Petition for Writ of Certiorari — S/S Salvador v. Berisford Metals Corp.

Supreme Court brief1986

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Text

No.

IN THE * ad

Supreme Court of the United States

OCTOBER TERM, 1985

S/S SALVADOR, her engines, boilers, etc.,

and A/S Ivarans Rederi,

Petitioners,

—against—

BERISFORD METALS CORPORATION,

Respondent.

PETITION FOR A WRIT OF CERTIORARI

TO THE UNITED STATES COURT OF APPEALS

FOR THE SECOND CIRCUIT

CHESTER D. HOOPER

Counsel of Record

HAIGHT, GARDNER, POOR & HAVENS

1 State Street Plaza

New York, New York 10004

(212) 344-6800

Of Counsel:

CHARLES L. BLACK, JR.

216 Bishop Street

New Haven, Connecticut 06511

QUESTIONS PRESENTED

Whether the Court of Appeals, in setting aside § 1304(5) of

the United States Carriage of Goods by Sea Act, 46 U.S.C.

$ 1300 et seq., and thus in holding inapplicable that Section’s

$500 per package limit of carrier’s liability in the case of

issuance Of an erroneous on-board bill of iading, has given

proper interpretation and effect to an Act whose language

implements, virtually verbatim, an international convention to

which, with many other maritime nations, the United States is

a party?

Whether the Court of Appeals erred by depriving a carrier of

its package limitation because the carrier inadvertently issued

an erroneous on-board bill of lading?

TABLE OF CONTENTS

PAC I

OO OE 2 eS oS l

Oo oe DBR 8) Bt | i\

| |

en eS cigs t wlec sek baw AE CA 2

TREATIES AND STATUTES INVOLVED............ 2

mueeememres Ge Bett: CASE... ... ok cick ci decane 2

tet ee 3

I. The Court Below Erred in Denying Effect to the

Monetary Limitation on Damages Set by a Statute

That Implements Verbatim an_ International

ee Oi koe ag cults « Axa ve xk 3

Il. There are in this Case, and in Others Like It, No

Extraordinary Equities That Might Override the

Foregoing International Considerations ......... 12

SUR I en 12

SS ee 14

Il. The Opinion Below Will Seriously Harm the

United States’ Ability to Develop an Efficient

Multimedal Transportation System and Will Place

Carriers Calling at United States Ports at a Com-

en 16

eS ssn yy vk Cake ls aah aees 24

PAGE

APPENDIX

Opinions and Judgments Below

Court of Appeals opinion of December 16, 1985 la

District Court opinion of April 19, 1985........ 1¥a

Court of Appeals Order of January 27, 1986.... 0 24a

Treaties and Statutes Involved

International Convention For the Unification ot

Certain Rules Relating to (Ocean) Bills of Lading 26a

Carriage of Goods By Sea Act

TABLE OF AUTHORITIES

Cases: PAGE

Adams Express Co. v. Croninger, 226 U.S. 491, 33 S.Ct.

Sy Fhe SUR P MRED 5 oss Ree OO een 23

American Trucking ve. A.T. & SFR. Co., 387 U.S. 397

(AMIN SN 55 hein Heese a eae ee eee ee 19

American Trust Co. v. Smyth, 347 F.2d 249 (9th Cir.

BI URN noes at greeter eae ate ete tenn ee eres 4

Amiable Isabella, 19 U.S. 1, 32-33 (1821) ............ 4

Archison, Topeka & Sante Fe Ry. v. Harold, 241 U.S.

S71, 36 3.42, G65, @ L.Ed. 1050 (4996) ..3 22 coo das. 23

Atlantic Mutual Insurance Co. v. Poseidon Schiffahrt,

1963 A.M.C. 665, 313 F.2d 872 (7th Cir. 1963)...... 1]

B.M.A. Industries, Ltd. v. Nigerian Star Line, Ltd...

Docket Nos. 85-7864, slip op. 2259 (2d Cir. March 19,

POE aS a yee SeGh ae ie ee ee 11, 15, 16, 22

Baby Togs Inc. v. S.S. AMERICAN WING, 1975

A.M . SOE CK POTS os os een eee

Berisford Metais Corp. v. S/S Salvador, 779 F.2d 841,

Appendix at la (2d Cir. 1985)........... oS ty ey ee

C.A. Articulos Nacionales de Goma v. M/VARAGUA,

TSO Fae TSG (ke Cie: PSY oS ee eee 13

Conoco, Inc. v. Andrews Van Lines, Inc., 526 F. Supp.

fae (WD. ORE. 8960)) ..3...3 di tee eee eee 2

Drew Brown, Ltd. v. Orient Trader, [1972] 1 L.R. 35

(Can. Ex.), aff'd, [1973] 2 L.R. 174 (Can. Sup. Ct.) . 1]

Encyclopedia Brittanica v. Hong Kone Producer, 422

F.2d 7 (2d Cit. 19). cnt eee eee WH

PAGE

Hanseatisches OLG Hamburg, 230/56 (July 1, 1958),

Monatasschritt tur Deutsches Recht 923 (1988). 2.2... Q

Iligan Integrated Steel Mills, Inc. v. S.S. John Weyer-

nausel, S07 F.2d GE TEE CR. TF7E) . icc cu vnbstaveers 14,15

Insurance Co. of North America v. S’S AMERICAN

ARGOSY, 132 F.20 ae (20 Ci WR cas cceccacaws 13, 14

Internat. Paper Co. v. Malaysia Oversea Lines, 1976

A.MLC. 243 G6.0N YY ISS cs caveats 15

Jones v. The Fivinge Clipper, 116 F. Supp. 386 (S.D.N-Y.

Dt) ee ee re ee ee er ee ee ee

Krupp International Inc, v. Federal Atlantic Lake Lines,

1982 A.M.C. 1799 (E.D. Mich. 1981)............5:. il

Madow vy. Liberty Exporter, 5€9 F.2d 1183 (2d Cir. 1978) 18

New York, New Haven & Hartford R.R. Co. v.

Nothnagle, 346 U.S. 128, 73 S.Ct. 986, 97 L.Ed. 1500

+} ) ee aee waren ee were worn ry rs Srey irr. 23

Olivier Straw Goods Corporation v. Osaka Shoshen

Kaisha, 47 F.2d 878 (2d Cir. 1931), cert. denied, 283

OS. BOG (USSU so oss vn ncinndes cnn ss een eaae 10, 11

Parnass International Trade & Oil v. Sea-Land Service,

595 ©. Supp. 133 (SN. PSG ss sos csack week 18

Portland Fish Co, v. States Steamship Co., 510 F.2d 628

(DOR Cee, USER) occas cediens ce naneeuess4cae eee

Pyrene Co., Ltd. v. Scindia Steam Navigation Co., Lid.,

[USSG] t LACHES ER. SZ4, SIGs vo Wks cscaxacwes 9

Rocky Ford Moving Vans, Inc. v. United States, 501

Poe 1509 (0th Cit. 1978)... 0s ccna sacs 053400 eee

Southern Ry. v. Prescott, 240 U.S. 632, 36 S.Ct. 469, 60

RAG. BI CUS UG) occ kun snnwasc peas eka arama 23

Southwestern Sugar & Molasses Co., Inc. v. River Ter-

minals Corp., 360 U.S. 411, 79 S.Ct. 1210, 3 L.Ed.2d

Se Ce 6 i Saeed ie ee caea as

Spanish-American Skin Company vy. Ferngulf, 1956

A.M.C. 2238, 143 F. Supp. 345 (S.D.N.Y. 1956),

aff'd, 1957 A.M.C. 611, 242 F.2d 551 (2d Cir. 1957) .

Spartus Corp. v. S/S Yafo, 1979 A.M.C, 2294, 590 F.2d

SSS Ga ROUEN rca keke tuba thes eeteseeeeaae

Strickland Transportation Co. v. United States, 334 F.2d

eek 2S Pere pe rere rrr et Pree ee

United States v. Pennsyivania R. Co., 323 U.S. 612

PAGE

fo Perr rr sete rene yy ry er epee re 19

Treaties:

International Convention for the Unification of Certain

Rules Relating to (Ocean) Bills of Lading (The Hague

Rules), June 29, 1937, 51 Stat. 233, T.S. 931, 120

RitG, Geeks. Ms Big WNh 505s ethan seewiewese Weaaneae 2,3

Statutes:

y EER ae P| reer Terres Tr ey ere 2

Sa. Ue UE ck GAARA SAR ROMER SKERUCOA NE RARE ONS 2

Be Bi DS BOSE SHS KA RSA WER CSEAD NARS SNS UNE RRO 2

Wes ocd We sie ChSCU Rehnaa kee 6, 10

i EF FN Reva aang Gh ry-ctgeninn Afurer anata we

Ss cas SE oak Reo Genes CA ened kee kaiks 7,9

OD Utes OPE Ch kak cha aR caw un caucees ite as Vee

OE UTS UE 5 kaa eck s ewe coven ce uhaeaecis 23

Statute No. 66-420 of June 18, 1966 (France) ......... 12

Vil

Other Authorities:

Chauveau, 7raite de droit maritime (Paris 1958)

DeBaer, The Stack Car Revolution, Vol. 205, No. 11.

Trattic World 54 (Mar. 17, 1986)

Down and Wise, The Intermodal Challenge, Vol. 205,

No. 11, Traffic World 30 (Mar. 17, 1986)

hield, Landbridge Versus All- Water Struggle Debated at

Seatrade Intermodal Panel, Vol. 204, No. 13. Traffic

World 19 (Dec. 23, 1985)

eS She GAD? OED RE OE 6 OS SOE OS

Gilmore and Black, The Law of Admiralty, (2d ed. 1978)

International Chamber of Commerce. The Development

of International Container Transport: Its Application

in’ Developing Countries 6-7 (Intl. Chamber Com-

merce 1977)

Pe ee eS Oe iy Se Oe ee. Oe eee ee ek ee eo ok

Mahoney, /ntermodal Goal; Trim Time and Cost at

Point of Interchange, Vol. 208, No. 11, Traffic World

57 (Mar. 17, 1986)

AES ES SOTA EONS 2 eS OE Oe 6 ee ae ef

Munday, The Uniform Interpretation of International

Conventions, 27 International and Comparative Law

Quarterly 450 (1978)

PS SSS SS See, Oe ee ee ON 6. oe ee SS a oe

Note, Containerization and Intermodal. Service in Ocean

Shipping, 21 Stan. L. Rev. 1077 (1969).............

Schaps-Abraham, Das Seerecht in der Bundesrepublik

Deutschland (4th ed. 1978)

TR OSS .e ae eee eS aA eS ee eee Se eS

Selvig, Unit Limitation of Carrier’s Liability: The Hague

Rules Art. [V(5}, § Archiv for Sjorett 106

Tetley, Marine Cargo Claims (2d ed. 1978)

PAGI

IN THI

Supreme Court of the ilnited States

OcTOBER TERM, 1985S

No.

S/S SALVADOR, her engines, boilers, ete.,

and A/S Ivarans Rederi,

Petitioners,

—against—-

BERISFORD METALS CORPORATION,

Respondent.

PETITION FOR A WRITE OF CERTIORARI

TO THE UNEPED STATES COURT OF APPEALS

FOR THRE SECOND CIRCUIT

OPINION BELOW

The opinion of the United States District Court for the

Southern District is not reported officially but is unofficially

reported at 1986 A.M.C. 99. It is reproduced at page 19a otf

the Appendix. The Second Circuit opinion is reported at 779

F.2d 841, and is reproduced at page la of the Appendix. The

denial of detendants’ petition for rehearing dated January 27,

1986 is not reported, but is reproduced at page 24a of the

Appendix.

JURISDICTION

The Second Circuit opinion, of which review is sought, was

decided and entered on December 16, 1985. Defendants’ peti-

tion for rehearing was denied on January 27, 1986. This

petition was filed within ninety days of that date, and this

court’s jurisdiction is invoked under 28 U.S.C. § 1254(1).

The federal courts below had jurisdiction of this admiralty

cause under 28 U.S.C. §§ 1333 and 1291.

TREATIES AND STATUTES INVOLVED

This case involves the ‘‘International Convention for the

Unification of Certain Rules Relating to (Ocean) Bills of

Lading (The Hague Ruies),’’ June 29, 1937, 51 Stat. 233, T.S.

931, 120 L.N.T.S., reprinted at page 26a of the Appendix, and

the United States statute which implements this convention,

the Carriage of Goods by Sea Act, 46 U.S.C. § 1300 ef seq.

(1936), reprinted at page 37a of the Appendix.

STATEMENT OF THE CASE

Defendants’ agent in Santos, Brazil received 100 bundles of

tin ingots for carriage to the Port of New York. Defendants’

agent loaded the bundles of tin ingots into four ocean con-

tainers as permitted by the bill of lading, and locked and sealed

the containers. Defendants’ agent transported the containers,

which behaved as if they were loaded, not empty, to a Brazilian

government controlled storage yard located near the loading

dock. The government storage yard issued weight receipts

which indicated that the correct cargo was in the containers.

Approximately 24 hours after delivery to the government yard,

the containers were loaded on board the vessel SALVADOR,

and defendants’ agent issued an on board bill of lading. When

the vessel discharged the containers in New York, two of the

four containers were found to be empty. Seventy bundles were

missing and were probably removed from the containers while

the loaded, locked and sealed containers were stored tor 24

hours in the government storage yard.

The district court awarded summary judgment to plaintiff,

but limited defendants’ liability to $500 per package, or

$35,000, pursuant to the United States Carriage of Goods by

Sea Act (“COGSA”), 46 U.S.C. § 1304(S). The Court of

Appeals for the Second Circuit reversed the district court on

the limitation issue, and remanded for entry of unlimited

damages, $483,214.90.

Petitioners do not contest the liability issue on this appeal;

they raise the limitation issue only.

1. THE COURT BELOW ERRED IN DENYING EFFECT

TO THE MONETARY LIMITATION ON DAMAGES

SET BY A STATUTE (The Carriage of Goods by Sea

Act)’ THAT IMPLEMENTS VERBATIM AN_ IN-

TERNATIONAL AGREEMENT.

All the defects of the judgment below stem from one radical

error: The Court of Appeals failed to give effect to the plain

meaning of treaty” language (repeated verbatim in “COGSA”)

that fixed a monetary limit per package on carriers’ liability.

Where many nations, with many differing legal concepts and

methods, seek world-wide uniformity in some part of law, by

and only by agreeing on a fext, then faithful adherence by

national courts to the plain meaning of that text is the only

way to approximate this desired uniformity.’ Displacement of

I 46 U.S.C §§ 1300, et seq., hereinafter “*COGSA.”’

‘“‘Treaty’’ herein refers generically to all international compacts. The

treaty underlying COGSA is called the **International Convention For

The Unification of Certain Rules of Law Relating to (Ocean) Bills of

Lading’’ (Emphasis supplied). The United States ratified this 1924

Convention on June 29, 1937.

3 The circuit courts of the United States have not even agreed on the

meaning of COGSA. For a discussion of inter-circuit conflict, see page

such textual language (as here) by forum-devised doctrines

practically contradictory to the agreed text—doctrines devised

for dealing with domestic law only, as to which no purpose of

international uniformity exists—puts at high risk the uniform-

ity sought by the signatories. These considerations ought to

generate a principle of construction: Where the words of

COGSA, in themselves, have an intelligible meaning, the rule

stated by that meaning should be adhered to.

This Court has laid down a general rule of treaty construc-

tion:

This court is bound to give effect to the stipulation of

the treaty, in the manner and to the extent which the

parties have declared and not otherwise. We are not at

liberty to dispense with any of the conditions or require-

ments of the treaty, or to take away any qualification or

integral part of any stipulation upon any notion of equity

or general convenience or substantial justice.

Amiable Isabella, 19 U.S. 1, 32-33 (1821).

Similarly, the Ninth Circuit has stated:

We are constrained to look within the four corners of

the Treaty keeping in mind the purpose of the contracting

parties. Any resort to domestic law must be derived from

the express terms of the Treaty itself.

