Petitioners Brief — Den Norske Amerikalinje, A/S v. Blumental Import Corp.

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AOR PAID PT 7

Supreme Court of the United States

Octoser Term, 1940,

Den Norske Amerikatinsr A/S, as claimant of the steam-

ship Inersorp, her engines, ete.,

Petitioner,

against

BLUMENTHAL Import CorporaTIoN,

Respondent.

BRIEF IN SUPPORT OF PETITION FOR WRIT

OF CERTIORARI.

The essential facts are stated in the petition. For a

fuller statement the Court is referred to the findings of

fact made by the District Court (R. pp. 282-288). See,

too, the opinion of the Cireuit Court of Appeals (R. pp.

306-308 ).

FIRST POINT

The decision below is in conflict with that of the

Circuit Court of Appeals for the Third Circuit in The St.

Hubert, 107 Fed. 727, certiorari denied 181 U. S. 621,

and with many other well considered decisions.

1. The decision in The St. Hubert.

In The St. Hubert, supra, Stanley & Co. of Calcutta,

acting as agents of Cooper, Smith & Co. of Philadelphia,

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shipped to the latter sixty-five bales of goat skins in two

lots, on board two steamers, the Palawan and the City of

Sparta. The bills of lading issued at Calcutta by the

owners of the two vessels are thus described by the Cireuit

Court of Appeals (107 Fed. at p. 728):

“The bills of lading given by the owners of the

Palawan and Sparta were through bills of lading

from Caleutta to Philadelphia; that of the Palawan

stating that the skins were to be carried via London,

with a stipulation that ‘the company are to be at

liberty to carry the said goods to the port of their

destination by the above or other steamer or steam-

ers, ship or ships, either belonging to the company

or to other persons.’ The bill of lading for the

skins shipped by the Sparta is also a through bill

of lading from Calcutta to Philadelphia, but states

that the ship is bound for London via Suez Canal,

and that the goods are ‘to be transshipped or landed

at London, with liberty to warehouse there, and from

London to be forwarded by steamer, at the risk of

the shipper, but at ship’s expense, and to be deliv-

ered subject to the exceptions and conditions at foot

hereof.’ It also has a general stipulation similar to

that of the Palawan,—that the ‘owners are to be at

liberty to carry the said goods to their port of des-

tination by the above or other steamer or steamers,

ship or ships, either belonging to the owners or other

persons, * * * and to transship * * * the goods,

either on shore or afloat, and reship and forward the

same, at owner’s expense, but at merchant’s risk.’

Upon this bill of lading of the Sparta there is also

the following note: ‘The goods to be carried to Phila-

delphia, subject to the terms and conditions of local

bills of lading issued by the agents of such steamer

or steamers.’ ”

When the goods arrived at London they were trans-

shipped on the steamship St. Hubert, to be carried from

London to Philadelphia. The goods were received by the

St. Hubert pursuant to the terms of its own bill of lading

which contained a provision not in the bills of lading issued

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at Calcutta providing that the shipowner was not to be i

liable: ¥

“* * * for any claim, notice of which is not given

before the removal of the goods” (p. 729).

The St. Hubert reached Philadelphia in due course and

the goods were delivered to Cooper, Smith & Co., who é

did not give notice of claim before they removed the goods. ‘

A suit to recover for the damage sustained by the goods

was later brought in rem against the St. Hubert. The Cir-

cuit Court of Appeals for the Third Cireuit held that the

St. Hubert could be made liable only in accordance with é

the contract under which it had accepted the goods and that ,

the failure to give notice of claim before the goods were

removed barred the suit. In addition to the extracts from

the opinion quoted supra, pages 6, 7, the Cireuit Court of

Appeals for the Third Cireuit further said (p. 732):

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“The new carrier receipted for the goods from the

old, and delivered to them its bills of lading, which

were the measure of its responsibility, and the terms

of which were binding upon it, as an obligation of

its own contract freely entered into. There is in

these bills of lading a single reference to the through

bills of lading issued by the owners of the Palawan

and Sparta, in Calcutta, and that is the convenient

and usual one in cases of transshipment that the

delivery of the goods is to be made to the party or

parties who appear to be consignees of the through

bills of lading, properly indorsed. But this is an

express term and stipulation of the particular bills

of lading issued by the new carrier. The terms upon q

which the service was to be performed depended :

upon the consent of the new carrier as embodied

in the agreement of its bills of lading. It assumed

no duty or obligation towards the consignees, other

than as stated and limited therein. The original

carriers were obliged to make the best bargain they

could for the continuance of the carriage service they

had undertaken for the owners and consignees.”

