Earl Warren: Number 292, Missouri Pacific Railroad Company, Petitioner, versus Elmore & Stahl.
Thurman Arnold: Mr. Chief Justice, --
Earl Warren: Judge Arnold.
Thurman Arnold: -- may it please the Court. The case is -- presents a very simple and clear-cut issue to this Court. It involves the liability of a railroad for damages for spoilage of fruit in a case where it has carried out its burden of proof. And the jury has specifically found that it is without negligence and it's carried on all its obligations without fault. Our position is that under the federal common law, as applied by the Carmack Amendment, the obligation of the railroad is solely to assume the burden of proof of showing that there were -- was no negligence. In the early days, as the Court probably knows, the only exemption from liability to your -- to your hand was act of God or the public enemy. But as time developed and transportation increased, it -- it's came to include, add to the Government, add to the shipper an inherent vice in the goods. And there, developed an exception when cattle were shipped and would tend as -- to injure each other and all the railroad had to prove was due care and lack of negligence. And later as the shipment of fruits became a tremendous enterprise going over long distance, the -- the cattle exception was extended to perishable fruits and vegetables. And I think it had to be because if the inherent vice means anything, then it -- the tendency of vegetables to decay is an inherent vice. Second place, we assert that we're exonerated from liability on proof of freedom from fault by the terms of the bill of lading itself, which exempts the carrier from liability if the damage is caused by inherent vice in the goods. In the third place, we are exempt from liability by the protective tariff services. It is provided that the shipper may pay for what is called "protective services". And in the regulations covering those services, the liability of the carrier specifically brought out and it includes only liability where he has caused the damage and where there is some fault. Now, the respondent takes the position that inherent vice means some peculiar defect in vegetables which are not present in ordinary vegetables. It means that the mere tendency to decay is not an inherent vice in the goods and that the carrier therefore must prove more than freedom from negligence. He must pursue -- prove precisely what did cause the decay. And of course, that means he is liable as the insurer. We assert in our brief and we reexamine the cases that all of the cases are against to be -- the position of the respondent with respect to their argument. The cases which he cites in his favor are it is true fruits and vegetable cases but they're not cases of decay. They are cases of spoilage and completely irrelevant here. And finally, the respondent --
Potter Stewart: What's the difference between spoilage and decay? I suppose the --
Thurman Arnold: I -- I made -- I make -- I do not use the words separate. I mean I used -- I mean the same thing, by spoilage and decay.
Potter Stewart: Well, I thought you just said these cases are not cases of decay but are cases of spoilage.
Thurman Arnold: Oh, no, it's -- this case are -- not cases of spoilage or decay. They're cases of breakage.
Potter Stewart: I see. Or is it a --
Thurman Arnold: And --
Potter Stewart: -- case of negligence on the part of the carrier?
Thurman Arnold: No. In the case of breakage, I think the carrier would -- would not have an exemption because that is not an inherent vice in the goods themselves. Finally, the last argument of the respondent is based on public policy which we do not comprehend at all. Certainly, liability without fault has never been proved by the law. And I cannot in -- I think it's -- the public policy argument amounts to no more or less than an assertion. And I don't think it is backed by any reasoning. Thank you.
Arthur J. Goldberg: (Inaudible)
Thurman Arnold: No. Well, I -- I think it maybe what I mean but let me restate it. It is -- when the goods arrived in a deteriorated state, after they had been put on in a good state, there is only one reason -- only two possible reasons for the deterioration. One is negligence on the part of the carrier and third is the inherent tendency of the vegetable to decay. And our position is that when you eliminate negligence on the part of the carrier, the words "inherent vice" found in the bill of lading, found in the common law, mean not peculiar defects but the general tendency for the vegetables' decay.
Earl Warren: (Inaudible)
John C. North, Jr.: May it please the Court. To go a little bit further into the facts of this case, it involved the shipment of honeydew melons at Rio Grande City in Texas. They were consigned to Chicago, Illinois in 1958. The car arrived in a damaged condition. I have never been able to determine from the brief what Judge Arnold or the railroad means by the term "spoilage". To me, it's an all inclusive term. If you drop one and break the honeydew melon or any commodity, it breaks, it's spoiled. But be that as it may, they did arrive spoiled. They had 3% decay in them and they had 15% discoloration.
