Hischemoeller v. National Ice & Cold Storage Co. of Cal.

• Decision Date: 20 May 1955
• Citation: 284 P.2d 81
• Court: California Court of Appeals Court of Appeals
• Parties: Herbert HISCHEMOELLER, doing business under the name and style of Hismoco (American Co.), a fictitious firm name, Plaintiff and Respondent, v. NATIONAL ICE AND COLD STORAGE COMPANY OF CALIFORNIA, a corporation, Defendant and Appellant. Civ. 20595.

Page 81

284 P.2d 81

Herbert HISCHEMOELLER, doing business under the name and style of Hismoco (American Co.), a fictitious firm name, Plaintiff and Respondent, v. NATIONAL ICE AND COLD STORAGE COMPANY OF CALIFORNIA, a corporation, Defendant and Appellant.

Civ. 20595.

District Court of Appeal, Second District, Division 3, California.

May 20, 1955.

Rehearing Denied June 16, 1955.

Hearing Granted July 13, 1955. ^*

James D. Garibaldi, Los Angeles, Gavin McNab, Schmulowitz, Sommer & Wyman, by Nat Schmulowitz, Peter S. Sommer, Ronald P. Klein, San Francisco, for appellant.

McBain & Morgan and Newell & Chester, by Robert M. Newell, Los Angeles, for respondent.

ASHBURN, Justice pro tem.

Plaintiff sues defendant warehouseman for damages for negligence in storage of certain dried chili peppers. The case was tried to a jury and verdict rendered for plaintiff in the sum of $23,112.30. Defendant has appealed. Recognizing a substantial conflict in the evidence on the subject of negligence counsel do not argue that point. Their principal contention is that defendant's liability was limited by its warehouse receipt to a valuation of $100 per short ton, or a total sum computed to be $4,866.35.

Defendant is a public warehouseman and as such a public utility. Public Utilities Code, §§ 216, 239. It is also governed by the Food Warehouseman Act, Public Utilities Code, §§ 2501-2574, which defines food warehousemen as public utilities, §§ 2502, 2507. Section 2551 requires the filing with the Public Utilities Commission (formerly Railroad Commission) of 'schedules showing all rates and charges, which are in force for warehousing and storage services of every description, including sorting, handling, weighing, elevating, and packing charges, and all charges directly or indirectly connected with such services, together with all rules which in any manner affect or relate to rates or charges, and showing plainly when they became effective. The rates shall be uniform in their operation and shall apply with equal force and effect to all persons or corporations dealing with the food warehouseman.' Section 2552: 'Every food warehouseman doing business in the State shall print and keep open to public inspection at each building, structure, warehouse, elevator, or plant maintained by him in this State copies of the schedules filed with the commission pursuant to Section 2551.'

Defendant has filed, and kept open to public inspection as required schedules covering its rates and other charges. One of them is Cold Storage Warehouse Tariff No. 12, C.R.C. No. 87, which contains a rule 70-B reading as follows: 'Limited Liability.--For the purpose of fixing storage rates and the maximum limit of the warehousemen's liability, the value of merchandise stored shall be conclusively deemed not to exceed, per ton of 2000 lbs.----

                "for potatoes and onions ........... $ 50.00
                "for all other vegetables and for
                  fruits and fish 1 ............. 100.00
                "for frozen packaged processed
                  foods ............................. 200.00
                "for butter, eggs and cheese ........ 500.00
                "for all other merchandise ......... 200.00"
                

unless the person to whom the warehouse receipt is issuable declares, when such merchandise is offered for storage, that it is of greater value and such greater value is noted on the warehouse receipt by the warehouseman, in which case the value shall be conclusively presumed not to exceed that so declared. The specified tariff storage rates are minimum rates which apply where no value is so declared and noted, or where, if declared, it does not exceed the otherwise presumed limit; and where such declared value exceeds such otherwise presumed limit, an additional rate will be added and charged equivalent to one-quarter of one per cent of the amount of such excess for each month or part thereof. The warehouseman's liability is limited to and shall in no event exceed whichever is smaller of the actual value, or, as the case may be, such presumed or declared limit of value in respect of which the storage rate is so fixed and payable. Such presumed or declared value as an agreed limit, and likewise such limitation of liability, applies separately and proportionately on a weight basis to each part of the stored merchandise; and liability, if any, for any partial loss of or injury to any part thereof shall not exceed that portion of such limited liability with respect to such part, proportionate to the actual loss of or damage thereto.

