under subsection (ii) of the proposed subsection 1056.16(c). The Carriers' Bureau opposes this deletion, stating that this liability exclusion is inherent in the common law governing common carriage.

The Carriers' Bureau further notes that section 1(e) of the terms of the present uniform household goods bill of lading' allows a carrier to disclaim liability for loss or damage resulting "from strikes, lockouts, labor disturbances, riots, civil commotions, or the acts of any person or persons taking part in any such occurrences or disorder." The Carriers' Bureau questions the omission of this liability exclusion in subsection (ii) of the proposed section 1056.16(c) noting that no reason was given for such omission in the interim report, and arguing that this provision should be retained. Finally, the Carriers' Bureau contends that carriers have an absolute common law right not to be held accountable for loss of or damage caused by any "act of God," and that this right exists irrespective of the amount of the released value of an involved shipment. Accordingly, it proposes that subsection (ii)(e) of the proposed subsection 1056.16(c) be changed to allow a liability exclusion in all instances when damage results from an act of God. The Movers' & Warehousemen's Association argues that, in certain respects the proposed rule would impose unreasonable and unrealistic burdens upon the carriers. The Association suggests that the term "articles of extraordinary value" be preserved, and that the Commission define the term by identifying the specific types of articles which fall within the classification. The Association notes, as did other parties, that traditionally carriers have been free from liability for loss or damage resulting from strikes, riots, or civil commotions and argues that this liability exclusion should be reflected in the proposed rule.

Similarly the Association states that, with respect to the liability exclusion of "acts of God," carriers are entitled to absolute protection regardless of the valuation of the shipment.

The National Furniture Warehousemen's Association, a trade organization with a membership of more than 1,000 agents of nationwide van lines, concurs with all of the recommendations of the Household Goods Carriers' Bureau discussed above. However, it notes that the Carriers' Bureau accepted the Commission's conclusion that carriers should assume liability for the quality of 'See our interim report, 121 M.C.C. 347, 375.

appliance servicing performed by third persons engaged by them. The Warehousemen's Association disagrees. arguing that when damage results from the work done by outside personnel, the dispute should be settled between the shipper and the tradesman providing the service.

The Movers Round Table, a voluntary membership organization of the smaller independent motor common carriers of household goods, submits a copy of the legislative history of section 20(11) of the act and argues that the statute was never intended to remove carriers' common law defenses to liability. It complains that the proposed regulation does in fact so limit the basic common law right of household goods carriers.

Movers Round Table further asserts that there is no evidence in this proceeding to justify the decision not to require prior notice by the shipper to the carrier of articles of unusual nature. In its view, the uniform bill of lading used by household goods carriers should be revised so that its format provides ample space for the specific listing of each article of extraordinary value contained in the shipment. It argues that this positive requirement would afford potection to the shipper as well as the carrier resulting in fair and equal protection to both parties. It contends that the shipper would thus be forced to consider the real risks involved in the transportation of such articles, and the carrier would be put on notice that certain articles in the shipment require extraordinary

care.

Finally, Movers Round Table contends that the basic problem existing at the present time is the undervaluation of shipments which move at $1.25 a pound based on the net weight of the shipment. It notes that these probably constitute the predominate number of shipments, but states that, in its opinion, too many of these shipments are undervalued, and that the consequence of such undervaluation is an alarming increase in the cost of cargo insurance. It states that in today's inflationary market, the sum of $1.25 is totally inadequate in designating a minimum average value for household goods, that this figure should probably be doubled, and that, if this were done, the charge paid by the shipper would be more than adequate to compensate the insurance companies for the increased exposure.

124 M.C.C.

DISCUSSION AND CONCLUSIONS

In this proceeding we must determine (1) whether motor common carriers of household goods are performing services in accordance with the terms of their certificates, and (2) whether the limitation of liability provisions in their tariffs are lawful. We recognize that this is not a simple task. We agree with those who assert that the consumer must be protected from unreasonable carrier practices, but we also concur in the proposition that there should be some means of protection from the unscrupulous consumer who files. fraudulent or inflated claims. A consideration of the statements filed subsequent to our entering of the interim report, however, reinforces our conclusion that certain provisions in the tariffs of house hold goods carriers which limit their liability are responsible for the carriers' failure to fully perform service in accordance with the terms of their certificates. Likewise, we still believe that the promulgation of specific rules by us which clearly delineate those specific instances in which carriers may limit their liability will afford the best protection to both consumers and carriers. At the outset, however, we believe that a discussion of the historical context of common carrier liability is warranted.

The liability of interstate carriers for loss, damage, or delay to freight while in their possession is based (a) on the common law, (b) on statutory law, (c) on lawful conditions of the contract of shipment (the bill of lading), and (d) on pertinent provisions of applicable tariffs legally on file with this Commission as to interstate transportation.' The law governing the common carrier's liability for loss and damage of property delivered to it for transportation is an outgrowth of the law of bailments. Much of the modern law of bailments has its origins in the early Roman law, yet the question of the bailee's liability, as best as can be determined from the historical material available to us, was subject to no clear rules until the eighteenth century. In the famous 1703 case of Coggs v. Bernard, 2 Ld. Raym. 909, Lord Holt took the opportunity to consider the whole question of the bailee's liability.

