Missouri Pacific Railroad Company v. Elmore & Stahl/Opinion of the Court

by Potter Stewart

United States Supreme Court

377 U.S. 134

Missouri Pacific Railroad Company  v.  Elmore & Stahl

 Argued: March 3, 1964. --- Decided: May 4, 1964

The question presented in this case is whether a common carrier which has exercised reasonable care and has complied with the instructions of the shipper, is nonetheless liable to the shipper for spoilage in transit of an interstate shipment of perishable commodities, when the carrier fails to prove that the cause of the spoilage was the natural tendency of the commodities to deteriorate. The petitioner is a common carrier and the respondent is a fruit shipper. The respondent sued the petitioner in a Texas court to recover for d mage to a carload of honeydew melons shipped from Rio Grande City, Texas, to Chicago, Illinois. ^[1]

In accordance with Texas practice, special issues were submitted to the jury at the close of the evidence. The jury affirmatively found that the melons were in good condition at the time they were turned over to the carrier in Rio Grande City, but that they arrived in damaged condition at their destination in Chicago. The jury also affirmatively found that the petitioner and its connecting carriers performed all required transportation services without negligence. The jury were instructed that 'inherent vice' means 'any existing defects, diseases, decay or the inherent nature of the commodity which will cause it to deteriorate with a lapse of time.' They answered 'No' to a special issue asking whether they found from a preponderance of the evidence that the condition of the melons on arrival in Chicago was due solely to an inherent vice, as so defined, 'at the time the melons were received by the carrier at Rio Grande City, Texas, for transportation.' ^[2]

On the basis of these special findings, the trial judge entered judgment for damages against the carrier. The judgment was affirmed by the Texas Court of Civil Appeals, 360 S.W.2d 839, and by the Texas Supreme Court, upon the ground that, as a matter of federal law, 'the carrier may not exonerate itself by showing that all transportation services were performed without negligence but must go further and establish that the loss or damage was caused by one of the four excepted perils recognized at common law.' 368 S.W.2d 99, 100. The court concluded, in view of the jury's findings, that, although '(a) common carrier is not responsible for spoilage or decay which is shown to be due entirely to the inherent nature of the goods, * * * petitioner has not established that the damage in this case was caused solely by natural deterioration.' Id. 368 S.W.2d at 103. We granted certiorari, 375 U.S. 811, 84 S.Ct. 72, 11 L.Ed.2d 47, because of a conflict with an almost contemporaneous decision of the United States Court of Appeals for the Ninth Circuit holding that 'in the case of perishable goods the burden upon the carrier is not to prove that the damage resulted from the inherent vice of the goods, but to prove its own compliance with the rules of the tariff and the shipper's instructions.' ^[3] For the reasons which follow, we affirm the judgment before us.

The parties agree that the liability of a carrier for damage to an interstate shipment is a matter of federal law controlled by federal statutes and decisions. The Carmack Amendment of 1906, ^[4] § 20(11) of the Interstate Commerce Act, makes carriers liable 'for the full actual loss, damage, or injury * * * caused by' them to property they transport and declares unlawful and void any contract, regulation, tariff, or other attempted means of limiting this liability. ^[5] It is settled that this statute has two undisputed effects crucial to the issue in this case: First, the statute codifies the common-law rule that a carrier, though not an absolute insurer, is liable for damage to goods transported by it unless it can show that the damage was caused by '(a) the act of God; (b) the public enemy; (c) the act of the shipper himself; (d) public authority; (e) or the inherent vice or nature of the goods.' Bills of Lading, 52 I.C.C. 671, 679; Chesapeake & O. Ry. Co. v. A. F. Thompson Mfg. Co., 270 U.S. 416, 421-423, 46 S.Ct. 318, 319-320, 70 L.Ed. 659; Adams Express Co. v. Croninger, 226 U.S. 491, 509, 33 S.Ct. 148, 153, 57 L.Ed. 314; Hall & Long v. Railroad Companies, 13 Wall. 367, 372, 20 L.Ed. 594. Second, the statute declares unlawful and void any 'rule, regulation, or other limitation of any character whatsoever' purporting to limit this liability. ^[6] See Cincinnati N.O. & Texas Pac. R. Co. v. Rankin, 241 U.S. 319, 326, 36 S.Ct. 555, 557-558, 60 L.Ed. 1022; Boston & M.R.R. v. Piper, 246 U.S. 439, 445, 38 S.Ct. 354, 355, 62 L.Ed. 820. Accordingly, under federal law, in an action to recover from a carrier for damage to a shipment, the shipper establishes his prima facie case when he shows delivery in good condition, arrival in damaged condition, and the amount of damages. Thereupon, the burden of proof is upon the carrier to show both that it was free from negligence and that the damage to the cargo was due to one of the excepted causes relieving the carrier of liability. Galveston, H. & S.A.R. Co. v. Wallace, 223 U.S. 481, 492, 32 S.Ct. 205, 207, 56 L.Ed. 516; Chicago & E.I.R. Co. v. Collins Co., 249 U.S. 186, 191, 39 S.Ct. 189, 190, 63 L.Ed. 552; Chesapeake & O. Ry. Co. v. A. F. Thompson Mfg. Co., 270 U.S., 416, 420-423, 46 S.Ct. 318, 319-320, 70 L.Ed. 659; Thompson v. James G. McCarrick Co., 5 Cir., 205 F.2d 897, 900.