Potter Stewart: Was there a showing that the discoloration had to do with the decay or rot or -- or otherwise caused by it?
John C. North, Jr.: No, sir. The testimony was not conclusive on that insofar as discoloration was concerned, why, the testimony of the witnesses for the railroad. They brought one down from New York all the way to testify. He was an expert named Huss (ph). He testified as did Sleigh WW (ph), that's a western land inspection bureau, their Government aids or inspection agencies. They testified that they associated with -- with immaturity. Actually, in the case, they had some other melons that arrived slightly green and that's the melons that they were talking about. But the undisputed evidence in this case, according to the destination inspection was that they were mature. In fact, the word "mature" is used on the U.S. Government destination inspection and they admitted that whether they're white to cream, there were no green in this, white to cream, well, that was evidence of maturity. The only other evidence, we say, that bruising follows that -- discoloration and decay follows bruising and they bear that out in -- in one respect in that they say slight abrasions. And now, when they say slight abrasions, well, that's -- that's just discussed -- placed and that could occur in transit. They infer that it was incurred in the package but there is no proof on that.
Speaker: (Inaudible)
John C. North, Jr.: Absolutely. We have no finding that there was no negligence on the part of the carrier. Actually, there were three issues. One was a little inconsistent but we make no point to that. But we also have a finding by the jury that the melons were in a worsen condition and would reasonably be anticipated upon their arrival in Chicago. They also have a finding by the jury that the damage was not due to an inherent vice. They also have a finding that it was not due to fault of shipper. And in a damage issue, the -- they discovered again what is the value at the time and in the condition in which they should've arrived if transported in accordance with plaintiff's instruction and the reason to prove the matters to all might have not covered by those instruction. Now, every one of those other issues, the railroad would have us disregard. They say it's a case of inherent vice. As a matter of fact, insofar as inherent vice is concerned, it's not clear from their argument whether we make out the issue of inherent vice when we show arrival in damage condition or we, at the same time, I guess according to their theory, we're making out -- we're disproving our own case. We have to show it's spoiled or at least we have to show that it arrived in a worsened condition and it was at the time we delivered it to the carrier. So we must automatically be proven that it was unaccepted cause. The -- the argument to me is -- is ridiculous. But if you -- you can carry a little further and -- and see how absurd it might become. For example, in the -- in the brief -- in their brief, reply brief, they say that once the jury finds that a carrier is free from negligence, then you have shown inherent vice. And the issue should never have even been submitted to the Court. Well, now, I don't understand which -- which they're doing when it -- when we show it around as spoiled, does that -- does that mean it's inherent vice? Or when they show it freedom from negligence, does that mean it's inherent vice? Put it another way, if the railroad were negligent and they come in and say, "Yes, we are negligent." Then is this spoilage which in one case they say is inherent vice becomes something else.
Byron R. White: What did -- (Inaudible)
John C. North, Jr.: The Court improperly instructed the jury that inherent vice are included. In -- it -- it would cover natural deterioration, Justice White. That was the -- the wrong part of it. The rest of the instruction was proper and it wasn't really improper or misleading to include that but it was too in -- too all inclusive and -- and that --
Byron R. White: Do you think that area -- do you think the jury answered the questions correctly though, I take it?
John C. North, Jr.: Yes, sir. In fact, they -- they -- it -- it would be in my favor of course --
Byron R. White: What are the reasons of --
John C. North, Jr.: -- because it covered natural deterioration.
Byron R. White: What are the reasons are there besides the negligence of the carrier or inherent vice to -- to result in this worsened condition?
John C. North, Jr.: Well, about --
Byron R. White: Other than the fact that they were just perishable commodity?
John C. North, Jr.: A thousand different reasons, acts of third parties. The -- a commodity improper ventilation, I mean is that what you're going into all of these reasons that --
Tom C. Clark: (Inaudible)
John C. North, Jr.: Sir?
Tom C. Clark: (Inaudible)
John C. North, Jr.: Well, it would be and --
Tom C. Clark: (Inaudible)
John C. North, Jr.: What if --
Tom C. Clark: (Inaudible) inherent vice, it would also end in (Inaudible) with some negligence.
John C. North, Jr.: Well, that's correct. Of course, I -- I say that -- what -- what if they were called, if they felt it was caused by the act of third party. And also, I -- I say negligence doesn't have any -- any bearing at all in this case. What if they felt like the damage was caused by some fault of carrier that didn't amount to negligence or --
Tom C. Clark: Is there any evidence in the third party presented?
John C. North, Jr.: No, sir, we don't have any evidence but there --
Tom C. Clark: (Inaudible)
John C. North, Jr.: We don't -- we contend that we don't have to show that. All -- all we have to show is a delivery in good and arrival in bad or at least an arrival in a worsened condition than it was. Otherwise, all you've got is a warehouseman liability here. If you take the first statement in their reply brief, since the carrier has shown its freedom from negligence in compliance with the shipper's instructions, it is not liable for the spoilage and decay of the melon. That's all you have in a warehouseman liability except in a warehouseman liability, a plaintiff would have a better chance to probably prevail because at least he could may -- maybe be around his warehouse, whereas here, the shipment moved to some other place and suppose it doesn't take into account mistakes --
Byron R. White: You would have -- you would have --
John C. North, Jr.: -- honest mistakes in the record.
Byron R. White: You would have to prove negligence against the warehouseman, would you?
John C. North, Jr.: After -- that's what they say we have to prove against them.
Byron R. White: Well, they do -- don't they have to prove no negligence?
John C. North, Jr.: Well, they show first that they handled it in accordance with shipper's instructions and in a recently prudent manner as to all matter is not covered by such instructions that they were free from negligence, yes, sir. Then they say that in order to --
Byron R. White: If your case is made out just when you show that they arrived in bad condition?
John C. North, Jr.: Sir?
Byron R. White: And you -- and they left in good condition and you can -- you can rest right there, can't you?
John C. North, Jr.: Yes, sir, that's correct and that --
Byron R. White: It's not true of the warehouseman, (Inaudible)?
John C. North, Jr.: Well, you show that a delivery to them in good condition and an out turn in a damaged condition and I think most under your uniform warehouseman act you can rest.
Byron R. White: I see. Could they -- they have to show their freedom from negligence, the warehousemen?
John C. North, Jr.: Then they would have to go in. Then the warehousemen would have to come forward and show freedom from negligence. I -- I don't think you have any difference basically in the -- in the liability that you have here.
Arthur J. Goldberg: I take it your argument (Inaudible).
Byron R. White: That -- that is correct and that -- this is not new law. This is -- what they're doing, it sounds new because they're asking such a tremendous jump in carrier law. This has always been the law. The Department of Agriculture case, this Court held is to be the law. And in its footnote there, it says, "After we establish a prima facie case, then the burden is upon the carrier to show that the cause was one for which the law accepts it." And actually, we've got -- if you want to really get down to the real question here in a nutshell, it -- it's who is liable for unexplained loss. It -- it's a fair rule of course to -- to have the railroad liable for unexplained loss. And to start out with this business of saying, "We prove a prima facie case by showing delivery in good and arrival in bad." We say that to quick. It's a -- it's a very difficult task. I've been trying this for 20 years. I've represented the Missouri Pacific in a lot of the cases years ago but it's a hard proposition to prove a delivery in good condition of the exact condition of the commodity. The railroad has the advantage of -- take for example honey -- honeydew melon, for you to get 200 feet in the air around Rio Grand City and probably to see every inch of ground that every honeydew melon in Texas is grown on. And the railroad has records of every court. Now, I mention that we sustain that burden and they have the right to cross-examine and they have the right to compare the cars, they have their experts down there on hand, they have their agents who issue a clean bill of lading. And incidentally, these honeydew melons, you see every melon in the crate, alright they take it over then they move it up there. Now, what do we have in -- in the -- in -- suppose an honest mistake on the part of the carrier -- we -- we pay for an honest mistake that the carrier makes. In every case, the one that reports, not in every case but in most cases, the one that reports position of events and so forth is the man who manipulates the particular events. If he doesn't see fit to admit his error, who pays for it? The railroad? No, the shipper, under their theory of the law. It's -- it's inconceivable. And again, you have all numerous instances. For example, they cite in there their principles and practices and this -- this set of rules that they have among themselves for the adjustment of claims which parts of them are -- aren't -- are not based on legal liability. I don't even think that they contend it but they say we're happy with them. We're not happy with them. We're not happy at all with them.
Byron R. White: Do you -- are there any cases you know of that squarely hold that you don't need to prove negligence in the perishable commodity situation?
John C. North, Jr.: Yes, sir, I don't -- that the shipper doesn't?
Byron R. White: No -- yes, do you have -- do you assert -- is there -- in -- in perishable commodity cases, is there any requirement beyond negligence imposed by any cases you know?
John C. North, Jr.: Are there any cases that hold in a perishable case (Voice Overlap) --
Byron R. White: That put a higher burden and just negligence that -- that no negligence on the part of the carrier?
John C. North, Jr.: Well, yes, sir. I think the Department of Agriculture case would be one if I understand your question correctly. You're --
Byron R. White: The judge said the cases were uniformly against you, isn't that true?
John C. North, Jr.: Well, the judge is wrong. The -- the cases are uniformly in my favor. Now, they cite for example. They -- the judge cites in his brief. He cites two cases in support of his proposition that a common law, the rule as to perishables was as he contends. Those cases are the Itule case. Now, the Itule case, if you will read that on Arizona case which attained prominence only because some ALR writer haven't picked it up, you can find a hundred state court cases that -- that holds other. I haven't even bother to cite state court cases in my -- in my brief. But in the Itule case, the Court knew what the law was at common law, they expressly stated. At common law that the carrier was liable unless it proved that it was one of these -- except for one of these causes. Then it went on to say, "Now, this is a thing of first impression to us and we're -- we're here for the first time. And we think tomatoes are more like livestock so we're going to use the livestock rule on a carload of tomatoes." As a matter of fact, I wrote -- they don't have the reverse side of bill of lading in evidence in that case. But in that case, if -- if the judge felt -- the Court felt that way and felt it wasn't a fair rule, all the lawyer would have had to do and say, "Judge, I don't care how fair you think it -- you -- it looks, turn the bill of lading over and read the section here", and it says that they agree to be liable as a common law --
Byron R. White: But then what --
John C. North, Jr.: -- and he would've lost in the Itule case.
Byron R. White: What case is it that you say you have it in a -- in a court which -- which would've held those tomatoes not to be like livestock? I'm not sure if the case that you have in mind didn't deal with tomatoes but I suppose it would've held according to you that tomatoes weren't livestock.
John C. North, Jr.: The one that I just quoted that said that they partook more of the -- that tomatoes partook more of the (Voice Overlap) --
Byron R. White: No, that the case on your side, the agricultural case, what is that?
John C. North, Jr.: That was the United States versus Department of Agriculture that was decided here.
Byron R. White: Would you say that that court wouldn't have -- wouldn't have held tomatoes to be like livestock but the tomatoes were (Voice Overlap) --
John C. North, Jr.: Well, that was a case of eggs that the United States Supreme Court --
Byron R. White: Yes, but that -- does that court, the Supreme Court decided that case would've said that tomatoes are not like livestock at all?
