One who deliberately, without fraud or imposition, accepts a
contract of shipment limiting the recovery to a valuation specified
in the filed tariff, but who is given the privilege of paying
increased rates for increased valuation and liability up to full
amount as also specified in the filed tariff, is limited in case of
loss to recover the specified amount.
Contracts for limited liability, when fairly made, do not
contravene the settled principles of the common law preventing the
carrier from contracting against liability for its own negligence.
Hart v. Pennsylvania R. Co., 112 U.
S. 331.
Under the provisions of the Act to Regulate Commerce in regard
to filing tariffs and the Carmack Amendment of 1906 to that Act,
the amount to which the liability of the carrier is limited and the
additional rate for additional liability must be stated in the
filed tariff, and must be equally applicable to all shippers under
like circumstances.
The legality of a contract limiting the carrier's liability to a
specified or agreed valuation does not depend upon that valuation's
having a relation to the value of the shipment, but depends upon
acceptance of the parties to the contract and upon the filed tariff
and the requirement
Page 236 U. S. 279
of the shipper to take notice thereof and to be bound
thereby.
If the filed tariff specifies an amount as the carrier's
liability which is unreasonable, it is for the Interstate Commerce
Commission to correct upon proper proceedings, but it stands until
so corrected, and all shippers under like circumstances must be
treated alike.
While the fifty dollar limit of value of the shipment and of
express companies' liability for shipments of undeclared value at
regular rates has been modified by the Commission since the
shipment in this case, it was then the filed tariff limitation, and
the shipper was bound to take notice thereof, and to permit a
greater recovery than the amount specified in the filed tariff
would result in the very favoritism towards him that it is the
purpose of the anti-discrimination provisions in the Act to
Regulate Commerce to avoid.
The rule that conclusiveness of filed tariff rates does not
relate to attempted fraudulent acts or billings has no application
where, as in this case, the transaction was open and aboveboard and
the character of the goods was known to both parties, and the
shipper was competent to agree to the lower valuation in
consideration of the lower rate.
A contention as to liability of the carrier for value of
wreckage which was not presented on the pleadings nor involved in
the disposition of the case by the court below cannot be considered
here.
189 F. 561 affirmed.
The facts, which involve the validity of clauses in express
receipts limiting the liability of the carrier to a fixed amount in
absence of declared valuation and payment of a higher rate, are
stated in the opinion.
MR. JUSTICE DAY delivered the opinion of the Court.
This action was begun in the Circuit Court of the United States
for the Western District of New York, to recover
Page 236 U. S. 280
$20,000 for the loss of certain automobiles, shipped for the
petitioner, hereinafter called the automobile company, by the
respondent, hereinafter called the express company. The automobiles
were shipped under circumstances to be detailed later, and the
recovery of their value was sought for a breach of the contract to
carry safely, failure to deliver according to the contract, for
negligence, and for breach of the duty imposed upon the initial
carrier by ยง 20 of the Act to Regulate Commerce, the Carmack
Amendment (act of June 29, 1906, c. 3591, 34 Stat. 584). The
automobiles were shipped and receipt was issued in the form usually
used by the express companies, and containing the clause,
"Nor, in any event, shall said company be held liable beyond the
sum of fifty dollars at not exceeding which sum the said property
is hereby valued, unless a different value is hereinabove
stated."
The receipt is in the form of the one shown in
Adams Express
Co. v. Croninger, 226 U. S. 491, and
is identical in form with the one involved in the case of
Wells, Fargo & Co. v. Neiman-Marcus Co., 227 U.
S. 469.
At the trial, the tariff book of the express company was marked
for identification, but does not appear to have been embodied in
the record. Counsel for the petitioner has, since the argument,
filed a memorandum in explanation of the tariffs of the express
company, and giving extracts therefrom from which it appears that
the rate for uncrated automobiles is double the merchandise rate,
and that a through rate could be made by combination of rates from
the point of shipment to the basing point, thence to destination.
The rates filed, according to the memorandum, show merchandise rate
from Chicago, as a basing point, to Buffalo, whence the goods were
shipped, and shows merchandise rate, California section, page 20,
from Chicago to San Francisco, and double the merchandise rate from
Chicago to Buffalo, Chicago to San Francisco, would be $26.50 per
hundred pounds, or, using
Page 236 U. S. 281
Kansas City as a basing point, taking the rates from Kansas City
to Buffalo, Kansas City to San Francisco, the doubled rate would be
the same amount per hundred pounds; also a valuation tariff,
showing an additional charge for value in excess of $50, on rate of
$8 per hundred pounds or over, 20 cents per hundred pounds, and, as
the memorandum shows, if the value of the shipment may be taken to
be $15,487.06, the rate for that sum in excess of $50 would be
$31.
