
    Isaac Greenwald and Others, Respondents, v. Levi C. Weir, as President of Adams Express Company, Appellant.
    First Department,
    March 5, 1909.
    Carrier — contract limiting liability — estoppel of shipper —- Interstate Commerce Act, section 20, construed — liability of initial carrier for loss of goods on lines of connecting carrier — statute does not affect right of carrier to limit liability.
    It is competent for a carrier and a shipper to agree upon the value of the goods shipped, and when such an agreement has been made the shipper is estopped, in case of loss, from claiming that the goods were of greater value than the sum agreed upon.
    If the receipt constituting the contract of shipment contain a clause by which the shipper expressly agrees that the value of the property is not more than a sum stated, unless a different value be stated in the receipt, and no greater value is stated, the shipper is estopped from claiming that the value of the goods was actually greater than that sum.
    Section 20 of the Interstate Commerce Act, as amended June 29, 1906, providing that common carriers shall issue a bill of receipt or a bill of lading and be liable for the amormt of any damage to the property caused by it or by any common carrier to which such property may be delivered, and that no receipt' shall exempt the carrier from liability, merely changes the common-law rule so as to make the initial carrier liable for losses occurring on the lines of connecting carriers and prohibits the initial carrier from exempting itself from such liability. It does not prevent the initial carrier from contracting with the shipper as to the amount of liability based upon the agreed value of the goods.
    The contract with a common carrier of goods imposes a double obligation, that of the carriage proper and that of insurance, and they may by contract fix a rate to be paid with reference to each liability.
    Appeal by the defendant, Levi 0. Weir, as president,, etc., from an order of the Appellate Term of the Supreme Court, entered in the office of the cleric of the county of Hew York on the 5th day of June, 1908, reversing a judgment of the Municipal Court of the city of Hew York,, borough of Manhattan, in favor of the plaintiffs, entered on the 30th day of September, 1907.
    
      Walker D. Hines [Carl A. De Gersdorff and Edward V.Conwell with him on the brief], for the appellant.
    
      Samuel J. Rawak, for the respondents.
   Scott, J.:

This is an action against an express company to recover the alleged actual value of merchandise shipped by plaintiffs upon a receipt in which was stated an agreed valuation ,of fifty dollars.

The plaintiffs, at their place of business in the city of Hew York, delivered to defendant a package of dry goods to be carried to Waukegan, 111. The plaintiffs had in their possession, and had been in the habit of using for some months, a book issued by defendant containing printed forms of express receipts. They had been in the habit of using similar forms for six years. The receipt was filled out by plaintiffs’ shipping clerk and delivered to defendant’s driver, who signed it and left it with plaintiffs and took away the package mentioned therein. The plaintiffs made no statement as to the value of the goods when shipping them, and accepted the receipt without, objection. The package of goods was not delivered to the consignees and its loss was not accounted for. The receipt contained the following clause, clearly and plainly printed thereon: “ 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 fifty dollars unless a greater value is declared, the shipper agrees that the value of said property is not more than fifty dollars 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 fifty dollars if no value is stated herein.” At the trial plaintiffs proved that the value of the goods was $235, and sought to recover judgment for that amount. The Municipal Court awarded judgment for $50, the agreed value as stated in the receipt. The Appellate Term, by a divided court, has reversed the judgment, holding that notwithstanding the stipulation as to the value contained in the receipt, the plaintiffs are entitled to recover the actual value of the goods. (59 Misc. Rep. 431,) The defendant appeals. It is conceded that but for the Federal statute hereinafter quoted, the judgment of the Municipal Court was in accordance with the settled law of this State. We have recently had occasion to again consider that question, and it is unnecessary to dwell upon it here. (See Jonasson v. Weir, 130 App. Div. 528.) The rule is that it is competent for .a carrier and a shipper to agree, as one of the terms of the contract of shipment, upon the value of the goods shipped, and that when such an agreement has been made the ' shipper- is estopped from claiming, in case of loss, that the goods were of greater value than the sum agreed upon. Furthermore, if the -written receipt, which constitutes the contract of shipment, contains a clause by, which the shipper expressly agrees that the value of the property is not -more than a stated sum, unless a different value is stated in the receipt, and no greater value is so stated, the shipper is held to have stated and represented, as one of the terms of liis contract with the carrier, that the goods are not of a greater value than the sum stated, -and will be estopped from afterwards claiming, in case of loss, that the value was actually greater. The exception to the rule arising in the so-called “ baggage ” cases is not pertinent to the present discussion. The plaintiffs claim, however, that, as to contracts involving interstate carriage, the foregoing rule has been abrogated by the amendment to section 20 of the Interstate Commerce Act, passed.June 29, 1906, which reads as follows:

“That any common carrier, railroad or transportation company receiving property for transportation from a point in one State to a point in another State shall issue a receipt or bill of lading therefor and shall be liable to the lawful' holder thereof for any loss, damage or injury to such property caused by it or by any common carrier, raii- ■ road or transportation company to which such property may be delivered or over whose line or lines such property may pass, and no con■tract, receipt, rule or regulation shall exempt such common carrier, railroad or transportation company from the liability hereby imposed: Provided, That nothing -in this section shall deprive any holder of such receipt or bill of lading of any remedy or light of action which he has under existing law.
“ That the common carrier, railroad or transportation company issuing such receipt or bill of lading shall be entitled to recover from the common carrier, railroad or transportation company on whose line the loss,, damage or injury shall have bee'n sustained, the-amount-of such loss, damage or injury as it may be required to pay to' the owners ' of such property, as may be evidenced by any receipt, judgment or transcript thereof.” (24 U. S. Stat. at Large, 386.,, § 20, as amd. by 34 id. 593-595, § 7.)

It will be seen at a glance that this statute has changed the common-law rule, as it has heretofore been applied in this and many other States, respecting the non-liability of the first carrier for losses accruing' on the line of connecting carriers. It has heretofore been held at common law and frequently stipulated by express provisions of shipping contracts that the liability of each carrier is confined to losses occurring on his own line. This rule in cases of interstate carriage has now been abrogated, and hereafter • the initial carrier remains liable to the shipper for losses occurring on the lines of connecting carriers, as well as on his own, having a right of recovery over against the connecting carrier df the loss has occurred on the lino of the latter. The defendant’s contention is that this is the-whole extent to which the statute has abrogated or changed the existing rule. The plaintiffs insist that the statute goes further. The words upon which plaintiffs rely are that any common carrier “ shall be liable to the lawful holder thereof for auy loss, damage or injury to such property (the merchandise shipped) caused by it, * * * and no contract, receipt, rule or regulation shall exempt such common carrier, railroad or transportation company from the liability hereby imposed.” What the statute forbids is the making of a contract, receipt, rule or regulation exempting a carrier from the liability imposed by the statute. There is but one liability which can properly be said to be imposed by the statute, and that is the liability - of the initial carrier for a loss occurring on the line of a connecting carrier. That is a new liability created and imposed by the statute. The liability of a carrier for a loss upon its own line is not new and is not created or imposed by the statute, but existed before the statute was passed. The statute is completely satisfied, therefore, by construing it as creating and imposing on the initial carrier a new liability, and forbidding him from exempting himself, by stipulation or agreement, from that new liability. What the statute forbids is the use of any device whereby the carrier undertakes to “exempt” himself from the newly imposed liability. The use of the word “ exempt ” is appropriate if it ivas the intention of the Congress to prevent a carrier from relieving himself altogether from liability for a loss occurring- on the line of a connecting carrier, but wholly inappropriate if intended to prevent an agreement between the carrier and the shipper as to the value of'the goods to be shipped. Both the Federal courts and the courts of this State have uniformly distinguished between shipping contracts wherein the carrier has. undertaken to exempt himself from liability at all, and those in which he has. agreed with the shipper as to the amount which should be taken as the value of the goods. Contracts of the first kind have been generally condemned, and contracts of the second kind sustained. (Railroad Co. v. Lockwood v. Wall. 357; Hart v. Pennsylvania R.R. Co., 112 U. S. 331; Zimmer