Chesapeake & Ohio Railway Co. v. National Bank of Commerce

95 S.E. 454, 122 Va. 471, 1918 Va. LEXIS 112

• Court: Supreme Court of Virginia
• Decided: March 21, 1918
• Status: Published

Opinion

Sims, J.,

after making the foregoing statement, delivered the following opinion of. the court:

The assignments'of error present the questions for our •decision which will be considered and disposed of in their order as stated below:

1. Was the defendant, under the facts of this case, the initial carrier, as contemplated by the Federal statute law above mentioned?

As bearing on this question we will, in the outset, state certain general propositions about which there is no serious question made in argument before us, which are as follows

In every case of an action for damages for breach of contract or breach of duty by a common carrier of freight to carry it safely, whether in assumpsit on the contract, or in tort for breach of duty, the right of action is dependent upon the existence of a contract of carriage between the plaintiff and defendant at the time the alleged cause of action arose, (10 C. J. sec. 130, p. 110); which contract, however, need not have been an express contract, but may have arisen from the duty imposed at common law or by statute, State or Federal, in which case the contract will be implied in law from the duty imposed by the common law or by statute.

It is immaterial therefore whether the action in the instant case was in assumpsit or in tort. The right of the plaintiff to maintain such an action, whether in assumpsit or in tort, depends, in the last analysis, on the existence of a contract of carriage between the plaintiff and defendant, either in fact or implied in law, at the time the alleged cause of action arose, and further upon such contract being an enforceable one under the law.

Prior to the Carmack amendment, above quoted, there were many conflicting decisions as to the circumstances from which the contract on which the right of action depended would be implied at common law, when it was for a through transportation of property designated to a point beyond the terminus of the receiving carrier’s line. As said in Atlantic C. L. R. Co. v. Riverside Mills, 219 U. S. 186, at page 198, 31 Sup. Ct. 164, at page 167, 55 L. Ed. 167, at page 179, 31 L. R. A. (N. S.) 7, at page 24: “Congress by the act here involved (the Carmack amendment) has declared, in substance, that the act of receiving property for transportation to a point in another State and beyond the line of the receiving carrier shall impose on such receiving carrier the obligation of through transportation with carrier liability throughout.” Again, at p. 36, in this opinion of the United States Supreme Court in the case last cited, it is said: “In substance Congress has said to such carriers : ‘If you receive articles for transportation from a point in one State to a place in another State, beyond your own terminal, you must do so under a contract to transport to the place designated. ’ ” '

Since the Congress has occupied the whole field of interstate commerce by virtue of the Federal statutes aforesaid, those statutes have superseded all State legislation on the subject and they and their construction must be alone looked to in the ascertainment of the rights of parties litigant in all actions, such as that in the instant case, involving an interstate shipment.

Further: The settled construction of the Federal statute law aforesaid is that if an interstate shipment of freight is begun under an express contract of carriage between the initial- carrier and the shipper, and subsequently a connecting carrier, en route of the shipment, beyond the terminal of the initial carrier, issues another contract of carriage to the shipper for a remaining portion of the original route and takes up the original bill of lading evidencing the original contract upon its.surrender by the shipper, the second contract of carriage does not supersede the first, and in such case the first contract remains in force by virtue of said Federal statute law and the shipper and all assignees of his claiming through him (all of whom could have enforced such original contract), have no right of action for damages against such subsequent carrier but only against the initial carrier. In such case there can be, in contemplation of law, but one initial carrier and no action by the shipper or one claiming under him can be maintained against any subsequent carrier en route, although instituted upon a subsequent contract of carriage with the latter, such as that aforesaid. Atlantic C. L. R. R. Co. v. Riverside Mills, supra; Looney v. Oregon Short Line R. R., 271 Ill. 588, 111 N. E. 509; Hudson v. Chicago, etc., R. Co., 226 Fed. 38; W. H. Alton Piano Co. v. Chicago, etc., R. Co., 152 Wis. 156, 189 N. W. 743; Atchison, etc., R. Co. v. Harold, 241 U. S. 371, 36 Sup. Ct. 665, 60 L. Ed. 1050. And the same would be true if the initial contract of carriage were not an express contract, but one implied in law because of the duty imposed by the Federal statute, where the initial carrier received the shipment for interstate transportation to a destination beyond the terminal of its line. Hudson v. Chicago, etc., R. Co., supra.

