Alair v. Northern Pacific Railroad Co.
| Decision Date | 27 April 1893 |
| Citation | 54 N.W. 1072,53 Minn. 160 |
| Parties | Walter E. Alair v. Northern Pacific Railroad Co |
| Court | Minnesota Supreme Court |
Argued April 12, 1893
Appeal by defendant, Northern Pacific Railroad Company, from an order of the District Court of Ramsey County, J. J. Egan, J made November 7, 1892, sustaining a demurrer to its answer.
The plaintiff, Walter E. Alair, on April 4, 1891, delivered to defendant at Minnesota Transfer in St. Paul, eighteen horses to be transported to Seattle, Washington. The plaintiff at the same time entered into a contract with the company in which it was agreed that the value of each horse did not exceed $ 100; such valuation being that whereon the rate of compensation to the company for its services and risk connected with the property was based. Seven of the horses worth $ 2,100, were killed on the route, by the negligence of the defendant in operating its railway. Prior to the commencement of this action, the company tendered to the plaintiff $ 700 and afterwards brought it into court and deposited it for the plaintiff. These facts were set forth in the answer, and plaintiff demurred thereto, and the trial court sustained the demurrer. Defendant appeals.
Order reversed.
John H Mitchell, Tilden R. Selmes, and Wm. Allen Butler, for appellant.
Plaintiff's contention is, that the contract on which he sues is valid against the company as to the rate of freight, but void as to the agreed value of his property.
It was lawful for the defendant to make the contract with the plaintiff for the transportation of his property, agreeing as to the value of the property, and fixing the rate of freight accordingly. The terms and conditions of the contract as to such value, and the rate of freight based thereon, were just and reasonable, and should be upheld. Hart v Pennsylvania Railroad Co., 112 U.S. 331.
The plaintiff in this action must concede that the law in England and in most of the States of the United States accords with the above cited decision, but he claims that this court will apply a contrary rule, following Moulton v. St. Paul, M. & M. Ry. Co., 31 Minn. 85; Boehl v. Chicago, M. & St. P. Ry. Co., 44 Minn. 191.
The Moulton case is really an authority for the defendant, and the case of Boehl does not touch the point raised on this appeal.
The Moulton case was classed in the opinion in Hart v. Pennsylvania R. Co., among the authorities condemning without qualification, any limitation by a carrier of its common law liability for its negligence; but the text of the opinion of this court, does not warrant such a classification. The inadvertence has been followed in text books of later date. Liverpool Steam Co. v. Phenix Ins. Co., 129 U.S. 397.
Lawler, Durment & Bigelow, for respondent.
A contract made by a common carrier with a shipper is void as against public policy when it seeks to limit the amount to be recovered for loss or damage arising from the negligence of the common carrier, in the absence of any fraud upon the part of the shipper in concealing or misrepresenting the value of the freight shipped. Moulton v. St. Paul, M. & M. Ry. Co., 31 Minn. 85; Railroad Co. v. Lockwood, 17 Wall. 357; Railway Co. v. Stevens, 95 U.S. 655; Southern Express Co. v. Moon, 39 Miss. 822; United States Express Co. v. Blackman, 28 Ohio St. 144; Black v. Goodrich Transp. Co., 55 Wis. 319.
If it is competent to make a contract limiting the recovery, in case of loss, to an agreed value, there is no agreed value in the case at bar. There is no certain value agreed on in the contract.
This court has decided that a common carrier cannot limit his liability for his own negligence, either as to the right, or the amount of the recovery. Boehl v. Chicago, M. & St. P. Ry. Co., 44 Minn. 191.
The complaint alleges the delivery by plaintiff to defendant, a common carrier, of eighteen horses for transportation; that seven of the horses, of the value of $ 2,100, were, while in transit, killed through the negligence of the defendant. Judgment is asked for $ 2,100.