American Trust Co. v. Smyth, 347 F.2d 249, 153 (9th Cir.

1957).

These and many similar expressions apply with fullest

strength to treaty language that is to become part of the private

law of the signatory countries; the desired uniformity of

expectation and of result as to certain private-law matters

cannot be had when the treaty language is displaced or disre-

garded.

11, wifra. In tact, as of March 19, 1986, there appears to be a conflict

within the Second Circuit Court of Appeals with reference to unrea-

sonable deviation. See infra at 15-16.

‘nn

In a thorough article, R.J.C. Munday, 7he Uniform In-

terpretation of International Conventions, 27 International

and Comparative Law Quarterly 450 (1978), the author con-

cludes:

The more closely courts adhere to the ordinary and

natural meaning of the words of the agreed text, the less

opportunity there will be for wide divergences in their

construction at home and abroad.

Id. at 458.

The present case concerns nothing but a typical contract for

the carriage of goods. COGSA provides:

Neither the carrier nor the ship shall in anv event be or

become liable for any loss or damage to or in connection

with the transportation of goods in an amount exceeding

$500 per package lawful money of the United States, or in

case of goods not shipped in packages, per customary

freight unit, or the equivalent of that sum in other

currency, unless the nature and value of such goods have

been declared by the shipper before shipment and inserted

in the bill of lading.

46 U.S.C. § 1304(5) (emphasis supplied).

In the face of this language, sweeping and clear, the court

below has treated COGSA § 1304(5) as “ousted”. and ordered

a judgment for some fifieen times the package limitation.

This paradoxica!l decision caps a long development having

two related aspects: Firsi, literal geographical “deviation” was

held to “oust” limitation of liability. Secondly, various faults of

the carrier were held to be so similar to literal “deviation” that

this effect of “deviation” should be attached to them, whether

under the name of “quasi-deviation” or under some other

name of identical effea. Both these developments were of

dubious rightness before COGSA. Each of them is wrong

under COGSA. Neither of them has been approved by this

Court since COGSA came into force in 1936.

Earlier cases, before or under the Harter Act, 46 U.S.C.

S§ 190-196, and thus before COGSA, held that “deviation” —

literal geographical departure from the contracted voyage—

“ousted” the contract of carriage, including any contracted-for

limitation of recoverable amount. It was sometimes said that

the deviating carrier became an “insurer” of the cargo. By

1936, when COGSA superseded the Harter Act in foreign

trade, a treaty and statute, not just a private contract, limited

the recoverable amount “in any event.” The pre-COGSA

deviation rule, even as to literal geographic deviation, was

probably not justifiable anymore, because its only reasonable

support was the fact that, in earlier times, cargo lost its own

insurance when the ship deviated from the contracted voyage.

With the coming of “held-covered” clauses in cargo insurance

policies, this result no longer ensued on deviation.” However

that may be, this problem should have been treated as very

different under COGSA, with its internationally agreed-on text

fixing all the principal liabilities of ship and cargo.

Yet, especially in the Second Circuit, the imperatives of

construing and honoring such a text were not realized. An

early COGSA case, Jones v. The Flying Clipper, 116 F. Supp.

386 (S.D.N.Y. 1953), though a district court decision, has been

most influential. The court there held that deviation was to

have the same drastic effect as before COGSA, on the ground

that the language of COGSA was not clear or emphatic enough

to lead to the conclusion that “Congress” had “intended” to

change that law. But that was not only the wrong answer; it

was an answer to the wrong question. It must be wrong to ask

whether a text, meant to produce uniformity of outcome in the

courts of Japan, Argentina, Sweden, and the United States,

4 It is extremely ironic that a rule concerning rea/ deviation, a rule that

In its own narrow terms has thus had its rational foundation eroded by

expanded cargo insurance coverage, should form the basis for analogic

reasoning that creates an open class of “quasi-deviational” faults that

“oust”, not the “contract” now, but a statute and its underlying treaty;

yet that is what has happened, in this case and in those immediately

ancestral to it. See ifra, p. 11.

sufficiently evidences an “intent” of the American Congress to

change some feature of the prior United States law. The

question should rather have been, and should still be, “What is

the most natural way (without any presumptions favoring

antecedent peculiarities of the legal system either of the United

States or of any other country) to take this treaty language,

addressed as it is to a// courts in the maritime world?” Yet

Jones v. The Flying Clipper is still of power in the Second

Circuit;> it is cited twice, in very important places, in the

opinion in this very case. Berisford Metals Corp. v. S/S

Salvador, 779 F.2d 841, 847, 848, Appendix la, 15a, 17a (2d

Cir. 1985).

But if one freshly approaches COGSA, holding in mind the

international origin and goal of its text, how can one conclude

that COGSA leaves standing a rule that the package limitation

is lost by deviation? The language of § 1304(5), quoted supra,

must have been written with the very thought in mind of

answering negatively all such questions as this. Section 1304(5)

declares the $500 package limitation applicable “in any evel,”

and goes beyond literal “loss or damage” fo the goods, to

sweep in, by a more general phrase, “loss or damage . . . in

connection with the transportation of the goods”. There is no

way that the facts of the present case can be seen as outside the

coverage of that phrase. The shipper is given a clear chance of

providing for a greater recovery, by deciaring the value of the

goods before their delivery to the carrier, and by insertion of

this value in the bill of lading—with the consequence that a

higher freight will probably have to be paid. Tellingly, COGSA

§ 1304(5), which lays out the per-package limitation, immedt-

ately follows § 1304(4), which defines and deals with the

substance of deviation; how could this collocation have oc-

curred, and been read over time and again in the drafting

process, if the words “in any event”, § 1304(5) supra, were

thougnt not to apply “in the event” of deviation?

5 it was tollowed substantially in Encyclopedia Brittanica v. Hone

Kong Producer, 422 '.2d 7, 18 (2d Cir. 1969). As to conflict among

Circuits, see discussion at p. 11-12, vfra.

Blending with and supplementing the theory that literal

geographic deviation “ousts” the exceptions and the monetary

limitation normally applicable, there has gradually been con-

firmed and expanded (not without hesitations) a doctrine at

odds with obvious etymology, and with not much support

besides ingenious use of metaphor, that says that certain kinds

of carrier misconduct are so “fundamental” as to amount to

“deviation”, or to something enough like deviation to be given

the drastic effect of real deviation—that is to say, “ouster” of

the contract, or even, as in this case, of a statute and of a

treaty. It is handy to call this doctrine “quasi-deviation” (a

term that figures several times in the opinion of the court

below in this case}. But what is essential is that, whether this

not-really-deviational conduct is called “deviation”, or “quasi-

deviation”, or “fundamental breach”, or even whether a new

terminology of “warranty” is adopted, as in the opinion below

in this case,” it is all one thing: Certain conduct is picked out as

so serious a breach of carrier’s obligation as to “oust” not just

a contract anymore, but, under COGSA, a statute as well, and

with it a treaty. That is a lot of “ouster”.

This doctrine (or set of identically operative doctrines) ori-

ginated in connection with on-deck stowage of cargo, and has

radiated out from this center, as in this case. lt was not and is

not obvious that deck stowage (or any later-devised “quasi-de-

viations”), should be separated trom all other faults tor espe-

clally drastic treatment. Some of the principal maritime

nations do not have such a doctrine. But at all events the

picture should have changed under COGSA; the new position

should have been seen as ruled by COGSAY’s text naturally

interpreted, rather than by addressing that text with the ques-

tion whether it showed with strongest clarity the “intent” of

the American Congress to change the earlier American law.

COGSA, so naturally interpreted, allows no room tor equating

one or more nondeviating actions—deck stowage or anything

6 The court below recognizes the possibility of these terminological

Variations, treating them as what they are—merely different ways of

saving the same thing. 779 F.2d at 846, Appendix at 20a.

else—with deviation itself. COGSA covers deviation in these

words:

Any deviation in saving or attempting to save life or

property at sea, or any reasonabie deviation shall not be

deemed to be an infringement or breach of this Chapter

or of the contract of carriage, and the carrier shall not be

liable for any loss or damage resulting therefrom: pro-

vided however, that it the deviation is for the purpose of

loading or unloading cargo or passengers it shall, be

regarded as unreasonable. ]

46 U.S.C. § 1304(4)

This section seems to be referring to geographical “devia-

tion”; it is hard to imagine deck stowage (for example) as being

instrumental to saving life or property, or to loading or

unloading cargo or passengers; it is obvious that real deviation

was at the focus. If draftsmen had wanted radically to extend

the scope of “deviation”, this would have been the’point at

which to say so. This very silence of COGSA is strongly

persuasive; it is to the last degree unlikely that so symmetrical

and carefully wrought a consolidation of goods-carriage law

would not have spelled out so drastic a rule as the one applied

in this and similar cases, if the draftsmen had intended that

such a doctrine was to play a part in the COGSA regime. Of

Very significantly, the “official” text, in French, underlying COGSA,

has “deroutement” for “deviation.” No wonder France seems to have

no doctrine of “quasi-deviation”. This official text is available for

resolving any ambiguities. See Pvrene Co., Lid. v. Scindia Steam

Navigation Co., Ltd., [1954] 1 Lloyd’s L.R. 321, 330. Under the

German law, it appears that the liability of the carrier is strictly limited

in cases of unjustifiable deviation or any breach of contract, and even

of gross negligence, to a fixed sum per package (approximately the

equivalent of $800). Prussman-Rabe, Seehandelsrecht $$ 636a and 660

(2d ed. 1983); Schaps-Abraham, Das Seerecht in der Bundesrepublik

Deutschiand § 636a, No. 10 (4th ed. 1978); Hanseatisches OLG Ham-

burg, 230/56 (July 1, 1958), Monatasschrift fur Deutsches Recht 923

(1958). It is to be noted that the German rule makes it unimportant

whether a doctrine of quasi-deviation, or its equivalent, exists, since

the package limitation applies anyway.

these “quasi-deviational” holdings (the present case, in all

effect, being one), a modern treatise says, “It would seem

unwise to extend analogically and by way of metaphor a

doctrine of doubtful justice under modern conditions, of

questionable status under COGSA, and of highly penal ef-

fect.” Gilmore and Black, The Law of Admiralty, § 3-42, p.

183 (2d ed. 1975).

As to the “ousting” of the COGSA monetary limitation,

either by real “deviation” or by “quasi-deviation”, or by an

absolutely equivalent doctrine under another name, one must

spotlight a specific radical contrast between the earlier Harter

Act and COGSA. The Harter Act contained no monetary

limitation; no siatute, not even a domestic statute, was being

“ousted” when the contractual monetary limit was set aside.

Thus the peculiar concept of the “ouster” of a statute (and

therewith of a treaty) played no part while the Harter Act

governed. One might approve (under the law of the United

States only) of the breaking, on certain happenings, of a

limitation the carrier had devised and imposed in a contract of

adhesion, without coming near to agreeing that a limit imposed

by statutory law, obedient to a treaty, could be similarly

“ousted”. See Gilmore and Black, § 3-41, p. 180 (2d ed. 1975).

It is thus precisely symptomatic of the root trouble in this

case that the court below relied heavily, even centrally, on its

own 1931 decision in Olivier Straw Goods Corporation vy.

Osaka Shoshen Kaisha, 47 F.2d 878 (2d Cir. 1931), cert.

denied, 283 U.S. 856 (1931), calling that case “remarkably

similar to the present one”, Berisford Metals, 779 F.2d at 845,

Appendix at !0a. In truth, that case was markedly dissimilar to

this, even on its own facts and equities; when the carrier’s

people, in Olivier, issued an on-board bill of lading, the ship

had not even arrived in the named port of loading. This fact

was plainly known to the carrier as a corporation, and to its

people in the port who issued the false bill. Olivier, then, had

to do with a fully knowing misrepresentation; our case involves

nothing but an unfortunate error. The difference between the

two cases is the difference between a lie and a mistake.

But the far more tundamental difference, with wide implica-

tions that mark this case as one this Court should consider, is

that Olivier was decided (whether correctly or not) in the time

of the Harter Act, five years before COGSA, implementing a

treaty, took effect. No international uniformity problem was

involved. The very fact that the court below could, with no

visible difficulty, cite Olivier as governing this case, both as to

law and as to policy, 779 F.2d at 846, Appendix at 13a, shows

that the international uniformity problem is not even being

Saced. This lack marks this case not simply as one erroneously

interpreting the Carriage of Goods by Sea Act, but as a

decision based on the most fundamental error as to the proper

mode of interpreting a multinational agreement fixing private

commercial law. There cannot be a more suitable occasion for

the grant of the writ prayed for herein.

This would be true even if there were no inter-circuit con-

flict. But there is sharp conflict with a Seventh Circuit holding,

in Atlantic Mutual Insurance Co. v. Poseidon Schiffakrt, 1963

A.M.C. 668, 313 F.2d 872 (7th Cir. 1963), that even real

“deviation” does not wipe out the COGSA § 1304(5) $500

limitation. This holding has been approved and followed in a

district court in at least one other Circuit, Arupp International

Inc. v. Federal Atlantic Lake Lines, 1982 A.M.C. 1799 (E.D.

Mich. 1981) (not officially reported), and has even been fol-

lowed by a Canadian court in search of United States law.

Drew Brown, Ltd. v. Orient Trader, [1972] 1 Lloyd’s L.R. 35

(Can. Ex.), aff'd, [1973] 2 Lloyd’s L.R. 174 (Can.). The

Second Circuit Court of Appeals has, of course, held

otherwise, Hong Kong Producer, 422 F.2d 7 (2d Cir. 1969), but

cf. B.M.A. Industries. Ltd. v. Nigerian Star Line, Lid., Nos.

85-7684, 7922, slip op. at 2259, 2264 (2d Cir. March 19, 1986),

as has the Fifth Circuit, Spartus Corp. v. S/S Yafo, 590 F.2d

1310 (Sth Cir. 1979). This conflict is on a matter of great

concern both to ship and to cargo interests, especially in

foreign trade, as to which even inter-circuit, and intra-circuit,

uniformity is vital.

If. THERE ARE IN THIS CASE, AND IN OTHERS LIKE

IT, NO EXTRAORDINARY EQUITIES THAT MIGHT

OVERRIDE THE FOREGOING INTERNATIONAL

CONSIDERATIONS.

Petitioner concedes that the rule of construction it has put

forward, as proper for interpreting internationally negotiated

texts of multinational application, might have to yield to a

showing of actual gross fraud, or of other conduct so shocking

as to create equities that would be determinative in the courts

of all civilized countries.” But nothing of that sort is implicated

in this case,

Reliance

The Court of Appeals bases its judgment on the equity of

reliance. But “reliance” here cuts both ways. Petitioner agrees

with the statement by the Court of Appeals, 779 F.2d 841, 845,

Appendix at Ya-10a, that the negotiable bill of lading is a

“fundamental and vital pillar of international trade and com-

merce. . .”, that the bill “. . . has become so universal and

necessary a factor in mercantile credits that the law should

make good what the bill of lading holds out”, and that “the

goods are locked up in the bill.” But the bill of lading in this

case quite surely “held out” that $500 per package was to be

the measure of the carrier’s liability. The goods were “locked

up” in a bill that readably recited this limit as its most

8 For instance, under Section 28 of the French “Law Concerning

Contracts of Attreightment and Maritime Carriage”, which imple-

ments the treaty here, see p. 3, n.1, supra, and is the French equivalent

of the United States COGSA, the package limitation is available to the

carrier Where the shipper has not declared a higher value except in the

case Of carrier traud or dol. Statute No. 66-420 of June 1&8, 1966. See

Tetley, Marine Cargo Claims, 360, 603-610 (2d ed. 1978); Chauveau,

Traite de droit maritime, § 813 (Paris 1988). Protessor Erling Selvig of

the Institute of Maritime Law, University of Oslo, explained that the

Scandinavian countries will disregard the package limitation “. . . in

cases of infentional misconduct by the carrier himself.” Selvig, Unit

Limitation of Carrier’s Liability: The Hague Rules Art. IV(S), §

Archiv tor Sjorett 106, 137 (emphasis supplied).

important term—the most important, to both parties, by a

factor of about 15 to one (see supra, pp. 2-3). The breaking of

that limitation, in a few odd cases, can in no way contribute to

“confidence” in the bill.

