Kansas City Southern Railway Co. v. Carl

after making the foregoing statement, delivered the opinion of the court.

The Supreme Court of the State declined to consider or pass upon any of the questions made in that coúrt for reversal except the single question as to whether the plaintiff in error, as the final carrier in the route, was entitled to the benefit of the stipulation in the release signed by the shipper,, releasing the Chicago, Rock Island and Pacific Railway, the primary carrier, “and all other Railroad and

The court, after saying that the plaintiff in error “relies for a reversal on the clause in the contract with the initial carrier limiting the liability as to value'in case of loss . . . as a stipulation for its benefit as well as for the benefit of the initial carrier, and bases this contention on our decisions to that effect,” in answer to this contention, said:

• “Butin making their contention they have not taken into cortsideration the effect of the Hepburn Amendment to the Interstate; Commerce Act, which became effective on June 29th, 1900, a date prior to the time the contract in question was made.”

The provisions of the twentieth section of that act were then set out, and the court proceeded by saying:

“The undisputed evidence shows that the initial carrier received the property for transportation from a point in one State to a point in another State, and the presumption in the absence of evidence to the contrary was, as will be seen from our decisions hereinafter referred to, that the goods were lost through the negligence of appellant, the last carrier.

“The section of the Hepburn Act above quoted makes the carrier liable ‘for any loss, damage, or injury to such property caused by it, ... and no contract■, receipt, rule or regulation shall exempt such common carrier, railroad or transportation company from the liability hereby imposed.’

“The express .terms of the act makes the carrier liable for any loss caused by it, and provides that no contract shall exempt it from the liability imposed. It is manifest that the act. renders invalid all stipulations designed to limit liability for losses caused by the carrier. Public

policy .forbids that a public carrier should by contract exempt, itself from the consequences of its own negligence. For the same reason a statute may prohibit it from making stipulations in a contract which provide for such partial exemption.

“If the initial carrier is prohibited from making a contract limiting' its own liability, it is obvious that it could not make a contract limiting the liability of its connecting carriers; for the section of the Hepburn Act under' discussion provides that the carrier issuing the bill of lading may recover from the connecting carrier, on whose line the loss occurs the amount of the loss it may be required to pay the owner.”

As the shipment was interstate, the contract was controlled by the twentieth section of the act of Congress of June 29, 1906. The initial carrier under that provision of the Interstate Commerce Act, as an interstate carrier, .holding itself out to receive shipments from a point upon its own line in one State to a point in another State upon the line of a succeeding and connecting carrier, came, under liability not only for its own default but also fpr loss or damage upon the line of a connecting carrier in the route: Atlantic Coast Line v. Riverside Mills, 219 U. S. 186 . Any stipulation in its own receipt was ineffective in so far as it was not authorized by the section of the act referred to, whether intended for its own benefit or that of the succeeding carrier. It is also true that any limitation of liability contained in its contract which would be valid in its own behalf would likewise inure to the benefit of its connecting carrier. The liability of any carrier in the route over which the articles .were routed, for loss or damage, is that imposed by the act as measured by the original contract of shipment so far as it is valid under the act. This ..^provision of the Interstate Commerce Act has been so fully considered and decided that we need not go further into the matter: Adams Express Company v. Croninger,

But it is said that, upon the face of the contract of limitation here involved, it is an exemption from liability for negligence forbidden by the Carmack Amendment, and that the judgment should therefore be affirmed.

That amendment undoubtedly manifested the purpose of Congress to bring contracts for interstate shipments under one uniform rule or law, and therefore;., withdraw them from the influence of state regulation. Adams Express Co. v. Croninger, above cited.' Every such initial carrier is required “to issue a receipt or bill of lading therefor,” when it receives property for transportation from one State to another. Such initial carrier is made liable to the holder of such receipt for any loss or damage “caused by it,” or by any connecting carrier in the route to whom it shall make delivery. It is then declared that no contract, receipt, rule or regulation shall “exempt” such a commoh carrier “from the liability hereby imposed.”

In speaking of the “liability” imposed by the provision referred to, we said, in the Croninger Case (p. 511), that “the statutory liability, aside from responsibility for the default of a connecting carrier in the route, -is not beyond the liability imposed by the common law as that body of law applicable to carriers has been intexpreted by this court as well as many,courts of many States:” .Referring to the exemption forbidderi by the’same clause, we said, that that was “a statutory declaration that a contract of exemption from liability for negligence is against, public •policy and void.” Citing Bernard v. Adams Express Co., 205 Massachusetts, 254, 259, and Greenwald v. Barrett, 199 N. Y. 170 , 175, and other cases.

It follows, therefore, that when the carrier has filed rate-sheets which show two rates based upon valuation Upon a particular class of traffic, that it is legally bound to apply that rate which corresponds to' thé valuation. If the shipper desires the lower rate, he should, disclose the valuation, for in the absence of knowledge the carrier has a right to assume that the higher of the rates based upon value applies. In no other way can it protect itself in its

“As a general rule, and in the absence of fraud or imposition, a common carrier is answerable for the loss of a package of goods though he is ignorant of its contents, and though its contents are ever so valuable, iLke does not make a special acceptance. This is reasonable, because he can always guard himself by a special acceptance, or by insisting on being informed of the nature and value of the articles before receiving them. If the shipper is guilty of fraud or imposition, by misrepresenting the nature or value of the articles, he destroys his claim to,indemnity, because he has attempted to deprive the carrier of the right to be compensated in proportion to the value of the articles and the consequent risk assumed, and what he has done has tended to lessen the vigilance the carrier would otherwise have bestowed.” ,

In summing up the view of the court in the same case it was said fp. 343):

“The distinct ground of our decision in the case at bar is, that where a contract of the kind, signed by the shipper, is fairly made, agreeing oh-the valuation of the property carried, with the rate of freight based on the condition

that the carrier assumes liability only to the extent of the agreed valuation, even in case of loss or damage by the negligence of the carrier, the contract will be upheld as a proper and lawful mode of securing a due proportion between the amount for which the carrier may be responsible and the freight he receives, and of protecting himself against extravagant and fanciful valuations.”

