Adams Express Company v. Croninger, No. 18

• Court: United States Supreme Court
• Writing for the Court: Lurton
• Citation: 33 S.Ct. 148,226 U.S. 491,57 L.Ed. 314
• Parties: ADAMS EXPRESS COMPANY, Plff. in Err., v. E. H. CRONINGER
• Docket Number: No. 18
• Decision Date: 13 March 1912

226 U.S. 491 33 S.Ct. 148 57 L.Ed. 314 ADAMS EXPRESS COMPANY, Plff. in Err.,

v.

E. H. CRONINGER.

No. 18. Argued March 13, 1912.

Ordered for reargument before full bench April 8, 1912.

Reargued October 23, 1912. Decided January 6, 1913.

Page 492

This was an action in the circuit court of Kenton county, Kentucky, against the express company, to recover the full market value of a small package containing a diamond ring which was delivered by the plaintiff below to the express company at its office in Cincinnati, Ohio, consigned to J. W. Clendenning at Augusta, Georgia. The package was never delivered.

The express company made defense by answer. The plaintiff demurred to the answer as not containing a defense, which demurrer was sustained. The company declined to further plead, whereupon the circuit court gave judgment for the sum of $137.52, being the full value of the ring and interest. A writ of error was sued out from this court to the circuit court of Kenton county, that being the highest court of the state in which a decision could be had.

The answer and accompanying exhibit were in substance as follows:

Page 493

That the defendant was an express company engaged in interstate commerce within the provisions of the act of Congress of June 29, 1906 [34 Stat. at L. 584, chap. 3591, U. S. Comp. Stat. Supp. 1911, p. 1288]; that in obedience to that act it had duly filed with the Interstate Commerce Commission schedules showing its rates and charges from Cincinnati to Augusta, Georgia, which schedules showed that its rates and charges, when the value of the property to be carried was in excess of $50, were graduated reasonably, according to the value, and that the lawful rate upon the package of the plaintiff from Cincinnati to Augusta was 25 cents if the value was $50 or less, and was 55 cents if its value was $125.

It is averred that the plaintiff knew that the charges upon the package shipped were based upon the value of the shipment, and that it (the defendant) required that the value should be declared by the shipper, and that if he did not disclose and declare the value when he delivered the shipment to it at Cincinnati for transportation to Augusta, the rate charged would be based upon a valuation of $50. It is then alleged that the package so delivered was sealed, and that defendant did not know the contents or value, and that if it had, it would not have received it for carriage for less than the lawful published rate of 55 cents. The receipt or bill of lading issued shows no value, but contains a stipulation in these words:

'In consideration of the rate charged for carrying said property, which is regulated by the value thereof, and is based upon a valuation of not exceeding $50 unless a greater value is declared, the shipper agrees that the value of said property is not more than $50, unless a greater value is stated herein, and that the company shall not be liable in any event for more than the value so stated, nor for more than $50 if no value is stated herein.'

Page 494

Messrs. Lawrence Maxwell and Joseph S. Graydon for plaintiff in error.

[Argument of Counsel from pages 494-497 intentionally omitted]

Page 497

Messrs. John Randolph Schindel and Morison R. Waite for defendant in error.

[Argument of Counsel from pages 497-499 intentionally omitted]

Page 499

Mr. Justice Lurton, after making the foregoing statement, delivered the opinion of the court:

The answer relies upon the act of Congress of June 29, 1906 [34 Stat. at L. 584, chap. 3591, U. S. Comp. Stat. Supp. 1911, p. 1288], being an act to amend the interstate commerce act of 1887 [24 Stat. at L. 379, chap. 104], as the only regulation applicable to an interstate shipment; and avers that the limitation of value, declared in its bill of lading, was valid and obligatory under that act. This defense was denied. This constitutes the Federal question and gives this court jurisdiction.

Under the law of Kentucky this contract, limiting the plaintiff's recovery to the agreed or declared value, was invalid, and the shipper was entitled to recover the actual value, 'unless,' as said in Adams Exp. Co. v. Walker, 119 Ky. 121, 67 L.R.A. 412, 83 S. W. 106, and affirmed in Southern Exp. Co. v. Fox & Logan, 131 Ky. 257, 133 Am. St. Rep. 241, 115 S. W. 184, 117 S. W. 270, 'sufficient facts are shown, independently of the special contract, to avoid the contract for fraud, or to create an estoppel at common law.'

The question upon which the case must turn is whether the operation and effect of the contract for an interstate shipment, as shown by the receipt or bill of lading, is

Page 500

governed by the local law of the state, or by the acts of Congress regulating interstate commerce.

