Alaska Coast Co. v. Alaska Pacific Fisheries

236 F. 463 | 9th Cir. | 1916

MORROW, Circuit Judge

(after stating the facts as above). 1. It is contended by the appellant that this suit cannot be maintained because the appellee did not, as required by the bills of lading, present to the appellant its claim for loss and damage within 10 days from the date of the arrival of the vessel at the port of discharge, and did not, within 60 days from such date, bring this suit for such loss and damage.

[1,2] We are of the opinion that this objection to the action cannot be sustained: First. Because it does not appear from tire evidence that such bills of lading, if delivered, were delivered to any person whose acceptance of the same bound the appellee. If, as claimed by the appellant, the bills of lading were delivered to the watchmen at the canneries, there is no evidence that these watchmen had, or assumed to have, any authority from the appellee to enter into any shipping contract with any officer ox the vessel. No one signed the bills of lading for or on behalf of the appellee, and the order of the ap-pellee’s president and manager to the master of the vessel to bring ' out the salmon did not bind the appellee to the terms set forth in the forms of the bills of lading in use by the vessel. The evidence is. not sufficient to establish an agreement with respect to such a limitation upon the carrier’s liability. Second. Because it appears that on the 7th day of April, 1913, and after the appellee had by examination ascertained the damage to its cargo and the appellee was about to bring a suit in rem against the vessel to recover the loss and damage so ascertained, the parties entered, into a stipulation, wherein it was recited, among oilier things, that subsequent to the arrival of appellant’s vessel at Seattle on January 8, 1913, it was found that the cargo of salmon owned by the appellee had been more or less damaged on the voyage; that to avoid all unnecessary expenses in connection with any litigation in the determination of any liability for the loss of or damage to said salmon, in consideration of the sum of $1, paid by the appellant to the appellee, and the premises mentioned, the appellee would refrain from talcing any legal proceedings in the matter of the protection of its claim by filing a libel against the steamer Jeanie, and the appellant on its part undertook and agreed that it would stand in the place of and accept services on behalf of the Jeanie in connection with any claim against said steamer, and would, at any time that the appellee might desire to commence litigation, appear in court on behalf of the said steamer and would give security for the payment of any claim which might rightfully be due against said steamer, notwithstanding the fact that the steamer might not, at the time of the beginning of the suit, be within the jurisdiction of the court. This stipulation, as a legal as well as a practical business transaction entered into for a valuable consideration, is inconsistent with the terms of limitation in the bills of lading under consideration, and must be deemed an admission that such terms did not exist or were waived by the appellant.

[3] 2. Whether the Jeanie was seaworthy for the transportation of appellee’s cargo on the voyage under consideration depends upon the question whether she was “reasonably fit to carry the cargo which she had undertaken to transport.” The Silvia, 171 U. S. 462, 464, 19 Sup. Ct. 7, 8 (43 L. Ed. 241). “As seaworthiness depends, not only upon the vessel being staunch and fit to meet the perils of the sea, but upon its character in reference to the particular cargo to be transported, it follows that a vessel must be able to transport the cargo which it is held out as fit to carry, or it is not seaworthy in that respect.” The Southwark, 191 U. S. 1, 9, 24 Sup. Ct. 1, 4 (48 L. Ed. 65). “A ship may be seaworthy as to one sort of cargo and unsea-worthy as to another. When a customary and well-known article of commerce is received on board ship and carried on a voyage, the master guarantees the seaworthiness of his ship for taking charge of that article. As to her cargo, seaworthiness is that quality of a ship which fits it for carrying safely the [particular] merchandise which it takes on board. A ship is impliedly warranted to be seaworthy quoad that article, and, if damage occurs in consequence of the unfitness of the ship for carrying that article, the ship is liable, and cannot exonerate itself by proving the non sequitur that it is capable of carrying safely and without damage, some other article of a different character.” The Thames, 61 Fed. 1014, 1022, 10 C. C. A. 232, 240, cited by the Supreme Court in The Southwark, 191 U. S. 11, 24 Sup. Ct. 1, 48 L. Ed. 65. Whether a vessel is reasonably fit to carry her cargo, must be determined upon all the circumstances and evidence in the case. Int. Nav. Co. v. Farr, etc., Co., 181 U. S. 218, 224, 21 Sup. Ct. 591, 45 L. Ed. 830.

