Source: https://supreme.justia.com/cases/federal/us/219/186/
Timestamp: 2019-04-24 12:29:22+00:00

Document:
A provision in a bill of lading issued by the initial carrier, that it should not be liable for loss or damage not occurring on its portion of the route, is not a contract of exemption from its own liability as a carrier, but a provision of nonassumption of the liabilities of others, and, at common law, relieves it of such liabilities.
The general rule adopted by this Court is that, in the absence of legislation, a carrier, unless there be a special contract, is only bound to carry over its own line and then deliver to a connecting carrier; it may, however, contract to carry beyond its line, and if it does so, its common law carrier liability extends over the entire route.
It was not only the legal elements of the situation, but also the fact that the business prosperity of the country largely depends on through rates and routes of transportation, that induced Congress to enact such regulations in regard to the duties and liabilities of interstate carriers as would relieve shippers whose goods were damaged from the burden of proving where the loss occurred.
There is no absolute freedom of contract. The government may deny liberty of contract by regulating or forbidding every contract reasonably calculated to injuriously affect public interests.
The United States is a government of limited and delegated powers, but in respect to the powers delegated, including that to regulate commerce between the states, the power is absolute except as limited by other provisions of the Constitution.
and the Carmack Amendment of January 29, 1906, C. 3591, 34 Stat. 584, 595, to § 20 of the Interstate Commerce Act, making such carriers liable for loss or damage to merchandise received for interstate transportation beyond their own lines, notwithstanding any contract of exemption in the bill of lading, is a valid exercise of such power and is not in conflict with the due process provision of the Fifth Amendment.
Quaere, and not decided, whether a carrier can be compelled to accept goods for transportation beyond its own lines or be required to make a through or joint rate over independent lines.
Under the Carmack Amendment to the Interstate Commerce Act, the initial carrier is, as principal, liable not only for its own negligence, but that of any agency which it may use, although as between themselves the carrier actually causing the loss may be primarily liable. Section 8 of the Act to Regulate Commerce of February 4, 1887, c. 104, 24 Stat. 379, 382, does not authorize the taxing of an attorney's fee in an action to recover damages for loss to goods which does not result from a violation of the act.
168 F. 987 and 990 affirmed.
Riverside Mill filled out, showing what goods it had loaded into cars, and the name of the consignee; said receipt containing a stipulation that the shipment is 'per conditions of the company's bill of lading,' and that the Atlantic Coast Line Railroad Company, on said receipts prepared by the Riverside Mill, issued, for each of the shipments hereinbefore referred to, bills, of lading on forms like that attached, marked exhibit 'B.'"
"This bill of lading is signed for the different carriers who may engage in the transportation, severally, but not jointly, each of which is to be bound by and have the benefits of the provisions thereof, and in accepting this bill of lading the shipper, owner, and consignee of the goods, and the holder of the bill of lading, agree to be bound by all its stipulations, exceptions, and conditions, whether printed or written."
After making the above statement, MR. JUSTICE LURTON delivered the opinion of the Court.
"That any common carrier, railroad, or transportation company receiving property for transportation from a point in one state to a point in another state shall issue a receipt or bill of lading therefor, and shall be liable to the lawful holder thereof for any loss, damage, or injury to such property, caused by it or by any common carrier, railroad, or transportation company to which such property may be delivered, or over whose line or lines such property may pass, and no contract, receipt, rule, or regulation shall exempt such common carrier, railroad, or transportation company from the liability hereby imposed. Provided, that nothing in this section shall deprive any holder of such receipt or bill of lading of any remedy or right of action which he has under existing law. "
"That the common carrier, railroad, or transportation company issuing such receipt or bill of lading shall be entitled to recover from the common carrier, railroad, or transportation company on whose line the loss, damage, or injury shall have been sustained the amount of such loss, damage, or injury as it may be required to pay to the owners of such property, as may be evidenced by any receipt, judgment, or transcript thereof."
