Polyplastics, Inc. v. Transconex, Inc.

• Citation: 827 F.2d 859
• Decision Date: 31 July 1987
• Docket Number: No. 87-1134,87-1134
• Parties: POLYPLASTICS, INC., Plaintiff, Appellee, v. TRANSCONEX, INC., Defendant, Appellant. . Heard
• Court: United States Courts of Appeals. United States Court of Appeals (1st Circuit)

Page 859

827 F.2d 859

POLYPLASTICS, INC., Plaintiff, Appellee, v. TRANSCONEX, INC., Defendant, Appellant.

No. 87-1134.

United States Court of Appeals,

First Circuit.

Heard July 31, 1987.

Decided Sept. 3, 1987.

Fernando Castro with whom Roberto Boneta and Trias, Doval, Munoz, Acevedo & Otero, Hato Rey, P.R., were on brief, for appellant.

Edelmiro Salas Garcia, Santurce, P.R., for appellee.

Before BOWNES, TORRUELLA and SELYA, Circuit Judges.

SELYA, Circuit Judge.

Transconex, Inc. (Transconex), defendant/appellant, is a so-called non-vessel-operating common carrier (NVOCC), which does business essentially as a freight forwarder. In the usual course, an NVOCC assembles small lots into a single large container at a determinate point of origin for shipment and handling by an ocean carrier to a specified destination. The freight forwarder arranges for the bulk load to be broken down dock-side or moved inland to a dispersal point, as circumstances warrant. In either event, the container is unloaded by the NVOCC's agents or contractors, and the goods delivered to the individual consignees. As a freight forwarder, an NVOCC is considered the "carrier." See 49 U.S.C. Sec. 11707(a)(2); see also Fireman's Fund American Insurance Companies v. Puerto Rican Forwarding Co., 492 F.2d 1294, 1295 (1st Cir.1974). Vis-a-vis the owner, the forwarder retains primary responsibility for carriage of the goods from origin to destination (both by water and by land).

In December 1980, Polyplastics, Inc. (Polyplastics), plaintiff/appellee, purchased a used trailer from Fruehauf Corporation (Fruehauf). Faced with the necessity of bringing its acquisition from Fruehauf's yard in Miami, Florida to Polyplastics's plant in Humacao, Puerto Rico, the appellee sought Transconex's assistance. Transconex made Polyplastics's problem its own, and agreed to deliver the trailer--which it promptly lost. Polyplastics duly tendered claim against Transconex. The latter steadfastly refused to pay what the appellee thought its trailer was worth. Polyplastics sued. The case was tried jury-waived. The district court found for the plaintiff in an amount equal to the price which Fruehauf charged Polyplastics for the trailer. Transconex appealed.

Following a bench trial, we can disturb the findings of the court only if clearly erroneous or contrary to law. Fed.R.Civ.P. 52(a). And, we need not limit ourselves to the exact grounds for decision utilized below. We are free, on appeal, to affirm a judgment on any independently sufficient ground. Chongris v. Board of Appeals, 811 F.2d 36, 37 n. 1 (1st Cir.), cert. denied, --- U.S. ----, 107 S.Ct. 3266, 97 L.Ed.2d 765 (1987); Casagrande v. Agoritsas, 748 F.2d 47, 48 n. 1 (1st Cir.1984) (per curiam). A review of the (rather scanty) evidence in this case persuades us that we hold no brief to disturb the verdict.

There were but two witnesses at the trial: Gabriel Espases, president of Polyplastics, and Rafael Catinchi, a Transconex executive. The underlying facts are largely undisputed. The trailer was at Fruehauf's yard in Miami and Polyplastics wanted it moved to Humacao. Therefore, Espases called Transconex to make shipping arrangements. He was quoted two prices for transportation. One--presumably the scheduled rate--was in excess of $2500. The second was a special rate negotiated between the parties which contemplated allowing appellant to treat the trailer not as ordinary freight, but to use it as a shipping container for transporting other wares. The parties settled on the double-duty arrangement and on a flat fee of $500.

Transconex then wrote up the paperwork unilaterally in the traffic department of its Miami office. It chose not to complete much of the cargo-specific information on its own form, leaving the boxes for such data as "rate," "measurements," and "weight" untouched. Catinchi specifically denied that his firm acted as the plaintiff's agent in inscribing and processing the bills of lading and other documents. Supplemental Record Appendix (SRA) at 37. No value was stated for the trailer; indeed, the applicable boxes on the bill of lading form--"FOB Value," "Insured Value," etc.--were left blank. No documents were signed by Polyplastics; in particular, Transconex's standard instruction form (Exhibit B), which is designed for the joint signatures of the owner and the carrier, was neither filled out nor presented to the appellee for execution. Catinchi testified that, if his company's customary practice was followed, a duplicate original of Exhibit A (the bill of lading upon which Transconex relies) would have been mailed from Miami to the plaintiff's offices in Puerto Rico. SRA at 26. There was no evidence, however, that Polyplastics ever received it. ¹

Appellant took possession of the trailer in Miami, crammed it full of goods belonging to Transconex's other customers, and stowed it aboard the Fortaleza. The vessel arrived in San Juan without untoward incident on or about December 18, 1980. The trailer was received dock-side by PRCS and taken to a distribution point. The merchandise was thereafter unloaded. Overnight, while in appellant's custody and control, the trailer mysteriously disappeared. Transconex nevertheless submitted an unitemized "miscellaneous" invoice (Exhibit 5) in the amount of the agreed fee.

