Zoller Hop Co. v. Southern Pac. Co.

Mr. Justice Burnett delivered the opinion of the court. The essence of the dispute here involved is the validity of the condition of the bill of lading prescribing the invoice price of the hops as the basis upon which to compute damages in case of loss. Error of the trial court is assigned in various'forms, all centering on the excerpt noted. The judge presiding at the hearing instructed the jury that the condition quoted was void, as against public policy, and that the parties to the action “are bound by the rules of law placing the liability of a comm oh carrier to the shipper of a commodity as if the contract referred to had not been entered into.” The court also refused the carrier’s offer to prove that the plaintiff’s agent, who shipped the hops, made out and signed the bill of lading containing the. clause quoted and the rate of freight at $1.50 per hundred, and afterward brought it to the defendant’s agent at Independence, who signed it on behalf of the carrier. The court likewise refused to allow the defendant to prove its allegation about the regulations prescribing one rate for a shipment under the uniform bill of lading with its restricted liability of the carrier and a higher rate im — 268 — posing upon the carrier the common-law responsibility except as stated. Besides this, the defendant was denied the right to prove that the copy of the tariff was on file and open to inspection at its station in Independence, Oregon, at and before the shipment moved. 1, 2. The transaction confessedly involved a movement of freight between the states of Oregon and Pennsylvania, and hence is governed by the interstate commerce law and the construction thereof announced by the Supreme Court of the United States. By the terms of that national statute every common carrier engaged in interstate commerce is required to file with the Interstate Commerce Commission, and print and keep open for public inspection, schedules showing all the rates, fares and charges for transportation, which schedules shall contain the classification of freight in force, and shall also state separately all privileges or facilities granted or allowed, and any rules or regulations which in any wise change, affect or determine any rates, or charges, or the value of service rendered to shipper or consignee. Printed copies of these schedules must be kept posted in two public and conspicuous places in every depot station or office of such carrier where passengers or freight are received for transportation in such form that they shall be accessible to the public and can be conveniently inspected. The Commission has power to change all rates, regulations and practices of common carriers filing such schedules, so far as it shall determine any of them to be unreasonable or unjust, and it is made a criminal offense for either the carrier or shipper to deviate from the scheduled rates or regulations in any of their dealings with each other: 34 Stat. 584 (U. S. Comp. Stats. 1913, § 8563). As said by Mr. Justice Harlan — 269 — in Louisville & Nashville R. R. Co. v. Mottley, 219 U. S. 467 (55 L. Ed. 297, 31 Sup. Ct. Rep. 265, 34 L. R. A. (N. S.) 671): “The evident purpose of Congress was to establish uniform rates for transportation, to give all the same opportunity to know what the rates were, as well as to have the equal benefit of them. * * The purpose of Congress was to cut up by the roots every form of discrimination, favoritism and inequality. ’ ’ The design and effect of the statute is not only to compel interstate carriers to give fair and equal treatment to all shippers, without distinction or favor, but also to provide for such publicity in the matter that all may know certainly that they are receiving the benefits of the law. As early as 1902, in the case of Normile v. Oregon Nav. Co., 41 Or. 177 (69 Pac. 928), a case on a bill of lading containing a maximum valuation clause, this court held that: “The plaintiff cannot consistently claim a higher valuation upon the agreed rate of freight, and the contract is not, in any proper sense, one for the exemption of defendant from the consequences of negligence In such a case the shipper is estopped to deny the value which he himself has deliberately fixed and agreed to as the real value of the property when it comes to a loss. Such stipulations and contracts are supported and upheld upon considerations of fairness, as it relates both to the shipper and the carrier. We are led to this conclusion by cases of palpable analogy and high authority. Indeed, there are but few opposed: Hart v. Pennsylvania R. Co., 112 U. S. 331 (28 L. Ed. 717, 5 Sup. Ct. Rep. 151); Alair v. Northern Pac. R. R. Co., 53 Minn. 160 (54 N. W. 1072, 39 Am. St. Rep. 588, 19 L. R. A. 764); Railway Co. v. Sowell, 90 Tenn. 17 (15 S. W. 837); Starnes v. Railroad Co., 91 Tenn. 516 (19 S. W. 675); Richmond & D. R. Co. v. Payne, 86 Va. 481 (10 S. E. 749, 6 L. R. A. 849); Gregg v. Illinois Cent. R. Co., 147 Ill. 550 (35 N. E. 343, 37 — 270 — Am. St. Rep. 238); Hill v. Boston etc. Co., 144 Mass. 284 (10 N. E. 836); Abrams v. Milwaukee etc. Co., 87 Wis. 485 (58 N. W. 780, 41 Am. St. Rep. 55).” The Normile case, it is true, lays down the rule that the agreement must he fairly and honestly made if the shipper is