PRPS OE

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In concluding its opinion the Circuit Court of Appeals

for the Third Circuit further stated (p. 733):

“The liability of the last carrier to the owners

of the goods it had undertaken to carry, whether

that liability rested on contract or in tort, must be

taken to be limited by the express stipulation con-

tained in its individual contract of service.”

The Cireuit Court of Appeals for the Third Cireuit fur-

ther pointed out that a provision in the bill of lading for

the Sparta, that the goods were to be carried “subject to

the terms and conditions of local bills of lading,” removed

“all ground for controversy as to the 25 bales of skins

received from that ship” (p. 733). While the bill of lading

of the Palawan contained no such provision, the Circuit

Court of Appeals held that the same rule applied.

9 Other decisions in accord with the St. Hubert.

In Crossan v. New York & New England R. R. Co., 149

Mass. 196 (1889), the defendant, an independent auxiliary

carrier, had notice from the way-bill that freight had been

fully prepaid to the initial carrier. Nevertheless it re-

ceived a shipment of horses and transported them to des-

tination, where it refused to deliver them unless paid the

freight due on its own line. The owner of the horses

brought suit for conversion, arguing that the initial carrier

was a special agent and that the defendant had notice

that the initial carrier had no authority to create an addi-

tional charge on the goods. In deciding in favor of the

defendant, Mr. Justice Holmes, at that time on the Massa-

chusetts bench, said (pp. 198-199) :

“An unforeseen ease had arisen, and the defend-

ant was called on by the plaintiff’s forwarding agent

to act at once in some way. * * * The plaintiff was

not present, and it might take time and cost money

to communicate with him; the horses were perish-

able, and their keep would probably have cost more

than the unpaid freight if they had been delayed;

although we do not now decide whether these laa?

facts make a difference in the law.

“If the effect of the plaintiff's instructions were

doubtful, the law would give the defendant the benefit

of the interpretation adopted by it in good faith

(/reland vy. Livingston, L.. Ro 5 H. L. 395, 416), ame

would consider the necessity of an immediate deei-

sion. Hawks v. Locke, 139 Mass. 205, 200."

In concluding the opinion on this point Mr. Justiee

Holmes said (p. 199) :

“It is to be observed that the principle that ne

man’s property can be taken from him without his

consent, express or implied, has not prevented the

last of a line of carriers from maintaining its lien

when the first carrier has forwarded the goods te

a wrong place. Briggs v. Boston & Lowell Railroad,

6 Allen 246, distinguishing Robinson y. Baker, 5

Cush. 137. Whitney y. Beckford, 105 Mass. 267.

Patten v. Union Pacific Railway, 29 Fed. Rep. 500,

disapproving Fitch y. Newberry, 1 Doug. ( Mich.)

1; Vaughan v. Providence Worcester Railroad,

13 R. 1. 578. Yet in that case the last carrier might

be said to have notice that the forwarding agent's

authority was limited to sending the goods to the

place directed by the shipper.”

In addition to the authorities cited in the preceding

paragraph, reference may be made to Volume 13, C.J...

p. 913; Crane v. Tooker Storage & Forwarding Co., 204

Ill. App. 354; Hall ¢ ‘orp. v. Cargo ex s/s Mont Louis, 62

Fed. (2d) 603, 605 (C. C. A. 2), and the numerous decisions

holding that the owner of goods is bound by a contract of

carriage restricting the carrier’s liability, although the’

agent was without authority to enter into such a contract

and that lack of authority was ascertainable by the earrier,

Reid v. Fargo, 241 U.S. 544;

Nelson v. Hudson River R. R. Co., 48 N. Y. 498:

Miller v. Harvey, 221 N. Y. 54, o7, per Mr. Justice

Cardozo.

