AM COLLINS & CO. et al. v. Panama R. Co.

• Decision Date: 31 July 1952
• Docket Number: No. 13658.,13658.
• Citation: 197 F.2d 893
• Court: U.S. Court of Appeals — Fifth Circuit
• Parties: A. M. COLLINS & CO. et al. v. PANAMA R. CO.

197 F.2d 893 (1952)

A. M. COLLINS & CO. et al. v. PANAMA R. CO.

No. 13658.

United States Court of Appeals Fifth Circuit.

June 27, 1952.

Rehearing Denied July 31, 1952.

John O. Collins, Ancon, C. Z., for appellant.

Paul A. Bentz, Balboa Heights, C. Z., for appellee.

Before HOLMES, RUSSELL and RIVES, Circuit Judges.

RIVES, Circuit Judge.

This appeal is by plaintiffs below from a judgment in their favor for $500. The appellants adopt the statement of the case from the opinion of the District Judge:

"On May 24th, 1950, the `Americo Contact Plate Freezers, Inc., of New Jersey\' shipped from New York to Cristobal in the Canal Zone freight listed as nine packages, one of which contained an electric freezing unit. These articles of freight were delivered to and received by the `Coldemar Line\' and placed on vessel, the `M/S Immen\' to be transported under bill of lading and delivered on port at Cristobal to order of Captain Hans Elliott of Panama, Republic of Panama. (Hans Elliott is a member of a partnership firm doing business in Panama as A. M. Collins & Co.)

"Upon docking at the Port of Cristobal, the Captain of the vessel M. S. Immen not desiring to use the equipment or labor of the vessel to unload its cargo, engaged the equipment and services of the Panama Railroad Co., to perform that service. The freezer unit while being removed by the Railroad from ship to docks was dropped, resulting in that its working parts and equipment sustained a definite injury.

"The Plaintiff as consignee and owner of the freezer unit has instituted this action against the Panama Railroad, seeking to recover from the Railroad its claimed damages. The ship Immen, or its owner or operator, have not been joined in this proceeding.

"The Railroad by its answer pleads the provision of bill of lading which limits recovery of damages of any amount in excess of $500.00."

Appellants contend that the bill of lading has no application on the theory that appellants and appellees were not formally parties to it. Appellants contend further that the limitation contained in the bill of lading would be void under Title 3, Section 933 of the Canal Zone Civil Code adopted by an Act of June 19, 1934, Chapter 667, 48 Stat. 1122, which provides in pertinent part as follows:

"Contract fixing damages, void. — Every contract by which the amount of damage to be paid, or other compensation to be made, for a breach of an obligation, is determined in anticipation thereof, is to that extent void * * *."

The Harter Act, 46 U.S.C.A. § 190, et seq., was held to be superseded for the most part by the Carriage of Goods by Sea Act, of April 16, 1936, Ch. 229, 49 Stat. 1207, 46 U.S.C.A. §§ 1300-1315. The Monte Iciar, 3 Cir., 167 F.2d 334, 336; cf. U. S. v. Atlantic Mutual Insurance Co., 343 U.S. 236, 72 S.Ct. 666. Likewise, the provisions of the Canal Zone Civil Code relied upon must give way to the provisions of the later enacted Carriage of Goods by Sea Act, which applied to this shipment upon one or the other of two theories.

If Cristobal, Canal Zone, is a port of a foreign country, as held by the District Judge,¹ then by Section 13 of the Act, 46 U.S.C.A. § 1312, it applied to the contract of carriage. On the other hand, if Cristobal is a port of the United States or its possessions then the bill of lading contained an express statement that it was subject to the provisions of the Act as was authorized by Section 13, 46 U.S.C.A. § 1312; see Globe Solvents Co. v. The California, 3 Cir., 167 F.2d 859; The Vale Royal, D.C., 51 F.S. 412, 424.

The bill of lading contains an express limitation of liability to $500.00 per package or per customary freight unit as permitted by Section 4(5) of the Act, 46 U.S.C.A. § 1304(5):

"(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 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. This declaration, if embodied in the bill of lading, shall be prima facie evidence, but shall not be conclusive on the carrier."

