SEl-1-EJiBER 1, 1914.] 



THE INDIA RUBBER WORLD 



659 



The Liability of Railroads for Lost or Damaged Goods. 



Every rubl'cr mamilailurcr is also, to a large extent, a rubber merchant, as lie not only manufactures his i^ooiis, but he has to 

 And a customer for them ichen finished, and is obliged lo enter the market as a buyer not only for his crude rubber and fabrics, 

 but for all the various other ingredients that go into the construction of his goods, and also for the purchase of machinery and 

 other equipment. Ho that both in buying and selling he is a constant user of the railroads and will in consequence be interested in 

 this article on railroad liability just as much as if he were a merchant pure and simple. The jobber of rubber goods is a 

 merchant pure and simple, and therefore the laws goierning Iransporlalion are to him of vital importance ; for with jobbers gener- 

 ally — except possibly a few in the very large cities — the railroads must be used both in gelling and in distributing their stocks. 

 What Ihey can e.rpect and what they can e.ract fram the railroads, Ihercfore. are matters of the first importance. 



THE liability of railroads and other common carriers for 

 damages for the non-delivery or the delivery in dam- 

 aged condition of goods committed to their care is a 

 subject of interest to almost every dealer, whether wholesaler 

 or retailer. Every merchant in business uses the railroads 

 as a means of transportation, and almost every one at one 

 time or another will have claims against them, so that some 

 illumination of the legal principles that control such claims 

 may be useful. 



In the beginning, the status of the merchant in making 

 claims against a railroad company depends on the way in 

 which he has purchased the goods. As to delivery, merchan- 

 dise is usually sold in either of two ways. John Jones & Co., 

 jobbers or manufacturers, of New York City, will take an 

 order from James Brown, a retailer in Cincinnati, Ohio, for 

 goods. If the goods are sold delivered in Cincinnati, freight 

 paid, the railroad is the agent of the seller, and if anything is 

 wrong with the shipment — if it is either not delivered at all, 

 or delivered damaged — the buyer's claim is against the seller. 

 In such a case he has nothing whatever to do with the rail- 

 road, and should hold the seller responsible for the loss, 

 whatever it may be, for the contract is of course not fulfilled 

 by the seller until the goods are properly delivered. In this 

 case the seller has the claim against the railroad. 



In my judgment, however, sales of merchandise arc mostly 

 made the other way. i. e., f. o. b. (free on board) the place 

 of sale. In this case John Jones & Co. sell the goods at 

 New York and it is Brown's business to get them transported 

 to Cincinnati. Practically always in such cases, Jones & Co. 

 will actually deliver the goods to the railroad and make all 

 shipping arrangements. In this case the railroad is the agent 

 of the buyer and if anything happens to the goods en route 

 the buyer must look to the railroad. Some retailers not so 

 fair in their business methods as they might be, will arbi- 

 trarily seek to hold the seller responsible in such cases, by 

 deducting enough from bills to cover their loss. Even though 

 the seller, for business reasons, should permit this, there is 

 not the slightest legal warrant for it. 



In spite of the fact that the seller of goods sold f. o. b., 

 who delivers them to the railroad, is acting simply as the 

 buyer's agent, it is established that the seller in the contract 

 he makes with the railroad will usually bind the buyer. In 

 other words, if the seller accepts from the railroad a bill of 

 lading which contains a limitation of the railroad's liability, 

 the buyer is bound and cannot claim that he did not consent 

 to any such limitation. 



It is by these contracts that common carriers give them- 

 selves the upper hand over shippers of merchandise and 

 make it extremely difficult to get justice when goods are 

 lost or destroyed. Before the days when railroads had 

 learned how to reduce their liability the matter was con- 

 trolled by the common law, and a railroad was considered an 

 absolute insurer of goods given it to transport. In those 

 days no ordinary excuse was accepted. If goods were lost 

 <ir damaged the railroad was compelled to make good the 



loss, unless it could be shown that it came from the act of 

 God, a public enemy or the negligence of the shipper himself. 



Conditions have changed, however, and today practically 

 every railroad and common carrier uses a bill of lading which 

 makes its liability for damage only a fraction of what it 

 formerly was, and what it should be. Under the bill of 

 lading now in general use a railroad can be held responsible 

 only for damage that comes from its negligence, and upon 

 the claimant is usually put the burden of proving the negli- 

 gence. This is often a very hard thing to do. The railroads 

 have even tried to go further and force on shippers contracts 

 which relieved them of practically all liability, even for the 

 results of their own negligence. In every case, however, the 

 courts have held such contracts void as against public policy. 



The acceptance of such a bill of lading by a shipper makes 

 the contract, whether the shipper read or understood it or not. 



When a merchant receives merchandise in bad order he is 

 often compelled by the railroads to sign for it in good order 

 before they will deliver it to him. Often he is required to do 

 this before he has even had the chance to examine it and 

 learn its condition. By doing so he loses none of his rights, 

 however, for he will always be permitted to show that he 

 was compelled to give the good-order receipt against his 

 will. If he discovers that the goods are damaged his course 

 is plain, but not alwaj's easy. If he has bought the goods 

 f. o. b. and it is incumbent upon himself to make the claim 

 against the road, he should at once file a formal claim for 

 damages. The chance is he will never hear of this again 

 unless he presses it. If he finds he can get nothing out of 

 court, he can begin an action. In order to make out a 

 prima facie case (a case good enough to get judgment if not 

 overturned) he needs simply to prove the delivery of the 

 goods to the railroad in good order and their delivery to 

 him in bad order. It is then up to the railroad to show that 

 by reason of the contract in the bill of lading they are 

 not responsible. If the bill of lading relieves the road of all 

 responsibility, except for negligence, the merchant will then 

 have to prove the negligence in order to recover. Sometimes 

 this is comparatively easy, sometimes almost impossible. In 

 such cases negligence is not presumed by the simple oc- 

 currence of damage and must be shown, except where the 

 goods are lost entirely. In that case negligence need not be 

 proven: the loss is supposed to be due to the railroad's 

 negligence. 



The rule as to what is negligence in these cases is simple; 

 If the railroad failed to use ordinary prudence and care, and 

 as a result the goods were damaged, negligence is made out. 



The measure of damages in case judgment is obtained is 

 the market value of the goods at the point of destination, 

 not the point from which they were shipped. To the market 

 value may be added interest, and from the sum of principal 

 and interest the freight charges are to be deducted. The 

 above is the rule where the goods are lost. Where they are 

 simply damaged, the measure is the market value less the fair 

 value of the damaged goods at the point of destination. In 