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The Cayo Mambi, 1 Fed. Supp. 118, aff’d 62 Fed. (2d)

791 (C. C. A. 2), also follows The St. Hubert, supra, and

supports the petitioner. In that case the bill of lading

issued by the initial carrier fixed the value of the packages

received at not to exceed £100 per package. Transshipment

was effected at New York, the bill of lading of the independ-

ent auxiliary carrier restricting the amount recoverable to

$100 per package. The goods were damaged while in the

possession of the independent auxiliary carrier, which

thereupon paid the goods owner the amount of the claim

up to $100 per package. The goods owner was held en-

titled to recover from the initial carrier the balance of

damages outstanding, on the theory that the initial carrier

had by the forwarding contract restricted the claim of the

goods owner against the independent auxiliary carrier,

and that this restriction was valid insofar as the independ-

ent auxiliary carrier was concerned.

3. The decision of the Circuit Court of Appeals in the

case at bar.

The Idefjord, an “independent auxiliary carrier,” was

free to accept the goods on its own conditions, if we assume,

as we should, that The St. Hubert, supra, was correctly

decided.

The Cireuit Court of Appeals for the Second Circuit,

however, denied the validity of that fundamental proposi-

tion, saying (R., bottom of p. 312):

“«* * * the Idefjord, by accepting the cargo for

carriage with knowledge of the clean through bills,

made the issuer of those bills its agent. It could

not then accept the goods under its own conditions

* * #9)

If the Idefjord “made the issuer of those (Alexandria)

bills of lading its agent,” it could not escape liability in

the present suit; by parity of reasoning, the St. Hubert

made the issuer of the Caleutta bills of lading its agent,

and that case was wrongly decided.

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The above surprising proposition of the Cireuit Court

of Appeals for the Second Cireuit is contrary to other

authorities. In Scrutton on Charter Parties and Bills of

Lading, 14th Ed. (1939), the legal principle is stated as

follows (p. 84):

“Semble, that the companies other than the com-

pany which signs and delivers the bill of lading, are

not liable and cannot sue on the contract of carriage

contained in such bill of lading, unless the signing 'g

company had authority to act in their behalf, or its :

action was afterwards ratified by them.”

17

In the case at bar D. C. Pitellos & Co., who signed the 3

Alexandria bills of lading, had no authority to act on behalf

of the Idefjord. Nor were the Alexandria bills of lading

ratified by or on behalf of the Idefjord, which accepted

the goods under and subject to its own terms and condi-

tions.

There are some subsidiary points in the opinion of the

Cireuit Court of Appeals which may be briefly referred to:

It is said (R. p. 311) that there is no provision in the

Alexandria bills of lading which authorized shipment on

deck from Port Said. The Alexandria bills of lading,

however, provided, as quoted by the Cireuit Court of Ap-

peals (R. p. 310), that the goods were to be transshipped

“subject to the conditions and exceptions of the carrying

conveyance.”

It was a necessary condition that the goods should be

carried for a part of the way on deck, because there was

no room below deck. It was unnecessary that the Alex-

andria bills of lading specify in detail all the conditions

that an independent auxiliary carrier might have to insist

upon.

Moreover, these Alexandria bills of lading gave the

carrier the liberty “to deviate” (par. 1 of bills of lading,

inserted between pages 224 and 233 of the record). The

right to deviate includes the right to carry goods on deck.

G. W. Sheldon & Co. vy. Hamburg American Line, 28 Fed.

(2d) 249, 251 (C. C. A. 3).

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The Alexandria bills of lading, so called, did not provide

for carriage on the ships named therein beyond Port Said.

From Port Said on they were not in a true sense bills of

lading, but merely contracts of D. C. Pitellos & Co. to effect

transshipment. Any person receiving them did so charged

with knowledge of these infirmities, patent on their face,

including the provision therein that the goods would be

transshipped “subject to the conditions and exceptions of

the carrying conveyance.”

Indeed, the provisions of the Alexandria bills of lading

on this subject appear unnecessary. In The St. Hubert,

supra, the bills of lading issued by the Palawan at Cal-

cutta contained no provision that transshipment would be

subject to the terms of the independent auxiliary carrier.

Nevertheless the Court held that the clause in the bill of

lading of the independent auxiliary carrier, requiring that

notice of claim be given before removal of the goods, re-

quired the dismissal of the suit.

Petitioner does not assert that there may not be liability

on the part of D. C. Pitellos & Co., who was bound by the

provisions of the Alexandria bills of lading, and takes no

position on that subject.

