Case ID: ny-super-ct_6/html/0136-01.html
Source: Caselaw Access Project
Author: {"author": "By the Court. Campbell, J.", "license": "Public Domain", "url": "https://static.case.law/"}
Date Created: 2024-08-24T03:29:51.129683

Dorr and others v. The New Jersey Steam Navigation Company.
    A common carrier may, by an express special contract, limit or restrict bis'common •law liability as an insurer for the safe transportation and delivery of'goods - intrusted to him.
    Public policy forbids that a common carrier should be permitted to exonerate him-1 self, even bvan express -contract, from a loss occasioned by his default or neglect of duty.
    The carrier’s- liability; as- an insurer,’ cannot be restricted-by a-general-notice that lie -will not be responsible, even if such notice be brought home to the em; ployer.
    The case of Gould v. Sill, 2 Hill’s E. 623, doubted and dissented from.
    (Before Duek, Mason, and Campbeh,, J. J.)
    June 12, 13, 14;
    Sept. 28, 1850.
    Demurrer to Pleas. This was an action instituted against tbe defendants as common carriers upon the Long Island Sound, between New York and Stonington. The declaration averred that on the 13th of January, 1840, the plaintiffs, who were merchants in the city of New York, shipped on board the steamer Lexington, in the defendants’ line, two cases of merchandise, of the value of thirty-five hundred dollars, to be carried to Stonington. That on the same evening, the steamer was consumed by fire on her passage, and the merchahdise of the plaintiffs was destroyed. The plaintiffs claimed to recover damages for the loss of the goods.
    The defendants pleaded that the merchandise in question was received by the defendants under a special contract, by reason of a clause and notice inserted in their bill of lading, which was set forth in the pleadings as follows:
    . “ New Jersey Steam Navigation Company, received of S. & E. Dorr & Co., on board the steamer Lexington, Child, master, two cases for E. Baker & Co., Boston, marked and numbered as in the margin, to be transported to. St.onington, and there to be delivered to railroad agent or assigns; danger of fire, water, breakage, leakage, and all other accidents excepted, and no package whatever, if lost, injured, or stolen, to be deemed of greater value than two hundred dollars. Freight as customary with steamers on this line.
    “ N. B. — The company are to be held responsible for ordinary care and diligence only, in the transportation of merchandise and other property shipped or put on board the boats of this line.
    “Dated at New York, January 3d, 1840.
    “ Contents unknown. George Child, master.”
    The plea averred that the liability of the defendants was restricted by the exception of the casualties mentioned in the bill of lading, and that the loss in question was occasioned by one of the excepted casualties, and was without the fault or negligence of the defendants. To this plea the plaintiffs demurred.
    The case was commenced in the supreme court, and subsequently transferred to this court.
    
      B. D. Silliman, for the plaintiffs.
    I. The law is settled, in this state, that a common carrier cannot shelter himself from his liability as such by notice, nor' even by special contract.
    II. Common carriers are .liable for all losses and injuries to property committed to their care, arising from any causes except the act of God, or the public enemy. (2 Kent’s Com. 507, 602; Story on Bailments; Coggs v. Barnard, 2 Ld. Raym. 918; Hollister v. Nowlen, 19 Wend. 234.)
    III. This was held to be the settled law from the earliest period, down to the case of Nicholson v. Willan, (5 Easts’ R. 507, A. D. 1804,) when notice by the carrier limiting his liability was held valid. A great mass of cases followed, unsettling the common law rule in England. They are fully cited and reviewed in Hollister v. Nowlen, (19 Wend. 284,) and Cole v. Goodwin, (Ibid. 251.)
    IV. In the confusion which resulted from disregarding the common law, the English courts early perceived that the only proper qualification would have been to permit the carrier, by notice brought home to the customers, to require for the transportation of the goods, a price proportioned to their value. (Leeson v. Holt, 1 Starkie 187; Beck v. Evans, 16 East. 244; Riley v. Horn, 5 Bing. 217.)
    V. The evils which resulted in England by departing from the common law rule, were so great, that the courts expressed strong regret that the innovation had been tolerated, and invoked the action of parliament to restore the original rule. (Bell’s Commentaries, p. 1, 474; Maving v. Tod, 1 Starkie, 79 ; Smith v. Horne, 8 Taunt. 144; Down v. Fromont, 4 Camp. 40.)
    