[4] The cargo which the appellant undertook to transport for the appellee consisted of 29,657 cases of canned salmon (13 short, leaving 29,644 cases delivered), all in good order and condition when received on board appellant’s vessel; that is to say, they were in a clean and marketable condition. When delivered at Seattle, a large number of the cases were found in an unclean, damaged, and unmarketable condition by reason of having come in contact with coal dust mixed with water. This condition made it necessary to overhaul and examine the entire cargo, clean the cans that were covered with dirt and coal dust, clean and remove the rust from cans that had been wet and damaged by rust, relacquer such cans, and relabel a large number of cans where the labels had been damaged or removed. It appears from the evidence that previous to receiving appellee’s cargo for transportation from Alaska to Seattle, a cargo of coal in bulk had been carried in the vessel and delivered at ports in Alaska, but a large quantity of coal remained in the vessel when the first shipment of ap-pellee’s cargo was received on board at Chilkoot, and between that cargo and the coal no bulkhead or other separating device was placed. Before the next shipment was received on board at Yes Bay, the coal had been discharged, and some effort made to clean the vessel, but that this cleaning had not been effective or thorough is evidenced by the fact that shipments received on board at Yes Bay and Chorniy were also damaged by coal dust and water. It appears, further, that water, mixed with coal dust, accumulated in the hold of the vessel and, coming in contact with the cargo, injured and damaged the cans in the manner stated. Part of this water coming in contact with the cargo is accounted for by a plank alongside the keelson coming loose and letting bilge water into the hold. The plank was replaced, but the water, mixed with coal dust, had probably reached the cargo. The wetting of the cargo is also accounted for by the rotten and perforated condition of some of the tarpaulins covering the hatches, through which the water penetrated, and, taking up the coal dust, washed it upon the cargo.

To have made this vessel seaworthy to carry this cargo, it was the duty of the carrier, before receiving the cargo, to have effectively separated the first shipment from the coal and to have cleaned the vessel thoroughly of coal dust, so that none of it would be carried by either air or water and deposited on the cargo, and it was the further duty of the carrier to furnish the,vessel with sound and serviceable tarpaulins, and make the hatches water-tight against seas that might reasonably be expected to sweep over the vessel. It is contended on the part of the appellant that the water entered the vessel through a seam or crack between the deck and hatch coaming and other seams and cracks opened by the strain upon the vessel caused by the heavy weather encountered on the voyage. In other words, it is contended that the damage to the cargo was caused by perils of the sea.

[5] The burden of proving seaworthiness as against this cause of damage was upon tire appellant (The Edwin I. Morrison, 153 U. S. 199, 212, 14 Sup. Ct. 823, 38 L. Ed. 688; The Southwark, 191 U. S. 1, 16, 24 Sup. Ct. 1, 48 L. Ed. 65; The Wildcroft, 201 U. S. 378, 389, 26 Sup. Ct. 467, 50 L. Ed. 794) with the presumption in favor of the appellee that it was the fault of the appellant. The Queen and cases there cited (D. C.) 78 Fed. 155, 171. We do not think that the appellant has overcome this presumption or maintained the burden of proof placed upon it. The presence of coal dust in the cargo has not been accounted for as a peril of the sea; on the contrary, its presence is accounted for by the fact that the previous cargo was coal, from which the first shipment of appellee’s cargo was not sufficiently separated, and the dust of that cargo had not been sufficiently removed from the interior spaces of the vessel when the remainder of appellee’s cargo was received on board. In that respect the vessel was not seaworthy for the transportation of that cargo. The presence of water in contact with'the cargo is accounted for, in part, by the leaky condition of the tarpaulins covering the hatches and, in part, by a plank alongside the keelson coming loose and letting bilge water into the hold. The evidence is that this plank was replaced and continued in position during the remainder of the voyage. Why, then, did it come loose at all ? It was after this plank had come loose and had been replaced that the vessel encountered the heavy seas and suffered the strain claimed by the appellant to have been the cause for the opened seams near the hatch and other places on deck, but the heavy seas and strain did not disturb this plank. If the strain was so great, why did this plank remain in position after having been replaced? Must we not conclude that it was not properly secured when the first shipment of appellee’s cargo was taken on board, and, in this respect, that the vessel was not seaworthy for this cargo ?

