Robert C. Herd & Company v. Krawill Machinery Corp.

• Decision Date: 16 June 1958
• Docket Number: No. 7620.,7620.
• Citation: 256 F.2d 946
• Parties: ROBERT C. HERD & COMPANY, Inc., a Maryland Corporation, Appellant and Cross-Appellee, v. KRAWILL MACHINERY CORPORATION, Kraus Manufacturing Corporation and Engineering Industries International, S. A., Appellees and Cross-Appellants.
• Court: U.S. Court of Appeals — Fourth Circuit

256 F.2d 946 (1958)

ROBERT C. HERD & COMPANY, Inc., a Maryland Corporation, Appellant and Cross-Appellee, v. KRAWILL MACHINERY CORPORATION, Kraus Manufacturing Corporation and Engineering Industries International, S. A., Appellees and Cross-Appellants.

No. 7620.

United States Court of Appeals Fourth Circuit.

Argued April 16, 1958.

Decided June 16, 1958.

Robert E. Coughlan, Jr., and George W. P. Whip, Baltimore, Md. (Lord, Whip & Coughlan, Baltimore, Md., on brief), for appellant and cross-appellee.

William A. Grimes, Baltimore, Md. (Ober, Williams, Grimes & Stinson, Baltimore, Md., Fildew, DeGree, Fleming & Gilbride, and Leslie W. Fleming, Detroit, Mich., on brief), for appellees and cross-appellants.

Before SOBELOFF, Chief Judge, and SOPER and HAYNSWORTH, Circuit Judges.

SOBELOFF, Chief Judge.

A stevedoring company was held liable in a civil suit in the United States District Court for the District of Maryland in the sum of $47,992.04, the full amount of resulting damage when a crated press fell into the Baltimore Harbor. The defendant's appeal challenges the amount of the judgment awarded. It claims the benefit of the limitation provisions of the Carriage of Goods by Sea Act (popularly called "Cogsa"), 46 U.S.C.A. §§ 1300-1315,¹ and parallel provisions of the bill of lading,² which limit the liability of the carrier to the sum of $500.00 per package or customary freight unit. The District Judge held that while the carrier's liability is so limited, the stevedore's is not. The plaintiff cross-appeals, complaining of the Court's refusal to allow interest.

The crate containing the press was one of sixty-two cases or crates of machinery and equipment which Krawill Machinery Corporation of Detroit had sold and agreed to deliver to a Spanish purchaser. The particular crate involved in this suit had been loaded on a flat car and brought by rail from Detroit to the dock in Baltimore alongside which the SS Castillo Ampudia was moored, and the press was to be loaded on the ship by Robert C. Herd and Co., Inc., the stevedore, and carried to Valencia, Spain. The case was eight feet wide, five feet long, and eleven feet high, and weighed nineteen tons. As this was, in the judgment of the defendant's manager, too heavy to be lifted by the ship's gear, he arranged for the Bethlehem Steel Company's floating derrick to assist in the loading. The derrick was moored alongside the ship's offshore side, and the derrick's boom was swung over and across the ship's deck so that the hook and gear were suspended over the flat car. As it was found that the regular wire sling could not be slipped under the heavy crate, it was decided to work a thinner wire under the crate, attach it to the hook of the derrick, and then as the crane lifted the crate a very short distance, the regular sling could be inserted under it.

The work was under the sole direction of the stevedore's gang leader, who stood on the pier and gave signals to his man on the deck, who was to relay them to the operator of the derrick. The latter was not informed that the plan was to lift the crate preliminarily only a few inches. Due to a miscalculation of the stevedore's foreman as to the reaction time of the deckman and the derrick operator in the execution of their orders, there was a failure of coordination between the man who signalled from the pier, the man who stood on the deck, and the operator of the derrick. The preliminary lift given the crate was more than the few inches intended. The crate being topheavy, its center of gravity shifted and it fell into the water. The District Judge's finding that the stevedore's foreman was negligent, is well supported and, indeed, is not contested on appeal.

We turn to the pertinent statute. Section 4(5) of Cogsa, codified as 46 U.S.C.A. § 1304(5), is the limitation of damage section. By its express provision, neither the carrier nor the ship is liable in an amount exceeding $500.00 per package. Stevedores and others who may become responsible for loss or damage in connection with the movement of goods are not mentioned in this section, and the rights and responsibilities, liabilities and limitations upon liability, with which the act deals are generally in terms of carrier and ship vis-a-vis shipper. Nothing in the language or history of the legislation indicates a purpose to regulate the stevedore's liability.

