A bill of lading was given in New York State for transporting a
horse to a point in Pennsylvania, containing a clause limiting the
carrier's liability to a stipulated value in consideration of the
rate paid, the shipper having been offered a bill of lading without
such limitation on payment of a higher rate signed a memorandum
accepting the contract at the lower rate. The common law as
interpreted by the courts of New York and the federal courts
permits a common carrier to limit by contract his liability for his
own negligence; as interpreted by the courts of Pennsylvania, he
cannot so limit it. On writ of error to review a judgment recovered
in a state court of Pennsylvania by the shipper for damages caused
by the negligence of the carrier in excess of the limited
amount,
Held that the jurisdiction of this Court to review a
judgment of a state court under sec. 709, U.S. Revised Statutes,
depends upon the assertion of a right, privilege or immunity under
the federal Constitution or laws set up and denied in the state
courts.
Held that the highest court of a state may administer
the common law according
Page 191 U. S. 478
to its own understanding and interpretation thereof, being only
amenable to review in this Court where some immunity or privilege
created by the federal power has been asserted and denied.
Held that, while Congress under its power may provide
for contracts for interstate commerce permitting the carrier to
limit its liability to a stipulated valuation, it does not appear
that Congress has, up to the present time, sanctioned contracts of
this nature; and, in the absence of Congressional legislation on
the subject, a state may require common carriers, although in the
execution of interstate business, to be liable for the whole loss
resulting from their own negligence, a contract to the contrary
notwithstanding.
There is no difference in the application of a principle based
on the manner in which a state requires a. degree of care and
responsibility whether enacted into a statute or resulting from the
rules of law enforced in its courts.
The defendants in error brought suit in the Court of Common
Pleas of Philadelphia against the Pennsylvania Railroad Company to
recover for injuries to a horse shipped by them from Albany in the
State of New York to Cynwyd, in the State of Pennsylvania. The
shipment was under a bill of lading of the New York Central and
Hudson River Railroad Company, bearing date of August 10, 1900. It
recited the receipt of the horse --
"for transportation from _____ to destination, if on the said
carrier's line of railroad, otherwise to the place where said
livestock is to be received by the connecting carriers for
transportation to or toward destination, and that the same has been
received by said carrier for itself and on behalf of connecting
carriers, for transportation, subject to the official tariffs,
classifications and rules of the said company, and upon the
following terms and conditions, which are admitted and accepted by
the said shipper as just and reasonable, viz.:"
"That said shipper, or the consignee, is to pay freight thereon
to the said carrier at the rate of ___ per ___, which is the lower
published tariff rate, upon the express condition that the carrier
assumes liability on the said livestock to the extent only of the
following agreed valuation, upon which valuation is based the rate
charged for the transportation of the said animals, and beyond
which valuation neither the said carrier
Page 191 U. S. 479
nor any connecting carrier shall be liable in any event, whether
the loss or damage occur through the negligence of the said carrier
or connecting carriers, or their employees or otherwise."
"If horses or mules -- not exceeding $100 each."
The through rate of freight was not filled out in the blanks in
the shipping receipt or the bill of lading, but was collected by
the agent of the Pennsylvania Railroad Company at Cynwyd, and it
appears was the reduced tariff rate usually charged on such
shipments where the limited liability clause above recited is
inserted. The shipper signed the bill of lading, which contained
the following stipulations:
"Thomas Grady does hereby acknowledge that he had the option of
shipping the above-described livestock at a higher rate of freight
according to the official tariffs, classifications, and rules of
the said carrier and connecting carriers, and thereby receiving the
security of the liability of the said carrier and connecting
railroad and transportation companies, as common carriers of the
said livestock, upon their respective roads and lines, but has
voluntarily decided to ship the same under this contract at the
reduced rate of freight above first mentioned."
The agreement further provided:
"No carrier shall be liable for loss or damage not occurring on
its own road or its portion of the through route, nor after said
property is ready for delivery to the next carrier or to consignee.
The amount of any loss or damage for which any carrier becomes
liable shall be computed at the value of the property at the place
and time of shipment under this bill of lading, unless a lower
value has been agreed upon or is determined by the classification
upon which the rate is based, in either of which events such lower
value shall be the maximum price to govern such computation."
Upon the trial, the jury returned a verdict in favor of the
plaintiff for $10,000, and judgment was rendered accordingly. The
horse was transported in safety to the end of the line of the
receiving carrier, and delivered to the defendant company,
Page 191 U. S. 480
and injured while the car in which he was shipped was standing
on the track of the Pennsylvania Railroad Company in the City of
Philadelphia, it being run into by heavily laden cars.