[6] But the appellant contends that, even if these charges be true, the vessel is not liable under the provisions of section 3 of the act of February 13, 1893 (Harter Act, 27 Stat. 445). That section provides, in substance, that, if the owner—

“shall exercise due diligence to make the said vessel in all respects seaworthy and properly manned, equipped, and supplied, neither the vessel, her owner or owners, agent, or charterers shall become or be held responsible for damage or loss resulting from faults or errors in navigation or in the management of said vessel.”

The trend of judicial decisions has been to construe this act strictly, and not to extend the carrier’s exemption from liability to doubtful and uncertain cases. The tendency has been to leave the liability of the ship and the owner as it was defined and enforced by the law maritime and by the common law, unless the act plainly and unequivocally asserts a different liability. The Germanic, 124 Fed. 1, 5, 59 C. C. A. 521 (Circuit Court of Appeals, Second Circuit), affirmed in Supreme Court, Id., 196 U. S. 589, 25 Sup. Ct. 317, 49 L. Ed. 610. Under this rule of construction, it has been held that section 3 of the act is limited to faults primarily connected with the navigation or the management of the vessel and not with the cargo. Knott v. Botany Mills, 179 U. S. 69, 73, 74, 21 Sup. Ct. 30, 45 L. Ed. 90; The Germanic, 196 U. S. 589, 597, 25 Sup. Ct. 317, 49 L. Ed. 610.

In this case the faults relate to the unseaworthy condition of the vessel and the care and custody of the cargo, and not to the navigation and management of the vessel. There is no complaint that the vessel was not properly navigated or managed; the complaint is primarily that the vessel waS unseaworthy, and that by the misconduct and negligence of the master and crew a large part of the cargo was improperly stored in the lower hold of the vessel without being separated from the coal, and that the remainder was not properly dunnaged to protect it from injury by contact with bilge water, that they were negligent in not keeping the hatches covered with safe, adequate and secure tarpaulins to prevent the water leaking through the hatches into the interior of the vessel, and were negligent and guilty of misconduct in leaving the whole of the interior space of the vessel in an unclean and unfit condition for the storage of the cargo by reason of the presence of coal dust. If we now examine sections 1 and 2 of the act, we find that liability for loss and damage arising from such neglect and misconduct as is here charged is a liability from which the shipowner is not relieved, and cannot be relieved, by any contract or agreement. Section 1 prohibits the shipowner from inserting in any bill of lading any clause, covenant, or agreement whereby he “shall he relieved from liability for loss or damage arising from negligence, fault, or failure in proper loading, stowage, custody, care or proper delivery of any and all lawful merchandise or property committed to its or their charge;” and section 2 prohibits the shipowner from inserting in any bill of lading—

“any covenant or agreement whereby the obligations of the owner or owners of said vessel to exercise due diligence to properly equip, man, provision, and outiit said vessel, and to make said vessel seaworthy and capable of performing her intended voyage, or whereby the obligations of the master, officers, agents, or servants to carefully handle and stow her cargo* and to care for and properly deliver same, shall in any wise be lessened, weakened, or avoided.”

[7] This brings us to the question whether, conceding all that the appellant claims for perils of the sea, the carrier is relieved from liability for loss or damage from such perils where the carrier has by his fault or negligence contributed to such loss or damage. In Liverpool Steam Co. v. Phenix Ins. Co., 129 U. S. 397, 438, 9 Sup. Ct. 469, 470 (32 L. Ed. 788), the Supreme Court, commenting on the difference in liability on the part of the insurance company and the carrier with respect to loss and damage caused by perils of the sea, said:

“Collision or stranding is doubtless a peril of the seas; and a policy of insurance against perils of the seas covers a loss by stranding or collision, although arising from the negligence of the master or crew, because the insurer assumes to indemnify the assured against losses from particular perils, and the assured does not warrant that his servants shall use due care to avoid them. * * * But the ordinary contract of a carrier does involve an obligation on his part to use due care and skill in navigating the vessel and carrying the goods; and,' as is everywhere held, an exception, in the bill of lading, of perils of the sea or other specified perils does not excuse him from that obligation, or exempt him from liability for loss or damage from one of those perils, to which the negligence of himself or his servants has contributed.”

