Hercules Powder Co. v. Pennsylvania Railroad

32 Del. 309

• Court: Superior Court of Delaware
• Decided: July 15, 1922
• Docket: No. 19
• Status: Published

Opinion

Pennewill, C. J.,

delivering the opinion of the court:

This suit was brought to recover the value of a large quantity of toluol, alleged to have been lost in transit from Johnstown, Pa., to Hercules, Cal.

It is alleged in the declaration that the goods were delivered to the defendant November 16, 1917, at Johnstown, and that the defendant neglected to carry the same safely and securely, and make delivery to the plaintiff at Hercules. The suit was commenced November 16, 1920.

In addition to three general pleas to the declaration the defendant filed three special pleas. The fourth plea, which is the first special plea, alleges that the said shipment was transported in accordance with the conditions of the uniform bill of lading, which provided, inter alla, that:

“Suits for loss, damage or delay shall be instituted only within two years and one day after delivery of the property, or in case of failure to make delivery, then within two years and one day after a reasonable time for delivery has elapsed.”

This plea further alleged that the tank car in question arrived at its destination on or about February 4, 1918, that this was a reasonable time for delivery, and that suit was not brought within two years and one day after reasonable time for delivery had elapsed.

The defendant’s fifth plea, which is his second special plea, alleges that the consignor of said goods undertook to furnish and did furnish the car used for the transportation of the goods mentioned in the declaration, the loss complained of occurring while the goods were being transported in said car, and that the said loss was due' to the defective condition of the car at the time goods were loaded, said defective condition being that the car was loaded without properly draining the heater coils, etc. The defendant's sixth plea, which is his third special plea, is practically the same as his fourth plea.

To the first and third special pleas the plaintiff demurred both generally and specially setting out the following grounds:

(1) The terms and conditions of the said bill of lading as alleged in the pleas became inoperative during the period of federal control.

(2) The terms and conditions of the said bill of lading as alleged in the fourth and sixth pleas are unlawful and wholly void.

These grounds will be considered in their inverse order.

We think the liability of carriers at common law or under state laws prior to the federal statutes on the subject is immaterial to the question presented by the pleadings in this case, and that question will not be discussed or considered.

By the statute known as the Carmack Amendment to the Hepburn Act, Congress provided, among other things, that the carrier must issue to the shipper a receipt or bill of lading; that the carrier should be liable to the lawful holder thereof for any loss, damage or injury to property, caused not only by the issuing carrier but any common carrier, railroad or transportation company to which the property might be delivered; and that no contract, receipt or rule, regulation or other limitation of any character whatsoever should exempt such carrier from the liability thus imposed.

Because of such federal jurisdiction, regulation and control, all state laws became inoperative as to shipment from one state to another, in so far as they were covered by federal legislation.

It is alleged in the declaration that the goods were shipped November 16, 1917, and it is alleged in the plea that a part of the goods arrived at destination on February 4, 1918. On December 26, 1917, the President issued his proclamation taking over the railroads of the country under authority of the Army Appropriation Act of August 29, 1916, and the Director General of Railroads took over the transcontinental lines, including the defendant.

On March 21, 1918, Congress passed an act to supplement the powers of the President over railroads, and to provide for their operation while under federal control.

Under the Transportation Act of February 28, 1920, federal control ended March 1, 1920. The period, therefore, during which the defendant was under federal control was from December 26, 1917, to March 1, 1920. By said act (title 2, § 206f) it was provided that:

“The period of federal control shall not be computed as a part of the periods of limitation in actions against carriers, * * * for causes of action arising prior to federal control.”

It was also provided by said Transportation Act (Section 206a) that:

“Such actions, suits, or proceedings may within the periods of limitation now prescribed by state or federal statutes, but not later than two years from the date of the passage of this act, be brought in any court which but for federal control would have had jurisdiction of the cause of action had it arisen against such carrier.”

[ 1] Such, together with the Cummins Act hereafter mentioned, are the federal statutes applicable to the questions raised by plaintiff’s first ground of demurrer. The court are unable to see that the bill of lading issued by the defendant to the plaintiff was illegal under any federal statute. Such bill of lading is claimed by the defendant to be based upon and drawn in conformity with the act known as the Cummins Act, approved March 4, 1915, which provides:

“That it shall be unlawful for any such common carrier to provide by rule, contract, regulation, or otherwise a shorter period * * * for the institution of suits than two years.”