That the constitutional power of Congress to regulate commerce among the states and with foreign nations comprehends power to regulate contracts between the shipper and the carrier of an interstate shipment by defining the liability of the carrier for loss, delay, injury, or damage to such property, needs neither argument nor citation of authority.

But it is equally well settled that until Congress has legislated upon the subject, the liability of such a carrier, exercising its calling within a particular state, although engaged in the business of interstate commerce, for loss or damage to such property, may be regulated by the law of the state. Such regulations would fall within that large class of regulations which it is competent for a state to make in the absence of legislation by Congress, growing out of the territorial jurisdiction of the state over such carriers, and its duty and power to safeguard the general public against acts of misfeasance and nonfeasance committed within its limits, although interstate commerce may be indirectly affected: Smith v. Alabama, 124 U. S. 465, 31 L. ed. 508, 1 Inters. Com. Rep. 804, 8 Sup. Ct. Rep. 564; New York, N. H. & H. R. Co. v. New York, 165 U. S. 628, 41 L. ed. 853, 17 Sup. Ct. Rep. 418; Chicago, M. & St. P. R. Co. v. Solan, 169 U. S. 133, 137, 42 L. ed. 688, 692, 18 Sup. Ct. Rep. 289; Richmond & A. R. Co. v. R. A. Patterson Tobacco Co. 169 U. S. 311, 42 L. ed. 759, 18 Sup. Ct. Rep. 335; Cleveland, C. C. & St. L. R. Co. v. Illinois, 177 U. S. 514, 44 L. ed. 868, 20 Sup. Ct. Rep. 722; Pennsylvania R. Co. v. Hughes, 191 U. S. 477, 48 L. ed. 268, 24 Sup. Ct. Rep. 132. In the Solan Case, cited above, it was said of such state legislation:

'They are not, in themselves, regulations of interstate commerce, although they control, in some degree, the conduct and the liability of those engaged in such commerce. So long as Congress has not legislated upon the particular subject, they are rather to be regarded as legislation in aid of such commerce, and as a rightful exercise of the police power of the state to regulate the relative rights and duties of all persons and corporations within its limits.'

Page 501

In that case the court upheld the validity of an Iowa statute which made void every 'contract, receipt, rule, or regulation which shall exempt any railway from liability as a common carrier, which would exist had no contract, receipt, rule, or regulation been made or entered into.'

The contract there involved was for transportation of cattle with a drover in charge, and the shipper had signed a contract limiting the liability to himself or the drover to $500 for injury to the person of the drover. Proof was offered that this limitation was the consideration of a reduced rate of transportation.

In Pennsylvania R. Co. v. Hughes, 191 U. S. 477, 487, 491, 48 L. ed. 268, 271, 273, 24 Sup. Ct. Rep. 132, there was involved a bill of lading in all essentials identical with the one here concerned, whereby it was stipulated that, in consideration of a reduced rate of freight, the shipper should receive, in case of negligent loss, the agreed value declared in the receipt. The shipment was made in New York, where the stipulation was valid, to a point in Pennsylvania, where such a limitation was invalid. The loss occurred in the latter state, and the supreme court of the state upheld a judgment for the full value, declaring the limitation invalid as forbidden by the public policy of that state. That case came to this court upon the contention that the Pennsylvania court, in refusing to limit the recovery to the valuation argeed upon, had denied to the railroad company a right or privilege secured to it by the interstate commerce law. But this court, as to that, said:

'It may be assumed that under the broad power conferred upon Congress over interstate commerce, as defined in repeated decisions of this court, it would be lawful for that body to make provision as to contracts for interstate carriage, permitting the carrier to limit its liablity to a particular sum in consideration of lower freight rates for transportation. But upon examination of the terms

Page 502

of the law relied upon we fail to find any such provision therein. The sections of the interstate commerce law relied upon by the learned counsel for plaintiff in error (24 Stat. at L. 379, 382, chap. 104, U. S. Comp. Stat. Supp. 1911, p. 1284; 25 Stat. at L. 855, chap. 382, U. S. Comp. Stat. Supp. 1911, p. 1289) provide for equal facilities to shippers for the interchange of traffic; for nondiscrimination in freight rates; for keeping schedules of rates open to public inspection; for posting the same in public places, with certain particulars as to charges, rules, and regulations; for the publication of joint tariff rates for continuous transportation over one or more lines, to be made public when directed by the Interstate Commerce Commission; against advances in joint tariff rates except after ten days' notice to the Commission; against reduction of joint tariff rates except after three days' like notice; making it unlawful for any party to a joint tariff to receive or demand a greater or less compensation for the...