Upon appeal to the Supreme Court of Pennsylvania, the judgment
was affirmed. 202 Pa. 222.
Page 191 U. S. 484
MR. JUSTICE DAY delivered the opinion of the Court.
The right to review the judgment of the Supreme Court of
Pennsylvania herein depends upon the proper assertion of a right or
privilege under the federal Constitution or statutes which was
denied to the plaintiff in error by the adverse holding of the
state court.
Upon the trial in the common pleas court, it was contended that
the special contract above recited limited the recovery of the
plaintiff to the sum of $100. The court refused to so charge, but
holding that the policy and law of Pennsylvania, as declared by her
courts of last resort, did not permit such limitations on the
liability of common carriers, left to the jury to determine the
value of the horse and the question of the negligence of the
defendant.
In view of being carried to the Supreme Court of Pennsylvania,
two errors were assigned to the refusal of the court to charge:
"1. That it was lawful in the State of New York for the carrier
to limit its liability by a special contract for an injury
resulting from its negligence; that said contract having been
Page 191 U. S. 485
for a through consignment from Albany to Cynwyd, a place within
this state, said contract must be considered in its entirety, and
is incapable of divisibility; that said contract having stipulated
for an agreed valuation of the stock shipped, the parties must be
governed, by its terms, throughout the entire route, as said
contract must be interpreted and enforced here by the law of the
place where it was made, and within which state it was partly
performed, and that consequently the plaintiff is not entitled to
recover in excess of the valuation agreed upon by the parties at
the time of shipment."
"2. That the plaintiff is not entitled to recover in excess of
$100"
Neither of these assignments of error presents a federal
question in such sense as to give this Court jurisdiction to review
the judgment of the state court under § 709 of the Revised
Statutes of the United States. Nothing is better settled in federal
jurisprudence than that the jurisdiction of this Court in such
cases depends upon the assertion of a right, title, privilege, or
immunity under the federal Constitution or laws set up and denied
in the state courts.
Beals v. Cone, 188 U.
S. 184.
The first error assigned in the common pleas court raised the
question as to the law of the contract. It does not assert that any
federal right was invaded or denied. It seems to have been conceded
at the trial that the law of the State of New York, where the
contract was made, permitted the making of a contract limiting the
liability of the carrier to the agreed valuation in consideration
of the lower freight rate for carriage, the shipper having the
opportunity to have the larger liability for the value of the goods
if the higher rate of freight for carriage was paid. This rule also
prevails in the courts of the United States,
Hart v.
Railroad, 112 U. S. 331,
wherein it was held that a contract fairly made and signed by the
shipper, agreeing on a valuation of the property carried, with a
rate of freight based on such valuation, on the condition that the
carrier assume liability only to the extent of such agreed
valuation
Page 191 U. S. 486
in case of loss by the negligence of the carrier, will be upheld
as a proper and lawful mode of securing a due proportion between
the amount for which the carrier is responsible and the freight
received, and of protecting the carrier against extravagant
valuations. But this is not a question of federal law wherein the
decision of the highest federal tribunal is of conclusive
authority. In
Grogan v. Adams Express Co., 114 Pa. 523,
the Supreme Court of Pennsylvania expressly declined to follow the
rule laid down in
Hart v. Railroad, adhering to its own
declared doctrine denying the right of a common carrier to thus
limit its liability for injuries resulting from negligence. The
cases are numerous and conflicting, different rules prevailing in
different states. The federal courts, in cases of which they have
jurisdiction, will doubtless continue to follow the rule of the
Hart case, but the highest court of Pennsylvania may
administer the common law according to its understanding and
interpretation of it, being only amenable to review in the federal
Supreme Court where some right, title, immunity, or privilege, the
creation of the federal power, has been asserted and denied.
Bethell v.
Demaret, 10 Wall. 537;
Delmas
v. Ins. Co., 14 Wall. 666;
Ins. Co. v.
Hendren, 92 U. S. 287;
United States v. Thompson, 93 U. S.
586.
In the Supreme Court of Pennsylvania a further assignment of
error was made as follows:
"III. The learned court below erred in entering judgment in
conflict with the Act of Congress of February 4, 1887, entitled 'An
Act to Regulate Commerce.' Section 1 of said act clearly provides
that, where the transportation is from one state to another under a
through bill of lading, its provisions shall be carried out unless
it be in conflict with a statute of the state in which it may be
performed, or in conflict with the policy of the United States as
laid down in the federal courts, and that, as the contract was
valid in the place where made, and as there is no statute in
Pennsylvania prohibitory of an agreed valuation to establish a
rate, and as it is consistent with the policy of the United States
as declared by the federal
Page 191 U. S. 487
courts, the judgment should have been for the valuation
mentioned in the contract."