The automobile company was engaged in Buffalo in the
manufacture, sale, and shipment of automobiles. It had frequently
made use of the services of the express company, knew its course of
business, had a copy of its tariffs and a book of its express
receipts, and was familiar with the same; that is, it knew of the
filed rate based upon weight or volume and the primary statement of
value and consequent limitation upon the right to recover, as well
as of the existence of a right to declare additional value, and
secure, in case of loss, an additional amount of recovery. Indeed,
the automobile company had frequently resorted to the method of
making a declaration of increased value in order to secure an
increased amount of recovery under the tariff.
In May, 1907, the automobile company requested the express
company to furnish an express car for the shipment of a carload of
automobiles to San Francisco. Negotiations followed between the
officers of the two companies, and an understanding was reached. An
express car was furnished and put, as requested by the automobile
company, upon a side track, where it could be by that company
conveniently loaded. Four automobiles were then moved by their own
power to the place of loading, and, together with an extra
automobile body and other automobile parts, were loaded in the car
by the shipper. When the car was loaded, triplicate receipts on the
form usually used by the express company were made out and
handed
Page 236 U. S. 282
to the agent of the automobile company, who read them, observed
the absence of declaration of value and the limitation of $50, and
said they were satisfactory. Before the shipment moved, the agent
of the express company again called the attention of the agent of
the shipper to the absence of declared valuation, inquired whether
such declaration had been intentionally omitted and whether the
property was insured, and was told that the omission was
intentional, and that the property was insured. Indeed, it was
shown beyond dispute that the failure to declare an additional
value was the result of a change in the method of shipping its
goods which had been shortly before put in practice by the
automobile company, and that, in this particular case, the
additional value was not declared because the shipment had been
ordered from San Francisco, and the primary rate -- that is, the
one shown by the tariff on weight or volume, based upon the primary
value -- had been designated from San Francisco as the rate under
which the goods should be carried. The car moved toward its
destination, but never reached there because, while in transit on
the rails of the Santa Fe Railway in the State of Missouri, it was
destroyed by fire.
This suit was then brought by the automobile company against the
express company and the Santa Fe Railway to recover $20,000, the
alleged value of the automobiles. The suit as to the Santa Fe
Railway was dismissed for want of service, and the case was tried
only against the express company. As the case went to the jury,
there was no denial of some liability on the part of the express
company, the issue being whether its responsibility was limited to
the sum of $50, the value of the automobiles as stated in the
shipping receipt, which was in accordance with the published and
filed tariff, or embraced the actual value of the things shipped.
The trial court sustained the limitation in the receipt, and
directed a verdict for the $50 only, and, after the affirmance by
the Circuit Court
Page 236 U. S. 283
of Appeals of the Second Circuit of the judgment of the trial
court, entered on such instructed verdict (189 F. 561), the writ of
certiorari which brings the case before us was granted.
The case as made therefore presents the question whether one who
has deliberately and purposely, without imposition or fraud,
accepted a contract of shipment limiting the amount of recovery to
$50, which is the sum named in the filed tariffs as the amount of
recovery in the absence of declaration of a greater value on the
part of the shipper, who is given the privilege of paying an
increased rate and having the liability for the full value of the
goods, is entitled in case of loss to recover the full value of the
property.
That contracts for limited liability, when fairly made, do not
contravene the settled principles of the common law preventing the
carrier from contracting against its liability for loss by
negligence (
Railroad Company v.
Lockwood, 17 Wall. 357), was settled by this Court
in what is known as the
Hart case,
Hart v.
Pennsylvania R. Co., 112 U. S. 331. In
that case, a recovery limited to $1,200 for six horses, one shown
to be worth $15,000 and the others from $3,000 to $3,500 each, was
sustained upon the principle that the contract did not relieve
against the carrier's negligence, but limited the amount that might
be recovered for such negligence, and it was there held that such
contracts, when fairly made, did not contravene public policy. That
case has been frequently followed since, and its doctrine applied
in construing limited-liability contracts in connection with the
Carmack Amendment to the Interstate Commerce Act, in a series of
cases beginning with
Adams Express Co. v. Croninger,
226 U. S. 491.
See, in this connection, Wells, Fargo & Co. v.
Neiman-Marcus Co., 227 U. S. 469;
Kansas City Southern Railway v. Carl, 227 U.
S. 639;
M., K. & T. Ry Harriman,
227 U. S. 657;
Chicago, Rock Island &
Pacific v. Cramer, 232
Page 236 U. S. 284
U.S. 490;
Boston & Maine R. Co. v. Hooker,
233 U. S. 97;
A., T. & S.F. Ry. v. Robinson, 233 U.
S. 173.
The facts detailed show that there was nothing unfair in the
contract. It was made between competent parties, dealing at arm's
length, and for the purpose, so far as the shipper was concerned,
of securing the lower rate, it deliberately took upon itself the
risk of lessened recovery in case of loss for the sake of the lower
rate.