Such holding is based, however, upon the fundamental consideration that in such cases the initial contract of carriage was one which was enforceable by the plaintiff under the Federal statute, as covering the entire route of the original shipment; that any subsequent contract Of carriage with any interstate carrier was needless, was not required in such case by the Federal statute and was against its policy, which was (as stated in Hudson v. Chicago, etc., R. Co., supra), “to secure simplicity in the transportation of freight carried by several common carriers—as the Supreme Court expresses it, 'unity of transportation with unity of responsibility * * by localizing the responsible carrier,’ ” (quoting from the case of Atlantic C. L. R. R. Co. v. Riverside Mills, supra). Further dealing with the question of the proper consideration of the Carmack amendment, the court in the Hudson v. Chicago, etc., R. Co. case supra, said:

“Now if that is the purpose of the amendment the question arises: Would that purpose be effected by requiring each one, we will say, of seven connecting common carriers in an interstate shipment to issue a separate bill of lading? If this were done we would have, on plaintiff’s theory, seven common carriers, six of whom would stand in the position of principals to succeeding carriers, and also six in the position of agents of the preceding carriers. All seven of them would stand in the position of principals so far as their own lines of railway were concerned. Instead of having localized the remedy it would needlessly expand it * ■ * *

“If the Carmack amendment does not compel the intermediate carrier to issue a bill of lading, then the obligation cannot be assumed by the intermediate carrier by the issuance of a bill of lading, for that would be allowing the intermediate carrier to give at its option special privileges to a shipper * * *. So it seems, to me that neither in the absence of a bill of lading, nor by. issuing a bill of lading, can the intermediate carrier be held liable for loss or damage occurring on the line of the succeeding carrier.

“The first transaction has already settled the relation between the owner of the goods and the carrier and fixed the duties and liabilities of the carrier to such owner. A contract afterwards entered into between the shipper and another carrier manifestly cannot affect these duties and liabilities.”

In all of the cases above cited, however, the plaintiff, either as a party to it or as assignee of the shipper who was such a party, could have enforced his claim of damages under the original contract, if the subsequent contract had not been made—there was no stoppage or interruption of the continuous carriage of the freight under the initial contract, made for any necessary purpose; hence, the subsequent contract did not fall within the permission given in section 7 of the interstate commerce act to make it, and the making of it was in effect prohibited by the Carmack amendment. And subsequent- amendments made such prohibition even more explicit. But for such prohibitory effect of Federal statute law, such cases would, of course, have held otherwise than they did, where the subsequent contract of carriage was in fact made without duress.

We come now to the consideration of the controverted question above stated.

The defendant relies on the authorities above referred to to sustain its position that in the instant case the Union Pacific Railroad was the initial carrier and could alone be sued by the plaintiff in the instant case.

The defendant especially relies on the case of Atchison, etc., R. Co. v. Harold, supra, to sustain the position that a change of consignee does not affect the matter.

As to the last named case the following should be said: Neither change of title to the goods (Gulf Railway Co. v. Texas, 304 U. S. 403, 27 Sup. Ct. 360, 51 L. Ed. 540) nor change of consignee while the goods are in transit does, of itself, affect the matter; but a change of contract (which is not invalid because prohibited by the Federal statute law aforésaid), by the substitution of a different contract from the initial contract, may affect the matter; and will, and, upon principle, must of necessity do so. For as we have noted above, such an action as that in the instant case can be maintained only as based directly or indirectly upon a contract of carriage existing between the plaintiff and defendant at the time the alleged cause of action arose. If then there was a subsequent contract between the parties to the action which was by them both substituted for a former contract of carriage of the same freight between other parties, and such second contract was not forbidden by law, the action must of necessity be based on the latter contract. If indeed the latter contract was forbidden by law and the former contract was by force of statute law continued in existence, then, and then only, the action should be based on the former contract.

The pivotal question, therefore, just at this point in our consideration of the instant case is this: Was the second contract of carriage forbidden by law? This, in turn, depends upon the further question: Was the tariff regulation aforesaid forbidden by the Federal statutes aforesaid, as to shipment of live stock from points west of Chicago to points east of that place?

