Scottish Court of Session Decisions

Lyons & Company, wholesale merchants, Watling Street, London, raised an action in the Sheriff Court at Edinburgh against the Caledonian Railway Company for payment of the sum of £84, 19s.

The following narrative of the facts and circumstances which gave rise to the action is taken from the interlocutor of the First Division, who found in fact“(1) That on 15th February 1907 the pursuers' traveller, Mr R. H. Lyons, deposited with the defenders at their left luggage office at Buchanan Street Station, Glasgow, three hampers, or skips, containing ladies’ clothing, and received from defenders a ticket specifying the articles deposited, being No. 10 of process; (2) that on the face of the said ticket there was printed in legible type a statement in the following terms, viz., ‘The company only receive the herein-mentioned articles upon the conditions expressed on the back of this Ticket’; and that on the back of the same there were printed certain conditions, one of which, being the fourth, was a condition to the following effect, viz., ‘The company will not be responsible for the loss of … any parcel, package, or other article when the value of such parcel, package, or other article exceeds £5 … unless at the time of the delivery of such parcel &c. to them, its true value is declared to exceed £5 on a form to be supplied by the company, and signed by the party delivering such parcel &c.,’ and further, that payment at the rate of one penny per £ in respect of such value should be made in addition to the ordinary charges; (3) that the said R. H. Lyons read and understood the statements printed on the face of the ticket, but did not read the conditions printed on the back thereof, or otherwise

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inform himself of their terms; (4) that the said R. H. Lyons did not at the time of delivery of the aforesaid hampers or skips to the defenders declare that their value or the value of any one of them exceeded £5, or make any additional payment in terms of said fourth condition; (5) that when application was made on pursuers' behalf on Monday, 18th February 1907, by presentation of said ticket for return of said three skips, the defenders were only able to return two skips, the third having been stolen; and (6) that each of said three skips was over £5 in value, the skip which was not returned being worth £84, 19s. 5d.”

The pursuers pleaded, inter alia:—“(1) The pursuers having deposited the said skip in question and its contents with the defenders, and received their acknowledgment therefor in the usual course observed by defenders in their traffic with railway travellers, they are bound to make good the damage sustained by the pursuers through the loss of said skip and contents. (2) The pursuers having contracted with the defenders that defenders should keep in safe custody the said skip and contents, and the said skip and contents having been lost through the negligence of the defenders, or those for whom they are responsible, the defenders are liable to the pursuers in damages. (4) The defenders having broken their contract with the pursuers, are not entitled to the benefit of conditions of the contract.”

The defenders pleaded, inter alia:—“(3) The value of the skips and their contents having exceeded £5, and the value not having been declared at the time of delivery to defenders, the defenders are, in terms of the contract, free from liability for the loss of the skip and its contents, and they ought to be assoilzied. (4) The pursuers not having sustained any loss or damage owing to defenders' fault or neglect, the defenders ought to be assoilzied.”

On 18th March 1908 the Sheriff-Substitute ( Millar), before answer, allowed both parties a proof of their averments, and to the pursuers a conjunct probation.

Note—[ After narrating the nature of the action and quoting condition 4]—“Mr Lyons admits he knew of this condition when he received the ticket. The pursuers maintain that the defenders are not in a position to enforce this condition as they failed to take such reasonable care as is required of them in terms of their contract, they having left the skip on the platform of the station without any guardianship at all. This is denied by the defenders, and in view of the case of Handon v. Caledonian Railway Company, 7 R. 966, I think I must allow a proof before answer.”

The defenders appealed to the Sheriff ( Maconochie), who, on 24th March 1908, pronounced this interlocutor—“…. Ad—eres to the interlocutor of the Sheriff-Substitute now appealed against, and dismisses the appeal: Finds the defenders liable to the pursuers in the expenses of the appeal, and remits to the Auditor of Court to tax the same and to report: Quoad ultra remits the cause to the Sheriff-Substitute to proceed.”

Note.—“I have, though with much difficulty, arrived at the same conclusion as the Sheriff-Substitute, but hardly, I think, on the same grounds. The question as raised here has never so far as I can ascertain been decided in the Court of Session, the case of Handon v. Caledonian Ralway Company, 7 R. 966, having been decided on the specialties of the conditions appearing on the ticket or note, conditions which have been altered for the express purpose, as I am told, of meeting the difficulty raised in Handon's case.

