Leather's Best, Inc., Plaintiff-Appellee-Cross v. S.S. Mormaclynx, Defendants-Appellants-Appellees

MULLIGAN, Circuit Judge

(dissenting in part):

I respectfully dissent only from Part IV of this scholarly opinion. I agree that the $500 limitation on the face of the bill of lading is invalid while the cargo is on board and COGSA is applicable. However, I cannot agree that its invalidity persists after the cargo has been unloaded from the ship. There is no dispute that COGSA is applicable only from the time the goods are loaded to the time when they are discharged, 46 U.S.C. § 1301 (e). It is also agreed and COGSA provides ( 46 U.S.C. § 1311 ) that after the cargo is discharged the duties, responsibilities and liabilities of the ship or carrier are to be governed by the Harter Act ( 46 U.S.C. §§ 190-196 ). It is further undisputed that the Harter Act permits a contractual limitation of liability such as that on the face of this bill which gives the shipper the option to declare a higher valuation and to pay higher freight. If all of this is agreed and understood, by what legal legerdemain is the limitation on this bill which is valid under the applicable statute, found to be invalid?

The majority opinion relies on the decision of this court in David Crystal, Inc. v. Cunard Steamship Co., Inc., 339 *818 F.2d 295 (2d Cir. 1964), cert. denied, John T. Clark and Son v. Cunard S.S. Co., 380 U.S. 976 , 85 S.Ct. 1339 , 14 L.Ed. 2d 271 (1965) which held that since the liability limitation in that bill was void under COGSA “it should remain void forever” ( 339 F.2d at 298-299 ). This is not at all persuasive. Concededly the limitation is invalid while the container was on board ship but it was not offensive once the container was ashore. The Congress has meticulously defined the jurisdictional bounds of each statute and I do not see how we can disregard this by the incantation of the once void, forever void formula of Crystal. The suggestion that it is unfair since the shipper relied on the inapplicability of the clause in making its decision on adequate cargo insurance, ( 339 F.2d at 299 ) is not realistic. The shipper in this case had no basis to rely on the definition of a package under COGSA, unless we attribute to him the ability to foresee the precedential decision of this court. What he more realistically relied upon is the explicit bold face language of the lower left hand corner of the bill which limited the carrier's liability to $500 “with respect to entire contents of each container.” This is specific and unambiguous and would be controlling over the small print boiler plate of the bill. Pannell v. United States Lines, 263 F.2d 497 (2d Cir.), cert. denied, 359 U.S. 1013 , 79 S.Ct. 1151 , 3 L.Ed.2d 1037 (1959).

We think J. Aron v. The Askvin, 267 F.2d 276 (2d Cir. 1959) should control here. There the bill of lading, as in this ease, incorporated COGSA and. also contained a specific statute of limitations that was more restrictive than the COGSA provision. The issue was which limitation provision would apply to a shipper’s claim for a loss of cargo which occurred after discharge and before delivery. This court found that the specific language of the bill controlled the general language of COGSA and that the limitation was valid under the applicable Harter Act. In that case the shipper had no alternative but to adhere to the specific language of the limitation. In the present case the shipper at least had the option of declaring a higher valuation and paying more freight. This he deliberately failed to do and I am not conscious of any unfairness in limiting his recovery. In J. Aron this court totally barred the recovery.

The fact J. Aron was not cited to the court in David Crystal is interesting but not significant. If this court were limited in its decision to cases and authorities cited to us, the landmark opinion of Chief Judge Friendly in this case would never have been written.