v. N. Y. C. & H. R. R. R. Co., 137 N. Y. 460; Tewes v. North German Lloyd S. S. Co., 186 id. 151; Barnes v. Long Island R. R. Co., 115 App. Diva 44; affd., without opinion, 191 N. Y. 528.) This distinction rests upon a sure and substantial basis. The contract of carriage by a common carrier imposes. upon the latter-a double obligation, that of carriage proper and that of insurance. It is reasonable and customary to fix a rate to be paid with reference to both liabilities, and in order to fix such rate it is necessary that the carrier should be apprised of the value of the article to be carried. (Hart v. Pennsylvania R. R. Co., supra ; Rosenthal v. Weir, 170 N. Y. 148 ; Zimmer v. N. Y. C. & H. R. R. R. Co., supra; Bates v. Weir, 121 App. Div. 275.) It would scarcely be contended that if plaintiffs had stated what they claimed to be the actual value of the goods shipped at the amount they now claim, and had incorporated that declaration in the contract itself, and had paid a rate expressly based upon such valuation, they would have been permitted to recover any larger sum by way of damages for -the loss of the goods. But this is precisely what they have done. The ground upon which clauses like that in the receipt have been held to limit the amount of recovery is that they were incorporated into the contract and constituted a binding representation by the shipper that the goods shipped were not worth more than the amount named in the receipt. In Barnes v. Long Lsland R. R. Co. the court had before it a receipt similar to the one now under consideration, and was called upon to determine its validity and effect under a provision of the Gonstitution of Kentucky to the effect that no common carrier shall be permitted to contract for relief from its common law liability.” The court discusses and very clearly points out the fundamental distinction between a contract which seeks to avoid the coinmon-law liability of a carrier and one which merely provides for a limitation of liability to the amount at which the shipper himself values the goods at the time of shipment, and the same distinction has been recognized in many other jurisdictions. The Interstate Commerce Commission, whose opinion in matters respecting the interpretation and effect of the law under which the Commission was established is entitled to great respect, has held such a clause as that upon which defendant relies to be valid. In Matter of Released Rates (13 I. C. C. Rep. 550) it said: “We hold that it is in contravention neither of the letter nor the spirit of the law for the carrier to provide a higher rating for goods of special value than it applies to goods of the same class but of lower value. If it enforces its tariffs in good faith, endeavoring to give to each shipment the rating which its value requires, the law affords complete protection against the frauds and misrepresentations of the shipper, * * *

“ If a rate is conditioned upon the shipper’s agreeing that the carrier’s liability shall not exceed a certain specified value —

“ (a) The stipulation is valid when loss occurs through causes beyond the carrier’s control.

“ (b) The stipulation is valid, even when loss is due to the carrier's negligence, if the shipper has himself declared the value, expressly or by implication, the carrier accepting the same in good faith as the real value, a/nd the rate of freight being .fixed in accordance ‘ therewith.”

Upon principle and authority we are of the opinion that the amendment to section 20 of the Interstate Commerce Act upon which the plaintiffs rely has not abrogated and was not intended to abrogate the well-established rule recognized by the courts of this State and by the Federal courts, that under such a state of facts as is presented in this case the carrier’s liability is limited to the declared and agreed value specified in the shipping receipt.

It follows that the determination of the Appellate Term must be reversed, and the judgment of the Municipal Court affirmed, with costs to the appellant in this court and the court below.

Ingraham, McLaughlin, Clarke and Houghton, JJ., concurred.

Determination reversed and judgment of Municipal Court affirmed, with costs to appellant in this court and in the Appellate Term. 
      
       Took effect sixty days thereafter (34 U. S. Stat. at Large, 838, Res. 47).— [Rep.
     