Zajicek v. United Fruit Company
| Citation | 459 F.2d 395 |
| Decision Date | 17 April 1972 |
| Docket Number | No. 29196.,29196. |
| Parties | Milos ZAJICEK, Plaintiff-Appellee, v. UNITED FRUIT COMPANY, etc., Defendant, Third Party Plaintiff-Appellant, v. PANAMA FREE PORT CORPORATION, Defendant, Third Party Defendant-Appellee. |
| Court | United States Courts of Appeals. United States Court of Appeals (5th Circuit) |
R. Phillips, Balboa, Canal Zone, Charles E. Dunbar, III, Ronald A. Johnson, New Orleans, La., for United Fruit Co.; Phelps, Dunbar, Marks, Claverie & Sims, New Orleans, La., of counsel.
Harry H. Allen, Jr., Balboa, Canal Zone, for Milos Zajicek.
Woodrow de Castro, Balboa, Canal Zone, for Panama Free Port Corp.
Before JOHN R. BROWN, Chief Judge, and WISDOM and RONEY, Circuit Judges.
Carrier1 prepared for issuance a set of bills of lading covering a shipment of sandal straps from New York to Cristobal, Panama. This set, which we refer to as First Issue, showed the order consignee to be the Panamanian agent of the Peruvian buyer of the goods. Shortly thereafter, to correct misdescription of the goods and to carry out Shipper's2 instructions to change the consignee to Shipper's order, the Carrier issued and delivered a new set (called Second Issue) of ladings. In the meantime, although no originals of First Set had ever been executed or delivered, Carrier routinely but mistakenly sent non-negotiable copies of them to its Cristobal office. This error was compounded by its failure to send non-negotiable copies of Second Set, the true and only bills of lading, to the Cristobal office.
And thereby hangs this tale. For assuming First Set to be the true and only outstanding bills, Carrier's agent delivered the goods on surrender of a non-negotiable copy of First Set against a so-called letter of indemnity by Free Port.3 By now, of course, the goods were gone, so was Shipper's security. A few weeks later Shipper, wondering about his goods, came to the Canal Zone — with originals of Second Set in hand — in search of his goods. After much effort and several investigatory trips to the Canal Zone and New York, they were never found. This suit against Carrier and Free Port followed but, unfortunately not until 16 months after actual delivery of the goods — a fact which turned an otherwise open and shut case of palpable carrier liability into one of considerable difficulty on problems of applicability of COGSA and the statutory (and contractual) one-year limitation for suit.
The District Judge in findings which none can, or do, assail held each liable jointly and severally but with indemnity to Free Port against Carrier. Only Carrier appeals — a fact which eliminates all of the difficult problems Shipper's tardiness injected. We affirm.
The facts in this case are really undisputed. Shipper's claim is for misdelivery of a cargo of sandal straps shipped from New York to Cristobal, Panama on Carrier's S/S Telde. In April, 1966, Shipper purchased the sandal straps from the Atlas Trading Corporation and subsequently on May 2, 1966, sold them to Chia Hermanos of Lima, Peru. The purchase price of $24,189.94 was on a landed cost basis and included freight, import taxes and delivery expenses. As part of the sale Shipper assumed the duty of having the goods shipped to Lima. The first leg was to be accomplished by shipment on S/S Telde sailing from New York bound for Cristobal, Panama, on about July 8, 1966. As is customary the Atlas Corporation, Shipper's forwarder, prepared First Set bills of lading for issuance by Carrier. The cargo and the covering unexecuted bills of lading were delivered to Carrier's pier. In effect the consignee was to order of Purchaser.4 Because First Set misdescribed the goods and Shipper wanted clean bills, Carrier was informed that a new set of bills would be submitted. Before this was done Shipper cabled instructions to change the name of the consignee, thus countermanding his original instruction as to consignee shown in First Set.
The Second Set was then prepared, correcting the description of the goods and most importantly changing the name of the consignee to order of Shipper.5 Carrier's managing clerk did not take notice of the changed consignee.
No original bills of lading were issued or delivered for First Set showing Perubras S.A. (order) as the consignee. But Carrier did retain several non-negotiable copies. Several of these were forwarded to Carrier's Cristobal office. In the meantime on receipt of three originals of Second Set, Atlas processed and forwarded them to Shipper's agent in Peru. Carrier's Cristobal office did not receive any copies of Second Set, the only valid documents, nor did it receive any notification that Second Set existed or had been issued and delivered.
S/S Telde sailed from New York on July 9, 1966 and arrived in Panama on July 15, 1966 shortly after which the cargo was discharged onto the dock at Cristobal where it was placed in the Panama Canal Company warehouse. The goods were held in the custody and possession of the Panama Canal Company, subject to the order of the Carrier and remained in the warehouse for approximately ten days.