On the other side, there is the solid point that “confidence”

is aS Important to carrier as it is to shipper. A quite recent Fifth

Circuit case explains why:

This position [that the concept of quasi-deviation

should not be expanded to encompass unexplained non-

delivery] also appears most reasonable as a matter of

business practice. Section 4(5) of COGSA gives the ship-

per two options: to declare the full value of the cargo,

obtaining full coverage from the carrier at the cost of

higher rates, or to obtain lower rates by leaving the value

undeclared and self-insuring for any value above $500.

The shipper obviously has the best knowledge of the value

of the cargo, and is in the best position to determine

which of the two options would be most efficient from an

economic standpoint. /n addition, the section 4(5) limita-

tion serves an important function in allowing the carrier

to evaluate his potential liability and make proper provi-

sion. See Insurance Co. of North America vy. S/S

AMERICAN ARGOSY, 732 F.2d 299, 304 (2d Cir. 1984).

We are reluctant to tamper with this function without

some compelling reason.

C.A. Articulos Nacionales de Goma v. M/V ARAGUA, 756

F.2d 1156, 1161 (Sth Cir. 1985) (emphasis supplied).

The holding in the present case even cuts athwart the Second

Circuit’s own words in S/S AMERICAN ARGOSY, uttered in

1984, and cited supra in the Fifth Circuit opinion:

The district court’s decision’ would also threaten the

role of the bill of lading as an effective means for carriers

Y That the vessel was liable wr rem tor cargo damage under an

unauthorized bill of lading issued by a Non-Vessel Operating Common

Carrier, under the theory that the vessel ratitied the bill of lading by

sailing with the cargo on board.

to limit their liability. Under the Carriage of Goods by Sea

Act, 46 U.S.C. § 1304(5), the carrier’s liability is limited

to $500 per package “unless the nature and value of such

goods have been declared by the shipper before shipment

and inserted in the bill of lading.” Moreover, the bill of

lading consiitutes prima facie evidence of a cargo’s value,

thereby preserving the carrier’s ability to appraise its

potential liability and to obtain insurance.

732 F.2d 299, 304 (2d Cir. 1984) (emphasis supplied).

It is simply mysterious that these considerations (so recently

formulated by itself) did not move the same Court of Appeals

in Our case to protect the very reliance interest so clearly

discerned.

It is the consignee, not the carrier, who is here seeking escape

from the consequences of the shipper’s actual choice—statu-

tory limit and minimum freight. One might ask why this choice

has not estopped the shipper, and his successor in interest,

from claiming a higher value than the statutory value, the

shipper’s choice for which was clearly the inducement for the

low freight.

Disproportionality

There is no equity, but rather gross disproportionality, in

treating the SALVADOR’s fault—erroneous issuance of a

shipped bill of lading—in so drastic, even penal, a manner as is

done in this case. The Second Circuit Court of Appeals has

held that very gross negligence as to Jurnishing an obviously

unseaworthy ship is no basis for breaching the $500 limit.

Iligan Integrated Steel Mills, Inc. y. S.S. John Weverhauser,

507 F.2d 68 (2d Cir. 1974). Yet the effect of such negligence can

be, and often is, the total or near-total loss of cargo—and the

fault is at least as flagrant as in this case. Negligent nonde-

livery, misdelivery and short delivery are exactly similar in

effect to the facts in this case. The goods are just not there. Yet

the Second Circuit Court has turned aw ay the attempt to break

‘”

the $500 limit in such cases. It seems that even an intentional

misdelivery of goods, /mternat. Paper Co. v. Malaysia Oversea

Lines, 1976 A.M.C. 143, 144-145 (S.D.N.Y. 1975) (not offi-

cially reported) or damage from a fire wherein the owner 1s

held liable, The Edmund Fanning, 291 F.2d 281 (2d Cir. 1953),

would be limitable to $500. (And see B.M.A. Industries, slip

op. decided March 1986, infra at pp. 15-16, refusing to break

the $500 limit in a case of possibly criminal misdelivery.)

Why should the breach of duty in this case be more like

“deviation” (or more suitable tor the discernment of a “war-

ranty” that is just another name for the same thing) than

another breach that has the same or even a worse effect, and is

equally a fault?

Certain language in the 1974 //igan opinion must be pon-

dered:

We think the principle of “quasi-deviation” is not one

to be extended. As previously noted even the holding that

a deviation in the geographical sense voids limitations on

the carrier’s liability seems inconsistent with the language

ot COGSA.

lligan, 507 F.2d at 72.

In 1974, the Second Circuit Court thus set its face against

further extension of the “principle” of “quasi-deviation”. But

the present case is nothing but such an extension, with, at

most, a change of name. The //igan opinion, moreover, says

that even the voiding of the limitation by real deviation (on

which has been erected the whole superstructure of “quasi-de-

viation” and its equivalents) “seems inconsistent: with the

language of COGSA.” Indeed it does.

Puzzlement deepens when one notes that on March 19, 1986,

the Second Circuit held that misdelivery of an entire cargo, in

violation of directions in the bill of lading, and even if

procured by bribery, was compensabie by the carrier only up to

the COGSA $500 limit per package. B.M.A. Industries, Ltd. v.

Nigerian Star Line, Litd., Nos. 85-7864, 7922, slip op. at 2259,

2264 (2d Cir. March 19, 1986). Said the court, “The principle

of quasi-deviation is arguably inconsistent with COGSA, and

is ‘not one to be extended’ ” (citing //igan, but not citing the

present case).

From all this it becomes very clear that this subject—nor

having been dealt with by this Court at all under COGSA—

badly needs this Court’s attention.

lil. THE OPINION BELOW WILL SERIOUSLY HARM

THE UNITED STATES’ ABILITY TO DEVELOP AN

EFFICIENT MULTIMODAL TRANSPORTATION SYS-

TEM AND WILL PLACE CARRIERS CALLING AT

UNITED STATES PORTS AT A COMPETITIVE DIS-

ADVANTAGE.

The anomaly created by the Second Circuit’s disproportio-

nate emphasis of the quantity of cargo received over the

condition of cargo received, and over most other aspects of the

bill of lading, will seriously harm the United States’ ability to

develop an efficient multimodal transportation system. It may

very well deprive the United States of advantages other

maritime nations are reaping from the ocean container.

The opinion below states that carriers will be deemed to have

guaranteed receipt of the quantity, but not the condition, of

cargo described in the bill of lading. The opinion indicates that

the guaranty will apply even to cargo received by the carrier in

locked and sealed ocean containers. This ruling will seriously

hamper, if not totally prevent, the United States transportation

industry from taking full advantage of the ocean container and

a multimodal transportation system.

It will require all carriers to discharge, tally and reload ail

containers on receipt, or to install scales on every container

pier in the world to weigh containers immediately before

The ocean container, coupled with double stack railroad

equipment, is just now starting to provide United States

railroads with the opportunity to carry substantial quantities of

ocean cargo." It is doubtful that United States railroads could

take advantage of this cpportunity if they were required to

open and tally the contents of every container they received, or

if they were required to weigh every container before loading it

onto their rail equipment.

. The ocean container also provides United States exporters of

cargo with advantages that will be taken away by the Second

Circuit’s opinion in this case. The ocean container offers the

physical possibility to the manufacturer of a product, far from

any ocean, of loading the product into an ocean container, and

securing it within the container according to the peculiarities of

the product. The manufacturer can lock and seal! the container

to assure that his product will not be touched or tampered with

until it reaches its final destination. '!

IG For discussions of double stack container trains’ use of ocean

containers and the effect of the ocean container and the double stack

container train on multimodal transportation in the United States, see

Field, Landbridge Versus All-Water Struggle Debated at Seatrade

Intermodal Panel, Vol. 204, No. 13, Traffic World, 19 (Dec. 23, 1985);

Down and Wise, The Intermodal Challenge, Vol. 205, No. 11, Traffic

World, 30 (Mar. 17, 1986); DeBaer, The Stack Car Revolution, td. at

54; and Mahoney, /ntermodal Goal; Trim Time and Cost at Point of

Interchange, id. at $7.

1] A study by the International Chamber of Commerce, 7he Develop-

ment of International Container Transport: Its Application in Devel-

oping Countries, 6-7 (Int'l Chamber Commerce 1977), has listed the

following as advantages of the ocean container:

(a) Faster transit time, caused not by faster, more expensive ships,

but by a reduction of in port time by smoothness in handling cargo on

and off ships, which has reduced port congestion and delay.

(bj) Protection of cargo because containers protect cargo against

physical damage and permit shippers to use lighter and cheaper

packaging. Containers also reduce the number of occasions during

which the cargo is handled, thus reducing the chance of damage and

pilferage.

The extra handling encouraged by the opinion below would, ot

course, destroy these advantages. See also Note, Containerization and

Intermodal Service in Ocean Shipping, 21 Stan. L. Rev. 1077 (1969).

According to the opinion below, ocean carriers will, at the

very least, have to install container scales on all container piers

throughout the world and/or will have to break the seal on

each container, open the container, discharge its contents and

tally its contents. Securing peculiar to the product might not be

duplicated after the product is returned to the container, or the

product might be damaged and/or pilfered during the process.

Certainly, the cargo would be delayed. By overemphasizing the

receipt aspect of the bill of lading, its contract aspect is

seriously harmed.

The opinion will also hamper the present relay system, which

promotes efficient transportation. This system allows cargo,

remaining in a locked and sealed container, to be transferred

from ship to ship at various relay points to provide a speedy

and efficient method of transportation. Parnass International

Trade & Oil v. Sea-Land Service, 595 F. Supp. 153 (S.D.N-Y.

1984). If cargo were transferred between carriers at the various

relay points, the Second Circuit opinion in this case, together

with the last “carrier doctrine”'* expressed in Madow vy. Lib-

erty Exporter, 569 F.2d 1183 (2d Cir. 1978), would make each

carrier in the chain a guarantor of the bill of lading quantity

description and would force each carrier in the chain to

discharge and tally each container’s contents or to weigh each

and every container before it was loaded or received by each

and every carrier.

If carriers, realizing the impracticability of the opinion

below, decide to continue business as is for the sake of the

efficiency of the transportation system, and not to empty and

tally or to weigh containers at the various transfer terminals,

the carriers would, of course, assume greater risks. The car-

riers would undoubtedly pay higher insurance rates for the

greater risks and would pass those rates on to cargo interests in

12 The last carrier doctrine places upon the last carrier, in a chain of

successive carriers, liability for damage or loss unless the last carrier

can prove that it was not negligent or that it is protected by one of the

COGSA exceptions from liability. Madow, 569 F.2d at 1185.

the form of higher freight rates, which would, in the final

analysis, be paid by the consumer.

Even if each carrier did tally each and every container’s

contents on receipt, common sense tells us that the carrier’s

insurance rates would not decrease. The greater handling

during emptying and loading containers would increase the risk

of physica! damage, and weighing containers would delay their

transportation and advertise their contents to many people on

the docks, thus inviting theft. The uncertainty left by this

opinion would prevent both the vessels’ and cargoes’ under-

writers from predicting whether the COGSA limitation would

apply. Shippers of cargo would not be able to assure their

underwriters that they would be fortunate enough to deal with

carriers who mistakenly issue on-board bills of lading for cargo

not loaded on board. The resultant uncertainty would proba-

bly raise, not lower, both cargoes’ and vessels’ insurance

premiums.

The problems created by the Second Circuit opinion in this

case surely run counter to the intent of the Interstate Com-

merce Commission cited by this Court: “It is our purpose and

our hope to encourage the growth of this [multimodal] trans-

portation phenomenon.” American Trucking v. A.T. & S.F-R.

Co., 387 U.S. 397, 405 (1967). The problems also run counter

to the “Congressional purpose to foster an efficient and fair

national transportation system.” United States v. Pennsylvania

R. Co., 323 U.S. 612, 616 (1945).

The unfortunate and detrimental effects of this opinion must

have been reached, not with the original purpose of the

doctrine of unreasonable deviation or with ali functions of a

bill of lading in mind. It must have been reached by following

a misguided tangent of reasoning to the tangent’s logical

conclusion. That tangent was based on two unsound founda-

tions, application of a theory referred to as “quasi-deviation”,

“fundamental breach”, or “warranty,” in violation of the plain

meaning of COGSA, and overemphasis of the quantity receipt

aspect of the bill of lading in derogation of its contract aspect.

This overemphasis will hold carriers accountable, without the

benefit of any defense, for quantities of cargoes, described in

bills of lading to be within locked and sealed containers,

although the practicalities of modern, multimodal shipping do

not permit carriers to verify the quantity accurately. The

tallying and weighing required by the opinion below will delay

the delivery of cargo and will increase the risk of damage to the

cargo, thus hampering the carrier’s ability to perform the

contract aspect of the bill of lading. Carriers will, however, be

able to limit their liability if they are grossly negligent or if an

employee criminally misdelivers as long as they have counted

or weighed the cargo properly when each carrier receives the

cargo.

The issue of a carrier’s duty to verify the contents of

containers was first broached in the bulk cargo case, Portland

Fish Co. v. States Steamship Co., 510 F.2d 628 (9th Cir. 1974)

but the tangent did not start with that case. Portland Fish

specifically refused to consider the effect of its ruling on

containers. Portland Fish had estopped an ocean carrier from

denying that it had received the weight of a bulk cargo of fish,

which had been described in the bill of lading it issued. The

Portland Fish court reasoned that, if a carrier had reasonable

grounds to suspect that the bill of lading did not accurately

describe the goods, marks, number, quantity, or weight, or if

the carrier had no reasonable means of checking that informa-

tion, the carrier was not bound to issue a bill of lading

containing such a description, /d. at 633. Thus, if a carrier did

harbor such suspicions, or had no reasonable means of check-

ing the description, the carrier would be estopped from deny-

ing the bill of lading description vis-a-vis a person who had

relied on them. /d.

This decision specifically avoided the use of dictum which

could have been construed to apply the estoppel theory to

containerized cargo. Ocean carriers feared that the estoppel

theory might someday be extended from bulk cargo to con-

tainers and requested leave to file amicus curiae briefs for

rehearing. The court found rehearing unnecessary:

On rehearing, several ocean carriers have moved for

leave to tile briefs amicus curiae. However, it appears that

the issues sought to be raised in such briefs concern the

possible effect of our decision on the ocean transportation

of containerized cargoes—those in sealed “packages” not

normally opened and inspected by the carrier at the time

he issues a bill of lading. The motions are denied. Since

the case before us involves solely a bulk shipment subject

to piece count, the questions thus raised will have to wait

another day for decision. We intimate no opinion on

them.

Id. 510 F.2d at 634 (9th Cir. 1974).

The courts did not take long to reach the container ques-

tions, and the tangent began by ignoring the “shipper’s load

and count” or “said to contain” clause on bills of lading. Once

reached, the court in one decision, Baby Togs Inc. v. S.S.

AMERICAN WING, 1975 A.M.C. 2012 (S.D.N.Y. 1975) (not

officially reported), merely treated the bill of lading quantity

description as prima facie proof. It did not estop the carrier

from proving that it had not, in fact, received the quantity

described in the bill of lading, and certainly did not hold the

carrier to have warranted receipt of the quantity described by

the bill of lading. The language emphasized below presumes

that the carrier could rebut the biil of lading description:

Defendant carricr contends that plaintiff has failed to

prove the contents of the container and their condition at

the time of delivery to defendant. In so doing, it relies

upon the statements “Shipper’s Load & Count” and

“Said to Contain” appearing on the dock receipt and on

the clean bills of lading which defendant issued. However,

the bills of lading herein also list the number of cartons of

infants’ wear, their cubic measurement, and their weight,

although under 46 U.S. Code, Sec. 1303(3)(c), the carrier

may omit such information from the bill of lading if it has

reasonable grounds for suspecting, or no reasonable

means of checking, the accuracy of any marks, number,

quantity or weight. Spanish-American Skin Company v.

