Galveston, Harrisburg & San Antonio Railway Co. v. Wallace

Background

A railroad company shipped mohair from points in Texas to a consignee in Lowell. The company said its contract ended when it handed the goods to the next carrier at Galveston, and it tried to prove it had done so. The trial court prevented some of that proof, and neither the pleadings nor the evidence clearly showed what happened to the mohair or why it did not reach the consignee. The lower court held the carrier liable for the loss.

Reasoning

The Court addressed whether the initial carrier must pay when interstate goods do not arrive and the carrier cannot prove lawful delivery. Applying the federal Carmack amendment (which treats the initial carrier as responsible for through shipments and voids exempting contracts), the Court said an initial carrier is treated as if it made a through contract and the connecting carriers are its agents. When the holders of the bills of lading proved nondelivery, a presumption arose that the loss resulted from carrier negligence. The Court placed the burden on the carrier to prove the loss was caused by an exception (for example, act of God, public enemy, or a lawful contractual exception). Because the carrier failed to prove such an exception or lawful delivery, the plaintiffs were entitled to recover.

Real world impact

This ruling means initial carriers who accept goods for interstate shipment must keep clear proof of delivery and explain nondelivery or face liability. State courts may hear these civil claims under the federal statute unless the statute plainly limits remedies. The judgment against the carrier was affirmed.