Court Opinion

ID: 8780107
Source: CourtListenerOpinion
Date Created: 2022-11-26 13:15:14.101252+00
Date Added: 2024-06-11T17:02:47.468981
License: Public Domain

NOYFS, Circuit Judge (dissenting).
In upholding the right to contract many courts have gone so far as to rule that a common carrier may even stipulate for exemption from responsibility for its own negligence. But the Supreme Court of the United States has never accepted this view. In a series of decisions beginning with the great case of Railroad Co. v. Lockwood, 17 Wall. 357, 21 L. Ed. 627, it has consistently held that any contract which excuses a common carrier from negligence in the performance of its duty is contrary to public policy and void.
The principles of public policy involved are broad. The law as administered by the federal courts will not permit a common carrier to abandon its obligations to the public. Still it has been contended that, while these considerations would forbid a carrier from altogether relieving itself from liability, they should not prevent it from exempting itself if it offer the shipper the alternative of paying a greater rate and obtaining full liability. But the Supreme Court of the United States in Calderon v. Atlas Steamship Co., 170 U. S. 272, 282, 18 Sup. Ct. 588, 592, 42 L. Ed. 1033, after saying that contracts for exemption from all responsibility have been repeatedly held by it invalid as attempts to put off the essential duties resting upon carriers, said:
“The difficulty is not removed by the fact that the carrier may render himself liable for these goods, if ‘bills of lading are signed therefor with the value therein expressed, and a special agreement is made.’ ”
See, also, The New England (D. C.) 110 Fed. 415, 419.
. So it has been contended that, while a carrier may not stipulate for Its absolute release from liability for negligence, it may limit its liability *566to a certain sum. in case of loss. But the weight of authority in this country is undoubtedly to the effect that the same principles of public policy which condemn total exemptions condemn such partial exemptions, and that such limitations, as distinguished from agreed valuations, are invalid. See Hutchinson on Carriers, § 250.
It' is upon the theory of an agreed valuation that the majority of the court decide this case. It is said that the parties agreed that the valuation of property obviously worth about $15,000 was $50, and consequently that no more was recoverable, although the property was destroyed by the defendant’s negligence.
Unquestionably the law makes a distinction between agreed valuations and mere limitations, and sustains the former. When shipper and carrier make a fair valuation of property offered for transportation with a rate of freight based thereon, a contract releasing the carrier from liability beyond the agreed amount will be sustained. Such agreements permit an adjustment of rate to liability and protect the carrier from fanciful añd extravagant valuations. In the case of articles of doubtful or uncertain value, every presumption should be in favor of the valuation agreed upon. But the principle should not, in my opinion, be extended further. It is only because such agreements present a meeting of the minds of the parties as to the fair value of the. property, as distinguished from an arbitrary limitation of liability, that they escape condemnation by those considerations of public policy which we have noticed. I cannot concur in holding that a fictitious valuation, known by both parties to have no relation whatever to the real value of the property, is within the governing principle.' In my opinion a valuation of $50 upon $15,000 worth of property — of known value to both carrier and shipper — is not a valuation at all, but is an arbitrary and unreasonable limitation in the guise of a valuation. If $50 can be sustained as a valuation of this property, any <sum may be named as the value of any property. While public policy declares that agreements which relieve a carrier from the effects of its negligence “are contrary to the fundamental principles upon which the law of carriers was established,” nevertheless such exemption may be obtained by going through a form of words — by “valuing” the most valuable article at a penny!
Moreover, the opinion of the majority not only says that the “valuation” in this case escapes the condemnation of principles of public policy, but goes further, and states that it would be in the highest degree violative of those principles to permit a shipper to recover the full value of his property in the face of such a “valuation.” But precisely the same thing could be said in the case of a shipper who enters into an agreement with a carrier, in consideration of a reduced rate of freight, to release the carrier from all liability for negligence. It has never been held inimical to public policy to permit a shipper to repudiate such an agreement although deliberately entered into for value. On the contrary, as we have seen, public policy requires such repudiation. The controlling consideration is not one of private right, but of public interest.
The decision of the majority is based upon the opinion of the Supreme Court in Hart v. Pennsylvania Railroad Co., 112 U. S. 331, 5-*567Sup. Ct. 151, 28 L. Ed. 717, the gist of which, as I view it, is contained in the following paragraph:
“The distinct ground of our decision in the case at bar is that where a contract of the kind signed by the shipper is fairly made, agreeing on the valuation of the property carried, with the rate of freight bused on the condition that the carrier assumes liability only to the extent of the agreed valuation, even in case of loss or damage by negligence of the carrier, the contract will be upheld as a proper and lawful method 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.”
As I construe this language, it states the rule already noted: That a fair valuation — a valuation “fairly made” — between shipper and carrier will be sustained. While the language of some parts of the opinion is broad, I find nothing to indicate an intention upon the part of the Supreme Court to depart from those principles governing carriers which it had previously consistently maintained. There was not in the Hart Case a fictitious “valuation” — an arbitrary sum having no relation whatever to the real value of the property. The valuation in the receipt of $200 was undoubtedly a fair average valuation of a horse, and race horses which, probably more than any other class of property, are susceptible of “extravagant and fanciful valuations,” were shipped under it. The Supreme Court apparently held the valuation bona fide and sustained it for that reason. If the amount stated in the present receipt had been a fair average valuation of an automobile — say $1,000 — and these machines, although of greater value, had been shipped under it, there would be far more ground for contending that the decision in the Hart Case is applicable here. In view of the facts, the decision in that case seems not inconsistent with the views already expressed.1
Eor these reasons I am constrained to dissent in this case. I < do so with diffidence and reluctance. The majority opinion is able, and I appreciate that it is in accordance with the trend of the decisions in this court. But, if the principles qf public policy which condemn agreements whereby carriers seek to put off their obligations to the public and exempt themselves from the consequences of their negligence means anything of substance, I strongly feel that they should be given an application broad enough to accomplish something. It would be better, as it seems to me, to hold that carrier and shipper may enter into such agreements as they see fit than to deny the right to make a direct contract and permit the same result to be accomplished by indirection. It would be better to deny the existence of considerations of public policy than to insist that they are sound and while still insisting expressly approve an obvious and deliberate evasion of them.
In my opinion there was error in the judgment of the Circuit Court.

 The decision of this court in Hohl v. Norddeutscher Lloyd, 175 Fed. 541, 99 C. C. A. 166, is in my opinion distinguishable from the present case, in that there the value of the property was concealed. The shipment was a closed package containing hosiery. In the present case the value of the automobiles was well known.