Michigan Central Company v. Mark Owen & Company/Dissent Clark McReynolds
Mr. Justice MCREYNOLDS dissenting.

This cause is important because of what had been said concerning section 5 of the uniform bill of lading approved and recommended by the Interstate Commerce Commission after much consideration and repeated conferences between carriers and shippers, extending through four years.

In their report, 14 Interest. Com. Com'n R. (1908) 346, 348, 349, 350, the Commission said:

'This proposed bill of lading-for the two forms may be      considered as one in what we have further to say-is submitted      for adoption by the carriers and use by the shipping public      with considerable confidence. It is not claimed to be      perfect, and experience may develop the need of further      modifications, but it represents the most intelligent and      exhaustive efforts of those who undertook its preparation to      agree upon a bill of lading which should be reasonably      satisfactory to the railroads and the public. It is, of      course, more or less a compromise between opposing interests, because on the one hand it imposes obligations of      an important character which carriers have not heretofore      assumed, and on the other retains exemptions to which some      shippers may object, and perhaps not without substantial      reason. As we are advised, it is in some respects less      favorable to the shipper than the local laws or regulations      of one or more states, but is more favorable to the shipper      than the local laws or regulations of most of the states. On      the whole, it is believed to be the best adjustment which is      now practicable of a controversy of long standing which      affects the business interests of the entire country. * * *      The circumstances under which the work of the joint committee      has been conducted and the substantial agreement on most      points by the different interests concerned, to say nothing      of direct assurances from representatives of the carriers,      warrant us in expecting that the assenting roads will adopt      the bill upon our recommendation. We therefore assume that      the railroads in Official Classification territory, whose      proposed action was the subject of the original      investigation, will adopt and use this bill, to the extent      above indicated, from and after the date named for that      purpose. We shall also expect that railroad carriers subject      to the act outside of Official Classification territory will      adopt and use this bill of lading to the same extent and from      and after the same date. There may be peculiar conditions in      Western and Southern territory which require some      modifications of or additions to this standard bill, but the      desirability of uniform usage is so great and the reasons for      it so obvious as to justify the expectation that carriers in      Western and Southern territory will adopt the bill in      question to the fullest extent practicable without abridging      any just privileges which their shippers now enjoy.'

The language in controversy was not selected by the carriers alone; they reluctantly accepted the whole instrument rather than dictated it to others. Texas & Pacific Ry. v. Reiss, 183 U.S. 621, 22 Sup. Ct. 253, 46 L. Ed. 358, holding that doubtful provisions should be resolved in the shipper's favor, is not applicable. The agreement ought to be construed and applied as one arrived at through deliberate negotiation by intelligent parties seeking to make some definite statement or modification of common law rules concerning their rights and liabilities.

The carrier acknowledges receipt of--

'The property described * * * marked, consigned and destined      as indicated below, which said carrier (which word is to be      understood throughout this bill of lading as meaning any      person or corporation in possession of the property under the      bill of lading) agrees to carry to its usual place of      delivery at said destination, if on its road, otherwise to      deliver to another carrier on the route to said destination.'

'The carrier or party in possession of any of the property      herein described shall be liable for any loss thereof or      damage thereto, except as hereinafter provided. * * * When in      accordance with general custom, on account of the nature of      the property, or when at the request of the shipper the      property is transported in open cars, the carrier or party in      possession (except in case of loss or damage by fire, in      which case the liability shall be the same as though the      property had been carried in closed cars) shall be liable      only for negligence, and the burden to prove freedom from      such negligence shall be on the carrier or party in      possession.'

'Property not removed by the party entitled to receive it      within forty-eight hours (exclusive of legal holidays) after      notice of its arrival has been duly sent or given may be kept      in car, depot, or place of delivery of the carrier, or      warehouse, subject to a reasonable charge for storage and to      carrier's responsibility as warehouseman only, or may be, at the option of the carrier, removed to and stored      in a public or licensed warehouse at the cost of the owner      and there held at the owner's risk and without liability on      the part of the carrier, and subject to a lien for all      freight and other lawful charges, including a reasonable      charge for storage.'

The uniform bill does not purport to specify all rights and obligations of the parties as between themselves, but leaves these as established by law, except when and as otherwise provided. Particularly, it does not undertake to define what shall constitute delivery to the consignee.

'In order to simplify the issues the respondent' confines its claim here to losses from car No. 22049-$8.68. The parties stipulated that this car--

'arrived in Chicago on October 8, 1914, was placed on a      public delivery team track on October 9, 1914, at 8 a. m.      o'clock; that notice of arrival and placement of said car was      given to the plaintiff herein on October 9, 1914, at 9 a. m.      o'clock; that plaintiff accepted said car, broke the seals      thereon, and started to unload it on October 9, 1914, at 9:30      a. m. o'clock; and that the unloading of said car was      completed by the plaintiff on October 9, 1914, at 6 p. m.      o'clock. * * * That at the time the plaintiff accepted and      started to unload each of said cars, every car contained the      same number of baskets and pounds of grapes as were received      by the defendant in said car for transportation at the point      of origin thereof, named herein, and that at said time the      doors of each of said cars were sealed with the same seals      intact as were placed on them by the defendant when it      received said grapes for transportation.'

