,55
• Citation: 366 Mich. 138,114 N.W.2d 221
• Parties: CENTRAL WHOLESALE CO., a Michigan Corporation, Plaintiff and Appellant, v. The CHESAPEAKE AND OHIO RAILWAY COMPANY, a Virginia Corporation, Defendant and Appellee.
• Court: Michigan Supreme Court

Page 221

114 N.W.2d 221

366 Mich. 138

CENTRAL WHOLESALE CO., a Michigan Corporation, Plaintiff and Appellant, v. The CHESAPEAKE AND OHIO RAILWAY COMPANY, a Virginia

Corporation, Defendant and Appellee.

No. 55.

Supreme Court of Michigan.

March 19, 1962.

Starr & Sachs, Detroit, for plaintiff and appellant, I. R. Starr, Detroit, of counsel.

John J. Holden, Detroit, for defendant and appellee.

Before the Entire Bench.

BLACK, Justice (for affirmance).

This case presents the same question as was recently considered and decided in Warren Alloy Co. v. Blair Transit Co., 363 Mich. 358, 109 N.W.2d 798. The facts, however, are decisively different. In the Warren Alloy case the plaintiff consignee, following joint signature of a corresponding inspection report, promptly wrote the defendant carrier that 'We are filing a claim against your company for damages incurred in transit * * *.' The letter referred to the report as showing 'the extent of such damages.' Here the plaintiff consignee did nothing, from and after like signature of a similar report, until expiration of some two and one-half years. By that time the 9-month limitational period the parties had agreed upon--in the bill of lading--had run its legal course.

The present plaintiff consignee sued the present defendant carrier for damages arising from delivery to it, by the carrier at Flint, of certain carload shipments of vegetables and fruits which had been damaged or spolied during transit. We assume, from the time of year and nature of the shipments, that defendant was not the initial carrier and that each shipment originated in Florida or California.

The following allegation of plaintiff's declaration--which defendant admitted subject to its special defense of limitation--presents fully the factual background of the issue before us:

'That between the year December 26th, 1951 and January 22nd, 1952, the defendant delivered to the plaintiff approximately 35 shipments in number under the terms and regulations above set forth and the terms and conditions of certain Bills of Lading consigned to the plaintiff as consignee of the shipper named therein, consisting of vegetables and fruits. That said shipment of fruits and vegetables were delivered to the defendant and/or its connecting carrier or carriers in good condition, but were received by the plaintiff in damaged and/or spoiled condition. Details of the nature and degree of damage on each shipment were heretofore presented and are fully within the knowledge of the defendant, its agents and representatives.'

The case was submitted below and comes here on a carefully restricted stipulation of facts. No surrounding and possibly relevant circumstances affecting the issue, as in some of the authorities we are to consider, and no proof of custom or trade usage, have been made to appear. The parties manifestly desire a precedentially unconditional determination of the legal effect of the 'joint report,' portrayed later in this opinion, as constituting or not constiting the filing of a claim, in writing, within meaning of the limitational clause of section 2(b) of the uniform bill of lading. Said section 2(b) reads 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 (or, in case of export traffic, within nine months after delivery at port of export) or, in case of failure to make delivery, then within nine months after a reasonable time for delivery has elapsed; and suits shall be instituted against any carrier only within two years and one day from the day when notice in writing is given by the carrier to the claimant that the carrier has disallowed the claim or any part or parts thereof specified in the notice. 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.'

Now for the essential stipulated facts:

Each of the shipments to plaintiff moved in interstate commerce under the uniform bill of lading. Within 5 days after the delivery of each shipment to plaintiff an inspection was made of the contents of each car. The inspection was made by a representative of the Railroad Perishable Inspection Agency, referred to in the record as the 'R.P.I.A.' The R.P.I.A. was created by and receives its financial support from a group of rail carriers, one being the defendant carrier.

The R.P.I.A. inspector made a report of his findings on R.P.I.A. form No. 20, called 'joint report.' Thirty-five such forms were filled out. Each bore the signature of the inspector and of plaintiff's representative. The parties agree that all 35 reports should be considered as having been received in evidence, and that one of them, reproduced in the margin, is to be considered for the purpose of making decision. Formal claims for reimbursement were made in writing by plaintiff against defendant on June 23, 1954. Defendant thereupon informed plaintiff, in writing, that is 'could not honor the claims because they had not been filed within the nine month period provided in section 2(b)' above.

