Loveless v. Universal Carloading & Distributing Co.

• Decision Date: 29 July 1955
• Docket Number: No. 5075.,5075.
• Citation: 225 F.2d 637
• Parties: M. W. LOVELESS, dba Loveless Manufacturing Company, a sole proprietorship, Appellant, v. UNIVERSAL CARLOADING & DISTRIBUTING COMPANY, Inc., a corporation, Appellee.
• Court: U.S. Court of Appeals — Tenth Circuit

225 F.2d 637 (1955)

M. W. LOVELESS, dba Loveless Manufacturing Company, a sole proprietorship, Appellant, v. UNIVERSAL CARLOADING & DISTRIBUTING COMPANY, Inc., a corporation, Appellee.

No. 5075.

United States Court of Appeals Tenth Circuit.

July 29, 1955.

John M. Wheeler, Tulsa, Okl. (Wheeler & Wheeler, John Wheeler, Jr. and Robert L. Wheeler, Tulsa, Okl., were with him on the brief), for appellant.

William J. Treadgill, Tulsa, Okl. (Joseph N. Shidler, Tulsa, Okl., was with him on the brief), for appellee.

Before BRATTON and MURRAH, Circuit Judges, and WALLACE, District Judge.

MURRAH, Circuit Judge.

M. W. Loveless, dba Loveless Manufacturing Company, sued Universal Carloading & Distributing Company, Inc. as the terminating carrier, for damages to machinery shipped under a bill of lading in interstate commerce. The case was removed from the state court to the federal court on requisite diversity of citizenship and amount in controversy and as one arising under the laws of the United States.

The undisputed facts are that Loveless orally notified Universal's local manager, Gillam, on May 5, 1952, that he would not accept delivery of the damaged goods. One of Universal's warehousemen then inspected the machinery, noting upon the consignment memo the extent of apparent damage and signing his name thereto. After extensive negotiations between Loveless and Gillam, Loveless agreed to accept the machinery and install it, with the understanding that a formal claim for ultimately ascertained damages could be filed at any time within two years. And on the same date Gillam wrote Loveless enclosing the consignment memo, stating:

"You will note this freight bill carries notation as to damage noted on arrival.

"Inasmuch as this does not nor is intended to cover probable damage that might exist due to apparent rough handling on the part of the carriers, we have notified both the Frisco and the New York Central that the shipment had shifted approximately five feet and that the lags holding the machine to the skids had been pulled away from the machine, indicating that the car had been terrifically humped somewhere along the line.

"This will protect you in the event claim will be filed, for a period of up to two years. As you explained it will be possible to determine the damage, if any, long before that time, but just to make sure, we have notified the carriers that claim will be filed, undetermined amount at some future date * * *"

The machine did not function properly from the time of installation, but Loveless did not present a formal claim for the damages until December, 1953, 19 months after delivery. Universal denied the claim solely on the ground that not having been filed within 9 months of the delivery date, it was barred by Sec. 2(b) of the bill of lading, which provides in presently material part that:

"As a condition precedent to recovery, claims must be filed in writing with the * * * carrier * * * within nine months after delivery of the property * * *" and "* * * Where claims are not filed * * * in accordance with the foregoing provisions, no carrier hereunder shall be liable, and such claims will not be paid."

The decisive question is whether the writings between the parties can be said to be a claim "in writing" within the meaning of Sec. 2(b) as judicially construed and applied.

Loveless contends that the notation by Appellee's warehouseman on the consignment memo together with the letter from Appellee's local manager to him, constitute a substantial compliance with the notice requirements of Sec. 2(b) of the bill of lading; and that in any event actual knowledge of the damages by Universal served as timely notice to initiate the necessary investigation by the carrier and thus excused the filing of a claim. Loveless also pleads estoppel to assert non-compliance with Sec. 2(b) having acted to his prejudice upon representations of the local manager that he had two years within which to file a claim.

While the trial court was impressed with the equities of Loveless' contentions, it was nevertheless constrained to deny the claim on the grounds that neither the notation on the consignment memo nor the letter written by Gillam, separately or together, constituted a sufficient claim "in writing" as required by Sec. 2(b) of the bill of lading; and that the facts did not justify the imposition of equitable estoppel.

