Appendix — Braniff Airways, Inc. v. El Paso Coin Co.

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No. 6395

Appeal from the District Court of

EI Paso County, Texas

BrANirF AIRWAYS INCORPORATED,

Appellant,

v.

Et Paso Corn Company, INc. and

CONTINENTAL AIRLINES, INC.,

Appellees.

OPINION

El Paso Coin Company recovered judgment against Con-

tinental Airlines and Braniff Airways for the value of one

can of gold coins lost in a shipment from El Paso, Texas,

to New York, New York. The shipment originated with

Continental and the coins were lost while in the posses-

sion of Braniff and the trial Court allowed Continental

judgment of indemnity against Braniff. Continental has now

paid the judgment to El Paso Coin and Braniff brings this

appeal. We affirm.

E] Paso Coin Company delivered to Continental Airlines

at the El Paso International Airport three five-gallon paint

cans each containing 250 gold coins. A rapid airbill was

prepared as to each can with some of the information being

supplied by El Paso Coin and the other blanks being filled

in by Continental. Proper tariff charges were paid. The can

that was ultimately not delivered was given rapid airbill

number 005-1307-5532. This airbill listed the value of the

can of coins as $26,625.00, and listed the destination as

LaGuarda Airport in New York. The three cans were trans-

ported by Continental to Dallas, Texas, where physical pos-

session was taken by a Braniff employee who receipted for

them through his endorsement of the cargo manifest. Braniff

‘piesa ine

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changed the routing to Kennedy Airport in New York and

two of the cans arrived there, and it is still not known what

happened to the third can, which is the subject of this law-

suit. There is no question but that the loss occurred while

the can of coins was in the possession of Braniff, but how

or when the loss occurred is unknown. Appellant Braniff,

says that the trial Court erred in rendering judgment

against Braniff as El Paso Coin and/or Continental failed

to comply with the applicable tariffs regarding the ship-

ment in question. As to this, our conclusion is that under

the circumstances in which the loss occurred while the

shipment was in the possession of Braniff its liability for

the loss is established, and this assertion of tariff violation

amounts to an excuse for such liability which Braniff must

prove. We arrive at this conclusion recognizing that Federal

law controls, but that in this particular area as to air car-

riers there is no Federal regulation setting out the rights

and liabilities between shipper and carrier and connecting

carriers nor is it spelled out in the tariffs. The liabilities and

rights of carriers in general are set forth in the Interstate

Commerce Act, particularly the section known as the Car-

mack Amendment, 49 U.S.C.A. § 20(11) and (12). Under

the Carmack Amendment a shipper establishes his prima

facie case when he shows delivery in good condition, loss

or damaged condition on arrival, and the amount of dam-

ages. The burden of proof is then upon the carrier to excuse

the loss and show that it was free from negligence. Mis-

souri Pacific Railroad Co. v. Elmore & Stahl, 337 U.S. 134,

84 S. Ct. 1142, 12 L. Ed. 194 (1964). The Federal Aviation

Act has no such provisions as the Carmack Amendment

and, as noted by the Texas Supreme Court, Congress has

not seen fit to make the Carmack Amendment applicable

to airline carriers. American Airlines, Inc. v. Miller, 163

Tex. 400, 356 S.W. 2d 771 (1962). In the case of Modern

Wholesale Florist v. Braniff International Airways, Inc.,

162 Tex. 594, 350 S.W. 2d 539 (1961), the Texas Supreme

Court, speaking through the late Justice Norvell, said:

“We recognize the established dectrine that the rights

and liabilities in respect to damage to goods moving in

interstate commerce are controlled by Acts of Congress,

Jorge SLAIN ALET RIE SRE SLO EEN ETE PEE

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agreements between the parties and common law prin-

ciples accepted and enforced in the federal courts, but

we have been cited to no federal case which hclds that

the common law presumption relating to terminal car-

riers has been abrogated by the adoption of the Federal

Aviation Program, 49 U.S.C.A. § 1373. Such presump-

tion is not a local Texas device but one that has general

application throughout most common law jurisdictions.

In the federal domain, it has been recognized and

approved by the Supreme Court of the United States.

In Chicago & Northwestern Ry Co. v. C. C. Whitnack

Produce Co., 258 U.S. 369, 42 S. Ct. 328, 66 L. Ed. 665,

(cited in the original opinion), it was held that the

terminal carrier presumption was not abrogated by the

adoption of the Carmack amendment. We may para-

phrase the language of that opinion and say that we

find nothing in 49 U.S.C.A. § 1373 which indicates a

legislative purpose to abrogate the accepted common

law doctrine concerning the terminal carrier presump-

tion.”

