Western Union Telegraph Co. v. Nester

• Decision Date: 15 September 1939
• Docket Number: No. 9104.,9104.
• Citation: 106 F.2d 587
• Parties: WESTERN UNION TELEGRAPH CO. v. NESTER et al.
• Court: U.S. Court of Appeals — Ninth Circuit

106 F.2d 587 (1939)

WESTERN UNION TELEGRAPH CO. v. NESTER et al.

No. 9104.

Circuit Court of Appeals, Ninth Circuit.

September 15, 1939.

Francis R. Stark, of New York City, Oscar Lawler, of Los Angeles, Cal., and Alfred Sutro, of San Francisco, Cal. (Lawler, Felix & Hall, of Los Angeles, Cal., and Pillsbury, Madison & Sutro, of San Francisco, Cal., of counsel), for appellant.

August J. O'Connor and George J. Hider, both of Los Angeles, Cal., for appellees.

Before WILBUR, GARRECHT, and HANEY, Circuit Judges.

HANEY, Circuit Judge.

Appellant challenges a judgment rendered against it for breach of its duty to transmit and deliver $150 paid it by appellee Nester, to appellee Charles in the Republic of Honduras.

Appellees, at the time of the transactions in question, were partners engaged in operating, under lease, a mine in the Republic of Honduras. Nester, on August 2, 1937, at Los Angeles, shipped some goods to Charles, who was in the Republic of Honduras. The shipment arrived there on August 15, 1937. The applicable articles of the Honduras statutes, regarding confiscation of the goods are:

"Article No. 4 — All goods shall be deposited in the national warehouses. * * *

"Article No. 7 — The following merchandise shall not go into the national warehouses, and shall be entitled to only six days of free deposit on sites within the jurisdiction of the Customshouse: * * *

The goods listed include those here involved.

"Two centavos shall be charged daily for each kilogram of merchandise after the fixed period of time has elapsed, to cover the expense of safekeeping the articles under the custody of the state shall not exceed the period of six days on the following goods: * * *

The goods listed do not include those here involved

and fifteen days on all others.

"Article No. 9 — The cargo referred to in Article 7th and 8th, shall be considered as of compulsory shipment, and its custody or reshipment must be applied for within the time and conditions established for deposits."

"Article No. 41 — The merchandise shall become the property of the State, and will be sold in public auction, whenever its custody, deposit or reshipment are not requested as prescribed by the law — or whenever they are expressly abandoned by their owner."

Charles received notification of the arrival of the goods on August 19, 1937.

On September 1, 1937, Nester at Los Angeles paid appellant $150 to be transmitted and paid to Charles in the Republic of Honduras, as provided in a money order blank, pursuant to which the money was to be sent. One provision in such blank was: "In any event, the company shall not be liable for damages for delay, non-payment or underpayment of this money order, whether by reason of negligence on the part of its agents or servants or otherwise, beyond the sum of five hundred dollars, at which amount the right to have this money order promptly and correctly transmitted and promptly and fully paid is hereby valued, unless a greater value is stated in writing on the face of the application and an additional sum paid or agreed to be paid based on such value equal to one-tenth of one per cent thereof." The money was not delivered to Charles. The above mentioned shipment was confiscated.

On July 26, 1938, appellee brought this action against appellant and its agent to recover $7,600 due to the alleged negligence in failing to deliver the money. Upon the trial, in which a jury was waived, appellees failed to prove any damages except the value of the confiscated shipment which was $500. They failed to prove the date of confiscation. The trial court handed down an opinion, 25 F.Supp. 478, 480, 481, in which it was said: "the loss of these goods, valued at about five hundred dollars, cannot be traced directly to the nondelivery of the money". The opinion further stated that the provision in the money order blank "is a provision for liquidated damages, which entitles the sender to recovery of the minimum amount of five hundred dollars in the absence of any proof or without any offer of proof". In the findings thereafter made, the trial court found that appellees "have suffered and sustained damages, loss and injury in the sum of" $500. Judgment was entered for that sum, from which this appeal is taken.

Upon argument this court questioned the jurisdiction of the lower court, because the citizenship of appellant's agent did not appear in the record, and at its request, the parties have filed briefs upon that question. Upon the authority of Horn v. Lockhart, 84 U.S. 570, 17 Wall. 570, 21 L.Ed. 657, and Dollar S.S. Lines v. Merz, 9 Cir., 68 F.2d 594, we think the court below had jurisdiction to render the judgment.