The disposition of this case in the Texas courts was in accordance with these established principles. It is apparent that the jury were unable to determine the cause of the damage to the melons. '(T)he decay of a perishable cargo is not a cause; it is an effect. It may be the result of a number of causes, for some of which, such as the inherent defects of the cargo * * * the carrier is not liable.' ^[7] But the jury refused to find that the carrier had borne its burden of establishing that the damaged condition of the melons was due solely to 'inherent vice,' as defined in the instruction of the trial judge-including 'the inherent nature of the commondity which will cause it to deteriorate with a lapse of time.' The petitioner does not challenge the accuracy of the trial judge's instruction or the jury's finding. ^[8] Its position is simply that if goods are perishable, and the nature of the damage is spoilage, and the jury affirmatively find that the carrier was free from negligence and performed the transportation services as required by the shipper, then the law presumes that the cause of the spoilage was the natural tendency of perishables to deteriorate e en though the damage might, in fact, have resulted from other causes, such as the acts of third parties, ^[9] for which no exception from carrier liability is provided. Consequently, it is argued, the question of 'inherent vice' should not have been submitted to the jury, since the carrier in such a case does not bear the affirmative burden of establishing that the damage was caused by the inherent vice exception of the common law.

The petitioner appears to recognize that, except in the case of loss arising from injury to livestock in transit-a well-established exception to the general common-law rule based on the peculiar propensity of animals to injure themselves and each other ^[10]-no distinction was made in the earlier federal cases between perishables and non-perishables. It is said, however, that the 'large-scale development, in relatively recent years, of long distance transportation of fresh fruit and vegetables in interstate commerce has led to the evolution' of a new federal rule governing the carrier's liability for spoilage and decay of perishables, similar to the 'livestock rule,' which absolves the carrier from liability upon proof that the carrier has exercised reasonable care, and has complied with the shipper's instructions. ^[11]

We are aware of no such new rule of federal law. As recently as 1956, in Secretary of Agriculture v. United States, 350 U.S. 162, 76 S.Ct. 244, 100 L.Ed. 173, this Court gave no intimation that the general rule placing on the carrier the affirmative burden of bringing the cause of the damage within one of the specified exceptions no longer applied to cases involving perishable commodities. ^[12]