Of this assignment of error, Mr. Justice Potter, delivering the
opinion of the Supreme Court of Pennsylvania, said:
"The third assignment of error suggests that the entry of
judgment is in conflict with the Interstate Commerce Act of
Congress. This seems to be an afterthought, as there is no
indication in the record that this question was raised or
considered in the court below. It is not apparent how the act can
have any application to this case. It contains nothing bearing upon
the validity of a contract limiting the liability of a railroad for
loss or injury caused by negligence. The object of the act seems to
me to be to secure continuous carriage and uniform rates, and to
compel the furnishing of equal facilities. We cannot see that the
entry of judgment in this case interferes in any way with the
legitimate exercise of interstate commerce."
Upon the authority of
Missouri, Kansas &c. R. Co. v.
Elliott, 184 U. S. 533,
it may be admitted that the question of the decision of the state
court being in contravention of the legislation of Congress to
regulate interstate commerce was sufficiently made, and the adverse
decision to the party claiming the benefit of that act gives rise
to the right of review here. In refusing to limit the recovery to
the valuation agreed upon, did the state court deny to the company
a right or privilege secured by the interstate commerce law? It may
be assumed that, under the broad power conferred upon Congress over
interstate commerce as defined in repeated decisions of this Court,
it would be lawful for that body to make provision as to contracts
for interstate carriage, permitting the carrier to limit its
liability to a particular sum in consideration of lower freight
rates for transportation. But upon examination of the terms of the
law relied upon, we fail to find any such provision therein. The
sections of the interstate commerce law relied upon by the learned
counsel for plaintiff in error, 24 Stat. 379, 382, 25 Stat. 855,
provide for equal
Page 191 U. S. 488
facilities to shippers for the interchange of traffic; for
nondiscrimination in freight rates; for keeping schedules of rates
open to public inspection; for posting the same in public places,
with certain particulars as to charges, rules, and regulations; for
the publication of joint tariff rates for continuous transportation
over one or more lines, to be made public when directed by the
Interstate Commerce Commission; against advances in joint tariff
rates except after ten days' notice to the commission; against
reduction of joint tariff rates except after three days' like
notice, making it unlawful for any party to a joint tariff to
receive or demand a greater or less compensation for the
transportation of property between points as to which a joint
tariff is made different than is specified in the schedule filed
with the commission; giving remedies for the enforcement of the
foregoing provisions, and providing penalties for their violation;
making it unlawful to prevent continuous carriage, and providing
that no break of bulk, stoppage or interruption by the carrier,
unless made in good faith for some necessary purpose, without
intention to evade the act, shall prevent the carriage of freights
from being treated as one continuous carriage from the place of
shipment to the place of destination.
While under these provisions it may be said that Congress has
made it obligatory to provide proper facilities for interstate
carriage of freight, and has prevented carriers from obstructing
continuous shipments on interstate lines, we look in vain for any
regulation of the matter here in controversy. There is no sanction
of agreements of this character limiting liability to stipulated
valuations, and, until Congress shall legislate upon it, is there
any valid objection to the state enforcing its own regulations upon
the subject, although it may to this extent indirectly affect
interstate commerce contracts of carriage?
It is well settled that the state may make valid enactments in
the exercise of its legislative power to promote the welfare and
convenience of its citizens, although in their operation they may
have an effect upon interstate traffic.
Page 191 U. S. 489
In
M., K. & T. R. Co. v. Haber, 169
U. S. 614,
169 U. S. 635,
after reviewing previous cases in this Court, MR. JUSTICE HARLAN,
delivering the opinion of the Court, says:
"These cases all proceed upon the ground that the regulation of
the enjoyment of the relative rights and the performance of the
duties of all persons within the jurisdiction of a state belong
primarily to such state under its reserved power to provide for the
safety of all persons and property within its limits, and that,
even if the subject of such regulations be one that may be taken
under the exclusive control of Congress, and be reached by national
legislation, any action taken by the state upon that subject does
not directly interfere with rights secured by the Constitution of
the United States or by some valid act of Congress, must be
respected until Congress intervenes."
