(dissenting).
I dissent. In my opinion the District Court did not have jurisdiction and consequently our jurisdiction is limited to that of reversing the decision of the trial court. Jurisdiction is predicated upon diversity of citizenship. Plaintiffs, who are residents of California, join as defendants the Western Union Telegraph Company, a citizen of New York, T. J. Inie and certain other defendants sued by their fictitious names. The complaint contains no allegation concerning the citizenship or - residence of the defendant T. J. Inie. The complaint alleges the joint negligence of all the defendants in delaying the payment of a money order procured by the plaintiffs and judgment is prayed for against them all. The defendants Western Union Telegraph Company and Thelma Ivie (sued and served herein as T. J. Inie) answered the complaint and denied the allegation of negligence and for separate defense set up the terms of the contract between the parties for the transmission of money and alleged that under that contract the Western Union Telegraph Company was not liable for delay, non-payment or underpayment of the money order by reason of negligence or otherwise b'eyond the sum of $500. The evidence did not show the citizenship of Thelma Ivie. The trial court delivered its opinion on November 9, 1938, wherein it was held that there was a breach of the contract for the transmission of the money order for $150, for which the Telegraph Company was liable for liquidated damages in the sum of $500.. As to the defendant T. J. Inie the opinion states: *591“Plaintiffs take nothing against the defendant T. j. Inie [Thelma Ivie].” The findings of fact and conclusions of law which followed the opinion, dated December 5, 1938, contained no reference to the defendant Thelma Ivie except the finding that “T. J. Inie was the duly appointed and acting employee of the Western ■ Union Telegraph Company, a corporation, and was acting within the scope of her authority.” And the following in the con■elusions of law: “That Paul Nester and Juan Charles, co-partners plaintiff are entitled to recover the amount of five hundred dollars ($500.00) against the Western Union Telegraph Company only, and not against T. J. Inie.” The judgment of the same date gave judgment “in the sum of Five Hundred ($500.00) Dollars against the Western Union Telegraph Company, a corporation, only, and for their costs taxed in the sum of $69.11. Cause dismissed as to T. J. Inie.”
The majority opinion holds that the dismissal of the action as to T. J. Inie gave the court jurisdiction of the case. I can-mot agree to this proposition. The decision :in favor of T. J. Inie was one on the merits. The new rules in force at the -.time the judgment was rendered provide, :rule 41, subdivision b, as'follows: “ * * * 'Unless the court in its order for dismissal ■otherwise specifies, a dismissal under this subdivision and any dismissal not provided for in this rule, othér than a dismissal for lack of jurisdiction or for improper venue, operates as an adjudication upon the merits.” The trial court would have no jurisdiction of the action until the action was dismissed as to T. J. Inie for lack of jurisdiction. The dismissal (on the merits) was contemporaneous with and a part ■of the judgment against the Western Union Telegraph Company. In my opinion the judgment should be reversed for lack >of jurisdiction.