The Carmack Amendment to the Interstate Commerce Act, Title 49 U.S.C. A. § 20(11), specifically requires the carrier to issue a bill of lading for property received for transportation in interstate commerce. And it also forbids the carrier from contracting for the filing of claims within a shorter period than nine months. While the statute does not specifically provide that notice of claim shall be in writing, or for that matter in any other particular form, Sec. 2(b) has historically been incorporated in the uniform bill of lading as a safeguard against tariff abuses and discriminations. The requirement in 2(b) that the notice of claim shall be "in writing" has come to be an integral part of the uniform published tariffs and regulations which the carrier may not waive or be estopped to assert. Georgia, Fla. & Ala. Ry. Co. v. Blish Milling Co., 241 U. S. 190, 36 S.Ct. 541, 60 L.Ed. 948; Chesapeake & Ohio Ry. Co. v. Martin, 283 U. S. 209, 21 S.Ct. 453, 75 L.Ed. 983; Insurance Co. of North America v. Newtowne Mfg. Co., 1 Cir., 187 F.2d 675; Burns v. Chicago, M., St. P. & P. R. Co., 8 Cir., 192 F.2d 472; Delphi Frosted Foods Corp. v. Illinois Cent. R. Co., 6 Cir., 188 F.2d 343.

To satisfy the requirements of Sec. 2(b) the writing need not be in any particular form. It is sufficient if it apprises the carrier that damages have occurred for which reparations are expected, so that the carrier may make a prompt investigation consistent with the "practical exigencies of the situation." Georgia, Fla. & Ala. Ry. Co. v. Blish, supra; Thompson v. James G. McCarrick Co., 5 Cir., 205 F.2d 897; Insurance Co. of North America v. Newtowne Mfg. Co., supra; Minot Beverage Co. v. Minneapolis & St. Louis Ry. Co., D.C., 65 F. Supp. 293. Thus the practical construction of Sec. 2(b) has been satisfied by an exchange of telegrams between the shipper and the carrier the last of which claimed damages for the total loss, Georgia, Fla. & Ala. Ry. Co. v. Blish, supra; by a timely informal letter from the shipper's agent to the carrier stating that a claim "will be filed against you" on a specified shipment, Minot Beverage Co. v. Minneapolis & St. Louis Ry. Co., supra; and by writings entitled "statements of protest" and "placement notices" filed with the carrier's agent stating damages, identifying the shipment, and containing the notation "this is consignee's claim", Thompson v. James G. McCarrick Co., supra.

Formal written notice was deemed unnecessary in Hopper Paper Co. v. Baltimore & O. R. Co., 7 Cir., 178 F.2d 179, 182, where the carrier had actual knowledge of the damage and had notified the shipper thereof. "In such a situation a formal notice by plaintiff to the defendant could not have accomplished anything more. * * *" and "* * * the carrier may not use the provisions of the bill of lading to shield itself from the liability imposed upon it by the statute and the common law for its negligent destruction of the shipper's property. To hold otherwise would not be construing the bill of lading `in a practical way.'" As against the contention that dispensation with the requirements of the formal written notice would open the door to widespread discrimination, hence frustration of the purpose of the Interstate Commerce Act, the court took the view that actual knowledge in lieu of written notice was neither discriminatory nor a preference in favor of one particular shipper at the expense of another but rather a mode of proof "applicable alike to all railroads and in favor of all shippers."

While the Hopper case was deemed "perhaps out of line with * * * other cases" in Insurance Co. of North America v. Newtowne Mfg. Co., supra 187 F.2d 681, the court was at pains to point out that in the Hopper case the carrier at least "knew that the loss had occurred during the transportation on its line and had so advised the shipper by telegram." Whereas in the Newtowne case the carrier had no record of having accepted any shipment, had no knowledge of the loss, and denied responsibility for it. Notice or knowledge of the loss was in issue. In these circumstances the court refused to open the door to possible abuses by admitting oral proof of actual notice or knowledge.

The Hopper case was again distinguished in Delphi Frosted Foods Corp. v. Illinois Cent. R. Co., supra, where the shipper's customers who had...