NOTE: OPINION CONTAINS TABLE OR OTHER DATA THAT IS NOT VIEWABLE

To the above we note agreement of the parties that defendant was required by law to advise plaintiff of its refusal to pay if no claim or claims were timely filed under section 2(b); the reason being that the defendant carrier could not under federal regulation waive the limitation. See to the point Georgia, Fla. & Ala. Ry. Co. v. Blish Milling Co., 241 U.S. 190, 197, 36 S.Ct. 541, 60 L.Ed. 948 (considered later in this opinion).

The parties agree, as they did before the trial judge, that the sole question is whether such joint reports, signed as they were by agents of both consignee and carrier and 'filed' within 5 days after deliveries to the consignee, constitute the filing of 'claims' in writing sufficient to toll the 9 month limitation specified in said section 2(b).

The issue was tried to the court and resulted in a carefully reasoned opinion by Judge Rashid. His conclusion was that the joint reports, standing alone as they do under the stipulation, lacked the essence of 'claims' in that they did not, formally or otherwise, notify the defendant final carrier of a demand upon it for payment of the noted losses. Judgment for defendant entered accordingly. Plaintiff appeals.

Counsel for the parties have asked that we examine and then apply or reject, according to their divergent contentions, a number of cases wherein other courts have decided that like instruments or circumstances constitute or do not constitute the 'filing' of 'claims' sufficient to toll the limitational period. We proceed to do so, noting that the above cited Blish case, considered last below, seems to be the praised authority from which all polemics flow.* Lehigh Valley R. Co. v. State of Russia, CCA 2, 21 F.2d 396.

The court held the negligent carrier estopped to assert that the consignee's claim, as 'filed,' did not comply with the requirements of the bill of lading. It was shown that the consignee promptly 'filed' what it did in accordance with the carrier's instructions after the latter had reported the loss to the consignee.

Minot Beverage Company v. Minneapolis & St. Louis Ry. Co., D.C., 65 F.Supp. 293.

Following the loss consignee's agent wrote promptly to the carrier. His letter identified the shipment, indicated the contents and the points of shipment and destination, declared that the shipment was damaged, and recited that in a short time 'claim will be filed' for the loss. This was held to be a 'claim' within meaning of a like section 2(b) stipulation.

Hopper Paper Co. v. Baltimore & O. R. Co., CCA 7, 178 F.2d 179.

The only semblance of a 'claim' within the limitational period was a telegram from the carrier to the shipper advising that the shipment had been destroyed in a railroad accident. The court held that, the carrier having actual knowledge of the shipper's loss and its own liability, the provisions of section 2(b) needed no compliance.

Insurance Co. of North America v. Newtowne Mfg. Co., CCA 1, 187 F.2d 675.

No claim in writing was made. On that account the court denied carrier liability, noting at the same time that the Hopper case seemed out of line with other cases. Newtowne is known for its definition of what constitutes a claim 'in writing' (p. 681):

'Their presentation to the claim agent cannot be deemed a substantial compliance with the requirement of a claim 'in writing' which, at the minimum, we think, must be a written document, however informal in expression, indicating an intention on the shipper's part to claim reimbursement from the carrier for a loss asserted to have occurred in the past, and sufficiently identifying the shipment in question either on the face of the document or by reference to previous correspondence between the parties.'

Delphi Frosted Foods Corp. v. Illinois Central R. Co., CCA 6, 188 F.2d 343.

It was shown that the shipper neither gave nor attempted to give notice to any of the involved carriers. Instead it sought to employ the claims certain of its customers gave to the delivering carrier regarding the damaged condition of the subject goods upon arrival thereof. The court ruled (p. 345):

'Notice to the delivering carrier was sufficient; but the assertion of damage by persons who had contracted for some portion of the goods, title to which had not passed, persons who were not agents of the appellant, did not constitute such a claim as was required.'

The court mentioned in passing that the Hopper case, 'As expressly stated in the opinion therein, * * * is based upon the peculiar facts of the case.'

Northern Pac. Ry. Co. v. Mackie, CCA 9, 195 F.2d 641.

It was shown that an...