to be bound; but under that principle, as showing good faith and justice, the carrier in this case ought to have been allowed to prove the schedules, rules and regulations under which it received the shipment, and which had the approval of the Interstate Commerce Commission, that the means of knowing all about the freight tariff were open and within convenient reach of the plaintiff in the manner directed by the statute, and that the plaintiff had itself made out the bill of lading and tendered it with the hops it shipped. All this was proper to consider in any event, if the question were open, in determining whether the transaction was attended with deceit or unfairness, or was carried on in the open. 3, 4. The Interstate Commerce Law, however, does not leave the question open. By its terms interstate commerce cannot be transacted by common carriers without they first file their schedules, rules and regulations, after which neither they nor their patrons can deviate from them. The effect of the offers to prove which have been mentioned would have been to show that the contract was not only lawful, but was the only one permissible in connection with the rate and the regulations sanctioned by the Interstate Commerce Commission. Kansas City So. Ry. Co. v. Carl, 227 U. S. 639 (57 L. Ed. 683, 33 Sup. Ct. Rep. 391), was a case involving a restricted valuation clause in a bill of lading. There the Supreme Court of the United States, speaking by Mr. Justice Lurton, said: — 271 — “The valuation declared or agreed upon, as evidenced by the contract of shipment upon which the published tariff rate is applied, must be conclusive in an action to recover for loss or damage a greater sum. * * To permit such a declared valuation to be overthrown by evidence 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. The valuation the shipper declares determines the legal rate, where there are two rates based upon valuation. He must take notice of the rate applicable, and actual want of knowledge is no excuse. The rate, when made out and filed, is notice, and its effect is not lost, although it is not actually posted in the station: Texas & Pac. Ry. v. Mugg, 202 U. S. 242 (50 L. Ed. 1011, 26 Sup. Ct. Rep. 628); Chicago & A. Ry. v. Kirby, 225 U. S. 155 (56 L. Ed. 1033, 10 Ann. Cas. 1914A, 501, 32 Sup. Ct. Rep. 648). It would open a wide door to fraud and destroy the uniform operation of the published tariff rate sheets. When there are two published rates, based upon difference in value, the legal rate automatically attaches itself to the declared or agreed value. Neither the intentional nor accidental misstatement of the applicable published rate will bind the carrier or shipper. The lawful rate is that which the carrier must exact and that which the shipper must pay. The shipper’s knowledge of the lawful rate is conclusively presumed, and the carrier may not be required to surrender the goods carried upon the payment of the rate paid, if that was less than the lawful rate, until the full legal rate has been paid.” That case and others of similar import dispose of the plaintiff’s reply to the effect that it did not know there were two rates applicable to the carriage of the goods in question. The reason is that rules and rates — 272 — governing such transactions are established in a manner provided by law, under the sanction of a national Commission having exclusive jurisdiction in the premises in the first instance, and they are parts of public records of which everyone interested must take notice. Where the law had provided authentic and conclusive means of knowledge, a shipper cannot close his eyes and ears to official information, and be heard to say he did not know, and hence was defrauded. On this point Mr. Justice McBride of this court said in Baldwin Land Co. v. Columbia Ry. Co., 58 Or. 285, 289 (114 Pac. 469, 471): “If the rate quoted is less than the schedule rate approved by the Interstate Commerce Commission and published, the shipper is liable for the. full rate, whether he actually knows that the rate quoted is less than the schedule rate or not. ’ ’ The contention that the stipulation in question amounts to obviating for the carrier the results of its own negligence is refuted by such cases as Bernard v. Adams Express Co., 205 Mass. 254 (91 N. E. 325, 18 Ann. Cas. 351, 28 L. R. A. (N. S.) 293), in which last publication a large number of precedents controlling the instant case are collated in the note. The following excerpt from the opinion of Mr. Chief Justice Knowlton is decisive of the point. “But- such a contract as we are considering in this case is not an exemption from liability for negligence in the management of property, within the meaning of the .statute. It is a contract as to what the property is, in ref'erence to its value. The purpose of it is not to change the nature of the undertaking of the common carrier, or limit his obligation in the care and management of that which is intrusted to him. It is to describe and define the subject matter of the contract, so far as the parties care to define it, for the purpose of showing of what value that is which comes — 273 — into the carrier’s possession, and for which he must account in the performance of his duty as a carrier. It is not in any proper sense a