Hart v. Pa. R.R. Co., 112 U.S. 331

Lawrence Hart brought this suit in a State court in Missouri, against the Pennsylvania Railroad Company, to recover damages from it, as a common carrier, for the breach of a contract to transport, from Jersey City to St. Louis, five horses and other property. The petition alleges that, by the negligence of the defendant, one of the horses was killed and the others were injured, and the other property was destroyed, and claims p. 332damages to the amount of $19,800. After an answer and a reply, the plaintiff removed the suit' into the Circuit Court of the United States for the Eastern District of Missouri, where it was tried by a jury.

But no carrier shall be liable for the acts of the animals themselves, or to each other, such as biting, kicking, goring, and smothering, nor for loss or damage arising from p. 333condition of the animals themselves, which risks, being beyond the control of the company, are hereby assumed by the owner, and the carrier released therefrom.

Fifth. This company’s liability is limited to the transportation of said animals, and shall not begin until they shall be loaded on board the boats or cars of the company. The owner of said animals, or some person appointed by him, shall go with and take all requisite care of the said animals during their transportation and delivery, and any omission to comply herewith p. 334shall be at the owner’s risk. Witness my hand and seal, this 20th day of October, 1879.

The errors assigned are, that the court erred in refusing to permit the plaintiff to show the actual damages he had p. 335sustained, and in so charging the jury as to restrict their verdict to $1,200.

J/r. George M. Stewart for plaintiff in error.—The following facts are clear : (1) that the property shipped was of much greater value than that named in the printed form of contract; (2) that the carrier knew this before it received the stock for shipment; (3) that the plaintiff was not asked the value of the property when he signed the contract, and no valuation had been agreed upon or attempted by the parties at that time; (4) that the injury was the direct result of gross negligence of the carrier.—I. The defendant could not relieve itself by a bill of lading so procured from the common law liability for injuries resulting from its own negligence or the negligence of its servants. Railroad Co. v. Lockwood, IT Wall. 357; Express Co. v. Caldwell, 21 Wall. 264; Farnham v. Camden Railway Co., 55 Penn. St. 53; American Express Co. n . Sand, 55 Penn. St. 140; Railway Co. n . Henlei/n, 52 Ala. 606-615; Railway Co. v. Abels, 60 Mississippi, 1017; Southern Express Co. v. Moon, 39 Mississippi, 832; Moulton v. Railway Co., 31 Minn. 85.—II. Being unable to relieve itself from such liability in toto, it could not fix the limit for its liability at less than the total damage sustained by its negligence. We do not deny that a shipper may be called upon to state value in order that proper freight rates may be charged for transportation, and that in such case he will be bound—that was the case in Graves n . Railway Co. 137 Mass. 33, and in Harvey v. Railroad Co., 74 Missouri, 538. But in this case no representation of value was required; no misleading statement of value was made; and the shipper knew that the value of the property was greatly in excess of the sum named in the bill of lading. A shipper is not bound to disclose the value of property shipped unless the carrier demands it. Jones v. Yoorhis, 10 Ohio, 145. A common carrier may undoubtedly limit his liability by agreement. Farnham v. Railway Co., 55 Penn. St. 53. Nawugation Co. v. Bank, 6 How. 344; but such exemptions must be clearly stated in the contract. Maginn v. Dinsmore, 56 N. Y. 168 ; and in the absence of such an agreement a carrier p. 336cannot escape liability for his negligence. Sager v. Portsmouth Railway Co., 31 Maine, 228 ; Southern Express Co. v. Moon, 39 Mississippi, 822; Chicago, &c., Railway n . Abels, 60 Mississippi, 1017 ; Railwa/y Co. n . Simpson, 30 Kansas, 645 ; City of Nw: wich, 4 Benedict, 271 ; Black v. Tra/nsportation Co., 55 Wis. 319 ; Levenig v. Union, &c., Co., 42 Missouri, 88 ; Newburyer n . Howard, 6 Philadelphia Rep. 174; Railway Co. v. Henlein, 52 Ala. 606. Such an agreement fixing the extent of the liability so extremely disproportionate to the value of the property is unjust and will not be upheld. Express Co. n . Caldwell, 21 Wall. 264 ; Railway Co. v. Henleim, 52 Ala. 606-615 ; Railway v. Simpson, 30 Kansas, 645. That the loss was occasioned by the negligence of defendants’ agents does not admit of serious discussion.

