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ATLANTIC COAST LINE RAILROAD COMPANY v. MAZURSKY.

SOUTHERN EXPRESS COMPANY v. McTEER.

ATLANTIC COAST LINE RAILROAD COMPANY v. CHARLES.

SAME v. VON LEHE.

SAME v. SAME.

ERROR TO THE SUPREME COURT OF THE STATE OF SOUTH

CAROLINA.

Nos. 58, 59, 60, 61, 62. Argued December 9, 1909.—Decided
February 21, 1910.

A state statute that requires a carrier to settle, within a specified time, claims for loss of or damage to freight while in its possession within that State, is not, in the absence of legislation by Congress on the subject, an unwarrantable interference with interstate commerce; and so held that Act No. 50 of South Carolina of February 23, 1903, to that effect is not unconstitutional under the commerce law as to goods shipped from without the State but which actually are in the possession of the carrier within the State.

A state statute in aid of the performance of the duty of an interstate carrier which would exist in the absence of the statute, which does not obstruct the carrier, and which relates to the delivery of goods actually in the carrier's possession within the State, is not void as a regulation or obstruction to interstate commerce, in the absence of congressional legislation on the subject.

78 So. Car. 36, affirmed.

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:

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"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 fifty dollars 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

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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 fifty dollars 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 section 1710, vol. 1, of the Code of Laws of South Carolina, 1902."

Section 1710, volume 1, page 661 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.

Argument for Plaintiff in Error.

the provisions of § 2 of the act of February 23, 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 fifty dollars 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, Atlantic Coast Line Railroad Company v. Charles, 78 S. C. 36. 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 twentieth 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 curia on or before the third 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.

Mr. Frederic D. McKenney, with whom Mr. P. A. Willcox, Mr. F. L. Willcox and Mr. Henry E. Davis were on the brief, for plaintiff in error:

Seaboard Air Line v. Seegers, 207 U. S. 73, sustained the statute of South Carolina involved in this case only as to a shipment wholly intrastate; the act as to interstate shipments, as in these cases, is unconstitutional under Art. I, § 8, cl. 3 of the Federal Constitution. The power of Congress over such shipments is complete. Covington Bridge Co. v. Kentucky, 154 U.S. 204, 209.

The statute does not fall within the test of a reasonable exercise of the police power, but constitutes a burden on inter

Argument for Plaintiff in Error.

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state commerce. Henderson v. New York, 92 U. S. 259; Minnesota v. Barber, 136 U. S. 313; McNeill v. Southern R. R., 202 U. S. 543; Central Stock Yards v. L. & N. Railway, 118 Fed. Rep. 113; Gulf Railway v. Ellis, 165 U. S. 150; Atchison Railroad v. Matthews, 174 U. S. 96; see also Central of Georgia v. Murphey, 196 U. S. 194, which involved a similar statute of Georgia; Houston & Tex. Cent. R. R. Co. v. Mayes, 201 U. S. 321.

Under this statute, as construed by the Supreme Court of South Carolina, a common carrier may be penalized for its failure to adjust a claim for damages growing out of injury to an interstate shipment if such injury occurs on its line, even though in another State than South Carolina. Seegers v. Seaboard Air Line R. Co., 73 S. C. 71.

If it be true, as held by the Supreme Court of South Carolina, that the investigation and adjustment of claims is but an incident of interstate transportation, it follows that the regulations of such claims adjustment should properly be prescribed by Congress, and that the States are powerless to provide for such regulation.

Congress has legislated extensively in the field of interstate commerce, its enactments command the performance of a great variety of duties as well as prohibit many practices and customs heretofore indulged in by common carriers in the prosecution of interstate commerce. The failure of Congress to legislate with respect to the period within which claims such as those contemplated by the South Carolina statute should be adjusted, would seem to be tantamount to a declaration that the matter of such adjustments should be left free from restrictive regulations.

Payment of a claim connected with the interstate transportation of goods, before it has been developed by proper investigation to be legitimate and in good conscience payable, might be made to border on the ancient practice of rebating, which has been severely condemned by Federal laws. See Union Pac. Co. v. Goodridge, 149 U. S. 680. The Interstate Com

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