Bingham v. San Pedro, Los Angeles & Salt Lake Railroad

FRICK, C. J. Respondent recovered judgment against appellant for damages be alleged were caused by its negligence as a common carrier in transporting forty-two bead of borses from Salt Lake City, Utab, to Los Angeles, Cal.; thirty-one of said borses being killed and tbe remainder injured while in transit. Appellant in its answer admitted that it bad received tbe borses for shipment to Los Angeles, but denied that it was guilty of negligence, and, as an affirmative der fense, alleged that tbe borses were shipped under a special contract wherein it was agreed by respondent that, in consideration of reduced freight rates, tbe value of tbe borses be fixed at twenty dollars, per bead, and that it was agreed that, in case of loss of or injury to tbe borses, said valuation should be tbe basis of recovery. In a separate paragraph of tbe answer appellant also averred that tbe value of tbe borses was limited to $100 per bead. Respondent in bis reply admitted that appellant’s agent bad fixed tbe value of tbe borses at twenty dollars per bead, and that be bad inserted that value in the contract of shipment, but, in substance, alleged that said valuation was inserted into tbe contract by said agent without tbe assent of respondent and against bis express declaration that tbe borses were worth $200 and upwards per bead, and that respondent signed said contract under protest. At the trial tbe respondent was permitted to testify, over the objection of appellant’s counsel, that be (respondent) objected to shipping tbe borses at tbe valuation of twenty dollars per bead, and that be informed the agent of appellant at tbe time that they were worth nearly $200 per bead; that tbe appellant’s agent said that tbe valuation as fixed by him was only a matter of form, and that all tbe shippers of live stock shipped under such a contract; that respondent then told tbe agent, “I would sooner pay a higher rate and have tbe borses valued at their value.” To this tbe agent replied that be bad no other contract that be could give respondent, and after this conversation respond — 402 — ent signed the contract. Respondent also- testified that the agent of appellant at Salt Lake City was informed of the actual value of the horses; that “he asked the price of a certain team,” and said a friend of his wanted to buy a team. The price stated to him was $550 for the team, and the agent telephoned to his friend. The agent looked all of the horses over, and was advised of their quality and condition at and before the time the contract of shipment fixing the valuation- was executed. It also appears from the record that the horses were originally received for shipment by the Oregon Short Line Railroad Company. One car load was received at Brigham City and the other at Ogden, Utah, both of which cities are stations on the Oregon. Short Line Railroad. It appears, further, that, when the horses were received as aforesaid, a statement was entered into the original contract that they were worth $100 per head. Respondent, however, -asserts that he objected to that valuation, and then insisted, as he did “ afterwards, that the horses were worth $200 per head. We mention the foregoing facts only as an explanation of appellant’s statement in his answer that the horses were valued at $100 per head. As this alleged valuation was entirely superseded and ignored by appellant in the contract in question, no further reference to the $100 valuation will be made. Appellant’s counsel frankly concede that the evidence is sufficient to establish culpable negligence on the part of the employees who were in charge of the train on which the horses were transported. They, however, insist that, since the respondent admitted that he entered into and executed a contract of shipment wherein the value of the horses was fixed at twenty dollars per head, therefore he should be bound by said valuation, and that the court erred in permitting him to vary the terms of the contract in that regard, and in permitting a recovery for more than twenty dollars per head for the horses which were killed, and in not limiting the recovery upon that basis for those which were injured. These two propositions really cover all of appellant’s assignments. — 403 — As we have pointed out, while respondent admitted the execution of the contract in his reply, he nevertheless alleged as an avoidance of the contract that the valuation of the horses was inserted therein by the agent of appellant without respondent’s assent and over his protest. These facts he testified to, and therefore established at the trial. In view of the issue arising by the reply, the question of whether the respondent assented to the valuation of the horses or not was a question of fact. (Chicago & N. W. Ry. Co. v. Calumet Stock Farm, 194 Ill. 9, 61 N. E. 1095, 88 Am. St. Rep. 68; Atchison, T. & S. F. Ry. Co. v. Dill, 48 Kan. 210, 29 Pac. 148.) In the latter case the shipment consisted of horses which were received by the Chicago', Rock Island & Pacific Railroad Company, and