Appellant challenges the finding that appellees were damaged in the sum of $500. Rule 52 of the Federal Rules of Civil Procedure, 28 U.S.C.A. following section 723c provides: "Findings of fact shall not be set aside unless clearly erroneous, and due regard shall be given to the opportunity of the trial court to judge of the credibility of the witnesses. * * *" There was evidence that Charles was unable to pay the charges on the shipment because he did not have the money which was to be forwarded by Nester. The question therefore is when, under the laws of Honduras, the shipment was subject to confiscation. Appellant's interpretation of the laws is shown by the following quotation from its brief: "* * * the goods in question were entitled to six days' free time (Art. 7), if their custody was applied for (Art. 9). In default of such application the goods became the property of the state at the end of the six days' free time (Art. 41)." If this interpretation is correct, it is clear that the shipment was subject to confiscation six days after August 15, 1937, which was more than a week prior to the day when Nester attempted to send the money. On the other hand appellees contend that "all of the goods shipped by appellee come within the class of goods allowed six days free deposit and fifteen days charge * * * and not the six days free, six days charge; so assuming that the goods arrived in Honduras on the 15th day of August, 1937, they were not subject to confiscation until the 5th day of September, 1937," which was after Charles would have received the money had it been promptly delivered by appellant.

We express no opinion as to which of these opposing contentions is correct. The translation, which was introduced in evidence by appellant, regarding the second paragraph of Article No. 7, is either erroneous or incomplete. It may be that the omitted matter, if any, or the correct translation, would disclose the correct meaning. Under the circumstances, speculation is not a proper course of action. For purposes of this decision, we will assume, without so deciding, that appellant's contention is correct.

Appellant contends that the provision in the money order blank was a part of the tariff filed with the Interstate Commerce Commission, and as such limited the damages recoverable to the actual damage, not exceeding $500, and that without actual damage there could be no recovery. The question presented is one of interpretation of the provision, not of validity thereof.

There have been clauses construed which limit liability for damages at not more than a specified sum. Primrose v. Western Union Telegraph Co., 154 U.S. 1, 14 S.Ct. 1098, 38 L.Ed. 883; Postal Telegraph-Cable Co. v. Warren-Godwin Co., 251 U.S. 27, 40 S.Ct. 69, 64 L.Ed. 118; Western Union Tel. Co. v. Esteve Bros. & Co., 256 U.S. 566, 41 S.Ct. 584, 65 L.Ed. 1094. In such cases, the damages are limited to the actual damages or the amount stipulated, whichever is less.

In Hart v. Pennsylvania Railroad Co., 112 U.S. 331, 5 S.Ct. 151, 28 L.Ed. 717, a carrier assumed a liability in the transportation of horses at "not exceeding two hundred dollars each". It was clearly intended there that the liability for loss or injury to the horses was confined to their actual value, but if it exceeded $200 each, then recovery was limited to that amount.

In Western Union Tel. Co. v. Czizck, 264 U.S. 281, 44 S.Ct. 328, 68 L.Ed. 682, a provision substantially identical to the one here was in question. It contained a provision limiting liability for damages, and a provision valuing a telegram at $50. The distinction between the two clauses was adverted to, the court saying, 264 U. S. at page 285, 44 S.Ct. at page 329, 68 L. Ed. 682: "We have not adverted to the first clause of the exemptions, limiting liability to the amount received for sending the message. Obviously this has a narrower scope than the valuation clause and we should hesitate to hold that it exonerated the defendant in this case. * * *" Although the damages greatly exceeded the agreed valuation, it was held that the claim was limited by the valuation clause to that sum. In Western Union Tel. Co. v. Priester, 276 U.S. 252, 257, 48 S.Ct. 234, 72 L.Ed. 555, the provision again contained these two clauses. No point was made concerning the valuation clause, and the limitation of liability clause was held applicable.

Here, the provision in question has a limitation of liability clause — "the company shall not be liable for damages * * * beyond the sum of five hundred dollars". The provision also contained a clause by which it was agreed that "the right to have this money order promptly and correctly transmitted and promptly and fully paid is hereby valued" at $500. Although appellant contends that the clause means that such right is valued at not "beyond the sum of" $500, the clause does not so state. It states that such right is valued at $500.

When Nester delivered the $150 to appellant, he had the right to have the money transmitted without unreasonable delay (Western Union Tel. Co. v. Crovo, 220 U.S. 364, 31 S.Ct. 399, 55 L.Ed. 498) and delivered to Charles. Moore v. New York Cotton Exchange, 270 U.S. 593, 46 S.Ct. 367, 70 L.Ed. 750, 45 A.L.R. 1370. Because of appellant's acts, that right was...