It is contended for the plaintiff that the bill of lading does not purport to limit the liability of the defendant to the amounts stated in it, in the event of loss through the negligence of the defendant. But we are of opinion that the contract is not susceptible of that construction. The defendant receives the property for transportation on the terms and conditions expressed, which the plaintiff accepts “ as just and reasonable.” The first paragraph of the contract is that the plaintiff is to pay the rate of freight expressed, “ on the condition that the carrier assumes a liability on the stock to the extent of the following agreed valuation : If horses or mules, not exceeding two hundred dollars each. ... If a chartered car, on the stock and contents in same, twelve hundred dollars for the car load.” Then follow in the first paragraph, these words : “But no carrier shall be liable for the acts of the animals themselves, or to each other, such as biting, kicking, goring or smothering, nor for loss or damage arising from condition of thé animals themselves, which risks, being beyond the control of the company, are hereby assumed by the owner, and the carrier p. 337released therefrom.” This statement of the fact that the risks from the acts and condition of the horses are risks beyond the control of the defendant, and are, therefore, assumed by the plaintiff, shows, if more were needed than the other language of the contract, that the risks and liability assumed by the defendant in the remainder of the same paragraph are those not beyond, but within, the control of the defendant, and, therefore, apply to loss through the negligence of the defendant.

In Rail/road Co. v. Lockwood, 17 Wall. 357, the following propositions were laid down by this court: (1) A common carrier cannot lawfully stipulate for exemption from responsibility when such exemption is not just and reasonable, in the eye of the law; (2) It is not just and reasonable in the eye of the law, for a common carrier to stipulate for exemption from responsibility for the negligence of himself or his servants; (3) These rules apply both to carriers of goods and to carriers of passengers for hire, and with special force to the latter. The p. 339basis of the decision wa&, that the exemption was to have applied to it the test of its justness and reasonable character. It was said, that the contracts of the carrier “ must rest upon their fairness and reasonableness ; ” and that it was just and reasonable that carriers should not be responsible for losses happening by sheer accident, or chargeable for valuable articles liable to be damaged, unless apprised of their character or value. That case was one of a drover travelling on a stock train on a railroad, to look after his cattle, and having a free pass for that purpose, who had signed an agreement taking all risk of injury to his cattle and of personal injury to himself, and who was injured by the negligence of the railroad company or its servants.

The limitation as to value has no tendency to exempt from liability for negligence. It does not induce want of care, exacts from the carrier the measure of care due to the value agreed on. The carrier is bound to respond in that value for p. 341negligence. The compensation for carriage is based on that value. The shipper is estopped from saying that the value is greater. The articles have no greater value, for the purposes of the contract of transportation, between the parties to that contract. The carrier must respond for negligence up to that value. It is just and reasonable that such a contract, fairly entered into, and where there is no deceit practised on the shipper, should be upheld. There is no violation of public policy. On the contrary, it would be unjust and unreasonable, and would be repugnant to the soundest principles of fair dealing and of the freedom of contracting, and thus in conflict with public policy, if a shipper should be allowed to reap the benefit of the contract if there is no loss, and to repudiate it in case of loss.

The subject-matter of a contract may be valued, or the damages in case of a breach may be liquidated in advance. In the present case, the plaintiff accepted the valuation as “ just and reasonable.” The bill of lading did not contain a valuation of all animals at a fixed sum for each, but a graduated valuation according to the nature of the animal. It does not appear p. 342that an unreasonable price would have been charged for a higher valuation.

As relating to the question of the exemption of a carrier from liability beyond a declared value, reference may be made to section 4281 of the Revised Statutes of the United States (a re-enactment of Section 69 of the act of February 28,1871, ch. 100, 16 Stat. 458), which provides, that if any shipper of certain enumerated articles, which are generally articles of large value in small bulk, “ shall lade the same, as freight or baggage, on any vessel, without at the time of such lading giving to the master, clerk, agent, or owner of such vessel receiving p. 343the same, a written, notice of the true character and value thereof, and having the same entered on the bill of lading therefor, the master and owner of such vessel shall not be liable as carriers thereof in any form or manner, nor shall any such master or owner be liable for any such goods beyond the value and according to the character thereof so notified and entered.” The principle of this statute is in harmony with the decision at which we have arrived.