      VI. The doctrine of notice was put an end to, by act of parliament, and the common law rule substantially restored, in 1830. (Statute 1 Wm. IV., c. 68.)
    VII. In some of the United States, notices have not been permitted to affect the carrier’s liability, (Jones v. Voorhees, 10 Ohio, 145,) and where notice had been admitted, its expediency and policy have been subsequently questioned by the courts. (Eagle v. White, 6 Wharton, 516; Barney v. Prentiss, 4 Harr. & Johns. 317.)
    VIII. In the state of New York, the common law liability of the carrier is unchanged; he cannot screen himself from it by notice, whether brought home to the customer or not, nor even by special agreement and contract. (2 Kent’s Com. 608 ; Story on Bailments, p. 354, § 554, note; 19 Wend. 234; Ibid. 251; Camden Co. v. Belknap, 21 Ibid. 354; Clark v. Faxton, 21 Ibid. 153; Gould v. Hill, 2 Hill, 623; Alexander v. Green, 3 Ibid. 1; S. C., Court of Errors, 7 Ibid. 533; Jones v. Voorhees, 10 Ohio, 145.)
    IX. Every thing is negligence in a common carrier, which the law does not excuse. (Dale v. Hall, 1 Wilson, 282; Batson v. Donovan, 4 Barn, and Ad. 21; McArthur v. Sears, 21 Wend. 190; Williams v. Grant, 1 Conn. R. 487.) The law holds the common carrier liable for loss by fire, and does not excuse him because the fire was the result of accident. (Forward v. Pittard, 1 Term. R. 281; Hyde v. Trent. Navig. Co., 5 Term. R. 389; Garside v. The Same, 4 Ibid. 581; Story on Bailments, §§ 507, 511; Gould v. Hill, 2 Hill R. 623.)
    X. The common carrier cannot stipulate against his own negligence. The law of this state is settled that the carrier cannot protect himself even by special mutual contract from his common law liability; but even admitting, for sake of argument, that he might do so, still the bill of lading in this case set forth in the plea is not such a contract. It is at most a receipt for the goods with notice incorporated therein that the carrier denies the liability which the law imposes on him. It is no higher evidence of the contract than were the notices of stage proprietors brought home to the knowledge of their passengers.
    
      XI. The interests of commerce, and especially of the people of this state, who transact so large an amount of business with common carriers, require that the liability established by the common law be not impaired.
    
      W. M. Evarts, for the defendants.
    I. The plea sets up that the plaintiffs’ goods were received by defendants for transportation, (they being common carriers from New York to Stonington, by water,) under a special contract set forth in the plea; that by such contract, their liabilities as common carriers were- restricted by the exception of certain casualties from their responsibilities as insurers, and that the loss of the plaintiffs’ goods occurred by one of the excepted casualties, and without the fault or negligence of the defendants. The demurrer raises the question whether such a. restriction of their liabilities may be legally made by such common carriers as the defendants.
    II. A common carrier cannot, (in general,) refuse to carry for reasonable hire, and in the line of his business, and insist upon a limitation of his legal liabilities before he will do so. Such refusal subjects him to an action.
    III. But if the bailor, rather than insist upon his legal rights and remedies against the common carrier as such, choose to make a special contract with him for the transportation of his goods upon a restricted liability, the relation pro kao vice of bailor and private carrier for hire according to, and by force of the special contract, arises between them.
    IY. Such a contract is valid and will be upheld. The repudiation of it by the bailor, after gaining the object of his assent, would be a clear fraud upon the common carrier.
    Y. The exceptions of dtmgers of the seas and of navigation has always been sustained in favor of carriers by water. That of fire is of similar character, their liability for loss by this cause being strictly in the nature of insurance, and having no connection with the specific employment as carriers.
    YI. The nature of the employment at the present day, as much exposes the common carrier to fraud from the bailor as the reverse, and public policy is as much concerned to protect the carrier in his service, as the bailor in his property.
    VII. Neither public nor private necessity or convenience requires that common carriers, on the one hand, should be compelled to be insurers against fire, unless the bailor insists upon it; nor that the bailor, on the other hand, should be obliged to pay rates of carriage which include compensation for insurance, unless he choose so to do. To legally incapacitate the parties from separating by mutual contract, the service of transportation and the responsibility of insurance, involves this absurdity. (Wyld v. Pickford, 8 Mees. & Welsh. 442 ; Hollister v. Nowlen, 19 Wend. 234; Cole v. Goodwin, Ibid. 251; Orange Co. Bank v. Brown, 9 Wend. 85; N. J. St. Nav. Co. v. Merchants’ Bank, 6 How. U. S. 344; Gould v. Hill, 2 Hill, 623; Wells v. The St. Nav. Co., 2 Comstock, 204.)
   By the Court.

Campbell, J.

