Jordan v. EASTERN TRANSIT & STORAGE COMPANY

146 S.E.2d 43 (1966)

266 N.C. 156

Patricia S. JORDAN v. EASTERN TRANSIT & STORAGE COMPANY, Incorporated.

No. 284.

Supreme Court of North Carolina.

January 14, 1966.

*46 J. Donnell Lassiter, Kennedy, Covington, Lobdell & Hickman, Charlotte, for defendant appellant.

Moore & Van Allen, by John T. Allred, Charlotte, for plaintiff appellee.

*47 LAKE, Justice.

There was no error in the court's refusal of the defendant's request for instructions 2 and 3. In effect, the defendant requested the court to instruct the jury that the plaintiff could not recover in this action for any loss or damage which occurred before her property reached Charlotte and was stored in the warehouse and that the burden was upon the plaintiff to show, by the greater weight of the evidence, how much of her loss and damage occurred after her goods were so stored.

The defendant was both the carrier and the warehouseman. As carrier, it packed the articles into the "barrels" and "cartons." Had it so desired, it could have prepared an inventory, item by item, showing the then condition of each item. It did not do so. The plaintiff testified that the items she alleges were lost were so packed by the defendant's employees and that all of the lost articles as well as all of those she alleges to have been damaged were, when so packed, in "perfect condition." There was no evidence to the contrary. From that time until the cartons and "barrels" were redelivered to the plaintiff they remained continuously in the possession and control of the defendant.

Of course, the plaintiff, having alleged in her complaint loss of and damage to her property while it was in the possession of the defendant in its warehouse in Charlotte, pursuant to its contract as warehouseman entered into on 24 February 1960, could not recover in this action for loss or damage which occurred prior to that time, at a different location and while the property was in the defendant's possession under a different contract creating a different relationship. The plaintiff can recover only on the theory of her complaint. Hormel & Co. v. City of Winston Salem, 263 N.C. 666, 140 S.E.2d 362; Howell v. Smith, 258 N.C. 150, 128 S.E.2d 144; Fox v. Hollar, 257 N.C. 65, 125 S.E.2d 334. Thus the proposition of the law upon which these requests of the defendant were based is sound. However, it is not applicable to this action for there is no suggestion in either pleading, or in the evidence offered by either party, that any loss or damage occurred before the plaintiff's property reached Charlotte and was stored in the defendant's warehouse.

The plaintiff, having introduced evidence to show that her properties were lost and damaged while in the exclusive possession and control of the defendant, the burden was upon the defendant to show where and when the loss and damage occurred, if it relies upon those circumstances as a defense to the plaintiff's claim, the facts being peculiarly within the knowledge of the defendant. See: Skyland Hosiery Co. v. American Ry. Express Co., 184 N.C. 478, 114 S.E. 823; Ange v. Woodmen, 173 N.C. 33, 91 S.E. 586; Harper Furniture Co. v. Southern Express Co., 144 N.C. 639, 57 S.E. 458; Meredith v. Seaboard Air Line R.R. Co., 137 N.C. 478, 50 S.E. 1; Stansbury, North Carolina Evidence, § 208.

No such evidence having been offered by the defendant and no contention having been made by it, in its pleadings or otherwise, that it lost or damaged the plaintiff's articles while they were in its possession as carrier, it was not necessary for the court to instruct the jury as to the law which would have governed the case if such facts had been shown. On the contrary, it is error for the court to charge on abstract principles of law not supported by any view of the evidence. Pressley v. Pressley, 261 N.C. 326, 134 S.E.2d 609; Chappell v. Dean, 258 N.C. 412, 128 S.E.2d 830. It is clearly not error to refuse a request for such an instruction. Edwards v. Western Union Telegraph Co., 147 N.C. 126, 60 S.E. 900.

There was also no error in the instruction to the jury that paragraphs 6 and 7 on the back of the warehouse receipt are "unenforceable in this law suit," and, therefore, the jury was to give no consideration *48 to those provisions, or in the refusal of the court to give the instruction requested by the defendant to the effect that the amount recoverable by the plaintiff could not exceed $50.00 for the contents of any one "barrel" or "carton."

The evidence of the plaintiff is sufficient to show that all of the articles were delivered to and packed by its employees in New Jersey. They were transported by the defendant to its warehouse in Charlotte and stored there by it. All of the articles were in "perfect condition" when delivered to and packed by the defendant. Thereafter, the defendant failed to redeliver some of the articles and delivered others in a damaged condition. This was sufficient to support the jury's finding that the defendant, through its negligence, lost the missing articles and damaged those which were redelivered to the plaintiff in that condition. Swain v. Twin City Motor Co., 207 N.C. 755, 178 S.E. 560; Morgan v. Citizens Bank, 190 N.C. 209, 129 S.E. 585, 42 A.L.R. 1299.

We need not determine the validity of paragraph 6 of the terms and conditions printed upon the back of the warehouse receipt for, by its terms, it is inapplicable to this transaction. The articles were packed by the defendant and so it knew they, or many of them, were fragile. It was the defendant, not the plaintiff, who knew what went into each "barrel" or carton. It could have made an inventory of the contents of each container had it so desired. Such a provision in a bill of lading must be construed against the carrier, who prepared it, in case of any ambiguity. 13 Am.Jur.2d, Carriers, § 280.

