Tishman & Lipp, Inc. v. Delta Air Lines

• Decision Date: 31 July 1969
• Docket Number: No. 630,Docket 31936.,630
• Citation: 413 F.2d 1401
• Court: U.S. Court of Appeals — Second Circuit
• Parties: TISHMAN & LIPP, INC., Plaintiff-Appellant, v. DELTA AIR LINES, Defendant-Appellee.

413 F.2d 1401 (1969)

TISHMAN & LIPP, INC., Plaintiff-Appellant, v. DELTA AIR LINES, Defendant-Appellee.

No. 630, Docket 31936.

United States Court of Appeals Second Circuit.

Argued June 10, 1969.

Decided July 31, 1969.

John L. Conners, New York City (Bigham, Englar, Jones & Houston, John V. McAuliffe, New York City, on the brief), for defendant-appellee.

Robert L. Horkitz, New York City (Rein, Mound & Cotton, Samuel A. Berger and Eugene Wollan, New York City, on the brief), for plaintiff-appellant.

Before MOORE, SMITH and ANDERSON, Circuit Judges.

J. JOSEPH SMITH, Circuit Judge:

This is an appeal from a judgment of the United States District Court for the Southern District of New York, Pollack, Judge, dated October 25, 1967, directed for plaintiff-appellant Tishman & Lipp, Inc. in the amount of $50 after a trial to the court and a jury. Tishman & Lipp, Inc. v. Delta Airlines, 275 F.Supp. 471 (S.D.N.Y.1967). We find no error and affirm the judgment.

Appellant's president, Irving Tishman had purchased air transportation which included a trip from New Orleans to New York. On March 19, 1964 Mr. Tishman presented himself at the Delta passenger counter at the New Orleans airport for the purpose of checking his luggage. Mr. Tishman's luggage consisted of an attache case which he carried with him aboard the plane, a suitcase containing personal belongings which he checked as baggage under his free weight allowance of 40 pounds, and two separated sections of his jewelry sample case containing some $80,000 in jewelry. Each of the two sections measured 18 × 18 × 10 inches and was hinged to fit together with the other part and was separately covered entirely with a blue zippered cover. The ticket clerk told Mr. Tishman that there was an excess weight of 60 pounds, the weight of the two sample pieces, and added that he would "put it on air-freight because it was less expensive." The clerk said nothing about priority, and at no time did Mr. Tishman reveal to the clerk what was enclosed in the sample case sections, nor the specific value therefor. Tishman received a claim check entitled "BAGGAGE AIRBILL" which recited "BAGGAGE CHECKED SUBJECT TO AIR FREIGHT TARIFFS INCLUDING LIMITATIONS OF LIABILITY THEREIN CONTAINED." The baggage airbill receipted payment of $10.80 for air freight weighing 60 pounds. Had Mr. Tishman chosen to check the sample cases as excess baggage the cost to him would have been $26.12. After receiving his claim stubs and boarding pass, Tishman said that he would wait until his baggage went down below, adding "It is expensive, and make sure it gets on the plane with me." The clerk replied "Don't worry, I'll take care of it."

On arrival in New York, one of the sample cases was missing from the baggage area and was never found. Mr. Tishman immediately asserted that it contained jewelry worth $50,000, demanded an investigation and ultimately brought this action.

The case was brought to the District Court by removal from the Supreme Court of the State of New York on the ground of diversity of citizenship, jurisdiction was further based on the Federal Aviation Act of 1958, 49 U.S.C. § 1301 et seq. When plaintiff-appellant rested on the second day of trial, defendant-appellee moved for a directed verdict, then rested on plaintiff's case and renewed its motion. From the bench the Court dismissed the complaint and discharged the jury. Several days thereafter, the court concluded that plaintiff intended to claim for the sample case as well as the contents thereof, and the court on its own motion reversed its original decision and directed a verdict for plaintiff in the amount of $50, thus granting appellee's alternative motion for a directed verdict.

The District Court's verdict was based upon the tariffs filed by appellee Delta Air Lines with the Civil Aeronautics Board pursuant to 49 U.S.C. § 1373.

Delta's Air Freight Rule No. 2.5(c)¹ states that jewelry is "not acceptable for shipment as baggage and must not be enclosed in baggage." Rule 3.2(c)² states that "The carrier shall not be liable for any loss of * * * jewelry, precious stones * * * unless such articles are specifically described on the airbill, provided that carrier shall not be liable in any event for such articles enclosed in or shipped as baggage." Rule 3.3(a)³ provides that "the value of the shipment shall be determined in accordance with the provisions of Rule 4.3 and that the total liability of the carrier shall in no event exceed the value of the shipment as so determined." Rule 4.3⁴ provides that a shipment shall "be deemed to have a declared value of $0.50 per pound (but not less than $50.00) unless a higher value is declared on the airbill at the time of receipt of the shipment from the shipper." The rule further provides for an additional transportation charge of 10 cents per $100 value by which the declared value on the airbill exceeds $0.50 per pound or $50. Finally, Delta's Passenger Tariff Rule No. 70(c) states that it is "not liable for loss * * * in the delivery of * * * jewelry * * * which are included in the passenger's checked baggage, whether with or without the knowledge of carrier."