Ferngulf, 1956 A.M.C. 2238, 143 F. Supp. 345, 350

(S.D.N.Y. 1956), aff'd, 1957 A.M.C. 611, 242 F.2d 551

(2d Cir. 1957). Accordingly, the recitation of the number,

weight and measurement in the bilis of lading established

prima facie receipt by the carrier of the number, weight

and measurement recited, regardless of the above quoted

statements appearing on those documents.

This prima facie proof has not been effectively rebutted

by competent evidence.

Id. 1975 A.M.C. at 2018 (emphasis supplied).

Application of even the estoppel theory to the case now

before the bar should decide this case correctly. It would hold

defendants liable as if the cargo had been loaded on board and

would, of course, award plaintiff what plaintiff paid for, a bill

of lading which limited the carrier’s liability to $500 per

package.

In fact, the Baby Togs court stated in dictum that the

package limitation, if relevant, would have been applied. /d. at

2022.

The Second Circuit’s imposition of insurer lability on S/S

SALVADOR seems out of step with even this line of reasoning

when it is compared with the more recent Second Circuit

opinion in B.M.A. Industries, Ltd. v. Nigerian Star Line, Ltd.,

Docket Nos. 85-7864, 7922, slip op. 2259 (2d Cir. March 19,

1986), which was discussed, supra, at pp. 15-16. It held that

even crimina! misdelivery would not constitute an unreason-

able deviation.

The B.M.A. Industries rationale is more in line with the

clear meaning of COGSA, and with the interpretation of the

law governing United States inland transportation. For the

sake of predictability and nationwide uniformity, courts permit

inland carriers to limit their liability even if they fundamentally

breach their contracts of carriage. Rocky Ford Moving Vans,

Inc. v. United States, 501 F.2d 1369 (8th Cir. 1974), expressed

the rationale as follows:

. . . [W]e rely primarily upon the policy underlying the

Carmack Amendment to the Act to Regulate Commerce,

49 U.S.C. § 20(11).

* ok x x *

The Carmack Amendment thus expressly recognizes the

right of a shipper and carrier to establish an agreed value

of the goods to be shipped which limits the carrier’s

liability and permits a ....pper thereby to benefit from a

lower rate. Strickland Transportation Co. vy. United

States, 334 F.2d 172 (Sth Cir. 1964). In adopting the

Carmack Amendment, Congress intended to impose a

single uniform federal rule upon the obligations of car-

riers operating in interstate commerce. New York, New

Haven & Hartford R.R. Co. v. Nothnagle, 346 U.S. 128,

73 S.Ct. 986, 97 L.Ed. 1500 (1953); Atchison, Topeka &

Sante Fe Ry. v. Harold, 241 U.S. 371, 36 S.Ct. 665, 60

L.Ed. 1050 (1916); Adams Express Co. v. Croninger, 226

cia eee, so oct. 148, 57 L.Ed. 314 (1913). Such

statutory provisions supercede [sic] “the diverse require-

ments of state legislation and decisions”, Southern Ry. vy.

Prescott, 240 U.S. 632, 639-640, 36 S.Ct. 469, 472, 60

L.Ed. 836 (1916), and render invalid all “agreement{[s] in

derogation of them * * *.” Southwestern Sugar & Mo-

lasses Co., Inc. v. River Terminals Corp., 360 U.S. 411,

420, n.9, 79 S.Ct. 1210, 3 L.Ed.2d 1334 (1959).

Rocky Ford, 501 F.2d at 1371, 1372, (emphasis supplied).

The Western District of Oklahoma restated and followed this

rationale in Conoco, Inc. v. Andrews Van Lines, Inc., 526 F.

Supp. 720 (W.D. Okl. 1981). It too emphasized the importance

of the “. . . overriding federal policy of uniformity.” /d. at

Tam

It is curious, to say the least, that the Eighth Circuit and the

Western District of Oklahoma so clearly recognize the need for

uniform application of federal transportation law throughout

the United States, but the Second Circuit does not recognize

the need for the uniform application of a multinational con-

vention throughout the maritime world.

CONCLUSION

For the foregoing reasons, petitioners pray that a writ of

certiorari to the United States Court of Appeals for the Second

Circuit be granted.

Respectfully submitted,

CHESTER D. HOOPER

Counsel of Record

HAIGHT, GARDNER, POOR & HAVENS

1 State Street Plaza

New York, New York 10004

(212) 344-6800

Of Counsel:

CHARLES L. BLACK, JR.

216 Bishop Street

New Haven, Connecticut 06511

APPENDIX

UNITED STATES COURT OF APPEALS

FOR THE SECOND CIRCUIT

Nos. 91, 195—August 1985 Term

Argued: September 30, 1985

Decided: December !6, 1985

Docket Nos. 85-7401, 85-7429

BERISFORD METALS CORPORATION,

Plaintiff-Appellant-

Cross-Appellee,

—against—

S/S SALVADOR, her engines, boilers, etc.,

and A/S IVARANS REDERI,

Defendants-Appellees,

Cross-Appellants.

Before:

FRIENDLY, MANSFIELD and WINTER,

Circuit Judges.

Appeal by plaintiff from an order of the Southern

District of New York, Gerard L. Goettel, Judge, limiting

the liability of the defendant carrier and its ship for loss

of cargo to $500 per package under § 4(5) of the Carriage

of Goods By Sea Act, 46 U.S.C. § 1304(5). Defendant

carrier and its ship cross-appeal from the denial of their

request that the action be dismissed.

The order is reversed and the case is remanded with

directions to enter judgment for the full amount of

plaintiff’s loss.

JOHN P. CONROY, Esq., New York, NY

(Douglas A. Franklin, Esq., McHugh &

O’Conor, New York, NY, of counsel), for

Berisford Metals Corporation.

CHESTER D. HOOPER, Esq., New York, NY

(Ara A. Shimshidian, Esq., Haight,

Gardner, Poor & Havens, New York, NY,

of counsel), for S/S Salvador and A/S

Ivarans Rederi.

aoe

MANSFIELD, Circuit Judge:

Berisford Metais Corporation (Berisford), plaintiff in

this cargo-loss action, appeals from an order and judg-

ment of the Southern District of New York, Gerard L.

Goettel, Judge, granting its motion for summary judg-

ment against the ship S/S Salvador and A/S Ivarans

Rederi (Ivarans), its owner and operator, for loss of 70

bundles of tin ingots valued at $483,214.90 but applying

the limitation of liability provisions of § 4(5) of the

Carriage of Goods by Sea Act, 46 U.S.C. § 1304(5)!

(COGSA), to limit the defendants’ liability to $500 per

bundle, or a total of $35,000. Defendants cross-appeal

from the district court’s denial of their motion for dis-

missal of the action. We reverse the judgment to the

extent that it limits defendants’ liability to $500 per

bundle and remand the case with directions to enter

judgment in Berisford’s favor for the full value of the lost

cargo. We affirm the district court’s denial of defendants’

motion to dismiss the complaint.

The material facts are not in dispute. On June 23, 1983,

Berisford contracted to purchase from Paranapanema

International Ltd. (Paranapanema), located in Sao

Paolo, Brazil, 50 metric tons of grade A tin ingots in

bundles at a price of $13,140 per metric ton (a price later

changed by the parties to $13,300 per metric ton). The

terms were F.O.B. vessel at Santos, Brazil, for shipment

to New York in January 1984.° Payment was to be made

I Section 4(5) of COGSA, 46 U.S.C. § 1304(5) provides:

“Neither the carrier nor the ship shal! in any event be or become

liable for any loss or damage to or in connection with the transpor-

tation of goods in an amount exceeding $500 per package lawful

money of the United States, or in case of goods not shipped in

packages, per customary freight unit, or the equivalent of that sum

in other currency, unless the nature and value of such goods have

been declared by the shipper before shipment and inserted in the bill

of lading. This declaration, if embodied in the bill of lading, shall

be prima facie evidence, but shall not be conclusive on the carrier.”

: F.O.B. or Free on Board “means that title to property passes from

the seller to buyer at the designated FOB point.” 10 Williston on

Contracis, § 1079A, at 94 n.6 (3d ed. 1967). Since the vessel was

designated as the FOB point in this case title to the goods was to pass

when the goods were loaded on board the ship. See id., § LOROA, at

109-10 (Standard American Foreign Trade Definitions).

net cash 45 days after ocean bill of lading date against

presentation of a “full set of shipping documents,”

which, in conjunction with the F.O.B. vessel term, was

understood by the parties as requiring a clean on board

bill of lading.

Pursuant to the contract Paranapanema delivered 100

bundles, each containing 30 tin ingots and steel-strapped

onto wooden pallets, to Ivarans’ agent at Santos, Agencia

de Vapores Grieg, S.A. (Grieg), which maintains a ter-

minal located about 5 kilometers from the dock where

cargo would be loaded onto ivarans’ ship. Grieg ac-

knowledged receipt of the bundles on December 29, 1983.

Grieg stuffed the 100 bundles into four 20-foot containers

at its terminal, as follows:

Container No. NICU 901692 35 bundles

Container No. NICU 703002 35 bundles

Container No. IVLU 904540 9 bundles

Container No. IVLU 902420 21 bundles

The containerization was carried out “at ship’s conven-

ience”, to which Berisford did not object. Clause 6 of the

bill of lading later issued by Ivarans authorized the carrier

to stow goods “as received or, at Carrier’s option, by

means of containers or similar articles of transport used

to consolidate goods”.

After stuffing of each container its doors were closed,

locked and sealed. On January 3, 1984, the containers

were transported by Grieg to a Brazilian government-con-

trolled storage yard located near the loading dock. Upon

delivery of the containers to that yard they appeared,

from the sound and handling of the trucks used to

transport them, to be loaded, not empty. The government

storage yard issued receipts indicating weights approxi-

mately equaling those listed on the shipping documents.

At that point the seals and locks appeared unchanged.

On January 4, 1984, the containers were removed from

the yard and loaded by stevedores aboard the vessel. On

the same date Grieg, acting on behalf of Ivarans and the

Master of the S/S Salvador, issued a clean on board bill

of lading stating that the ship had received “100 bundles

steel strapped on wooden skids containing 3000 refined

tin ingots, “Mamore” brand, with a minimum purity of

99.9%”. The gross weight was stated on the bill to be

“50,647” kilos and the net weight as “49,845” kilos. Par.

3 of the conditions on the back side of the bill of lading

provided that the provisions of COGSA would apply

throughout “the entire time the goods [would be] in the

carrier’s custody, including the period of carrier’s custody

before loading on and after discharge from the ship”. The

bill further stated that unless a higher value had been

declared in writing prior to delivery and inserted in the

bill, the $500 limit per package specified by COGSA

would govern the carrier’s liability. See note 1, supra.

Upon the loading of the four containers aboard the

ship, neither Ivarans nor its agent Grieg verified the

contents or made a tally of the 100 bundles represented by

the bill of lading to be in the containers. After being

loaded aboard the ship, the containers were not shifted

from their place of stowage until the ship arrived in New

York on January 19, 1984, at the Red Hook Terminal in

Brooklyn. There the four containers were discharged on

January 20, 1984, and placed on the ground outside Pier

11 to await stripping. On January 24, 1984, Universal

Maritime Services, Ivarans’ stevedore, opened the four

containers by using a bolt cutter or pliers to cut the seals

and found that two of them supposed to contain 70

bundles were empty. Before being broken the seals of the

containers appeared to be intact, with no evidence of

tampering; in fact, the seals were pitted and rusted.

Neither the floors of the two containers nor the snow-

covered ground around them near Pier 11 revealed any

evidence of recent removal of any cargo from the con-

tainers. Each bundle would have weighed approximately

1100 Ibs.

On January 27, 1984, Berisford wrote U.S. Navigation,

Ivarans’ New York agent, charging Ivarans with responsi-

bility for the loss of the 70 bundles. On February 7th Mr.

K. W. Hansen, a marine surveyor retained by U.S. Navi-

gation to investigate the loss, rendered a written report

which stated that in his opinion the “70 missing bundles

of tin ingots were never loaded in the two containers.”

In the meantime the Mellon Bank in New York, repre-

senting Paranapanema, the seller and shipper of the tin

ingots, presented to Berisford in accordance with the

purchase contract a cull set of shipping documents with

respect to the 100 bundles of tin ingots purchased by

Berisford, including three original on board bills of lad-

ing issued by the carrier (Ivarans), Paranapanema’s in-

voice, weight and analysis certificates, and a draft in the

amount of $662,938.50, payable 45 days after the bill of

lading date. Since the papers were in order and complied

with the parties’ purchase contract Berisford accepted the

draft and on February 17, 1984, paid the full amount of

the purchase price to the Mellon Bank as collection agent

for Paranapanema. In addition, Berisford paid Ivarans’

freight charges amounting to $10,101.67.

On August 31, 1984, Berisford commenced the present

action, seeking $525,000 damages for the missing cargo.

Defendants’ answer admitted receipt of the shipment of

bundles of tin ingots but denied liability, asserting its -

rights under COGSA and its bill of lading with respect to

the shipment, including COGSA’s $500 per package limi-

tation on its liability, and alleging that it acted without

any fault or neglect. On February 5, 1985, after the

parties had conducted pre-trial discovery, including the

taking of depositions,’ Berisford moved for summary

judgment, contending that it had paid the purchase price

in reliance on Ivarans’ representation in its on board bill

of lading that the 70 missing bundles had been loaded

aboard its ship, that it was committed by its purchase

contract to pay the purchase price upon the seller’s

presentation of the shipping documents, and that the

defendant carrier’s issuance of a clean on board bill of

lading when in fact it had not received the 70 bundles

constituted a “quasi-deviation,” depriving the carrier of

the benefits of the bill of lading, including its per package

limitation on liability. Berisford sought damages in the

amount of $483,214.90 plus interest.

Ivarans did not seriously question the probability that

the loss of the 70 bundles occurred prior to its loading of

the containers aboard its ship in Santos. Indeed, the

evidence that the two containers had not been opened

after loading and prior to their being found empty upon

their arrival in New York (while still in Ivarans’ custody)

was overwhelming. Ivarans offered no evidence to the

contrary. Its principal defenses were (1) that it could not

be faulted for any pilferage that may have occurred while

the goods were in the custody of the Brazilian govern-

The persons deposed included Paul W. Schaldonat, Berisford’s Vice

President; Ingeman Johansen, captain of the S/S Salvador; and Peter

J. Rainone, employee of McRoberts Protective Agency, who was in

charge of security at Pier 11, Red Hook Terminal, Brooklyn.

ment-controlled dockside warehouse in Santos since it

had no control over that warehouse or the government’s

longshoremen, (2) that Berisford’s loss was not caused by

its misdescription of the contents of the containers be-

cause Ivarans was not required, under the purchase con-

tract’s provision for payment against a “full set of

shipping documents,” to issue an on board bill of lading,

and (3) that in any event defendants’ liability was limited

to $500 per bundle. In opposing plaintiff’s motion the

defendants, in an affidavit of their attorney, Chester D.

Hooper, asked thai the complaint be dismissed or in the

alternative that Ivarans’ liability be limited to $500 per

bundle.

In an oral bench opinion Judge Goettel concluded that

an evidentiary hearing was unnecessary since the existing

evidence demonstrated that the loss had occurred while

the cargo was in the possession of the Brazilian govern-

ment’s stevedores in Santos. He rejected Ivarans’ argu-

ment that it was not responsible for a loss occurring while

the cargo was in the possession of the Brazilian Govern-

ment. However, he also rejected Berisford’s contention

that Ivarans’ issuance of a false on board bill of lading

constituted a “quasi deviation” negating the availability

of the COGSA per package limitation on liability. In-

stead, he held that a carrier is estopped from denying that

the goods were loaded only upon a showing that it knew

that they had not been loaded. He accordingly granted

plaintiff's motion to the extent of awarding it judgment

in the sum of $35,000, from which both parties appeal.