Contracts exempting persons from liability for negligence are not favored by the law and are strictly construed against the party claiming such exemption. Neece v. Greyhound Lines, 246 N.C. 547, 99 S.E.2d 756, 68 A.L.R.2d 1341; Hall v. Sinclair Refining Co., 242 N.C. 707, 89 S.E.2d 396; Winkler v. Appalachian Amusement Co., 238 N.C. 589, 79 S.E.2d 185; Hill v. Carolina Freight Carriers Corp., 235 N.C. 705, 71 S.E.2d 133; Miller's Mutual Fire Insurance Ass'n of Alton, Ill. v. Parker, 234 N.C. 20, 65 S.E.2d 341. However, in the ordinary economic relationships, the law accords to contracting parties freedom to bind themselves as they see fit and such a contract, if clearly intended to have that effect, will be enforced, at least where the parties have relatively equal bargaining power. Hall v. Sinclair Refining Co., supra. There are, however, other economic relationships in which, by reason of exceptional public interest in the services involved or because of the obvious inequality of the bargaining powers of the parties, it is held that such contracts are contrary to public policy and are void and unenforceable. On this ground, it has long been held that, in absence of statutory authorization, a common carrier or other public utility may not contract for its freedom from liability for injury caused by its negligence in the regular course of its business. Hall v. Sinclair Refining Co., supra; Miller's Mutual Fire Insurance Ass'n of Alton, Ill. v. Parker, supra; Hill v. Carolina Freight Carriers Corp., supra; Gardner v. Southern R.R. Co., 127 N.C. 293, 37 S.E. 328.

G.S. § 27-7, which is part of the Uniform Warehouse Receipts Act, states that a warehouseman may insert in a receipt issued by him, in addition to those provisions required by the Act to be inserted, any other terms and conditions, provided that they are not contrary to the provisions of the Act and provided that such terms and conditions shall not "[i]n anywise impair his obligations to exercise that degree of care in the safekeeping of the goods entrusted to him which a reasonably careful man would exercise in regard to similar goods of his own." Thus, a warehouseman, like a common carrier, may not, by contract with his customer, absolve himself from liability for loss of or damage to goods stored in his *49 warehouse, which loss or damage is due to his negligence.

In Gardner v. Southern R.R. Co., supra, Douglas, J., speaking for the Court, said:

"It is a well-settled rule of law, practically of universal acceptance, that for reasons of public policy a common carrier is not permitted, even by express stipulation, to exempt itself from loss occasioned by its own negligence. * * * The measure of such liability is necessarily the amount of the loss; and if a common carrier is permitted to stipulate that it shall be liable only for an amount greatly less than the value of the property so lost,that is, for only a small part of the loss,it is thereby exempted pro tanto from the results of its own negligence. Such a course, if permitted, would practically evade the decisions of the courts and nullify the settled policy of the law. We do not mean to say that there are no cases where a common carrier can make a valid agreement as to the value of the article shipped, but all such agreements must be reasonable, and based upon a valuable consideration."

An agreement limiting the warehouseman's liability for loss or damage to an amount which the warehouseman knows, or in the exercise of ordinary judgment should know, is but a small fraction of the real value of the goods delivered to him, cannot be deemed a reasonable agreement and, even though a smaller charge for storage is made because of the agreement, it cannot be held valid, since it is, by its necessary effect, an agreement limiting the liability of the warehouseman for damages due to his own negligence.

Here, the employees of the warehouseman packed the articles. Consequently, they knew the general nature of them. They were packed in containers which the defendant's president testified were used for breakable articles. The defendant is, therefore, not in the position of a warehouseman who has received containers, packed by another, with no knowledge of the nature and quality of the contents.

One in the business of storing household furnishings must be held to know that a "barrel" of antique silver, fine china and glassware has a value far in excess of $50.00. The so-called agreement between the parties, assuming the plaintiff entered into it, that the value of each such "barrel" or "carton" does not exceed the sum of $50.00, cannot, therefore, be deemed a reasonable effort of the parties to state the true value of the goods stored. On the contrary, it is an arbitrary limitation upon the liability of the defendant for loss or damage due to its negligence.

Furthermore, the plaintiff did not sign a statement that the goods were of a value not in excess of $50.00 per "barrel" or "carton." The statement she signed was: "I acknowledge that the condition of the goods at the time of the loading is as noted on this inventory and that I have received a copy of this inventory." That statement was printed on the front of the receipt, near the bottom, and below a partial list of the articles, cartons, barrels, and other designations of articles stored with the defendant. At the top of the page is a receipt, signed by the defendant, stating, in substance, that it has received the goods enumerated thereafter "upon the Terms and Conditions on the back of this Receipt." On the back of the receipt, in much smaller type than the available space made necessary, are 15 paragraphs of terms and conditions, including the agreement for limited liability. There is no evidence in the record to show that these terms and conditions were called to the attention of the plaintiff when she signed the statement concerning the condition of her goods "at the time of the loading."

In the absence of any evidence that the plaintiff's attention was directed *50 to the printed statement on the back of the document, concerning the valuation of the goods, her signing of an entirely different statement, upon the front of the paper, is not sufficient evidence to support a finding that she agreed to release the defendant, in whole or in part, from liability for loss or damage to her property caused by its negligence. See: Miller's Mutual Fire Insurance Ass'n v. Parker, supra. The burden of proof is upon the defendant warehouseman to show that the plaintiff made the contract upon which it relies for the limitation of its liability for loss due to its own negligence. While the plaintiff may be held to knowledge and understanding of that which she signed, the statement she signed was so placed upon the document and so worded that it would not, of itself, put her on notice of the printed provision on the back of the paper concerning the valuation of her property.

No error.