Union Pacific Railroad v. Burke

delivered the opinion of the court.

On March 10, 1915, S. Ontra & Brother delivered to the .Pacific Mail Steamship Company at Yokohama, Japan, 56 cases of “Drawn work goods and Renaissance,” consigned to their oWn order at New York, and received a bill of lading for ocean transportation to San Francisco and thence by the Southern Pacific Company and its connections, by rail, to destination. The property was delivered to the Southern Pacific Company and without new billing was carried to a junction with the line of the petitioner, the Union Pacific Railroad Company, and while in its custody was totally destroyed in-a collision. The respondent, successor in interest to the consignor, claimed in this suit^the right -to recover the fair invoice value of the goods, $17,549.01, and the petitioner conceded his right to recover, but only to the amount of the agreed valuation of $100 per package,. $5,600, to which it contended he was- limited by the bill of lading. All of the facts are stipulated or proved by undisputed evidence.

The Appellate Division — First Department New-York Supreme Court — rendered judgment in favor of respohclent for $5,600, with interest and costs, but on appeal to the Court of Appeals of that State the judgment of the Appellate Division was reversed and an order was entered that

On the face of the bill of lading received at Yokohama was 'the notation: “Weight 26,404 lbs.; Ocean weight rate, 50/, Freight $132.02. Rail, mipimum carload weight 30,000 lbs., wgt. rate $1.25, Freight $375-00.” (Thus the ocean and rail rates áre separately stated, and the latter is $1.25 per 100 lbs., minimum carload.) On the back of the bill of % lading were printed thirty-one conditions, the thirteenth of which contained the provision that, “ It is expressly agreed that the goods named in this bill of lading are hereby valued at not exceeding $100.00 per package . . . and' the liability of the Companies therefor, in case of the total loss of all or any of the said goods from any cause, shall not exceed $100.00 per package.”

The petitioner was an interstate common carrier by rail at the time of the shipment involved and as such had filed with the Interstate Commerce Commission schedules of rates and regulations under which the property was moving at the time it.was destroyed. By these schedules the earlier was bound, and to them it was limited, in contracting for traffic. Southern Ry. Co. v. Prescott, 240 U. S. 632 , 638. The statute expressly provided -that it should not charge or demand or collect or' receive a greater or less or different compensation for the transportation of property or - for any service in connection therewith than such as was specified in such schedules. ( 34 Stat. 587 , § 6.)

In these schedules was included a rule, designated as Rule 9A, which reads: “Unless otherwise provided, when-property is transported, subject to. the provisions of theWestern Classification, the acceptance and use are,required, respectively,^ the ‘Uniform Bill of Lading,’ ‘Straight’ or ‘Order’ as shown on pages 87 to;9.0, inclusive.”

For the purposes of this case, only, it is admitted, and

Upon the facts thus stated the petitioner contends that the agreed valuation of $100 per package or case in the Yokohama bill of lading is necessarily imported into the Uniform Bill of Lading,' becomes the valuation “agreed upon” within the terms and conditions quoted from that bill, and limits the respondent’s recovery to that amount, $5,600, regardless of the value of the property and of the fact that it was lost by the carrier’s negligence.

To this contention it is replied by the respondent: that it is admitted by the petitioner that its filed arid published schedules contained but one rate applicable to the shipment as it was carried east of San Francisco; that that rate, $1.25 per 100 pounds minimum carload, was charged in the Yokohama bill of lading; and that,.since no choice of rates was given,' or could be given, to the shipper, any agreement, in form a valuation of the property, made for the purpose of limiting the carrier’s liability to less thari the real value thereof, in case of loss by negligence, was void and without effect.

As a matter of legal distinction, estoppel is made the basis of this ruling — that, having accepted the benefit óf the lower rate, in . common honesty the shipper may not repudiate the conditions on which it was obtained — but the rule and the effect of it are clearly established.

The petitioner admits all this, but contends that it has never been held by this court that such choice of rates was essential to the validity of valuation agreements, and, arguing that they should be sustained unless shown to have been fraudulently or oppressively obtained, it affirms the validity of the agreement in the Yokohama bill of lading, and cites as a decisive authority Reid v. American Express Co., 241 U. S. 544 .

With this contention we cannot agree.

This court has consistently held the law to be that it is against public policy to permit a .common carrier to limit its common-law liability by contracting for exemption from the consequences of its own negligence or that of its servants ( 112 U. S. 331 , 338 and 246 U. S. 439 ,444, supra), and valuation agreements have been sustained 'only on. principles of estoppel and in carefully restricted cases where choice of rates was given — where “the rate was tied to the release.” Thus, in the Hart Case (p. 343),.it is said: “The distinct ground'of our decision in the case at bar is, that where a contract'of the kind, signed by the shipper, is

And in the Piper Case it is said (p. 444): “In the previous decisions of this court upon the subject it has been said that the limited valuation for which a recovery may be had does not permit the carrier to defeat recovery because of losses arising from its own negligence, but serves to fix the amount of recovery upon an agreed valuation made in consideration of the lower rate stipulated to be paid for the service/’

The Reid Case, supra, does not conflict with these decisioris, for in that case the bill of lading containing the undervaluation, which was there sustained, expressly recited that the freight was adjusted on the basis of the agreed value and that the carrier’s liability should not exceed that sum “unless a value in excess thereof be specially declared, and stated herein, and extra freight as may be agreed on paid.” The bill of lading was for ocean carriage only, London to New York, to which, of course, the Interstate Commerce Act was not applicable, ( 36 Stat. 544 , § 1; Armour Packing Co. v. United States, 209 U. S. 56 , 78; Cosmopolitan Shipping Co. v. Hamburg-American Packet Co., 13 I. C. C. 266 ) and the carrier, therefore, was in a position to tender to, and, by the quoted provision of the bill, did tender to, the shipper the choice of paying a higher rate'^nd being subject to less restricted recovery in case of loss. The case was plainly within the scope of ithe prior decisions of this court upon the subject.

Thus this valuation rule, where choice is given to and ac

Affirmed.