It was held in that case that the plaintiff in presenting

its claim was entitled to rely on a presumption that dam-

age to the goods in transit was caused by the terminal

carrier even though the plaintiff did not know where and

how the damage occurred and even though the tariff pro-

vided that the terminal carrier would not be liable for

loss not caused by actual negligence of itself, Since the time

of that case, Texas has adopted the Uniform Commercial

Code, Tex. Bus. & Comm. Code Ann., and we think it is

controlling of the matters presented in this case. The

adoption of the Code repealed the bill of lading laws of

Texas. See Uniform Commercial Code, 7 S. Tex. L. J. 161;

Transition to Uniform Commercial Code, 29 Tex. B. J. 345;

Construction and Effect of UCC Art. 7, 21 A.L.R. 3d 1339.

By Section 1.201 (6), the term “Bill of Lading” is made

to include an airbill. Section 7.302 is very similar to the

Carmack Amendment in that it provides that the issuer

of a bill of lading is liable to anyone entitled to recover

on the bill of lading for any breach of its obligations by a

conecting carrier. It also provides that while the goods are

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in his possession the duties of the connecting carrier are

the same as those of the issuer, and that the issuer of such

bill of lading is entitled to recover from the connecting

carrier in possession of the goods when the breach of the

obligation occurred. And the amount of recovery is such

as may be evidenced by any receipt, judgment, or tran-

script thereof. See 9 Tex. Jur. 2d, Bills of Lading, p. 423.

As applied to the case before us, this would make Con-

tinental liable to El Paso Coin for the loss which occurred

while the coins were in the possession of Braniff and it

would entitle Continental to then recover the amount paid

the El Paso Coin Company from Braniff. That is what

the judgment in this case does. In addition to the liability

imposed by Section 7.302, Section 7.403 imposes the obli-

gation to deliver the goods to the rightful person unless

certain enumerated excuses are proved by the carrier. None

of those excuses are pertinent here, and Braniff is liable

under this section of the Code unless its tariff-violations

excuse can be upheld. Under the provisions of the Code

cited, Braniff stands liable as a prima facie case was made.

It has not refuted the facts establishing that liability. In-

stead, it stands on the proposition, which it pled, that the

sole proximate cause of the loss was the failure of El Paso

Coin and/or Continental Airlines to comply with the ap-

plicable tariffs with regard to this shipment. The applicable

tariffs specified that advance arrangements shall be made

on shipments of extraordinary value. The shipment in ques-

tion was a shipment of extraordinary value and the ad-

vance arrangements were not made. The burden of proof

was on Braniff to establish this pleading of sole proximate

cause, and the trial Court, sitting without a jury, obvi-

ously found against it, and we are of the opinion that the

evidence sustains this implied finding of the trial Court.

Ir. the case of Travelers Insurance Company v. Delta Air

Lines, Inc., 498 S.W. 2d 443 (Tex. Civ. App. — Texarkana

1973, no writ), almost the same contention was made in

that it was contended that had the agents of the airline

known that the shipment contained jewelry it would have

inaugurated special handling procedures designed for high

risk shipments and as a result the shipment would not have

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been lost. In rejecting this excuse of the carrier, the Court

pointed out what is also true here. That is, that it is not

known how the loss occurred, therefore, it cannot be said

that the special handling procedure would have prevented

that particular loss. Since no one knows what happened

to the shipment or when or what caused or contributed

to the happening, there is an absence of evidence that

the acts of El Paso Coin and Continental had any casual

connection with the loss. More specifically, Braniff’s plead-

ing of sole proximate cause is not sustained by this specu-

lative evidence.

Appellant Braniff urges that the trial Court erred in

finding that there was a waiver of the tariff provisions,

and also that by the very terms of the tariff, they could

not be waived. These questions are academic, since we

have determined that the failure to comply with the tariff

did not relieve Braniff of liability under the manner in

which the case was tried. If the waiver would not affect

the outcome, it matters not whether there could be or was

such a waiver.

Appellant’s final point of error is that the Court erred

in finding Braniff negligent. This, too, was covered by our’

prior discussion.

The judgment of the trial Court is affirmed.

December 31, 1974.

/s;___Stephen F. Preslar

Stephen F. Preslar, Chief Justice: