70 F. 201 | 8th Cir. | 1895
Lead Opinion
after stating the facts as above, delivered the opinion of the court.
Is a condition, in a lease by a railway company of a portion of its right of way, that it shall not be liable to the lessee for any damage to any buildings or personal property thereon, caused by fire set by its locomotives, or by the negligence of its officers or servants, in violation of public policy, and therefore void? This is the question in this case. The public policy of a state or nation must be determined by its constitution, laws, and judicial decisions; not by the varying opinions of laymen, lawyers, or judges as to the demands of the interests of the public. Vidal v. Girard’s Ex’rs, 2 How. 127, 197; U. S. v. Trans-Missouri Freight Ass’n, 7 C. C. A. 15, 73, 58 Fed. 58; Swann v. Swann, 21 Fed. 299. If this was a question of local law, or of the public policy of the state of Iowa alone, it would require little consideration by this court. There are many provisions of the
Upon the latter question, however, it is not conclusive upon the national courts. Whether or not: such a provision of a contract: is against public policy is a question of general law, and not dependent solely upon any local statute or usage. Over this question the national courts exercise concurrent jurisdiction with those of the state, and, while the decisions of the latter are always entitled to the weight of persuasive authority, the federal courts must in the end exercise their own judgment. Railroad Co. v. Lockwood, 17 Wall. 357, 368; Myrick v. Railroad Co., 107 U. S. 102, 1 Sup. Ct. 425; Carpenter v. Insurance Co., 16 Pet. 495, 511; Swift v. Tyson, 16 Pet. 1; Railroad Co. v. National Rank, 102 U. S. 14; Burgess v. Seligman, 107 U. S. 20, 33, 2 Sup. Ct. 10; Smith v. Alabama, 124 U. S. 465, 478, 8 Fup. Ct. 564; Bucher v. Railroad Co., 125 U. S. 555, 583, 8 Sup. Ct. 974; Liverpool & C. W. Steam Co. v. Phenix Ins. Co., 129 U. S. 397,443, 9 Sup. Ct. 469. We turn accordingly, to the consideration of this question.
Before entering upon its discussion, ii is important to note the terms and effect of the lease before us, and the situation of the parties and of the property which was destroyed. Before the lease-was made, the lessees had no right to enter upon, or to place any property upon, tlie leased premises, and the railway company owed to the lessees no duty to exercise ordinary care not to set lire to any
The question, then, is, was it a violation of public policy for the lessees to agree, under these circumstances, that, if they were permitted to put their buildings and property upon the right of way of the railroad company, and to use them thereon, the duties and liabilities of the latter to them, and to the public, should remain as they were before the lease was made, and should not be increased by any additional burden? No act of congress, no statute, no decision of any court (except a decision of the supreme court of Iowa, which was overruled by Griswold v. Railroad Co., supra), which prohibits such an agreement or declares it to be against public policy, has been called to our attention. Counsel for plaintiffs in error present a carefully prepared and exhaustive argument, by analogy, to show that such an agreement is detrimental to the public welfare, and against public policy, but their contention rests entirely upon that argument. If the analogy fails, the argument falls. The argument runs in this way: A contract by a railroad company with one of its employés, or with a passenger, or with a shipper, to exempt itself from liability for negligence in operating its railroad is against public policy and void. Railway Co. v. Payne, 29 Kan. 169; Railway Co. v. Eubanks, 48 Ark. 460, 3 S. W. 808; Railroad Co. v. Lockwood, 17 Wall. 357; Express Co. v. Caldwell, 21 Wall. 264, 267; York Co. v. Central Railroad, 3 Wall. 107; Bank of Kentucky v. Adams Ex
Again, the law imposes upon a railroad company the absolute duty to accept passengers and freight when offered, and to carry the former with the utmost, and the latter with ordinary, care. The passenger is often obliged to travel, and the shipper to send his goods, by railroad. In making their contracts, they do not stand on an equal footing with it. They' cannot stop to in gotiate and settle the terms of a contract, every time they desire to use the railroad. They would often prefer the abandonment of the contracts to such negotiations. On the other hand, the railroad company, with its trained employés, and its monopoly of the traiisporfation facilities sought, has the ability and the power to exact the contract it desires, This inequality in the situation of the parties, which would, if permitted, enable the railroad company to obtain unfair contracts
But the defendant in error and Simpson, Mclntire & Co., did not stand on unequal footing. The lessees Avere not compelled to lease of the railroad company. The latter had no monopoly of land in Iowa. Each party had the option to execute, or to refuse to execute, the lease. The condition exempting the company from liability for damages to the property of the lessees caused by fire set by the negligence of the company relieved the company from no duty it was required by law to perform, but simply provided that it should not assume an additional burden, which it had the option to take or to refuse. Thus, in the case at bar, all the reasons for the rule avoiding contracts exempting common carriers from liability for negligence failed. And it is difficult to perceive how the proposition that this rule should govern this case can be successfully maintained.
