Whether void or not under the state statute, a provision in an
express receipt limiting recovery in case of loss or negligence is
valid as to interstate shipment under the Carmack Amendment if
fairly made for the purpose of applying to the shipment the lower
of two rates
Page 227 U. S. 470
based upon valuation.
Adams Express Co. v. Croninger,
226 U. S. 491.
A statement filed in the case that a clause in a contract is
void under a statute is a concession for purposes of argument as to
a matter of law, and cannot conclude anyone, as it does not operate
to withdraw the contract from the case nor its validity from the
court's consideration.
The reasonable and just consequence of misrepresentation of
value to get the lower rate of shipment is not that the shipper
recover nothing, but that he is estopped to recover more than the
value declared to obtain the rate.
A shipper, by accepting a receipt reciting that the carrier is
not to be held liable beyond a specified amount at which the
property is thereby valued unless a different value than that is so
stated, and thus obtaining a lower rate than that which he would
have been obliged to pay had he declared the full value, declares
and represents that the value does not exceed the specified
amount.
There is no substantial distinction between a value stated on
inquiry and one agreed upon or declared voluntarily.
The facts, which involve the liability of an express company on
goods of undeclared value and also the construction of the Carmack
Amendment, are stated in the opinion.
Page 227 U. S. 473
MR. JUSTICE LURTON delivered the opinion of the Court.
Action by a shipper against an express company to recover for
the loss of a package of furs shipped from New York to Dallas,
Texas, and never delivered.
The receipt executed by the express company contained a clause
exempting it from loss or damage not due to its fraud or
negligence, and providing that it should in no event be held liable
"beyond the sum of $50 at not exceeding which sum said property is
hereby valued, unless a different value is hereinabove stated." No
different value was declared. The package weighed 7 pounds. It
contained furs enclosed in a paper box which was securely wrapped
and tied with cord.
The defendants in error were permitted to prove that the actual
value of the furs was $400. That the consignors kept in their
shipping office an express book containing blank express receipts.
One of these was filled out in their office by their shipping
clerk. When the wagon of the express company called at the office,
the agent signed the receipt, and the package was delivered to him
by a boy assistant to the shipping clerk. No questions were asked
as to the value, and no value declared other than as shown in the
receipt. It was also shown
Page 227 U. S. 474
that the clerk who wrapped and marked the package did not know
the value, and had no actual knowledge of the graduated rates of
the express company, and that he had had nothing to do with the
selling or buying of the furs. One of the consignors, Abraham
Jacobson, sold the furs personally and testified as to their value.
He testified that he knew that, if the value had been declared to
be $400, the express rate would have been higher, and that, if no
value was especially declared, they would be carried under the
express rate applying to a package valued at not in excess of
$50.
There was put in evidence the table of graduated rate sheets on
file with the Interstate Commerce Commission. These showed that the
rates were graduated by weight and value. The rate from New York to
Dallas upon a package weighing between 5 and 7 pounds, and valued
at not over $50, was $1, which was the rate applicable to and
charged upon the package in question. If the value had been
declared at $400, the rate would have been increased 15 cents for
each additional $100 of value.
One of the provisions of the filed tariff sheets contained this
direction:
"Always ask shipper to declare the value, and, when given,
insert it in the receipt, mark it on the package, and enter amount
on waybill. If shipper refuses to state value, write or stamp on
the receipt, 'Value asked and not given.'"
A jury was waived, and there was a judgment for the plaintiff
below for the full value of the package.
The contract of shipment, including the clause for the
limitation of any recovery in case of loss or negligence, is
substantially like the contract upheld in
Adams Express Company
v. Croninger, 226 U. S. 491. To
take this case without the controlling influence of that case,
counsel say that no federal question based upon the validity of the
shipping contract was raised in the state court, and
Page 227 U. S. 475
for this they rely upon a paragraph in the brief of one of the
counsel for the express company, filed in the court below, in which
it is said:
"For the purpose of this case, we are willing to concede that
said provision, insofar as it limits the liabilities of the company
for $50, is void both under a statute of that State of Texas"
and under the provisions of the Carmack Amendment of ยง 20 of the
Act to Regulate Commerce of June 29, 1906.
That such a clause may be void under the legislation of Texas
may be true. But that it is valid, if fairly made for the purpose
of applying to the shipment the lower of the two rates based upon
valuation, is not now an open question.
Adams Express Co. v.
Croninger, cited above.
That case had not been decided when this case was heard in the
state court, and there was much diversity of opinion as to the
meaning of that section when counsel made the concession. At most,
it was a concession for purposes of argument as to a matter of law,
and could not conclude anyone, since it did not operate to withdraw
the shipping contract from the case, nor its validity from the
court's consideration.
It is undoubtedly true that the principal defense upon which the
defendants seem to have relied in the state court was that, by
intentional misrepresentation, the plaintiff had obtained a rate
based upon a valuation of $50, and that they had thereby secured
transportation of the property for which they sue at a less rate
than that named in the tariffs published and filed by the carrier,
as required by the acts of Congress regulating commerce, and thus
obtained an illegal advantage and caused an illegal discrimination
forbidden by the acts referred to. But this defense rested upon the
misrepresentation as to real value declared only in the carrier's
receipt, and therefore involved the consequence of the
undervaluation by which an unlawful rate had been obtained. The
question at last would be shall the shipper or owner recover
nothing
Page 227 U. S. 476
because of that misrepresentation, or only the valuation
declared to obtain the rate upon which the goods were carried? The
latter would seem to be the more reasonable and just consequence of
the estoppel. The ground upon which the validity of a limitation
upon a recovery for loss or damage due to negligence depends is
that of estoppel.
But it is a mistake to assume that the company did not rely upon
the stipulation limiting a recovery in case of loss or damage to
the value agreed upon or declared. In the twelfth paragraph of its
answer, it asserted that, if liable at all, its liability "should
be limited to $50, as provided in said contract of shipment, which
$50 has heretofore been tendered to plaintiff." By its eighth and
ninth assignments of error in the court of civil appeals, error was
assigned upon the refusal of the trial court to hold that the
defendants in error were estopped, by the valuation declared, to
recover any amount in excess of $50. The court of civil appeals,
while not in express terms denying the validity of such a
stipulation limiting recovery, did so in effect, for it seems to
have placed its judgment of affirmance upon the rule requiring the
company's agents to ask the shipper to declare the value, and if no
value is stated, that the package should be stamped, "Value asked
and not given." This was not done. Therefore, said the court, "the
company's agent failed to perform a plain duty . . . , and it is in
no attitude to complain that the shipper did not state the
value."
But the shipper, in accepting the receipt reciting that the
company "is not to be held liable beyond the sum of $50 at not
exceeding which sum said property is hereby valued, unless a
different value is hereinabove stated," did declare and represent
that the value did not exceed that sum, and did obtain a rate which
he is to be assumed to have known was based upon that as the actual
value. There is no substantial distinction between
Page 227 U. S. 477
a value stated upon inquiry and one agreed upon or declared
voluntarily. The rate of freight was based upon the valuation thus
fixed, and the liability should not exceed the amount so made the
rate basis.
Hart v. Pennsylvania Railroad, 112 U.
S. 331,
112 U. S.
338.
Judgment reversed and remanded for further proceedings not
inconsistent with this opinion.