Wells Fargo Company v. Neiman-Marcus Company/Opinion of the Court

Action by a shipper against an express company to recover for the loss of a package of furs shipped from New York to Dallas, Texas, and never delivered.

The receipt executed by the express company contained a clause exempting it from loss or damage not due to its fraud or negligence, and providing that it should in no event be held liable 'beyond the sum of $50, at not exceeding which sum said property is hereby valued, unless a different value is hereinabove stated.' No different value was declared. The package weighed 7 pounds. It contained furs inclosed in a paper box which was securely wrapped and tied with cord.

The defendants in error were permitted to prove that the actual value of the furs was $400. That the consignors kept in their shipping office an express book containing blank express receipts. One of these was filled out in their office by their shipping clerk. When the wagon of the express company called at the office, the agent signed the receipt, and the package was delivered to him by a boy assistant to the shipping clerk. No questions were asked as to the value, and no value declared other than as shown in the receipt. It was also shown that the clerk who wrapped and marked the package did not know the value, and had no actual knowledge of the graduated rates of the express company, and that he had had nothing to do with the selling or buying of the furs. One of the consignors, Abraham Jacobson, sold the furs personally and testified as to their value. He testified that he knew that if the value had been declared to be $400, the express rate would have been higher, and that if no value was especially declared, they would be carried under the express rate applying to a package valued at not in excess of $50.

There was put in evidence the table of graduated rate sheets on file with the Interstate Commerce Commission. These showed that the rates were graduated by weight and value. The rate from New York to Dallas upon a package weighing between 5 and 7 pounds, and valued at not over $50, was $1, which was the rate applicable to and charged upon the package in question. If the value had been declared at $400, the rate would have been increased 15 cents for each additional $100 of value.

One of the provisions of the filed tariff sheets contained this direction: 'Always ask shipper to declare the value, and when given insert it in the receipt, mark it on the package, and enter amount on waybill. If shipper refuses to state value, write or stamp on the receipt, 'Value asked and not given."

A jury was waived, and there was a judgment for the plaintiff below for the full value of the package.

The contract of shipment, including the clause for the limitation of any recovery in case of loss or negligence, is substantially like the contract upheld in Adams Exp. Co. v. Croninger, 226 U.S. 491, 57 L. ed. --, 33 Sup. Ct. Rep. 148. To take this case without the controlling influence of that case, counsel say that no Federal question based upon the validity of the shipping contract was raised in the state court, and for this they rely upon a paragraph in the brief of one of the counsel for the express company, filed in the court below, in which it is said: 'For the purpose of this case, we are Willing to concede that said provision, in so far as it limits the liabilities of the company for $50, is void both under a statute of that state of Texas,' and under the provisions of the Carmack amendment of § 20 of the act to regulate commerce of june 29, 1906 [34 Stat. at L. 593, chap. 3591, U.S.C.omp. Stat. Supp. 1911, p. 1304].

That such a clause may be void under the legislation of Texas may be true. But that it is valid, if fairly made for the purpose of applying to the shipment the lower of the two rates based upon valuation, is not now an open question. Adams Exp. Co. v. Croninger, cited above.

That case had not been decided when this case was heard in the state court, and there was much diversity of opinion as to the meaning of that section when counsel made the concession. At most it was a concession for purposes of argument as to a matter of law, and could not conclude anyone, since it did not operate to withdraw the shipping contract from the case, nor its validity from the court's consideration.

It is undoubtedly true that the principal defense upon which the defendants seem to have relied in the state court was, that by intentional misrepresentation the plaintiff had obtained a rate based upon a valuation of $50, and that they had thereby secured transportation of the property for which they sue at a less rate than that named in the tariffs published and filed by the carrier, as required by the acts of Congress regulating commerce, and thus obtained an illegal advantage and caused an illegal discrimination forbidden by the acts referred to. But this defense rested upon the misrepresentation as to real value declared only in the carrier's receipt, and therefore involved the consequence of the undervaluation by which an unlawful rate had been obtained. The question at last would be, Shall the shipper or owner recover nothing because of that misrepresentation, or only the valuation declared to obtain the rate upon which the goods were carried? The latter would seem to be the more reasonable and just consequence of the estoppel. The ground upon which the validity of a limitation upon a recovery for loss or damage due to negligence depends is that of estoppel.

But it is a mistake to assume that the company did not rely upon the stipulation limiting a recovery in case of loss or damage to the value agreed upon or declared. In the 12th paragraph of its answer it asserted that, if liable at all, its liability 'should be limited to $50, as provided in said contract of shipment, which $50 has heretofore been tendered to plaintiff.' By its 8th and 9th assignments of error in the court of civil appeals, error was assigned upon the refusal of the trial court to hold that the defendants in error were estopped, by the valuation declared, to recover any amount in excess of $50. The court of civil appeals, while not in express terms denying the validity of such a stipulation limiting recovery, did so in effect, for it seems to have placed its judgment of affirmance upon the rule requiring the company's agents to ask the shipper to declare the value, and if no value is stated, that the package should be stamped, 'Value asked and not given.' This was not done. Therefore, said the court, 'the company's agent failed to perform a plain duty. . . and it is in no attitude to complain that the shipper did not state the value.'

But the shipper, in accepting the receipt reciting that the company 'is not to be held liable beyond the sum of $50, at not exceeding which sum said property is hereby valued, unless a different value is hereinabove stated,' did declare and represent that the value did not exceed that sum, and did obtain a rate which he is to be assumed to have known was based upon that as the actual value. There is no substantial distinction between a value stated upon inquiry, and one agreed upon or declared voluntarily. The rate of freight was based upon the valuation thus fixed, and the liability should not exceed the amount so made the rate basis. Hart v. Pennsylvania R. Co. 112 U.S. 331, 338, 28 L. ed. 717, 720, 5 Sup. Ct. Rep. 151.

Judgment reversed, and remanded for further proceedings not inconsistent with this opinion.