ISBRANDTSEN CO., Inc. v. UNITED STATES
No. 109, Docket 22503
United States Court of Appeals Second Circuit
Argued Dec. 11, 1952. Decided Jan. 15, 1953.
201 F.2d 281
AUGUSTUS N. HAND, Circuit Judge
The EDMUND FANNING.
It follows that the United States district court was right in holding that it had nо jurisdiction to determine whether decedent was domiciled in Florida or in California, and had no jurisdiction to disturb the possession of decedent‘s property, a part thereof presently being administered by a Florida court and a part thereof presently being administered by a California court. The doctrine of full faith and credit is inapplicable to thе relief asked.
Affirmed.
binding on any other state, even under the full faith and credit clause of the federal Constitution (article 4, § 1); but other states in which a testator‘s property is situated, may determine such question, each state for itself, without reference to the decree of the state which passed upon that question first in point of time.”
For a full treatment of the point discussed in this note see Reynolds v. Stockton, 1891, 140 U.S. 254, at 272, 11 S.Ct. 773, 35 L.Ed. 464.
Myles J. Lane, U. S. Atty., New York City, Edward L. Smith, Erwin W. Rossuck and Walter L. Hopkins, Attys. Department of Justice, New York City, Advocates, for United States, appellee.
Before AUGUSTUS N. HAND, CLARK and FRANK, Circuit Judges.
AUGUSTUS N. HAND, Circuit Judge.
In September 1947 Isbrandtsen Company, Inc., a domestic corporation organized under the laws of the State of New York (hereinafter called Isbrandtsen) filed a petition in the United States District Court for the Southern District of New York seeking exoneration under the Fire Statute,
The ten locomotives and tenders were loaded by the United States Army on The Fanning at Bremen, Germany, for shipment to Korea. Additional cargo, including sulphuric acid, chlorate of potash and sodium peroxide, was later taken on board. The fire occurred while the ship was in port аt Genoa, Italy, resulting in the total loss of the ship and damage to the cargo in suit. The trial judge held that the fire resulted from the negligent stowing of the sulphuric acid over the above-mentioned chemicals, finding that the acid corroded the metal drums in which it was stored and leaked down upon the other chemicals, producing a fire and explosion. Isbrandtsen‘s resрonsibility for the negligent stowage was held to be established because of the acts of its agent, Captain Praast, who was authorized to, and in fact did, supervise the loading of the cargo. Consequently the Fire Statute,
The parties agreed that the shipment was covered by the government form of bill of lading. By its terms this form was “subject to the same rules and conditions as govern commercial shipments made on the usual forms provided therefor by the carrier.” Hence, the trial court concluded that the government form, as modified by the provisions of the usual Isbrandtsen form, established the conditions under which the shipment was made. The latter bill of lading contained language limiting liability, which is set forth below.1 It also incorporated the provisions of the Carriage of Goods by Sea Act,
Isbrandtsen contends that the government failed to show that the fire was caused by Isbrandtsen‘s negligence. We think the trial judge was right in holding as he did that, in order to deprive Isbrandtsen of exoneration from liability under the Fire Statute,
Isbrandtsen further argues that, since the evidence showed that а mixture of the acid and potassium chlorate would result in an explosion, and smoke was observed before the rumblings and explosion were heard, the fire was not caused by such a mixture. But there could well have been smaller explosions at first which, taking place at the bottom of the hold, were inaudible and hence the ignition of the potassium chlorаte before the explosion was heard was not improbable. That the fire might have resulted from a mixture of the leaking acid with the sodium peroxide was also adequately proved. In the light of the evidence of constant vigilance to prevent smoking in the hold Isbrandtsen‘s contention that the fire resulted from a smouldering cigarette seems implausible. The court below did not believe this and there was no evidence to support the theory that smoking occurred in the hold where the fire started while the ship was at Genoa. In view of the undeniably dangerous situation created by the negligent stowage and the fact that a fire did result, we agree with the trial court that the government sufficiently met its burden of showing that Isbrandtsen‘s negligеnce caused the fire. All of the circumstances were proved, see Chicago, M. & St. P. Ry. v. Coogan, 271 U.S. 472, 477, 46 S.Ct. 564, 70 L.Ed. 1041 (1926), and it was not unreasonable to hold that fire, danger of which was clearly shown to have existed, did in fact eventuate.