Nor do Rules 130 and 135 of the Perishable Protective Tariff, relied upon by petitioner, reflect any such change in the federal law, when read in the light of the history underlying their adoption in 1920 by the Interstate Commerce Commission. Rule 130, declaring that a carrier does not 'undertake to overcome the inherent tendency of perishable goods to deteriorate or decay,' ^[13] merely restates the common-law rule that a carrier shall not be held liable in the absence of negligence for damage resulting solely from an inherent vice or defect in the goods. And Rule 135, declaring that the carrier shall not be 'liable for any loss or damage that may occur because of the acts of the shipper or because the directions of the shipper were incomplete, inadequate or ill-conceived,' ^[14] me ely reiterates the common-law and bill-of-lading rule that the carrier shall not be liable, in the absence of negligence, for the 'act or default of the shipper or owner.' Neither of these rules refers to the presumptions or burdens of proof imposed by the common law, and it is clear that it was not the intention of the Commission in approving these rules to modify or reduce the common-law liability of a carrier. Indeed, the Commission stated at the time these rules were adopted in 1920 that 'such declarations can have no controlling effect, for the carrier's liability for loss or damage is determined by the law. Nothing can be added to or subtracted from the law by limitations or definitions stated in tariffs * * *. There is the constant risk, therefore, if such declarations are included, of misstating the law and misleading the parties to no good purpose.' Perishable Freight Investigation, 56 I.C.C. 449, 482. Although the Commission concluded for this reason that this type of rule was generally objectionable, id., at 483, it recognized the desirability of giving 'some warning to shippers' that a carrier was not liable for the inherent tendency of perishable goods to deteriorate or decay, or for the shipper's failure to give proper transportation instructions. Ibid. The rules themselves reflect nothing more than this objective. ^[15]

That this was the limited purpose of Rules 130 and 135 is confirmed by the Commssion's action in rejecting an additional proposal made by the carriers at the time these Rules were approved in 1920. The carriers sought to include a provision to be known as Item 20(d), reading:

'Nothing in this tariff shall be construed as relieving carriers from such liability as may rest upon them for loss or damage when same is the result of carriers' negligence.' See 56 I.C.C., at 481.

The Commission emphatically rejected the provision on the express ground that

'a carrier may be liable under the common law for loss or damage which is not the result of its negligence, and this item implies that there may be something in the tariff which seeks to limit such liability.' Id., at 483. (Emphasis supplied.)

Finally, all else failing, it is argued that as a matter of public policy, the burden ought not to be placed upon the carrier to explain the cause of spoilage, because where perishables are involved, the shipper is peculiarly knowledgeable about the commodity's condition at and prior to the time of shipment, and is therefore in the best position to explain the cause of the damage. Since this argument amounts to a suggestion that we now carve out an exception to an unquestioned rule of long standing upon which both shippers and carriers rely, and which is reflected in the freight rates set by the carrier, the petitioner must sustain a heavy burden of persuasion. The general rule of arrier liability is based upon the sound premise that the carrier has peculiarly within its knowledge '(a)ll the facts and circumstances upon which (it) may rely to relieve (it) of (its) duty * * *. In consequence, the law casts upon (it) the burden of the loss which (it) cannot explain or, explaining, bring within the exceptional case in which (it) is relieved from liability.' Schnell v. The Vallescura, 293 U.S. 296, 304, 55 S.Ct. 194, 196, 79 L.Ed. 373. We are not persuaded that the carrier lacks adequate means to inform itself of the condition of goods at the time it receives them from the shipper, and it cannot be doubted that while the carrier has possession, it is the only one in a position to acquire the knowledge of what actually damaged a shipment entrusted to its care.

Affirmed.

Mr. Justice DOUGLAS, with whom Mr. Justice BLACK concurs, dissenting.