In the absence of Congressional legislation upon the subject, an
act of the legislature of Alabama, to require locomotive engineers
to be examined and licensed by a board to be appointed by the
governor for that purpose, was sustained in
Smith v.
Alabama, 124 U. S. 465.
An enumeration of the instances in which this Court has
sustained the validity of local laws intended to promote the safety
and comfort of passengers, employees, persons crossing railroad
tracks, and adjacent property owners is given in the opinion by MR.
JUSTICE BROWN in
Cleveland &c. Ry. Co. v. Illinois,
177 U. S. 514,
177 U. S.
516.
The case of
Chicago, Milwaukee &c. Ry. Co. v.
Solan, 169 U. S. 133, is,
in our opinion, virtually decisive of the question made upon this
branch of the case. In that case, cattle were loaded at Rock
Valley, Iowa, to be shipped to Chicago. The contract, as here, was
for interstate transportation. An injury happened to the drover in
charge of the cattle in Iowa, due to the negligence of the
transporting company. The shipper had signed a contract
providing:
"That the company shall in no event be liable to the owner or
person in charge of said stock for any injury to his person in any
amount not exceeding the sum of $500.00."
The company averred and offered to prove
Page 191 U. S. 490
that, in view of this limited liability, it had agreed to
transport the cattle at a reduced rate. The statute of Iowa
provided:
"No contract, receipt, rule, or regulation shall exempt any
corporation engaged in transporting persons or property by railway
from liability of a common carrier, or carrier or passengers, which
would exist had no contract, receipt, rule, or regulation been made
or entered into."
Iowa Code of 1879, § 1308. The trial court charged that the
limitation contained in the contract was void, and a verdict of
$1,000.00 damages was returned. A judgment on the verdict was
affirmed in the Supreme Court of Iowa. In delivering the opinion of
this Court, MR. JUSTICE GRAY said:
"A carrier exercising his calling within a particular state,
although engaged in the business of interstate commerce, is
answerable according to the law of the state for acts of
nonfeasance or of misfeasance committed within its limits. If he
fails to deliver goods to the proper consignee at the right time
and place, or if by negligence in transportation he inflicts injury
upon the person of a passenger brought from another state, the
right of action for the consequent damage is given by the local
law. It is equally within the power of the state to prescribe the
safeguards and precautions foreseen to be necessary and proper to
prevent by anticipation those wrongs and injuries which, after they
have been inflicted, the state has the power to redress and punish.
The rules prescribed for the construction of railroads, and for
their management and operation, designed to protect persons and
property, otherwise endangered by their use, are strictly within
the scope of the local law. They are not in themselves regulations
of interstate commerce, although they control in some degree the
conduct and the liability of those engaged in such commerce. So
long as Congress has not legislated upon the particular subject,
they are rather to be regarded as legislation in aid of such
commerce, and as a rightful exercise of the police power of the
state to regulate the relative rights and duties of all persons and
corporations within its limits. . . . The statute now
Page 191 U. S. 491
in question, so far as it concerns liability for injuries
happening within the State of Iowa -- which is the only matter
presented for decision in this case -- clearly comes within the
same principles. It is in no just sense a regulation of commerce.
It does not undertake to impose any tax upon the company, or to
restrict the persons or things to be carried, or to regulate the
rate of tolls, fares, or freight. Its whole object and effect are
to make it more sure that railroad companies shall perform the
duty, resting upon them by virtue of their employment as common
carriers, to use the utmost care and diligence in the
transportation of passengers and goods."
It is true that this language was used of a statute of Iowa
enacting a rule of obligation for common carriers in that state.
But the principle recognized is that, in the absence of
Congressional legislation upon the subject, a state may require a
common carrier, although in the execution of a contract for
interstate carriage, to use great care and diligence in the
carrying of passengers and transportation of goods, and to be
liable for the whole loss resulting from negligence in the
discharge of its duties.
We can see no difference in the application of the principle
based upon the manner in which the state requires this degree of
care and responsibility, whether enacted into a statute or
resulting from the rules of law enforced in the state courts. The
state has a right to promote the welfare and safety of those within
its jurisdiction by requiring common carriers to be responsible to
the full measure of the loss resulting from their negligence, a
contract to the contrary notwithstanding. This requirement in the
case just cited is held not to be an unlawful attempt to regulate
interstate commerce, in the absence of Congressional action
providing a different measure of liability when contracts such as
the one now before us are made in relation to interstate carriage.
Its pertinence to the case under consideration renders further
discussion unnecessary.
The judgment of the Supreme Court of Pennsylvania is
Affirmed.