The trial judge held that the Carriage of Goods by Sea Act could not validly be incorporated into the bill of lading covering the locomotives, and that the further provision in the bill of lading limiting liability to an agreed sum, which is identical in so far as here relevant with the effect of incorporating the Carriage of Goods by Sea Act, was contrary to public policy. But
The Carriage of Goods by Sea Act is applicable to shipments in foreign trade to and from ports of the United States, but not to shipments such as the locomotives here between foreign ports or to coastal shipping between two United States ports,
The government further urges that no opportunity of securing a higher valuation was afforded it. See Union Pacific R. R. v. Burke, 255 U.S. 317, 41 S.Ct. 283, 65 L.Ed. 656 (1921). The clause in the Isbrandtsen bill of lading expressly provides that the shipper may avoid the limitation by declaring in writing the nature of the goods and a higher valuation, paying extra freight. Such a provision is prima facie evidence of what it recites. Hart v. Pennsylvania R. R. Co., 112 U.S. 331, 337, 5 S.Ct. 151, 28 L.Ed. 717. The government was at libеrty to show the falsity of the recital, Transmarine Corp. v. Charles H. Levitt & Co., 2 Cir., 25 F.2d 275; see Frederick Leyland & Co. v. Hornblower, 1 Cir., 256 F. 289, 294, but we do not think that it did so. The evidence showed that no published tariff was applicable to locomotives of the size and weight of those involved here, and that each contract was separately negotiated. There is no showing that in the negotiation of the contract a higher valuation could not have been secured upon payment of a higher freight charge. Nor does the fact that the value agreed upon was only a fraction of the actual value of the locomotives invalidate the clause. Pierce Co. v. Wells, Fargo & Co., 236 U.S. 278, 285, 35 S.Ct. 351, 59 L.Ed. 576 (1915); see Frederick Leyland & Co. v. Hornblower, 1 Cir., 256 F. 289, 293-294. So long as a higher valuation could have been secured and there was no fraud on the part of the carrier, the provision is not unreasonable or unconscionable. The government‘s contention that the negligent stowage of the chemicals with the locomotives constituted a conversion of the latter would stretch the meaning of conversion to a degree that is unwarranted.
The government asserts that since its bill of lading, the basic shipping document, provided: “the shipment is made at the restricted or limited valuation specified in the tariff or classification at or under which the lowest rate is available,” and there was in existence no tariff or classification providing for any limitation, that there was no limited valuation clause applicable. Consequently, it argues, the two clauses in the Isbrandtsen bill of lading providing for a $500 limitation, being inсonsistent with the basic government bill,
The argument is made that the Isbrandtsen bill of lading was not its “usual form” within the meaning of the clause in the government bill of lading providing for the incorporation of “the usual form” of the carrier. But it was undoubtedly shown to be the usual form which Isbrandtsen employed for its shipping throughout the world. We agrеe with Judge Ryan that such a form is properly to be termed a “usual form.” The fact that this was the first time that Isbrandtsen had carried goods between these particular ports does not preclude it from having a usual bill of lading.
The $500 limitation of liability applies “per package” or “per customary freight unit,” if shipment is not made in packages. It would seem that an unсrated locomotive is not a “package.” Middle East Agency v. The John B. Waterman, D.C.S.D.N.Y., 86 F.Supp. 487; Studebaker Distributors Ltd. v. Charlton Steam Shipping Co., 59 Lloyds List L.Rep. 23, 27. The authorities have construed the words “customary freight unit” to refer to the unit upon which the charge for freight is computed and not to the shipping unit. Waterman S.S. Corp. v. U. S. Smelting, Refining & Mining Co., 5 Cir., 155 F.2d 687; The Bill, D.C.D.Md., 55 F.Supp. 780, affirmed, 4 Cir., 145 F.2d 470; Middle East Agency v. The John B. Waterman, supra; cf. Stirnimann v. The San Diego, 2 Cir., 148 F.2d 141. But such a construction avails the government nothing here, for the shipping unit and the unit for computing the freight charge were the same—a locomotive and tendеr. The evidence clearly shows that the rate was calculated at $10,000 per unit of locomotive and tender. This interpretation may lead to a strange result, for freight on small locomotives under twenty-five tons is computed per ton and consequently would involve a larger liability than is imposed for the more expensive locomotives involved herе. But the language of the limitation is controlling and applies to the locomotives and tenders here by its express terms. Our conclusion accordingly is that Isbrandtsen‘s liability is limited to $500 per unit of locomotive and tender, or $5,000 in all.
