COMMON CARRIERS.

[Darke Circuit Court,

November Term, 1897.]

Shearer, C. J., Summers and Wilson, JJ.

#### C. C. C. & St. L. Ry. Co. v. Simon.

Contract as to Valuation Sustained, though Goods are Dost by Negligence oe Carrier.

A contract of carriage, fairly made and signed by a shipper, agreeing upon the valuation of the property carried, with the rate of freight based on the condition that the carrier assumes liability only to the extent of the agreed valuation, will, even in case of loss through negligence, be upheld, and the shipper, limited to the agreed valuation.

The plaintiff below, Simon, sued the C., C., C. & St. L. Ry. Co., as a common carrier, to recover $3,000 damages. He alleges that in September, 1896, at Evansville, Indiana, he delivered a valuable race horse to The Evansville & Terre Haute Ry. Co., for shipment by said company and connecting lines from said city to Columbus, Ohio, and that said company, then and thereby agreed, and became bound through itself and its connecting lines, to transport and safely deliver the horse to plaintiff at Columbus; that said company safely transported the horse to Terre Haute, and delivered him to the defendant; that the defendant was a common carrier, and as such received the horse and agreed and undertook as a connecting carrier, to carry the horse and deliver him to plaintiff at Columbus, Ohio; that through the negligence of the defendant, a collision occurred at Indianapolis between two of its trains, and the car containing the horse, was thrown from the track and the horse permanently injured.

The defendant answered setting up two defenses. First, (admitting the receipt of the horse and many of the allegations of the petition), that at the time of the delivery of the horse to the first company at Evansville, the plaintiff there entered into a written contract with that company, which it alleges was made in its own behalf and in behalf of the defendant, and sets out a copy of the contract. So much of the contract as is pertinent, is as follows:

Read this Contract.

Evansville & Terre Haute Railroad and Associated Lines.

LIVE STOCK CONTRACT.

Liability limited to the declared valuation by shippers, but not exceeding the following:

Each horse or pony (gelding,' mare or stallion,) mule or jack -$100.

And in no event shall the carrier’s liability exceed twelve hundred dollars per car. 1

Agents are not permitted to receive or ship animals of a higher value than as stated above, unless by special agreement noted hereon, and a proper contract or release is signed by the owner or shipper thereof. And it is agreed between the owner and shipper of these animals and the said railway company, that in case of accident, resulting in injury to said animals, the value thereof shall in no case exceed the valuations named above.

*541Shipment of Live Stock in Car Loads, or less than car loads, will only be taken at the rates named herein, after this contract or agreement shall have been signed by the company’s station agent and the owner or shipper, by which it is agreed and understood, that such owner or shipper, shall load, feed, water, and take care of such stock at his own expense and risk; and will assume all risk of injury, or damage that the animals may do themselves, or each other, by kicking or gouging, suffocating, fright, burning of hay or straw, or other material used for feeding or bedding, or by fire from any cause whatever, or by heat, cold, or by changes in weather, or for delay caused by stress of weather, by obstruction of track by riots, strikes, or stoppage of labor.

J. B. Cavanaugh, Gen’l. Freight Agent.

Nos. of Way Bills

Nos. of cars

No. of _ Animals in each car shipper’s count.

Freight Office, Evansville & Terre Haute R. R. and Associated Lines. Evansville Station, Sept. 17, 1896, 10:80 A. M. Received of A. Simon to be delivered to A. Simon, Columbus, Ohio, Station, at the 'following rates: 4000 (a) 48 cts for horses 1 Horse

O. R. Rel.

in consideration of which, and for other valuable considerations, it is hereby mutually agreed that said company shall not be liable for loss of live stock by jumping from the cars, delay of trains not caused by negligence as aforesaid, or any damage said property may sustain, except such as may result from a collision of the train with other trains, or when the cars are thrown from the track in course of transportation, and in this case the company upon whose road the accident, loss or damage shall occur, shall be liable therefor, and no suit shall be brought or claim made against any other company forming a part of the route for such loss or damage (it being expressly understood and agreed that the responsibility of this railroad company shall cease upon delivery of said property to its connecting line, unless otherwise agreed to in writing, and signed by the respective parties hereto), and that the rules and regulations printed above are an essential part of this contract.