Read together, Delta's rules provide that jewelry is not acceptable for shipment as baggage, and that as carrier it is not liable for jewelry shipped as baggage. It will assume liability for jewelry not so shipped or enclosed providing it is specifically described on the airbill, and an additional transportation charge is paid at the rate of 10 cents for each $100 by which the declared value exceeds $0.50 per pound or $50, whichever is higher.

Tariffs filed with the Civil Aeronautics Board if valid, are conclusive and exclusive, and the rights and liabilities between airlines and their passengers are governed thereby. Slick Airways, Inc. v. United States, 292 F.2d 515, 154 Ct.Cl. 417 (1961); Lichten v. Eastern Air Lines, Inc., 189 F.2d 939, 25 A.L.R.2d 1337 (2d Cir. 1951), 49 U.S.C. § 1373. Limitations of liability in tariffs required to be filed by air carriers with the Civil Aeronautics Board are binding on passengers and shippers whether or not the limitations are embodied in the transportation documents. Vogelsang v. Delta Air Lines, Inc., 302 F.2d 709 (2d Cir. 1962), cert. denied 371 U.S. 826, 83 S.Ct. 46, 9 L.Ed.2d 65 (1962); cf. Herman v. Northwest Airlines, Inc., 222 F.2d 326 (2d Cir.), cert. denied 350 U.S. 843, 76 S.Ct. 84, 100 L. Ed. 751 (1955).

Appellant claims that no evidence supports the District Court's finding that Tishman elected to have his luggage transported as air freight baggage rather than as excess passenger baggage. Mr. Tishman's testimony refutes this claim.⁵ From his testimony, it is clear that appellant cannot sustain its contention that Tishman had no understanding sufficient to form an election.

Appellant cites Vogelsang v. Delta Air Lines, Inc., 193 F.Supp. 613 (S.D.N.Y. 1961), aff'd 302 F.2d 709 (2d Cir. 1962) in support of the proposition that the very passenger tariff involved in the case at bar has been held to apply to a jewelry sample case. In Vogelsang, however, Judge Sugarman noted that if Delta intended to exclude jewelry for transportation as baggage, it did not say so in the tariff provision then effective. In the present case, Rule 70(c) explicitly states that Delta is not liable "for loss, damage to, or delay in the delivery of * * * jewelry * * * which are included in the passenger's checked baggage, whether with or without the knowledge of carrier."

Furthermore, even if appellant's contention had merit, appellant would be subject to the limitation of liability rules. Rule 71 of the Passenger Tariff limits Delta's liability for checked baggage to $250 unless the passenger has declared a higher value.

The District Court was correct, however, in holding that since jewelry is not acceptable for shipment as baggage under tariff rule 2.5, the loss in the present case was subject to the limitations in the Air Freight Tariff Rules, which provide for no liability for loss of jewelry in Rule 3.2(c), and which limit the liability for loss of the sample case to its declared value (Rule 3.3(c)), which under Rule 4.3(a) is deemed to be $0.50 per pound but not less than $50 unless a higher value is declared. See Vogelsang v. Delta Air Lines, Inc., supra, at 193 F.Supp. 614-615.

Appellant's next argument is that Delta, by charging Tishman the rate for air freight for his sample case, checked as baggage and given the 40 pound free weight allowance of the passenger tariff, intentionally flouted its filed tariff provisions, and should therefore be estopped from relying on the limitation of liability provisions.

A similar contention was rejected by this court in Lichten v. Eastern Air Lines, 189 F.2d 939, 25 A.L.R.2d 1337 (2d Cir. 1951).⁶ This contention also assumes that there was a violation of Delta's tariff rules, which is not the case. The rules do not prohibit Delta from offering to ship baggage at air freight rates. Rule 2.3 provides that "all property is acceptable for transportation" except as otherwise provided by the applicable tariffs or laws.

Appellant maintains that the tariff provisions relied upon by Delta are inconsistent and confusing and for this reason none of them can be given effect. Appellant points to Rule 70(c) which denies any liability for jewelry and compares it with Rule 71 which limits liability to $250 unless a higher value is declared. There is no inconsistency. Rule 71 limits liability, if any, to the lesser of $250 or the declared value. However, since appellant's claim is based upon loss of jewelry, that claim comes within Rule 70 which provides that Delta is not liable for the loss of jewelry included in the passenger's checked baggage. The limitation of liability provision therefore does not come into play, since there is no liability at the outset. Rule 70 alone governs the jewelry claim, and there is no contradiction.

Appellant claims that the tariff rules...