DISCUSSION

The central question raised by this appeal is whether a

carrier that issues a clean on board bill of lading erro-

neously stating that certain goods have been received on

board when they have not been so loaded should be

precluded from limiting its liability pursuant to an agree-

ment binding the parties to the terms of § 4(5) of

COGSA, 46 U.S.C. § 1304(5). For the purpose of resolv-

ing this issue a brief review of pertinent admiralty law

principles is helpful.

As we recently reaffirmed in Allied Chemical Interna-

tional Corp. v. Companhia de Navegacao Lloyd Brasi-

leiro, ___ F.2d ___, Oct. 15, 1985, Dkt. No. 85-7103,

Slip Op. 6429, 6437-38, a negotiable or order bill of

lading is a fundamental and vital pillar of international

trade and commerce, indispensable to the conduct and

financing of business involving the sale and transporta-

tion of goods between parties located at a distance from

one another. It constitutes an acknowledgement by a

carrier that it has received the described goods for ship-

ment. It is also a contract of carriage. As a document of

title it controls the possession of the goods themselves.

See Gilmore and Black, The Law of Admiralty, Ch. Il,

§ 3-1, p. 93 (2d ed. 1975). It has been said that the bill

and the goods become one and the same, with the goods

being “locked up in the bill.” /d. 96. As the court stated

in Pollard v. Reardon, 65 F. 848, 852 (1st Cir. 1895),

“In the developments of commerce and commercial

credits the bill of lading has come to represent the

property, but with greater facility of negotiation,

transfer, and delivery than the property itself. . . .

And it has become so universal and necessary a

10a

factor in mercantile credits that the law should make

good what the bill of lading thus hoids out. There is

every reason found in the law of equitable estoppel

and in sound public policy for holding, and no

injustice is involved in holding, that, if one of two

must suffer, it should be he who voluntarily puts out

of his hands an assignable bill of lading, rather than

he who innocently advances value thereon.”

The necessity for maintaining the integrity of and confi-

dence in bills of lading has been recognized by us in a line

of cases beginning before and continuing after the 1936

enactment of COGSA. In Aiggins v. Anglo-Algerian

Steamship Co., 248 F. 386 (2d Cir. 1918), for instance,

after reviewing decisions of English courts on the ques-

tion we held that a carrier which issued a clean bill of

lading falsely representing that it received goods in ap-

parent good order and condition when it knew they were

damaged may not take advantage of exceptions and

limitations in the bill for its own benefit.

The carrier’s responsibility for issuance of false bills of

lading was thoroughly considered by this court in Olivier

Straw Goods Corporation v. Osaka Shosen Kaisha, which

was the subject of two appeals over a period of four

years, 27 F.2d 129 (2d Cir. 1928) (Olivier 1), aff’d after

remand, 47 F.2d 878 (2d Cir.), (Olivier II), cert. denied,

283 U.S. 856 (1931). In that case, which was remarkably

similar to the present one, the shipper delivered 18 cases

of hemp to the carrier at its Yokohama dock for shipment

by steamer to New York. The carrier issued and delivered

to the shipper a bill of lading representing that the cases

had been loaded on the ship Alaska Maru when in fact

they had not been loaded because that ship had been

diverted elsewhere due to an earthquake. The cases of

lla

hemp, which had been placed by the carrier in an unpro-

tected dockside shed, were lost as a result of looting.

Relying on the bill of lading and other shipping papers

forwarded to it by the shipper, the purchaser’s bank

accepted and paid the shipper’s invoice. The purchaser

then sued the carrier for the value of the hemp. In an

opinion by Judge Augustus Hand, concurred in by

Judges Learned Hand and Swan, the court held the

carrier liable for the full value of the goods described in

the bill of lading, stating:

“The bill of lading recited that the goods were

shipped in apparent good order and condition. That

statement was a warranty that they were so shipped,

and the libelant, as indorsee of the bill of lading,

acquired the direct obligation of the carrier and with

it the right to sue. .

“The warranty that the goods were on board was

broken by the failure to ship them, and that breach

. . . deprived the carrier of the right to invoke the

clauses limiting liability. In The Sarnia, 278 F. 459,

where the cargo had been improperly stowed on

deck, we held that the valuation clauses in the bill of

lading did not serve to limit damages. We said, at

page 461 of 278 F.: ‘The general rule undoubtedly is

that, if the shipowner commits a breach of the

contract of affreightment which goes to the essence

of the contract, he is not entitled after such breach to

invoke the provisions of the contract which are in his

favor.’

* * * * *

“Certainly a breach like the one here, which arose

from a failure to ship the cargo at all, with its

12a

consequent loss or destruction on land, was no less

fundamental than a deviation in the voyage, or than

stowage of cargo on deck contrary to agreement, or

than misdelivery of goods. In all such circumstances

valuation clauses in the bill of lading have been held

inoperative to relieve the shipowner. St. Johns N.F.

Shipping Corporation v. S.A. Companhia Geral,

etc., 263 U.S. 119, 44S. Ct. 30, 68 L. Ed. 201; The

Cabo Villano (C.C.A.) 18 &.(2d) 220; Niles-Bement-

Pond Co. v. Dampkiesaktieselskabet Balto (C.C.A.)

282 F.235; The Sarnia (C.C.A.) 278 F. 459.” Olivier

II, supra, at 879-80.

Although we have declined to extend full liability in

some contexts that have been likened to deviations or

“quasi-deviations” in a voyage, see /ligan Integrated Steel

Mills, Inc. v. S.S. John Weyerhaeuser, 507 F.2d 68, 71-72

(2d Cir. 1974), cert. denied, 421 U.S. 965 (1975); Encyclo-

paedia Britannica, Inc. v. S.S. Hong Kong Producer, 422

F.2d 7, 19 (2d Cir. 1969) (Hays, J., dissenting), cert.

denied, 397 U.S. 964 (1970), we have steadfastly adhered

to the result reached in Olivier I] and have cited the case

with approval for the proposition that the $500 per

package limitation of liability may not be invoked by a

carrier that has issued an on board bill of lading erro-

neousiy representing that goods were loaded aboard its

ship, regardless whether or not the carrier acted fraudu-

lently. Elgie & Co. v. S.S. “S.A. Nederburg”, 599 F.2d

1177, 1181 (2d Cir. 1979), cert. denied, 444 U.S. 1072

(1980). It is true that E/gie & Co. involved a shipment

from the United States governed by the Pomerene Act, 49

U.S.C. § 81 et seq., which does not contain limitation of

liability provisions. However, the court took pains to

point out that it did not base its holding on that distinc-

l3a

tion but on what it conceived to be “established doctrines

of admiralty law”, citing Olivier I]. Similarly we recog-

nized that it was “the common law rule” that such a

fundamental misstatement in a bill of lading need not be

fraudulent or intentional for liability to ensue. 599 F.2d at

1180.

The Olivier I] ruling represents just as sound public

policy today as it did in 1931. Whether one likens the

carrier’s issuance of a false bill of lading with respect to

its loading of cargo te a “deviation,” a “breach of

warranty” or a representation which it must be “es-

topped” to deny, its adverse impact on trade and on

reliance on bills as an essential method of facilitating

trade is serious. Title to the goods usually passes from the

seller to the buyer when the seller delivers the goods to the

carrier and the carrier or its agent issues a bill. In the

past, on board bills, signifying that the goods had been

loaded on board the ship, were generally required. More

recently, “received for shipment” bills, which indicate

merely that the carrier has received the goods, are some-

times used. See 10 Williston, supra, at § 1078A, pp.

83-87. In this case, an on board bill was clearly required

by the parties. When the proper bill issues, the seller then

ceases to assume any risk of loss or damage. The carrier,

by issuing the bill, enables the seller to collect full pay-

ment of the purchase price from the buyer since presenta-

tion of the bill to the buyer assures it that the seller has

fulfilled its commitment to ship the goods and obligates

the buyer to pay for them. Presentation of an on board

bill also serves to satisfy the buyer that the goods have

not been stolen or lost while in the custody of the carrier

prior to loading, an interval during which the seller bears

the risk of any loss in any transaction requiring such a

l4a

bill. If, instead, the buyer were free to question the

‘accuracy of the bill upon presentation, the entire struc-

ture would be weakened as a method of carrying out

commercial transactions.

In support of their contention that a carrier may be

held liable for a misstatement in its bill of lading only if it

acted intentionally or fraudulently, defendants direct our

attention to decisions holding that when a carrier issues a

bii! of lading to the effect that it has received goods in

apparent good condition it may not be held liable beyond

a per package limitation for damaged goads contained in

the bill of lading or COGSA unless it had actual knowl-

edge of the damaged condition at the time of loading or

the damage was readily apparent at that time. See The

Carso, 53 F.2d 374 (2d Cir. 1931); American Industries

Corp. v. M.\.. Margarite, 556 F. Supp. 206, 212-13

(S.D.N.Y. 1981). These “conditions” cases are readily

distinguishable from those applying Olivier 1/7. The “con-

ditions” cases raise the issue of the extent to which a

carrier must inspect the condition of goods made, sold

and bought by others. Since the imposition of a duty to

make a detailed inspection of the condition of the con-

tents of every package received from others would be

excessive, the carrier may be held liable only if it knew or

could readily see that the packages were not in good

condition. A carrier is not required to open every package

received from a shipper and inspect the contents before

issuing a bill to the effect that they appear to be in good

condition.

When a carrier, on the other hand, makes a representa-

tion in a bill of lading with respect to its own conduct it is

properly held to a higher standard since it is reasonably

expected to be aware of its own actions, including

lSa

whether or not it has loaded cargo, Olivier II, supra;

Miles Metal Corp. v. M.S. Havjo, 494 F.2d 563 (2d Cir.

1974), or has loaded the cargo below or above decks. See

St. Johns N.F. Shipping Corporation v. S.A. Companhia

Geral, 263 U.S. 119 (1923); Encyclopaedia Britannica vy.

S.S. Hong Kong Producer, supra, at 18; The Sarnia, 278

F. 459, 463 (2d Cir. 1921), ceri. denied, 258 U.S. 625

(1922); Jones v. The Flying Clipper, 116 F. Supp. 386

(S.D.N.Y. 1953). As we stated in Nichimen Company y.

M.V. Farland, 462 F.2d 319, 330 (2d Cir. 1972), “the duty

to load, stow, and discharge cargo—and the conse-

quences for failing to do so properly—fall upon the ship

and her owners.” 46 U.S.C. § 1303(2) specifically pro-

vides, “The carrier shall properly and carefully /oad,

handle, stow, carry, keep, care for, and discharge the

goods carried.” (Emphasis supplied).

Applying the foregoing principles to the present case,

we conclude that the defendants must be held responsible

for the full value of the lost cargo at the time of shipment

in Santos and cannot invoke the $500 per package fimita-

tion of liability provision of § 4(5) of COGSA, 46 U.S.C.

§ 1304(5). The carrier here, having received 100 bundles

of tin ingots from the shipper in Santos, issued a false

F.O.B. bill of lading with respect to its own conduct,

warranting that on January 4, 1984, it had loaded 100

bundles on its ship when in fact it had loaded only 30.

The bill of lading, whether or not intentionally false,

enabled the shipper to collect from Beristord, the buyer,

the full purchase price for 100 bundles. If the carrier had

disclosed that 70 bundles had not been loaded, Berisford

would have been entitled to refuse payment and the loss

would have fallen on the seller of the goods as required

by the conditions of the sales contract. The carrier’s

l6a

misrepresentation therefore amounted to a fundamental

breach going to the very essence of its contract and

precluding it from invoking those provisions extending

the limitation of liability terms of § 4(5) of COGSA to the

period when the goods were on shore.

Defendants cannot escape responsibility on the ground

that the four containers into which it claims that it had

placed the bundles after receipt from the shipper were

locked and sealed at the time when the containers were

loaded aboard its ship, the S.S. Salvador. It is undisputed

that the defendant received from the shipper the 100

separate bundles and that for its own convenience it

placed them in the four containers. It was thereafter

responsible for verifying the contents before loading the

containers and issuing a clean on board bill of lading. The

weight of the missing 70 bundles of tin ingots was

approximately 78,885 lbs. Even if opening of the con-

tainers posed difficulties, at the very least the carrier

owed a duty to verify the weight of the containers at

shipside before they were placed aboard its ship and

before it stated that they contained 100 bundles of tin

ingots weighing the equivalent of 50,647 kilos or 111,656

Ibs., which would have been 78,885 Ibs. in excess of the

weight of the containers actually loaded.

Defendants argue that, even if they might have been

liable for breach of warranty under pre-COGSA princi-

ples outlined in Olivier 11, Congress in effect intended the

limitation of liability provisions of COGSA to override

those principles in a case governed by it. See dissenting

opinion of Judge Hays in Encyclopaedia Britannica vy.

S.S. Hong Kong Producer, supra, 422 F.2d at 19-20. We

disagree, however, since courts in this circuit have long

refused to hold that COGSA altered pre-COGSA law

17a

with respect to deviation and other conduct carrying the

same consequences. See Elgie & Co. v. S.S. “S.A. Neder-

burg,” supra, 599 F.2d at 1181 (false representation in bill

of lading that cargo was loaded on ship renders $500 per

package limitation inapplicable);* Encyclopaedia Britan-

nica v. S.S. Hong Kong Producer, supra, at 18 (unauthor-

ized on deck stowage of goods renders $500 per package

limitation inapplicable); Jones v. The Flying Clipper,

supra (same).

Lastly, Ivarans contends that since the theft of the

ingots occurred while the property was in the temporary

custody of the Brazilian government it is exempted from

liability by § 4(2)(q) of COGSA, 46 U.S.C. § 1304(2)(q),

which was incorporated in the parties’ contract. Section

4(2)(q) exempts the carrier from liability for damage or

loss “arising without the actual fault and privity of the

carrier and without the fault or neglect of the agents or

servants of the carrier, but the burden of proof shall be on

the person claiming the benefit of this exception. . . .”

The argument misconceives the nature of Berisford’s

claim. Its suit is not based on the theft of the ingots or on

Ivarans’ negligence but on the carrier’s false representa-

tion that it loaded the 70 containers on its ship. Regard-

less whether some third party stole the ingots, the carrier

here was obligated to state truthfully what it had loaded.

If the carrier had truthfully stated what it had loaded on

the ship, Berisford would not have been required to pay

the purchase price for the 70 bundles of unloaded ingots

4 In Eleie & Co. the bill of lading, notwithstanding the absence ot

liability limitations in the Pomerene Act, did extend by contract the

application of COGSA to the entire period of time when the goods

were in the carrier's custody. See 1976 A.M.C. 2446, 2449 & n.4 (not

officially reported). Nevertheless, this was not advanced as a basis tor

departing from the fundamental rule of Olivier IT.

l8a

which it had contracted to purchase. As between the

purchaser, which could not have verified the accuracy of

the carrier’s representation as to the number of bundles

loaded, and the carrier, the carrier is the party that must

be held responsible for loss resulting from the falsity of

its warranty that the goods had been loaded when in fact

it had not put them aboard its ship.

Our holding leaves intact the principle that, once goods

are aboard the ship as represented, a carrier may be

responsible for misdescription of the apparent condition

of the goods loaded by it only upon proof of knowledge

or intent. The Carso, supra. We hold simply that when a

carrier misrepresents its own conduct in loading goods

aboard ship it is responsible for the misrepresentation and

may not invoke contract provisions incorporating

COGSA’s limitations on liability.

The order and judgment of the district court are re-

versed and the case is remanded to the district court with

directions to enter judgment in favor of Berisford in the

sum of its full damages, plus that portion of freight and

handling charges attributable to the lost bundles, and

costs and interest from January 20, 1984.

19a

UNITED STATES DISTRICT COURT

SOUTHERN DISTRICT OF NEW YORK

84 Civ. 6311

—

BERISFORD METALS CORPORATION,

Plaintiff,

S/S SALVADOR and A/S IVARANS REDERI,

Defendants.

—

New York, New York—-April 19, 1985—10:00 a.m.

Before:

HON. GERARD L. GOEFTTEL,

District Judge.

