ATLANTIC COAST LINE R. CO. v. MAZURSKY 216 U.S. 122 (1910)

By the act of the general assembly of the state of South Carolina, entitled, 'An Act to Regulate the Manner in which Common Carriers Doing Business in This State Shall Adjust Freight Charges and Claims for Loss of or Damage to Freight,' approved February 23, 1903 (No. 50, Acts of S. C. 1903, p. 81), it was enacted: [216 U.S. 122, 123]   'Section 1. Be it enacted by the general assembly of the state of South Carolina, That from and after the passage of this act, all common carriers doing business in this state shall settle their freight charges according to the rate stipulated in the bill of lading: Provided, The rate therein stipulated be in conformity with the classifications and rates made and filed with the Interstate Commerce Commission, in case of shipments from without this state, and with those of the railroad commissioners of this state, in case of shipments wholly within this state; by which classifications and rates all consignees shall in all cases be entitled to settle freight charges with such carriers; and it shall be the duty of such common carrier to inform any consignee or consignees of the correct amount due for freight, according to such classifications and rates; and upon payment or tender of the amount due on any shipment, or on any part of any shipment, which has arrived at its destination, according to such classifications or rates, such common carrier shall deliver the freight in question to the consignee or consignees, and any failure or refusal to comply with the provisions hereof shall subject each such carrier so failing or refusing to a penalty of $50 for each such failure or refusal, to be recovered by any consignee or consignees aggrieved by suit in any court of competent jurisdiction.

'Sec. 2. That every claim for loss of or damage to property while in the possession of such common carrier shall be adjusted and paid within forty days, in case of shipments wholly within this state, and within ninety days, in case of shipments from without this state, after the filing of such claim with the agent of such carrier at the point of destination of such shipment: Provided, That no such claim shall be filed until after the arrival of the shipment or of some part thereof at the point of destination, or until after the lapse of a reasonable time for the arrival thereof. In every case such common carrier shall be liable for the amount of such loss or damage, together with interest thereon from the date of the filing of the claim therefor [216 U.S. 122, 124]   until the payment thereof. Failure to adjust and pay such claim within the periods respectively herein prescribed shall subject each common carrier so failing to a penalty of $50 for each and every such failure, to be recovered by any consignee or consignees aggrieved in any court of competent jurisdiction: Provided, That unless such consignee or consignees recover in such action the full amount claimed, no penalty shall be recovered, but only the actual amount of the loss or damage, with interest as aforesaid: Provided, further, That no common carrier shall be liable under this act for property which never came into its possession, if it complies with the provisions of 1710, vol. 1, of the Code of Laws of South Carolina, 1902.'

Section 1710, volume 1, of the Code of Laws of South Carolina, 1902, is as follows:

'When under contract for shipment of freight or express over two or more common carriers, the responsibility of each or any of them shall cease upon delivery to the connecting line 'in good order;' and if such freight or express has been lost, damaged, or destroyed, it shall be the duty of the initial, delivering, or terminal road, upon notice of such loss, damage, or destruction being given to it by the shippers, consignee, or their assigns, to adjust such loss or damage with the owners of said goods within forty days, and upon failure to discharge such duty within forty days after such notice, or to trace such freight or express, and inform the said party so notifying when, where, and by which carrier the said freight or express was lost, damaged, or destroyed, within said forty days, then said carrier shall be liable for all such loss, damage, or destruction in the same manner and to the same extent as if such loss, damage, or destruction occurred on its lines: Provided, That if such initial, terminal, or delivering road can prove that, by the exercise of due diligence, it has been unable to trace the line upon which such loss, damage, or destruction occurred, [it] shall thereupon be excused from liability under this section.'

The above-entitled cases were brought to test the validity of [216 U.S. 122, 125]   the provisions of 2 of the act of February, 1903, when applied to claims for loss or damage to interstate freight.

In each case the objection that that section was unconstitutional and invalid was seasonably made. In each case the objection was overruled and judgment given in favor of the respective claimants, plaintiffs, for the value of the undelivered freight, with the full penalty of $50 added.

The opinion of the supreme court of South Carolina, construing and applying the provisions of the state statute, appears in the printed transcript of the record in case No. 60 (Charles v. Atlantic Coast Line R. Co. 78 S. C. 36, 125 Am. St. Rep. 762, 58 S. E. 927). In each of the other cases the principles assumed to have been settled in and by that opinion were made the basis of the judgment of the state supreme court.

The cases were submitted to this court December 9, 1909, as one case, and argued as such on one side only. On the 20th of December, this court entered an order that notice of the pendency of these cases should be given to the attorney general of South Carolina, and leave was given to him to file a brief as amicus curioe on or before the 3d day of January, if he should be so advised. The attorney general filed a brief accordingly January 3, 1910; Townsend was with him on the brief.

Messrs. Frederic D. McKenney, P. Willcox, F. L. Willcox, Henry E. Davis, and J. P. K. Bryan for plaintiffs in error.

