
    GEORGE C. TAYLOR, AS PRESIDENT OF THE AMERICAN EXPRESS COMPANY, v. THE UNITED STATES
    
    [No. A-326.
    Decided March 9, 1925]
    
      On the Proofs
    
    
      Railroad rates; Government MU of lading; limitation of value in case of loss. — Government property was shipped by express on a Government bill of lading which adopted the “ terms and conditions ” of a uniform commercial express receipt authorized by the Interstate Commerce Commission, among which was a restricted valuation clause in case of loss, and said property, after having been transported part of its way to destination by express and after considerable delay due to the negligence of plaintiff’s employees, was forwarded by freight and was burned up en route as a result of a railroad collision. Held, That the Government was bound by the restricted valuation in the commercial express receipt in its deductions from other bills of plaintiff.
    
      The Reporter's statement of the case:
    
      Mr. Arthur D. Smith for the plaintiff. Garter, Ledyard (& Milburn were on the briefs.
    
      Mr. Joseph Henry Gohen, with whom was Mr. Assistant Attorney General Robert H. Lovett, for the defendant. Mr. Barrett F. Brown was on the brief.
    The following are the facts as found by the court:
    I. The plaintiff, the American Express Company, is an unincorporated association consisting of over seven members, organized and existing under the laws of the State of New York, pursuant to which this petition is brought in the name of George C. Taylor, as its president. Said plaintiff was at the times hereinafter mentioned a common carrier, and as such duly filed and posted its tariffs, schedules, and classifications showing the rates for transportation in all respects as required by the Interstate Commerce Act approved February 4,1887, and as amended.
    
      II. On February 4, 1918, tbe defendant, acting by Major M. A. Eeasoner, Med. Corps, U. S. A., delivered to the plaintiff at Bridgeton, New Jersey, at the place of business of the Martin Dyeing and Finishing Company in said city, 54 rolls of Khaki Duck, Numbered 1609-62, weighing in all 19,995 lbs. Upon delivery of said merchandise to the plaintiff a Government bill of lading was presented and signed by a representative of the plaintiff, P. M. McGuire. This bill of lading bears the Number WQ,. 3063, the form having been approved by the Comptroller of the Treasury in June, 1916. As shown by the face of this bill of lading, the weight of the said shipment at the time of delivery as aforesaid was 19,995 lbs. No dollar value was declared at the time of shipment. Under “ General Conditions and Instructions ” on said bill of lading are the folloAving “ conditions ”: ■>
    “2. Unless otherwise specifically provided hereon, this bill of lading is subject to the same rules and conditions as govern commercial shipments made on the usual forms provided therefor by the carrier.
    # * * #
    “ 5. This shipment is made at the restricted or limited valuation specified in the tariff or classification at or under which the lowest rate is available, unless otherwise indi-cated on the face hereof.”
    Attached to the stipulation is a correct copy of the uniform express receipt as authorized by a decree issued by the Interstate Commerce Commission on or about the 2d of October, 1917. Under “terms and conditions ” is the following provision:
    “2. In consideration of the rate charged for carrying said property, which is dependent upon the value thereof and is based upon an agreed valuation of not exceeding fifty ■dollars for any shipment of 100 pounds or less, and not ■exceeding fifty cents per pound, actual Aveiglit, for any shipment in excess of 100 pounds, unless a greater value is declared at the time of shipment, the shipper agrees that the company shall not be liable in any event for more than fifty dollars for any shipment of 100 pounds or less, or for more than fifty cents per pound, actual weight, for any shipment weigídng more than 100 pounds, unless a greater value is stated herein. Unless a greater value is declared and stated herein the shipper agrees that the value of the shipment is as last above set out and that the liability of the company shall in no event exceed such value.”
    III. The shipment was originally consigned to Heywood Bros. & Wakefield, of Wakefield, Mass., but while the shipment was being delivered to the plaintiff at Bridgeton the destination of the shipment ivas changed to L. Stern, 327 W. Baltimore St., Baltimore, Maryland, said goods being remarked as hereinafter shown. The plaintiff’s tariff route between these points is on the lines of the New Jersey Central via Jersey City and Philadelphia, and the legal tariff rate of the plaintiff determined from its schedules filed with the Interstate Commerce Commission on the date hereof on shipments between Bridgeton and Baltimore was the sum of 90‡ per one hundred pounds for shipments forwarded under a valuation of 50 ‡ per pound. A bill for the amount so calculated (viz: 90‡ times 199.95 hundred pounds=$l79.96) w’as presented to the Auditor for the War Department but was later withdrawn as hereinafter shown, and nothing has been paid by the defendant by way of transportation charges on said shipment.
    IV. Said shipment was made from Bridgeton, N. J., 40 miles southeast of Philadelphia, by express, because the supplies were urgently needed by the Medical Department, ü. S. Army. From Bridgeton it traveled a distance of 136 miles to Jersey City, N. J., which is 90 miles north of Philadelphia and 50 miles farther from destination than the starting-point.
    There were two trains leaving Bridgeton after noon each tlay for Jersey City on which such a car might go forward and on one or the other of which such cars were customarily forwarded from Bridgeton. The first of these was a regular passenger train known as No. 324, which left Bridgeton by schedule at about 3.33 p. m., and the -other, known as train No. 348, -which also ran on schedule time, left Bridgeton at about 8 p. m. and arrived at Jersey City at about 5 a. m. next morning. This latter train did not carry passengers. It was what is commonly termed a “ fast freight.” It stopped only at designated stations to pick up carloads or to pick up shipments for this particular train and did no local work such as loading and unloading shipments of less than carload lots, but ran on schedule as above stated. If any certain shipment or car did not leave on one or the other of these trains, No. 324 or No. 348, it could not leave Bridgeton until the following day. The delay-caused by the changing of the destination of the shipment and the necessary remarking prevented the forwarding of the car by train 324. It was forwarded by train 348. The car ivas consigned, in accordance with the usual form of car card' used in such cases, to plaintiff’s agent at Jersey City, for forwarding by him from that point to Baltimore.
    The railroad “ Yardmaster ” at Jersey City is charged with the physical control and disposition of all cars of whatever nature or whatever the contents upon their arrival at that terminal. Upon the arrival of this car, M. P. 38295, at that terminal, the yardmaster did not turn the same over to the plaintiff’s agent at that point for forwarding as instructed by the car card, but after a delay of several days, in error forwarded the same himself from Jersey City to Baltimore attached to freight train No. 1513. This was on February 15, after a delay at Jersey City of ten days. Said car with.all its contents was destroyed by ñre as a result of a collision at Neshaminy Falls, Pa., being then 21 miles north of Philadelphia, and only 19 miles nearer destination than when started 11 days earlier.
    Y. In July, 1918, the American Railway Express Company, a corporation formed under the laws of Delaware, took over the business of the plaintiff and other companies with respect to the transpprtation of goods by express. On July 3, 1919, the American Railway Express Company presented to the Auditor for the War Department its statement for services in the carriage and transportation of various shipments' during the period from July, 1918, to February, 1919, amounting in all to the sum of $19,374.95. On July 22, 1919, the said Auditor for the War Department sent to the American Railway Express Company a notification and statement of difference annexed to the stipulation. As shown in said statement, the said auditor deducted from said bill and disallowed the sum of $12,484.10, stating therein as follows:
    
