Southern Railway Co. v. Porter , 76 Ga. App. 1 ( 1947 )

A valuation clause in a bill of lading limiting the amount of the carrier's liability for loss or damage to goods shipped in an amount not exceeding one dollar per hundred pounds on used furniture, and the shipper having no opportunity to choose between a common-law rate and a lower rate with limited liability, is unreasonable and contrary to public policy, even if upon a valid consideration, and the shipper is not estopped to claim damages according to the general rule for loss or damage to cargo shipped in interstate commerce.

DECIDED SEPTEMBER 19, 1947. REHEARING DENIED OCTOBER 29, 1947. M. B. Porter, doing business as Bass Furniture Company, hereinafter designated as plaintiff, filed suit against Southern Railway Company, hereinafter designated as defendant, in the Civil Court of Fulton County, for damage to certain described furniture shipped from New York to Atlanta. The case was tried before the judge, upon an agreed stipulation of facts without the intervention of a jury. Judgment was rendered in favor of the plaintiff in the amount of $2,249.45 plus $ ____ cost. The defendant filed a motion for a new trial which was overruled. Exceptions are taken to the judgment of the court overruling the motion for a new trial.

The material facts agreed to and the contentions of the parties as set out in the opinion of the trial court fully present the facts and issues raised, and as stated in the opinion were as follows:

"The full actual damage amounted to $2,249.45 and resulted from negligence of one of the carriers handling the shipment in interstate commerce under a through bill of lading. The bill of lading contained an agreed or released value of $1.00 per hundred pounds. The damaged pieces of furniture weighed 5,750 pounds. The freight charged amounted to $1.48 per hundred pounds. The classification tariff under which the furniture was shipped was issued pursuant to Released Rates Order of the Interstate Commerce Commission No. 1078. This order provided for the released valuation of $1.00 per hundred pounds applicable to used mixed furniture and further provided: ``It is further ordered, That changes may be made in any rating, carload minimum weight or packing specification established under the authority of this order, but no change in commodity description or in the released valuation upon which the ratings are dependent may be made without specific authority of the Commission.'

"The classification tariff itself provided for the released valuation of $1.00 per hundred pounds and further provided: ``If shipper declines to declare or release value. Not taken.' This tariff classification further provided for the specific packing requirements applicable to used mixed furniture. Released Order 1078 was issued pursuant to application of the railroads handling the shipment in question and other railroads, which stated in part: ``In consideration of being able to ship as described, shippers are willing to release rail carriers of all liability for damage during transportation. As that is not possible under the Transportation Act, shippers are willing to release valuation to the lowest possible amount, and suggest $1.00 per hundred pounds.'

"There are certain other classifications covering buffets, china cabinets, beds, tables and each of the other items included in the shipment of used mixed furniture in question. These other classifications existed prior to Released Rates Order 1078 and provided different packing requirements for the named articles of furniture. The freight rates applicable to these other articles were lower than the rate under which the furniture was shipped and the packing requirements more stringent. The total freight charge on the carload of furniture in question was $266.40, and the charge for the same amount of furniture under the other classifications would have been $161.20. It cost the shipper $125 to pack the furniture as shipped and would have cost $500 to have packed the same furniture in accordance with the other classifications.

"Plaintiff contended that he was entitled to recover full actual damage and that the released valuation agreement is unlawful and void for the following reasons: 1. It is contrary to the public policy of the United States because it in effect attempts to limit the carrier's liability for negligence by a contract which leaves practically no recovery for damages resulting from such negligence. 2. The shipper had no chance to intelligently contract to ship without agreeing to the limited valuation in view of the railroads' tariff and the order of the Interstate Commerce Commission. 3. The released valuation contract was not made in accordance with provisions of Section 20 (11) of the Interstate Commerce Act in that the order of the Interstate Commerce Commission did not provide for rates dependent upon value, and the tariff did not provide rates varying with value.

"The defendant contended that the released valuation was based on a sufficient consideration in that the shipper saved money by virtue of the more liberal packing requirements and that any lawful consideration is sufficient to support the agreement." 1. Every question of the validity of stipulations in bills of lading covering interstate shipments is a Federal question, and the State court must follow the applicable Federal statutes and decisions, notwithstanding that the Federal courts may hold contrary to what is recognized in the jurisprudence of the State. Both the plaintiff and the defendant recognize this principle. See Adams Express Company v. Croninger, 226 U.S. 491 (33 Sup. Ct. 148, 57 L. ed. 314); Cincinnati N. O. T. P. Railroad v. Rankin, 241 U.S. 319 (36 Sup. Ct. 555, 60 L. ed. 1022).

2. The pertinent inquiries are: first, whether or not the record discloses evidence that there was on file with the Interstate Commerce Commission at the time of the shipment in question, tariffs and schedules establishing more than one rate for furniture, old, used and mixed; second, whether or not the released valuation clauses of Release Order of the Interstate Commerce Commission No. 1078 are agreeable to Title 49, U.S.C.A., Section 20 (11).

Counsel for the defendant in their brief contend, "It is true that the shipper could not ship a carload of used furniture not boxed or crated but merely braced in the car without first releasing the value in accordance with the provisions of the new classification, but unquestionably such furniture could have been shipped without releasing the value in the same manner and under the same conditions as furniture had been shipped from the time railroads first began to ship furniture." It was admitted by both parties that other classifications existed prior to release order No. 1078 and provided different packing requirements for the named articles of furniture. The freight rates applicable were lower than the rate under which the furniture was shipped and the packing requirements more stringent.