This decision was rendered in 1888, and prior to the Harter Act, but this act does not touch the law here declared, except in the navigation and management of the vessel; the obligation of the carrier with respect to the cargo remains the same. The Supreme Court cites the case of The Xantho, in the House of Lords, 12 App. Cas. 503, 510, 515. Lord Herschell, in that case, states that tne true view with respect to the carrier’s liability had been stated by Willes, J., in Grill v. General Iron Screw Collier Company, L. R. 1 C. P. 600, 611, as follows :

“I may say that a policy of insurance is an absolute contract to indemnify for loss by perils of the sea, and it is only necessary to see whether the loss comes within the terms of the contract, and is caused by perils of the sea; the fact that the loss is partly caused by things not distinctly perils of the sea does not prevent its coming within the contract. In the case of a bill of lading it is different, because there the contract is to carry with reasonable care, unless prevented' by the excepted perils. If the goods are not carried with reasonable care, and are consequently lost by perils of the sea, it becomes necessary to reconcile the two parts of the instrument, and this is done by holding that if the loss through perils of the sea is caused by the previous default of the shipowner, he is liable for this breach of his covenant.”

Upon the evidence in this case, the rule here stated fixes beyond question the liability upon the appellant for the loss and damage to ap-pellee’s cargo.

[8] 3. The court below awarded damages in favor of the appellee in the sum of $12,796.26, with interest at the rate of 6 per cent, per annum from the date of the decree. The total sum is made up in part by the sum of $4,283.06, paid by the appellee for the labor and material required to recondition the cargo, and interest on the sum so paid amounting to $578.20. This expense was necessary to place the cargo in as good condition as when it was received on board the vessel. It appears to have been the usual and reasonable charge for such work, and was properly allowed. The total sum allowed in the decree includes the further sum of $7,935 for the depreciation in the market value of the cargo during- the period required to- place it in a marketable condition. The appellee was entitled to have its cargo delivered in a marketable condition when the vessel arrived on January 8, 1913. It appears from the evidence that on January 10, 1913, the market value was $85,630. It was not in a marketable condition, with an exception to be hereafter noticed, until March 20th, when it had been overhauled and reconditioned, and when the market value of the whole cargo had fallen to $77,695. The difference is the sum of $7,935, incorporated in the decree. It appears from the evidence that this difference arises out of a fall in the market value of 30 cents per case on 10,498 cases of salmon designated as “Chums,” making a loss of $3,149.40, and a fall in the market value of $1 per case on 4,786 cases of salmon designated as “Medium Reds,” making a loss in this quality of salmon of $4,'786.00, and a total of $7,935.40 for both “Chums” and “Medium Reds.” With respect to the remainder of the cargo, consisting of 14,373 cases of salmon designated as “Pinks,” there was no fall in the market value.

It appears that appellee sold to the Pacific Commercial Company, at Manila, some time in the month of January, 1913, 5,500 cases of salmon designated as “Chums.” The shipment was made on February 8, 1913, and it was found convenient to take this shipment from the reconditioned part of the cargo brought down by the Jcanie, instead of from the stock on hand. This salmon was then in a marketable condition, and delivered to the appellee for the market. What it sold for, the evidence does not disclose. The presumption is that it was sold for the price prevailing in January. In any event, the burden was clearly upon the appellee to prove the loss on this particular lot of salmon, if any there were, and it is not sufficient to say that this lot was merely substituted for an equal number of cases taken from the stock on hand, and that the loss was upon the like amount in stock, to be estimated as of March 20th. There was a market price for this quantity of salmon as of the date of its sale in January, and, in the absence of proof as to what that price was, we are of the opinion that a loss on this lot of salmon has not been proven, and that the estimated loss of 30 cents a case, making $1,650, should be deducted from the decree.

We are of the opinion that the overhauling of the entire cargo was necessary under all the circumstances, and that the expense incurred therefor was just and reasonable. The amount, $4,283.06, was promptly paid by the appellee, and it was entitled to interest charged thereon amounting to $578.20, or a total of $4,861.26. For the loss in the market price of the salmon, the lower court found the loss and damage to be the sum of $7,935. From this sum we find there should be deducted $1,650, leaving the damage on this account $6,285.00, or a total of $11,146.26,¹ upon which sum interest shall he allowed to the date of the final decree to be entered herein.

The decree of the District Court will therefore be reversed, with directions to enter a decree in favor of the appellee for $11,146.26, with interest and costs, including costs on this appeal.