The United States further argues that there were deviations which nullified the limitations contained in the bill of lading. The first one claimed was the absence of a competent master for part of the voyage and the loading of cargo while unseaworthy in that respect. But the Captain was in fact on board and technically at least in supervision of the vessel. The fact that he was unwell and availed himself of the assistance of one of Isbrandtsen‘s agents to aid in the navigation and stowage оf cargo was not in our opinion a deviation. It is also asserted that it was a deviation to stow the cargo negligently. But improper stowage has been held by Judge Goddard in the District Court for the Southern District of New York not to constitute a deviation, Lagerloef Trading Co. v. United States, D.C.S.D.N.Y., 43 F.2d 871, and a similar conclusion was indicated by the Fifth Circuit, The Chester Valley, 5 Cir., 110 F.2d 592, 594. The third claim of deviation is based on the contention that the ship would have to deviate to restow before passing through the Suez Canal. The ship never reached the Suez Canal because she was destroyed by fire. We can discover no basis for such a speculative claim of deviation as the foregoing. Moreover, it is entirely possible that the stowage would have been completely rectified bеfore reaching the Suez Canal without deviating to restow.
For the foregoing reasons we hold that Isbrandtsen‘s liability is to be limited to $5,000, and the case is accordingly remanded with instructions to proceed in accordance with this opinion.
I agree fully in the decision that the carrier is not exonerated from liability under the Fire Statute, but have much more doubt as to thе limitation of its loss to $500 per locomotive. The opinion suggests, but does not fully develop, the gerry-built structure of reasoning necessary to find this limitation in a shipment initiated over the telephone and confirmed by brief letters, finally arrived at by a process of double incorporation by reference to the government bill of lading and thence—rejecting аn unauthorized bill issued by the carrier‘s Bremen agent—to the Isbrandtsen bill itself. Various defenses to this limitation are suggested or raised; some of them, such as the unusual (to say the least) form of customary freight unit, cf. our discussion in Stirnimann v. The San Diego, 2 Cir., 148 F.2d 141, may well give pause. But I have decided to pass these to get to the point I regard as most crucial, namely, whether there was properly avаilable a tariff at higher rate so that the shipper could secure a higher valuation to provide a legal basis for the limitation.
That there was no existing tariff of this nature on locomotives from Bremen to Korea is conceded by all; and Isbrandtsen‘s vice-president so testified. This telephonic agreement was an ad hoc bargain, made for a particular unusual shipment for which there was no regular tariff. The real question is whether the various clauses quoted in the text of the opinion placed on the shipper the burden of asking and securing an ad hoc quotation of a higher rate had it been interested. Does the limitation apply until the shipper shows that the carrier refused to bargain at all on any other basis? Or is it invalid unless the carrier shows that it had offered the shipper some definite alternative? When the original judicial restrictions on attempts at limitation of liability were developed, I do not believe there is much doubt but that the carrier would have had the laboring oar in a case like this. Union Pac. R. Co. v. Burke, 255 U.S. 317, 323, 41 S.Ct. 283, 65 L.Ed. 656; Transmarine Corp. v. Charles H. Levitt & Co., 2 Cir., 25 F.2d 275, 279. And the recent case of United States v. Atlantic Mut. Ins. Co., 343 U.S. 236, 72 S.Ct. 666 (1952), affirming United States v. Farr Sugar Corp., 2 Cir., 191 F.2d 370, while not on all fours, shows that some vestiges of the older concepts still remain. But there is no doubt of the trend of legislation and of precedent to foster and support our merchant marine. Even though at times this has gone to unusual lengths, who, remembering our dependence on shipping in the World Wars, can dare question its wisdom? And so I have decided to yield to the judgment of my brothers and go along, albeit with some lingering doubts, in the viеw that this $100,000 in freight charges was collectible at a total risk of only $5,000.