We cannot agree with the defendant that the plaintiff had a choice between a common-law rate and a limited liability rate. "In considering whether a shipper had an opportunity to choose between the common-law rate and the limited liability rate, it is held, the question is not what the contract recites in respect to the matter, but whether he had in fact a chance to choose between his common-law rate and a lower rate with limited liability." 13 C. J. S., carriers, p. 182, § 94. Certainly, by no stretch of the imagination, can it be said that the plaintiff had an opportunity to choose between a common-law rate and a lower rate withlimited liability. It was admitted by the defendant that the rate for the same amount of furniture under other classifications would have been $161.20, whereas, the total freight charges on the carload in question was $266.40. The fact that packing charges under the released valuation rate were less than packing charges under other classification, in our opinion, cannot be urged in support of the theory of a lower rate with limited liability, for the reason that the overall cost to the shipper under the released valuation rate would have been less. Rates and packing costs are separate and distinct factors.

3. We now deal with the question as to whether or not the released valuation clauses of Release Order No. 1078 of the Interstate Commerce Commission are agreeable to Title 49 U.S.C.A., § 20(11), which provides in part as follows: "and any such common carrier, railroad, or transportation company so receiving property for transportation from a point in one State, Territory, or the District of Columbia to a point in another State or Territory, or from a point in a State or Territory, to a point in the District of Columbia, or from any point in the United States to a point in an adjacent foreign country, or for transportation wholly within a Territory . . shall be liable to the lawful holder of said receipt, or bill of lading or to any party entitled to recover thereon, whether such receipt or bill of lading has been issued or not, for the full actual loss, damage, or injury to such property caused by it or by any such common carrier, railroad, or transportation company to which such property may be delivered or over whose line or lines such property may pass within the United States or within an adjacent foreign country when transported on a through bill of lading, notwithstanding any limitation of liability or limitation of the amount of recovery or representation or agreement as to value in any such receipt or bill of lading, or in any contract, rule, regulation, or in any tariff filed with the Interstate Commerce Commission; and any such limitation, without respect to the manner or form in which it is sought to be made is hereby declared to be unlawful and void; . . Provided, however, that the provisions hereof respecting liability for full actual loss, damage, or injury, notwithstanding any limitation of liability or recovery or representation or agreement or release as to value, and declaring any such limitation to be unlawful and void, shall not apply first . . to property, except ordinary livestock, received for transportation concerning which the carrier shall have been or shall be expressly authorized or required by order of the Interstate Commerce Commission to establish and maintain rates dependent upon the value declared in writing by the shipper or agreed upon in writing as the released value of the property, in which case such declaration or agreement shall have no other effect than to limit liability and recovery to an amount not exceeding the value so declared or released, and shall not, so far as relates to values, be held to be a violation of section 10 of this chapter; and any tariff schedule which may be filed with the commission pursuant to such order shall contain specific reference thereto and may establish rates varying with the value so declared or agreed upon; and the commission is hereby empowered to make such order in cases where rates dependent upon and varying with declared or agreed values would, in its opinion, be just and reasonable under the circumstances and conditions surrounding the transportation. Provided further, 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 the existing law."

The classification tariff itself provides for the release valuation of $1 per hundred pounds and further provides; "If shipper declines to declare or release value. Not taken." By the wording used in the classification tariff, no discretion was left with the shipper, but to accept the valuation of $1 per hundred pounds or to seek other modes of transportation, regardless of the value of articles shipped.

Counsel for the defendant contend that the cases of Boston Maine Railroad v. Piper, 246 U.S. 439 (38 Sup. Ct. 354,62 L.ed. 820); Ansaldo San Giorgio I. v. Reinstrom Bros. Co., 294 U.S. 494 (55 Sup. Ct. 483, 79 L. ed. 1016), have no application to the present case. To this contention we cannot agree. In the two cases above cited it was held by the Supreme Court that a stipulation in a bill of lading limiting the amount of the carriers' liability for loss or damage due to the carriers' negligence is not offensive to public policy, nevertheless a valuation clause which is unreasonable and contrary to public policy, cannot, even if upon a valid consideration, estop the shipper to claim damages measured according to the general rule for loss of or injury to goods. It is interesting to note that in these cases the Supreme Court speaks of a lower rate as against a higher rate for service with a release clause valuation. In the case of Pierce Company v. Wells Fargo Company, 236 U.S. 278 (35 Sup. Ct. 351, 59 L. ed. 576), which counsel cite as a case "exactly in point," the shipper was given the privilege of paying an increased rate, and having the liability extended to the full value of the goods.

In our opinion, the provision limiting liability to $1 per hundred pounds in the bill of lading in the present case, was contrary to the statute law as set out in 49 U.S.C.A., § 20(11), in that it is unreasonable and contrary to public policy although supported by a valuable consideration. See, Adams Express Company v. Croninger, supra.

We have carefully considered the briefs of able counsel for both the plaintiff and the defendant, and we have no doubt but that the issues presented were decided in accordance with the decisions of the Federal courts.

4. The contention of the defendant that the courts of this State are without jurisdiction to decide the issues presented, is without merit.

Judgment affirmed. MacIntyre, P. J. and Gardner, J., concur.