Western Transit Co. v. A. C. Leslie & Co.

Background

A Montreal copper merchant, A. C. Leslie & Co., delivered 25 tons of copper to a carrier in Michigan with instructions to store the goods at Buffalo and await further directions. The carrier placed the shipment in its warehouse under its published circular offering free storage in transit for up to four months. About four months later roughly one ton was stolen, and the merchant sued the carrier in a Buffalo court to recover the full market value of the loss.

Reasoning

The narrow question was how much the merchant could recover for the stolen copper. The Court examined the bill of lading and the filed tariffs. The bill of lading included an agreed valuation clause limiting value to $100 per net ton when a lower freight rate was used, and the Act requires carriers to file tariffs and to treat storage as part of transportation. The Court held that this agreed valuation was valid, applied to goods held in storage in transit, and bound the shipper because it was part of the transportation contract. The Court rejected the shipper’s claim that a later letter created a separate warehouse contract and rejected the idea that the $100 limit applied to the whole 25-ton lot instead of per ton.

Real world impact

Carriers may cap liability when the bill of lading and tariffs disclose an agreed valuation tied to a lower freight rate. Shippers who want full recovery must declare higher value or pay higher freight. The judgment of the lower courts was reversed and the case sent back for proceedings consistent with this ruling.