Evansville & Terre Haute R. R. Co., By E. E. Wieland, G. Agent.

A. Simon, Owner.

Defendant further alleges, that at the time the contract was made, the plaintiff represented in the written agreement to the first company, that the horse was of the value of one hundred dollars, and no more; that he paid the freight, the rate being based upon such valuation, though he knew at the time, that the agent was not permitted to- receive or ship animals of a higher value than one hundred dollars at the same rate as an animal worth not to exceed one hundred dollars, and with such knowledge, represented to said company, and agreed to and with said company, for the benefit of said company and its connecting line, the defendant, in said written agreement, that the value of said horse was one hundred dollars and no more, and that said company for *542itself and the defendant, relying upon the statement and agreement of the plaintiff, that the horse was of the value of one hundred dollars, and that the risk incurred in case of accident, would be only one hundred dollars, for itself, and defendant accepted the horse for shipment upon said valuation and at a rate based upon said valuation. Whereupon defendant says, that plaintiff is estopped to claim that the horse is of greater value than one hundred dollars, for which sum, with costs of suit, it offers to confess judgment.

Second. — For a second defense the defendant sets up the contract; that it was made by the first company in behalf of both, and says that the contract was made and executed in the state of Indiana; that the freight was paid in Indiana, and that the accident happened in Indiana, and that according to the laws of that state, the plaintiff is bound and concluded by the value which he placed upon said horse in the contract, and upon the basis of which the freight was paid by him, and offers to confess judgment.

To these defenses the plaintiff interposed a general demurrer, which was sustained, and the defendant not desiring to plead further, the court assessed the damages at one thousand dollars, and rendered judgment.

The error complained of, is the sustaining of the demurrer to the answer.

Summers, J.

The first question to be determined is, whether the interpretation of the contract is governed by the laws of Ohio, or of Indiana; for, if by the latter, the demurrer admits that by the law of Indiana, the plaintiff is bound by the valuation by him placed upon the horse and upon which the freight was based.

The rule established by the Supreme Court of the United Statés is, that:

> “The law of the place where a contract is made governs its nature, obligation and interpretation, unless it appears that the parties, when entering into the contract, intended to be bound by the law of some other country.”

Liverpool & G. W. Steam Co. v. Phoenix Ins. Co. 129 U. S., 397.

In England the rule is the same. See In re Missouri Steamship Co., 42 Ch. Div., 321; Hutchinson on Carriers, (2nd Ed.) sec 144a.

> • “Matters bearing upon the execution, interpretation, and validity of a contract, are determined by the law of the place where it is made. Matters connected with its performance are regulated by the law prevailing at the place of performance. Matters respecting the remedy depend upon the law of the place where the suit is brought.”

Scudder v. Union National Bank, 91 U. S., 406.

In the opinion Mr. Justice Hunt gives illustrations of matters connected with performance, and it is evident that the question here does not relate to such matters.

In .this state, however, the matter seems to be controlled by the place of performance, and a different rule is established, by which, of course, we are bound.

In Railway Co. v. Sheppard, 56 O. S., 68, it is decided, that:

> “A contract made in one state or country to be performed in another, is governed by the latter, which determines its validity, obligation and effect,” and that “where a railroad company receives live stock in another state, under a contract there made, to transport it to a desig*543nated place in this state, and while the stock is being carried in this state, it is injured by the company’s negligence, the rights of the parties, in an action for damages for the loss, are governed by the laws of this state, and not by those of the state where the contract was made.”

See also, Jacobson & Co. v. Express Co., I Ohio Circ. Dec., 212.