were turned over to the Atchison, Topeka & Santa Fe Railway Company while in transit, and the latter company, upon receipt of the horses, insisted upon a new contract of shipment similar to the one in the case at bar and in which the valuation of the horses, without assent “of the shipper, was fixed at twenty dollars per head. The Supreme Court of Kansas, however, held that the shipper could show the circumstances under which he entered into the contract, and also held that, in view of the fact that he did not assent to the valuation fixed in the contract in question, he was not bound thereby, but could recover the actual value of the horses. We are clearly of the opinion, therefore, that the trial court committed no error in permitting respondent to show the facts and circumstances under which the value of the horses was fixed and inserted into the contract and under which he signed the same. Counsel, however, strenuously insist that, under the great weight of authority, it was proper for the appellant as a common carrier and respondent as a shipper of live stock to enter into a contract wherein it was agreed that, in consideration of a special or lower freight rate, the value of the horses in case of loss should not exceed a specified sum. In other words, the carrier and shipper may for a sufficient consideration agree to just what risk each will assume with respect to a particular shipment. The leading, or at — 404 — least one of the leading, cases upon the subject is the case of Hart v. Pennsylvania R. Co., 112 U. S. 331, 5 Sup. Ct. 151, 28 L. Ed. 717. Another early and well-considered case which is often, cited is the case of Alair v. Northern Pac. Ry. Co., 53 Minn. 160, 54 N. W. 1072, 19 L. R. A. 764, 39 Am. St. Rep. 588. These cases, have been followed by a large number of cases decided by many of the state courts of last resort. It is, however, not necessary for us to refer to a great number of cases upon this questioñ. The reader wall find a large number of them collated in 1 Hutchinson on Carriers (3d Ed.), section 426, 427, and in 4 Elliott on Railroads (2d Ed.), section 1500. The United States Supreme Court in the case referred to, and in many later cases decided by that court, has held that such a contract, when fairly and honestly entered into, is good as against a loss occasioned by the ordinary negligence of the carrier. A great many cases decided by the state courts also go to this extent. One of the later ones is the case of Donlon Bros. v. Southern Pac. Ry. Co., 151 Cal. 763, 91 Pac. 603, 11 L. R. A. (N. S.) 811. In that case a large number of cases are cited in support of the doctrine. In California the question is, however, regulated by statute. While this court has not as yet held that a contract based upon a sufficient consideration wbicb is reasonable in its terms and conditions and is freely and fairly entered into' by both shipper and carrier, and in wbicb the valuation of the property transported is fixed at a specific amount, will not be enforced although it is lost through the ordinary negligence of the carrier, we have, however, several times held that a contract entered into as aforesaid will be enforced where negligence is not involved, but where the effect of the contract is merely to excuse the carrier from bis common law liability as an insurer. (Houtz v. Union Pac. Ry. Co., 33 Utah, 175, 93 Pac. 439, 17 L. R. A. (N. S.) 628; Benson v. Railroad, 35 Utah, 241, 99 Pac. 1072, 136 Am. St. Rep. 1052; Larsen v. O. S. L. R. Co., 38 Utah, 130, 110 Pac. 983.) There may be instances where the regular freight rate might be prohibitive, and where the shippers by contracts whicb are rea — 405 — sonable in tbeir terms and freely and fairly entered into for a sufficient consideration may be permitted to assume a portion of the risk in transporting tbeir property ratber tbat be prevented from shipping it at all. Tbat question is, however, not involved in this case. Nor is the question involved whether in ease of loss or injury contracts limiting the value of live stock or other freight will be enforced by this court in cases where the loss or injury is occasioned through the ordinary negligence of the carrier or his servants. That question can best be determined when a case comes here in which a reasonable contract fixing the' value has been freely and fairly entered into, or where the shipper has himself fixed the value as in the case of Donlon Bros. v. Southern Pac. Ry. Co., supra, and thus may have estopped himself, upon the foregoing propositions we therefore express no opinion. Tn view of the facts in the case at bar, there was in fact no agreement with regard to the value of the hoi’ses at all. It is true a specific value was inserted in the contract by appellant’s agent, but respondent never assented to the value as fixed by such agent, and hence there never was a meeting of minds upon the question of value between 1 the shipper and the carrier. To bind a shipper under such circumstances would be-a reproach to the law. That a contract wherein the carrier is permitted to limit his