Sorensen-Christian Indus., Inc. v. Railway Express Ag., Inc.
| Decision Date | 30 November 1970 |
| Docket Number | No. 14368.,14368. |
| Citation | 434 F.2d 867 |
| Parties | SORENSEN-CHRISTIAN INDUSTRIES, INCORPORATED, Appellee, v. RAILWAY EXPRESS AGENCY, INCORPORATED, Appellant. |
| Court | U.S. Court of Appeals — Fourth Circuit |
Robert N. Simms, Jr., Raleigh, N. C., for appellant.
Before HAYNSWORTH, Chief Judge, and WINTER and CRAVEN, Circuit Judges.
Railway Express Agency, Inc. (REA) appeals from a judgment against it as a result of delay in the shipment of certain equipment for Sorensen-Christian Industries, Inc. (Sorensen). The district judge, sitting non-jury, found that the delay was caused by REA's failure to perform a "Protective Signature Service" for which Sorensen had paid an additional shipping charge. He concluded that REA could not avail itself of a limited liability provision contained in tariffs filed with the Interstate Commerce Commission.
On appeal, REA claims that it had no duty to deliver by any particular date, and is consequently not liable for any losses Sorensen sustained. REA also asserts that even if it is liable for the delay, Sorensen's damages cannot exceed the declared value of the equipment indicated on the express receipt. While we agree with the district judge that REA is liable for the delay in the shipment, we conclude that Sorensen may not recover more than $500, the limit of liability under the applicable tariff. We vacate the judgment and direct the entry of a new judgment in that amount.
Sorensen, whose factory is in Angier, North Carolina, manufactures and markets "The McCalls Rebounder," a device to increase the proficiency of boys and girls in certain basketball skills. Wishing to display this device at a basketball coaches' clinic at Kutscher's Country Club in Monticello, New York, the week of June 14, 1965, Sorensen's president made arrangements for its delivery with REA's agent at the latter's office in Dunn, North Carolina. Sorensen had previously rented space at the site of the clinic and had expended considerable sums in advertising its device. REA's agent was advised of the importance of timely arrival of the "Rebounder," and he assured Sorensen that there would be no question of its arriving on time. To this end Sorensen purchased REA's "Protective Signature Service," which provides that "shipments will be handled under person-to-person signature from time of receipt at origin to delivery at destination." REA's agent informed Sorensen that this service would insure timely delivery, as well as provide that the three packages necessary to ship the "Rebounder" would not be separated en route.
Sorensen delivered the "Rebounder" to REA's office on June 7, one week before the coaches' clinic was to begin. The express receipt governing the shipment bore the same date. The receipt had printed on it the following notice:
In consideration of the rate charged for carrying said property, which is dependent upon the value thereof and is based upon an agreed valuation of not exceeding fifty dollars for any shipment of 100 pounds or less and not exceeding fifty cents per pound, actual weight, for any shipment in excess of 100 pounds, unless a greater value is declared at the time of shipment, the shipper agrees that the company shall not be liable in any event for more than fifty dollars for any shipment of 100 pounds or less, or for more than fifty cents per pound, actual weight, for any shipment weighing more than 100 pounds, unless a greater value is stated herein. Unless a greater value is declared and stated herein the shipper agrees that the value of the shipment is as last above set out and that the liability of the company shall in no event exceed such value. (Emphasis added.)
This provision was predicated on Rule 13-E of Official Express Classification 36 on file with the ICC, which governs shipments by REA. Part of the receipt was filled out by Sorensen, including the insertion of the amount of $500 in the blank marked "declared value."
Upon arriving in Monticello for the clinic, Sorensen's representatives were unable to locate the "Rebounder." They informed REA's agent in North Carolina, who was able to trace the shipment only as far as Washington, D. C. Two of the packages arrived on Tuesday, June 15, but the third did not reach Monticello until Friday, June 18, the final day of the clinic. At trial REA's North Carolina agent admitted that Sorensen did not get the service it had paid for. Because the sample "Rebounder" was relatively useless for display without the contents of all three packages, much of the benefit Sorensen had sought to derive from the clinic was lost to it. There was evidence that Sorensen incurred out-of-pocket expenses of approximately $4,800 in arranging for the display. Based upon these expenses for advertising and for travel by Sorensen's representatives to Monticello, as well as evidence of lost sales, the district judge entered a judgment of $10,000 against REA.
-II-
Section 20(11) of the Interstate Commerce Act provides that a common carrier is liable "for the full actual loss, damage, or injury * * *" to property carried by it except for "transportation concerning which the carrier shall have been or shall be expressly authorized or required by order of the Interstate Commerce Commission to establish and maintain rates dependent upon the value declared in writing by the shipper or agreed upon in writing as the released value of the property, in which case such declaration or agreement shall have no other effect than to limit liability and recovery to an amount not exceeding the value so declared or released, * * *." (Emphasis added.) 49 U.S. C.A. § 20(11). Under this section, a shipper is afforded the opportunity to get greater protection, and consequently incur greater shipping expense, by declaring a higher value for his property. REA was authorized to limit its liability in accordance with this procedure by Rule 13-E of Official Express Classification 36.
It has been held that the language of § 20(11) is broad enough to provide for limited liability in the case of negligent delay as...
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