Midstate Horticultural Co v. Pennsylvania Co, No. 40

CourtUnited States Supreme Court
Writing for the CourtRUTLEDGE
Citation88 L.Ed. 96,320 U.S. 356,64 S.Ct. 128
PartiesMIDSTATE HORTICULTURAL CO., Inc., v. PENNSYLVANIA R. CO
Docket NumberNo. 40
Decision Date22 November 1943

320 U.S. 356
64 S.Ct. 128
88 L.Ed. 96
MIDSTATE HORTICULTURAL CO., Inc.,

v.

PENNSYLVANIA R. CO.

No. 40.
Argued Oct. 21, 22, 1943.
Decided Nov. 22, 1943.

Mr. Theo. J. Roche, of San Francisco, Cal., for petitioner.

Mr. John Dickinson, of Philadelphia, Pa., for respondent.

Mr. Justice RUTLEDGE delivered the opinion of the Court.

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:

Page 357

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.1

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 gen-

Page 358

eral or special statute of limitations.'2 Two months later, but within the extended time, petitioner finally declined to pay and respondent began this action.3

In all stages of the litigation petitioner has contended that the statute prohibits maintenance of the action, notwithstanding its agreement. Respondent has taken the contrary view as have the California District Court of Appeal, one judge dissenting (124 P.2d 902), and the California Supreme Court (21 Cal.2d 243, 131 P.2d 544). We think petitioner's position must be sustained. In short this is that the agreement is invalid as being contrary to the intent and effect of the section and the Act.

In classical statement, the question has been posed as whether the section operates, with the lapse of time, to

Page 359

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;4 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,5 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.6 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

Page 360

a part of them7 or in which the shipper sues the carrier to recover excess charges paid or damages for the charging of unreasonable rates.8

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 imposes9 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.10 The test of creation may aid when origin is clear.11 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

Page 361

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.12 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.13 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.14 Not

Page 362

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.15 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

Page 363

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),16 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.17

With a single exception, Pennsylvania R.R. v. Susquehanna Collieries Co., D.C., 23 F.2d 499, the federal courts have not decided squarely whether an agreement such as is presented here is valid. In that suit to recover demurrage charges the court sustained and gave effect to the contract. But we think this is contrary to the general course of decision which has construed the section and predecessor limitations.

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 decisions18 and those of the inferior federal courts.19 It is true of suits by shippers

Page 364

against carriers and of suits by carriers against shippers.20 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.21

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...

To continue reading

Request your trial
144 practice notes
  • Lucas v. Wisconsin Electric Power Company, No. 71-1113.
    • United States
    • United States Courts of Appeals. United States Court of Appeals (7th Circuit)
    • August 2, 1972
    ...utility to pay their bills promptly in order to forestall discrimination. Midstate Horticultural Co., Inc. v. Pennsylvania Railroad Co., 320 U.S. 356, 64 S.Ct. 128, 88 L.Ed. 96. 10 "The fact that its opportunity for a hearing was lost because misapprehension as to the appropriate remedy was......
  • Adams v. Paul, No. S041623
    • United States
    • United States State Supreme Court (California)
    • November 22, 1995
    ...Co. (1942) 21 Cal.2d 243, 247, 131 P.2d 544, revd. on other grounds sub nom. Mid State Horticultural Co. v. Pennsylvania R. Co. (1943) 320 U.S. 356, 64 S.Ct. 128, 88 L.Ed. 4 Conditioning a finding of harm on such a consideration would conflict with the rationale of Laird v. Blacker, supra, ......
  • Briosos v. Wells Fargo Bank, No. C 10-02834 LB
    • United States
    • United States District Courts. 9th Circuit. United States District Courts. 9th Circuit. Northern District of California
    • August 25, 2010
    ...to bar the remedy for its enforcement.' " Beach, 523 U.S. at 412, 118 S.Ct. 1408 (quoting Midstate Horticultural Co. v. Penn. R. Co., 320 U.S. 356, 358-59 & n. 4, 64 S.Ct. 128, 88 L.Ed. 96 (1943)) (emphasis added). Examining the plain language of § 1635(f), the Supreme Court determined that......
  • Brooklyn Sav Bank v. Neil Dize v. Maddrix Arsenal Bldg Corporation v. Greenberg 8212 1945, Nos. 445
    • United States
    • United States Supreme Court
    • April 9, 1945
    ...be waived or released if such waiver or release contravenes the statutory policy. Midstate Horticultural Co. v. Pennsylvania Railroad Co., 320 U.S. 356, 361, 64 S.Ct. 128, 130, 88 L.Ed. 96; A. J. Phillips Co. v. Grand Trunk Western Ry., 236 U.S. 662, 667, 35 S.Ct. 444, 446, 59 L.Ed. 774. Cf......
  • Request a trial to view additional results
144 cases
  • Lucas v. Wisconsin Electric Power Company, No. 71-1113.
    • United States
    • United States Courts of Appeals. United States Court of Appeals (7th Circuit)
    • August 2, 1972
    ...utility to pay their bills promptly in order to forestall discrimination. Midstate Horticultural Co., Inc. v. Pennsylvania Railroad Co., 320 U.S. 356, 64 S.Ct. 128, 88 L.Ed. 96. 10 "The fact that its opportunity for a hearing was lost because misapprehension as to the appropriate remedy was......
  • Adams v. Paul, No. S041623
    • United States
    • United States State Supreme Court (California)
    • November 22, 1995
    ...Co. (1942) 21 Cal.2d 243, 247, 131 P.2d 544, revd. on other grounds sub nom. Mid State Horticultural Co. v. Pennsylvania R. Co. (1943) 320 U.S. 356, 64 S.Ct. 128, 88 L.Ed. 4 Conditioning a finding of harm on such a consideration would conflict with the rationale of Laird v. Blacker, supra, ......
  • Briosos v. Wells Fargo Bank, No. C 10-02834 LB
    • United States
    • United States District Courts. 9th Circuit. United States District Courts. 9th Circuit. Northern District of California
    • August 25, 2010
    ...to bar the remedy for its enforcement.' " Beach, 523 U.S. at 412, 118 S.Ct. 1408 (quoting Midstate Horticultural Co. v. Penn. R. Co., 320 U.S. 356, 358-59 & n. 4, 64 S.Ct. 128, 88 L.Ed. 96 (1943)) (emphasis added). Examining the plain language of § 1635(f), the Supreme Court determined that......
  • Brooklyn Sav Bank v. Neil Dize v. Maddrix Arsenal Bldg Corporation v. Greenberg 8212 1945, Nos. 445
    • United States
    • United States Supreme Court
    • April 9, 1945
    ...be waived or released if such waiver or release contravenes the statutory policy. Midstate Horticultural Co. v. Pennsylvania Railroad Co., 320 U.S. 356, 361, 64 S.Ct. 128, 130, 88 L.Ed. 96; A. J. Phillips Co. v. Grand Trunk Western Ry., 236 U.S. 662, 667, 35 S.Ct. 444, 446, 59 L.Ed. 774. Cf......
  • Request a trial to view additional results

VLEX uses login cookies to provide you with a better browsing experience. If you click on 'Accept' or continue browsing this site we consider that you accept our cookie policy. ACCEPT