The Harter Act (46 U.S.C.A. § 190 et seq.), which preceded Cogsa, likewise did not deal specifically with the liability of the stevedore, and was considered to apply to the relation between the cargo shipper or owner and the ship or its owner, and not to the stevedore's liability. Poor, Charter Parties and Ocean Bills of Lading (3d Ed., 1948), Sec. 306, p. 129; Green, "The Harter Act," 16 Harv.L.Rev. 157, 177.

In Reid v. Fargo, 1916, 241 U.S. 544, 36 S.Ct. 712, 60 L.Ed. 1156, where a bill of lading covering the shipment of an automobile limited the carrier's liability to $100.00, this limitation was enforced as to the carrier. In the same case, however, the stevedore, by whose negligence the automobile was dropped into the harbor, was declared by the Supreme Court liable for the full amount. This was considered the settled law for many years.

Although the later-enacted (1936) Cogsa dealt with the reciprocal rights and obligations of shippers and carriers, there is nothing to intimate that in enacting it, Congress meant to change the announced rule as to the stevedore's independent unlimited liability.

More recently, however, a sharp difference of opinion has arisen on this point. In the Fifth Circuit, in A. M. Collins & Co. v. Panama R. Co., 1952, 197 F.2d 893, certiorari denied 344 U.S. 875, 73 S.Ct. 168, 97 L.Ed. 677, the majority, in an opinion by Judge Rives, accorded a stevedore operating in the Canal Zone the benefit of the $500.00 limitation. The Court's rationale was that the stevedore was the ship's agent and therefore entitled to any immunity to which the ship was entitled.

We note preliminarily that the case before us may be different, for unlike Collins, we have here evidence that on the eastern seaboard, stevedores base their charges upon such factors as weight, difficulty of handling, etc., and do not, like the carrier, offer a choice of rates in which the declared value of the cargo and the amount of possible liability is considered in fixing the charge. There is, accordingly, less reason in the instant case to infer, as did the majority in Collins, that the limitation of liability in the bill of lading related to or was relied on by the stevedore, or that the carrier and shipper intended to contract for its benefit. Herd and Company had no contract with the shipper, and its agreement with the shipper's agent included no limitation of liability.

However this may be, Judge Holmes' dissent in Collins reasons that a stevedore is subject to the ordinary liability for its negligence; that immunity (or limitation of liability) is the exception and not the rule; that the right of the carrier to limit its liability for negligence to an amount not exceeding $500.00, being in derogation of the common law, should be strictly construed, and may not be availed of by one who is not a party to the bill of lading. He thought Reid v. Fargo, supra, sufficient authority for his position, but also invoked the general principle that an agent who violates a duty to a third party is liable for failing in his common law obligation not to injure another. 3 C.J.S. Agency § 221. "The liability of an agent for his own negligence has long been imbedded in the law." Brady v. Roosevelt SS Co., 1943, 317 U.S. 575, 580, 63 S.Ct. 425, 428, 87 L.Ed. 471. In declining to make an inference that a private operator of a government vessel, an agent of an immune government corporation, had likewise been immunized, the Supreme Court said "if Congress had intended to make such an inroad on the rights of claimants it would have said so in unambiguous terms." 317 U.S. at page 581, 63 S.Ct. at page 428.

The bill of lading, concluded Judge Holmes' dissent, limited the carrier's liability to $500.00, "but it did not confer upon the carrier the power to diffuse partial dispensations to its negligent stevedores or other agents for their wrongful acts." 197 F.2d 893, 898.

With the highest respect to the majority opinion in Collins, Judge Holmes' reasoning commends itself to us more. It is not unknown in the law for several liabilities to arise from a single injury and, unless commanded by law or agreed to by the parties, there is no requirement that the same measure of damages shall apply to all persons subject to liability.

We perceive no incongruity in limiting the liability of the ship and its owners, without similarly limiting the stevedore's liability for its tort. The extent of the latter's liability was apparently not in contemplation in the drafting of the statute, or the bill of lading to which it was not a party. The principle that independent liabilities, differently measured, may co-exist, was given recognition by Judge Chesnut in The Steel Inventor, D.C., 35 F.Supp. 986, 996, 997.

It is, of course, true that the practice of using stevedores' services in loading and unloading ships was well known both when Cogsa was enacted and when the bill of lading was executed. In the absence of any reference to the stevedore in defining the statutory or contractual limitation of the carrier's liability, it does not follow that the stevedore was to be included. Rather, the silence of Congress and the contracting parties suggests that only the carrier's and not the stevedore's liability was to be affected. In Wilson v. Darling Island Stevedoring and Lighterage Co., Ltd. (1956), Argus Law Reports 311, 29 Australian Law Journal 740, in a concurring opinion, Judge Kitto of the Australian Supreme Court says:

"A necessity for the carrier to depend upon others to perform his obligations under the contract suggests a strong reason why

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