East Texas Motor Freight Lines v. United States
Decision Date | 14 December 1956 |
Docket Number | No. 16183.,16183. |
Parties | EAST TEXAS MOTOR FREIGHT LINES, Appellant, v. UNITED STATES of America, Appellee. |
Court | U.S. Court of Appeals — Fifth Circuit |
O. D. Montgomery, of Callaway, Reed, Kidwell & Brooks, Dallas, Tex., for appellant.
John C. Ford, Asst. U. S. Atty., Dallas, Tex., Heard L. Floore, U. S. Atty., Fort Worth, Tex., for appellee.
Before RIVES, TUTTLE and CAMERON, Circuit Judges.
The question here presented is whether the requirement in an interstate bill of lading that claims of damage must be filed in writing with the carrier within nine months1 is valid and whether it is rendered inoperative when the carrier acquired from other sources knowledge that the shipment was damaged. Appellee, the United States, was awarded judgment against appellant, East Texas Motor Freight Lines, for damages to an interstate shipment of machinery, the District Court holding upon stipulated facts that the "bill of lading notice in writing was unnecessary * * * if and when the carrier knew that the damage had actually occurred to the shipment which it had carried."2 (Execution thereon was withheld because appellee had recouped the full amount claimed by it, by failing to pay freight charges due appellant.)
We think this holding was, under the facts of this case, contrary to the law as established in an unbroken line of decisions of the Supreme Court holding that this requirement of notice3 is valid and must be observed by shippers and carriers alike. The stipulated facts show that the asserted knowledge on the part of appellant consisted of two writings copies of which were furnished to appellee by appellant in a letter of October 27, 1953. The first was an accident report4 detailing the facts of the accident and estimating the damage to the machinery at $200.00. The second was a "Report of Loss or Damage to Freight Inspected After Delivery" made by D. Glaser, Inspector of Steffke Freight Company, covering his inspection of the shipment at Chicago, Illinois, evidently made at the time of delivery of the shipment by appellant to Central Wisconsin Motor Transport, the delivering carrier.5 This knowledge acquired by the carrier does not, in our opinion, have the effect of releasing appellee from the obligation of complying with the provisions as to notice set forth in the contract of carriage.
Laws in force at the time and place of making of a contract enter into and form a part of it as if they were expressly incorporated in its terms, and a bill of lading is a contract within this rule. Northern Pac. Ry. Co. v. Wall, 1916, 241 U.S. 87, 91-92, 36 S.Ct. 493, 60 L.Ed. 905. The parties to the bill of lading were, therefore, bound by its terms, insofar as they are not inconsistent with the Interstate Commerce Act6 and applicable court decisions.
One of the early Supreme Court decisions7 construing this clause involved a carload of flour which had become wet in transit. Upon discovery of this condition the consignee rejected the shipment and the railroad "`retook possession of the car and unloaded it, and in a few days sold, as perishable property, a part of the flour * * *.'" In upholding and defining the effect of the provision that damage claims must be filed within a specified time, the Supreme Court used this language:
The Supreme Court, speaking through Mr. Justice Holmes, held categorically that actual knowledge on the part of the carrier's employees would not dispense with the requirement of notice of claim. Gooch v. Oregon Short Line R. Co., 1922, 258 U.S. 22, 24, 42 S.Ct. 192, 193, 66 L. Ed. 443. Involved there was the stipulation that a drover accompanying a cattle shipment could not recover for personal injuries unless notice of his claim was given the general manager of the carrier within thirty days of the accident. He was injured in a wreck and was confined to the hospital about thirty days, and no notice of his claim was given. The Supreme Court approved a judgment denying recovery because of such failure, saying: 8
Each time the question has been presented to the Supreme Court it has held that the object of the Interstate Commerce Act and of requiring tariffs, contracts and regulations to be filed with the Commission by carriers was to insure uniformity of treatment to shippers with respect to all pertinent aspects of dealings between them and the carriers, and no decisions of that Court are cited to the contrary.9
We applied the notice provision here involved to government shipments in United States v. Chicago, R. I. & P. R. Co., 5 Cir., 1952, 200 F.2d 263, 264, pointing out that this standard clause in commercial bills of lading had as its purpose "`to provide for the ascertainment of liability before the means of proof should be lost * * *.'" That decision was rested in part on Northern Pac. R. Co. v. Mackie, 9 Cir., 1952, 195 F.2d 641, 643, which involved not only validity of the notice requirement, but the question whether knowledge on the part of the carrier would excuse failure to comply with the provisions of the bill of lading.
The facts of Mackie are quite like those here. A shipment of plywood had been damaged in transit to such an extent that it was refused by the consignee and the railroad disposed of the shipment at a net loss of $1,177.71. The shipper discussed the loss with the chief clerk in the carrier's freight claim department, advising that he intended to file claim as soon as the exact loss could be determined. The claim was not filed within nine months, and was rejected on that ground, and the Court of Appeals sustained the carrier's action citing many of the Supreme Court cases above mentioned and announcing this as the general rule distilled from them:
Appellee stakes its chief reliance on Hopper Paper Co. v. Baltimore & Ohio R. R. Co., 7 Cir., 1949, 178 F.2d 179, certiorari denied 339 U.S. 943, 70 S.Ct. 797, 94 L.Ed. 1359,10 and Loveless v. Universal Carloading Co., 10 Cir., 1955, 225 F.2d 637. Hopper involved the complete loss in a train wreck of a carload of paper. The salvage was disposed of by the railroad for a nominal amount without consultation with or accounting to the owner. The carrier promptly advised consignor and consignee in writing of the destruction of the shipment. The Court felt that these facts charged the carrier "with actual knowledge of all the conditions as to the damages that a written notice could give." 178 F.2d 181.
We do not have that situation here. The machinery was not destroyed or taken over by appellant and the report of the subordinate employee indicated that the injury to the machinery was trivial and that damages were superficial, amounting to about $200.00. The shipment was accepted by the consignee, which waited more than two years after its receipt and more than nine months...
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