Greenwald v. Weir

The facts of this case are undisputed. The plaintiffs delivered to Adams Express Company a package containing dry goods of the value of $235, to be forwarded to Waukegan, 111. An employé of the defendant received the package and signed a receipt for it. Nothing was said at this time in reference to the contents or value of the package. The package was not delivered, and its loss is not explained. The express receipt had printed in small type upon it the following clause:

“In consideration of the rate charged for carrying said property, which is regulated by the value thereof and is based upon a valuation of not exceeding fifty dollars unless a greater value is declared, the shipper agrees that the value of said property is not more than fifty dollars, unless a greater value is stated herein, and. that the company shall not be liable in any event for more than the value so stated, nor for more than fifty dollars if no value is stated herein.”

The defendant offered evidence to show that, had a higher value than $50 been declared, an additional charge of 10 cents for each $100 declared in excess of $50 would have been added to the freight charges.

“That any common carrier, railroad or transportation company receiving property for transportation from a point in one state to a point in another state, shall issue a receipt or bill of lading therefor and shall be liable to the lawful holder thereof for any loss, damage or injury to such property caused by it or by any common carrier, railroad or transportation company to which such property may be delivered or over whose line or lines such property may pass, and no contract, receipt, rule or regulation shall exempt such common carrier, railroad or transportation company from the liability hereby imposed. Provided that nothing in this section shall deprive the holder of such receipt or bill of lading of any remedy or right of action, which he has under existing law.”

The question presented for decision is whether the contract under which the package was delivered is in contravention of the terms of section 20 of the interstate commerce act. Assuming the statute to be constitutional, if the contract is in violation of its terms, it is void, and the plaintiffs may recover the true loss sustained. Whether the contract is contrary to the terms of the statute depends upon whether the purpose and effect of the contract is to “exempt” the carrier from the liability imposed by the statute. If such is the purpose and effect of the contract, it comes within the condemnation of the statute. It is noticeable that, at the beginning of the section under consideration, it is distinctly and explicitly provided that the carrier “shall be liable * * * for any loss, damage or injury,” etc. Thus, without regard to the last clause, it is clear that the statute establishes the carrier’s liability as to all cases within the purview of the section. The liability imposed by statute is “for any loss, damage or injury to such property.” Having established such liability, it goes on to declare that “no contract, receipt, rule or regulation shall exempt * * * such carrier from the liability hereby imposed.” A contract is protected and enforced by law, not because it is a moral obligation, but because it is a civil obligation. To entitle it to enforcement, it must be legal, and, if it is illegal, it creates no obligation. Story on Const. § 1380. The liberty to contract is not absolute. It has never been suggested by judicial authority that one possessed a freedom to make an illegal contract. If, therefore, the contract under consideration is within the prohibition of the statute, no question as to freedom of contract is involved. Nor can the constitutionality of this provision of the statute be successfully assailed. Common carriers cannot claim that, in the discharge of their public duties, their ability to contract is free from governmental regulation and control. A common carrier is engaged in a public employment, and throughout' the history of English law has been regarded as one holding a public office. Story on Bailments, § 495. Common carriers being engaged in the performance of public duties, their activities are within the sphere of governmental regulation and control. By assuming to discharge public duties, they submit themselves to public control. As was said, bv Chief Justice Waite:

“[Where] one devotes his property to a use in which the public has an interest, he, in effect, grants to the public an interest in that use, and must submit to be controlled by the public for the common good, to the extent of the interest he has thus created. He may withdraw his grant by discontinuing the use; but, so long as he maintains the use, he must submit to the control.” Munn v. Ill., 94 U. S. 125 , 126, 24 L. Ed. 77 .

The stringent rule of liability, to which common carriers have al-t ways been subjected, arises out of the public nature of their employment and considerations of public policy with which that employment is affected. If it was necessary in early times to insist upon the public character of a common carrier in order to protect public interests, how much more necessary to-day that the rule should not be relaxed,, when the commercial interests affected by the work of the common carrier are so much greater. Whether legislation embodied in section 20 of the interstate commerce act is wise or unwise is the concern of the legislative, and not of the judicial, branch of the government. Congress has the constitutional power to regulate the ability to contract of a public or common carrier of interstate commerce, and the-act in question is not unconstitutional. Addyston Pipe & Steel Company v. United States, 175 U. S. 211 , 228, 20 Sup. Ct. 96 , 44 L. Ed. 136 ; United States v. Joint Traffic Association, 171 U. S. 505 , 572, 19 Sup. Ct. 25 , 43 L. Ed. 259 . Almost universally, throughout the United States, it has been held that a common carrier cannot relieve-itself by contract from liability for its negligence. 6 Cyc. 388. A contrary rule has existed in New York state. Kenney v. N. Y. C. & H. R. R. Co., 125 N. Y. 422 , 26 N. E. 626 . There is no room for doubt that in this state heretofore the shipper’s recovery in the absence of fraud or imposition would be limited to the amount specified in the-contract or receipt. Among the many authorities that might be cited in support of this statement, Tewes v. North German Lloyd, 186 N. Y. 151 , 78 N. E. 864 , 8 L. R. A. (N. S.) 199 , Addoms v. Weir, 56 Misc. Rep. 487 , 108 N. Y. Supp. 146 , and Hoye v. Pa. R. R. Co., 191 N. Y. 104 , 83 N. E. 586 , are the most recent and interesting.

The argument, which is attempted to be made, based upon the distinction in meaning between the words “exempt” and “limit,” does, not seem to me to be convincing. To limit one’s liability to an amount less than one would be liable for, except for the contract of limitation, is to exempt such a one from any liability in excess of the amount of the limitation. The act itself provides that the carrier “shall' be liable” for any loss, and declares that no contract “shall exempt” such-carrier “from the liability hereby imposed.” It is evident that, construing all parts of the section together and according to the language used its ordinary import, this contract attempts to do precisely what the statute declares shall not be done, and it is therefore void. Section 2074 of the Code of Iowa is similar to section 20 of the interstate commerce act, and contracts like the one now under consideration have, under that statute, been held to be invalid. Hart v. Chicago & N. W. Ry. Co., 69 Iowa, 486 , 29 N. W. 597 . In Barnes v. Long Island Railroad Co., 115 App. Div. 44 , 100 N. Y. Supp. 593 , affirmed by Court of Appeals, 84 N.

The language of the statute seems to me to be plain, and the contract made, between the parties to this action, clearly in contravention of its terms. It follows, therefore, that the clause attempting to limit the liability of the carrier to $50, or to exempt it from all liability in excess of that sum, regardless of the value of the goods, was void and inoperative.

The judgment appealed from should be reversed and a new trial ordered, with costs to appellants to abide the event.

GILDERSLEEVE, P. J., concurs.

(dissenting). It seems to me that the interstate commerce act, as was said in Hart v. Chicago & N. W. Ry. Co., 69 Iowa, 490 , 29 N. W. 599 , leaves the parties here “free to make such contract as they may choose to make with reference to the compensation which shall be paid for the services to be rendered.” It is well settled that there is a marked distinction between limitation of and exemption from liability. Section 20 of the act in question directs the issuance of a receipt upon which the carrier is liable to the holder for any loss caused by it or any connecting line, and provides that no contract shall exempt the carrier from that liability. This language “establishes no new principle in the law.” Munn v.

Judgment affirmed, with costs of this appeal to the respondent.