If my associates agreed with me on -this jurisdictional question it would be unnecessary to consider the effect of the «contract for the transmission of the message and particularly those provisions thereof with reference to the limitation of liability. In view of the fact that the court has passed upon that question it is proper for me to add that I am not in accord with the opinion of the majority with relation to the effect of the contract for the transmission of the message. It is provided in this contract that- the damages for nondelivery should not exceed the sum of $500. This provision taken alone is clearly a limitation of liability, but because of the language which follows this provision fixing the value of the right to have money orders transmitted at five hundred dollars, the majority holds that the agreement is one for the payment of liquidated damages. In other words, that a right belonging to the plaintiffs valued at $500 has been destroyed and that therefore by agreement the amount of recovery should be for that amount. There is no doubt that the language of the contract is susceptible of this construction, but such construction overlooks the historical background and the decisions of the courts and of the Interstate Commerce Commission upon which the terminology of the contract is based. Since jurisdiction over the transmission of interstate telegraph messages has been vested by Congress in the Interstate Commerce Commission by statute approved June 18, 1910, 36 Stat. 539, 544, the Supreme Court has had occasion to pass upon this question of the limitation of the liability of a telegraph company with relation to the valuation placed upon a message by the agreement of the ’ parties. The Interstate Commerce Commission - has permitted and required companies to fix a value upon the message transmitted for each unrepeated message at not less than $500.00. See Western Union Telegraph Co. v. Anderson, Tex.Civ.App., 245 S.W. 731. Such provisions have been considered by the Supreme Court. In the case of The Ansaldo San Giorgio I v. Rheinstrom Brothers Co., 294 U.S. 494, 55 S.Ct. 483, 484, 79 L.Ed. 1016, the Supreme Court had occasion to refer to the matter in a case dealing with a bill of lading limiting the liability of the carrier. lnt discussing the effect of the bill of lading the court referred arguendo to the two types of valuation clauses that had been in frequent use by common carriers and refers to a contract similar to that involved in the case at bar as follows: “One is a true limitation agreement. It recites that a sum named in the bill of lading is the agreed value of the goods, or their value per unit or per package, in the absence of the shipper’s declaration of a higher value; that the rate is fixed with reference to the specified value, and if a greater be declared a higher rate will apply; that in consideration of the rate to be charged, the carrier’s liability for loss or damage shall be limited to the stipulated *592value. In case of loss or damage this clause enures to the carrier’s, but not to the shipper’s benefit. The latter can in no event recover more than his actual loss, but may have to take much less. The damages are computed in the usual way without reference to the stipulation, but, if when so computed they exceed the agreed limit of value, no recovery of the excess may be had. Such a stipulation, we have said, is not enforcible unless the shipper, for agreeing to such a limitation of the carrier’s liability, receives a consideration consisting in the offer of a lower rate as against a higher rate offered for the service without such limitation; or, as has been said, the rate is tied to the release. Agreements of this kind are held to be reasonable and not offensive to the public policy against contracts relieving the carrier from its own negligence. The agreement as to value in consideration of carriage at the lower rate thus obtained is held to estóp the shipper .from demanding damages in excess of the agreed value.” (Italics mine.)
In Western Union Telegraph Company v. Czizek, 264 U.S. 281, 44 S.Ct. 328, 68 L.Ed. 682, referred to in the main opinion, the • court had under consideration a contract with the Western Union Telegraph Company for the transmission of an unrepeated telegram which, as stated in the main opinion, contained a provision almost identical in terms with that included in the contract of transmission of the money order in the case at bar. The provision is as follows: “In any event the Company shall not be liable for damages for any mistakes or delays in the transmission or delivery, or for the nondelivery, of this telegram, whether caused by the negligence of its servants or ■ otherwise, beyond the sum of fifty dollars, at which anjount this telegram is hereby valued, unless a greater value is stated in writing thereon at the time the telegram is offered to the Company for transmission, and -an additional sum paid or agreed to be paid based on such value equal to one-tenth of. one per cent, thereof.” The Circuit Court of Ap-peals held that this contract was invalid so far as applied to a case of gross negligence and held the company liable for actual damages in the sum of $4,500 with interest at 7%. 9 Cir., 286 F. 478. The Supreme Court reversed the decision, holding that the claim was “limited to $50.00” by the above quoted terms of the contract. 264 U.S. 281, 44 S.Ct. 328, 68 L.Ed. 682. Thus instead of treating the agreement as an agreement for liquidated damages in the sum of $50.00, the court treated it as a contract limiting the liability of the company. The question here involved has been considered by several state courts and in each instance since the ’ assumption of jurisdiction by the United States over the transmission of interstate messages it has been held that the stipulated value of the message was the limit of liability for the actual damages suffered because of nondelivery. Western Union Telegraph Co. v. Anderson, Tex.Civ.App., 245 S.W. 731, decided in 1922; Western Union Telegraph Co. v. Bashinsky, Case & Co. (Alabama), 217 Ala. 661, 117 So. 289, decided In 1928; and Wernick et al. v. Western Union Telegraph Co., 290 Ill.App. 569, 9 N.E.2d 72, decided in 1937.
These decisions discuss the origin and effect of the stipulated value of a message. I think that they are correct, that the valuation of $500 stated in the contract is for the purpose of limiting, but not of fixing the damages.
The judgment should be reversed for lack of jurisdiction in the trial court.