"The term "household goods" is defined at 49 CFR 1056.1(a) as: (1) personal effects and property used or to be used in a dwelling when a part of the equipment or supply of such dwelling; (2) furniture, fixtures, equipment, and the property of stores, offices, museums, institutions, hospitals, or other establishments, when a part of the stock, equipment, or supply of such stores, offices, museums, institutions, hospitals, or other establishments; and (3) articles, including objects of art, displays, and exhibits, which because of their unusual nature or value require the specialized handling and equipment usually employed in moving household goods. 'For a good discussion of the law in this area, see Sigmon, Richard R., Miller's Law of Freight Loss and Damage Claims, 4th ed. (Dubuque, Iowa, 1974).

The only point in issue in Coggs v. Bernard was the liability of a gratuitous bailee for damage to goods while he was moving them. The defendant, without reward, had undertaken to move a cask of brandy from one cellar to another. The cask was damaged during the move and the plaintiff sued for damages. The judges agreed that the rule of absolute liability against a gratuitous bailee, (which had been announced in an earlier case, Southcote v. Bennett, 4 Coke 83b, Cro. Eliz. 815 (1601)), was wrong and was no longer the law. Lord Holt went further and reviewed the whole filed of bailments and laid down a number of rules which established varying standards of care applicable to the different types of bailments. These reflected a scale of degree of care due, ranging from the gailee who receives goods to keep for the use of the bailor, to whom he is liable only for gross neglect; to the common carrier for hire, who is chargeable with the highest degree of care. The carrier, said Lord Holt, "is bound to answer for the goods at all events," and went on to explain:

The law charges this person thus entrusted to carry goods, against all events, but acts of God, and the enemies of the King. For though the force be ever so great, as if an irresistible multitude of people should rob him, nevertheless he is chargeable.

The strict common law rule of carrier liability had its foundation in a public policy which has been variously imputed to the absolute possession and control by the carrier during transit, to the survival of a rule once applied to all bailees, and to the consequences of the rigid forms of pleading at common law. It should be noted, however, that even in the quoted statement from the Coggs case, the judge states two exceptions from the strict liability standard. A carrier is not liable for loss or damage resulting from "acts of God" or acts of "enemies of the King."

In this country, strict liability has continued to be the basic law with respect to common carriers. The only significant changes have been certain additions to the exceptions stated by Lord Holt. In Hutchinson's Law of Carriers (Chicago: Callaghan and Co., 2d ed., 1891, pp. 198-99), it was stated that:

*** the common carrier is regarded as a practical insurer of the goods against all losses of whatever kind with the exception of (1) those arising from what is known as an act of God, and (2) those caused by the public enemy; to which modern times have been added (3) those arising from the act of the public authority, (4) those arising from the act of the shipper, and (5) those arising from the inherent nature of the goods.

The severity of liability imposed upon carriers by the common law led to resistance on the part of the carriers. Following our own

independence, the various State legislatures passed laws with respect to common carriers, some of which were more advantageous to them than the common law used by the Federal courts. As a result the chaos brought about through the railroad monopoly of transportation, Congress enacted the Interstate Commerce Act in 1887. Section 20 of the act as originally enacted, while important in that it delegated to the Federal courts adjudication of all disputes on matters pertaining to interstate commerce, was far from satisfactory in disposing of the questions relating to liability of interstate common carriers. For almost 20 years after the enactment of this legislation, rail carriers continued to issue bills of lading containing clauses intended to relieve them from some of their common law liability, not only as insurers but also for negligence. Particular concern was caused by the carrier's liability for any loss or damage occurring beyond its own line. For this and other reasons the original Interstate Commerce Act was supplemented by the Hepburn Act, passed in 1906, and the Clayton Act, passed in 1914. The Hepburn Act of 1906 contained what is commonly designated as the Carmack amendment. The purpose of this amendment was to provide a more uniform standard of liability for rail and water carriers. It required carriers to issue a bill of lading or receipt for property received for transportation and imposed liability on the initial carrier for all injuries to a shipment not only while in its own possession, but even when in the possession of a connecting line. The amendment took away from the initial carrier its former right to make a contract limiting its liability for injury to the goods occurring while in its possession and made the connecting lines the agents of the initial carrier. Claimants were thereby relieved of the burden of proving the particular carrier upon whose line the injury occurred. The Carmack amendment did not sufficiently cover all the controversies arising in connection with carrier liability. The law with respect to released valuation in bills of lading was the source of many disputes and as a result additional Federal legislation was enacted. In 1915 Congress enacted the First Cummins amendment, which imposed liability on the carrier for the full loss, damage, or injury caused by it or any connecting carrier regardless of any agreement for limitation of liability or value. In 1916 Congress passed the Second Cummins amendment to provide that carriers might lawfully limit their liability by released rates which had been specifically authorized by the Interstate Commerce Commission. As we noted earlier, released rates authorized by a specific order of this Commission are the only exception to the general rule set forth in section 20(11) of the act.

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