Here it is admitted that the pursuers were aware of the conditions on the back of the ticket, and did not declare the value of their goods or pay a special rate for them, their value being above £5. It is also admitted that the Railway Company accepted their payment, which was at the special rate for commercial travellers. The pursuers aver that the company's servant into whose charge the package was given left it unwatched on the station platform from which it was stolen. This the defenders deny, and maintain that the averment of want of care on their part is irrelevant, looking to the terms of the contract. The question at this stage, then, is whether the pursuers are entitled to prove their averments, which for present purposes I must assume to be true. They practically amount to this, that the company after accepting the pursuers' money took no care whatever of their luggage.

The case of Handon decided that under the terms of the ticket the Railway Company undertook to put Mr Handon's luggage into a warehouse or cloak-room, and it was held that the company ‘having failed to perform their part of the obligation under the contract of deposit … cannot be heard to say that a condition of the contract has been violated by the pursuer’—L.P. Inglis, p. 970. Now condition 4 in this case cannot be said to imply any such special condition on the part of the company, the words ‘deposited in their cloak-room or warehouses’ being left out. The question, then, is whether by leaving out these words, or rather these words not being present, the company are absolved from taking any care whatever of articles exceeding £5 in value, in respect of the receipt of which they have accepted a money payment, That they should be so absolved seems to me so inequitable that I should have had no difficulty in coming to the conclusion that they were not had it not been for the leading English case of Harris v. Great Western Railway Company, 1876, 1 QBD 515, and one or two other decisions which followed on it. Before considering that case I should like to mention that at the hearing I was referred to the case of Rusk v. Caledonian Railway Company, which I decided in 1904 in favour of the Railway Company, though the conditions of the contract were there the same as they are here. But in that case it must be noticed that the articles were

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deposited in the company's cloak-room, which is the recognised place for keeping passengers' luggage. It may well, I think, be held that the company when they placed the articles in the cloak-room were exercising that reasonable care which an ordinary person would be expected to exercise in his own affairs, but that cannot be said of their conduct here when they left the package unwatched on the public platform.

Now, in Handon's case Lord President Inglis said that the contract must be looked at as a whole, and (p. 970) ‘taking the contract as a whole, it is one of deposit and custody, but for a payment of money. A proper contract of deposit is gratuitous. But this is not so.… It is a combination of the two contracts of deposit and locatio operarum, and the measure of the liability of the depository is that he shall take all due and reasonable care of the articles deposited. That is clear law.’ I do not think that because the pursuers assented to condition 4 as a term of the contract they assented to this, that the company were to be clear of their common law duty as laid down in the sentence I have quoted.

