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Vol. II.]

PRICE v. Gover.

[No. 4.

this a breach of duty on their part? The case does not call for the decision of the broad question whether under a contract to purchase and carry stock on a margin to be kept good by the customer, the broker has the right to hypothecate the stock for the purpose of raising money upon it, because we are satisfied from the evidence that when this arrangement was entered into, it was understood between the parties that the appellees, in undertaking to carry the stock, were to be at liberty to use it for the purpose of enabling them to do so. Price, in his testimony, admits that, at the time he entered into this arrangement with the appellees, Purvis & Co. were carrying for him 400 other shares of the same stock; and in reference to this carrying, he says, "Purvis took them up and borrowed money on them, and that is the way they were carried, that is the way I got him to do it." There is nothing to show he could reasonably have expected Lee & Co. to deal differently with the 1,000 shares they agreed to take up, but on the contrary, it is very clear he must have expected they would deal with them in the same way; for he says that when the arrangement respecting the 1,000 shares was proposed, Gover, the partner to whom it was made, said to him, we can carry them for you, and that he knew where he could lay his hands on $60,000; that when he reported to Purvis that Lee & Co. had agreed to carry the 1,000 shares, Purvis said, "They are not able, they are from hand to mouth, for they are borrowing every day;" that he then told him that Gover had said he knew where he could put his hands on $60,000, and Purvis then replied, "By the help of outsiders they may be enabled to carry it." Again, he testifies that he told them, before they took the stock, that he had no money, it was all in their hands; that they knew he had no money from the start; that they knew he was carrying the 400 shares, and knew all about it as well as he did. He was, therefore, according to his own testimony, informed beforehand they would be obliged to borrow money to carry the stock, and according to the testimony of Reese, he was informed by the latter in frequent interviews and conversations, that they had borrowed money on the stock by hypothecating it, and that was the manner in which it was carried, and to this no protest or objection on his part was made. We cannot escape the conclusion that it was part of the original agreement and understanding that the brokers should in this case have the power of hypothecation. There was, therefore, no violation of their duty in this case, even if that power would not, without an agreement to that effect, express or implied, remain with the broker, under a contract to carry stock on a margin, a point upon which we wish to be understood as expressing no opinion.

2d. We find no proof upon which the charge that actual fraud and imposition were practised by the appellees upon Price, by which he was led to execute the mortgage, can be sustained. There was no attempt to take advantage of his inability to read. The mortgage was prepared by his own directions, and by his own conveyancer, in whom he had confidence, and whom he trusted to prepare all his deeds, and it was carefully read over to him before he executed it. There is nothing in it to which he did not give his full assent. He understood what a stock operation of this kind meant. When he engaged in it he hoped to make money, but he knew he ran the hazard of loss. He acted intelligently, with his eyes

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Vol. II.]

SOUTHERN EXPRESS Co. v. CALDWELL.

[No. 4. open, and we cannot discover that he has been in anywise cheated, defrauded, or deceived. In this connection our attention has been particularly called to the testimony of Price, that at one time he gave an order to sell the stock which they failed to execute. His testimony is: "I think about August, 1857, I gave Josiah Lee & Co. a written order to sell that stock at $65 per share, but not less; they did not do it, and I think I called the order in and they tore it up, to the best of my knowledge." But it does not appear at what time in August this order was given, or that it would have been possible to obey it before it was withdrawn by a sale at $65 per share. At this period the value of the stock was very fluctuating. The record shows that on the 5th of August, 1857, the appellees purchased for Price 150 shares, at $52 per share, and that the highest point it reached between the 25th of June and the 6th of October, 1857, was $67 per share. This is all we learn from the record on this subject, and it is impossible for us to infer fraud on the part of the appellees in not executing the order referred to.

These are all the questions in the case we deem important to be decided. Having thus considered and disposed of them, the result is that the decree appealed from must be affirmed. Decree affirmed.

SUPREME COURT OF THE UNITED STATES.

COMMON CARRIER.

--

[DECEMBER, 1874.]

RIGHT OF EXPRESS COMPANY TO LIMIT DURATION OF LIABILITY FOR LOSS OF PACKAGE.

SOUTHERN EXPRESS CO. v. CALDWELL.

An agreement, that in case a common carrier shall fail to deliver goods intrusted to it to the consignee, a claim for the goods shall be made within a specified time, is liable to no sufficient objection, provided the period is a reasonable one.

In the case of an express company ninety days is a proper limitation.

