GLOBE RUTGERS FIRE INSURANCE COMPANY v. AIRBORNE FLOWER FREIGHT TRAFFIC

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District Court of Appeal, Second District, Division 1, California.

GLOBE & RUTGERS FIRE INSURANCE COMPANY, a corporation, Plaintiff and Respondent, v. AIRBORNE FLOWER & FREIGHT TRAFFIC, Inc., a corporation, Defendant and Appellant.*

Civ. 21977.

Decided: January 28, 1957

Wallace, Garrison, Norton & Ray, Maynard Garrison, San Francisco, for appellant. Joseph F. Rank and Russell K. Lambeau, Los Angeles, for respondent.

Defendant Airborne Flower & Freight Traffic, Inc. appeals from the judgment that it pay to respondent $11,755 and costs. Respondent is the subrogee of Saks Fifth Avenue, the consignor and consignee of ten cartons shipped by United Airlines from Los Angeles to San Francisco.

The airbill was prepared in sextuplicate, signed by the agent of Saks who kept the original or ‘No. 1 Copy’. The other five copies were delivered by Saks with the ten cartons to United Airlines at the airport near Los Angeles. The value of the ten cartons was therein declared to be $50. Charge for air transport by United, airport to airport, based upon weight and declared value was $13.19.

All parties agree that if United had lost the entire shipment before delivering it to appellant, United's total liability for the ten cartons would have been $50.

Upon arrival of the cartons at the San Francisco airport, United, in the absence of instructions, would have delivered them to the consignee at the airport, or would have sent notice of arrival to the consignee and kept the cartons until called for, Civil Code, §§ 2118–2121. The airbill signed by Saks and delivered to United with the cartons however, contains other instructions, to wit: ‘Delivery will be made to the consignee at points where delivery service is available unless otherwise specified below’. Not only did Saks fail to otherwise specify, but its agent encircled the word ‘delivery’, inserted the street address of Saks' San Francisco store, and under the printed words ‘instructions to carrier’ added ‘Pls A.M. Delivery’, meaning please deliver to the San Francisco store before noon. On the instant appeal, it is unquestioned that both Saks and United understood this airbill to mean that United was requested by Saks to deliver the cartons to a surface carrier for transportation from the San Francisco airport to Saks' San Francisco store. United followed those instructions. The receipt for the cartons, on the fourth copy of the airbill, signed by appellant's driver as the agent of the consignee, was kept by United. United's responsibility ended when the ten cartons and the fifth copy of the airbill were then delivered by it to appellant's driver, Civil Code, § 2201.

The airbill constituted appellant's only information or instructions from Saks. Prominently displayed on the face thereof was the following: ‘Declared value $_____’ in printing, with the amount ‘$50.00’ inserted therein with pencil, on the line next to the signature of Saks' agent who initiated the shipment.

Appellant's driver delivered to Saks' San Francisco store only nine of the ten cartons, one having been lost or stolen. Appellant's delivery charge was $1.79 based upon weight. It was billed to and paid by Saks. Later Saks made claim for $11,755 and started the instant action to recover from appellant that amount as the reasonable market value of the contents of the lost carton.

It is conceded that appellant is liable for the loss of the carton. However, appellant urges that its liability is limited by the declaration of value made by Saks to United on the airbill signed by Saks and United at the beginning of the shipment and by appellant's driver when he accepted the cartons for hauling. The first and third grounds urged by appellant in support of its position are that appellant was acting as the agent of United and the airbill was a ‘through bill’ to Saks' San Francisco store; and that appellant is entitled to the benefit of United's tariff. United, as the agent of Saks and upon Saks' express instructions, delivered the cartons to appellant, who, in turn, became the agent of Saks—not a subagent of United. Cavallaro v. Texas & P. Ry. Co., 110 Cal. 348, 355, 42 P. 918. Therefore, appellant Airborne is not entitled to the benefit of United's tariffs.

Appellant's second affirmative defense is ‘That at the time said defendant received and accepted said ten cartons, plaintiff's assignor represented to defendant that all of them were of a value totalling $50.00.’