But counsel for plaintiff in error, claim that the case is not in point, because it is limited to cases in which the accident happens in the state, and that the case decides that the rights of the parties are to be determined by the laws of the state of Indiana, in which the accident happened. This claim may be warranted by what appears in the opinion, if not by the quotations we have made from the syllabus. On page 78, in Railway Co. v. Sheppard, supra, the judge delivering the opinion, says:

> “We understand the rule to be, that where a contract is made in one state to be performed in part in another, and an action is brought for a breach of that part of the contract, the rights of the parties must be determined according to the law of the latter state. Story on Contracts, sec. 655; Barton v. Wheeler, 49 N. H., 9.”

The decision in the case above referred to, in the United States Supreme Court, is to the contrary. Mr. Justice Gray, delivering the opinion, says (129 U. S., 397, 461) (having determined that the contract was an American and not an English contract):

> “This being so, the fact that the place where the vessel went ashore, in consequence of the negligence of the master and officers in the prosecution of the voyage, was upon the coast of Great Britain, is quite immaterial.”

And on page 458, he says:

> “The suggestion in Barton v. Wheeler, 49 N. H., 9, 29, that the question, whether the liability of a railroad corporation for goods transported through parts of two states, was that of a common carrier or of a forwarder only, should be governed by the law of the state in which the loss happened, was not necessary to the decision, and appears to be based on a strained inference from the observations of Mr. Justice Story, in Pope v. Nickerson, above cited. In a later case, the Supreme Court of New Hampshire reserved any expression of opinion upon a like question. Gray v. Jackson, 51 N. H., 9, 39.”

But, as we have already shown, our Supreme Court has decided that the laws of the place of performance govern. So that the demurrer • to the second defense was properly sustained.

The next question is, whether a contract, signed by a shipper, agreeing upon the valuation of the property carried, with the rate of freight based on the condition that the carrier assumes liability only to the extent of the agreed valuation, will be upheld and the shipper be limited to the agreed valuation, in case of loss through negligence.

It is claimed that this question has been answered in the negative in Express Co. v. Backman, 28 O. S., 144. An examination of that case will show that it was admitted that the goods were of greater value than that agreed upon, and that the carrier knew that fact at the time the contract was made. Jacobson v. Express Co., supra, is also cited. In that case, the court was of the opinion that there was no special contract. The second syllabus is as follows:

> “In the foregoing case, a receipt of the company, stating that, in no ev^at shall the holder demand beyond the sum of $50.00, at which the article forwarded is valued, ‘not signed by the shipper and no statement *544made by him as to value/ is not a valid stipulation against a loss by fraud or negligence.”

In Hunt v. Railroad Co., 112 U. S., 331, it is held: “Where a contract of carriage, signed by the shipper is fairly made with a railroad company, agreeing on a valuation of the property carried, with the rate of freight based on the condition that the carrier assumes liability only to the extent of the agreed valuation, even in case of loss or damage by the negligence of the carrier, the contract will be upheld as a proper and lawful mode of securing a due proportion between the amount for which the carrier may be responsible and the freight he receives, and of protecting himself against extravagant and fanciful valuations.”

The opinion is by Mr. Justice Blatchford, and a careful study of it will show that most of the suggestions made in the argument of the case at bar, are disposed of there. It was contended for the plaintiff, Hart, that the bill of lading did not purport to limit the liability of the carrier to the amount stated in it, in the event of loss through the negligence of the defendant. He shows that the contract is not susceptible of that construction, and then says, it must be presumed from the terms of the bill of lading, that the rate of freight is graduated by the valuation.

> “It is further contended by the plaintiff, that the defendant was forbidden, by public policy, to fix a limit for its liability for a loss by negligence, at an amount, less than the actual loss by such negligence. As a minor proposition, a distinction is sought to be drawn between a case where a shipper, on requirement, states the value of the property, and a rate of freight is fixed accordingly, and the present case. It is said, that, while in the former, case the shipper maj’- be confined to the value he so fixed, in the event of a loss by negligence, the same rule does not apply to a case where the valuation inserted in the contract, is not a valuation previously made by the shipper. But we see no sound reason for this distinction.”