THE opinion of the court was delivered by

Mr. Justice STRONG. The defendants in the court below, having been sued as common carriers for their failure to deliver at New Orleans a package received by them on the 23d day of April, 1862, at Jackson, Tennessee, pleaded that when the package was received "it was agreed between them and the plaintiff, and made one of the express conditions upon which the package was received, that they should not be held liable for any loss of, or damage to, the package whatever, unless claim should be made therefor within ninety days from its delivery to them." The plea further averred that no claim was made upon the defendants, or upon any of their agents, until the year 1868, more than ninety days after the delivery of the package to them, and not until the present suit was brought. To the plea thus made the plaintiff demurred generally, and the circuit court sustained the demurrer, giving judgment thereon

Vol. II.]

SOUTHERN EXPRESS Co. v. CALDWELL.

[No. 4.

against the defendants. Whether this judgment was correct is the only question presented by the record which we can consider.

Notwithstanding the great rigor with which courts of law have always enforced the obligations assumed by common carriers, and notwithstanding the reluctance with which modifications of that responsibility, imposed upon them by public policy, have been allowed, it is undoubtedly true that special contracts with their employers limiting their liability' are recognized as valid, if in the judgment of the courts they are just and reasonable,—if they are not in conflict with sound legal policy. The contract of a common carrier ordinarily is an assumption by him of the exact duty which the law affixes to the relation into which he enters when he undertakes to carry. That relation the law regards as substantially one of insurance against all loss or damage except such as results from what is denominated the act of God or of the public enemy. But the severe operation of such a rule in some cases has led to a relaxation of its stringency, when the consignor and the carrier agree to such a relaxation. All the modern authorities concur in holding that, to a certain extent, the extreme liability exacted by the common law originally may be limited by express contract. The difficulty is in determining to what extent, and here the authorities differ. Certainly it ought not to be admitted that a common carrier can be relieved from the full measure of that responsibility which ordinarily attends his occupation without a clear and express stipulation to that effect obtained by him from his employer. And even when such a stipulation has been obtained the court must be able to see that it is not unreasonable. Common carriers do not deal with their employers on equal terms. There is, in a very important sense, a necessity for their employment. In many cases they are corporations chartered for the promotion of the public convenience. They have possession of the railroads, canals, and means of transportation on the rivers. They can and they do carry at much cheaper rates than those which private carriers must of necessity demand. They have on all important routes supplanted private carriers. In fact they are without competition, except as between themselves, and that they are thus is in most cases a consequence of advantages obtained from the public. It is, therefore, just that they are not allowed to take advantage of their powers, and of the necessities of the public, to exact exemptions from that measure of duty which public policy demands. But that which was public policy a hundred years ago has undergone changes in the progress of material and social civilization. There is less danger than there was of collusion with highwaymen. Intelligence is more rapidly diffused. It is more easy to trace a consignment than it was. It is more difficult to conceal a fraud. And, what is of equal importance, the business of common carriers has been immensely increased and subdivided. The carrier who receives goods is very often not the one who is expected to deliver them to the ultimate consignees. He is but one link of a chain. Thus his hazard is greatly increased. His employers demand that he shall be held responsible, not merely for his own acts and omissions, and those of his agents, but for those of other carriers whom he necessarily employs for completing the transit of the goods. Hence, as we have said, it is now the settled law that the responsibility of a common carrier may be limited

Vol. II.]

SOUTHERN EXPRESS Co. v. CALDWELL.

[No. 4.

by an express agreement made with his employer at the time of his accepting goods for transportation, provided the limitation be such as the law can recognize as reasonable and not inconsistent with sound public policy. This subject has been so fully considered of late in this court that it is needless to review the authorities at large. In York Company v. The Central Railroad Company, 3 Wall. 107, it is ruled that the common law liability of a common carrier may be limited and qualified by special contract with the owner, provided such special contract do not attempt to cover losses by negligence or misconduct. And in a still later case, Railroad Company v. Lockwood, 17 Wall. 357; 1 Am. L. T. R. N. S. 21, where the decisions are extensively reviewed, the same doctrine is asserted. The latter case, it is true, involved mainly an inquiry into the reasonableness of an exception stipulated for, but it unequivocally accepted the rule asserted in the first-mentioned case. The question, then, which is presented to us by this record is, whether the stipulation asserted in the defendant's plea is a reasonable one, not inconsistent with sound public policy.