Appellant's contract is evidenced by its driver's signature upon the fourth and fifth copies of the airbill (retained by United and appellant, respectively) indicating appellant's receipt of the ten cartons. Respondent contends and the trial court found and concluded that appellant ‘had no published tariff schedules or other published rates providing for limits of its liability, and that there was no special contract in the instant case between said defendant and the consignor or consignee of said shipment providing any basis for limits of defendant's liability * * *’

The law of California is that a carrier's liability may be limited by an express contract, Civil Code, §§ 2174–2176; Donlon Bros. v. Southern Pacific Co., 151 Cal. 763, 776, 91 P. 603, 11 L.R.A.,N.S., 811. The Donlon case and many others following it hold that an agreement such as the airbill in the instant action is not one limiting the liability of the carrier, but is an agreement that the value of the property shipped is a certain amount. In the instant action, respondent contends and the trial court held that appellant cannot benefit from the declared and agreed value of the cartons because appellant ‘failed to offer the shipper a rate differential in consideration of a limited liability’ and because appellant's ‘charge was based exclusively on weight’. In support of these contentions, respondent cites: Donlon Bros. v. Southern Pacific Co., supra; Pierce v. Southern Pacific Co., 120 Cal. 156, 166, 47 P. 874, 52 P. 302, 40 L.R.A. 350; and Michalitschke Bros. & Co. v. Wells, Fargo & Co., 118 Cal. 683, 50 P. 847. It is true that in each of the three cases last above cited the carrier did offer, and the shipper declared the value of the goods shipped in order to procure, a lower freight rate based upon such declaration of value. In each of those cases, it is said that the freight differential was sufficient consideration to create a valid agreement as to the value of the goods shipped for all purposes. It does not follow, however, that such rate differential based on value is the only consideration which will support such an agreement as to the value of the goods shipped.

In the instant action, appellant's manager of claims and insurance, in answer to questions by respondent's attorney, Mr. Lambeau; testified as follows:

‘Mr. Lambeau: Q. In what respect did the airbill govern the charges that you made in this case, Mr. Cetchen? A. Well, our charge, as previously stated, was based on the weight and the fact that there was only a $50 declared value involved, and $50 was less than the least valuation; so the only charge we could make was for carrying 268 pounds.

‘Q. Well, suppose the airbill had shown $5,000, what would be your charge? A. We wouldn't have accepted it off of United's bill. They would have been required to negotiate our shipping documents. We would have cut our own waybill and charged according to our published tariff and rates.

‘Q. You mean that you would have refused a shipment valued at $5,000 of this same weight and size? A. Well, we wouldn't have refused it. We would have required them to negotiate our own shipping documents because of the value.

‘Q. You would have required whom to negotiate your shipping documents? A. Whoever was tendering us the shipment.

‘Q. Let us assume that United tendered to you a shipment on which the declared value was $5,000 or $10,000:

‘Mr. Garrison (Attorney for appellant): Why don't you take the figures involved in this case and say $100,000?

‘Mr. Lambeau: All right, let us take $100,000.

‘Mr. Garrison: One box was worth $10,000, and there were ten boxes. They were all furs.

‘Mr. Lambeau: I don't know what the other nine would be. Let us say $50,000.

‘The Witness: We would not ordinarily accept a shipment of that value because we have a limitation of value that we will accept under the terms of our tariff. We could accept such a shipment, but only on prior advance arrangements, and then we would have to agree to accept it and they would have to pay the applicable charges.

‘Mr. Lambeau: Q. Well, let us go at that a little more slowly. You say you would refuse a shipment of a declared value of $50,000? A. Well, it depends on how you interpret the word ‘refuse’. Our tariff stipulates that we will not accept a shipment having a value over a certain limit, and $50,000 would be over that limit; so it would be at our option to refuse the shipment or arrange to handle it.

‘Q. You are referring again to your tariffs on file with the Civil Aeronautics Board? A. I am.’

The appellant in the instant action had no tariff governing intrastate shipments on file with the Public Utilities Commission. Its tariff filed with the Civil Aeronautics Board is not in the record on appeal. However, a common carrier is not required to accept and carry any freight offered to it except ‘of a kind that he undertakes or is accustomed a carry’, Civil Code, § 2169. None of the cases cited in the briefs, and none we have located by our own search, concern the transportation of goods of a kind or value not ordinarily transported by the carrier.

This court may take judicial knowledge of the fact that transportation of ten cartons containing merchandise worth $50 would not normally be handled with the same equipment, personnel and methods as would the same ten cartons containing merchandise worth between $50,000 and $100,000.

In our opinion it is not legally or equitably just or fair to permit a shipper to induce a carrier to accept a consignment of ten cartons by declaring the value thereof to be $50 and then—after one of the cartons has been lost, or stolen, perhaps by some one having knowledge of the actual value of its contents so misrepresented to the carrier—to permit the shipper to collect damages in excess of the value so declared. Under the facts of the instant action, appellant having been induced to accept and carry said consignment by the representation of respondent that the value thereof was $50, the judgment in favor of respondent should be for no more than that amount.

The judgment is modified by reducing the same to the sum of $50, and as so modified is affirmed. Appellant to recover costs on appeal.

WHITE, Presiding Justice.

DORAN and FOURT, JJ., concur.

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