Prior thereto, in 1861, Robert Forsythe had purchased the real estate described in the bill, with his own means, from Horatio G. Loomis, and, according to his directions, a deed p. 345was made by Loomis conveying the property to William R. Arthur, as trustee, and to his heirs and assigns, upon the following trusts therein expressed: “ To permit Mary E. Forsythe, wife of Robert Forsythe, of Chicago, to use and occupy, enjoy and receive the rents and profits of said lands and premises, for her life and to her own use, and at any and all times, upon the order or request in writing of said Mary E. Forsythe and the said Robert Forsythe jointly, to convey said lots, or either or any part of them, to such person or persons as they may designate; and in case said Mary E. shall die without issue in the lifetime of her said husband, then to convey said lands to said Robert Forsythe for life, immediately after the decease of said Mary E., to hold to him and his use for life, and to his child or children, if any lawfully begotten, in fee simple and remainder, to their use and to them equally as tenants in common. But if said Robert shall die without lawful issue, then to the children of his brother, Leonard E. Forsythe, and the children of Lydia T. Warrack who may be in being at the time of said Robert’s decease, in fee simple and remainder, to their use and to them equally as tenants in common. And in case said Robert shall die without lawful issue in the lifetime of said Mary E., then to convey said lands and premises to her for life immediately after the death of said Robert, to hold to her and her own use for life, and to the children of said Leonard E. Forsythe, and the children of said Lydia T. Warrack, who may be in being at the time of said Mary’s decease, in fee simple and remainder as aforesaid, to their use and to them equally as tenants in common. But if hereafter said Robert shall have child or children born of his said wife or of any future wife, then instead of the conveyance aforesaid to the children of said Leonard E. Forsythe and Lydia T. Warrack, said trustee is to convey said lands to said Mary E. or to said Robert (as the one may chance to survive the other), to her or his use for life as aforesaid, and to the child or children who may be so born to them or him, in fee simple and remainder, to their use and to them equally as tenants in common.”

Subsequently, upon proper proceedings for that purpose, this p. 346deed was reformed and corrected by a decree in chancery, whereby it was provided that the conveyance of said Arthur, the trustee, to be made on the request of the said Robert and Mary E. Forsythe, when made, should be in fee simple absolute, and should operate to cut off the several trusts thereafter specified in said original conveyance to Arthur.

Robert Forsythe being in default for non-payment of interest p. 347on the debt to Cochrane, Scoville executed the power of sale under the deed of trust to him, by a sale to James D. Wallace on April 17,1872. The latter had, just prior thereto, on March 8, 1872, acquired whatever title to the premises, if any, had vested in the assignee in bankruptcy, by a sale and conveyance thereof from him. Thereupon Wallace re-conveyed the premises, with some additional property, to George Scoville, as trustee, to secure the whole amount of principal and interest due to Cochrane, amounting, with the expenses of the transaction, to $17,- 000, the amount specified in the deed of trust. This arrangement was made for the better security of the debt due to Cochrane, John Forsythe having becoipe, in consideration thereof, a guarantor of the notes given therefor.