Now clearly such tariff regulation was not expressly forbidden by said Federal statutes. If forbidden at all it must have been by implication. The tariff regulation applied to all carriage of live stock freight on the lines of all common carriers east of Chicago on “order notify” bills of lading. The tariff regulation was, unquestionably legal and valid as to all such shipments originating at and east of Chicago. Its object plainly was merely to abolish “order notify” bills of lading contracts of carriage of the stock in the territory east of Chicago. It is not contended that this- object was not in itself lawful. The contention is that the tariff regulation was unlawful as to shipments of live stock from points west of Chicago originally destined to points east of that place on “order notify” bills of lading, because such tariff regulation incidently breaks, interrupts and stops such an originally intended through and continuous interstate carriage of freight. The latter position manifestly depends upon whether the Federal statutes aforesaid forbid any break, interruption or stoppage in every originally intended through and continuous interstate carriage of freight, which has once begun, without exception. Now we see from the provisions of section 7 of such statute law above quoted that this is not so. Such a break, stoppage or interruption as may be “made in good faith for * * * (a) necessary purpose and without any intent to avoid or unnecessarily interrupt such continuous carriage or to evade the provisions of this act,,” is not forbidden by such statute law. Wé think that the reasonable construction of said Federal statute is that the tariff regulation aforesaid was not forbid: den thereby to the extent of the incidental effect aforesaid; that the break, stoppage or interruption at Chicago of the originally intended through transportation from Medicine Bow in the instant case being made not “with any intent to avoid or unnecessarily interrupt such continuous carriage or to evade any provision” of the statute law aforesaid, but solely in order not to interfere with said tariff regulation, it was for a “necessary purpose” in contemplation of such statute. That, therefore, the first contract of carriage in evidence was invalid as a contract of carriage east of Chicago; and, hence, that the second contract of carriage was not forbidden by law but was a lawful and valid contract.

Taking up now the consideration of the cases cited and relied on for defendant as above noted upon the question under consideration, we deem it sufficient to say that the principle on which these cases were decided does not lead to the conclusion that the second contract of carriage in the instant case was forbidden by the Federal statute law. The instant case was not one where the transportation could have proceeded east of Chicago under the first contract of carriage. It was not a case where there was no necessity for a change of that contract into a new and different contract. The invalidity of the first contract under the lawful tariff regulation aforesaid was a sufficient justification of the defendant for requiring a new and different contract of carriage. The latter contract having been in fact entered into, and being a legal and valid contract, it superseded the former contract of carriage.

It is urged upon our consideration by defendant that the “order notify” bill of lading being illegal as a contract of carriage east of Chicago, it was to that extent a void contract ; that a void contract is no contract and that hence the case stands as if no express contract had been made with the Union Pacific Railroad. That in such case the mere receiving of the stock by such railroad for transportation to Windsor, N. C., constituted it the initial carrier for the entire route. This position, however, overlooks the consideration that what we are asked to resolve into a fact by construction was not a fact, and cannot be implied or considered-as existing consistently, with the actual facts. If, indeed, no express contract had been made with the Union Pacific Railroad Company, and the stock had been received by it for transportation as aforesaid, that state of facts would undoubtedly have constituted it the initial carrier for the entire route to Windsor, N. C.; and the Union Pacific Railroad could alone have been sued by the plaintiff, notwithstanding any subsequent contract of carriage made between the plaintiff and an intermediate connecting carrier. But in such case there would have been no need for any such subsequent contract, the contract implied in law from the duty imposed on the Union Pacific Railroad Company by said Federal statute law would have been ample to have obligated it for the carriage of the freight for the entire route (by itself and through its connecting carriers as its agents). And in such case no connecting carrier would have had the lawful right to refuse such carriage on the ground that it would have been under an invalid contract. But the ease before us is, as aforesaid, a very different one.

The conclusion, therefore, necessarily follows that the defendant, and not the Union Pacific Railroad Company, under the facts in the instant case, was the initial carrier as contemplated by the Federal statute law above cited.

Hence it follows that the defendant was the proper defendant to the action in the instant suit for the injury and damage complained of in the declaration, whether caused by it on its own line or by some connecting carrier en route from Chicago to Windsor, N. C.

Coming now to the question of the liability of the defendant for the injury and damages complained of—it was liable therefor if such injury and damage were due to the negligence or default in duty of the defendant or of some connecting carrier.