Based on these facts, the plaintiff adopted a classically simple position. Absent some statutory or contractual protection indigenous to the transaction, a carrier has an unflagging duty to keep, transport, and handle safely goods entrusted to its care. See, e.g., Propeller Niagara v. Cordes, 62 U.S. (21 How.) 7, 23-26, 16 L.Ed. 41 (1859) (likening carrier's burden to that of an insurer). Transconex breached this obligation, the plaintiff averred, and should be held accountable for the loss of the rig. The appellant agrees in part; it acknowledges the duty and the breach, but claims that a special circumstance--a $50 per shipment limit of liability contained in its form bill of lading--caps its exposure. And, it asseverates, the district court erred in entering judgment in a greater amount.

The district judge refused to honor the $50 limitation. In effect, though the ceiling appeared in the appellant's general tariff and the preprinted bill of lading which Transconex chose to employ, the judge held the restriction unenforceable under both our decision in Hanover Insurance Co. v. Shulman Transport Enterprises, Inc., 581 F.2d 268 (1st Cir.1978), and the district court's own pre-Hanover precedent. E.g., Federal Insurance Co. v. Transconex, Inc., 430 F.Supp. 290 (D.P.R.1976). Appellant points out--correctly--that there are notable differences between this case and those precedents. Those differences, Transconex urges, demand an opposite result. We need not assay the nature or worth of the claimed distinctions, however, for we find that--for reasons entirely independent of the rationale which undergirds Hanover and Federal Insurance ²--Transconex's liability limit is inapplicable in this one-of-a-kind instance.

We reflect briefly on the legal standards applicable to such agreed-value limitations. In the absence of statute:

... [I]t has been declared to be the settled federal law that if a common carrier gives to a shipper the choice of two rates, the lower of them conditioned upon his agreeing to a stipulated valuation of his property in case of loss, even by the carrier's negligence, if the shipper makes such a choice, understandingly and freely, and names his valuation, he cannot thereafter recover more than the value which he thus places upon his property.

Union Pacific R.R. Co. v. Burke, 255 U.S. 317, 321, 41 S.Ct. 283, 284, 65 L.Ed. 656 (1921). In such circumstances, the agreed valuation is sustainable on principles of estoppel: "having accepted the benefit of the lower rate, in common honesty the shipper may not repudiate the conditions on which it was obtained." Id. See also American Railway Express Co. v. Lindenburg, 260 U.S. 584, 592, 43 S.Ct. 206, 209, 67 L.Ed. 414 (1923) (similar). Put yet another way:

Neither is it conformable to plain principles of justice that a shipper may understate the value of his property for the purpose of reducing the rate, and then recover a larger value in case of loss.

Adams Express Co. v. Croninger, 226 U.S. 491, 510, 33 S.Ct. 148, 154, 57 L.Ed. 314 (1913).

Transconex contends that its $50 limitation slips neatly within this integument. After all, its preprinted form bill of lading provides for an agreed valuation of $50 per shipment "... unless a greater value is declared at the time of shipment and an additional charge of 1% thereof paid...." Transconex's filed tariff was in harmony with this clause. And, as remarked before, the boxes provided for declarations of value, see supra at 861, were left pristine when the appellant's crew prepared the documentation. Yet, this argument entirely misses the point.

The law in this area has been well settled for many decades. In the usual case, transport companies fashion a schedule of charges dependent, at least in part, "upon the value of the property carried." Adams Express, 226 U.S. at 512, 33 S.Ct. at 154. When goods are consigned for shipment without special arrangements, and a scheduled rate charged for the package, then it may fairly be assumed that the parties should have known there was an interrelationship between the rate and the declared valuation. Once "[h]aving accepted the benefit of the lower rate dependent upon the specified valuation, the [shipper] is estopped from asserting a higher value," American Railway Express Co., 260 U.S. at 592, 43 S.Ct. at 209, and the agreed valuation governs in the event of ensuing loss. See Boston & Maine R.R. v. Piper, 246 U.S. 439, 444, 38 S.Ct. 354, 355, 62 L.Ed. 820 (1918). In effect, the law recognizes that:

... [A] carrier might fix his charges somewhat in proportion to the value of the property.... The principle is that the charge should bear...