The valuation declared or agreed upon as evidenced by the contract of shipment upon which the published tariff rate is applied, must be conclusive in an action to recover for loss or damage a greater sum. In saying this we lay. on one side, as not here involved, every question which might arise when it is shown that the carrier intentionally connived with the shipper to give him an illegal rate, thereby causing a discrimination or preference forbidden by the positive terms of the act of Congress and made punishable- as a crime. To permit such a declared valuation to be overthrown by evidence aliunde the contract, for the purpose of enabling the shipper to obtain a recovery in a suit for loss or damage in excess of the .maximum valuation thus fixed, would both encourage and reward undervaluations and bring about preferences and discriminations forbidden by the law. Such a result would neither be Just nor conducive to sound morals or wise policies. The valuation the shipper declares determines the legal rate where there are two rates based upon valuation. He must take notice of the rate applicable, and actual want of knowledge is no excuse. The rate, when made out and filed, is notice, and its effect is not lost, although it is not actually posted in the station: Texas & Pacific Railway v. Mugg, 202 U. S. 242 ; Chicago & A. Railway v. Kirby, 225 U. S. 155 .

It would open a wide door to fraud and destroy the uniform operation of the published tariff rate sheets. When there are two published rates, based upon difference in value, the legal rate automatically attaches itself to

That, the valuation and the rate are dependent each upon the other is an administrative rule applied in reparation proceedings by-the Interstate Commerce Commission. Southern Oil Company v. Southern Railway Co., 19 I. C. C. Rep. 79; Miller & Lux v. Southern Pacific Company, 20 I. C. C. Rep. 129.

In Hart v. Penn. R. R. Co., 112 U. S. 331 , parole evidence that the horses shipped were of a far greater value than the valuation agreed upon was rejected as incompetent. The presumption is conclusive,” said the court, “that, if the liability had been assumed on a valuation'as great as that now alleged, a. higher rate qf freight would have been charged. The rate of freight is indissolubly bound up with the valuation.”

The difference between two rates upon the same commodity based upon valuation is presumably no more than sufficient to protect the carrier against the greater amount of risk he assumes by reason of the difference in value. When the higher rate is no more than to reasonably insure

In the instant case, we must assume that the difference between the rates upon household goods of less value than five dollars per hundredweight. and the rate upon the same class of goods of a higher value, has been fixed upon this principle. We must for the purpose of this case accept the high and low rate as reasonable. If the present rates upon such goods, as shown in the tariffs filed, are inadequate to protect the shipper, a remedy can be had by an order of the Interstate Commerce Commission readjusting the rates to meet the requirements of justice, alike to shipper and carrier.

Coming now to the application of the principles we have indicated, we aré at once confronted with the suggestion that the contract in this case is not one of valuation. Upon the side of the-shipper the pregnant words are that he thereby “releases the said company from alL liability for any loss or damage said property may sustain in excess of $5 per 100 lbs.” At the foot and below the signature of the consignor is a notation addressed to the company’s agent, stating in substance, that when house

The phrase “hereby releases,” etc.,-is said to indicate not a valuation but a release from liability for a part of the value. The words are somewhat misleading. Yét contracts for the limitation of loss to an agreed valuation are largely in this form. The Commission, which has the rate sheets of hundreds of railroads including stipulations as to value, treats the topic under the title “Released Rates.” 13 I. C. C. Rep. 550. The phrase has, we may take notice, come to be a term applied to contracts of shipment containing in one form or another an agreement to adjust a loss or damage upon the basis of an agreed or declared value. It is difficult not to. see, when we read the bill of lading and the release, with its note, in the. light of the filed rate sheets and the rate paid upon this shipment corresponding to the lower of two rates upon household goods, that the consignor and the carrier mutually under

It has been suggested that a rate of five dollars per hundred pounds upon household goods indiscriminately is arbitrary, and has no reasonable relation to the actual value. This objection goes to the classification made in the filed tariff sheets. They place two rates upon household goods valued over and under five dollars'-per hundred pounds. This basis has not been regarded by the Commission as either arbitrary or unreasonable. In the' opinion styled “In the matter of Released Rates,” cited above, the Commission, among other things, said (p. 564)':

"The practice of basing rates upon the condition that the carrier shall not be responsible for losses due to causes beyond its control has received legal sanction. Similarly wo find no impropriety.in a graduation of rates in accordance with the actual values of specific commodities. Household-goods, for-example, differ widely in value, and it is fair to all that the man who ships goods of low value should receive the benefit of a lower rate than the man who ships more expensive goods. Rate-making.upon this principle is in every respect legitimate.”

Our conclusion is that the shipping contract does not upon its face offend against the statute, and the judgment, must-, for the errors indicated, be reversed, and the case; remanded for further proceedings not inconsistent with this opinion.

Mr. Justice Hughes and Mr. Justice Pitney dissent.