[216 U.S. 122, 129]   Messrs. J. Fraser Lyon and W. H. Townsend, as amici curioe.

No counsel for defendants in error.

Mr. Chief Justice Fuller delivered the opinion of the court:

In No. 60 (Charles v. Atlantic Coast Line R. Co.), which was assumed by the supreme court of South Carolina to settle all the others, and to have been made the basis for the judgment of that court in all the cases, the state court found, as matter of fact, 'the evidence showed that defendant was in possession of the goods lost,' and held as matter of law 'that the statute in question, as it affects carriers doing business in this state who fail or refuse to adjust and pay the loss of or damage to goods while in their possession, is no unlawful interference with interstate commerce, even as applied to an interstate shipment.'

It is thus apparent that the statute is construed by the court as only concerning property lost or damaged while in the possession of a carrier in the state of South Carolina.

It is this conclusion of law that the plaintiff in error asks this court to review.

In Venning v. Atlantic Coast Line R. Co. 78 S. C. 55, 12 L.R.A.(N.S.) 1217, 125 Am. St. Rep 768, 58 S. E. 983, it was expressly decided that the act did not apply to claims [216 U.S. 122, 130]   for loss of property which never came into the possession of the defendant. In that case the state supreme court considered an act of May, 1903, and held it, for the reason given, to be unconstitutional, not as obnoxious to the 14th Amendment of the Constitution of the United States and the Constitution of South Carolina, but as amounting to an illegal attempt to regulate interstate commerce. And that 'on principle, as well as under the authority of Central R. Co. v. Murphey, 196 U.S. 194 , 49 L. ed. 444, 25 Sup. Ct. Rep. 218, 2 A. & E. Ann. Cas. 514, it is impossible to avoid the conclusion that the act of May, 1903, here under consideration, is unconstitutional.' And further, that it was evident from the complaint that the action was intended to rest on the invalidity, under the act of May, 1903, of such a contract as 1710 contemplates, and that therefore that section could have no application.

The court then considered the act of February, 1903, and said:

'The section of main importance here is the second, which provides for the recovery for loss of or damage to freight, and penalties for failure to adjust and pay such loss or damage within a certain time. The question vital to this case is whether the statute can be construed to impose upon one connecting carrier, liability for the default of another, unless such carrier obtains and gives the information, or uses due diligence to obtain it, as provided in 1710 of the Civil Code. We do not think it can be so construed.

'The main enactment as to the recovery of damages and penalties thus begins in 2: 'That every claim for loss of or damage to property while in the possession of such common carrier shall be adjusted and paid within forty days,' etc. The words we have italicized clearly limit the loss and damage which a carrier is required to adjust and pay for to that which befalls while the goods are in the possession of such carrier, and excludes the idea of liability for loss or damage to the goods while in the possession of another carrier.

'It is true there is a proviso at the end of this section, 'that [216 U.S. 122, 131]   no common carrier shall be liable under this act for property which never came into its possession, if it complies with the provisions of 1710, vol. 1, of the Code of Laws of South Carolina, 1902.' But as the body of the act does not make the carrier liable at all 'for goods which never came into its possession,' a proviso which exempts from liability for loss of or damage to such goods on certain conditions can have no effect. The act imposes no liability to which the exemption can be applied.

'The rule is that all parts of a statute, including provisos, are to be construed together, and effect given, if possible, to all. But it is contrary to reason as well as authority to extend by implication a proviso to cover that which is opposed to the express language of the main enactment. Southgate v. Goldthwaite, 1 Bail. L. 367; United States v. Dickson, 15 Pet. 141, 10 L. ed. 689; The Irresistible, 7 Wheat. 551, 5 L. ed. 520; 26 Am. & Eng. Enc. Law, p. 681; Endlich, Interpretation of Statutes, 184, 185. The fact that the statute is penal adds force to this conclusion. We are of the opinion that the proviso of 2 has no effect, and the act only imposes penalties upon the carrier for failing to adjust claims for loss occurring while the goods are in its own possession.

'It follows, the plaintiff in this case cannot sustain his recovery on the ground that the defendant was liable, under the act of February, 1903, for goods lost by a connecting carrier, because it failed to obtain and give information of the kind required in cases falling under that act, or to use due diligence to obtain such information.

'This penalty act of February will apply to the case, if the finding on the new trial should be that the loss occurred on the defendant's road, but not otherwise. It is attacked as unconstitutional under the interstate commerce clause of the Constitution of the United States. That question is discussed and decided against the defendants contention in Charles v. Atlantic Coast Line R. Co. 78 S. C. 36, 125 Am. St. Rep. 762, 58 S. E. 927.'