The circumstances accompanying acceptance and unloading are not revealed except as above stated. Whether these suffice clearly to establish final and complete delivery of possession of the freight to the consignee may be questioned, but mere consideration of the bill cannot solve the difficulty. If, as matter of fact, the consignee was put into actual possession of the property within 48 hours, it must be clear that the carrier's liability as insurer ceased when he accepted control.

What constitutes delivery by a railroad carrier sufficient to change its responsibility from insurer to warehouseman has given occasion for much difference of opinion.

The so-called New York rule, the strictest against the carrier,

'is stated to be that if the consignee is present, upon the      arrival of the goods, he must take them without unreasonable      delay; if he is not present, but lives at or in the immediate      vicinity of the place of delivery, the carrier must notify      him of the arrival of the goods, and then he must have a      reasonable time to remove them; if he is absent, unknown or      cannot be found, the carrier may store them; and if, after      notice of the arrival of the goods, the consignee has had a      reasonable opportunity to remove them, and does not, he      cannot hold the carrier longer as an insurer.' Hutchinson on      Carriers (3d Ed.) § 708.

The Massachusetts rule has been thus stated:

'All that could be required of railways was a safe deposit of      the goods upon the platform or in the warehouse of the road      at the end of the transit, to await delivery to the      consignee, when he should call for them, and that from the      time of such deposit, even without notice by the carrier to      the consignee, the liability of the former was changed from      that of common carrier to warehouseman.' Hutchinson on      Carriers (3d Ed.) § 702.

The New Hampshire rule continues the carrier's liability as insurer until the consignee has had a reasonable time to receive the goods after their arrival at destination. During that period--

'the servants of the carrier still continue in charge of      them. They are equally shut off from observation and the      oversight of others as when in transit; and if they are lost,      damaged, or purloined, he has no greater opportunity of ascertaining or proving by      whose fault or negligence it was done, than if such loss had      occurred during the transportation. Consequently, the same      reasons for holding the carrier to extraordinary      responsibility during the transportation of the goods exist      after their arrival, at least, until the owner or consignee      shall have had an opportunity to take them in charge.'      Hutchinson on Carriers (3d Ed.) § 704.

Undoubtedly, the uniform bill was prepared with the above rules in mind. It did not adopt any of them, but left the matter to which they relate for determination by the courts.

It should be noted that the bill acknowledged receipt of property 'which said carrier * * * agrees to carry to its usual place of delivery at said destination, if on its road, otherwise to deliver to another carrier on the route to said destination,' and further, that 'the carrier or party in possession of any of the property herein described shall be liable for any loss thereof or damage thereto, except as hereinafter provided.'

The special purpose of section 5 was to protect the carrier by placing an extreme limit upon the time during which freight might remain with it without charge for storage; and also to define the carrier's right and obligation thereafter. The unnecessary delay incident to unloading and the undue utilization of railroad cars and warehouses by consignees for storage purposes had seriously hindered prompt movement of freight, and proper employment of equipment. This section does not purport to establish any rule of liability during the 48 hours, but leaves that to be determined by application of the common law to the circumstances. To say that a carrier insures for 48 hours although the consignee has taken actual custody of the goods would seem an absurd conclusion. And the practical impossibility of stationing an agent at every car within a great terminal while freight is being removed by thousands of consignees and their agents-a necessary precaution of thefts or mistakes by any one of them must be prevented-makes it manifest that the Interstate Commerce Commission would not have sanctioned the responsibility now claimed and that the carriers would not have acquiesced. I cannot think there was purpose to burden carriers beyond the most stringent of the rules above referred to.

The fair inference from the facts stipulated is that the consignee received possession and control of his goods before the loss occurred. A carrier's responsibility as insurer depends upon exclusive possession and control and must cease when these end. The modified one prescribed by the uniform bill for goods shipped in open cars where such possession and control is difficult or impossible to maintain gives practical recognition to the real basis upon which liability rests. Here the car was opened, examined, accepted and apparently thereafter remained in charge of the consignee. Yet, it is said the delivery was not sufficient to terminate liability as insurer but that this continued because of section 5, which in plain terms refers only to removal. It must not be forgotten that we are not dealing here with a question of due care but with the absolute liability of an insurer.

It is not good reasoning to conclude that because an extreme limit is placed upon the time during which freight may remain in a car without charge, therefore the carrier's liability as an insurer continues during such time.

The uniform bill is in common use and the opinion of the court will be far-reaching. The subject therefore seems sufficiently important to demand an indication of the reasons which lead me to dissent. 

Notes