The power of Congress to enact this legislation has been denied first because it is said to deprive the carrier and the shipper of their common law power to make a just and reasonable contract in respect to goods to be carried to points beyond the line of the interstate carrier, and second that, in casting liability upon the initial carrier for loss or damage upon the line of a connecting carrier, the former is deprived of its property without due process of law.
The indisputable effect of the Carmack Amendment is to hold the initial carrier engaged in interstate commerce and "receiving property for transportation from a point in one state to a point in another state" as having contracted for through carriage to the point of destination, using the lines of connecting carriers as its agents.
other contract, the only question which has occasioned a conflict in the decided cases was whether it, in the particular case, made the one or the other.
The general doctrine accepted by this Court in the absence of legislation is that a carrier, unless there be a special contract, is only bound to carry over its own line, and then deliver to a connecting carrier. That such an initial carrier might contract to carry over the whole route was never doubted. It is equally indisputable that, if it does so contract, its common law carrier liability will extend over the entire route. Railway v. McCarthy, 96 U. S. 258, 96 U. S. 266; Railroad v. Pratt, 12 Wall. 123; Railroad v. American Trading Co., 195 U. S. 439; Muschamp v. Lancaster Railway Co., 8 M. & W. 421.
The English cases, beginning with Muschamp v. Lancaster Railway Company, 8 M. & W. 421, decided in 1841, down to Bristol &c. Railway v. Collins, 7 H.L. Cases 194, have consistently held that the mere receipt of property for transportation to a point beyond the line of the receiving carrier, without any qualifying agreement, justified an inference of an agreement for through transportation, and an assumption of full carrier liability by the primary carrier. The ruling is grounded upon considerations of public policy and public convenience, and classes the receipt of goods so designated for a point beyond the carrier line as a holding out to the public that the carrier has made its own arrangements for the continuance by a connecting carrier of the transportation after the goods leave its own line. There are American cases which take the same view of the question of evidence thus presented. Some of them are Railroad v. Campbell, 7 Heisk. 257; Railroad v. Mt. Vernon Co., 84 Ala. 175; Railroad v. Hasselkus, 91 Ga. 384; Beard v. Railroad, 79 Ia. 531; Kyle v. Railroad, 10 Rich. 382; Railroad v. Wilcox, 84 Ill. 240; Railroad v. Rogers & Hartsell,, 6 Heisk. 143.
Upon the other hand, many American courts have repudiated the English rule which holds the carrier to a contract for transportation over the whole route in the absence of a contract clearly otherwise, and have adopted the rule that, unless the carrier specifically agrees to carry over the whole route, its responsibility as a carrier ends with its own line, and that, for the continuance of the shipment, its liability is only that of a forwarder. The conflict has therefore been one as to the evidence from which a contract for through carriage to a place beyond the line of the receiving carrier might be inferred.
In this conflicting condition of the decisions as to the circumstances from which an agreement for through transportation of property designated to a point beyond the receiving carrier's line might be inferred, Congress, by the act here involved, has declared in substance that the act of receiving property for transportation to a point in another state and beyond the line of the receiving carrier shall impose on such receiving carrier the obligation of through transportation, with carrier liability throughout. But this uncertainty of the nature and extent of the liability of a carrier receiving goods destined to a point beyond its own line was not all which might well induce the interposition of the regulating power of Congress. Nothing has perhaps contributed more to the wealth and prosperity of the country than the almost universal practice of transportation companies to cooperate in making through routes and joint rates. Through this method, a situation has been brought about by which, though independently managed, connecting carriers become in effect one system. This practice has its origin in the mutual interests of such companies and in the necessities of an expanding commerce.
"These railway companies, though separate in themselves, are in the habit, for their own advantage, of making contracts, of which this was one, to convey goods along the whole line to the ultimate terminus, each of them being agents of the other to carry them forward, and each receiving their share of the profits from the last."
