Fort Worth and Denver Railway Co. v. United States

Decision Date28 March 1957
Docket NumberNo. 16304.,16304.
PartiesFORT WORTH AND DENVER RAILWAY COMPANY, Appellant, v. UNITED STATES of America, Appellee.
CourtU.S. Court of Appeals — Fifth Circuit

Thomas D. Magoffin, Barwise, Magoffin & Carrigan, Fort Worth, Tex., for appellant.

Clayton Bray, Asst. U. S. Atty., Heard L. Floore, U. S. Atty., Fort Worth, Tex., for appellee.

Before HUTCHESON, Chief Judge, and CAMERON and JONES, Circuit Judges.

JONES, Circuit Judge.

The Commodity Credit Corporation, an agency of the United States, made shipments under Government bills of lading of cottonseed products to various consignees in Texas over the appellant railway company. These shipments were made under the Emergency Drought Relief Program of 1953 pursuant to 12 U.S.C.A. § 1148a-2(d). The commodities shipped were to be sold as livestock feed to farmers and ranchers at prices which were about one-half of the market value at the various points of delivery. Freight rates on such shipments were, by a Joint Quotation of the rail lines serving the drought area, subject to a reduction of fifty per cent. of the applicable tariff rates. Shortages occurred in nine shipments handled by the appellant. These shortages were of goods having a fair market value at destination of $1,101.31, and a sales price at destination of $597.82. Of the nine shipments three were interstate and six were of shipments having both origin and destination in Texas. The appellant concedes liability for the amount of the sales price at destination. The United States claimed it was entitled to be paid the fair market value at destination of the shortages and brought suit in the District Court to vindicate its position. On stipulated facts the Court entered judgment for the United States. United States v. Fort Worth & Denver Railway Co., D.C.N.D.Tex.1956, 141 F. Supp. 381. The railway has appealed.

The Congress has expressly provided that property may be transported free or at reduced rates for the United States. 49 U.S.C.A. § 22. This enactment is the authority for the quoted rate applied to the shipments here considered. The measure of damages for loss of or damage to goods in interstate transportation is declared by the Cummins Amendment to be the full value, with a proviso that where the carrier has been authorized to establish a rate dependent upon value declared or agreed upon as the released value, the declaration shall be given the effect of limiting liability and recovery to an amount not exceeding the value so declared or released. 49 U.S.C.A. § 20 (11).

The appellant insists that the damages as to the shortages in the six intrastate shipments should have been measured by the law of Texas rather than under the Federal statute applicable to interstate shipments. The Government thinks the appellant is procluded from distinguishing between rules applicable to interstate and intrastate shipments, respectively, because the pretrial order stated the only issue as being whether the measure of damages is the fair market value at destination or the sales price of the commodities which were short. We do not believe that the record before us prevents our consideration of both rules, the Texas rule applicable to intrastate shipments, and the Federal law applicable to interstate shipments. However, we reach the conclusion that the Federal rule governing interstate shipments is more liberal to carriers than is the law of Texas as to intrastate shipments.

The appellant says that the common law rule permits the limiting of liability for loss or damage by agreement made for the purpose of affording the shipper the lower of two rates proportioned to the amount of risk. 8 Tex.Jur. 317, Carriers § 212; Adams Express Co. v. Croninger, 226 U.S. 491, 33 S.Ct. 148, 57 L.Ed. 314, 44 L.R.A.,N.S., 257. Such may be, and we think is, the common law rule followed by many jurisdictions but we think it is not the common law rule prevailing in Texas. The appellant states that the common law rule to be followed in Texas as to intrastate shipments permits the limiting of liability and cites International & G. N. Ry. Co. v. Rathblath, Tex.Civ.App., 167 S.W. 751. There the shipment out of which the litigation arose was from New Orleans, Louisiana, to Calvert, Texas, a shipment interstate, and the Carmack Amendment, 49 U.S. C.A. § 20(11) was applied. The opinion makes reference to Southern Pacific Railway Co. v. Maddox, 75 Tex. 300, 12 S.W. 815, and cites it for the proposition that a common carrier is liable under the common law rule upon the basis of the value of the property at the place of destination, even though the contract in consideration of a reduced rate of transportation limited the carrier's liability. The Maddox case also involved an interstate shipment, but one made prior to the Cummins Amendment, so we think it declaratory of the common law rule prevailing in Texas.

Whether or not the common law rule as declared by the Texas Courts permitted the placing of contractual limits on liability fixing a standard of less than full value at destination, such rule must adapt itself to the legislative will. By statute it is provided:

"Railroad companies and other common carriers of goods, wares and merchandise, for hire, within this State, on land, or in boats or vessels on the waters entirely within this State, shall not limit or restrict their liability as it exists at common law, by any general or special notice, or by inserting exceptions in the bill of lading or memorandum given upon the receipt of the goods for transportation, or in any other manner whatever. No special agreement made in contravention of this Article shall be valid; provided, however, that a requirement of notice or claim, consistent with the provisions of Article 5546 of the Revised Civil Statutes of Texas, 1925, as a condition precedent to the enforcement of any claim for loss, damage and delay, or either or any of them, whether inserted in a bill of lading or other contract or arrangement for carriage, or otherwise provided, shall be valid and is not hereby prohibited. Act Dec. 4, 1863, p. 7; G.L. vol. 5, p. 661; Acts 1941, 47th Leg. p. 805, ch. 500, § 1." Vernon\'s
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  • U.S. v. Crown Equipment Corp.
    • United States
    • U.S. Court of Appeals — Seventh Circuit
    • 21 Agosto 1996
    ...in part. Relying on United States v. New York, N.H. & H.R. Company, 211 F.2d 404 (2d Cir.1954) and Fort Worth & Denver Railway Company v. United States, 242 F.2d 702 (5th Cir.1957), the court ruled, as a matter of law, that the measure of damages for all the butter destroyed was the fair ma......
  • Great Atlantic & Pacific Tea Co. v. Atchison, T. & SF Ry. Co.
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    ...liability at common law, thereby leaving the measure of damages the same as it was at common law." In Fort Worth and Denver Railway Co. v. United States, 5 Cir., 242 F.2d 702, 705 (1957), the court said, "The amount of damages provided by § 20(11) The Carmack Amendment is the full actual lo......
  • Howe v. Allied Van Lines, Inc.
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    • 9 Mayo 1980
    ...its decision rested upon a section 22 exemption or upon substantial compliance with section 20(11). In Fort Worth & Denver R.R. Co. v. United States, 242 F.2d 702 (5th Cir. 1957), the court held that the carrier was liable to the United States for full value because neither the section 22 q......
  • Hector Martinez and Co. v. Southern Pac. Transp. Co.
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    • 8 Noviembre 1979
    ...Gulf, C., & Ste. F. Ry. v. Texas Packing Co., 244 U.S. 31, 37, 37 S.Ct. 487, 61 L.Ed. 970 (1917) (poultry); Fort Worth & D. Ry. v. United States, 242 F.2d 702, 705 (5th Cir. 1957) (livestock feed); Reider v. Thompson, 197 F.2d 158, 160 (5th Cir. 1952) (sheepskins). However, this test is gen......
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