Tewes v. North German Lloyd Steamship Co.

[EDITORS' NOTE: THIS PAGE CONTAINS HEADNOTES. HEADNOTES ARE NOT AN OFFICIAL PRODUCT OF THE COURT, THEREFORE THEY ARE NOT DISPLAYED.] For the purposes of this appeal we must assume that plaintiff's trunk was properly delivered to the defendant. The verdict of the jury settled that question in plaintiff's favor, and the unanimous affirmance of the Appellate Division precludes us from examining the record to ascertain whether the verdict is supported by evidence. There are exceptions to the charge, however, the principal one of which relates to the provision in the passage ticket purchased by the plaintiff, purporting to limit defendant's liability for loss of baggage. After the learned trial court had charged the jury very briefly as to the delivery of the trunk, and as to the obligations which the defendant assumed if the fact of proper delivery were deemed to be established, the defendant's counsel requested the court to charge "that in no event can the defendant be liable for an amount exceeding $50." In response to this request the court charged: "If this clause in this passage contract that the liability must be limited to $50 to each person * * * if that clause was not called to the attention of the plaintiffs, and they knew nothing about it, and by the exercise of reasonable attention would not have known it, in that case it will go for nothing, and the amount will be fixed at the full value which you find these things were worth." This charge was clearly in conflict with a number of well-settled cases which hold that there is a just and logical distinction between an ordinary railroad ticket, which may often be regarded as a mere token, and a passage ticket for an ocean voyage, the sale and purchase of which is usually conducted with such caution and deliberation as to invest the transaction with the elements of a contract, the terms of which the purchaser has ample opportunity to ascertain and understand. (Steers v. Liverpool, N.Y. P.S.S. Co., 57 N.Y. 1; Belger v. Dinsmore, 51 id. 166; Wheeler v. Oceanic Steam Nav. Co., 72 Hun, 5; affirmed without opinion, 149 N.Y. 576.)

The error in the charge referred to was later discovered by the learned trial judge upon the hearing and consideration of a motion for a new trial, when he handed down an opinion which recognized the controlling force of the cases above cited, but denied the motion on the ground that the passage ticket or contract contained no provision absolving the defendant from liability for its own negligence, and that the finding of the jury necessarily established the defendant's negligence in failing to put the trunk aboard the steamer on which the plaintiff sailed pursuant to his contract. To support this conclusion a number of cases were cited which, we think, have no application to the case at bar, since they all relate to the common-law liability of common carriers, unaffected by special contract stipulations designed to limit the carrier's liability.

There is, however, a case (Westcott v. Fargo, 61 N.Y. 542) which seems to support the conclusion that a stipulation limiting the amount for which the carrier shall be liable does not cover a loss of goods occasioned by his negligence. That action was brought to recover the value of a bale of furs, which had been shipped through the defendant's express company and lost by its negligence. The receipt given to evidence the shipment contained the following limitation: "Nor shall this company be liable for any loss or damage of any box, package or thing for over fifty dollars unless the true and just value thereof is herein stated." The value of the furs was not stated in the receipt and the defendant had no means of knowing the value or nature of the contents of the package. The plaintiff's agent had delivered the receipt containing the limitation to the defendant's agent, who signed and redelivered it to the former. In deciding that under such circumstances the plaintiff was entitled to recover, DWIGHT, C., writing for the Commission of Appeals, said: "The true question in this cause concerns the effect upon the parties of the stipulation that the defendant should ``not be liable for any loss or damage of any box, package or thing for over fifty dollars, unless the just and true value is herein stated.' It must be conceded that this stipulation, under the circumstances of this case, is a part of the contract, and is binding on the plaintiff. This was decided in Belger v. Dinsmore (51 N.Y. 166) and in Steers v.Liverpool, N.Y. P. Steamship Co. (57 id. 1). * * * The result of these cases is, that it is lawful for a carrier to make such a contract as was entered into in the present case, and that he may, by clear and distinct expressions, relieve himself from losses occasioned by his own negligence." After thus clearly stating the rule, which has ever since been consistently followed, the learned commissioner concluded that the words of limitation in the receipt referred to were not so unambiguous as to exempt the carrier from liability for its own negligence, and he was of opinion that the case was controlled by the decision inMagnin v. Dinsmore (56 N.Y. 168), where it was held that although a common carrier may stipulate for his exemption from liability for losses through his negligence, his contract will not be construed to contain such an exemption unless it is so expressly agreed.