Notes

1. The complaint contained four independent counts, each stating a separate claim for damage to a different shipment of perishables. The shipment involved here is solely that covered by Count 1, which related to the shipment of 640 crates of honeydew melons in Car ART 35042 from Rio Grande City to Chicago.
2. The jury also refused to find tht the damage was caused by acts or omissions of the shipper in the shipping instructions:
3. Larry's Sandwiches, Inc. v. Pacific Electric R. Co., 9 Cir., 318 F.2d 690, 692-693. Cf. Trautmann Bros. Co. v. Missouri Pac. R. Co., 5 Cir., 312 F.2d 102; United States v. Reading Co., 3 Cir., 289 F.2d 7; Atlantic Coast Line R. Co. v. Georgia Packing Co., 5 Cir., 164 F.2d 1.
4. 34 Stat. 595.
5. See 24 Stat. 386, as amended; 49 U.S.C. § 20(11).
6. The meaning of § 20(11) was reaffirmed by the Cummins Amendment of 1915. 38 Stat. 1196. Clearly recognizing that the phrase, 'caused by' did not limit the carrier's liability to cases of negligence, but covered liability without fault except where the specifi common-law exceptions could be established, the Cummins Amendment permitted the carrier to require the shipper to file a timely notice of his claim prior to filing a lawsuit in cases where the carrier was without fault but forbade such a condition where the loss resulted from the carrier's negligence. See Chesapeake & O. Ry. Co. v. A. F. Thompson Mfg. Co., 270 U.S. 416, 422, 46 S.Ct. 318, 319-320, 70 L.Ed. 659. The proviso forbidding the notice requirement in cases of negligence was repealed in 1930 (46 Stat. 251).
7. Schnell v. The Vallescura, 293 U.S. 296, 305-306, 55 S.Ct. 194, 197, 79 L.Ed. 373.
8. The petitioner does appear to argue, however, that the rule applied by the Texas courts required it to show some specific peculiar defect in this particular shipment of perishables. We find no intimation of such a requirement either in the trial court's instructions or in the Texas Supreme Court's opinion. The Texas courts merely placed upon the petitioner the affirmative burden of satisfying the jury that the cause of the spoilage was the natural tendency of perishables to deteriorate over time.
9. '(T)he carrier is responsible without regard to the exercise of due care, even though the damage or loss be occasioned by the independent act of third persons.' Commodity Credit Corp. v. Norton, 3 Cir., 167 F.2d 161, 164-165.
10. See, e.g., North Pennsylvania R. Co. v. Commercial Bank, 123 U.S. 727, 734, 8 S.Ct. 266, 269-270, 31 L.Ed. 287.
11. With respect to wholly intrastate shipments, this is the rule in a number of States. See, e.g., Southern Pacific Co. v. Itule, 51 Ariz. 25, 74 P.2d 38, 115 A.L.R. 1268.
12. The Court noted that it was 'conceded' that § 20(11) of the Interstate Commerce Act codified 'the common-law rule making a carrier liable, without proof of negligence, for all damage to the goods transported by it, unless it affirmatively shows that the damage was occasioned by the shipper, acts of God, the public enemy, public authority, or the inherent vice or nature of the commodity.' 350 U.S., at 165-166 n. 9, 76 S.Ct., at 247, 100 L.Ed. 173.
13. 'RULE 130-CONDITION OF PERISHABLE GOODS NOT GUARANTEED BY CARRIERS.-
14. 'RULE 135-LIABILITY OF CARRIERS.-
15. The suggestion is made that because the shipper elected to ship under the terms and conditions of the Uniform Domestic Straight Bill of Lading, the carrier's liability is limited to negligence. But insofar as damage to merchandise in transit is concerned, the bill provides for full 'common-law liability.' Section 1(a) of the bill provides that '(t)he carrier or party in possession of any of the property herein described shall be liable as at common law for any loss thereof or damage thereto, except as hereinafter provided.' Section 1(b) provides, in pertinent part, that a carrier shall not be liabe for damage 'resulting from a defect or vice in the property.' Nothing in the language of this contract even remotely suggests that the carrier does not bear the affirmative burden of proving that the damage was caused by a defect or vice in the property. Indeed, we think it significant that the identical bill of lading is used for the shipment of both perishable and nonperishable commodities, while a quite different contract, the Uniform Live Stock Contract, is employed in the shipment of livestock. See Uniform Freight Classification No. 4, p. 204.

Limitations on liability contained in other sections of the bill of lading apply to circumstances not covered by the Carmack Amendment. It could not lawfully be otherwise, for the Amendment codified the common-law liability for damage to goods in transit, and its legal effect was 'to bar the Interstate Comm rce Commission from legalizing tariffs limiting the common-law liability of a carrier for such damage. The common law, in imposing liability, dispensed with proof by a shipper of a carrier's negligence in causing the damage.' Secretary of Agriculture v. United States, 350 U.S. 162, 173, 76 S.Ct. 244, 251, 100 L.Ed. 173 (Frankfurter, J., concurring).