APPEARANCES:

McHUGH & O’CONNOR

John P. Conroy and Douglas A. Franklin

Attorneys for Plaintiff

HAIGHT, GARDNER, POOR & HAVENS

Chester D. Hooper and Elizabeth T. McCandless

Attorneys for Defendants

_ —

THE CourRT: The following is the decision of the Court:

This is an admiralty action involving a cargo loss. The facts

are straightforward and generally not in dispute.

2VUa

The plaintiff commenced this action to recover damages for

the nondelivery of 70 bundles of tin ingots intended to be

shipped on board the S/S Salvador from Santos, Brazil to New

York pursuant to defendant Ivarans Rederi Lines’ bill of lading

No. 202. Plaintiff purchased 100 bundles of tin ingots contain-

ing a total of 3000 ingots from Paranapanema.

Paranapanema delivered the 100 bundles to Grieg, an agent

of Ivarans at a terminal where they were stuffed into four

containers. Pursuant to clause 6 in the bill of lading, Ivarans

was permitted to containerize the bundles for shipment.

After the containers were sealed they were delivered to a

government controlled storage yard. The four containers re-

mained in the yard for less than 24 hours. This area is part of

the dock area where the S/S Salvador was loaded.

On January 4, 1984, the four containers were removed from

the government storage yard and loaded on board the vessel by

government stevedores.

Ivarans issued a bill of lading stamped “On Board,” at the

time the four containers were loaded on the S/S Salvador.

The vessel departed and made several stops before arriving

in New York. When the vessel arrived in New York, the four

containers were offloaded with seals and locks intact.

Upon opening, two of the containers, each supposedly

containing 35 bundles, were found to be empty. The other two

containers had their proper cargo in them.

The plaintiff now moves for summary judgment, arguing

that the 70 bundles of tin were never loaded aboard the vessel

at Santos.

The defendants acknowledge that the 70 bundles were not

delivered but deny knowing where they disappeared.

There are obviously only three general locations in which the

bundles could have disappeared: either before loading, during

the voyage at one of the stops, or after arrival in New York.

In theory, one might conclude that an evidentiary hearing is

necessary to determine where the loss occurred. But an eviden-

tiary hearing would not accomplish a thing.

2la

The two parties have presented all the evidence they have on

‘he issue. Based on the evidence before us, it does not appear

that the bundles were taken from the containers after arrival in

New York. It would have been quite difficult to have pilfered

the number of tin ingots missing during a stop on the way to

New York, and so it can be argued that it appears most likely

that it occurred during the 24 hours that the tin ingots were in

the possession of the government’s stevedores in Brazil.

There is, of course, some evidence to the contrary, namely

that when the containers were moved and when they were

loaded, there was no indication that they were empty, and since

these bundles of tin ingots are extremely heavy, their absence

should have been noted. However, it is a reasonable conclusion

from all of the facts presented that it probably occurred before

Two other factual issues are supposedly disputed. In this

Court’s view they are not truly factual issues at all but

conclusions of law which have no bearing upon the ultimate

determination of this case.

There is no indication that the holding of any evidentiary

hearing would clarify the issues to be faced and there appears

to be no reason to hide behind the possibility that a trial could

lessen the difficulty of deciding the legal issues now presented.

The bill of lading contains an express provision extending

the application of The Carriage of Goods by Sea Act, 46

U.S.C. § 1300 et seq. (hereinafter “COGSA”) throughout the

entire time the goods were in the carrier’s custody, including

the period of time before loading and after discharge from the

ship.

COGSA contains the ysua! provisions for a package limita-

tion unless a higher value has been declared in writing prior to

delivery and inserted in the bill of lading, in which case the

carrier obtains an additional payment. 46 U.S.C. § 1304(5).

It has been this Court’s observation that this is very rarely

done. It is apparently far cheaper to simply obtain insurance

for the shipment which would be necessary in any event and

22a

not to declare the excess value. In this instance, the plaintiff is

actually the :nsurer of the shipment seeking subrogation.

Initially, the defendants argue that they have no liability

whatever for this loss since the containers were in the posses-

sion of Brazilian Government stevedores for a period of 24

hours, and if, as the plaintiff argues, that is the time at which

the loss occurred, defendants should not be held responsible.

The Court cannot accept this concept. While there are cases

which find that a carrier is not liable when goods disappear

after unloading into the possession of government stevedores,

this is not that kind of case.

The goods were given to the defendant ivaran, delivered to it

and stored by it. Putting the goods into a container had some

value to both parties, but it did mean that for the period prior

to the loading, the goods were out of its possession and Ivaran

didn’t open the container to check and see whether the goods

were still in the container when it issued its on board bill of

lading. Under these circumstances, the carrier must take re-

sponsibility for the loading procedure.

The carrier asserts that, assuming it is liable, it is liable only

to the extent of the package limitation which in this instance

would be $35,000, which is only a small part of the total loss.

The plaintiff argues that the package limitation cannot be

asserted here because there was a “quasi deviation” which

deprives the carrier of the benefits of the bill of lading,

including the package limitation.

The plaintiff acknowledges that COGSA was in effect during

the period when the loss probably occurred. It argues, how-

ever, that the issuance of an on board bill of lading when, in

fact, the goods have not been loaded, constitutes a quasi

deviation.

It appears clear that if there was any proof that the carrier

knew that the goods had not been loaded and, nevertheless,

issued an on board bill, they would be estopped to deny the

loading and they would have lost their protection under

COGSA.

23a

That, however, is not the case before this Court. Even

accepting the plaintiff’s argument that in all likelihood the loss

occurred before loading, there is no proof whatever that the

carrier was aware of that fact when it issued the on board bill.

The plaintiff relies on Elgie Co. v. S. S. S. A. Nederburg,

559 F.2d 1177 (2d Cir. 1979) with which I am intimately

familiar.

In Nederburg, the Second Circuit, sua sponte, developed the

approach that on outbound shipments, the Pomerene Act

controlled and since in that instance the bill of lading did not

make COGSA effective at the time of delivery at the pier, the

COGSA package limitation did not apply when the goods

were, in fact, not loaded.

Tine Pomerene Act has no extra-territorial effect and does

not apply, since these goods were loaded in Brazil and the bill

of lading was issued in Brazil.

The plaintiff argues that some of the reasoning in the

Nederburg case, if applied here, could be used to find that the

absence of the cargo, for which a bill of lading was issued,

constituted a quasi deviation negating the availability of the

COGSA package limitation, 46 U.S.C. § 1304(5).

It is an interesting argument. However, there have been

literally thousands of similar cases since the time that Olivier

Straw Goods Corporation v. Osaka Shosen Kaisha, 27 ¥.2d

129 (2d Cir. 1928) and 47 F.2d 878 (2d Cir. 1931), was first

decided and even since the Nederburg case was decided, and

this approach has never been accepted by any court, to my

knowledge. If it is going to be accepted by any court, it is going

to have to be a higher court accustomed to making the law in

the admiralty field and not by a district court.

Consequently, the Court finds that the plaintiff is entitled to

recover but its recovery 1s limited to the package limitation,

and judgment should be entered in its favor in the amount of

$35,000.

Judgment may be entered with costs for the plaintiff.

24a

UNITED STATES COURT OF APPEALS

FOR THE SECOND CIRCUIT

—

At a stated Term of the United States Court of Appeals for

the Second Circuit, held at the United States Courthouse in the

City of New York, on the twenty-seventh day of January one

thousand nine hundred and eighty-six.

Present:

HON. HENRY J. FRIENDLY,

HON. WALTER R. MANSFIELD,

HON. RALPH K. WINTER,

Circuit Judges.

—§

Docket Nas. 85-7401, 85-7429

BERISFORD METALS CORPORATION,

Plaintiff-Appellant

Cross-A ppellee,

—_—vV.—

S/S SALVADOR, her engines, boilers, etc.

and A/S IVARANS REDERI,

Defendant-A ppellees

Cross-Appellants.

25a

A petition for rehearing having been filed herein by Appel-

lee-S/S SALVADOR and A/S IVARANS REDERI

Upon consideration thereof, it is

Order that said petition be aad it hereby is DENIED.

/S/ ELAINE B. GOLDSMITH

Clerk

INTERNATIONAL CONVENTION

FOR THE UNIFICATION OF CERTAIN RULES

RELATING TO (OCEAN) BILLS OF LADING

SIGNED AT BRUSSELS, THE 25TH AUGUST, 1924

U.S. Treaty Series No. 931

U.S. Statutes at Large, Volume 51, page 233

League of Nations Treaty Series, Volume 120,

pages 155, 157, 183

Translation by U.S. State Department

The President of the German Republic, the President of the

Argentine Republic, His Majesty the King of the Belgians, the

President of the Republic of Chile, the President of the

Republic of Cuba, His Majesty the King of Denmark and

Iceland, His Majesty the King of Spain, the Chief of the

Estonian State,* the President of the United States of

America, the President of the Republic of Finland, the Presi-

dent of the French Republic, His Majesty the King of the

United Kingdom of Great Britain and Ireland and of the

British Possessions Beyond the Seas, Emperor of India, His

Serene Highness the Governor of the Kingdom of Hungary,

His Majesty the King of Italy, His Majesty the Emperor of

Japan, the President of the Republic of Latvia,* the President

of the Republic of Mexico, His Majesty the King of Norway,

Her Majesty the Queen of the Netherlands, the President of

the Republic of Peru, the President of the Republic of Poland,

the President of the Portuguese Republic, His Majesty the

King of Rumania, His Majesty the King of the Serbs, Croats,

and Slovenes, His Majesty the King of Sweden and the

President of the Republic of Uruguay, (26).

Having recognized the utility of laying down in common

accord certain uniform rules relating to bills of lading, have

Since 1940, members of the U.S.S.R.

Now Yugoslavia.

27a

decided to conclude a convention to that effect and have

designated as their Plenipotentiaries, namely:

(The list of attending Diplomatic Plenipotentiaries of four-

teen Out Of twenty-six participating States is here omitted. The

eighteen Signers of the Convention appear at pages 67 and 70.)

Who, duly authorized therefor have agreed as follows:

INTERNATIONAL CONVENTION FOR THE

UNIFICATION OF CERTAIN RULES RELATING TO

(OCEAN) BILLS OF LADING

(Translation by the U.S. State Department)

ARTICLE I.—DEFINITIONS.

In this convention the following words are employed with

the meanings set out below:

(a) “Carrier” includes the owner of the vessel or the char-

terer who enters into a contract of carriage with a shipper.

(b) “Contract of carriage” applies only to contracts of

carriage covered by a bill of lading or any similar document of

title, in so far as such document relates to the carriage of goods

by sea; it also applies to any bill of lading or any similar

document as aforesaid issued under or pursuant to a charter

party from the moment at which such instrument regulates the

relations between a carrier and a holder of the same.

cles of every kind whatsoever except live animals and cargo

which by the contract of carriage is stated as being carried on

deck and is so carried.

(d) “Ship” means any vessel used for the carriage of goods

by sea.

(e) “Carriage of goods” covers the period from the time

when the goods are loaded on to the time they are discharged

from the ship.

28a

ARTICLE II.—RISKS.

Subject to the provisions of Article VI, under every contract

of carriage of goods by sea the carrier, in relation to the

loading, handling, stowage, carriage, custody, care,-and dis-

charge of such goods shall be subject to the responsibilities and

liabilities, and entitled to the rights and immunities hereinafter

set forth.

ARTICLE II].—RESPONSIBILITIES AND LIABILITIES.

1. The carrier shall be bound before and at the beginning of

the voyage to exercise due diligence to—

(a) Make the ship seaworthy;

(b) Properly man, equip, and supply the ship;

other parts of the ship in which goods are carried, fit and safe

for their reception, carriage, and preservation.

2. Subject to the provisions of Article IV the carrier shall

properly and carefully load, handle, stow, carry, keep, care for,

and discharge the goods carried.

3. After receivinz the goods into his charge the carrier or the

master or agent of the carrier shall, on demand of the shipper,

issue to the shipper a bill of lading showing among other

things:

(a) The leading marks necessary for identfication of the

goods as the same are furnished in writing by the shipper

betore the loading of such goods starts, provided such marks

are stamped or otherwise shown clearly upon the goods if

uncovered, or on the cases or coverings in which such goods

are contained, in such a manner as should ordinarily remain

legible until the end of the voyage;

(b) Either the number of packages or pieces, or the quantity,

or weight, as the case may be, as furnished in writing by the

shipper;

29a

Provided that no carrier, master, or agent of the carrier shall

be bound to state or show in the bill of lading any marks,

numbe:, quantity, or weight which he has reasonable grounds

for suspecting not accurately to represent the goods actually

received or which he has had no reasonable means of checking.

4. Such a bill of lading shall be prima facie evidence of the

receipt by the carrier of the goods as therein described in

accordance with paragraph 3 (a), (b), and (c).

§. The shipper shall be deemed to have guaranteed to the

carrier the accuracy at the time of shipment of the marks,

number, quantity, and weight, as furnished by him, and the

shipper shall indemnify the carrier against all loss, damages,

and expenses arising or resulting from inaccuracies in such

particulars. The right of the carrier to such indemnity shall in

no way limit his responsibility and liability under the contract

of carriage to any person other than the shipper.

6. Unless notice of loss or damage and the general nature of

such loss or damage be given in writing to the carrier or his

agent at the port of discharge vefore or at the time of the

removal of the goods into the custody of the person entitled to

delivery thereof under the contract of carriage, such removal

shall be prima facie evidence of the delivery by the carrier of

the goods as described in the bill of lading.

If the loss or damage is not apparent, the notice must be

given within three days of the delivery of the goods.

The notice in writing need not be given if the state of the

goods has at the time of their receipt been the subject of joint

survey or inspection.

In any event the carrier and the ship shall be discharged

from all liability in respect of loss or damage unless suit 1s

brought within one year after delivery of the goods or the date

when the goods should have been delivered.

30a

In the case of any actual or apprehended loss or damage the

carrier and the receiver shall give all reasonable facilities to

each other for inspecting and tallying the goods.

7. After the goods are loaded the bill of lading to be issued

by the carrier, master, or agent of the carrier to the shipper

shall, if the shipper so demands, be a “shipped” bill of lading,

provided that if the shipper shall have previously taken up any

document of title to such goods, he shall surrender the same as

against the issue of the “shipped” bill of lading. At the option

of the carrier such document of title may be noted at the port

of shipment by the carrier, master, or agent with the name or

names of the ship or ships upon which the goods have been

shipped and the date or dates of shipment, and when so noted,

if it shows the particulars mentioned in paragraph 3 of Article

lil, it shall for the purpose of this article be deemed to

constitute a “shipped” bill of lading.

8. Any clause, covenant, or agreement in a contract of

carriage relieving the carrier or the ship from liability for loss

or damage to or in connection with goods arising from negli-

gence, fault, or failure in the duties and obligations provided in

this article, or lessening such liability otherwise than as pro-

vided in this convention, shall be null and void and of no

effect. A benefit of insurance in favor of the carrier or similar

clause shall be deemed to be a clause relieving the carrier from

liability.

ARTICLE IV.—RIGHTS AND IMMUNITIES.

i. Neither the carrier nor the ship shall be liable for loss or

damage arising or resulting from unseaworthiness unless

caused by want of due diligence on the part of the carrier to

make the ship seaworthy and to secure that the ship is properly

manned, equipped, and supplied and to make the holds,

refrigerating and cool chambers, and all other parts of the ship

in which goods are carried fit and safe for their reception,

carriage, and preservation in accordance with the provisions of

3la

paragraph | of Article III]. Whenever loss or damage has

resulted from unseaworthiness, the burden of proving the

exercise of due diligence shall be on the carrier or other person

claiming exemption under this article.

2. Neither the carrier nor the ship shall be responsible for

loss or damage arising or resulting from:

(a) Act, neglect, or default of the master, mariner, pilot, or

the servants of the carrier in the navigation or in the manage-

ment of the ship.

(b) Fire, unless caused by the actual fault or privity of the

carrier.

ble waters.

(d) Act of God.

(e) Act of war.

(f) Act of public enemies.

(g) Arrest or restraint of princes, rulers, or people or seizure

under legal process.

(h) Quarantine restrictions.