      “Amt. $12,484.10 deducted on account of complete loss by fire of 19995 lbs. of ‘Khaki Duck’ covered by Gov’t. B/L 3063 Feb. 4th, 1918, Bridgeport, Ct., to Baltimore, Md., included in Am. Ex. Bill B/l/632 (withdrawn).” (Bridgeport, Ct., meaning Bridgeton, N. J.)
    The American Bailway Express Company and the American Express Company duly and frequently protested thereafter against the amount of such deduction, claiming that if the liability of the plaintiff were to be conceded the amount of that liability was determined by the value of said shipment at 50^ per pound thereof, or the sum of $9,997.50, and not the sum of $12,484.10, as claimed by the said auditor in his said statement.
    YI. On July 19, 1920, the same being within one year from the date of the notification of such deduction as hereto further stated, the plaintiff made application to the Comptroller of the Treasury pursuant to law for the revision of the aforesaid statement, and requested the payment of the sum of $2,486.60, being the amount deducted by the said auditor, namely, the sum of $12,484.10, as aforesaid, less the sum of $9,997.50, the liability conceded by the plaintiff. On September 22,1920, the Comptroller of the Treasury notified the plaintiff that he affirmed the said action of the Auditor for the War Department, and refused to revise said settlement or to pay any further sum or sums on account thereof. Thereafter, and on the following respective dates, viz, March 2, 1921, May 4, 1921, and August 3, 1921, the plaintiff made three several applications to the Comptroller of the Treasury for a reconsideration of his said decision of September 22, 1920, which said respective applications for reconsideration were refused and denied, respectively, on March 17,1921, June 11,1921, and August 22, 1921.
    VII. It is stipulated by the parties that no prejudice shall result to the plaintiff by reason of the fact that the amount of the said deduction on account of the loss of said shipment was made by the Auditor for the War Department in connection with a bill submitted by the American Kailway Express Company subsequent to the consolidation of the express companies in July, 1918, it being admitted that the accounts of the American Bailway Express Company and the plaintiff herein have been duly adjusted with respect thereto, and the am'ount of said deduction in full has been allowed by the plaintiff to the American Railway Express Company, and that the plaintiff is the proper party and the only party interested in the said claim at the present time.
    The court decided that plaintiff was entitled to recover.
    
      
       Appealed.
    
