## Facts

- A New Jersey hatchery sold 8,000 baby chicks to a California buyer and arranged air shipment from Newark to Los Angeles on American Air Lines.
- The shipment consisted of 81 boxes weighing 950 pounds, delivered to American’s Newark air-freight terminal on April 16, 1968.
- Dover provided American’s clerks with an invoice stating the chicks’ value ($2,240) and attached written instructions directing American to insure the shipment for its full value; an American clerk signed the invoice.
- American prepared the airbill through its employees; the completed airbill contained no declared value in the designated space.
- American had a Civil Aeronautics Board–filed tariff limiting liability to $0.50 per pound unless a higher value was declared and stating cargo-loss claims need not be paid until shipping charges were paid.
- Upon arrival in Los Angeles, the chicks were dead or predominantly dead; American did not dispute that its handling caused the loss.
- The trial court awarded plaintiffs $2,240 plus interest and costs (full invoice value), and American appealed.

## Issues

1. Whether an interstate air carrier may enforce a CAB-tariff limitation of liability ($0.50 per pound) when the shipper provided written full-value insurance instructions and the carrier’s employee failed to enter the declared value on the airbill.
2. Whether a tariff provision conditioning payment of cargo-loss claims on prior payment of freight charges bars recovery when the carrier’s negligence caused the loss and the carrier failed to carry out the shipper’s declared-value instructions.

## Decision

- The Appellate Division affirmed the trial court’s judgment for $2,240 plus interest and costs.
- American could not limit liability to $0.50 per pound because the absence of a declared value on the airbill was attributable to American’s own employee despite Dover’s written instructions and invoice stating full value.
- American could not rely on the tariff’s freight-payment condition to delay or defeat the claim under the circumstances presented.

## Legal Principles

- Interstate air cargo shipments are governed by federal law, and properly filed carrier tariffs incorporated into the airbill generally bind the parties.
- A carrier may not invoke a tariff liability limitation when the shipper clearly communicated a higher value to be declared and the carrier’s own agent failed to record that value on the airbill.
- A carrier may not use its own error or negligent failure to implement declared-value instructions as the basis to reduce liability to the shipper.
- A tariff term conditioning payment of loss claims on prior payment of freight charges may be denied enforcement where the carrier’s negligence caused the loss and enforcement would allow the carrier to benefit from its own breach.

## Conclusion

The court held American liable for the shipment’s full invoice value because Dover provided written full-value instructions and the missing declared value on the airbill resulted from American’s own employee error; the court also declined to enforce the tariff’s freight-payment condition to block or postpone recovery for a loss caused by American’s negligence.


Dover Farms, Inc. v. Am. Air Lines, Inc., 268 A.2d 289 (N.J. Super. Ct. App. Div. 1970)