The answer admits the delivery and receipt of the horses for transportation, their value, and their loss through its negligence, as stated in the complaint, but alleges that the property was delivered and received upon a special written contract, executed by both parties, containing the terms and conditions on which the defendant undertook to transport it, one of which was that "it is hereby further agreed that the value of the live stock to be transported does not exceed the following mentioned sums, to wit: Each horse, $ 100; each ox, $ 50; each bull, $ 50; each cow, $ 30; * * * such valuation being that whereon the rate of compensation to this company for its services and risks connected with said property is based." The answer further alleges a tender of $ 700, which is kept good by bringing the money into court. This appeal is from an order sustaining a demurrer to the answer on the ground that the facts stated do not constitute either a defense or counterclaim.
The sole question is whether this stipulation as to the value of the property is valid and binding, so as to limit the amount of plaintiff's recovery when the loss occurred through defendant's negligence. As against plaintiff's demurrer it must be assumed that this stipulation was fairly made, and for the purposes therein expressed.
How far, or in what respects, a public carrier of goods may limit his common-law liability is by no means a new question in the courts. At common law he was practically an insurer of the property. The rule imposing this extraordinary liability had its origin in considerations of public policy; and, as the duties of a common carrier are public in their nature, in the due performance of which the public at large, as well as the particular shipper, have an interest, and as the carrier and the shipper do not stand on a footing of equality, the latter often having no choice but to accept such conditions as the former might impose, the tendency of the courts formerly was to hold that it was against public policy, or, as otherwise expressed, not just and reasonable, to permit a common carrier to stipulate for any modification of his common-law liability, even by special contract with his customer.
But in course of time, the improved state of society, the introduction of better and safer modes of transportation, the diminished opportunities of collusion and bad faith on part of the carrier, and other considerations, rendered less imperative the rigorous application of the iron rule of the common law. The result has been that the courts now uphold as just and reasonable numerous limitations to, or exemptions from, the common-law liability of carriers, which would formerly have been held against public policy and void.
In fact, it has now become the accepted general business usage (which is itself strong evidence as to what is in accord with public policy) for carriers and shippers to contract for some exemptions from the strict liability imposed by common law. At one time the courts in England had gone so far as to hold that public carriers might by special contract, and even by public notice, relieve themselves from liability for the consequences of the gross negligence, or even felony, of their servants.
This led, in 1854, to the passage of the act commonly called the "Railway and Canal Traffic Act," declaring that such carriers should be liable for loss occasioned by their own neglect or default, or that of their servants, notwithstanding any notice, condition, or declaration to the contrary, but providing that they might make such conditions with respect to the carriage of goods as should be adjudged "just and reasonable" by the court or judge before whom the case should be tried. It is significant of the views of parliament as to what conditions would be just and reasonable, and hence in accordance with public policy, in case of the transportation of live stock, that this same statute provides that no greater damages shall be received for any animal than certain specified sums, (presumably fixed with reference to the average value of ordinary animals,) unless a higher value is declared by the shipper at the time of delivery. This is perhaps not without some weight in considering the justness and reasonableness of the conditions or stipulations of the contract now before us.
It would hardly be in point to consider the English decisions under this statute as to what conditions are or are not "just and reasonable," further than to say that beyond a doubt they would uphold the validity of the one now under consideration.
In the United States, at least since the case of New Jersey Steam Nav. Co. v. Merchants' Bank, 47 U.S. 344, 6 HOW 344, 12 L.Ed. 465, it has been the universal law of this country that, in the absence of a statute prohibiting it, any common carrier may by special contract limit his common-law liability, provided the contract is "just and reasonable in the eye of the law." We adopt this form of statement advisedly, for in all the cases the ultimate test applied by the courts in determining whether a condition limiting the common-law liability was or was not against public policy has been whether, under all the circumstances, it was or was not just and reasonable in the eye of the law. In the leading case of Railroad Co. v. Lockwood, 84 U.S. 357, 17 Wall. 357, 21 L.Ed. 627, the court placed its decision that a carrier could not stipulate for exemption from responsibility for the negligence of himself or his servants upon that express ground. The English statute, already referred to, in using the expression "just and reasonable," but adopted the...
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