Mr. John 8. Monk for appellants.—I. On the face of the trust conveyance, an interest was given to Robert Forsythe, on which the lien of appellants’ judgment attached. The words used being insufficient to raise a trust for the separate use of the wife, the deed, in effect, gives the first life estate to Robert, with remainder to Mary for life. Bowen v. Sebree & Wife, 2 Bush, 112; Wade v. Fisher et al., 9 Richardson Eq. 362; Chipchase v. Simpson, 16 Sim. 485; Wills v. Sayer, 4 Madd. 409; Kensington v. Bolland, 2 Myl. & K. 184; Austin n . Austin, 1 Ch. D. 236 ; Tyler v. Lake, 2 Russ. & Myl. 183; Hartly v. Murle, 5 Ves. 540. Conceding the trust to be for her separate use, Robert took a vested remainder for life. Juli v. Jacobs, p. 3483 Ch. D. TOT; Lainson v. Lai/nson, 18 Beav. 1; Weston v. Weston, 125 Mass. 268; Darling v. Blanchard, 109 Mass. 176 ; Wight v. Shaw, 5 Cush. 56; White v. Curtis, 12 Gray, 54; Blanchard v. Blanchard, 1 Allen, 223. The lien of the judgment attached to Robert’s interest, whether vested or contingent. White v. McPheeters, 7$ Mo. 286; Williams v. Amory, 14 Mass. 20 ; Kelly v. Morgan, 3 Yerg. 43T; Lockwood v. Nye, 2 Swan, 515; Wiley v. Bridgman, 1 Head, 68; Burton v. Smith, 13 Pet. 464; Tyndale v. Ware, Jacobs, 212; Smith v. Angell, 2 Ld. Raym. T83.—II. Was the lien divested by the exercise of the alleged power of appointment ? (1.) Forsythe’s interest having passed to the assignee in bankruptcy, subject to the lien of the judgment, could not be defeated, nor the lien displaced by a subsequent exercise of the power. Doe v. Britain, 2 B. & A. 93. (2.) The power was extinguished pro tanto by the judgment. Carr n . Holford, 3 Ves. 650; Cox v. Chamberlain, 4 Ves. 631; Maundrell v. MaAJmdrell, T Ves. 56T; Bay v. Pung, 5 B. & A. 561; Doe v. Jones, 10 B. & C. 459 ; Skeeles v. Shelley, 8 Sim. 153; 3 Myl. & Craig, 112 ; Taylor v. Stibbert, 2 Ves. 43T ; White v. McPheeters, T5 Mo. 286. (3.) The alleged appointment to Corwith, being by way of mortgage, could, as against creditors, operate only pro ta/nto, if at all. Skeeles v. Shea/rley, 3 Myl. & Craig, 112; White n . McPheeters, 75 Mo. 286; Jones v. Clifton, 101 U. S. 225.—III. The power reserved to Forsythe gave him the equitable fee on which a lien was created by the judgment. The Illinois statute, in force now, and at the date of the deed in trust to Arthur, and also at time of the rendition of judgment, regarding the force and effect of English common law and statutes, is as follows : Sec. 1. “ The common law of England, so far as the same is applicable and of a general nature, and all statutes or acts of the British Parliament made in aid of, and to supply the defects of the common law, prior to the fourth year of James the first, excepting the second section of the sixth chapter of the forty-third Elizabeth, the eighth chapter of thirteenth Elizabeth, and ninth chapter of thirty-seventh Henry Eighth, and which are of a general nature, and not local to that kingdom, shall be the rule of decision, and shall be considered as of full force p. 349until repealed by legislative authority.” Johnson v. Cushing, 15 N. H. 298; Lassells v. Cornwallis, 2 Vern. 465 ; Holmes n . Coghill, 12 Ves. 265; Tarbuck v. Harbury, 2 Vern. 510; Smith v. Hurst, 10 Hare, 30.—IV. The judgment was a hen on Forsythe’s estate in reversion, which, on the revocation of the trusts declared in the deed to Arthur, became absolute. Williams n . Amory, 14 Mass. 20; Kelley n : Horga/n, 3 Yerg. 437; Lockwood v. Nye, 2 Swan, 515 ; Wiley v. Bridgman, 1 Head, 68; Hickey n . Ullman, 2 Halst. 180; Burton v. Smith, 13 Pet. 464; Jacobs v. Ware, 3 Jacobs, 212; Smith v. Angell, 2 Ld. Raym. 783; Barlow v. Salter, 17 Ves. 479; Conklin v. Conklin, 3 Sandf. Ch. 64; Anderson v. Jackson, 16 Johns. 382.—V. Cochrane was not entitled to protection as a bona fide purchaser. Gibson v. Jones, 5 Leigh, 370; Peck n . Peck, 9 Yerg. 301; Boone v. Childs et al., 10 Pet. 177.