The question presented for our consideration is, whether common carriers can by special contract restrict their liabilities for losses which occur otherwise than by the act of God or the public enemies. If the point were, now for the first time raised, we should have considered it, if not entirely free from difficulty, at least as not leaving much room for doubt as to the correctness of the conclusion at which we have arrived. The judgment of a majority of the late supreme court, pronounced in the case of Gould v. Hill, 2 Hill’s R. 623, was cited and urged on the part of the plaintiffs as settling the law in this state, that a common carrier cannot, by special contract, limit his liability. Though the court was divided in opinion, the cause does not seem to have been carried to the court for the correction of errors, and we are not therefore sure of what would have been the decision of the court of last resort. But the clear conviction of all of us, that the case of Gould, v. Hill was not correctly decided, supported as we are by the supreme court of the United States, (Merchants’ Bank v. New Jersey Steam Navigation Company, 6 Howard, 344,) and the great importance of the question to4a commercial people, especially the importance of uniformity between the courts of the State and Union, in the rules of law regulating commercial transactions, compel us respectfully to dissent from the judgment in that case.

We entirely concur in the conclusion at which that court arrived in the case of Hollister v. Nowlen, and Cole v. Goodwin, (19 Wendell, 234 and 251,) that stage-coach proprietors, as common carriers, are answerable for the baggage of passengers, that they are regarded as insurers, and cannot restrict their common law liability by a general notice that the baggage of passengers is at the risk of the owners. The power of a common carrier to restrict his liability by a general notice, whether brought home or not to the knowledge of the owner of the property, is discussed at great length, and with distinguished ability and learning, by Justices Bronson and Cowen in these cases. In Hollister v. Nowlen, Mr. Justice Bronson, referring to the opinion of Lord Ellenborough in Nicholson v. Willan, (5 East. 507,) says: “Although this mode of reasoning is not the most conclusive, I shall not deny that the carrier may, by express contract, restrict his liability; for though the point has never been expressly adjudged, it has often been assumed as good law citing Aleyn, 93, 4 Co. 84, note to Southcote’s case, 4 Burr. 2301, per Yates, J., 1 Vent. 190, 238, Peake N. P. Cas. 150, 2 Taunton 271, and 1 Starkie R. 186. In the case of Nicholson v. Willan, Lord Ellenborough says: “ But considering the length of time during which, and the extent and universality in which, the practice of making such special acceptances of goods for carriage by land and water has now prevailed in this kingdom, under the observation and with the allowance of courts of justice, and with the sanction also and countenance of the legislature itself, which is known to have rejected a bill brought in for the purpose of narrowing the carrier’s responsibility in certain cases on the grounds of such a measure being unnecessary, inasmuch as the carriers were deemed fully competent to limit their own responsibility in all cases by special contract; considering also that there is no case to be met with in the books, in which the right of a carrier thus to limit by special contract his own responsibility has ever been by express decision denied,” &c. So it was- also said by Lord Ellenborough, in Kerr v. Willan, (2 Starkie R. 58): “ The hardship of the case cannot alter the liability of the party. By the common law, the carrier is responsible for the loss of the goods, unless he enter into a special contract by which he limits that responsibility.”

And in the same case, on a motion for a new trial, the court say: “ No doubt the rule of law might be superseded in the particular case by a special contract, since modus et conventio vincunt legem.”

So in 1 Bell’s Commentaries, 5 Ed. 472, the author remarks: “ It seems to admit of no doubt that, as matter of contract, carriers, innkeepers, stablers and others, may, with the consent of those who employ them, undertake only certain risks and responsibilities.”

In the case of the Merchants’ Bank v. New Jersey Steam Navigation Co., (6th Howard, U. S. Rep. 344,) Mr. Justice Nelson says, “ As the extraordinary duties annexed to his employment, concern only in the particular instances the parties to the transaction, involving simply rights of property, the safe, custody and delivery of the goods, we are unable to perceive any well-founded objection to the restriction, or any stronger reasons forbidding it, than exist in the case of any other insurer of goods to which his obligation is analogous, and which depends altogether upon the contract between the parties.” Mr. Justice Daniel, in the same case, remarks: “But a carrier may, in a given case, be exempted from liability for loss without fraud, by express agreement with the person for wj|om he undertakes for I cannot well imagine a principle creating a disability in a particular class of persons to enter into a contract fraught with no criminal or immoral element, a disability indeed extending injuriously to others who might find it materially beneficial to make a contract with them.” In Gordon & Walker v. Little, (8th Sergeant & Rawle, 533,) where the suit was against the defendant as a common carrier, and where there was an exception in the bill of lading of the dangers of the river, &c., Chief J. Tilghman says: “If ’the case had rested solely on the written contract, there would have been much to say in favor of the decision of the court, because, be the common law what it may, the parties have a right to alter or modify it by special contract, and when they have done so, the question is, what is the construction of the contract?”