It is said that it was the duty of the railroad company to furnish suitable warehouses for the receipt of butter and eggs offered to it for transportation, and already transported, but awaiting delivery to the consignees, that it was bound to exercise ordinary care not to burn the contents placed in such warehouses by it as a carrier, and that, if it employed Simpson, Mclntire & Co. to receive and store the goods of its shippers, it was bound to exercise the same degree of care to protect the goods in their possession. Stock-Yards Co. v. Keith, 139 U. S. 128, 133, 136, 11 Sup. Ct. 461. It is a conclusive answer to this contention that there is nothing in this record to show that the railroad company ever had employed Simpson, Mcln-tire & Co.' to receive or store any of the goods of its shippers. Moreover, if it had done so, it is not perceived why the contract of these lessees to take the risk of, and to hold the railroad company harmless from; any damage to such property from fires caused by the negligent operation of the railroad, would not have been valid. It goes without saying that the railroad company could have legally employed an insurance company to indemnify it against loss by fire occasioned by the negligence of its servants. If there were goods of its customers burned in the warehouse, the lessees had, in effect, insured the railroad company against damages for their loss, and the insurance companies had insured the lessees. Ko reason is perceived why these contracts were not valid.
It is said that a statute which should provide that a railroad company should not be liable to the owner of property for damages to it by fire, caused by the negligence of the company, would be un
- The public policy of this nation, with reference to contracts of com mon carriers exempting them from liability for negligence, was established and declared by the decisions of the supreme court in Railroad Co. v. Lockwood, 17 Wall. 357, 384; Express Co. v. Caldwell, 21 Wall. 264, 267, 268; and Liverpool & G. W. Steam Co. v. Phenix Ins. Co., 129 U. S. 397, 440, 441, 9 Sup. Ct. 469. In the leading case of Railroad Co. v. Lockwood, 17 Wall. 357, 384, Air. Justice Bradley declared the rules by which the validity of such contracts must be determined to be:
“First, that a common carrier cannot lawfully stipulate for exemption from responsibility wlion such exemption is not just anti reasonable in the eye of the law; secondly, that it is not just and reasonable, in the eye of the law, for a common carrier to stipulate for exemption from responsibility for the negligence of himself or his servants; thirdly, that these rules apply both to earners of goods and carriers of passengers for hire, and with special force to the latter.”
In Liverpool Steam Co. v. Phenix Ins. Co., 129 U. S. 397, at page 441, 9 Sup. Ct. 469, Sir. Justice Gray thus states the rule in a single paragraph:
“Special contracts between the carrier and the customer, the terms of which are just and reasonable, and not contrary to public policy, are upheld, —such as those exempting the carrier from responsibility for losses happening from accident, or from dangers of navigation that no human skill or diligence can guard against; or for money or other valuable articles, liable to be stolen or damaged, unless informed of their character or value; or for perishable articles or live animals, when injured without default or negligence of the carrier. But the law does not allow a public carrier to abandon altogether his obligations to the public, and to stipulate for exemptions which are unreasonable and improper, amounting’ to an abnegation of the essential duties of his employment.”
The burden is on the party who seeks to put a restraint upon the freedom of contracts to make it plainly and obviously clear that the contract is against public policy. U. S. v. Trans-Missouri Freight Ass’n, 7 C. C. A. 15, 82, 58 Fed. 58; Printing & Registering Co. v. Sampson, L. R. 19 Eq. 462; Tallis v. Tallis, 1 El. & Bl. 391; Rousillon v. Rousillon, 14 Ch. Div. 351, 365; Stewart v. Transportation Co., 17 Minn. 372, 391 (Gil. 348); Marsh v. Russell, 66 N. Y. 288; Phippen v. Stickney, 3 Metc. (Mass.) 384, 389. In our opinion, the plaintiffs in error fall far short of sustaining this burden, and our conclusions are:
The reasons why an unreasonable; and unjust contract between a common carrier and another, éxempting the former from liability
For these reasons the judgment below must be affirmed, with costs,- and it is so ordered.
Dissenting Opinion
(dissenting). I concur in the conclusion reached in this case but dissent from this statement in the majority opinion, namely:
“Upon the latter question, however, it is not conclusive upon the national courts. Whether or not such a provision of a contract is against public policy is a question of general law, and not dependent solely upon any local statute or usage.”
The contract referred to is a lease of real estate situated in Iowa. The lease was made and executed,, and its covenants were to be performed, in that state. The supreme court of Iowa held the lease and all its conditions valid under the laws of that state. No decision of the supreme court of the United States has been cited, and it is believed none can be found, holding that this decision of the supreme court of Iowa is not binding on this court. But, however this may be, there is no difference of opinion between the supreme court of Iowa and this court as to the validity of the lease and all its conditions, and there is, therefore, no occasion for this court to express an opinion upon the question whether it would be bound by the decision of the supreme court of Iowa if the two courts differed in opinion on the question of public policy. What is said on this subject is not necessary to the decision of the case, and, moreover, is not law. A “local statute,” declaring such a condition in a lease to be‘either valid or void, would undoubtedly be obligatory on this and all other courts. There are weighty reasons why a