The decision in Magnin v. Dinsmore (supra) was handed down in March, 1874. The case of Westcott v. Fargo (supra) was decided by the Commission of Appeals in January, 1875. In the following May the Magnin case came to this court on a second appeal, where it was held that a stipulation limiting the amount for which the carrier shall be liable was binding upon the shipper who had notice of the limitation and whose merchandise had been lost by the ordinary negligence of the carrier. In that case the merchandise consigned consisted of watches and watch keys. The shipper did not disclose their real value. The receipt given by the carrier provided that "if the value of the property above described is not stated by the shipper, the holder hereof will not demand of the Adams Express Company a sum exceeding fifty dollars for the loss or detention of or damage to the property aforesaid."

In reversing a judgment for the full value of the goods lost, this court said: "As has been stated, in the absence of agreement for a limited liability, it is the duty of the carrier to make all needful inquiry as to value. But when the shipper agrees with the carrier for a limited liability, he thereby expresses to the latter his estimate of the risk to be run and of the care needed and holds out the package to him as an ordinary article which he would have no objection to take as of course. The carrier is thereby put off his guard. The shipper might refuse to agree to a limited liability and demand generally carriage upon the common-law liability of the carrier; and then they deal at arms length and that would arouse the attention of the carrier; or at least would put upon him the duty of inquiry. But accepting carriage upon the terms of a limited liability, the shipper indicates his judgment of the degree of the risk and of needed care; and his silence as to real value is the same as an assertion of mean value, thus keeping the carrier from his adequate reward, and, what is worse, misleading him as to the degree of care and security which he should provide."

The foregoing extract from the opinion in the Magnin case on the second appeal (62 N.Y. 35) makes it clear that the WestcottCase (61 N.Y. 542) was distinctly overruled, and it is to be observed that the latter case has never been followed in any of the decisions of the court upon the subject rendered since then. When the Magnin case came to this court a third time (70 N.Y. 410) the rule laid down on the second appeal was distinctly reiterated, and it has been followed by this court in several subsequent cases. In Zimmer v. N.Y.C. H.R.R.R. Co. (137 N.Y. 460) the plaintiff sued to recover the value of a mare killed while in transit on the defendant's road. The contract recited that in consideration of reduced rates it was agreed that in case of loss the value of the mare should be held not to exceed $100. The mare was killed through the negligence of the carrier. Judge GRAY there said: "In this case the contract did not exempt the company from liability for the negligence which, we must assume, occasioned the loss of the horse. That occurred through none of the causes particularly specified in the contract, and nothing precluded the plaintiff from recovering upon the negligence proven; but the amount of his recovery was limited by the contract to the sum of $100."

The case last cited was followed in Wheeler v. Oceanic SteamNav. Co. (72 Hun, 5; affd., 149 N.Y. 576), where a passenger upon a transatlantic steamer, holding a passage ticket limiting the liability of the carrier to ten pounds sterling for the loss of goods, the real value of which is not declared, delivered to the carrier with her other baggage a box of valuable portraits, which were lost through the latter's negligence. There it was held that there is no valid distinction in principle between a shipment of goods and a transportation of passengers with the carriage of baggage as an incident, when the contract is one which limits the liability of the carrier, unless a special declaration of value is made by the shipper or passenger. The rule adopted by this court has been sustained by the Federal Supreme Court in Hart v. Penn. R.R. Co. (112 U.S. 331), where the contract provided for the transportation of horses which were stated to be of the value of $200, and the recovery was limited to that amount, although the loss was much greater and was occasioned by the negligence of the carrier.

It has been suggested that there is, or should be, a distinction between a case where the stipulation is designed merely to limit the carrier's liability, as in the case of a passenger whose baggage is carried free of charge, and the case of a stipulation framed for the double purpose of enabling a carrier of goods for hire to obtain proper compensation, as well as to limit his liability if no declaration of value is made by the shipper. At first glance this suggestion has a plausible appearance, but it does not seem to stand the test of analysis. It is not apparent why a carrier should be subjected to a greater liability in respect of a service which he performs free of charge, or simply as an incident to the carriage of persons, than is imposed upon him in the transportation of merchandise pursuant to a contract in which that is the precise duty which he undertakes for a specified hire. In the carriage of baggage the passenger usually exercises some degree of supervision or direction which may somewhat increase or diminish the carrier's actual responsibility; but in the shipment of goods the carrier takes complete possession and control, so that, if there could be any logical differentiation of the carrier's liability in the two cases, it could very plausibly be argued that it ought to be relaxed rather than augmented in the carriage of a passenger's baggage. But, whatever might be said upon that proposition, it is enough to suggest that it is not an open question in this state, for this court, as we have seen, has held that no such distinction exists.

The judgment herein should be reversed and a new trial granted, with costs to abide the event, unless the plaintiff shall stipulate to reduce his recovery to the sum of fifty dollars, with interest from the date of his loss, and costs, in which event the judgment herein as reduced should be affirmed, without costs of this appeal to either party.