It is the law of that court as well as of this state, that a common carrier may, by special contract, limit his common law liability; but that he cannot stipulate for exemption from the consequences of his own negligence or that of his servants, and, after reviewing the cases in that court in which it is so held, and stating that the court adhered to the views in them announced, he says, on page 340:

> “The agreement as to value, in this case, stands as if the carrier had asked the value of the horses, and had been told by the plaintiff the sum inserted in the contract. The limitation as to value, has no tendency to exempt from liability for negligence. It does not induce want of care. It exacts from the carrier the measure of care due to the value agreed on. The carrier is bound to respond in that value for negligence. The compensation for carriage is based on that value. The shipper is estopped from saying, that the value is greater. The articles have no greater value for the purposes of the contract of transportation between the parties to that contract. The carrier must respond for negligence up to that value. It is just and reasonable, that such a contract, fairly entered into, and where there is no deceit practiced on the shipper, should be upheld. There is no violation of public policy. On the contrary, it would be unjust and unreasonable, and would be repugnant to the soundest principles of fair dealing and of the freedom of contracting, and thus in conflict with public policy, if a shipper should be allowed to reap the benefit of the contract if there is no loss, and to repudiate it in case of loss.”

*545John F. Dye, and D. F. Dimbert, for plaintiff in *error. _*

*_*T. C. Miller, and Allread & Teegarden, for defendant in error.

In Railway Co. v. Sheppard, supra, an examination of the record discloses that there was no agreed valuation of the horses, but the contract provided, “that in consideration of being released from liability, as hereinafter specified, the said company agrees to transport one car load of horses” at the reduced rates.

The contract in this case is not, as to the question under consideration, distinguishable from the one passed upon in Hart v. R. R. Co., supra.

That cases dealing with such contracts are to be distinguished from those dealing with contracts providing for a limited liability, is pointed out in Hutchinson on Carriers, sec. 250.

The service required in the transportation of a race horse, may not be as great as in the case of an ordinary horse, but the risk is greater, and the business cannot be successfully or fairly conducted, unless the charge is based upon the risk as well as the service. This fact was recognized at an early day, and the common carrier was permitted to protect himself from imposition by a special acceptance, and, as Mr. Justice Blatchford points out, contracts such as these may be upheld by the same principle.

If a box or package is so disguised by the shipper as to cause it to resemble such a box or package as usually contains articles of little value, in order to avoid paying a reasonable compensation for its carriage, and the carrier is misled and accepts it as such, the shipper, in case of loss, cannot recover because of his fraud. Hutchinson on Carriers, secs. 214-216; Despatch Dine v. Glenny, 41 O. S., 166.

If he misrepresents the value of the article, and the carrier is misled, the shipper is at least estopped to claim a greater value.

In the Lottawanna, 21 Wall., 558, 572, Mr. Justice Bradley, speaking of the general maritime law and of the importance of uniformity to the commercial world, says:

> “The convenience of the commercial world, bound together, as it is, by mutual relations of trade and intercourse, demands that, in all essential things wherein those relations bring them in contact, there should be a uniform law founded on natural reason and justice. Hence, the adoption by all commercial nations, (our own included) of the general maritime law as the basis and groundwork of all their maritime regulations.”

Considerations of advantage from uniformity upon a matter of so much importance, as well as of respect for the decisions of the highest court, lead us to hold, in the absence of a decision directly in point by our own Supreme Court, that the plaintiff below is estopped to claim that the horse was worth more than one hundred dollars.

The court erred in sustaining the demurrer to the first defense.

Judgment reversed. Demurrer to first defense overruled; demurrer to second defense sustained, and cause remanded.