A possible difference might be claimed between an application of the Act ex proprio vigore on the theory that Cristobal is a foreign port and its application by reason of the agreement contained in the bill of lading in that in the latter alternative the limitation of liability may not be effective as to the Panama Railroad Company unless its services were engaged either expressly or impliedly subject to the same limitation of liability. For reasons hereafter stated we reach the conclusion that the Panama Railroad Company was acting under the limitation of liability provisions of the bill of lading. It is not necessary, therefore, to decide whether or not Cristobal is a foreign port.

While Congress is bound to have known that ships are usually unloaded by stevedores, Atlantic Transport Co. of West Virginia v. Imbrovek, 234 U.S. 52, 61, 34 S.Ct. 733, 58 L.Ed. 1208; 48 Am.Jur. Shipping, Sec. 211, it nevertheless provided in the Carriage of Goods by Sea Act that "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." 46 U.S.C.A. § 1301(e), see also Secs. 1302, 1303(2), 1306, 1307. It is conceded, as it must be, that the contract of carriage under the bill of lading was not fulfilled until the cargo described was delivered on dock at Cristobal.

The controlling feature of the case is not, as appellants contend, who are the formal parties to the bill of lading. What is controlling are the terms, purpose and effect of the bill of lading as applied to the facts. The unloading of the shipment was the obligation of the carrier. In the absence of a different agreement with persons not parties thereto, the terms of the bill of lading controlled all steps of the transportation, including, of course, the discharge of the shipment. The stevedore was not a meddler, nor did it inflict intentional harm. It was an agent selected by the carrier to carry out the carrier's obligation to safely deliver and discharge the cargo as required by its contract with the shipper. The negligent injury and damage arose in the course of this very performance of the carrier's obligation. This is well stated by the trial court.² That the carrier would engage such services must have been contemplated by the parties. The situation is substantially the same as if the carrier had shipped by another vessel, as authorized by the bill of lading. A stevedore so unloading, in every practical sense, does so by virtue of the bill of lading and, though not strictly speaking a party thereto, is, while liable as an agent for its own negligence, at the same time entitled to claim the limitation of liability provided by the bill of lading to the furtherance of the terms of which its operations are directed.

There is no occasion here for the application of the general rule which forbids common carriers to stipulate for immunity from their own or their agent's negligence. Here there is a limitation as to value, as provided by the statute and by the bill of lading. The distinction between a stipulation for an immunity from negligence and a limitation of value is well recognized. Adams Express Co. v. Croninger, 226 U.S. 491, 509, et seq., 33 S.Ct. 148, 57 L.Ed. 314. This limitation of value and consequent limitation of recovery available to the carrier, the principal, is likewise available to its alter ego.

The fact situation in Reid v. Fargo, as President of American Express Co., 241 U.S. 544, 36 S.Ct. 712, 60 L.Ed. 1156, was similar to that here involved, but the similarity does not extend to the principles controlling here. In that case, as may be clearly seen from the paragraph of the opinion ending on page 547 of 241 U.S., at page 713 of 36 S.Ct., Hogan & Sons, the stevedores, did not undertake to set up the limitation of liability contained in the bill of lading. In that case the Court did not pass on whether the limitation was available to the stevedores because the stevedores did not even claim it. Further, that case was not governed by the Carriage of Goods by Sea Act nor by any other statute intended to meet the need for uniformity in ocean bills of lading. If, in the present case, the carrier had contracted with the stevedoring company for a limitation of liability in a larger sum or for liability without limitation, a different situation would be presented.

All parties concerned with a negotiable ocean bill of lading, the carrier, the shipper, the consignee, the discounting bank, and the insurance underwriter, are alike interested not so much in the method as in the result to be achieved, the delivery of the cargo at the port of destination in good condition. The bill of lading contract with the carrier covers that completed service from the time of loading of the goods to their discharge from the ship. The extent of liability of the carrier and of other persons performing that service under the carrier does not depend upon the means adopted but is governed by the contract covering the entire service.

The limitation on liability of the carrier under the Carriage of Goods by Sea Act is not intended to be personal, but, unless otherwise agreed, extends to any agency by means of which the carrier performs its contract of transportation and delivery. As well stated in 2 Am.Law Inst., Restatement of Agency, Sec. 347: "An agent who is acting in pursuance of his authority has such immunities of the principal as are not personal to the principal." See also Herzog v. Mittleman, 155 Or. 624, 65 P.2d 384, 109 A.L.R. 662, 666; 35 Am.Jur., Master & Servant, Sec. 584, p. 1020, note...