(i) Act or omission of the shipper or owner of the zoods, his

agent, Or representative.

(j) Strikes or lockouts or stoppage or restraint of labor from

whatever cause, whether partial or general.

(k) Riots and civil commotions.

(1) Saving or attempting to save life or property at sea.

(m) Wastage in bulk or weight or any other loss or damage

arising from inherent defect, quality, or vice of the goods.

(n) Insufficiency of packing.

(o) Insufficiency or inadequacy or marks.

32a

(p) Latent defects not discoverable by due diligence.

(q) Any other cause arising without the actual fault or

. privity of the carrier, or without the fault or neglect of the

agents or servants of the carrier, but the burden of proof shall

be on the person claiming the benefit of this exception to show

that neither the actual fault or privity of the carrier nor the

fault or neglect of the agents or servants of the carrier contrib-

uted to the loss or damage.

3. The shipper shall not be responsible for loss or damage

sustained by the carrier or the ship arising or resulting from

any cause without the act, fault, or neglect of the shipper, his

agents, or his servants.

4. Any deviation in saving or attempting to save life or

property at sea or any reasonable deviation shall noi be

deemed to be an infringement or breach of this convention or

of the contract of carriage, and the carrier shall not be liable

for any loss or damage resulting therefrom.

5. Neither the carrier nor the ship shall in any event be or

become liable for any loss or damage to or in connection with

goods in an amount exceeding 100 pounds sterling* per pack-

age or unit or the equivalent of that sum in other currency

unless the nature and value of such goods have been declared

by the shipper before shipment and inserted in the bill of

lading.

This declaration if embodied in the bill of lading shall be

prima facie evidence but shall not be binding or conclusive on

the carrier.

By agreement between the carrier, master, or agent of the

carrier and the shipper another maximum amount than that

mentioned in this paragraph may be fixed, provided that such

maximum shall not be less than the figure above named.

* col

The First Understanding (p. 77, infra) declares that the correspond-

ing amount shall be $500 lawful money of the United States. See also

Article IX, (p. 62, infra); and Section 4 (5) of the Act (p. 8, supra).

33a

Neither the carrier nor the ship shall be responsible in any

event for loss or damage to, or in connection with, goods if the

nature or value thereof has been knowingly misstated by the

shipper in the bill of lading.

6. Goods of an inflammable, explosive, or dangerous nature

to the shipment whereof the carrier, master, or agent of the

carrier has not consented with knowledge of their nature and

character may at any time before discharge be landed at any

place or destroyed or rendered innocuous by the carrier

without compensation, and the shipper of such goods shall be

liable for all damages and expenses directly or indirectly arising

out of or resuliing trom such shipment. If any such goods

shipped with such knowledge and consent shall become a

danger to the ship or cargo, they may in like manner be landed

at any place or destroyed or rendered innocuous by the carrier

without liability on the part of the carrier except to general

average, if any.

ARTICLE V.—SURRENDER OF RIGHTS AND IMMUNITIES AND

INCREASE OF RESPONSIBILITIES AND LIABILITIES.

A carrier shall be at liberty to surrender in whole or in part

all or any of his rights and immunities, or to increase any of his

responsibilities and liabilities under this convention provided

such surrender or increase shall be embodied in the bill of

lading issued to the shipper.

The provisions of this convention shall not be applicable to

charter parties, but if bills of lading are issued in the case of a

ship under a charterparty they shall comply with the terms of

this convention. Nothing in these rules shall be held to prevent

the insertion in a bill of lading of any lawful provision

regarding general average.

34a

ARTICLE VI.—SPECIAL CONDITIONS.

Notwithstanding the provisions of the preceding articles, a

carrier, master, or agent of the carrier and a shipper shall in

regard to any particular goods be at liberty to enter into any

agreement in any terms as to the responsibility and liability of

the carrier for such goods, and as to the rights and immunities

of the carrier in respect of such goods, or concerning his

obligation as to seaworthiness so far as this stipulation is not

contrary to public policy, or concerning the care or diligence of

his servants or agents in regard to the loading, handling,

stowage, carriage, custody, care, and discharge of the goods

carried by sea, provided that in this case no bill of lading has

been or shall be issued and that the terms agreed shall be

embodied in a receipt which shall be a nonnegotiable document

and shall be marked as such.

Any agreement so entered into shall have full legal effect:

Provided that this article shall not apply to ordinary com-

mercial shipments made in the ordinary course of trade, but

only to other shipments where the character or condition of the

property to be carried or the circumstances, terms, and condi-

tions under which the carriage is to be performed are such as

reasonably to justify a special agreement.

ARTICLE VII.—LIMITATIONS ON THE APPLICATION OF THE

RULES.

Nothing herein contained shall prevent a carrier or a shipper

from entering into any agreement, stipulation, condition, res-

ervation, or exemption as to the responsibility and liability of

the carrier or the ship for the loss or damage to, or in

connection with, the custody and care and handling of goods

prior to the loading on, and subsequent to the discharge from,

the ship on which the goods are carried by sea.

3Sa

ARTICLE VIII.—LIMITATION OF LIABILITY.

The provisions of this convention shall not affect the rights

and obligations of the carrier under any statute for the time

being in force relating to the limitation of the liability of

owners of seagoing vessels.*

ARTICLE IX.

The monetary units mentioned in this convention are to be

taken to be gold value.*

Those contracting states in which the pound sterling is not a

monetary unit reserve to themselves the right of translating the

sums indicated in this convention in terms of pound sterling

into terms of their own monetary system in round figures.’

The national laws may reserve to the debtor the right of

discharging his debt in national currency accordirg to the rate

of exchange prevailing on the day of the arrival of the ship at

the port of discharge of the goods concerned.

ARTICLE X.

The provisions of this convention shall apply to all bills of

lading issued in any of the contracting States.

= See Part III.

The effect of this provision is nullified for the United States by the

declaration of the First Understanding, p. 77, infra.

Congress has declared the equivalent to be $500 lawful money of the

United States. See Section 4 (5) of the Act of April 15, 1936, p. 8,

supra.

¥Y The declaration of the Second Understanding is that in the event of a

conflict, the text of the Act of April 15, 1936, shall prevail over the

text of the Convention. The Act applies only to bills of lading in

foreign commerce; hence the Convention also applies only to foreign

commerce of the United States and not to domestic commerce. where

its use is Optional.

Not vet (1951) implemented by ratification.

36a

ARTICLE XI.

After an interval of not more than two years from the day

on which the convention is signed, the Belgian Government

shall place itself in communication with the governments of the

high contracting parties which have declared themselves pre-

pared to ratify the convention, with a view to deciding whether

it shall be put into force. The ratifications shall be deposited at

Brussels at a date to be fixed by agreement among the said

governments. The first deposit of ratifications shall be re-

corded in a proces-verbal signed by the representatives of the

powers which take part therein and by the Belgian Minister for

Foreign Affairs.

The subsequent deposits of ratifications shall be made by

means Of a written notification, addressed to the Belgian

Government and accompanied by the instrument of ratifica-

tion.

A duly certified copy of the proces-verbal relating to the first

deposit of ratifications, of the notifications referred to in the

previous paragraph, and also of the instruments of ratification

accompanying them, shall be immediately sent by the Belgian

Government through the diplomatic channel to the powers

who have signed this convention or who have acceded to it. In

the cases contemplated in the preceding paragraph the said

Government shall inform them at the same time of the date on

which it received the notification.

ARTICLE XII.

Nonsignatory States may accede to the present convention

whether or not they have been represented at the International

Conference at Brussels.

A State which desires to accede shall notify its intention in

writing to the Belgian Government, forwarding to it the docu-

ment of accession, which shail be deposited in the archives of

the said Government.

The Belgian Government shall immediately forward to all

the States which have signed or acceded to the convention a

duly certified copy of the notification and of the act of

37a

accession, mentioning the date on which it received the notifi-

cation.

ARTICLE XIII.

The high contracting parties may at the time of signature,

ratification, or accession declare that their acceptance of the

present convention does not include any or all the self-govern-

ing dominions, or of the colonies, overseas possessions, protec-

torates, or territories under their sovereignty or authority, and

they may subsequently accede separately on behalf of any

self-governing dominion, colony, Overseas possession, protec-

torate, or territory excluded in their declaration. They may

also denounce the convention separately in accordance with its

provisions in respect of any self-governing dominion, or any

colony, overseas possession, protectorate, or territory under

their sovereignty or authority.

ARTICLE XIV.

The present convention shall take effect, in the case of the

States which have taken part in the first deposit of ratifica-

tions, one year after the date of the proces-verbal recording

such deposit. As respects the States which ratify subsequently

or which accede, and also in cases in which the convention is

subsequently put into effect in accordance with Article XIII, it

shall take effect six months after the notifications specified in

paragraph 2 of Article XI, and paragraph 2 of Article XII,

have been received by the Belgian Government.

ARTICLE XV.

In the event of one of the contracting States wishing to

denounce the present convention, the denunciation shall be

notified in writing to the Belgian Government, which shall

immediately communicate a duly certified copy of the notifica-

tion to all other States informing them of the date on which it

was received.

ee ee

38a

The denunciation shall only operate in respect of the State

which made the notification, and on the expiry of one year

after the notification has reached the Belgian Government.

ARTICLE XVI.

Any one of the contracting States shall have the right to call

for a tresh conference with a view to considering possible

amendments.

A State which would exercise this right should notify its

intention to the other States through the Belgian Government

which would make arrangements for convening the conference.

Done at Brussels, in a single copy August 25, 1924.

Signatures ad referendum: Chile,* Estonia,* France, Ger-

many, Great Britain, Hungary, Italy, Japan,* with reservations,

Poland and Danzig. Rumania, Spain, United States of

America, Yugoslavia.* The names of the individual signers

appear on pages 66 and 68.

Not vet (1951) implemented by ratification.

Sec.

1300.

1301.

1302.

1303.

1304.

—

‘ae

_—

1306.

1307.

1308.

1309.

1310.

1311.

1312.

1313.

1314.

1315.

CHAPTER 28—CARRIAGE OF GOODS BY SEA

Bills of lading subject to chapter.

Definitions.

Duties and rights of carrier.

Responsibilities and liabilities of carrier ana

ship.

(1) Seaworthiness.

(2) Cargo.

(3) Contents of bill.

(4) Bill as prima facie evidence.

(5) Guaranty of statements.

(6) Notice of loss or damage; limitation

of actions.

(7) “Shipped” bill of lading.

(8) Limitation of liability for negligence.

Rights and immunities of carrier and ship.

(1) Unseaworthiness.

(2) Uncontrollable causes of loss.

(3) Freedom from negligence.

(4) Deviations.

(5) Amount of liability; valuation of

cargo.

(6) Inflammable, explosive, or dangerous

cargo.

Surrender of rights; increase of liabilities;

charter parties; general average.

Special aggreement as to particular goods

Agreement as to liability prior to loading or

after discharge.

Rights of liabilities under other provisions.

Discrimination between competing shippers.

Weight of bulk cargo.

Liabilities before loading and after dis-

charge; effect on other laws.

Scope of chapter; “United States”; “foreign

trade”.

Suspension of provisions by President.

Effective date; retroactive effect.

Short title.

40a

$ 1300. Bills of lading subject to chapter

Every bill of lading or similar document of title which is

evidence of a contract for the carriage of goods by sea to or

from ports of the United States, in foreign trade, shall have

effect subject to the provisions of this chapter.

(Apr. 16, 1936, ch. 229, 49 Stat. 1207.)

§ 1301. Definitions

When used in this chapter—

(a) The term “carrier” includes the owner or the charterer

who enters into a contract of carriage with a shipper.

(b) The term “contract of carriage” applies only to contracts

of carriage covered by a bill of lading or any similar document

of title, insofar as such document relates to the carriage of

goods by sea, including any bill of lading or any similar

document as aforesaid issued under or pursuant to a charter

party from the moment at which such bill of lading or similar

document of title regulates the relations between a carrier and

a novder of the same.

and articles of every kind whatsoever, except live animals and

cargo which by the contract of carriage is stated as being

carried on deck and is so carried.

(d) The term “ship” means any vessel used for the carriage

of goods by sea.

(ce) The term “carriage of goods” covers the period from the

time when the goods are loaded on to the time when they are

discharged from the ship.

(Apr. 16, 1936, ch. 229, § 1, 49 Stat. 1208.)

dla

SECTION REFERRED TO IN OTHER SECTIONS

This section is referred to in section 1313 of this title.

§ 1302. Duties and rights of carrier

Subject to the provisions of section 1306 of this title, under

every contract of carriage of goods by sea, the carrier in

relation to the loading, handling, stowage, carriage, custody,

care, and discharge of such goods, shall be subject to the

responsibilities and liabilities and entitled to the rights and

immunities set forth in sections 1303 and 1304 of this title.

(Apr. 16, 1936, ch. 229, § 2, 49 Stat. 1208).

SECTION REFERRED TO IN OTHER SECTIONS

This section is referred to in section 1313 of this title.

§ 1303. Responsibilities and iiabilities of carrier and ship

(1) Seaworthiness

The carrier shall be bound, before and at the beginning of

the voyage, to exercise due diligence to—

(a) Make the ship seaworthy;

(b) Properly man, equip, and supply the ship;

all other parts of the ship in which goods are carried, fit and

safe for their reception, carriage, and preservation.

(2) Cargo

The carrier shall properly and carefully load, handle, stow,

carry, keep, care for, and discharge the goods carried.

(3) Contents of bill

After receiving the goods into his charge the carrier, or the

master or agent of the carrier, shall, on demand of the shipper,

42a

issue to the shipper a bill of lading showing among other

things—

(a) The leading marks necessary for identification of the

goods as the same are furnished in writing by the shipper

before the toading of such goods starts, provided such marks

are stamped or otherwise shown clearly upon the goods if

uncovered, or on the cases or coverings in which such goods

are contained, in such a manner as should ordinarily remain

legible until the end of the voyage.

(b) Either the number of packages or pieces, or the quantity

or weight, as the case may be, as furnished tn writing by the

shipper.

vided, That no carrier, master, or agent of the carrier, shall be

bound to state or show in the bili of lading any marks, number,

quantity, or weight which he has reasonable ground for sus-

pecting not accurately to represent the goods actually received,

or which he has had no reasonable means of checking.

(4) Bill as prima facie evidence

Such a bill of lading shall be prima tacie evidence of the

receipt by the carrier of the goods as therein described in

accordance with paragraphs (3)(a), (b), and (c), of this section:

Provided, That nothing in this chapter shai? be construed as

repealing or limiting the application of any part of the Act of

August 29, 1916, commonly known as the “Pomerene Bills of

Lading Act” [49 App. U.S.C. 81 et seq.|].

(5) Guaranty of statements

The shipper shall be deemed to have guaranteed to the

carrier the accuracy at the time of shipment of the marks,

number, quantity, and weight, as furnished by him; and the

shipper shall indemnify the carrier against all loss, damages,

and expenses arising or resulting from inaccuracies in such

particulars. The right of the carrier to such indemnity shall in

43a

no way limit his responsibility and liability under the contract

of carriage to any person other than the shipper.

(6) Notice of loss or damage; limitation of actions

Unless notice of loss or damage and the general nature of

such loss or damage be given in writing to the carrier or his

agent at the port of discharge before or at the time of the

removal of the goods into the custody of the person entitled to

delivery therof under the contract of carriage, such removal

shall be prima facie evidence of the delivery by the carrier of

the goods as described in the bili of lading. If the loss or

damage is not apparent, the notice must be given within three

days of the delivery.

Said notice of loss or damage may be endorsed upon the

receipt for the goods given by the person taking delivery

thereof.

The notice in writing need not be given if the state of the

goods has at the time of their receipt been the subject of joint

survey Or inspection.

In any event the carrier and the ship shall be discharged

from all liability in respect of loss or damage unless suit is

brought within one year after delivery of the goods or the date

when the goods should have been delivered: Provided, That it

a notice of loss or damage, either apparent or concealed, is not

given as provided for in this section, that fact shall not affect

or prejudice the right of the shipper to bring suit within one

year after the delivery of the goods or the date when the goods

should have been delivered.