The tenth clause of the conditions annexed to this bill of lading, and shown elsewhere, affords a fair illustration of the customary methods of connecting carriers to cooperate for their mutual benefit in carrying on transportation begun by one which must be continued by other lines over which the thing to be transported must go. The receiving carrier makes the rate and the route, and as the agent of every such connecting carrier executes a contract which is to bind each of them, "severally, but not jointly," one of the terms of the agreement being that each carrier shall be liable only for loss or damage occurring on its own line. Through this well known and necessary practice of connecting carriers, there has come about, without unity of ownership or physical operation, a singleness of charge and a continuity of transportation greatly to the advantage of the carrier, and beneficial to the great and growing commerce of the country.
must go a separate agreement limiting the carrier liability of each separate company to its own part of the through route. As a result, the shipper could look only to the initial carrier for recompense for loss, damage, or delay occurring on its part of the route. If such primary carrier was able to show a delivery to the rails of the next succeeding carrier, although the packages might and usually did continue the journey in the same car in which they had been originally loaded, the shipper must fail in his suit. He might, it is true, then bring his action against the carrier so shown to have next received the shipment. But here, in turn, he might be met by proof of safe delivery to a third separate carrier. In short, as the shipper was not himself in possession of the information as to when and where his property had been lost or damaged, and had no access to the records of the connecting carriers who, in turn, had participated in some part of the transportation, he was compelled in many instances to make such settlement as should be proposed.
for the loss of the article in the way of damages. We save the shipper from going to California or some distant place to institute his suit. Why? The reasons inducing us to do that were that the initial carrier has a through route connection with the secondary carrier, on whose route the loss occurred, and a settlement between them will be an easy matter, while the shipper would be at heavy expense in the institution of a suit. If a judgment is obtained against the initial carrier, no doubt exists but that the secondary carrier would pay it at once. Why? Because the arrangement, the concert, the cooperation, the through route courtesies between them, would be broken up if prompt payment were not made. We have done that in conference."
40 Cong.Rec. Pt. 10, p. 9580.
It must be conceded that the effect of the act in respect of carriers receiving packages in one state for a point in another, and beyond its own lines, is to deny to such an initial carrier the former right to make a contract limiting liability to its own line. This, it is said, is a denial of the liberty of contract secured by the Fifth Amendment to the Constitution. To support this, counsel cited such cases as Allgeyer v. Louisiana, 165 U. S. 589; Lochner v. New York, 198 U. S. 45, and Adair v. United States, 208 U. S. 161.
"the power . . . vested in Congress as absolutely as it would be in a single government having in its Constitution the same restrictions on the exercise of the power as are found in the Constitution of the United States."
was upheld. And in Interstate Commerce Commission v. Illinois Central R. Co., 215 U. S. 452, it was held that the equipment of an interstate railway, including cars used for the transportation of its own fuel, was subject to the regulation of Congress. In Interstate Commerce Commission v. C. & A. Ry. Co., 215 U. S. 479, it was held to extend to the distribution of coal cars to the shipper, so as to prevent discrimination. In The Employers' Liability Cases, 207 U. S. 463, power to pass an act which regulated the relation of master and servant, so as to impose on the carrier, while engaged in interstate commerce, liability for the negligence of a fellow servant, for which at common law there was no liability, and depriving such carrier of the common law defense of contributory negligence save by way of reduction of damages, was upheld. In Addyston Pipe & Steel Co. v. United States, 175 U. S. 211, and Northern Securities Co. v. United states, 193 U. S. 197, it was held that this power of regulation extended to and embraced contracts in restraint of trade between the states.
It is obvious from the many decisions of this Court that there is no such thing as absolute freedom of contract. Contracts which contravene public policy cannot be lawfully made at all, and the power to make contracts may in all cases be regulated as to form, evidence, and validity as to third persons. The power of government extends to the denial of liberty of contract to the extent of forbidding or regulating every contract which is reasonably calculated to injuriously affect the public interests. Undoubtedly the United States is a government of limited and delegated powers, but in respect of those powers which have been expressly delegated, the power to regulate commerce between the states being one of them, the power is absolute except as limited by other provisions of the Constitution itself.
