Atlas Van Lines, Inc. v. Reitz

Horney, J., delivered the opinion of the Court. This appeal presents a question as to whether a motor carrier, which failed to comply with the provisions of the Interstate Commerce Act and the rules and regulations established by the Interstate Commerce Commission, has effectively limited its liability for loss and damage to household goods during shipment. In September of 1962, Margaret M. Reitz (shipper) contacted Atlas Van Lines (carrier) regarding the transportation of her household goods from New Orleans (Louisiana) to-Laurel (Maryland). It was agreed between the parties that the goods would be stored in the warehouse of the carrier in-Louisiana until such time as the shipper requested delivery in-Maryland and the goods were thereafter turned over to the carrier for storage and subsequent shipment.

The shipper paid the storage charges from time to time and in November of 1963 inquired as to the amount of the shipment charges. On being informed by the carrier that the cost would be $125 for “transportation charges for 820 lbs. as 1000 1 lbs. @ 12.50 cwt.,” the shipper mailed a check for that amount and requested delivery of the goods to her at Laurel. The carrier, without delivering a bill of lading to the shipper at any time, transported the goods by truck, along with other freight destined for the same general northeastern area of the country. En route, the truck made several stops, including one in New York City where the truck was broken into and certain items belonging to the shipper were damaged or stolen.

Such of the goods as had not been stolen, including the damaged items, were thereafter delivered to the shipper in Laurel. Subsequently, the shipper submitted a claim for damages to the carrier and, upon its refusal to pay the full amount claimed,, she sued and obtained a judgment in the amount of $1150, representing the full amount of damages sustained by the shipper, and this appeal followed. Atlas Van Lines was an interstate motor carrier operating ⁴¹⁹ under the provisions of 49 U.S.C. § 20 (11)/ by virtue of § 319 of 49 U.S.C., 2 and was a participating carrier in a tariff 3 ⁴²⁰ filed with the Interstate Commerce Commission which established rates for the shipment of household goods. The tariff fixed one rate to be charged where the declared value of the goods shipped did not exceed thirty cents per pound per article and higher rates to be charged where the declared value exceeded thirty cents.

The rates charged here by the carrier were based on the rate schedule published in the tariff for goods not exceeding a declared value of thirty cents per pound per article. The carrier therefore contends that its obligation to the shipper should be limited to thirty cents per pound per article, in accordance with the rate charged, rather than the full amount of the shipper’s damages. The limitation of an interstate carrier’s liability is governed by federal law. New York, N. H. & H. R. R. v. Nothnagle, 346 U. S. 128 , Boston & Maine R.R. v. Hooker, 233 U. S. 97 and Adams Express Co. v. Croninger, 226 U. S. 491 .

Section 20(11) imposes a liability on every common carrier, which is subject to the provisions of Title 49 of the United States Code, as the instant carrier was, for the full actual loss, damage or injury caused by it to the property which it has received for transportation and any attempt to limit liability is generally prohibited. The statute, however, does provide certain exceptions to the general prohibition. One such exception is to the effect that where the carrier has been authorized or required by the I.C.C. to adhere to a tariff establishing “rates dependent upon the value declared in writing by the shipper or agreed upon in writing as the released value of the property,” the declaration or agreement of the shipper limits the liability of the carrier to the value so declared or released and the shipper is precluded from receiving an amount exceeding that value. The carrier argues that this exception to liability imposed by § 20(11) applied in the case at bar, but we do not agree.

In order to limit the liability of a carrier under the exception it is necessary to have either a written declaration of value by the shipper or a written agreement as to the released value and ⁴²¹ without one or the other there is no criterion, short of the full actual damages sustained by the shipper, for limiting the liability of the carrier. Since there was nothing in writing (other than a letter stating the cost of the proposed shipment) showing that the shipper had either made a declaration or agreed to a released value, it is clear that the exception to liability imposed by § 20(11) is not applicable in this case. The same result was reached by the Second Circuit Court of Appeals in Caten v. Salt City Movers & Storage Co., 149 F. 2d 428 (1945), where the only writing received by the shipper was a letter from the carrier stating the shipping cost on the basis of the estimated weight of the household goods without mentioning the value thereof and where the goods thereafter delivered to the carrier, who failed to issue and deliver a bill of lading or receipt to the shipper, were subsequently destroyed during transit. In affirming the judgment based on the actual loss sustained by the shipper, the court said, at p. 432: “* * * It seems plain that nothing was done by these shippers in writing, or in respect to any writing, which had anything whatever to do with a valuation of their property for shipment under one rate or any other. * * * To permit a carrier, without any action whatever by the shipper in respect to valuation in writing, to limit its liability on the basis of declared or released value on which the rate was charged would be to ignore entirely the statutory requirement that the shipper must make the declaration or agreement in writing, and nullify that part of the proviso. “The statute [ 49 U.S.C. § 20 (11)] makes it abundantly clear that the carrier’s common law liability for full actual damages, whether or not caused by its negligence, is imposed when it accepts goods for carriage, unless a certain specified agreement limiting that liability has been made as the result of an equally certain specified action by the shipper in respect to a voluntary valuation of his goods. * * *.

Only by giving the shipper an opportunity to choose between higher and lower rates based upon valuation can the carrier place the shipper who has selected a lower rate ⁴²² in the prescribed manner in