The decision of the Cireuit Court of Appeals is based

on two fallacious premises: (1) that the Alexandria bills

of lading forbade carriage on deck by an independent

auxiliary carrier, even for a minor part of the journey;

(2) that the master of the Idefjord was affected with con-

structive knowledge of the Alexandria bills of lading, the

originals of which he never saw, being handed copies, along

with a bundle of other documents, as the Idefjord left Port

Said (R. pp. 91-92).

It is claimed that the master should have scrutinized

what purported to be copies of the Alexandria bills of lad-

ing, in which event he might at least have had a doubt as

to whether he could accept the bales for on-deck shipment.

There are many answers to the foregoing. The master

was assured on all sides that on-deck carriage had been

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agreed to (R. pp. 284, 285, 287). He was entitled to assume

that as consent had been obtained from the shippers, the

shippers had duly communicated with any other parties

interested. The law did not require the master to make

an exhaustive legal investigation before the goods were

accepted. Reid v. Fargo and Nelson v. Hudson River R. R.

Co., supra, p. 15.

As was pointed out by Mr. Justice Holmes in Crossan v.

N. Y. € New England R. R. Co. (supra, p. 15), if the

master’s instructions were not clear the law would give

him the benefit of a bona fide interpretation which he might

put upon them and would consider the necessity of an

immediate decision.

In the case at bar the suit is solely in rem against the

ship. The only undertaking on the part of the master was

to carry the bales on deck. Antecedent undertakings by

other persons not the agents of the ship do not create

any right in rem, which is a secret lien “stricti juris” and

not to be extended by “construction, analogy or inference.”

Osaka Shosen Kaisha v. Pacific Lumber Co., 260 U. S. 490,

499; The Seven Brothers No. 1, 203 Fed. 21 (C. C. A. 2);

The Owego, 270 Fed. 967 (C. C. A. 2); The Saturnus, 250

Fed. 407 (C. C. A. 2); The Blandon, 287 Fed. 722 (D. C.,

S. D. N. Y.); The Devona, 272 Fed. 275 (D. C., E. D. N. Y.).

The Cireuit Court of Appeals for the Second Circuit

states that The St. Hubert, supra, and Crossan v. N. Y. &

New England R. Co., supra, should be “limited to their

facts” (R. p. 309). In The St. Hubert the goods were

shipped by Stanley & Co. to Cooper, Smith & Co. Neither

of these parties ever gave any consent to the goods being

reshipped at London under a restricted liability. In the

ease at bar the sales contract hetween Zariffa and the re-

spondent herein was on a C. & F. basis so that Zariffa was

the respondent’s agent in making the shipment. The sit-

uation is wholly parallel to that in The St. Hubert, supra,

except that the position of the respondent in the case at

bar is weakened by the fact that Zariffa agreed that the

goods should be shipped on deck (R. p. 286).

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This was not a “harsh, arbitrary” condition as incor-

rectly said by the Circuit Court of Appeals (R. p. 311),

but was, on the contrary, the course deemed best by the

respondent’s agent and all of the other parties concerned,

including D. C. Pitellos & Co., Stapledon & Son and Port

Said & Suez Coal Co.

In further discussing the cases and in attempting to

distinguish The St. Hubert, supra, the Cireuit Court of

Appeals for the Second Circuit said (R. p. 312): “In none

of those cases was the variation one which could work harm

upon an innocent third party.”

In The St. Hubert, supra, the “variation” was a provi-

sion in the bill of lading of the independent auxiliary

earrier that there should be no liability on its part for

any claim, notice of which was not given before the removal

of the goods. As the bill of lading of the independent

auxiliary carrier was not issued to the consignee of the

goods, this provision was unknown to the consignee. Never-

theless, failure to give the notice resulted in dismissal

of the suit. In that case the “variation” was one “which

could work harm upon an innocent third party.”

SECOND POINT

Discussion of cases cited by the Circuit Court of Ap-

peals other than those already commented upon.

The T. A. Goddard (D. C., 8. D. N. Y.), 12 Fed. 174,

cited R. p. 308. In that case tea was shipped at Foochow,

China, on the steamer Orestes, the bill of lading providing

for transshipment at Hong Kong on the T. A. Goddard.