It is accordingly contended on behalf of the complainants, that their judgment took effect at its rendition as a lien upon an equitable estate for life, reserved to Robert Forsythe by the terms of the deed of trust to Arthur, which was not and could not be displaced by the appointment by virtue of which the conveyance was made by Arthur, the trustee, to Corwith; that the power of appointment secured to Forsythe and wife operated to subject the entire estate, which could be disposed p. 350of under that power, and which was the fee simple, to the claims of creditors reduced to judgment; and that Robert Forsythe had an equitable reversion in fee in the trust estate by reason of the failure of the ultimate limitations alleged to be void for remoteness, as they were to take effect, according to the terms of the trust, only after an indefinite failure of issue, which reversion in fee was subject to the lien of judgments against him.

In the present instance the trust was an active one, not p. 351merely passive. At no time during the lifetime of his wife could Robert Forsythe call for, or compel from the trustee, a conveyance of the legal title. On the contrary, the trustee was required by the terms of the trust, subject to the power of appointment, to retain the legal title in himself, and to permit Mrs. Forsythe to use and occupy the property, and to enjoy and receive the rents and profits thereof during her fife and to her own use; language which, if it cannot be properly construed to devote it to her separate use, all the more required the protection secured to her actual right by the legal title being vested in a trustee. The estate of Robert Forsythe, therefore, under the trust, whether for life or in fee, whether vested or contingent, was equitable merely, and of that nature which could not be subjected to sale for payment of his debts except by the aid of a court of equity. In such cases no lien arises by operation of law from the judgment, but only on the filing of the bill.

On the contrary supposition, that the estate of Robert Forsythe, under the deed of trust to Arthur, was subject at law to the lien of the appellants’ judgment, their title still must fail. Prior to the enactment of 1 and 2 Vic., ch. 110, it was settled in England that at law a judgment against the party having a power of appointment, with the estate vested in him until and in default of appointment, was defeated by the subsequent execution of the power in favor of a mortgagee. Doe v. Jones, 10 B. & C. 459 ; Tunstalls. Trappes, 3 Sim. 286, 300. And it was held to be immaterial that the purchaser had notice of the judgment, Eaton n . Sanxter, 6 Sim. 517 ; or that a portion of the purchase money was set aside as an indemnity against it, Skeeles v. Shea/rly, 8 Sim. 153 ; & C. on appeal, 3 Myh & Cr. 112. In that case, Sir John Leach, the vice-chan-cellor, decided that the effect of the transmission of the estate by appointment was, that the appointee takes it in the same manner as if it had been limited to him by the deed under which the appointor takes in default of appointment, and, consequently, free and disconnected from any interest that the appointor had in the tenements in default of appointment; that, as the appointee is in no sense the assignee of the appointor, p. 352he cannot be affected by judgments which affect only the estate and interest of the appointor, and, that being so, the circumstance of his having notice of such judgments is immaterial.

It is indeed a rule well established in England, and recognized in this country, that where a person has a general power of appointment, either by deed or by will, and executes this power, the property appointed is deemed, in equity, part of his assets, and subject to the demands of his creditors in preference to the claims of his voluntary appointees or legatees. This rule is stated by Mr. Justice Gray in Clapp v. Ingraham, 126 Mass. 200, to have had its origin, perhaps, in a decree of Lord Somers, affirmed by the House of Lords, in a case in which the person executing the power had, in effect, reserved the power to himself in granting away the estate. Thompson n . Towne, Prec. Ch. 52; S. C. 2 Vern. 319. But it was frequently afterwards'applied to cases of the execution of a general power of appointment by will, of property of which the donee had never any ownership or control during his life. In re Harvey’s Estate, L. R. 13 Ch. Div. 216. That doctrine, however, has no application in the present case for several reasons. The appellants did not seek such relief in equity as against the p. 353estate created by the exercise of the power of appointment by Robert Forsythe, but claimed a lien at law upon the antecedent estate, which that exercise of the power - had displaced and defeated. At the time when that might have been done, their judgment had ceased to be a debt against him by reason of his discharge in bankruptcy, and the appointees, Corwith and Cochrane, were not volunteers but purchasers for value.