South & Cent. American Commercial Co. v. Panama R. Co.

• Decision Date: 27 December 1923
• Citation: 142 N.E. 666,237 N.Y. 287
• Parties: SOUTH & CENTRAL AMERICAN COMMERCIAL Co., Inc., v. PANAMA R. CO.
• Court: New York Court of Appeals Court of Appeals

237 N.Y. 287

142 N.E. 666

SOUTH & CENTRAL AMERICAN COMMERCIAL Co., Inc.,

v.PANAMA R. CO.

Court of Appeals of New York.

Dec. 27, 1923.

Action by the South & Central American Commercial Company, Inc., against the Panama Railroad Company. Defendant appeals by permission from a judgment in favor of plaintiff (205 App. Div. 123,199 N. Y. Supp. 92) upon a submission of a controversy upon agreed facts.

Judgment affirmed.

Hiscock, C. J., and Hogan and McLaughlin, JJ., dissenting.

Appeal from Supreme Court, Appellate Division, First Department.

Richard Reid Rogers, of New York City, for appellant.

Edward S. Greenbaum, of New York City, for respondent.

CARDOZO, J.

Bags of sugar, 477 in number, were shipped at La Libertad, San Salvador, consigned to the plaintiff in New York. They were loaded on a vessel belonging to the Pacific Mail Steamship Company, and after reaching Cristobal, Canal Zone, were delivered to the defendant for transshipment by its vessel to the port of destination. At Hoboken, N. J., where the defendant has its pier, the 477 bags consigned to the plaintiff were confused with 472 bags of a different grade consigned to some one else. Misdelivery followed as a result of the confusion. The plaintiff sues for the damage, the difference in value between the sugar consigned and the sugar received. A term of the bill of lading is to the effect that notice of claim must be given within 60 days after knowledge of the loss, and action brought within 60 days thereafter. The defense is the failure to comply with this provision. Under St. Louis, I. M. & So. Ry. Co. v. Starbird, 243 U. S. 592, 606, 37 Sup. Ct. 462, 61 L. Ed. 917, the letter of September 3, 1920, was a compliance with the requirement of preliminary notice. A fuller and more formal notice went forward in October. More than 60 days thereafter, however, on January 17, 1921, an action was begun. This was too late if the contract is to govern.

[1] Whether the limitation is valid, is the question to be answered. The plaintiff insists that it is void under the Cummins Amendment to the Interstate Commerce Act, which provides as to carriers subject thereto that in certain classes of cases there shall be no requirement of notice; that in other cases the period prescribed shall be not less than 9o days; and that no shorter period than two years shall be allowed for the institution of suit. Act of March 4, 1915, c. 176, 38 Stat. 1196 (U. S. Comp. St. §§ 8592, 8604a). The period is to be computed from the disallowance of the claim. Transportation Act 1920, 41 Stat. 456, 494, § 438 (U. S. Comp. St. Ann. Supp. 1923, § 8604a). But the defendant is not subject to the provisions of the Interstate Commerce Act. The act does not extend to a common carrier by water whose carriage is unconnected with carriage by land. Mutual Transit Co. v. U. S., 178 Feb. 664, 666, 102 C. C. A. 164;Burke v. Union Pac. R. Co., 226 N. Y. 534, 537,124 N. E. 119;Union Pac. R. Co. v. Burke, 255 U. S. 317, 322, 41 Sup. Ct. 283, 65 L. Ed. 656. It is expresssly limited by its terms, and so again is the Cummins Amendment, to carriers--

‘engaged in the transportation of passengers or property wholly by railroad (or partly by railroad and partly by water when both are used under a common control, management, or arrangement for a continuous carriage or shipment).’Interstate Commerce Act, U. S. Compiled Statutes, § 8563; Cummins Amendment, 38 Stat. 1196.

The defendant is none of these. Reaching that conclusion, we do not stop to consider whether other provisions, governing the route of carriage, would remove it in any event from the purview of the act. Enough for present purposes that it is a carrier by water.

[2][3][4][5][6][7] Though the act does not govern, its standards are relevant to the inquiry whether public policy permits the enforcement of the contract. Bills of lading must be just and reasonable, whether they are those of carriers by land or of carriers by water. United States Shipping Board Act, 39 Stat. p. 728, c. 451, § 18. If unjust or unreasonable, they may be resisted by the shipper, or corrected by order of the supervising board. Interstate Commerce Act, § 15 (U. S. Comp. St. 8583); U. S. Shipping Board Act, supra, § 18. We think a new public policy, a new conception of what is just and reasonable in these contractual limitations is established by this act, reinforced, as it is by the Transportation Act, which followed in 1920.

‘A statute may indicate a change in the policy of the law, although it expresses that change only in the specific cases most likely to occur to the mind.’ Gooch v. Oregon Short Line R. R. Co., 258 U. S. 22, 24, 42 Sup. Ct. 192, 193 (66 L. Ed. 443).

‘The Legislature has the power to decide what the policy of the law shall be, and if it has intimated its will, however indirectly, that will should be recognized and obeyed.’ Johnson v. U. S., 163 Fed. 30, 32, 89 C. C. A. 508, 510, per Holmes, Circuit Justice.

We do not say that carriers not subject to these acts must adhere to the standards thus established with literal fidelity. That is obviously unnecessary, since the acts do not touch them ex properio vigore. We say, however, that there is a duty of approximate or reasonable conformity, a conformity so great as to escape flagrant disavowal of the conception of reasonable opportunity reflected in the will of Congress. We cannot find that this measure of correspondence has been reached. The contract exacts the institution of a suit within 60 days after notice of claim, and this though negotiations for a settlement are proceeding in the interval. In the very case at hand the defendant had held out to the shipper the...