John C. North, Jr.: Well, I think that they -- they did. I think you've got a completely different livestock rule which we're not concerned with here. And you've got different exceptions that come under the livestock rule. And if you read the livestock bill of lading which is permitted by the ICC, why you've got the word "negligence" referred to throughout the -- the livestock bill of lading and you never want -- and -- and common law is never mentioned in the livestock bill of lading. Whereas here, it says, the carrier shall be liable as at common law. Getting -- getting back to these errors, the -- the whole question presented in this case was stated in the first paragraph of the Supreme Court of Texas' opinion. Now, the AAR has conceded more or less. They've adopted secondarily the argument of -- of the Missouri Pacific but primarily, the -- the first time that the argument has ever been raised that by just showing a -- an arrival in a damaged condition that that ipso facto is spoilage, has been raised in this Court now. We've never had any of that throughout the state court. They've contended that their freedom from negligence was a complete exoneration. And we have contended that they must first prove that the damage was due to an accepted cause and like it stated in the Norton case. Now, bear in mind too that -- that the Court here is -- involved the shipment of honeydew melons. But what this decision amounts to is how -- not only shippers of fruits and vegetables but the -- the list of commodities that are now classified as perishables as inconceivable. It started out with the list way back there of 50 commodities in which list, they included the fruits and vegetables. They listed bananas and so forth. Today, it includes over 150 whereas all fruits and vegetables are not of such as that, are just simply in one category. Kale, walnuts and things like that are perishables. And that -- that's the rule that we're going to have live by that this Court will -- will have to decide. Where in their argument, is there any room for fault of shipper or any -- any of those other -- other defects? In other words, why isn't all -- why aren't all of the terms of the bill of lading surplage? Why do they say that the carrier shall be liable as at common law except this follows that they -- in case of inherent vice, fault of shipper and so forth? Why not just say that unless negligent and -- and you could go ahead and -- and comply fully with him and the burden of proof and freedom from negligence is on the carrier, the carrier is not liable. There -- there is no difference. You -- you rule out all your exceptions. You make them meaningless. And the -- the -- some of the confusion that results, I think in his argument that he says that it's -- that all -- all commodities will decay, and that's also said in the Itule case. That's not a true statement. You can take a -- a honeydew melon or anything else. It's not going to decay unless it has bacteria and an opening for the bacteria to enter. And even then, proper humidity and temperature and so forth will retort it. But if you don't have those factors, it's not going to automatically decay. The use of the term "decay" in this case con -- confuses this, just one of -- of a number of different causes of damages that can occur to various commodities. I still do not know whether they admit liability before this Court for bruising. They admitted it for bruising up in -- in the lower court and yet that -- that position is not proper. They should admit it if it occurred in transit, they should be liable. If it occurred before transit, they should not be liable. They confuse natural deterioration with inherent vice and then refused it in his own -- in his own statement when he says there that -- that fruit and vegetables die from the moment that you harvest them. That's not true. And as he says -- he says it on the next page, he says that, "As a matter of fact, a lot of these are peak -- picked before the peak." And the only -- only thing -- only good that a honeydew melon or any other fruit and vegetable is, is to eat. And when you pick these honeydew melons or when you pick in -- and pack tomatoes, we were talking about them, at the -- at the time they're not edible. They're picked matured green and in case of honeydew melons, why they're mature but then they're gassed and then they ripen up to market. It is just like you go in and you buy tomato that's not quite ripe in the market, you leave it at home for two or three day before you consume it. And it's the same thing here. Actually, they don't -- they continue to live. And if a commodity -- if -- if somebody were foolish enough, if some shipper were foolish enough to ship a carload of red ripe tomatoes and they got to appear and they were completely spoiled and overripe, the railroad would have the burden of showing the cause of the damage but it would not be an inherent vice, it's natural deterioration. Then after they reach that peak that they're going to be used for, then they began a period of natural deterioration. They only have so much life, that's true of any perishable. And they -- they list kale as a -- as a perishable. Well then, I guess that's -- that's true of it. But still, under --
Arthur J. Goldberg: The natural deterioration (Inaudible) --
John C. North, Jr.: The -- the bill of lading has a specific exception for natural deterioration. It doesn't treat it, there the same. It says that carrier shall not be liable for natural deterioration or for a vice or defect in the property. And it also has an exception for faults of shipper. They're treated separately and they are separately.
Arthur J. Goldberg: (Inaudible)
John C. North, Jr.: No, sir, abs -- absolutely not.
Arthur J. Goldberg: (Inaudible)
John C. North, Jr.: That's correct. You take another example, take a car of onions, say in -- in midsummer, 90 degree or 100 degree temperature in Texas. We -- we load them in a -- in a refrigerator car, say we ship them to New York and we order, I said this, I think, example in my brief, we order the bins closed on it. When they get up there they're going to -- you -- you better stand back from the door when you open them. And they're going to be completely wrong. Now -- now, they're not going to be necessarily decaying, in fact, I doubt if they would be decayed. They'd be really melted. But they'd be worthless. Now, it's not an inherent vice, that's not natural deterioration, the cause of that damage was fault of shipper in improperly ordering the service of that car. But the burden of proof in fault of shipper, we contend, would be upon the railroad. Otherwise, you -- you just destroy the terms of your bill of lading, you destroy your -- your meaning of your Carmack Amendment. And I -- and I say the consistent case of that is the Whitnack case. For example, the leading case, the one case against me in this case is the Larry's Sandwiches Company case. That's that frozen food case. Then -- then they cite that and they say, "That's it, that's the law, that's our baby." Now, we come along on the very next page and they say, "But the cases cited by the respondent aren't important because they're not cases that involved natural deterioration." And he says for example, Whitnack Produce case, "That involved the shipment of apples which thaw in trans -- I mean which froze in transit. So, he's -- he's asking you to apply a rule for a shipment of frozen commodity that thaws out but don't -- but says that a commodity that shouldn't be frozen -- that freezes doesn't apply at all. He confuses among other things in his brief, quality and condition. He -- he seems to -- to -- the railroad seems to be using the term "bruising" as a quality factor. Bruising isn't a quality factor, bruising is a -- is a condition factor. Quality never changes -- condition changes and --
Speaker: (Inaudible)
John C. North, Jr.: No, sir.