In the decision of the case of Gould v. Hill, Mr. Justice Cowen refers to his opinion in the case of Cole v. Goodwin, as containing his reasons for that decision, re-affirming the position that there is no difference between a special, acceptance or special contract, and a notice brought home to the owner of the goods, except in the evidence by which the responsibility of the parties is shown. This position was denied by the supreme court of the United States in the case of the New Jersey Navigation Company and Merchants’ Bank; and also by Mr. Justice Bronson, in the case of Hollister v. Nowlen, where he says: “ But conceding that there may be a special contract for a restricted liability, such a contract cannot, I think, be inferred from a general notice brought home to the employer. The argument is, that where a party delivers goods to be carried, after seeing a notice that the carrier intends to limit his responsibility, his assent to the terms of the notice may be implied. But this argument entirely overlooks a very important consideration. Notwithstanding ■ the notice, the owner has a right to insist that the carrier shall receive the goods subject to all the. responsibilities incident to his employment. If the delivery of goods under such circumstances authorizes an implication of any kind, the presumption is as strong, to say the least, that the owner intended to insist on his legal rights, as it is that he was willing to yield to the wishes of the carrier.”

It is said that1 there may be an implied special contract, where the carrier’s notice is brought home to the bailor, and the assent of the latter can be presumed; that there is an express special contract, where the contents of the notice are reduced to the form of a contract, and the express assent of the owner of the goods is given. While the courts of England have recognized the former, and'have given to it force in favor of the carrier, the courts of this state have rejected it; but the power- and right of a carrier to limit his liability by an express special contract, as before observed, has been denied only in the case of Gould v. jKill. A common carrier has in truth two distinct liabilities, the one for losses by accident or mistake, where he is liable, by "the custom of the realm or the common- law, as an insurer; -the other for losses by default or negligence, where he is'answerable as an ordinary bailee. It would certainly seem but reasonable, that he might, by express special contract,' restrict his liability as insurer, that he might protect himself against misfortune, even though public policy should require that he should not be permitted to stipulate for impunity where the loss occurs from his own default or neglect of duty. - - Such we understand to be the doctrine laid down in the case of the New Jersey Steam Navigation Co. v. Merchants’ Bank, in 6th Howard, and such we consider to be the law in the present case. The right and the power to make such contracts is for the benefit.of all parties. The-owner of the-goods may prefer-to select his own insurer. He may have confidence -in the-integrity and good faith of the carrier, and that, his property- will - not be lost through default or neglect, -when' he* knows that; in case of its destruction by fire or other calamity, the carrier will-be unable to respond for the loss; If no contract'-can be made, he must pay the carrier for his risk as insurer, and he- must, also-pay a premium to others for his protection against the same loss-for which the carrier stands responsible.

It may be remarked that the act of 1 William TY.;' eh. 68, passed in 1830, while it declares that no public -notice or declaration shall be construed to limit or in any wise affect' the liability, at common law, of common -carriers, with a single exception, also provides that nothing in the act shall extend or be construed to annul, or in any wise affect; any special ■ contract between such common- carriers and any- other parties for the conveyance of goods and merchandise. If the courts--of -England had departed from the old rule of the common law, by giving effect to notices, the statute has restored the' rulé, and in doing so expressly recognizes the power'to make special "contracts.

The necessity of allowing common carriers upon the seas to make special contracts with the owners of property committed to their care, was early seen and recognized, and exceptions in bills of lading restricting the carriers’ liability, have from time to time been added. The same necessity exists as to the domestic commerce in this vast country of ours, where the internal trade is so extensive, reaching, as it does, over the greater part of a continent, traversing rivers in length equal to the distance across the Atlantic, stretching out over large inland seas, where the amount of property annually carried has swollen up to hundreds upon hundreds of millions of dollars — where there exist extensive lines of transportation, reaching through different states, and controlled in different parts by the several owners, and where insurance, companies are organized for the protection of the owners of the property thus transported.

It will at once be seen how important it is, that the law which regulates the duties and liabilities of those who are the owners and the carriers of this property, should be uniform throughout all the states; and when once an important question like the present is settled by the supreme oourt of the United States, there should be a conformity as far as practicable. In this case, if we were to follow the ruling in the case of Gould v. Hill, we should do so with the full knowledge, that if the case upon the same pleadings was in the other end of this hall, the judgment would be in favor of the defendants.

It is not necessary to discuss the question, whether a bill of lading is evidence of a special contract, or when accepted by the owner forms such special contract. It has been so held, but the pleadings in this case admit that it does constitute a special contract.

We are all of opinion that a common carrier may, by an express special contract, limit or restrict his common law liability as an insurer for the safe transportation and delivery of goods intrusted to him.

The judgment must be for the defendants on the demurrer; but with liberty to the plaintiffs, on payment of costs, to withdraw their demurrer, and reply.