It is necessary now to turn to Harris's case. There the ticket bore ‘luggage and cloakroom’ on its face, and on the back, after a statement of ‘sums to be paid for warehousing passengers’ luggage,’ there was a notice that the company were not to be liable for the loss of any package beyond the value of £5, unless the value was declared and an extra payment made ‘in addition to the before-mentioned warehouse charges.’ The luggage was left unwatched in a vestibule adjoining the cloak-room to which the public had access, and was stolen from thence. The value, which was over £5, had not been declared, and no additional payment had been made. The Court, by a majority of one, decided that the Railway Company were not liable, and from that judgment Lush, J., dissented. I think that the ground of the judgment of the majority may be found in two sentences at the end of Mr Justice Blackburn's opinion—‘they would, if these parcels were under the value of £5, be in my opinion liable, not because they placed them in the vestibule, but because they took no care of them when there. I read the contract as being to take reasonable care of the luggage, and to be responsible for any loss occasioned by that want of care, with, in effect, a proviso that inasmuch as the remuneration is very small, and the loss may be very great, the defendants shall not be responsible for loss if the goods exceed £5 in value, unless the value is declared and paid for.’ In that view Mellor, J., concurred ‘with considerable hesitation,’ and Lush. J., the only remaining judge, expressly dissented from it. His view is summarised on page 518, and it comes to this, that by assenting to the condition, the depositor ‘who does not insure, takes upon himself a warehouse risk, the risk of his goods being stolen, burnt, or damaged while there. The argument on the part of the company casts on him a risk which no one contemplates when he pays for warehousing, and which would excuse the company not merely for want of care in the keeping, but for actual exposure in the open air, not only to every passing thief, but to damage by rain or breakage or otherwise, if this was done by their servants in neglect of their duty—in fact, they would be irresponsible though no precautions whatever were taken to secure the safety of the goods.’ That is precisely the argument now advanced by the defenders, but it must be distinctly remembered that Mr Justice Lush's view is the view only of the minority of the Court. Had it not been for certain observations made by Lord Shand in Handon's case, I should probably have felt myself bound, contrary to my own opinion, to follow the decision in Harris; but taking these observations and Mr Justice Lush's dissent together, I think that there is sufficient to entitle me to decide this preliminary question in favour of the pursuers. Referring to Harris's case, Lord Shand said (7 R. at p. 971)—‘It was a case in which there was a decided difference of opinion among the judges, and for my own part I can only say that the reasoning of Mr Justice Lush most commends itself to my mind as the sound view of the case. If I were dealing with a case of that kind, I should be inclined to come to the same conclusion as Mr Justice Lush, rather than to that of Lord Blackburn and Mr Justice Mellor, the latter of whom spoke with great hesitation in giving the decision he did.’ His Lordship then notes two distinctions in fact between the cases as accounting for the judgment of the Queen's Bench Division. The first specialty is that ‘the articles were left in a vestibule which seems to have been an attachment of the luggage room, and not as here on the open platform itself.’ Here according to the averments that specialty does not exist. The second is this, that ‘the terms of the contract were different from those we have here. The condition relating to the warehousing of articles did not occur on the ticket of the Great Western Company in the same terms as it did here.’ The terms of the contract in this case are also different to those in Harris's case, and that fact may, I hope, furnish an additional excuse for my coming to a decision which I rather fear is not altogether consistent with the view stated by Mr Justice Blackburn in the dicta which I have quoted.

“On these grounds I have with much difficulty come to the conclusion that I ought to adhere to the interlocutor of the Sheriff-Substitute.”

On 10th August 1908 the Sheriff-Substitute after a proof pronounced an interlocutor which after making findings in fact to the effect (1) that three hampers had been deposited, (2) that on presentation of the ticket two only were delivered, and (3) that the defenders had failed to recover and deliver the third hamper, proceeded, “Finds in law that by the contract contained in the said receipt the defenders undertook to receive and keep in safe

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custody the articles then delivered to them, and redeliver them on demand; and this undertaking was subject to the further condition, the fourth condition, that the company are not to be responsible for the loss of, injury to, or detention of any parcel, package, or other article, when the value of such parcel, package, or other article exceeds £5, unless the value is declared and an additional payment is made at the rate of one penny per pound of the declared value: Finds in fact (4) that the defenders did not deposit the articles in a safe place, but left them on a platform to which the public had access, and that they failed to take due care of them: Finds in law that the defenders thus committed a breach of contract, and that the said fourth condition does not apply, as the skip in question was not deposited in a safe place, nor was any care taken of it: Therefore finds the defenders liable to the pursuers in the sum of £84, 19s. sued for, and grants decree against the defenders in terms of the prayer of the petition: Finds the defenders liable to the pursuers in expenses,” &c.