Speaker: (Inaudible)
John C. North, Jr.: No sir. The only one that challenged it at the -- at the very beginning there on their application for writ of certiorari, they didn't -- the -- the railroad attorney obviously didn't understand their special issue of practice which is somewhat confusing. And it's -- it's calculated to -- so that the jury doesn't hold the effect of their answer but if they frame it, so they don't -- well then they usually end up as the lawyers don't know the effect either. And in -- in the -- they did say that the -- the issue on inherent vice was not a finding that the damage was not due to inherent vice. And they raised that again in their petitioner's brief and then we pointed out wherein they erred that it was. The jury did find that the damage in this case was not caused by inherent vice. And they didn't raise it in their reply brief or questioned that further.
Hugo L. Black: You --
John C. North, Jr.: That's --
Hugo L. Black: We must decide the case then on the basis that the railroad was not negligent.
John C. North, Jr.: Yes, sir. Abso -- oh, yes, sir. You -- you -- that the jury so found that the railroad was not negligent.
Hugo L. Black: You accept that?
John C. North, Jr.: That is -- that is correct.
Hugo L. Black: And you say that unless, even though the railroad is liable unless it's proven that the injury was due to an act of God, the public enemy or the fault of the shipper or the inherent nature of the goods themselves.
John C. North, Jr.: I think that that -- that is --
Hugo L. Black: If they had failed to prove that.
John C. North, Jr.: I think that that is without question and that that -- that's been established and never been questioned up to now either in the -- in the Court. That was the whole question. Whether they have that burden is the question in the case. Now, what if in this case, if the damage was caused by a bruising in transit? What if it was caused by act of third party? What if it's caused by something the -- the discoloration in this case, we don't know what caused it. Now, the decision is going to mean wherein a case of an unexplained loss, who bears the burden? Is whether we have to bear the burden or if the railroad made in this -- mistake in their record, the jury could very likely find and would find that I've seen a hundred cars where -- where one car arrives at destina -- at a -- at an intermediate point, they make a record of events, the delivering carrier, then the carrier that picks it up makes another record. Now, I've seen -- there's no manipulation of events. Now, I've seen those two records changed, are different. Now, one of them is in error. Well, always on that situation, they go back and they find out which is in accordance with the shipper's instructions and they correct that -- that one because we know one of them is wrong. They can't both be. They can't be opened and closed at the same time. They correct that one. Now, that's a fair rule as between the carriers. There's no reason to presume negligence where you got one that says they were open and one says they're closed, why presume that he was necessarily negligent? But it works manifestly, it's unfair to the shipper. You have all of these other reasons that -- the -- this rule is -- is a far, far step from -- from anything that's ever been advocated before and --
Hugo L. Black: (Inaudible) -- you make out a prima facie case against the railroad of negligence by simply showing the injury. And you say that even though the -- the railroad is negligent, nevertheless, it's liable unless these conditions caused the injury.
John C. North, Jr.: I say --
Hugo L. Black: Its more than a prima facie case. You make more than a prima facie case, do you not, under your argument?
John C. North, Jr.: I say, I don't have to. All I have to show is that it would -- delivery in good and the arrival in bad are arrival in the worsened condition.
Hugo L. Black: And that makes out a prima facie case?
John C. North, Jr.: Yes, sir.
Hugo L. Black: And the railroad cannot exempt itself by proving it was not its fault.
John C. North, Jr.: That -- not by proving freedom from negligence. Now, by saying that not its fault, you might be saying that it did not cause the damage. Now, that would imply that it found out what caused the damage and that's what they have to do. They have to tell us what caused the damage. But just to come in and say, our records are clear, they'd come in Texas and file a motion for summary judgment and say our records are clear and we can't get up on the -- and swear that their records in our opinion, they were closed at St. Louis or something, it would so speculative that we would be kicked out of court in -- on every case, on a -- on a summary judgment or in the majority of cases. It -- it would -- it would result in a gross enactment.
Hugo L. Black: In this case, under that principle of law, how could they prove nonliability?
John C. North, Jr.: How could the railroad --
Hugo L. Black: What method -- what -- what instances would release them in your judgment?
John C. North, Jr.: The railroad?
Hugo L. Black: Yes.
John C. North, Jr.: They could have shown that the -- they -- now, they're trying to -- when you read the record, well, you will see that they made every effort to but the jury didn't believe them. They -- they tried to show.
Hugo L. Black: But do you --
John C. North, Jr.: They --
Hugo L. Black: -- believe they were not negligent, that --
John C. North, Jr.: That's correct. They couldn't find it. They -- well, they -- they found affirmatively. I don't question that.
Hugo L. Black: Yes.
John C. North, Jr.: They found that they were not negligent. How they did? I don't know. You don't have a fund record in the case. They're supposed to keep the funds on. You don't have a final record one and yet everybody admits that they ought to be on. The absence of records, who pays for it? The shipper, not the railroad and that's in this very case. We do not have a final record here, yet the man who was testifying about it was the one that made up and says that the funds ought to be owned and he was on the -- the committee, tariff committee and everything and then they asked him, "Why didn't they have a record?" He says, "We didn't like a rule that required us to keep one." They were very smart about that but they didn't keep one whether it's required or not.
William J. Brennan, Jr.: Well, may I ask you (Inaudible) Mr. Justice Black's question, as I understand your position is, you make the case for liability, merely on proof of loading in good shape, arriving in poor shape. The railroad then has to prove two things. It has to prove absence of negligence but that doesn't let it out unless it also proves what? What's the other thing it has to prove?
John C. North, Jr.: It -- it has to prove your reversal. It would be its -- it matters not how they handle the car until they first prove that the cause of the damage was due to one of the accepted causes. Those accepted causes are act of God --
William J. Brennan, Jr.: Though they made no effort to prove act of God here.
John C. North, Jr.: No, no effort --
William J. Brennan, Jr.: Alright.
John C. North, Jr.: -- to prove act of God.
William J. Brennan, Jr.: What's the other one?
John C. North, Jr.: They did try to prove inherent vice.
William J. Brennan, Jr.: And they --
John C. North, Jr.: They tried to prove that the cause of the dark discoloration at destination was due to dark -- was due to immaturity. And the evidence was completely against them on it and the jury found it was not.
William J. Brennan, Jr.: And then after proving, they -- they have first approved they come, as I understand you, within one of the exceptions.
John C. North, Jr.: Yes sir.
William J. Brennan, Jr.: And then after establishing, they come in within one of the exceptions since they also have to prove no negligence, is that it?
John C. North, Jr.: Yes, sir. That -- that's my contention, actually if you wanted to get into a technical theory of the thing, when they show for example, that the sole cause is a (Inaudible) and so forth. They -- they doesn't have a minute to show that a part of it unless they show what part. But if you get into the point there, if they show that the sole cause was due to an inherent vice, why, then you might say that they, in effect, have excluded the possibility of negligence on their part. But --
Tom C. Clark: Why did they (Voice Overlap)
John C. North, Jr.: -- to keep it simple, I -- yes, sir.
Tom C. Clark: Why did they permit that with the jury in the --
John C. North, Jr.: Sir?
Tom C. Clark: Why did they permit the special agent to show negligence to the jury?
John C. North, Jr.: Well, they -- it should've been submitted with a tag as we say. It should've been submitted the -- they submitted the inherent vice in fault of shipper and then I say the Court should have submitted, if you have answered the preceding questions, no, that it was not due to those. You need not answer the following issue otherwise, your answer is the same and then they could have gone into their negligence issues.