Since the Act to Regulate Commerce and its amendments have gone
into effect, cases of this character must be decided in view of the
provisions of the Commerce Act and its requirement that the carrier
shall file its tariffs and rates, which shall be open to
inspection, and shall prescribe rates applicable to all shippers
alike, thus to effect one of the main purposes of the law often
declared by this Court, to require like treatment of all shippers
and the charging of uniform rates equally applicable to all under
like circumstances. As this Court said in one of the earlier cases
considering the limited liability contracts in connection with the
provisions of the Interstate Commerce Act (
Kansas City Southern
Railway v. Carl, 227 U. S. 639,
227 U. S.
652):
"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. . . . 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
Page 236 U. S. 285
the rate applicable, and actual want of knowledge is no
excuse."
But it is said, and this fact was the basis of the dissenting
opinion in the circuit court of appeals, that there was no
valuation at all in this case, and that the disproportion between
the actual value of the automobiles shipped -- about $15,000 -- and
$50 demonstrates this fact, and it is insisted that what was done
was merely an arbitrary and unreasonable limitation in the guise of
valuation. This argument overlooks the fact that the legality of
the contract does not depend upon a valuation which shall have a
relation to the actual worth of the property. None such was
attempted in the
Neiman-Marcus case, the
Croninger case, or the
Hooker case. But the
contract embodied in the receipt was sustained in the
Express
Company cases because of the acceptance of the same by the
parties as the basis of shipment and by force of the statute as to
the filed tariff and the requirement of the shipper to take notice
of its terms and to be bound thereby. In each of those cases, the
filed tariff showed an opportunity to the shipper to have a
recovery in a greater value than was declared, thus making it
optional with the shipper to ship at the lower rate, and not to
avail himself of the right to greater recovery upon paying the
higher rate named in the tariff. As the cases cited have held, so
long as the tariff rate remains operative, the alternative rates
based on value are deemed to be in force and controlling of the
rights of the parties.
Great Northern Ry. v. O'Connor,
232 U. S. 508;
Boston & Maine R. Co. v. Hooker, 233 U. S.
97,
233 U. S.
121.
If the rates were unreasonable, it is for the Commission to
correct them upon proper proceedings. If this were not so, the
Interstate Commerce Act would fail to make effectual one of its
prime objects, the prevention of discrimination among shippers. So
long as the tariffs are adhered to, shippers under the same
circumstances are treated alike.
Since the cause of action in this case arose, the Interstate
Page 236 U. S. 286
Commerce Commission has dealt with this subject (The Matter of
Express Rates, 28 I.C.C. 131), and the fifty-dollar limitation and
the classification based upon the valuation not exceeding $50 have
been made applicable only to shipments weighing not more than 100
pounds. 28 I.C.C. 137, 138. Under that weight, the recovery is
still limited to the sum of $50 unless a greater value is declared
at the time of shipment, and the declared value in excess of the
value specified paid for, or agreed to be paid for, under the
schedule of charges for excess value. The limitation in the tariffs
of $50 was made in view of the great mass of merchandise of
moderate value in shipments received by the company, and for that
reason has been permitted in modified form to remain in the
published tariffs by the action of the Interstate Commerce
Commission in the matter to which we have referred.
In the
O'Connor case,
232 U. S. 508, and
the
Robinson case,
233 U. S. 173,
above cited, the doctrine of the conclusiveness of the filed rates
was said to have no application to attempted fraudulent acts or
false billing. We do not perceive how this doctrine can be
applicable to the present case. As the statement of facts shows,
the transaction was open and aboveboard, the character of the goods
was plainly disclosed and known to both parties, and the rate paid
was not attempted to be fixed upon actual value alone, but upon a
value which the shipper was competent to agree to in consideration
of the lower rate. Indeed, if a recovery for full value was to be
permitted in this case, the shipper itself would obtain an undue
advantage in recovering such value when it had purposely and
intentionally taken the risk of less responsibility from the
carrier for a lower rate. Such result would bring about the very
favoritism which it is the purpose of the Commerce Act to
avoid.
The suggestion that there is a wrong to other shippers who value
their goods at their real worth is answered by
Page 236 U. S. 287
the fact that this tariff was open to all under the same
circumstances, and, while it remained in force, any shipper who
wished to take the risk of a recovery for very much less than the
value of his goods might have the benefit of the shipment at the
reduced rate. The contention that the carrier should have been held
to account for the value of what was left of the automobiles after
the wreck and fire does not seem to be presented by the pleadings,
and was not involved in the disposition of the case ultimately made
upon the contract of shipment. We find no error in the court's
withholding that issue from the jury in the condition of the
record.
Finding no error in the judgment of the circuit court of
appeals, it is
Affirmed.
MR. JUSTICE PITNEY dissenting.