In the case of any actual or apprehended loss or damage the

carrier and the receiver shall give a‘ reasonable facilities to

each other for inspecting and tallying the goods.

(7) “Shipped” bill of lading

After the goods are loaded the bill of lading to be issued by

the carrier, master, or agent of the carrier to the shipper shall,

if the shipper so demands, be a “shipped” bill of lading:

Provided, That if the shipper shall have previously taken up

44a

any document of title to such goods, he shall surrender the

same as against the issue of the “shipped” bill of lading, but at

the option of the carrier such document of title may be noted

at the port of shipment by the carrier, master, or agent with the

name or names of the ship or ships upon which the goods have

been shipped and the date or dates of shipment, and when so

noted the same shall for the purpose of this section be deemed

to constitute a “shipped” bill of lading.

(8) Limitation of liability for negligence

Any clause, covenant, or agreement in a contract of carriage

relieving the carrier or the ship from liability for loss or

damage to or in connection with the goods, arising from

negligence, fault, or failure in the duties and obligations

provided in this section, or lessening such liability otherwise

than as provided in this chapter, shall be null and void and of

no effect. A benefit of insurance in favor of the carrier, or

similar clause, shall be deemed to be a clause relieving the

carrier from liability.

(Apr. 16, 1936, ch. 229, § 3, 49 Stat. 1208.)

REFERENCES IN TEXT

The Pomerene Bills of Lading Act, referred to in par. (4) is

act Aug. 29. 1916, ch. 415, 39 Stat. 538, as amended, which is

classified generally to chapter 4 (§ 81 et seq.) of Title 49,

Appendix, Transportation. For complete classification of this

Act to the Code, see Short Title note set out under section 81

of Title 49, Appendix, and Tables.

48a

SECTION REFERRED TO IN OTHER SECTIONS

This section is referred to in sections 1302, 1304, 1306, 1313

of this title.

§ 1304. Rights and immunities of carrier and ship

(1) Unseaworthiness

Neither the carrier nor the ship shall be liable for loss or

damage arising or resulting from unseaworthiness unless

caused by want of due diligence on the part of the carrier to

make the ship seaworthy, and to secure that the ship is properly

manned, equipped, and supplied, and to make the holds,

refrigerating and cool chambers, and all other parts of the ship

in which goods are carried fit and safe for their reception,

carriage, and preservation in accordance with the provisions of

paragraph (1) of section 1303 of this title. Whenever loss or

damage has resulted from unseaworthiness, the burden of

proving the exercise of due diligence shall be on the carrier or

other persons claiming exemption under this section.

(2) Uncontrollable causes of loss

Neither the carrier nor the ship shall be responsible for loss

or damage arising or resulting from—

(a) Act, neglect, or default of the master, mariner, pilot, or

the servants of the carrier in the navigation or in the manage-

ment of the ship;

(b) Fire, unless caused by the actual fault or privity of the

carrier;

ble waters;

(d) Act of God;

(e) Act of war;

(f) Act of public enemies;

46a

(g) Arrest or restraint of princes, rulers, or people, or

seizure under legal process;

(h) Quarantine restrictions;

(i) Act or omission of the shipper or owner of the goods, his

agent or representative;

(j) Strikes or lockouts or stoppage or restraint of labor from

whatever cause, whether partial or general: Provided, That

nothing herein contained shall be construed to relieve a carrier

from responsibility for the carrier’s own acts;

(k) Riots and civil commotions;

(1) Saving or attempting to save life or property at sea;

(m) Wastage in bulk or weight or any other loss or damage

arising from inherent defect, quality, or vice of the goods;

(n) Insufficiency of packing;

(0) Insufficiency or inadequacy of marks;

(p) Latent defects not discoverable by due diligence; and

(q) Any other cause arising without the actual fault and

privity of the carrier and without the fault or neglect of the

agents or servants of the carrier, but the burden of proof shall

be on the person claiming the benefit of this exception to show

that neither the actual fault or privity of the carrier nor the

fault or neglect of the agents or servants of the carrier contrib-

uted tc the loss or damage.

(3) Freedom from negligence

The shipper shall not be responsible for loss or damage

sustained by the carrier or the ship arising or resulting from

any cause without the act, fauit, or neglect of the shipper, his

agents, or his servants.

47a

(4) Deviations

Any deviation in saving or attempting to save life or prop-

erty at sea, or any reasonable deviation shall not be deemed to

be an infringement or breach of this chapter or of the contract

of carriage, and the carrier shall not be liable for any loss or

damage resulting therefrom: Provided, however, That if the

deviation is for the purpose of loading or unloading cargo or

passengers it shall, prima facie, be regarded as unreasonable.

(5) Amount of liability: valuation of cargo

Neither the carrier nor the ship shall in any event be or

become liable for any loss or damage to or in connection with

the transportation of goods in an amount exceeding $500 per

package lawful rnoney of the United States, or in case of goods

not shipped in packages. per customary freight unit, or the

equivalent of that sum in other currency, unless the nature and

value of such goods have been declared by the shipper before

shipment and inserted in the bill of lading. This declaration, if

embodied in the bill of lading, shall be prima facie evidence,

but shall not be conclusive on the carrier.

By agreement between the carrier, master, or agent of the

carrier, and the shipper another maximum amount than that

mentioned in this paragraph may be fixed: Provided, That

such maximum shall not be less than the figure above named.

In no event shall the carrier be liable for more than the amount

of damage actually sustained.

Neither the carrier nor the ship shail be responsible in any

event for loss or damage to or in connection with the transpor-

tation of the goods if the nature or value thereof has been

knowingly and fraudulently misstated by the shipper in the bill

of lading.

(6) Inflammable, explosive, or dangerous cargo

Goods of an inflammable, explosive, or dangerous nature to

the shipment whereof the carrier, master or agent of the carrier,

has not consented with knowledge of their nature and charac-

48a

ter, may at any time before discharge be landed at any place or

destroyed or rendered innocuous by the carrier without com-

pensation, and the shipper of such goods shall be liable for all

damages and expenses directly or indirectly arising out of or

resulting from such shipment. If any such goods shipped with

such knowledge and consent shall become a danger to the ship

or cargo, they may in like manner be landed at any place, or

destroyed or rendered innocuous by the carrier without liability

on the part of the carrier except to general average, if any.

(Apr. 16, 1936, ch. 229, § 4, 49 Stat. 1210.)

SECTION REFERRED TO IN OTHER SECTIONS

This section is referred to in sections 1302, 1306, 1313 of this

title.

§ 1305. Surrender of rights; increase of liabilities; charter

parties; general average

A carrier shall be at liberty to surrender in whole or in part

all or any of his rights and immunities or to increase any of his

responsibilities and liabilities under this chapter, provided such

surrender or increase shall be embodied in the bill of lading

issued to the shipper.

The provisions of this chapter shall not be applicable to

charter parties: but if bills of lading are issued in the case of a

ship under a charter party, they shall comply with the terms of

this chapter. Nothing in this chapter shall be held to prevent

the insertion in a bill of lading of any lawful provision

regarding general average.

(Apr. 16, 1936, ch. 229. § 5, 49 Stat. 1211.)

49a

SECTION REFERRED TO IN OTHER SECTIONS

This section is referred to in sections 1306, 1309, 1313 of this

title.

$ 1306. Special agreement as to particular goods

Notwithstanding the provisions of sections 1303 to 1305 of

this title, a carrier, master or agent of the carrier, and a shipper

shall, in regard to any particular goods be at liberty to enter

intO any agreement in any terms as to the responsibility and

liability of the carrier for such goods, and as to the rights and

immunities of the carrier in respect of such goods, or his

obligation as 10 seaworthiness (so far as the stipulation regard-

ing seaworthiness is not contrary to public policy), or the care

or diligence of his servants or agents in regard to the loading,

handling, stowage, carriage, custody, care, and discharge of

the goods carried by sea: Provided, That in this case no bill of

lading has been or shall be issued and that the terms agreed

shall be embodied in a receipt which shall be a nonnegotiable

document and shall be marked as such.

Any agreement so entered into shall have full legal effect:

Provided, That this section shall not apply to ordinary com-

mercial shipments made in the ordianry course of trade but

only to other shipments where the character or condition of the

property to be carried or the circumstances, terms, and condi-

tions under which the carriage is to be performed are such as

reasonably to justify a special agreement.

(Apr. 16, 1936, ch. 229, § 6, 49 Stat. 1211.)

50a

SECTION REFERRED TO IN OTHER SECTIONS

This section is referred to in sections 1302, 1313 of this title.

$ 1307. Agreement as to liability prior to loading or after

discharge

Nothing contained in this chapter shall prevent a carrier or a

shipper from entering into any agreement, stipulation, condi-

tion, reservation, Or exemption as to the responsibility and

liability of the carrier or the ship for the loss or damage to or

in connection with the custody and care and handling of goods

prior to the loading on and subsequent to the discharge from

the ship on which the goods are carried by sea.

(Apr. 16, 1936, ch. 229, § 7, 49 Stat. 1212.)

SECTION REFERRED TO IN OTHER SECTIONS

This section is referred to in section 1313 of this title.

$ 1308. Rights and liabilities under other provisions

The provisions of this chapter shall not affect the rights and

obligations of the carrier under the provisions of the Shipping

Act, 1916 (46 U.S.C. 801 et seq.], or under the provisions of

sections 175, 181 to 183, and 183b to 188 of this title or of any

amendments thereto; or under the provisions of any other

enactment for the time being in force relating to the limitation

of the liability of the owners of seagoing vessels.

(Apr. 16, 1936, ch. 229, § 8, 49 Stat. 1212.)

REFERENCES IN TENT

The Shipping Act of 1916, referred to in text, is act Sept. 7,

1916, ch. 451, 39 Stat. 728, as amended, which is classified

principally to chapter 23 (§ 801 et seq.) of this title. For

complete classification of this Act to the Code, see section 842

of this title and Tables.

Section 175 of this title, referred to in text, was repealed by

act Oct. 9, 1940, ch. 777, § 7, 54 Stat. 1028.

Sia

SECTION REFERRED TO IN OTHER SECTIONS

This section is referred to in section 1313 of this title.

§ 1399. Discrimination between competing shippers

Nothing contained in this chapter shall be construed as

permitting a common carrier by water to discriminate between

competing shippers similarly placed in time and circumstances,

either (a) with respect to their right to demand and receive bills

of lading subject to the provisions of this chapter; or (b) when

issuing such bills of lading, either in the surrender of any of the

carrier’s rights and immunities or in the increase of any of the

carrier’s responsibilities and liabilities pursuant to section 1305

of this title: of (c) in any other way prohibited by the Shipping

Act, 1916, as amended [46 U.S.C. 801 et seq.].

(Apr. 16, 1936, ch. 229, § 9, 49 Stat. 1212.)

REFERENCES IN TEXT

The Shipping Act of 1916, as amended, referred to in text, is

act Sept. 7, 1916, ch. 451, 39 Stat. 728, as amended, which is

classified principally to chapter 23 (§ 801 et seq.) of this title.

For complete classification of this Act to the Code, see section

842 of this title and Tables.

§ 1310. Weight of bulk cargo

Where under the customs of any trade the weight of any

bulk cargo inserted in the bill of lading is a weight ascertained

or accepted by a third party other than the carrier or the

shipper, and the fact that the weight is so ascertained or

accepted is stated in the bill of lading, then, notwithstanding

anything in this chapter, the bill of lading shall not be deemed

to be prima facie evidence against the carrier of the receipt of

goods of the weight so inserted in the bill of lading, and the

accuracy thereof at the time of shipment shall not be deemed

to have been guaranteed by the shipper.

(Apr. 16, 1936, ch. 229, § 11, 49 Stat. 1212.)

§ 1311. Liabilities before loading and after discharge; effect on

other laws

Nothing in this chapter shall be construed as Superseding any

part of sections 190 to 196 of this title, or of any other law

which would be applicable in the absence of. this chapter,

insofar as they relate to the duties, responsibilities, and liabili-

ties of the ship or carrier prior to the time when the goods are

loaded on or after the time they are discharged from the ship.

(Apr. 16, 1936, ch. 229, § 12, 49 Stat. 1212.)

§ 1312. Scope of chapter; “United States”: “foreign trade”

This chapter shall apply to all contracts for carriage of goods

by sea to or from ports of the United States in foreign trade.

As used in this chapter the term “United States” includes its

districts, territories, and possessions. The term “foreign trade”

means the transportation of goods between the ports of the

United States and ports of foreign countries. Nothing in this

chapter shall be held to apply to contracts for carriage of

goods by sea between any port of the United States or its

possessions, and any other port of the United States or its

possessions: Provided, however, That any bill of lading or

similar document of title which is evidence of a contract for the

carriage of goods by sea between such ports, containing an

express statement that it shall be subject to the provisions of

this chapter, shall be subjected hereto as fully as if subject

hereto by the express provisions of. this chapter: Provided

further, That every bill of lading or similar document of title

which is evidence of a contract for the carriage of goods by sea

from ports of the United States, in foreign trade, shall contain

a statement that it shall have effect subject to the provisions of

this chapter.

(Apr. 16, 1936, ch. 229, § 13, 49 Stat. 1212: Proc. No. 2695,

eff. July 4, 1946, 11 F.R. 7517, 60 Stat. 1352.)

‘”

CODIFICATION

A proviso in second sentence of this section that the Philip-

pine Legislature might by law exclude its application to trans-

portation to or from ports of the Philippine Islands was

omitted in view of Proc. No. 2695, set out under section 1394

of Title 22, Foreign Relations and Intercourse, which pro-

claimed the independence of the Philippines.

§ 1313. Suspension of provisions by President

Upon the certification of the Secretary of Transportation

that the foreign commerce of the United States in its competi-

tion with that of foreign nations is prejudiced by the provi-

sions, or any of them, of sections 1301 to 1308 of this title, or

by the laws of any foreign country or countries relating to the

carriage of goods by sea, the President of the United States

may, from time to time, by proclamation, suspend any or all

provisions of said sections for such periods of time or indefi-

nitely as may be designated in the proclamation. The President

may at any time rescind such suspension of said sections, and

any provisions thereof which may have been suspended shall

thereby be reinstated and again apply to contracts thereafter

made for the carriage of goods by sea. Any proclamation of

suspension or rescission of any such suspension shall take

effect on a date named therein, which date shall be not less

than ten days from the issue of the proclamation.

Any contract for the carriage of goods by sea, subject to the

provisions of this chapter, effective during any period when

sections 130] to 1308 of this title, or any part thereof, are

suspended, shal! be subject to all provisions of law now or

hereafter applicable to that part of said sections which may

have thus been suspended.

(Apr. 16, 1936, ch. 339. § 14, 49 Stat. 1213, Aug. 6, 1981, Pub.

L. 97-31, § 12(146), 95 Stat. 166.)

S4da

AMENDMENTS

1981—Pub. L. 97-31 substituted in first par. “Secretary of

Transportation” for “Secretary of Commerce”.

§ 1314. Effective date; retroactive effect

This chapter shall take effect ninety days after April 16,

1936; but nothing in this chapter shall apply during a period

not to exceed one year following April 16, 1936, to any

contract for the carriage of goods by sea, made before April

16, 1936, nor to any bill of lading or similar document of title

issued, whether before or after such date in pursuance of any

such contract as aforesaid.

(Apr. 16, 1936, ch. 229, § 15, 49 Stat. 1213.)

$ 1315. Short title

This chapter may be cited as the “Carriage of Goods by Sea

Act.”

(Apr. 16, 1936, ch. 229, § 16, 49 Stat. 1213.)

REFERENCES IN TEX?

This chapter, referred to in text, was in the original “This

Act”, meaning act Apr. 16, 1936, ch. 229, 49 Stat. 1207, which

enacted this chapter and amended section 25 of former Title

49, Transportation. For complete classification of this Act to

the Code, see Tables.

This is a copy of a public record, reproduced as it was published. It is not legal advice, and it may not be the version a court would rely on. Check the official source before you cite it.