Story Case

The Empire Plough Manufacturing Company was engaged in the business of manufacturing farming implements in South Bend, Indiana. The Farmers' Supply Company of Nashville, Tennessee, had purchased from the plough company a lot of one thousand ploughs. The plant of the plough company was located about one mile from the freight station of the Midland Railway Company, by whom the ploughs were to be transported from South Bend to Nashville. Because of the large number of ploughs to be shipped, the plough company was compelled to consume several days in having them conveyed from the plant to the freight station. Since the Farmers' Supply Company was in immediate need of the ploughs, the plough company directed the railway company to ship them as rapidly as they were delivered at the station. The railway company, however, to suit its own convenience, decided to wait until all the ploughs had been conveyed to the station, and ship all in one consignment. After nine hundred had been delivered, the freight station and all its contents was destroyed by fire. The plough company brought suit against the railway company for the loss.

The railway company contended that it was only a warehouseman, and liable only for reasonable care, and, not having been negligent, it was not liable for the loss. But the plough company contended that it was a common carrier, and liable for the loss, whether negligent or not. What should be the decision of the court under the foregoing circumstances? What difference does it make whether the railway company was a common carrier or a warehouseman?

Ruling Court Case. Newby Vs. Southern Express Company, Volume 36 Georgia Reports, Page 635; Same Case, Volume 91 American Decisions, Page 783

Newby, while in Augusta, Georgia, met Mr. Shuter, who was president of the Southern Express Company. He told Mr. Shuter that he had some goods in Charlotte, North Carolina, which he wished to be transported to Richmond, Virginia. Mr. Shuter engaged the work for the Southern Express Company. He sent a telegram to the agent at Charlotte and instructed him to receive the goods for shipment, while Newby wrote to his agent and directed that the goods be sent to this company. When the goods arrived, the express agent at Charlotte wrote out a receipt, acknowledging the acceptance of the shipment for transportation. The company, at this time, was so busily engaged in shipping for the government that it was unable to ship these goods at once, and they were left in its warehouse until such time as it would be able to care for them. While they were so stored, the warehouse burned and the goods were lost. Suit was brought by Newby for the damages sustained.

Newby contended that the express company was liable as a common carrier, and that no amount of care would relieve it of the liability to pay for the loss. Whereas, the company contended that it was only a bailee, or warehouseman, at the time, and bound only to exercise reasonable care for the safety of the goods in question; and that its duty as common carrier did not begin until the goods were actually in transit.

Decision: A warehouseman is responsible only for reasonable care for the safety of goods in his possession, while a common carrier is liable absolutely, except for acts of God and the public enemy. In this case, the liability of the express company was that of a carrier; such liability begins when the goods are accepted for shipment, and continues until the goods are delivered, unless there is some agreement to the contrary. Therefore, in this case, the express company is liable for the loss of the goods, even though they may have been destroyed without any fault on its part. Mr. Justice Walker, who delivered the opinion of the court, said: "An express company, which pursues continually, for any period of time, the business of transporting goods, packages, etc., is a common carrier, and, in the loss of goods intrusted to it to be carried, the presumption of law is against it; and no excuse will avail it, unless the loss was occasioned by the act of God or public enemy of the State. At Common Law, a carrier is in the nature of an insurer, and is bound to keep and carry goods intrusted to his care, safely, and is liable for all losses and in all events, except those caused by the act of God and the public enemy." Accordingly, judgment was given for Newby.

Ruling Law. Story Case Answer

The Common Law was very exacting of the common carrier; and the law continues of the same tenor, except in so far as it has been changed by statute. The carrier is liable absolutely for the loss of, or damage to, property, except when the loss or damage is caused by the negligence or fault of the shipper himself, or by an act of God, such as an unprecedented flood or storm, or by the public enemy, such as an invading foe, or mobs and riots, over which the carrier has no control.

A warehouseman, on the other hand, is termed a bailee for hire; on him is imposed no such extraordinary liability; he is under a duty only to exercise reasonable care in the protection of goods intrusted to his care and custody. As a general rule, the liability of the carrier begins when goods are accepted by it for shipment, even though it may store them for several days before shipping. However, an agreement may be made between the shipper and the carrier that its liability shall be that of a warehouseman, while the goods are stored awaiting shipment. But if there is not such an agreement, the liability of the carrier begins when the goods are accepted and continues until they are delivered at their destination.

In the Story Case, the railway company was a carrier, from the time the goods were received at its freight station, and the liability of a carrier came into existence at that time. It was directed to ship the ploughs at once, but for its own convenience, delayed sending the shipment. Had the plough company consented to have the ploughs stored, so that cheaper freight rates might have been secured, the liability of the railway company would then have been that of a warehouseman only.