The opinion of the court was delivered by: CARTER
On September 3, 1968, Wing Hang Bank (WHB) counted, packaged and sealed on its premises in Hong Kong $250,000.00 United States dollars of mixed denominations. The package, weighing 15.5 kilos and addressed to National Bank of North America in New York (NBNA), was taken to the Hong Kong airport for shipment to New York on Japan Air Lines (JAL). In the shipper's letter of instructions, the package is described under column "Nature and Quantity of Goods" as "United States Dollars Two Hundred Fifty Thousand (U.S. $250,000.00) only in bank notes." In the space for shipper's declared value under "For Customs" appears "$250,000.00, " but under "For Carriage" "NVD," which it is agreed means "no value declared," is written.
The package and shipper's letters were given to personnel of JAL for shipment to New York by air freight. Plaintiff, by declaring no value, secured the cheapest air freight rate which was $7.37 per kilo. On receipt of the package and shipper's letter, JAL made up an airway bill in thirteen copies for distribution to its personnel. On the face of this bill the shipment is described as "United States Dollars Two Hundred Fifty Thousand ($250,000.00)." In addition, a cargo manifest similarly indicating that the shipment contained $250,000.00 in United States currency was prepared in twenty-two copies. At Tokyo, for the final leg of the flight to New York, a cargo manifest in twenty-four copies again indicating the value of the package was prepared for distribution.
At approximately 3 P.M., New York time on September 3, 1968, NBNA received a coded cablegram from WHB stating that the latter was shipping that day via JAL $250,000.00, covered by airway bill number 131HKG1577854. Pursuant to agreement WHB would send to NBNA from time to time United States currency by air freight to replenish its credit balances. NBNA would pick up the bank notes at the airport in New York at its own expense. It was agreed that WHB would notify NBNA by cable of any forthcoming shipment to enable the latter to pick up the currency without delay.
The shipment arrived in New York on September 4, 1968, in the early morning hours at approximately 5:00 A.M. The package was removed from the plane and stored in a safe at JAL facilities at John F. Kennedy Airport (JFK). At that time JAL did not have facilities at JFK sufficient for storage of freight and custom clearance. Pursuant to agreement American Airlines (AAL) had assumed the obligation of providing storage and of processing through customs all terminating freight received from JAL.
At approximately 9:10 A.M., on September 4, 1968, the package was delivered by JAL to the custody of AAL for custom clearance and storage until picked up by the consignee. The shipment was stored by AAL in its Valuable Cargo Area. This is space in AAL Hangar 10 at Bay 10 which is enclosed by heavy wire and is kept under lock. The only key to the area is kept in the possession of the supervisor of the particular shift on duty. The area is patrolled by guards and is monitored by a closed circuit television. However, no particular employee on duty apparently was given any special responsibility to keep watch on the television, everyone being expected to keep an eye on the set while doing their other assigned duties.
AAL processed the package through customs and returned it to its Valuable Cargo Area to await pickup by NBNA. In the belief that Freeslate International was NBNA's authorized agent, AAL advised that agency of the arrival of the package. Mr. Varone of Freeslate notified NBNA by telephone at about 4 P.M. on September 4 that the shipment had arrived, had cleared customs and was ready for pickup. Mrs. Gussy Brucato, an NBNA employee, received Mr. Varone's message. She called Wells Fargo requesting it to send an armored car to pick up the shipment but was advised that this could not be done that day but would be done the first thing the next day. In the early morning hours of September 5, armed robbers broke into the Valuable Cargo Area and stole plaintiff's package, along with other items in the cage.
Plaintiff concedes that the liability of the air carriers is governed by the Warsaw Convention. Article 18 makes the carrier liable for loss or damage to baggage, unless within the terms of Article 20 it has been proved that "all necessary measures to avoid the loss had been taken" or that it was not possible to take such measures. Article 22(2) limits carrier liability for freight loss to 250 francs per kilo "unless the consignor has made, at the time when the package was handed over to the carrier, a special declaration of the value at delivery and has paid a supplementary sum if the case so requires." In that instance the measure of damages may be governed by the amount of value declared.
Plaintiff contends that the air carriers were guilty of willful misconduct in the handling of the security of the shipment at JFK and therefore, that their liability should not be on the basis of 250 francs per kilo but for the full amount of the actual loss. Plaintiff contends that NBNA has responsibility for the loss because it was negligent in not arranging for the currency to be picked up on September 4 and argues that NBNA breached its agreement with plaintiff in not so doing.
JAL and AAL contend that at best plaintiff's recovery is limited to 250 francs per kilo, and AAL counterclaims against JAL in the event the former is held liable to the plaintiff for the reason that as a part of its agreement with JAL to store its terminating freight and clear same through customs, JAL agreed to indemnify AAL against all claims for loss or damage. NBNA contends the case against it should be dismissed and that if it should be held liable to the plaintiff, it has a counterclaim against JAL and AAL to the extent of its liability on the grounds that it was the carriers' negligence that precipitated plaintiff's loss.
Plaintiff's Contributory Negligence : Much has been made of the fact that the plaintiff shipped the currency by air freight, with papers being prepared in manifold copies for distribution to JAL personnel broadcasting that $250,000.00 American dollars were being shipped on a JAL flight. I must confess that to ship $250,000.00 unmarked and unrecorded and, therefore, unrecoverable American dollars by air freight without paying extra so that full value would be insured against what in fact happened seems on the surface to constitute carelessness of the grossest sort. Plaintiff, however, was fully insured against loss and was reimbursed by its insurance company before this action was commenced. At any rate, whatever degree of care plaintiff failed to utilize in sending the currency to New York, its negligence cannot be said to have been the proximate cause of its loss. The shipment arrived safely at JFK and remained there for approximately twenty-four hours before being stolen. If the package had been picked up on September 4, this litigation would not have ensued. It was the time lag between the arrival of the package and its being picked up that contributed to the loss, not the method of shipment chosen by the plaintiff.
The Carrier's Willful Misconduct : Plaintiff's concession that the carrier's liability is governed by the Warsaw Convention is fatal. Willful misconduct within the meaning of that Convention is defined as the willful performance of an act that is likely to result in damage or willful action with a reckless disregard of the probable consequences. See Pekelis v. Transcontinental & Western Air, 187 F.2d 122, 124 (2d Cir. 1951), cert. denied, 341 U.S. 951, 95 L. Ed. 1374, 71 S. Ct. 1020 (1951); Grey v. American Airlines, 227 F.2d 282, 285 (2d Cir. 1955), cert. denied, 350 U.S. 989, 100 L. Ed. 855, 76 S. Ct. 476 (1956); American Airlines v. Ulen, 87 U.S. App. D.C. 307, 186 F.2d 529, 533 (D.C. ...