Opinion
March 11, 1910.
Arthur H. Masten, for the appellant.
Harry D. Nims, for the respondent.
The appellant contests the validity of an act of Congress, to wit, section 20 of the Interstate Commerce Act (24 U.S. Stat. at Large, 386), as amended June 29, 1906, to take effect sixty days thereafter (34 id. 593, 595, § 7; Id. 595, § 11; Id. 838, Res. No. 47), on the ground that it interferes with liberty of contract and authorizes the taking of property without due process of law. Said section is as follows: "That any common carrier, railroad or transportation company receiving property for transportation from a point in one State to a point in another State, shall issue a receipt or bill of lading therefor and shall be liable to the lawful holder thereof for any loss, damage, or injury to such property caused by it or by any common carrier, railroad or transportation company to which such property may be delivered or over whose line or lines such property may pass, and no contract, receipt, rule or regulation shall exempt such common carrier, railroad or transportation company from the liability hereby imposed: Provided, That nothing in this section shall deprive any holder of such receipt or bill of lading of any remedy or right of action which he has under existing law.
"That the common carrier, railroad or transportation company issuing such receipt or bill of lading shall be entitled to recover from the common carrier, railroad or transportation company on whose line the loss, damage, or injury shall have been sustained the amount of such loss, damage or injury as it may be required to pay to the owners of such property, as may be evidenced by any receipt, judgment or transcript thereof."
It has long been the settled rule in the Federal, and in most of the State courts, that in the absence of special contract, a common carrier, receiving goods marked for shipment to a point beyond its own line, is not liable for anything occurring after the delivery of the goods to the next connecting carrier. (See Pennsylvania R.R. Co. v. Jones, 155 U.S. 333; Myrick v. Michigan Central R.R. Co., 107 id. 102.) The rule in England and in some of the States, is that the mere receipt of goods marked for shipment to a point beyond the line of the receiving carrier operates as a contract to carry to the point of destination, and that in the absence of special contract varying the rule, the initial carrier is solely liable to the shipper for whatever occurs at any point of the entire route. (See Bristor Exeter R. Co. v. Collins, 7 H.L. Cas. 194.) No doubt, it would be competent for Congress to change the common law as declared by the courts as to interstate commerce and to adopt the so-called English rule. Under that rule, however, the carrier could by special contract restrict its liability. The Federal courts, differing with the courts of this State, have held that a contract of a common carrier, exempting itself from liability for its own or its servant's negligence, is void as against public policy. ( Railroad Co. v. Lockwood, 17 Wall. 357.) If the courts, upon grounds of public policy, can limit the right of the carrier to contract for an exemption from liability, a fortiori Congress may do so.
It may be said that a carrier is not obliged to contract to carry beyond its own line, that the statute does not prohibit it from contracting for an exemption from liability, but commands it to contract for an extension of liability. Theoretically, that is unjust, and in the case of ordinary individuals, not engaged in the discharge of quasi-public functions, could not legally be justified; but in the case of transportation companies the difficulty is theoretical only, and it would appear to be less if the English rule had first been adopted, if Congress had taken two steps instead of one to accomplish its purpose. Practically, the statute will result in no hardship to the carriers and will prevent injustice to shippers. The carriers will have no difficulty in fixing responsibility for, and in adjusting among themselves, losses occasioned by loss, damage or injury to property transported by them. Whereas, if the shipper had to follow the goods so as to fix the responsibility for any loss, damage or injury he would usually be remediless. Plainly, the statute rests upon a reasonable basis.
While liberty to contract is included within the words "liberty or property" in the Federal Constitution (5th Amendt.) as broadly interpreted by the courts, that does not mean an unrestrained liberty. ( Addyston Pipe Steel Co. v. United States, 175 U.S. 211; Patterson v. Bark Eudora, 190 id. 169.) It is unnecessary to cite the numerous instances of valid legislative acts, passed in the exercise of the police power, restricting freedom of contract. The contention that the act authorizes a taking of property without due process of law really depends upon the contention that it is an unwarranted interference with the freedom of contract. The act merely regulates the liability of the carrier and prevents it from exempting itself from liability by contract. The question of due process is not involved.
The statute is plainly within the express power of Congress to regulate interstate commerce, granted by the Federal Constitution (Art. 1, § 8, subd. 3). It is now settled that that grant of power is to be broadly construed. ( Howard v. Illinois Central R.R. Co., 207 U.S. 463.) If an act regulating the relation of employer to employees is within the power to regulate commerce, an act regulating the liability of carrier to shipper certainly is. The appellant relies upon the case of Adair v. United States ( 208 U.S. 161), but there is no analogy between the statute in question here and an act making it a criminal offense to discharge an employee from the service of a carrier because of his membership in a labor organization.
The determination of the Appellate Term is affirmed, with costs.
INGRAHAM, P.J., McLAUGHLIN, LAUGHLIN and DOWLING, JJ., concurred.
Determination affirmed, with costs.