The rule of the common law was that the carrier of goods undertook an absolute duty to carry and deliver safely, unless harm befell by Act of God or the Public Enemy. The courts permitted a modification by special contract, but Federal legislation has restored the common law rule.
(1) The carrier liable as an insurer. It has been the law from early times that a carrier is an insurer of the safety of the goods entrusted to its care (with the exceptions hereinafter noted) ; that is to say that it has no defense that the loss was one not attributable to its negligence, or one which it could not have prevented by the exercise of every precaution.18 The reason for the rule was stated in the case cited as follows: "And this is a politic establishment, contrived by the policy of the law, for the safety of all persons, that they may be safe in their ways of dealing; for else these carriers might have an opportunity of undoing all persons that had any dealings with them, by combining with thieves, etc., and yet doing it in such a clandestine manner as would not be possible to be discovered." This rule has been maintained to the present day and re-affirmed in recent federal legislation.
17. Missouri Pac. R. Co. v. Larrabee Flour Mills Co., 211 U. S. 612.
18. Coggs v. Bernard, 2 Ld. Raymond, 909, 1 Smith's Leading Cases, 369.
(2) The exceptions to the liability. The carrier is excused if the loss is caused by the following causes, each of which is defined and briefly commented upon:
(a) Act of God. An act of God is a violent eruption of nature, not caused by man's intervention and which could not be foreseen or guarded against. Hurricanes, unusual floods, earthquakes, lightning, landslides, have in them the elements of violence, surprise, lack of man's intervention, which make them "Acts of God." 19 The carrier is not liable for loss so caused.
(b) Act of the public enemy. A public enemy was a force of sufficient organization and dignity to lay claim to political power, or pirates upon the high seas. A mob was not a public enemy,20 although authorities have excused loss caused by mobs when the carrier has taken every precaution.
(c) Loss caused by shipper's own act. This includes loss caused by improper crating, etc., and being attributable to the shipper, the carrier is not liable.
(d) Inherent defect or vice, of thing shipped. The carrier must take such proper precautions to preserve goods which their nature demands, as refrigeration, watering of live stock, etc. But for loss not thus preventable arising out of the inherent defect or vice of the article itself, the carrier is not responsible.
(e) Loss by authority of law. If the goods are seized under legal process, or other authority of law, the carrier is excused.
(3) Limitation of liability. The carrier naturally attempted a limitation of this liability, and the courts allowed this to be done by special contract. In England they were permitted to do so merely by posting notice of limitation, until legislation in 1854 required special contract. In this country, limitation by merely giving notice has generally been held insufficient, unless brought home to the shipper and assented to by him. In that event liability could be reduced to that caused by the carrier's own negligence which the carrier could not contract away.21
19. New Brunswick Steamboat Co. v. Thiers, 4 Zabr. (N. J.) 697, 64 Am. Dec. 394.
20. Coggs v. Bernard, supra.
By federal legislation (Carmack Amendment, first and second Cummins Amendment) the common law liability of the carrier has been practically restored; and it has also been provided that the initial carrier shall be liable for loss or damage whether arising upon its own line or upon the lines of connecting carriers over which it has accepted shipment.
A much mooted point in regard to this question of liability arose in connection with a stipulation as to value. For instance, suppose a loss of automobiles shipped under an express receipt limiting liability to $50.00 unless a greater valuation was stipulated in the receipt. In some states it was denied that such a limitation was effective; but the United States courts upheld such a limitation even against the carrier's own negligence;22 and the Croninger case decided that the federal rule must prevail in all interstate shipments. By the first and second Cummins Amendments, the rule now is that the law prohibits all limitations upon the carrier's liability for full loss, damage or injury caused by it except when rates dependent upon the value declared in writing by the shipper, or agreed to in writing by the shipper as the released value, are authorized by the Interstate Commerce Commission.23
21. Games v. Union Transportation Co., 28 Ohio St. 118.
22. Adams Express Co. v. Croninger, 226 U. S. 491; Pierce Co. v. Wells Fargo Co., 236 U. S. 278.
(4) Beginning and termination of liability as insurer. The liability of the carrier as such begins upon the receipt of the goods for shipment without further order of the shipper. Upon the question when the liability of the carrier as a carrier (that is, as an insurer) ceased, and its liability as a warehouseman (that is, liable only in case of negligence) began there were three rules. The Massachusetts rule was that the carrier's liability as such ends when the goods arrive at their destination and there safely deposited in the warehouse or upon the platform, no notice to consignee necessary. The New Hampshire rule was that the carrier's liability ends when the goods have arrived at destination and a reasonable time elapsed during which they might have been removed, no notice to consignee being necessary. The New York rule was that the carrier must give the consignee notice, and then he must have a reasonable time in which to remove them. The New York rule is also the rule applied everywhere as to water carriers. By order of the Interstate Commerce Commission, the bill of lading now reads to the effect that the carrier's liability shall become that of warehouseman for loss by fire occurring after the expiration of free time allowed by the tariffs lawfully on file, after notice of the arrival of the property, duly sent or given, and after the property has been placed for delivery, or tendered to consignee's order.
The common carrier undertakes to use diligence to transport without delay. But any cause not arising out of his negligence excuses him.
23. Interstate Commerce Commission Reports, Vol. 54, p. 66.
The common carrier is not an insurer of undelayed transportation; he undertakes only to use due care. Causes beyond his control excuse him; they need not be "Acts of God."
Freight is the charge which a carrier of goods is entitled to make for its services as carrier. Demurrage is the charge for delay by the shipper or consignee in not unloading the cargo after a reasonable length of time has elapsed for its unloading.
The compensation of the carrier for carrying1 the shipment is called freight. Freight rates must be reasonable and equal upon all. What maximum rates may be charged is now governed by the federal law, so far as interstate commerce is concerned, under the supervision of the Interstate Commerce Commission.
The carrier may also charge demurrage, that is, a charge for delay in unloading cars whereby they are held on the track more than a reasonable length of time. This would not apply of course to small shipments in which it is the carrier's duty to unload upon the platform or in its warehouse, but refers to the charge made upon cars which are set upon sidetracks for the consignee to unload.25
25. Schumacher v. R. Co. 207 111. 199.