contract exempting him from liability for the loss, damage or injury to the property, as the shipper describes it in stating its value for the purpose of determining for what the carrier shall be accountable upon his undertaking, and what price the shipper shall pay for the service and for the risk of loss which the carrier assumes.” The following citations support the validity of the bill of lading in the feature here involved: Adams Express Co. v. Croninger, 226 U. S. 491 (57 L. Ed. 314, 44 L. R. A. (N. S.) 257, 33 Sup. Ct. Rep. 148); Missouri K. & T. Ry. Co. v. Harriman, 227 U. S. 657 (57 L. Ed. 690, 33 Sup. Ct. Rep. 397); Wells, Fargo & Co. v. Neiman-Marcus Co., 227 U. S. 469 (57 L. Ed. 600, 33 Sup. Ct. Rep. 267); U. S. Express Co. v. Cohn, 108 Ark. 115 (157 S. W. 144); Appel Suit & Cloak Co. v. Platt, 55 Colo. 45 (132 Pac. 71); So. Nursery Co. v. Winfield Nursery Co., 89 Kan. 522 (132 Pac. 149); Wabash R. Co. v. Priddy, 179 Ind. 483 (101 N. E. 724); American Express Co. v. Burke & McGuire, 104 Miss. 275 (61 South. 312); Pacific Exp. Co. v. Ross (Tex. Civ. App.), 154 S. W. 340; Missouri, K. & T. Co. v. Walston, 37 Okl. 517 (133 Pac. 42); Metz v. Chicago, R. I. & Pac. Ry., 90 Kan. 460 (135 Pac. 667); New England News Co. v. Metropolitan S. S. Co., 215 Mass. 252 (102 N. E. 423); B. & O. Ry. Co. v. Hubbard, 72 Ohio St. 302 (74 N. E. 214). 5. It is reasonable and natural that the care and risk involved in the carriage of goods should be in proportion to their value. It is proper and legitimate that, the greater the risk and responsibility, the greater should be the recompense to the one incurring them. The converse is equally true, so that conse — 274 — quent damages are reduced in proportion to the lesser responsibility for the goods.. The risk and the rate have a logical and corresponding relation to each other, based upon the value of the property intrusted to the carrier. If it is lawful to agree in advance upon a more or less conventional value of the chattels for the purpose of securing cheaper rates in favor of the shipper, it is quite as proper to use the same value as a basis upon which to compute damage for breach of the contract. As contracting parties, the rights and duties of the shipper and the carrier are reciprocal, and what is just and reasonable for one is the same for the other. Under the authorities cited it is permissible to stipulate beforehand what shall be the value of the goods, as affecting not only the rate of freight, but also the measure of damages in case of loss. The shipper wonld snffer the same financial detriment, whether his goods were destroyed by train robbers or as the result of actual negligence on the part of the carrier. Logically, under the common-law responsibility of the carrier, it should require the same amount of money to cover the loss in each of the two cases. It accords with sound doctrine, therefore, that at the ontset the parties may in good faith fix upon one value of the property for all contingencies likely to arise in the transaction, and this does not in any way .relieve the carrier from the results of its own negligence. Nothing here written is intended to sanction fictitious valuations, made for the purpose of securing preferences for one shipper or carrier over another, and that feature is not discussed, because it is not here in question. It cannot be said fairly that the carrier is oppressing or defrauding the shipper, when the former says to the latter as the effect was in this' case: “We will assume the risk of transporting your hops — 275 — at your own valuation as expressed in your invoice to your consignee.” It is lawful for the carrier to protect itself by contract within reasonable limits from low valuation for freight purposes, as well as from exorbitant prices if the goods are damaged in transit. The deductions are: (1) As the transaction involved interstate commerce, it is governed by the national legislation on that subject, and the paramount authority of the decisions of the United States Supreme Court construing the statutory declarations of Congress. (2) The defendant was entitled to prove that it had filed its schedule of rates, rules and regulations with the Interstate Commerce Commission, that they were approved by that tribunal, and that they were published and kept posted as required by the Interstate Commerce Law, with the result that the shipper was bound to'know their contents, and cannot plead ignorance on that point. (3) Congress having assumed exclusive authority over interstate commerce, and invested the Commission with power to control rates, rules and regulations affecting the carriage of property in trade from state to state, the Commission’s approval of those rates, rules and regulations is conclusive of their justice and reasonableness as between the shipper and the carrier in any litigation of this sort. (4) The parties could not lawfully make any contract about the interstate carriage of goods that is not authorized by the published tariff. (5) The stipulation in question was a legitimate and reasonable exercise of the right of contract within the sanction of the interstate commerce law. It follows that the Circuit Court erred in its rulings. The judgment is reversed and the cause remanded for further proceedings. Beversed.