That is to say, the defendant, notwithstanding the Federal statute law aforesaid, is only liable for some default in its common law duty as a carrier or for some default in the like duty of some of its connecting carriers aforesaid. Adams Express Co. v. Croninger, 223 U. S. 491, 33 Sup. Ct. 148, 57 L. Ed. 314, 44 L. R. A. (N. S.) 257. In other words, it is liable only for negligence or default in duty at common law of itself, or of its connecting carriers aforesaid, and under, the Federal statute law aforesaid is liable for such negligence or default in duty of its connecting carriers as if it were its own and had occurred on its own line. Galveston, etc., R. Co. v. Wallace, 223 U. S. 481, 32 Sup. Ct. 205, 56 L. Ed. 516.

Now at common law, upon the proof merely of delivery to a common carrier of inanimate goods for transportation and the proof of their non-delivery, the law implies that they have been lost by the negligence of the common carrier or by reason of some cause for which it is responsible, and the plaintiff suing for damages occasioned by such loss is relieved of the burden of proof of the cause of the loss. This rule applies to the initial carrier of inanimate goods under the Federal statute law aforesaid. Galveston, etc., R. Co. v. Wallace, supra. As there said “The carrier and its agents (the connecting carriers)- having received possession of the goods, were charged with the duty of delivering them or explaining why that had not been done. This must be so, because carriers not only have better means, but often the only means, of making such proof. If the failure to deliver was due to the act of God, the public enemy or some cause against which it might lawfully contract, it was for the carrier to bring itself within such exception.”

Upon the trial in the court below one of the grounds of defense relied on by defendant was a common law exception, namely: that “The injuries to the animals shown in evidence may as well have been due to the inherent nature, vice or defects of the animals or to * * * fright * * * for which the carriers are not responsible, as to any cause for which the carriers were responsible.” But this defense is not relied on before us, and indeed could not be successfully relied on before us for the reason that the evidence for defendant tending to bring the case within such exception was in conflict with the evidence for plaintiff tending to show a contrary state of fact, hence such evidence for defendant was waived by its demurrer to evidence and cannot be considered by us—the result being that we must consider that the defendant has failed to sustain the burden resting upon it, hereinafter referred to, to prove by a preponderance of the evidence that the injury to the stock complained of may have been due to causes within said common law exception relied on by defendant. Therefore, such common law exception need not be further specifically mentioned'. ■ • The defendant, however, does, before us, rely on a special contract exception as hereinafter more particularly 'set forth. Now in connection with the consideration by us .of such defense the following should be said:

In the case of loss of inanimate freight it is not questioned by defendant that the common law rulé stated in the quotation above from the case of Galveston, etc., R. Co. v. Wallace, supra, applies, and that the same common law rule applies to injury and consequent loss or damage arising from injury to inanimate freight, and to any defense by such carrier, relying on exemption from liability in damages for injury to such freight by reason of any exception to the common law rule provided by contract. The burden of proof in such case is on the carrier to prove that the injury falls within the exception contained in the special contract relied on by the defendant. 6 Cyc. 519, 520; 10 C. J., sec. 577, pp. 574-5.

In the case of animate freight, however, there has been much diversity of opinion as to whether the common law rules applicable to inanimate freight exist in their entirety —whether the same burden of proof aforesaid rests upon the carrier in the event of loss of or injury to animate freight as to inanimate freight.

In considering this question no reference to the statute in Virginia or the rules of decision in Virginia or elsewhere on this subject, with respect to intrastate shipments, would be of any help in arriving at a right conclusion, since the liability for damages in the instant case is governed by the Federal statute law, and the common law rules applicable thereto as accepted and applied in Federal tribunals must govern. Cincinnati, etc., R. Co. v. Rankin, 241 U. S. 319, 36 Sup. Ct. 555, 60 L. Ed. 1022, L. R. A. 1917a, 265. Hence such statutes and decisions will not be referred to.

When we come to consider the common law rules under discussion as accepted and implied in Federal tribunals with respect to injury to animate freight, to-wit, live stock, in a case where a contract exception is relied on as a defense, whatever may be the difference in other of such rules as applicable to animate as distinguished from inanimate freight, there seems to be no room for valid dissent from the conclusion that the burden of proof, at the least, which is required of it in that behalf, is on the carrier in two particulars, namely: (a) It must prove that, at the time the injury may have occurred, the special contract exception relied on was in. operation; and (b) it must at least prove (unless such fact appears from the plaintiff’s evidence) that the injury was of such a nature that it may, with equal probability, in accordance with the evidence, have been occasioned by causes which were within the contract exception relied on. 6 Cyc. 524; 10 C. J., sec. 581, p. 379. Certainly this is true where the proof of the plaintiff shows that the injury was due to human agency. 6 Cyc. 524.