The tea was loaded on the T. A. Goddard at Hong Kong

alongside of some camphor, the odor of which permeated

the tea and damaged it. Russell & Co. were the charterers

of the T. A. Goddard, and it was claimed by the ship, when

sued for damage to the tea, that no recovery could be had

because Russell & Co. had sanctioned the stowage. The

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ship was held liable on the ground that the master was

negligent in stowing the camphor in proximity to the tea

and that the concurrence of Russell & Co. was not a defense.

The facts of the case are so different from those in the

case at bar that it can hardly be said to be a precedent

for either side. But if it may be relied on, it supports the

position of the petitioner, the Court saying (p. 181):

“The libellants, having no direct agreement with

the master of the T. A. Goddard, are doubtless lim-

ited in their recovery by the lawful terms of the

contract between Russell & Co. and the bark, as

laid down in the case of the N. J. St. Nav. Co. v. Mer-

chants’ Bank, 6 How. 344.”

The above is the position of petitioner in the ease at

bar.

Bank of California v. International Mercantile Marine

Co., 64 Fed. (2d) 97; The Hibernian, 1. R. [1907] P. 277:

Scrutton on Charter Parties and Bills of Lading, 14th Ed.,

1939, p. 84, cited R. p. 310, hold that the bill of lading

issued by the initial carrier may validly incorporate by

reference the bill of lading of the independent auxiliary

carrier. These decisions lend no support to the conelusion

of the Circuit Court of Appeals in the case at bar.

Pacific Rice Mills v. Westfeldt Bros., 31 Fed. (2d) 979,

and other cases cited at the bottom of R. p. 310, hold

merely that a provision in a contract in handwriting or

typewriting is to be preferred to a provision in print, if

the provisions are inconsistent. However, it is equally

well settled that a provision in typewriting or handwriting

does not supersede a provision in print unless inconsisteney

in fact exists.

The Delaware, 14 Wall. 579; St. Johns, N. F. Shipping

Corp. v. S. A. Companhia, etc., 263 U. 8. 119; The Gran

Canaria (D. C., 8. D. N. Y.), 16 Fed. 868, and The Kirkhill,

99 Fed. 575 (C. C. A. 4), cited R. p. 311, hold, generally,

that if the master issues a clean bill of lading, the goods

cannot lawfully be carried on the ship’s deck. In the ease

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at bar the goods were accepted by the Idefjord ynder the

stipulation that they were to be carried on the s\jp’s deck,

and the master of the Idefjord did not issue any clean bill

of lading (supra, p.3). The decisions referre’! togre eonse-

quently not in point.

Hansson v. Hamel & Horley, L. R. [1922] 2 A.c, 36, and

Harper v. Hochstim, 278 Fed. 102, cited R. — 312, are

cases relating to the sales of goods, and seem 9 have no

bearing on the carrier’s liability.

In The Sprott (D. C., S. D. N. Y.), 70 Fed. 32, cited by

the Cireuit Court of Appeals, R. p. 312, the -harterers,

acting in the immediate presence of the masterand ag his

amanuenses, signed, as his agents, clean bills of lading

for the shipment involved. Later this shipment yas stowed

on the ship’s deck and sustained damage. For oyjous rea-

sons the ship was held liable in a suit in rem; tle fact that

after the bills of lading referred to had been jggyed the

master signed another so-called general bill o jading in

favor of the charterers, who were not the shipjers of the

goods, which bore an on-deck clause, was obiously im-

material.

The Poznan, (D. C., 8. D. N. Y.), 276 Fed. 48° cited by

the Cireuit Court of Appeals, R. p. 312, does jot involve

any question of transshipment or on-deck carrijge, There

the charterer, under a provision of the chater party,

signed bills of lading, and it was held that the pills of

lading became binding on the ship as soon as thegoods were

laden on board. No other bills of lading wer, jgsyed by

anyone.

In the case at bar the contract of carriage of te Idefjord

was made at Port Said and provided for on-de,, carriage.

The bills of lading issued at Alexandria did no‘ nyrport to

bind the Idefjord.

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PEERED ASEINM

THIRD POINT

The petition for a writ of certiorari should be granted.

Respectfully submitted,

JOHN W. GRIFFIN ;

Counsel for Petitioner,

80 Broad Street,

New York, N. Y,

Wnuarton Poor,

James McKown, JR.,

of Counsel.