Adams Express Co. v. Croninger,
226 U.S. 491 (1913)

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U.S. Supreme Court

Adams Express Co. v. Croninger, 226 U.S. 491 (1913)

Adams Express Co. v. Croninger

No. 18

Argued March 13, 1912

Reargued October 23, 1912

Decided January 6, 1913

226 U.S. 491


The constitutional power of Congress to regulate commerce among the states and with foreign nations comprehends power to regulate contracts between shipper and carrier of shipments in such commerce in regard to liability for loss or damage to articles carried.

Until Congress has legislated upon that subject, the liability of a carrier, although engaged in interstate commerce, for loss or damage to property carried, may be regulated by law of the state.

Since the decisions of this Court in Chicago, Milwaukee & St. Paul Railway v. Solan, 169 U. S. 133, and Pennsylvania Railroad v. Hughes, 191 U. S. 477, Congress has by § 20 of the Hepburn Act of June 29, 1906, 34 Stat. 584, c. 3591, known as the Carmack Amendment, legislated directly upon the carrier's liability for loss of and damage to interstate shipments, and this legislation supersedes all regulations and policies of a particular state upon the same subject.

Only the silence of Congress authorizes the exercise of the police power of the state upon the subject of contracts with carriers for interstate shipments, and when Congress exercises its authority, the regulating power of the state is at an end.

In enacting the Carmack Amendment, it is evident that Congress intended to adopt a uniform rule as to the liability imposed upon interstate carriers by state regulations of bills of lading, and to relieve such contracts from the diverse regulation to which they had theretofore been subject.

A proviso reserving certain rights of action will not be construed as nullifying the statute itself and maintaining the existing confusion which it was the purpose of Congress to put an end to, and so held that the proviso in the Carmack Amendment related to remedies under existing federal law at the time of this action, and not to any state law.

A rational interpretation will be given to a statute and a proviso, and not one by which the statute will, through the proviso, destroy itself.

A common carrier cannot exempt himself from liability for his own

Page 226 U. S. 492

negligence or that of his employees, but the rigor of this rule may be modified by a fair, reasonable and just agreement with the shipper which does not include exemption from such negligence, and the right to receive compensation commensurate with the risk involves the right to agree upon rates proportionate with the value of the property transported.

An interstate carrier may, by a fair, open, and reasonable agreement limit the amount recoverable by the shipper to an agreed value made for the purpose of obtaining the lower of two or more rates proportioned to the amount of risk.

A limitation of liability based upon an agreed value to obtain a lower rate does not conflict with any sound principle of public policy, and it is not conformable to plain principles of justice that a shipper may understate value in order to reduce the rate and then recover a larger value in case of loss.

The provisions of the Carmack Amendment are not violated by a plain provision in a bill of lading basing the charges on value of article transported and charging higher rates for increasing liability as value is declared, and so held as to express rates filed with the Interstate Commerce Commission.

This was an action in the Circuit Court of Kenton County, Kentucky, against the express company, to recover the full market value of a small package containing a diamond ring which was delivered by the plaintiff below to the express company at its office in Cincinnati, Ohio, consigned to J. W. Clendenning at Augusta, Georgia. The package was never delivered.

The express company made defense by answer. The plaintiff demurred to the answer as not containing a defense, which demurrer was sustained. The company declined to further plead, whereupon the circuit court gave judgment for the sum of $137.52, being the full value of the ring and interest. A writ of error was sued out from this Court to the Circuit Court of Kenton County, that being the highest court of the state in which a decision could be had.

The answer and accompanying exhibit were in substance as follows:

Page 226 U. S. 493

That the defendant was an express company engaged in interstate commerce within the provisions of the Act of Congress of June 29, 1906; that, in obedience to that act, it had duly filed with the Interstate Commerce Commission schedules showing its rates and charges from Cincinnati to Augusta, Georgia, which schedules showed that its rates and charges, when the value of the property to be carried was in excess of fifty dollars, were graduated reasonably, according to the value, and that the lawful rate upon the package of the plaintiff from Cincinnati to Augusta was twenty-five cents if the value was fifty dollars or less, and was fifty-five cents if its value was one hundred twenty-five dollars.

It is averred that the plaintiff knew that the charges upon the package shipped were based upon the value of the shipment, and that it (the defendant) required that the value should be declared by the shipper, and that, if he did not disclose and declare the value when he delivered the shipment to it at Cincinnati for transportation to Augusta, the rate charged would be based upon a valuation of fifty dollars. It is then alleged that the package so delivered was sealed, and that defendant did not know the contents or value, and that, if it had, it would not have received it for carriage for less than the lawful published rate of fifty-five cents. The receipt or bill of lading issued shows no value, but contains a stipulation in these words:

"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. "

Page 226 U. S. 499

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