. In the instant case, while there was evidence for defendant to the contrary, there was ample evidence for plaintiff to establish the fact that the injury to the stock complained of was due to human agency, as appears from the statement of facts above, and on the demurrer to evidence this court must consider such as the fact in the instant case.

In the instant case the defendant relies on the special contract exception from liability contained in the contract of carriage with the Union Pacific Railroad, quoted in the above statement of facts, and also on the special contract exception from liability contained in the contract of carriage with the defendant, also quoted in the above statement of facts. Since, for the reason above stated, this action is not based upon the former contract, the exception from liability clause thereof cannot be relied on by the defendant. This leaves the defense under consideration entirely dependent upon such clause of the latter contract of carriage.

Now, since the burden of proof at the least which is required of it, as above noted, is upon the defendant in both of the particulars above mentioned, if the defendant has failed in its proof in either particular, such failure is fatal to its defense now under consideration.

It is urged upon our consideration by defendant that' the testimony for the plaintiff, when read in connection with certain entries on the contract of carriage with defendant, shows that the stock was accompanied by persons in charge of it within the meaning of clause 5 thereof, relied on by defendant, so that such exception clause was put in operation in the instant case, whereas it is urged on the part of the plaintiff that the fact in question is not directly proved but that it is a mere inference, which the defendant, as demurrant to the evidence has deprived itself of the right to draw; but, as we shall presently see, it is unnecessary for us in the instant case to pass upon that controverted question.

Nor is it necessary for us to consider the ground of defense mentioned in the above statement of the case, to-wit, that the burden of proof to show the cause of the injury to the stock was on the plaintiff because the stock was accompanied by persons to take care of, feed and water it. It is not necessary for us to consider such ground of defense because such burden of proof, if it were conceded to exist, did not arise unless the defendant had at least shown by a preponderance of the evidence which can be considered by us that the injury to the stock was of such a nature that it may, with equal probability as aforesaid, have been occasioned by causes which were within the exception from liability clause of the contract aforesaid on which such ground of defense rests. This, as aforesaid, we shall presently see the defendant has failed to do.

The pivotal question then, upon which the defense under consideration turns, and upon which its decision depends in the instant case, is, therefore, the following:

2. Has the defendant sustained the burden of proof resting upon it, at the least which is required of it in that behalf, to show by a preponderance of evidence, (b) that the injury to the stock was of such a nature that it may, with equal probability in accordance with the evidence in the case, have been occasioned by causes which were within the exception from liability clause aforesaid of the contract of carriage with defendant?

The exception from liability clause aforesaid of the contract of carriage with defendant, above quoted, is as follows :

“Sec. 5. The shipper at his own risk and expense shall load and unload said live stock and in case any person shall accompany said live stock in charge of the same, (shall) take care of, feed and water said live stock while being transported, whether delayed in transit or otherwise *

Now-the evidence for plaintiff (as noted in the above statement of facts) was direct and positive that the cars containing the stock were not over-crowded or over-loaded; that the stock was in sound and good condition when delivered to defendant for.transportation; that the injury to it apparent on its arrival at destination was of such nature that the jury were warranted in drawing the inference of fact that such injury was not occasioned by negligence in loading or unloading or in lack of care of it by any person accompanying the stock in charge of it, or from lack of feed or water. There was evidence for defendant, it is true, in conflict with that of the plaintiff on this question, but on the demurrer to evidence such conflicting evidence cannot be considered by us. It is, therefore, manifest that in the instant case the defendant has not proved by any evidence which is before us that the injury complained of in the declaration was of such a nature that it may with equal probability, as aforesaid, have been occasioned by causes which were within the exception from liability clause of the contract aforesaid relied on by defendant. On the contrary, the evidence for the plaintiff, as we must consider it, establishes the affirmative fact that such injury was of such nature that it was not occasioned by causes within such exception.

The question ‘last above stated must therefore be answered in the negative.

For the foregoing reasons, we are of opinion that there was no error in the action of the court below in overruling the demurrer to evidence, and the judgment complained of will be affirmed. '

Affirmed.