Frederick Leyland & Co. v. Hornblower

• Decision Date: 11 February 1919
• Docket Number: 1362.
• Citation: 256 F. 289
• Parties: FREDERICK LEYLAND & CO., Limited, v. HORNBLOWER.
• Court: U.S. Court of Appeals — First Circuit

256 F. 289

FREDERICK LEYLAND & CO., Limited, v. HORNBLOWER.

No. 1362.

United States Court of Appeals, First Circuit.

February 11, 1919

Stephen R. Jones, of Boston, Mass. (Blodgett, Jones, Burnham &amp Bingham, of Boston, Mass., on the brief), for plaintiff in error.

Harold P. Williams, of Boston, Mass. (Williams & Copeland, of Boston, Mass., on the brief), for defendant in error.

Before BINGHAM and JOHNSON, Circuit Judges, and ALDRICH, District judge.

JOHNSON Circuit Judge.

In the court below the plaintiff, a citizen of Massachusetts recovered judgment for damages to an automobile shipped by him from Liverpool, England, to Boston, Mass., on the defendant's steamer Cestrian.

While the automobile was being raised by a winch from the hold of the steamship at a wharf in Boston on September 30, 1909, and after it had reached the level of the deck, the clutch in the winch became disengaged, and the automobile fell between 30 and 40 feet to the bottom of the hold.

The defendant, a foreign corporation established under the laws of Great Britain, is a common carrier of passengers and freight between the ports of Liverpool, England, and Boston Mass.

The assignments of error relate to the instructions of the presiding judge as to the effect to be given to a provision in the bill of lading limiting the amount of the liability of the carrier, to the admission of evidence and to the receipt of certain money by the plaintiff from the Boston Insurance Company with whom the plaintiff had insured the automobile.

The provision by which the liability of the carrier is sought to be limited is as follows:

'Not accountable for any goods of whatever description beyond the sum of 20 pounds per package, unless the value be herein expressed and extra freight as may be agreed on paid.'

The learned judge of the District Court instructed the jury that this provision was unreasonable and invalid, because forbidden by 27 Stat. 445 (Act Feb. 13, 1893, c. 105, Sec. 1 (Comp. St. Sec. 8029)), known as the 'Harter Act.'

The plaintiff delivered the automobile to G. W. Sheldon & Co., for warders in Liverpool, who crated it, attended to its shipment and received a bill of lading from the defendant company containing the above provision. This bill of lading constitutes the contract of carriage and the rights of the parties are to be determined by it, in the absence of any testimony that an unfair advantage was taken of the shipper, or that there was fraud practiced upon him, or that he received it under a misapprehension as to its terms, or that it contained provisions which were unjust and unreasonable in view of the commonlaw obligation resting upon the carrier.

It was decided in Hart v. Pennsylvania R.r., 112 U.S. 331, 5 Sup.Ct. 151, 28 L.Ed. 717, that a common carrier may limit its liability for damages occasioned by its negligence by a contract fairly made with the shipper, 'agreeing on the valuation of the property carried, with the rate of freight based on the condition that the carrier assumes liability only to the extent of the agreed valuation, even in case of loss or damage by the negligence of the carrier. ' This case has been frequently followed and its doctrine applied in construing limited liability contracts of carriers, in cases which have arisen relating to interstate shipments under the provisions of the Interstate Commerce Act (Act Feb. 4, 1887, c. 104, 24 Stat. 379) and the Carmack Amendment to that act (Act June 29, 1906, c. 3591, Sec. 7, pars. 11, 12, 34 Stat. 595 (Comp. St. Secs. 8604a, 8604aa)), and in all of them it has been held that such a provision is only valid where a choice of rates dependent upon value has been afforded the shipper.

In Cincinnati, New Orleans & Texas Pacific Ry. v. Rankin, 241 U.S. 319, 327, 36 Sup.Ct. 555, 558 (60 L.Ed. 1022, L.R.A. 1917A, 265), the court said:

'The essential choice of rates must be made to appear before a carrier can successfully claim the benefit of such a limitation and relief from full liability.'

In that case both parties signed the bill of lading reciting that lawful, alternate rates, based on specific values, were offered; and it was held that such recitals constituted admissions by the shipper and prima facie evidence of choice. Since the passage of the Harter Act (Comp. St. Secs. 8029-8035), limited liability clauses in bills of lading issued by common carriers engaged in transportation of goods»between ports of the United States and foreign ports, have been held valid.