Note.—[ After narrating the circumstances]—“In these circumstances, what was the contract between the parties? I think the contract is contained in the ticket which was given by the defenders to the depositor. On the front of the ticket reference is made to the conditions on the back of the ticket. There the company says that they shall only receive articles of luggage, or other articles left for custody, ‘subject to the following conditions.’ Accordingly the contract between the parties is one for safe custody. I do not think the fact that Mr Lyons requested the articles to be taken inside the left luggage office affects the terms of the contract at all. The contract is contained in the ticket, and must be construed strictly by the terms of the ticket itself. But there arises the question, what is the effect of a contract in which one party undertakes to receive the property of another for safe custody? I think it is described accurately by the Lord President in the case of Handon, to which I shall afterwards refer. ‘It is one of deposit and custody but for payment of money. A proper contract of deposit is gratuitous, but this is not so. It partakes somewhat of a contract of locatio operaum, or rather it is a combination of the two contracts of deposit and of locatio operarum, and the measure of the liability of the depository is that he should take all due and necessary care of the articles deposited. That is clear law.’ Now, what is due and reasonable care in circumstances such as the present? This is further explained in Bell's Principles (10th edn.), sec. 155, where he says—‘This is the contract which regulates the duties of depositories for hire, wharfingers, &c. The engagement is for safe keeping, and this implies a secure place of custody, a warehouse water-tight, secure from attacks without and fire within,’ &c. In this case the defenders left the skips lying upon a platform, and I do not think it proved that any special care was taken of the property there lying. The place was open to the free access of the public during the day, and even at night, through a side gate which was left open, any one could get to the place where these skips were lying. I think it proved from the evidence of the detective M'Grimpsey, and also from the evidence of Cameron, the boots, as to the practice in other stations, that this was a very careless manner in which to treat the baggage of their passengers. I cannot hold that the defenders either placed the skips in a safe place or took reasonable care of them when they placed them on the platform as they did. This view I think is corroborated in three ways. In the first place, we have the company's own view of their duty by turning to the time-table which is referred to in the conditions on the back of the ticket. At p. 141, in dealing with commercial travellers’ luggage, they speak of it as ‘when left in any of the company's left luggage offices.’ That seems to me to imply the view that the articles were to be taken inside the office and not left on an open platform. Secondly, since the date when the pursuers' skips were deposited the defenders have erected a high iron railing around a considerable space at the door of the left luggage office, obviously for the safeguarding of goods left on the platform in the same way as the pursuers' skips were left. That seems to show that they were dissatisfied with the previous treatment of commercial travellers’ luggage; thirdly, in the case of Handon Lord Shand says—‘I think it has been shown that they left this trunk’ (which was left very much in the same way as the pursuers' baggage here) ‘exposed on the platform where it was not in a reasonably safe place.’ In these circumstances I think the defenders failed to carry out what was an essential condition of the contract, viz., to keep these skips in a safe place and to exercise reasonable care with regard to them.

The defenders, however, rely mainly upon the fourth condition on the back of the ticket, which says—‘… [ The Sheriff-Substitute quoted the fourth condition] …’ Mr Lyons says that he had never read this condition, but he is a commercial traveller and has been in the habit of receiving these tickets at various places, and although he never read the condition he admits that he has heard such a condition referred to in conversation with others. In these circumstances I think it must be held that he knew of this condition and that he is bound by it. But the answer of the pursuers is that the company not having carried out the essential conditions of their contract, cannot rely upon this condition in their favour. The only case so far as this question is concerned which has been decided in the Supreme Court of Scotland is Handon v. Caledonian Railway Company, 7 R. 966. I think that case lays down the law upon two points. The first is that where the Railway Company has failed to perform their part of the obligation under the contract of deposit, they cannot be heard to say that a condition of the contract has not been observed

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by the pursuer. That is laid down by the Lord President at p. 970; and Lord Shand on p. 971 says—‘That being so, the second observation is that if the company failed to bring themselves within what is thus of the very essence of the contract, and did not deposit the articles in their cloakroom or warehouse, they cannot take any benefit from this condition.’ The second point in the case is that the company failed to carry out the essential conditions of the contract in that case, but as the words on the ticket which constituted the contract differ in this case from those on the ticket in Handon's case I do not think the second ground of the judgment applies to this case. The first point that I have adverted to in Handon's case I think applies directly to this, and that is the reason why, relying upon Handon's case, I allowed a proof before answer. Before the Railway Company can enforce such a condition as the fourth condition on the ticket in this case they must show that they have carried out the essential conditions of the contract that they entered into. Now, as I have already said, the essential conditions of the contract in my view are that they shall place the articles received by them in deposit in a safe place, and that they shall take reasonable care of them. If they have so failed, I think Handon's case lays down directly that they cannot plead any condition in their favour. It is quite true that the contract in Handon's case differs in terms from this. Nevertheless the principle to be applied in the two cases is the same, and therefore in this case, as in Handon's case, I think the defenders are barred from pleading the fourth condition on the back of the ticket to exclude the pursuers' claim.