'The option of declaring such increased value rests with the customer and the warehouseman may not insist upon it.' Cold Storage Warehouse Tariff No. 2-D, D.R.C. No. 86, also on file, provided a minimum storage rate of 25 cents per hundred pounds of chilies for the first month and 12 1/2 cents per month for each succeeding month, provided same were in lots of 10,000 pounds or over (as was the case here).

The peppers were originally stored in 1949 by Gonzales & Blanco, who declared no value, and then received two 'Memorandum Acknowledgments' on which defendant acknowledged receipt from them of the peppers 'To be placed in Cold Storage Subject To Limited Liability and other Terms and Conditions as Shown By Warehouse Receipt and/or Rules and Regulations on File with the Railroad Commission of the State of California.' It seems a fair inference that conforming warehouse receipt was issued to Gonzales & Blanco. In January 1950 plaintiff, who had had considerable experience with certain types of warehousing, arranged for Security-First National Bank of Los Angeles to finance the deal and purchased the chilies, still in warehouse, from Gonzales & Blanco. Upon authorization from the sellers defendant issued to plaintiff two documents entitled 'Transfer Momorandum' which bore these words at the bottom: 'This Merchandise is Stored Subject to Limited Liability and other Terms and Conditions as shown by Warehouse Receipt and/or Rules and Regulations on File in This Office and with the Railroad Commission of the State of California.' At plaintiff's request defendant issued the warehouse receipts to 'Security-First National Bank of Los Angeles as pledgee for Hismoco (American Co.).' ² The document certifies that defendant has received the goods 'subject to all of the terms and conditions contained herein and on the reverse hereof.' At the bottom of the face of the receipt is this: '* * * Note. Rates for storage, handling and other services are as fixed by law in Tariffs filed with the Railroad Commission of California and in our office, notwithstanding omission to state same here or erroneous statement thereof.' Also: 'THE PARTY ACCEPTING THIS RECEIPT THEREBY AGREES TO ITS CONDITIONS.' ³ On the reserve side are 'Standard Terms and Conditions' which include the following: 'These goods are stored and handled subject to the rules, regulations, rates and charges as published in our warehouse schedules on file with the Railroad Commission of California and in our office, and such amendments thereto as may hereafter be filed.' Also: 'Rates are subject to limited liability as provided by the Tariffs on file with the Railroad Commission and in this office.' Neither plaintiff nor the bank made any declaration of value of the peppers at any time.

They were inspected by plaintiff before his purchase in January 1950, and every two or three months during 1950 and found to be in good condition, at least as late as September. When withdrawn from storage in January and February, 1951 the chilies were moldy and damaged. They were sold for $5,131.10, resulting in a loss of $23,112.30, the amount of the verdict.

Defendant insisted throughout the trial that its liability was limited, as matter of law, to $100 per ton of 2,000 pounds, because no higher value was declared and no greater rate than 12 1/2 cents per hundred pounds was charged to or paid by plaintiff. Counsel for plaintiff, on the other hand, tried the case upon the theory that such a limitation of liability, based upon an agreed value, does not bind the bailor unless he voluntarily accepts a warehouse receipt so declaring and does it with full knowledge and understanding on his part. The trial judge accepted this thesis as correct and instructed the jury accordingly.

Appellant's basic contention is that the schedules, with their rates and regulations an limitation of liability, automatically become implied terms of any contract made between a public utility and its customer. And they find support for this view in the recent case of Gardner v. Basich Bros. Construction Co., 44 Cal.2d 191, 281 P.2d 521.

Plaintiff in that case was a highway carrier who had been paid for a certain trucking job on the basis of a prescribed hourly rate. He sued to recover the difference between the amount paid him and an amount which would be due under a higher ton-mileage rate. Both rates were fixed by a tariff issued by the Railroad Commission. It provided that hourly rates would apply 'only when notice in writing is given to the carrier, before the transportation commences of the shipper's intention to ship under such rates.' Defendants argued that plaintiff could not recover because it had waived any right to a ton-mileage rate. The court said in 44 Cal.2d at page 193, 281 P.2d at page 522: 'However, as stated in Gardner v. Rich Mfg. Co., 68 Cal.App.2d 725, 730, 158 P.2d 23, 25, the prescribed rules and rate regulations 'become a part of every contract between a highway contract carrier and the shipper.'' The court assumed, but did not decide the correctness of defendant's position on waiver, and proceeded to determine the applicable statute of limitations. In the course of that discussion it said in 44 Cal.2d at page 194, 281 P.2d at page 522: 'The prescribed rate provisions and regulations are deemed a part of every such contract, and the parties are deemed to have contracted with such provisions in mind for otherwise the state's rate-making policy expressed in the Highway Carriers' Act...