common law liability in order to be enforceable must be freely, fairly, and honestly entered into, and must be reasonable in its terms and conditions, the authorities are uniform. The only point of difference among them is whether such a contract will be enforced where the loss is due to the ordinary negligence of the carrier or his servants. In view of the evidence in,this case, the contract in question was neither freely nor fairly entered into, nor was it reasonable in its terms and conditions. ‘ The respondent never assented to the conditions with regard to the value of the horses in case of loss or injury. These conditions were imposed upon him without his consent. In the case of Cau v. Texas & Pac. Ry. Co., 194 U. S. 427, 24 Sup. Ct. 663, 48 L. Ed. 1053, — 406 — the rule laid down in Hart v. Pennsylvania Rd. Co., supra, was followed, but in course of the opinion in the C'au Case, at page 431, 194 U. S., page 664 of 24 Sup. Ct. (48 L. Ed. 1053), it is said: “There can be no limitation of liability without the assent of the shipper. . . . And there can be no stipulation for any exemption by a carrier which is not just and reasonable in the eye of the law.” We do not think a single case can be found where the foregoing doctrine is not approved and enforced. The contract in question, therefore>, cannot be enforced as against the respondent because he never assented to its provisions with respect to the value of the horses. Moreover, the value inserted in the contract was wholly unreasonable. Under the circumstances, the value as fixed amounted to no more than an .arbitrary statement of value by appellant’s agent inserted in the contract for the sole purpose of limiting appellant’s liability as a common carrier. Courts have so often held that in entering into contract of shipment the shipper and carrier seldom stand upon an equal footing that nothing more is necessary than 2 to mention the fact. The carrier not only prepares the contract in advance and inserts in it all the stipulations he desires, but, when the shipper comes to enter into the contract, he usually is in a situation where he cannot exercise a free choice with respect to whether he will accept or reject certain provisions of the contract. No contract limiting liability when entered into under such circumstances will be enforced by the courts. (Hutchinson on Carriers (2d Ed.), section 427.) Ordinarily, in order to authorize the enforcement of a contract limiting the value of freight in case of loss or injury, the value agreed upon must be the reasonable value, unless the carrier is ignorant of the real value and the value is fixed by the shipper himself for the purpose of obtaining a lower rate, and in such event the shipper, in case of loss, may be estopped from claiming the true value. Again, the carrier’s agent may not know the value of the freight, and in such event, if acting in good faith, may rely upon the statement of the owner or shipper. If the agent of the carrier — 407 — who received the freight, however, knew its value, or knew' that the value inserted in the bill of lading was unreasonably low, such a value ordinarily will be held to be one that is arbitrary and unreasonable and will not be binding. In the case at bar the appellant’s agent had knowledge of the actual value of the horses before he inserted the same in the contract. He was then informed that twenty dollars per head was only about ten per cent, of the actual value of the horses shipped. He thus, as a reasonable person, must have known that the value as he inserted it into the contract was wholly unreasonable and unfair, and he further knew that it was fixed by him for the sole purpose of arbitrarily limiting appellant’s liability in case of loss or injury to the horses while in transit. We repeat that to enforce contracts which are conceived and executed under such circumstances would be a travesty of justice and a reproach to the law. Nor can the contention prevail that the court erred in permitting a recovery based upon the value of the horses at Los Angeles. The general rule with regard to the measure of damages for freight that is lost or damaged in ti’ansit is the value thereof at the place of delivery at the time it should have been delivered. It is true that the 3 shipper and carrier may under ordinary circumstances stipulate that the value of the freight should be determined at some other place. Appellant contends that in the contract in question it was stipulated that in ease of loss or injury the value of the horses at Salt Lake should govern. This stipulation was, however, a part or a provision of the contract with regard to the value of the horses, which provision we have already held to be void. It is impossible, even though it were permissible for the purpose of enforcing the contract, to segregate the stipulation referred to from the one fixing the value of the horses at twenty dollars per head, and, as the latter provision has fallen, the former one must fall with it. The judgment is affirmed, with costs to respondent. McOABTY and STBAHP, L, concur.