Tom C. Clark: You can't decide on the theory that you present here, that is that they had to prove the exceptions?
John C. North, Jr.: I think that that would be a safe assumption except the judges have had no rule to go by. They don't know what theory they're trying to know.
Tom C. Clark: They filed a motion for judgment on the verdict?
John C. North, Jr.: Yes, sir.
Tom C. Clark: On their negligence part?
John C. North, Jr.: Yes, sir. (Inaudible) Thank you.
Earl Warren: Mr. Arnold.
Thurman Arnold: I think I should be very brief. Mr. Chief Justice, may it please the Court. The whole thing, if the case can be summed down -- down in a couple of sentences. If fruit arrived in a spoiled condition, the car -- the carrier must show, first, that it was negligent. That it complied with all of the required services. Third -- second, they faithfully complied with the shipper's instructions. And having done that, I think the case is -- are conclusive on our way. The Secretary of Agriculture case does not hold, as counsel seems to think. That was the case where regulations of the Secretary allowing a certain percentage of breakage in eggs exempted the carrier over a certain percentage of breakings in eggs was overturned by this Court on the ground that it was an attempt to evade the common law liability which the Secretary of Agriculture did not have the right to do under the Carmack Amendment. And then in my final observation is that there is no separate exception in the bill of lading for natural deterioration, as counsel seems to think. You found the phrase natural deterioration in the protective services regulations and those regulations exempt the carriers for one natural deterioration. Now, finally, I call your attention to -- the Court, to the footnote on page 5 of our reply brief which then -- which starts out as follows. Both the Texas Supreme Court and the Texas Court of Civil Appeals viewed the case as whether the claims for spoilage and decay as to which the only issue was the proper legal rule to be applied. I call the Court's attention to that because counsel seemed that the points in his argument to be indicating there were some questions of facts.
Byron R. White: Judge, do you -- do you think that the protective service regulation states the applicable rule of law to be followed in cases like this?
Thurman Arnold: Yes, Your Honor.
Byron R. White: And that the state courts --
Thurman Arnold: (Voice Overlap) --
Byron R. White: -- the state courts have to follow that?
Thurman Arnold: Well, we -- we have three arguments. First, the Carmack Amendment applied to common law and this is a common law. Second, the bill of lading applies to common law rule and this is a common law. And third, the protective services also apply the same rule and the potential issues therefore is -- is the common law requirements complied with?
Byron R. White: Was your position -- does the state -- if the state courts apply a rule different in the protective service regulation that the case is wrong?
Thurman Arnold: Oh, no, I've -- I -- we assert that there is no case against us. The Secretary of Agriculture case believes that's not against -- there are no state courts against us.
Byron R. White: Oh, I take that, well, this one is.
Thurman Arnold: Oh, yes. I mean (Voice Overlap) to repeat.
Byron R. White: I mean, this one -- this one, I take it, refuses to follow the -- the protective service regulation.
Thurman Arnold: Yes sir.
Byron R. White: And could the case be reversed solely on that basis? That -- that it refused to follow the -- the regulation?
Thurman Arnold: Well, I suppose it could be. I suppose it could be -- I think it shouldn't be reversed on all three. I was -- because the fundamental issue is what is a common law?
Arthur J. Goldberg: (Inaudible)
Thurman Arnold: No, the instruction --
Arthur J. Goldberg: (Inaudible)
Thurman Arnold: No, no. The jury was instruct to find the railroad if they found -- the jury was instructed to find for the railroad if they found there was no negligence. Now, there is some inconsistent, apparently inconsistent findings here. If you turn to the record on page 180, the bottom, Special Issue Number 6, do you find from a preponderance of the evidence that the worsened condition if any of the honeydew melons in the car at the time of the delivery of Boston was solely due to an inherent vice, as that term was here in the finding existing, it's a time the melons were received by the carrier at the Rio Grande. Now, there are several findings like that. And the jury answered no to all of them. And counsel was quite honest in his admission that those are not affirmative findings at all. Under the Texas rule which we set out on page -- footnote -- page 5 and 6 of our brief, we give the cases supporting the admission of both counsels, that those are not affirmative findings. So there is no instances and findings in this case under the Texas rule.
Earl Warren: Very well. We'll adjourn.