“The defenders relied mainly on a case of Harris v. Great Western Railway Company, ( 1876) 1 Q.B.D. 515. There the Court held, in circumstances somewhat similar to this, that the condition on the back of the railway ticket prevented the pursuer having a right to recover. I do not wish to say more about that case than this. The circumstances are slightly different, as the Railway Company in that case placed the article in the vestibule leading to the cloak-room and not out on the open platform. Moreover, Lord Shand in Handon's case refers to Harris's case in these terms—‘It was a case in which there was a decided difference of opinion among the Judges, and for my own part I can only say that the reasoning of Mr Justice Lush most commends itself to my mind as a sound view of the case. If I were dealing with a case of that kind, I should be inclined to come to the same conclusion as Mr Justice Lush rather than to that of Lord Blackburn and Mr Justice Mellor, the latter of whom spoke with great hesitation in coming to the decision he did.’ Coming from a Judge of Lord Shand's eminence in the Scottish Court of Appeal, such an expression of opinion deprives the case of Harris of much of its authority, and accordingly I do not feel bound to follow the decision in that case, as otherwise I would. There is another case to which I was referred, viz., Meldrum v. North British Railway Company, 23 S.C.R. 135, in which in very similar circumstances Sheriff Davidson, and on appeal Sheriff Guthrie, held that the Railway Company was not liable on the ground of a similar condition on the back of the ticket as the fourth condition on the back of the ticket in this case. I differ with the greatest reluctance from the opinions of these learned Sheriffs, but for the reasons I have already given I think the Railway Company are barred from enforcing that condition in any case where it can be shown that they have failed to carry out their own obligation with regard to the essential conditions of the contract.…”

The defenders appealed to the Court of Session, and argued—The goods were worth more than £5, and had not been declared to be worth more than £5, and consequently under condition 4 the defenders were not liable for its loss, even assuming they had been negligent— Van Toll v. South-Eastern Railway Company, 1862, 12 C.B. (N.S.) 75, 31 L.J. C.P. 241; Harris v. Great Western Railway Company, 1876, 1 QBD 515. The case of Harris should be followed. The decision in Handon v. Caledonian Railway Company, June 18, 1880, 7 R. 966, 17 S.L.R. 664, did not take away from the authority of Harris. The doubt expressed by Lord Shand was obiter, and he himself had pointed out that the cases were different. The distinction was that in Handon there was an express obligation to deposit the article in the cloak-room or warehouse; neither in Harris nor in the present case was there any such undertaking. The pursuers' traveller knew, or must be held to have known, that there were conditions on the back of the ticket, and he was bound by them even though he had not read them— Parker v. South-Eastern Railway Company, 1877, 2 C.P.D 416; Acton v. The Castle Mail Packets Company, Limited, 1895, 73 L.T. 158. Reference was also made to Skipwith v. Great-Western Railway Company, 1888, 58 L.T. 520, and Pratt v. South-Eastern Railway Company [1897], 1 Q.B, 718, and Meldrum v. The North British Railway Company, 23 S.C.R. 135. (2) The company were not negligent, but had taken reasonable care.

Argued for the pursuers and respondents—The case was ruled by Handon ( cit. sup.). The time-table of the Caledonian Railway stated—“Commercial travellers' luggage … when left in any of the company's left-luggage offices is charged one-half of the ordinary rate.” That must be read along with condition 4, and was an undertaking to warehouse. The defenders had not fulfilled that undertaking, and accordingly were not in a position to enforce the condition as to value. Apart from contract, there was a statutory duty on them to afford all reasonable facilities for receiving “traffic”—Railway and Local Traffic Act 1854 (17 and 18 Vict., cap. 31), section 2—and traffic was defined, section 1, as including passengers' luggage. It followed from this,

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and was so assumed in Singer Manufacturing Company v. London and South-Western Railway Company [1894], 1 Q.B. 833, by Matthew, J., at 836, that it was the duty of a railway company to provide cloakrooms for passengers' luggage. The defenders were, in return for the payment of 3d., bound to exercise reasonable care even if the goods were over £5 and not declared— Harris ( cit. sup.), Lush, J., at 518. Reasonable care necessitated putting them in the cloak-room, or at any rate watching them in an adequate manner.

At advising—