Michalitschke Bros. & Co. v. Wells

California Supreme Court Nov 2, 1897 No. S. F. No. 736Published

Before: Henshaw, McFarland, Temple

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Holding. A common carrier may contractually limit its liability for the loss of goods to an agreed-upon value, and such a limitation is not contrary to public policy even if the loss results from the carrier's negligence.

Issues

Whether a common carrier can contractually limit its liability for loss to a specified value when the actual value of the goods is not disclosed.
Whether a limitation of liability clause in a contract of carriage is void as against public policy when the loss is caused by the carrier's negligence.
Whether a special defense based on a contractual limitation of liability must be specially pleaded rather than raised under a general denial.

Disposition. reversed

Quotations verified verbatim against the opinion

“The rule established by the weight of the authorities is, that where goods done up in packages are received by a carrier for transportation he cannot be held responsible, in-case of loss, for damages beyond the value of the goods as agreed upon”

“Such a contract is fair and reasonable, and is not contrary to public policy. It is not a contract which relieves the carrier from responsibility for his own misbehavior; he is liable in case of loss for the val ue of the packages”

“Limitation as to value does not excuse negligence.”

Synopsis

APPEAL from a judgment of the Superior Court of tbe City and County of San Francisco. A. A. Sanderson, Judge.

The facts are stated in the opinion of Mr. Justice McFarland.

By the acceptance of the receipt with the knowledge of its terms, the plaintiffs are held to have assented and agreed to all the terms and conditions therein contained, including the condition limiting the liability in case of loss to a specified sum, which is a valid and binding contract. (Bank of Kentucky v. Adams Exp. Co., 93 U. S. 174, 175, 188; Grace v. Adams, 100 Mass. 505; 97 Am. Dec. 117; 1 Am. Rep. 131; Belger ¶. Dinsmore, 51 N. Y. 166; 10 Am. Rep. 575; Oppenheimer v. United States Exp. Co., 69 Ill. 62; 18 Am. Rep. 596; Ballou v. Earle, 17 R. I. 441; 33 Am. St. Rep. 881; Pacific Exp. Co. v. Foley, 46 Kan. 457; 26 Am. St. Rep. 107; Kart v. Pennsylvania R. R. Co., 112 U. S. 331; Durgin v. American Exp. Co., 66 N. H. 277; Smith v. American Exp. Co., (Mich. 1896), 66 N. W. Rep. 479; Brehme v. Adams Exp. Co., 25 Md. 328; Graves v. Lake Shore etc. R. R. Co., 137 Mass. 33; 50 Am. Rep. 282; Zimmer v. New York Cent. etc. R. R.., 137 N. Y-460; St. Louis etc. Ry. Co. v. Weakly, 50 Ark. 397; 7 Am. St. Rep. 104; New Jersey Steam Nav. Co. v. Merchants’ Bank, 6 How. 397; N. Y. C. R. R. Co. v. Lockwood, 17 Wall. 357; Tyly v. Morrice, Carth. 485; Gibbon v. Paynton, 4 Burr. 2298; Clay v. Willan, 1 H. Black. 298; Clarke v. Gray, 6 East, 564; Nicholson v. Will an, 5 East, 507; Civ. Code, sec. 2176; Scammonv. Wells, Fargo & Co., 84 Cal. 311; California Powder Works v. Atlantic etc.R.R. Co., 113 Cal. 329.) The limitation of liability to the sum specified is valid and binding, even in cases of actual negligence. (Kart v. Pennsylvania, R. R. Co., svpra; Primrose v. Western Union Tel. Co., 154 U. S. 15; Kill v. Boston etc. R. R. Co., 144 Mass. 284; Zimmer v. New York etc. R. R. Co., svpra; Smith v. American Exp. Co., supra; Pacific Exp. Co. v. Foley, supra; Ballou v. Earle) supra; Brehme v. Adams Exp. Co., supra; Duntley v. Boston etc' R. R. Co., 66 F. H. 263; 49 Am. St. Rep. 610; Dvrgin v. American Exp. Co., supra; St. Louis etc. By. Co. v. Weakly, supra; Zouch v. Chesapeake etc. Ry. Co., 36 W. Va. 524; Richmond etc. R. R. Co. v. Payne, 86 Ya. 481; Louisville etc. R. R. v. Sherrod, 84 Ala. 178; Western Ry. Co. v. Harwell, 91 Ala. 340; Green-bood on Public Policy, 517.) The contract limiting the liability was new matter, and properly pleaded as such. (Missouri Pac. R. R. Co. v. Wichita etc. Co., 55 Kan. 525; Atchison etc. R. R. Co. v. Ditmars, 3 Kan. App. 459; Atchison etc. R. R. Co. v. 'Bryan (Tex. Civ. App. 1895), 28 S. W. Rep. 98.) The allegation of negligence in the complaint added nothing to the cause of action, and presented no material issue. (Jackson v. Sacramento Valley R. R. Co., 23 Cal. 268; Hooper v. Wells, Fargo & Co., 27 Cal. 11, 26; 85 Am. Dec. 211; Bohannan v. Hammond, 42 Cal. 227; Knowles v. Seale, 64 Cal. 377; Louvall ¶. Gridley, 70 Cal. 507; Malone v. County of Del Norte, 77 Cal. 217.) Under the Civil Code it requires “ gross negligence” to except the carrier from limited liability, which is distinct from mere “ negligence.” (Civ. Code, sec. 2175; Redington v. Pacific Postal etc. Co., 107 Cal. 317; 48 Am. St. Rep. 132.) It does not require an expressly stipulated value in order to the limiting of liability to a specified amount, where no value is stated. (Pacific Exp. Co. v. Foley, supra; St.Loxds etc. Ry. Co.v. Weakly,supra; Zouck v. Chesapeake etc. Ry. Co., supra; Richmond etc. R. R. Co. v. Payne, supra; Western Ry. Co. v. Harwell, supra; South etc. R. R. Co. v. Henlein, 52 Ala. 606; 23 Am. Rep. 578; Calderon v. Atlas Steamship Co., 69 Fed. Rep. 574; Squire v. Neiv York etc. R. R. Co., 98 Mass. 239; 93 Am. Dec. 162; Clarke v. Gray, 'sxipra; Nicholson v. Willan, supra; Civ. Code, sec. 2176.) Knowledge of the nature of the goods shipped is immaterial. (Levi v. Waterhouse, 1 Price, 280; Marsh v. Horne, 5 Barn. & C. 322.)

Opinion — McFarland

McFARLAND, J. It is averred in the complaint that plaintiffs, through their agents Seidenberg & Co., delivered to defendant at the city of New York four certain packages of cigars, of the [687]value of sis hundred and twenty-five dollars which defendant, a common carrier, received and agreed to deliver to plaintiff at the city of San Francisco; that defendant wrongfully and negligently failed to deliver said cigars to plaintiffs, to their damage in the sum of six hundred and twenty-five dollars and interest.

The defendant in its answer denied the averments of the complaint, and also set up a separate defense, to which plaintiffs interposed a general demurrer. Judgment was rendered for plaintiffs for six hundred and twenty-five dollars, which was the full value of the cigars, and defendant appeals from the Judgment, bringing up only the judgment-roll. The question presented is, whether or not the court erred in sustaining the said demurrer.

In that part of the answer to which the demurrer was sustained it is averred that the four packages were received by appellant to be carried and delivered to respondents at San Franaiseo upon the terms and conditions stated in a certain written contract of carriage accepted by respondents at the time the packages were received by appellant. The contract is set out and made part of the answer; and that part of it which is material here is as follows: “Received from Seidenberg <& Co. four (4) pkgs. said to contain cigars, valued at-. Addressed, Michalitschke Bros. & Co., San Francisco, Cal.Wells, Fargo & Company shall not be held liable for loss or damage .... for any amount exceeding fifty dollars on any shipment unless its true value is herein stated/’ It is further averred in the answer (substantially) that at the time of accepting said contract respondents had full knowledge of the terms of said contract; that the true, or any, value of the contents of said packages, or of either of them, was never named or stated to appellant, and appellant had no knowledge thereof until after they had been destroyed by fire; that appellant believed that the value of any one of said packages did not exceed fifty dollars, and, acting on that belief, made a reduced charge for their transportation; and that appellant would have made the regular charge for transportation, which would have been greater than the one charged, if it had known that the value of the contents of the packages was as great as that stated in the complaint. By the answer appellant admitted its liability in the sum of two hundred dollars—fifty dollars for each package—and offered to allow respondents to take judgment for that amount.

Michalitschke Bros. & Co. v. Wells

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Synopsis

Opinion — McFarland

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Concurrence — Temple

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