Case ID: ad_156/html/0525-01.html
Source: Caselaw Access Project
Author: {"author": "McLaughlin, J.:", "license": "Public Domain", "url": "https://static.case.law/"}
Date Created: 2024-08-24T03:29:51.129683

United Lead Company, Plaintiff, v. Lehigh Valley Railroad Company, Defendant.
    First Department,
    May 2, 1913.
    Common carrier — undervaluation of goods to obtain reduced freight rates — contract binding when rates have been published — interstate commerce — conflict of laws.
    Where the rates of a common carrier published pursuant to the Interstate Commerce Act provided a certain freight per 100 pounds on carload lots only if the shipper released the valuation to $100 per ton, with a higher rate if there were no limitation of liability and the shipper took advantage of the lower rate, which fact was noted in the bill of lading, the rate of liability agreed upon is conclusive as between the parties.
    Clauses in bills of lading not in conflict with the published rate limiting the common carrier’s liability are lawful, and where the rates of shipment are fixed according to valuation, such valuation applies to each part of the cargo and not to the whole cargo.
    Although such agreement is for carload lots the carrier is not liable for the value of an entire carload where only a portion thereof was lost.
    Decisions of the Supreme Court of the United States on matters of interstate commerce are binding upon the State courts.
    Submission of a controversy upon an agreed statement of' facts, pursuant to section 1279 of the Code of Civil Procedure.
    
      Arthur W. Clement, for the plaintiff.
    
      Stewart C. Pratt, for the defendant.
   McLaughlin, J.:

The defendant, a common carrier engaged in interstate commerce, on the 19th of September, 1911, accepted from the plaintiff, at New York, for the purpose of transporting to Chicago, a carload of pig tin, consisting of 323 pigs of substantially the same size, weighing 33,662 pounds. Forty of the pigs, weighing 4,150 pounds, were lost in transit. Prior to the shipment defendant, pursuant to the Interstate Commerce Act (24 U. S. Stat. at Large, .380, § 6, as amd. by 34 id. 586, § 2) had published and filed rates applicable to the' transportation of pig tin from New York to Chicago. Under such rates twenty-three cents per 100 pounds was fixed for carload lots only, “released to valuation of $100.00 per ton of 2000 pounds to be shown on bills of lading and shippers’ invoice,” and thirty cents per 100 without any limitation of liability.

At the time the shipment was made the plaintiff was afforded an opportunity to ship at either rate, and it chose the lower and paid the freight charges accordingly, which amounted to $82.80. After it had selected that rate, and before the shipment was made, it accepted and signed a bill of lading upon which was stamped the following: “ For the purpose of enabling the carrier to apply proper published rate as explained in its tariff, we hereby declare that in case of loss or damage to the property herein described we will not assert claim against the carrier on a higher basis of value than one hundred dollars per ton.” The actual value of the tin lost was $1,608.13, which sum the plaintiff claims it is entitled to 'recover,'while the defendant contends it is only liable at the rate of $100 for each ■ ton or fraction thereof lost, or $207.50.

The valuation declared or agreed upon, as evidenced by the contract of shipment upon which the published tariff rate was applied, is conclusive between the parties. Where there are two rates, based upon valuation, then the valuation which the shipper declares is the one applicable,, and if such rate be filed as required by law, "the shipper is bound to take notice of it whether called to his attention or not- (Kansas City S. Ry. Co. v. Carl, 227 U. S. 639; Gardiner y. N. Y. C. & H. R. R. R. Co., 201 N. Y. 387.)

The bill of lading does not conflict with the defendant’s published rate. It is simply explanatory of the rate and the rights of the parties,, therefore, are determined by it. Clauses in bills of lading, not in conflict with the published rate, limiting a common carrier’s liability, are lawful (Adams Express Co. v. Croninger, 226 U. S. 491; Greemvald v. Barrett, 199 N. Y. 170), and when the rates for shipment are fixed according to valuation, such valuation applies to each part of the cargo and not to the whole cargo. (Kansas City S. Ry. Co. v. Carl, supra.) The plaintiff expressly■ agreed,_ when it shipped by the lower rate, that in case of loss or damage it would not assert a claim — that is, that the defendant should not he liable — to exceed $100 per ton for the tin lost or damaged. Defendant had a right to enter into this agreement because, as indicated, it did not conflict with the published rate. Plaintiff, however, contends it could only ship under the rate which it accepted an entire carload, which in the present case, according to the submission, was of the value of $1,800; that, therefore, it is entitled to recover the full valué of the tin lost so long' as it does not exceed the value of the entire carload. In my opinion this is not a fair construction to be put upon the published rate, supplemented and explained as it was, by the clause stamped upon the bill of lading.

In Kansas City S. Ry. Co. v. Carl (supra) the shipment consisted of two boxes and one barrel containing “household goods.” On the bill of lading was written, “O. R. Val. 5.00 cwt.,” which meant “Owner’s released valuation five dollars per hundredweight. ” One of the boxes was never delivered and action was brought to recover its value. A recovery was had for the full value against the shipper, which was reversed, the court saying: “ In the light of the published tariffs and of the rate applied to this shipment, the two papers read together plainly mean that the household goods included in the two boxes and one barrel were valued, for the purpose of coming under the lower rate, at five dollars per hundred.”

The rule there laid down is directly applicable to the case here under consideration, and when applied the plaintiff is entitled to recover at the rate of $100 for each ton or fraction thereof lost.

The agreement that the liability, in case of loss, should be fixed or determined according to the rate selected, was not in violation of or prohibited by the Carmack Amendment to the Hepburn Act of June 29, 1906, which took effect sixty days thereafter. (24 U. S. Stat. at Large, 386, § 20, as amd. by 34 id. 593, 595, § 7; 34 id. 838, Res. No. 47; Missouri, K. & T. Ry. Co. v. Harriman, 227 U. S. 657; Kansas City S. Ry. Co. v. Carl, supra.)

Attention is called to the decision of this court in Carleton v. Union Transfer & Storage Co. (137 App. Div. 225), and it'is urged that the views here expressed ■ are in conflict with that decision. The facts are quite different. There the shipment consisted of furniture — pieces of different value ■— none of which were lost but damaged in transit. Questions involving interstate commerce, as this one does, are regulated and controlled by the Federal statutes, and when they have been construed by the Supreme Court of the United States, such construction is binding upon the State courts. If that decision cannot be distinguished from this one, then it is in conflict with the last two authorities cited from the Supreme Court of the United States, and it is the duty of this court to follow such decisions instead of one of its own prior decisions in conflict therewith. ■ '

It follows, therefore, that the plaintiff is entitled to judgment against the defendant for $207.50 and interest thereon from December 1, 1911, without costs.

Ingraham, P. J., Dowling and Hotchkiss, JJ., concurred; Laughlin, J., concurred in result.

Judgment ordered for plaintiff as stated in opinion, without costs. Order to be settled on notice.