"is not merely the matter regulated, but whether the regulation is directly one of interstate commerce, or is embraced within the grant [of power] conferred on Congress to use all lawful means necessary and appropriate to the execution of the power to regulate commerce."
balances. The routing in a measure depends upon the certainty and promptness of such traffic balance settlements, and such balances have been regarded as debts of a preferred character when there is a receivership. Again, the business association of such carriers affords to each facilities for locating primary responsibility as between themselves which the shipper cannot have. These well known conditions afford a reasonable security to the receiving carrier for a reimbursement of a carrier liability which should fall upon one of the connecting carriers as between themselves.
special receipt which contravenes the rule in question is invalid.
"is a politick establishment contrived by the policy of the law for the safety of all persons the necessity of whose affairs oblige them to trust these sorts of persons, that they may be safe in their ways of dealing."
"Unless the regulations are so utterly unreasonable and extravagant in their nature and purpose that the property and personal rights of the citizen are unnecessarily, and in a manner wholly arbitrary, interfered with or destroyed without due process of law, they do not extend beyond the power of the state to pass, and they form no subject for federal interference. As stated in Crowley v. Christensen, 137 U. S. 86:"
But it is said that the act violates the Fifth Amendment by taking the property of the initial carrier to pay the debt of an independent connecting carrier whose negligence may have been the sole cause of the loss. But this contention results from a surface reading of the act, and misses the true basis upon which it rests. The liability of the receiving carrier which results in such a case is that of a principal for the negligence of his own agents.
"If you receive articles for transportation from a point in one state to a place in another, beyond your own terminal, you must do so under a contract to transport to the place designated. If you are obliged to use the services of independent carriers in the continuance of the transit, you must use them as your own agents, and not as agents of the shipper."
carrier is, as principal, liable not only for its own negligence, but for that of any agency it may use, although, as between themselves, the company actually causing the loss may be primarily liable.
"the matter to be adjusted is one peculiarly within the knowledge of the carrier. It receives the goods and has them in its custody until the carriage is completed. It knows what it received and what it delivered. It knows what injury was done during the shipment, and how it was done. The consignee may not know what was in fact delivered at the time of the shipment, and the shipper may not know what was delivered to the consignee at the close of the transportation. The carrier can determine the amount of the loss more accurately and promptly and with less delay and expense than anyone else, and for the adjustment of loss or damage to shipments within the state forty days cannot be said to be an unreasonably short length of time."
The conclusion we reach in respect to the validity of the amendment has the support of some well considered cases. Among them we cite: Smeltzer v. Railroad, 158 F. 649; Railroad v. Mitchell, 91 N.E. 735; Railroad v. Scott, 133 Ky. 724.
of this act shall do, cause to be done, or permit to be done, any act, matter, or thing in this act prohibited or declared to be unlawful, or shall omit to do any act, matter, or thing in this act required to be done, such common carrier shall be liable to the person or persons injured thereby for the full amount of damages sustained in consequence of any such violation of the provisions of this act, together with a reasonable counsel or attorneys' fee, to be fixed by the court in every case of recovery, which attorneys' fees shall be taxed and collected as part of the costs in the case."
But that section applies to cases where the cause of action is the doing of something made unlawful by some provision of the act, or the omission to do something required by the act, and there is a recovery "of damages sustained in consequence of any such violation of this act," etc. The cause of action in the present case is not for damages resulting from "any violation of the provisions of this act." True, the plaintiff in error attempted by contract to stipulate for a limitation of liability to a loss on its own line, and in this action has defensively denied liability for a loss not occurring on its own line. But the cause of action was the loss of the plaintiff's property which had been entrusted to it as a common carrier, and that loss is in no way traceable to the violation of any provision of the Act to Regulate Commerce. Having sustained no damage which was a consequence of the violation of the act, the section has no application to this case.

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