What is an Act Of Public Enemy? How is it an Absolute Defense?

This will turn into an official series one of these days, but for now we have another great explanation of a complicated insurance topic from Bob Milsop.

So, Bob Milsop, what is an act of public enemy and how is it an absolute defense?

Common Carrier Liability

Absolute Defenses

Act(s) of Public Enemy

The origin of this exception to common carrier liability can be traced directly back to a decision made by Lord Hold in 1704 in the case of Coggs v. Bernard. 1 In order to understand how limited the application of this exception is, we need to quote the following from Lord Holt’s decision as it is the foundation upon which the Interstate Commerce Act and federal common law is based:

“And this is the case of the common carrier … The law charges this person thus entrusted to carry goods, against all events but acts of God, and of the enemies of the King. For though the force be never so great as if an irresistible multitude of people should rob him, nevertheless he is chargeable. And this is a politick establishment, contrived by the policy of the law, for the safety of all persons, the necessity of whose affairs oblige them to trust these sorts of persons, that they any be safe in their ways of dealing; for else these carriers might have an opportunity of undoing all persons that had any dealings with them, by combining with thieves, etc. and yet doing it in such a clandestine manner, as would not be possible to be discovered. And this is the reason the law is founded upon in that point.”

I’m convinced that Lord Hold had no inkling of how his decision would affect the growth of international and domestic commerce. The law office of Countryman & McDaniel have an interesting web site 2 particularly “The Gallery of Transport Loss – Photos & & Lessons of Disaster.”  Consider the total value of property loaded on a container ship. One ship mentioned by the web site has the capacity to carry 4,389 TEU’s; 4 another 5,618. Calculating the value of freight in one TEU at $50,000 [a low average value], a container ship carrying 4,389 TEU’s has property valued at $219½ million; if carrying 5,618 TEU’s, the number is $280.9 million. Without the legal foundation imposing specific standards and obligations on common carriers, what business person would entrust valuable shipments to “strangers”?

Prior or subsequent to ocean transport, many containers move via stack trains averaging 50 to 60 cars each carrying two containers. A sixty car train carrying 120 containers each containing $100,000 of property [a very low average] = $12,000,000. A tempting target for thieves, miscreants and ne’er-do-wells. Mobs have attacked trains stalled by floods, 5convulsions of nature [act(s) of God] as well as crimes of opportunity. Over the centuries since Coggs v. Bernard carriers have attempted to avoid responsibility by labeling mobs, strikers, et al as “public enemies.” While case law indicates these persons are not public enemies, there is limited information describing exactly what are public enemies. Based on a text book located on the internet, 6 public enemies are limited to pirates and “ … the government of a foreign country … at war with the United States.”

Again, quoting from the treatise:

“ …the term enemies was understood to mean the public enemies of the country of the carrier, and not of the owner of the goods, and did not include thieves, robbers, or those who engaged in mobs, riots or insurrections. The reasons of the rule were that it would impose upon the carrier a great hardship to compel him to pay for losses for which there was no remedy against those who brought the loss upon him, and there could be little if any danger of his combining with the common enemy to defraud the owner of the goods …”

It would appear that terrorists – not being citizens of a country with which the United States was at war – would not qualify as public enemies. Whether future courts will affirm my personal opinion is open to question.

The following, again from the aforementioned treatise, may illuminate this unique exception to common carrier liability:

“Where goods were taken from a carrier by an officer or an armed force of the Confederate government in the civil war, it was held in a number of cases that the carrier was not liable because it had been deprived of them by an act of the public enemy [citations omitted].” “So where goods were taken by United States troops from a Confederate carrier, the carrier was exonerated on the ground that they were taken by the public enemy.”

Public Enemy is not the only absolute defense.  We’ll have some more for you in the next few days.  Until then, leave us a comment or go to Wolpert.com for anymore information.