It may be remarked, in the next place, that the stipulation is not a conventional limitation of the right of the carrier's employer to sue. He is left at liberty to sue at any time within the period fixed by the statute of limitations. He is only required to make his claim within ninety days, in season to enable the carrier to ascertain what the facts are, and having made his claim, he may delay his suit.

It may also be remarked that the contract is not a stipulation for exemption from responsibility for the defendants' negligence, or for that of their servants. It is freely conceded that had it been such, it would have been against the policy of the law, and inoperative. Such was our opinion in Railroad Company v. Lockwood, supra. A common carrier is always responsible for his negligence, no matter what his stipulations may be. But an agreement that in case of failure by the carrier to deliver the goods, a claim shall be made by the bailor, or by the consignee, within a specified period, if that period be a reasonable one, is altogether of a different character. It contravenes no public policy. It excuses no negligence. It is perfectly consistent with holding the carrier to the fullest measure of good faith, of diligence, and of capacity which the strictest rules of the common law ever required. And it is intrinsically just, as applied to the present case. The defendants are an express company. We cannot close our eyes to the nature of their business. They carry small parcels, easily lost or mislaid, and not easily traced. They carry them in great numbers. Express companies are modern conveniences, and notoriously they are very largely employed. They may carry, they often do carry hundreds, even thousands of packages, daily. If one be lost, or alleged to be lost, the difficulty of tracing it is increased by the fact that so many are carried, and it becomes greater the longer the search is delayed. If a bailor may delay giving notice to them of a loss, or making a claim indefinitely, they may not be able to trace the parcels bailed, and to recover them, if accidentally missent, or if they have in fact been properly delivered. With the bailor the bailment is a single transaction, of which he has full knowledge; with the bailee, it is one of a multitude. There is no hardship in requiring the

Vol. II.]

SOUTHERN EXPRESS Co. v. CALDWELL.

[No. 4.

bailor to give notice of the loss, if any, or make a claim for compensation within a reasonable time after he has delivered the parcel to the carrier. There is great hardship in requiring the carrier to account for the parcel long after that time, when he has had no notice of any failure of duty on his part, and when the lapse of time has made it difficult, if not impossible, to ascertain the actual facts. For these reasons such limitations have been valid in similar contracts, even when they seem to be less reasonable than in the contracts of common carriers.

Policies of fire insurance, it is well known, usually contain stipulations that the insured shall give notice of a loss, and furnish proofs thereof within a brief period after the fire, and it is undoubted that if such notice and proofs have not been given in the time designated or have not been waived, the insurers are not liable. Such conditions have always been considered reasonable, because they give the insurers an opportunity of inquiring into the circumstances and the amount of the loss, at a time when inquiry may be of service. And still more, conditions in policies of fire insurance that no action shall be brought for the recovery of a loss unless it shall be commenced within a specified time, less than the statutory period of limitations, are enforced, as not against any legal policy. See Riddlesbarger v. Hartford Ins. Co. 7 Wall. 386, and the numerous cases therein cited.

Telegraph companies, though not common carriers, are engaged in a business that is in its nature almost, if not quite, as important to the public as is that of carriers. Like common carriers they cannot contract with their employers for exemption from liability for the consequences of their own negligence. But they may by such contracts, or by their rules and regulations, brought to the knowledge of their employers, limit the measure of their responsibility to a reasonable extent. Whether their rules are reasonable or unreasonable must be determined with reference to public policy, precisely as in the case of a carrier. And in a case where one of the conditions of a telegraph company, printed in their blank forms, was that the company would not be liable for damages in any case where the claim was not presented in writing within sixty days after sending the message, it was ruled that the condition was binding on an employer of the company who sent his message on the printed form. Wolf v. The Western Union Telegraph Co. 62 Penn. St. 83. The condition printed in the form was considered a reasonable one, and it was held that the employer must make claim according to the condition, before he could maintain an action. Exactly the same doctrine was asserted in Young v. The Western Union Telegraph Co. 34 N. Y. Sup. 390.

In Lewis v. The Great Western Railway Co. 5 Hurl. & Norm. Exchequer, 867, which was an action against the company as common carriers, the court sustained as reasonable stipulations in a bill of lading, that "no claim for deficiency, damage, or detention would be allowed, unless made within three days after the delivery of the goods, nor for loss, unless made within seven days from the time they should have been delivered." Under the last clause of this condition the onus was imposed upon the shipper of ascertaining whether goods had been delivered at the time they should have been, and in case they had not, of making his claim within seven days thereafter. In the case we have now

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