This law was passed subsequent to the Carmack Amendment, and we are unable to see how the bill of lading in question can be held illegal and void thereunder. The bill of lading does not provide a limitation shorter than that prescribed by the act, but one day longer, and to that extent it is .in favor of the shipper and against the carrier. The Carmack Amendment required the issuance of a receipt or bill of lading, and declared what its effect should be, but it did not prescribe any period of limitation.

Prior to the Cummins Act, and in the absence of any federal statute fixing a minimum period of limitation, the liability imposed by the federal statute might be limited or qualified by special contract with the shipper, provided the limitation or qualification was just and reasonable and did not exempt from loss or responsibility due to negligence. Missouri, Kansas & Texas R. R. Co. v. Harriman, 227 U. S. 657, 33 Sup. Ct. 397, 57 L. Ed. 690; Texas & Pac. Ry. Co. v. Leatherwood, 250 U. S. 478, 39 Sup. Ct. 517, 63 L. Ed. 1096.

Under the Cummins Act, a bill of lading may not provide for a limitation shorter than two years for instituting suit, but it may prescribe a longer period.

The other ground of demurrer to the fourth or first special plea, is that the terms and conditions of the bill of lading, as alleged in the fourth plea, became inoperative during the period of federal control.

The Lazarus Case (D. C.), 271 Fed. 93, relied on by both sides, does not seem to be applicable to the present case, for the reason that there was no bill of lading issued to the shipper. There was no express contract between the carrier and shipper, and the court held that the period fixed by the bill of lading filed by the carrier with the Interstate Commerce Commission was “á period of limitation prescribed by federal statutes.” The court .said:

“It may be where there is a valid contract between the carrier and the shipper for a period longer [than that fixed by statute], even by so short a time as one day, that it would be improper to speak of the limitation as ‘prescribed by’ the statute.”

But assuming that the statute does apply, and that the period of federal control is to be excluded from the period of limitation, even when there is a contract between the carrier and the shipper, as in the present case, where a bill of lading was sent to the shipper, still the statute is limited to cases where the cause of action arose before federal control. There is nothing in this case to show when the cause of action arose. There was no agreement, so far as we know, at what time the goods were to be delivered, and in the absence of such a contract, we assume that the time of delivery was a reasonable time after the goods were received by the carrier. What is a reasonable time usually depends very much upon circumstances and conditions existing at the time, and it may be a question for the jury to determine. Certainly it cannot be determined until the evidence is heard at the trial of the case. So far as the pleadings show, the cause of action may have arisen before or during federal control, although the defendant does say in his plea that—

“the tank car in question arrived at destination on or about February 4,1918, and was duly delivered to the consignee, and that this was a reasonable time for delivery of the property referred to.”

But it does not follow that an earlier date might not have been a reasonable time, for the property was received November 17, 1917.

Our attention has been called to a decision of the United States Circuit Court of Appeals for the Second District, delivered very recently, and reversing the judgment in the Lazarus Case. The appellate court (N. Y. Central Ry. Co. v. Lazarus, 278 Fed. 900) said:

“It is clear to us that in the uniform bill of lading the condition as to the two years became a part of the agreement for the transportation of the property in question.

“* * * The time within which the defendants in error were entitled to bring an action is therefore one fixed by the contract and not by statute,, and the extension of time granted by the provision of the Transportation Act does not permit adding thereto the period of federal control, and it cannot apply, so as to change the terms of the contract entered into between the carrier and the shipper. * * * Where the time within which an action could be brought is agreed upon by the terms of the contract of shipment, it is one of the terms and conditions thereof and Congress could not deprive the plaintiff in error of this property right, for to do so would be a violation of the provisions of the Fifth Amendment.”

This court held that Section 206 (f) of the Transportation Act (upon which the plaintiff in the present case relies), does not apply to all periods of limitation, whether applied by contract, regulation or statute; that Congress did not intend a different meaning in the use of the words “periods of limitation” as used in paragraph (f) than their meaning as defined in paragraph (a), and that the words as used in such sections apply to limitations now prescribed by the state or federal statutes.