   Downey, Judge,

delivered the opinion of the court:

An express shipment of fifty-four rolls of khaki duck, made by the United States, having been destroyed by fire as the result of a collision, the question is whether the plaintiff company, although admitting liability, is liable to the extent of a full valuation ascertained by the accounting officers and deducted from sums otherwise due the plaintiff, ■or only to the extent of the limited valuation of 50 cts. per pound, the plaintiff seeking herein to recover the excess ■deduction over and above that limited valuation. There would seem to be no room for argument except for facts alleged by the defendant which it is contended serve to abrogate the contract limiting the carrier’s liability and leave it liable for full value.

It was an express shipment, but in a carload lot. It originated at Bridgeton, New Jersey, and was originally intended to be transported to a firm at Wakefield, Mass., but during the loading it was determined to change the destination and it was finally consigned to a firm at Baltimore, Md., the -tariff route to which point was through Jersey City. Plaintiff had a passenger train passing through Bridge-ton at 3.33 p. m. and a fast freight at 8 p. m. The ■changing of the destination and the markings of the packages caused such a delay that the car could not be sent on the passenger train, and since there was no other passenger train until the next day the car, to expedite its movement, was attached to the fast freight and taken by that train to Jersey City. The car bore a proper “car card ” and should have been turned over to plaintiff’s agent :at Jersey City by the yardmaster for forwarding, but there was much congestion in the yards at that time and the yardmaster not only failed to do this but by some means so overlooked the car and its character that it was permitted to remain in the yards at Jersey City for ten days, when the yardmaster forwarded it attached to a freight train. This train was in collision, as a result of which the car was burned. The plaintiff concedes liability. It questions only the amount thereof.

Made a part of a stipulation of facts is a copy of the bill of lading, on approved Government form, upon which, among other “ conditions,” are the two paragraphs set out in finding II, limiting liability, and also there is stipulated a copy of the uniform express receipt authorized by the Interstate Commerce Commission, upon which, under “ terms and conditions,” is the limiting paragraph quoted in the same finding. There was no declaration of value in excess of that set up in the limiting paragraphs referred to.

The validity of such limiting paragraphs is fully determined by the law itself, by action pursuant thereto of the Interstate Commerce Commission, and by our court of last resort. The validity and effect of such limiting provisions are very fully considered in the comparatively recent case of American Ry. Exy. Co. v. Lindenburg, 260 U. S. 584.

It is true that the opinion in that case does not in terms consider the exact question here involved, neither does any preceding opinion, but in the case cited very strong language, in general terms, is used and quoted. It is said, "Having accepted the benefit of the lower rate dependent upon the specified valuation, the respondent is estopped from asserting a higher value.” And quoting from Kansas City Southern Ry. Co. v. Carl, 227 U. S. 639, at 652, it is said, “ To permit such a declared valuation to be overthrown by eAddence aliunde the contract, for the purpose of enabling the shipper to obtain a recovery in a suit for loss or damage in excess of the maximum valuation thus fixed, would both encourage and reward undervaluations and bring about preferences and discriminations forbidden by the law. Such a result would neither be just nor conducive to sound morals or wise policies.” In the two cases cited are found other forceful suggestions, not necessary to quote, and numerous cited authorities.

The defendant relies largely upon an inference drawn from a statement found in the later case of American Ry. Ex. Co. v. Levee, 263 U. S. 19, wherein (p. 21) it is said. “ Under the law of the United States governing interstate commerce the stipulation constituted a defense to liability beyond fifty dollars, unless the plaintiff should prove some facts that took the case out of the protection of the contract.” and the contention is that, since this was an express shipment, the plaintiff breached the contract and therefore may not avail itself of the provisions therein limiting liability. The statement is a general one, the words “ unless the plaintiff should prove some facts that took the case out of the protection of the contract” had no particular application to the case under consideration, and in the light of all that has been said in preceding cases we can not conclude that by the use of these words it was intended to hold that facts such as those here involved might be proven for the purpose and should have the effect of permitting a recovery in excess of the limited valuation.

Of weight in determining the question is the holding as to the nature of a contract limiting liability, and upon this question, without quoting at length, we refer to the 6'ari-case, supra, at page 650. After suggesting the invalidity of an agreement to release a carrier either in whole or in part for loss due to negligence, it is said, “A declared value by the shipper for the purpose of determining the applicable rate, when the rates are based upon valuation, is not an exemption from any part of its statutory or common-law liability. The right of the carrier to base rates upon value has been always regarded as just and reasonable. The principle that the compensation should bear a reasonable relation to the risk and responsibility assumed is the settled rule of the common law.”

In our opinion the plaintiff was entitled to the benefit of the limited liability clauses unaffected by the facts recited, and this conclusion must result in a judgment for the excess of the deduction over and above the limitation, and we have so ordered.

Hat, Judge, and Booth, Judge, concur.  