In Reid v. American Express Co., 241 U.S. 544, 36 Sup.Ct. 712, 60 L.Ed. 1156, the bill of lading contained the following provision:

'It is also mutually agreed that the value of each package shipped hereunder does not exceed $100, or its equivalent in English currency, on which basis the freight is adjusted, and the carrier's liability shall in no case exceed that sum, unless a value in excess thereof be specially declared and stated herein, and extra freight as may be agreed on paid.'

And the court there held that the liability of the carrier was limited to $100, 'as stated in the bill of lading' under which the shipment was made.

In Hohl v. Norddeutscher Lloyd, 175 F. 544, 99 C.C.A. 166, a case decided in the Second Circuit, in which a writ of certiorari was denied (216 U.S. 621, 30 Sup.Ct. 575, 54 L.Ed. 641), the limited liability provision was:

'Not accountable for any sum exceeding $100 per package for goods of whatever description, nor for any amount in respect of gold, silver, etc., * * *unlesssssssssss the value of such be herein expressed and freight as may be agreed paid thereon.'

The court there held that:

'It is competent for a steamship company as a carrier of goods to limit its liability' to a certain amount 'in case of loss, even as against its own negligence,' where the valuation 'is the basis on which freight is charged, and (this fact) was fully known to the shipper.'

In Calderon v. Atlas Steamship Co., 170 U.S. 272, 18 Sup.Ct. 588, 42 L.Ed. 1033, the court construed the provision to be one of exemption, and not of limitation, so that under it, if lawful, the carrier would be exempted from all liability if the goods lost or damaged, were above the value of $100 per package, but clearly intimated that if the liability of the carrier had been limited to the amount of $100 per package, it would have been sustained.

Counsel for the plaintiff in argument admits the binding force of these decisions, but claims that the contract for valuation must be reasonable and fairly made 'and that the shipper shall not be induced to assent to the same under any misapprehension. ' It is claimed that the automobile was delivered at the office of the steamship company in Liverpool by one Sontag, the plaintiff's chauffeur, who was asked the value of the car at the time of delivery, and said that the original price of the car was a few hundred dollars under $10,000, and that either through design, fraud, error, or mistake the declared valuation was not set forth in the bill of lading, and that the plaintiff had the right to rely upon the rate paid by him as being based upon the value which Sontag had declared. The evidence does not support this claim, however, as Sontag testified in cross-examination that he put the automobile 'into the hands of Sheldon & Co.,' who were to ship it for the plaintiff, and that they took charge of the shipment; that he had nothing to do with that; and the plaintiff himself testified that he turned the car over to Sontag in Liverpool to take to the shipping agents. There was no evidence that Sontag acted as agent for the shipping agents. The automobile was delivered by Sheldon & Co., as agents of the plaintiff, to the steamship company, and the bill of lading was issued in their names. There was no evidence that fraud was practiced upon them or that they misapprehended the terms of the bill of lading, or that the defendant did not offer them an opportunity of paying a higher rate and placing a higher value upon the automobile and thus increasing the amount of the defendant's liability; nor was there any evidence that the rate was not reduced because of the restricted liability assumed by the defendant.

The only testimony in regard to the rates of the company came from Robert S. Guilford, who testified that he had general charge of the steamship office of the defendant company in Boston; that the bill of lading under which the automobile in question was forwarded was 'the regular Leyland line bill of lading which had been in use by the company for the past five or six year; that the company did not publish any schedule of rates, but that its agents had certain memoranda to guide them in quoting rates; that in 1909 the company had no general rate on automobiles shipped from Liverpool to Boston, but that the rate for their carriage was quoted subject to acceptance and a special contract made; that the general rate of the steamship company, either on east-bound or west-bound freight, was based on cubic feet of space occupied by the shipment or its weight, and also on its valuation.

The plaintiff also claims in argument that the burden of proof is on the defendant to show that the rate charged the plaintiff was based on its minimum valuation of twenty pounds per package. So far as the matter has received any judicial consideration it has been held that a provision similar to that contained in the bill of lading in this case raises a presumption that the shipment was made upon the agreed valuation and that opportunity was afforded of shipping at a higher valuation by the payment of a higher rate, in the absence of evidence to the contrary. This is equivalent to saying that the bill of lading upon its face is prima facie evidence of all the facts...