While the decision of the District Court in the Lazarus Case, 271 Fed. 93, has been reversed, the decision of the appellate court is distinctly in favor of the defendant.

But it is contended by the plaintiff that the plea is bad because the defendant has failed to allege that the suit was not brought within two years after notice in writing was given by the carrier to the claimant that the carrier has disallowed the claim.

This contention is based on a provision in Transportation Act of 1920, § 438 (41 Stat. 494), which reads as follows:

“Such period [two years] for institution of suits to be computed from the day when notice in writing is given by the carrier to the claimant that the carrier has disallowed the claim or any part or parts thereof specified in the notice.”

This was in effect an amendment or supplement to the Cummins Amendment passed in 1915, which made it unlawful for a carrier to provide by contract a shorter period for the institution of suits than two years. The Cummins Act did not say from what time the period of limitation should be computed, and this omission the Transportation Act was designed to supply.

But the contract of shipment in this case, made pursuant to the Cummins Amendment, provides that:

“Suits for loss, damage or delay shall be instituted only within two years and one day after delivery of the property; or, in case of failure to make delivery, then within two years and one day after a reasonable time for delivery has elapsed.”

We have held that this was a good and valid contract at the time it was made, and one of its material provisions was the period of limitation for the institution of suits where there is failure to deliver the property. The contract said “two years and one day after a reasonable time for delivery had elapsed.' ’ The Transportation Act, passed more than two years after the contract was made, says two years after notice by the carrier to the claimant that his claim has been disallowed.

It is true, generally speaking, as claimed by the plaintiff, “that the limitation of an action is a matter of remedy and not of right.” 36 Cyc. 1142; Lewis’ Sutherland, Stat. Const. (2d Ed.) § 668; Terry v. Anderson, 95 U. S. 628, 24 L. Ed. 365.

(a)

And it may be that an extension, by a subsequent statute, of the time given under a prior statute for the institution of suits, would affect the remedy only; but we think where the limitation is embodied in and made a part of the contract, as in the present case, the subsequent statute does not apply.

To the defendant’s fifth or second special plea, the plaintiff has also demurred, and assigned the following grounds:

“That it nowhere appears in said plea that the consignor undertook to furnish and did furnish the car used for the transportation of said goods for a sufficient consideration.

That it nowhere appears that the defects were such that an ordinary inspection by the consignor would bring them to the attention of the consignor.

That it nowhere appears that the consignor knew of the defective condition of the said car at the time said goods were loaded.

That it nowhere appears that the consignor released the defendant from liabilities for injuries resulting from the said defective vehicle."

The cases cited on this question are more confusing than helpful. We are convinced, however, that a carrier is not relieved of liability for loss or damage to goods caused bj/ a defective car, merely because the shipper furnished the car. In one of the cases cited it was shown that the shipper had his own inspector. Frohlick v. Pa. Co., 138 Mich. 116, 101 N. W. 223, 110 Am. St. Rep. 310 (4 A. & E. Annot. Cas. 1140). And in another it was alleged that the car was defective, but that such defect was not discoverable by the carrier by the exercise of reasonable care. Ala. G. So. R. Co. v. Morris & Co., 249 Fed. 312, 161 C. C. A. 320.

In most of the cases cited by the defendant, something was shown from which it might reasonably be inferred that the shipper had released the carrier from the duty of inspection.

We are of the opinion that although the shipper furnished a defective car, the carrier is liable for loss resulting from the defect, if the loss could have been prevented by reasonable diligence on the part of the carrier in inspecting the car. (Ala. G. So. R. Co. v. Morris & Co., supra; see, also, Ala. & V. Ry. Co. v. Amer. Cot. & Oil Co., 249 Fed. 308, 161 C. C. A. 316) .unless the facts are such as to warrant the conclusion that the shipper had released the carrier from any liability (Cleveland, C., C. & St. L. Ry. Co. v. Louisville Tin & Stove Co., 33 Ky. Law Rep. 924, 111 S. W. 358, 17 L. R. A. [N. S.] 1034).

The plaintiff’s demurrer is, therefore, overruled as to the defendant’s fourth and sixth pleas, or first and third special pleas, and sustained as to the fifth, or second special, plea.

See, also, Cook v. Gray, 2 Houst, 455, and Gray v. Cook, 3 Houst. 49.