In Charles v. Atlantic Coast Line R. Co. supra, the action was brought in a magistrate court to recover the value of four [216 U.S. 122, 132]   sacks of rice, alleged to have been shipped from New Orleans, Louisiana, by Martin J. Wynne, to the plaintiff at Timmonsville, South Carolina, and to have been lost while in the possession of the defendant carrier, and also to recover $50 penalty for failure to adjust and pay the claim within ninety days, as prescribed by the act of February 23, 1903. The magistrate gave judgment against defendant for the amount claimed, and that judgment, on appeal, was affirmed by the circuit court, and then again by the supreme court of the state in this case. The supreme court held that the last proviso of the 2d section of the act of February, 1903, had no application to carriers into whose possession the goods had come, and referred to the opinion of the court in Seegers Bros. v. Seaboard Air Line R. Co. 73 S. C. 71, 73, 121 Am. St. Rep. 921, 52 S. E. 797, where it was said: 'The duty to make prompt settlement for loss or damage to goods is but an incident of the duty to transport and deliver safely and with reasonable diligence. The statute in question was designed to effectuate an important public purpose; viz., to compel the common carrier to perform with reasonable diligence the duty which peculiarly appertains to his business as a carrier of freight. The penalty is but a means to that end.' And see same case, 207 U.S. 73 , 52 L. ed. 108, 28 Sup. Ct. Rep. 28.

The supreme court, after making that quotation, thus proceeded:

'While it is not easy to define the exact limits of the operation of state laws as affecting interstate commerce, we have no hesitation in saying that the statute in question, as it affects carriers doing business in this state, who fail or refuse to adjust and pay the loss of or damage to goods while in their possession, is no unlawful interference with interstate commerce, even as applied to an interstate shipment. The penalty imposed is for a delict of duty appertaining to the business of a common carrier; and in so far as it may affect interstate commerce, it is an aid thereto by its tendency to promote safe and prompt delivery of goods, or its legal equivalent-prompt settlement of proper claim for damages. No penalty can at- [216 U.S. 122, 133]   tach except upon the establishment in a court of a default of duty inposed by statute. The statute does not attempt to regulate interstate commerce, and imposes no tax or burden thereon. It is supported by the general principle declared in Sherlock v. Alling, 93 U.S. 99, 104 , 23 S. L. ed. 819, 820, and enforced in Smith v. Alabama, 124 U.S. 465 , 31 L. ed. 508, 1 Inters. Com. Rep. 804, 8 Sup. Ct. Rep. 564, and Nashville, C. & St. L. R. Co. v. Alabama, 128 U.S. 96 , 32 L. ed. 352, 2 Inters. Com. Rep. 238, 9 Sup. Ct. Rep. 28, that state legislation 'relating to the rights, duties, and liabilities of citizens, and only indirectly and remotely affecting the operations of commerce, is of obligatory force upon citizens within the territorial jurisdiction, whether on land or water, or engaged in commerce, foreign or interstate, or in any other pursuit."

In the case of Western U. Teleg. Co. v. James, 162 U.S. 650 , 40 L. ed. 1105, 16 Sup. Ct. Rep. 934, a statute of Georgia requiring telegraph companies to transmit and deliver dispatches with impartiality, good faith, and diligence, under penalty of $100 in each case, in the absence of legislation by Congress on the subject, was held not to be an unwarrantable interference with interstate commerce as to messages without the state, and Mr. Justice Peckham, delivering the opinion of the court, said, p. 660:

'The statute in question is of a nature that is in aid of the performance of a duty of the company that would exist in the absence of any such statute, and it is in nowise obstructive of its duty as a telegraph company. It imposes a penalty for the purpose of enforcing this general duty of the company. The direction that the delivery of the message shall be made with impartiality and in good faith and with due diligence is not an addition to the duty which it would owe in the absence of such a statute. Can it be said that the imposition of a penalty for the violation of a duty which the company owed by the general law of the land is a regulation of or an obstruction to interstate commerce, within the meaning of that clause of the Federal Constitution under discussion? We think not.'

And see Chicago, M. & St. P. R. Co. v. Solan, 169 U.S. 137 , 42 L. ed. 692, 18 Sup. Ct. Rep. 289; Pennsylvania R. Co. v. Hughes, 191 U.S. 491 , 48 L. ed. 273, 24 Sup. Ct. Rep. 132; Missouri P. R. Co. v. Larabee Flour Mills Co. [216 U.S. 122, 134]   211 U.S. 624 , 53 L. ed. 361, 29 Sup. Ct. Rep. 214. The present cases fall within the rules there laid down, and Central R. Co. v. Murphey, 196 U.S. 195 , 49 L. ed. 445, 25 Sup. Ct. Rep. 218, 2 A. & E. Ann. Cas. 514; Houston & T. C. R. Co. v. Mayes, 201 U.S. 321 , 50 L. ed. 772, 26 Sup. Ct. Rep. 491; and McNeill v. Southern R. Co. 202 U.S. 543 , 50 L. ed. 1142, 26 Sup. Ct. Rep. 722, cited to the contrary, are really not in conflict therewith.

Judgments affirmed.