On July 25, 1966, Free Port requested that Carrier release the shipment to it against non-negotiable copy of the First Set one of which Carrier's agent had sent to Free Port as notification of the shipment's arrival. Free Port did not have any original bill of lading to surrender.
Carrier demanded and received from Free Port a letter of indemnity6 after which the shipment was accordingly released to Free Port. The shipment was then taken into the Colon Free Zone where it was entered as being the property of Perubras S.A. (the order party in First Set). The goods were then delivered to a freight-forwarder, who as far as is known, shipped the goods out of Panama.
On August 15, 1966 Shipper's agent arrived to take delivery of the shipment and presented the original bills of lading to Panama Free Port. Shipper and his agent made several inquiries about the shipment but were never able to discover its whereabouts. On January 10, 1968, over 17 months after actual delivery and 16 months after Shipper had knowledge of the misdelivery, he filed suit in the District Court for the Canal Zone, Cristobal Division against Carrier and Free Port.
From the adverse judgment against it Carrier contends that (i) under COGSA as incorporated in the bills of lading the suit is time-barred under the statutory and contractual one-year limitation, (ii) Free Port is not entitled to judgment over and against Carrier because it was negligent in not obtaining a customary letter of indemnity from Perubras S.A., (iii) Carrier, instead of indemnifying Free Port, should on its third-party complaint have received full indemnity from Free Port under the letter of indemnity, and (iv) the damages were excessive.7
Carrier from the outset strenuously urged that COGSA, having been expressly incorporated by the bills of lading8 for post-discharge activities, automatically incorporated the statutory9 and contractual10 one-year time bar for suits.
Notwithstanding the arguments which rest on the sound propositions that (i) COGSA may become a part of the contract of affreightment through express incorporation11 and (ii) that where COGSA is applicable it covers misdeliveries12 as well as non or damaged deliveries, we find it unnecessary to reach these substantial questions or the equally countervailing contention that what the right hand had extended in the COGSA incorporation (note 8, supra) the left hand had taken back in a couple of "except as may be otherwise specifically provided herein" clauses,13 the effect of which would be contractually withdrawing this post-discharge occurrence from COGSA.
All of this goes out because under the judgment Carrier is cast jointly and severally with Free Port and for reasons we now discuss Carrier cannot succeed in its dual argument that all should fall on Free Port. Since Shipper has a good collectible judgment against Free Port which is not assailable on any of the carrier-based contentions, the operation of the Rules (F.R. Civ.P. 14) in reverse makes such circuity wasteful and unnecessary. What — and all — that is left to Carrier is to prevail in its contentions (ii) and (iii) vis a vis Free Port that (ii) Free Port should have exacted indemnity from Perubras S.A. and (iii) indemnity should run to not from Carrier.14
Carrier attacks the judgment granting indemnity to Free Port on the ground that Free Port was negligent in failing to obtain a letter of indemnity from Perubras S.A. when it released the shipment to them.
In essence, Carrier's argument is that when Free Port subsequently released the shipment to Perubras S.A. (who of course did not have the originals), without requiring a letter of indemnity, they displayed such a lack of good business judgment as to render themselves liable for the loss. Since, the argument goes on, the customary procedure of requiring a letter of indemnity was not followed and since the goods were negligently delivered, Free Port rather than Carrier should be held ultimately liable for the whole loss.
Several answers are available. At the beginning there is no proof of quantity or quality which would compel the Judge to find the existence of any such custom or the prudence of it. Second we cannot discern how it would avail Carrier. That Free Port might have two indemnities to save it whole — (1) Carrier and (2) Perubras S.A. — would hardly afford a basis for excusing Carrier from the consequences of its flagrant, though innocent, mistake. Finally, and most significant, it was, as we discuss next, Carrier's unmitigating fault which brought it all about.
It is ostensibly — but only ostensibly — odd that the party indemnified by the letter agreement ends up (i) not only losing that indemnity but (ii) indemnifying the indemnitor to boot. But there are several...
To continue reading
Request your trial
-
Pan American W. Air. v. Duly Auth. Gov. of Virgin Islands, 19524.
...by the Commissioner is, as compared with other possibly valid allocation formulas, generous to the taxpayer. For example, allocation 459 F.2d 395 of revenues for each ticket between New York, Florida and the Virgin Islands, the three terminal jurisdictions, on a total mileage basis would pr......
-
Karp v. Cooley
...the requisite proof for the causes of action alleged is so stringently governed by Texas substantive law. Cf. Zajicek v. United Fruit Co., 5 Cir., 1972, 459 F.2d 395, 402-403; 1A Moore's Federal Practice § 0.3092, at 3330 We cannot conclude that the trial court's decision to exclude Dr. DeB......
-
Wirth Ltd. v. S/S Acadia Forest, CG-204
...of the statute rather than punctilious compliance with the language and meaning of the Bill of Lading. See Zajicek v. United Fruit Co., 5 Cir., 1972, 459 F.2d 395, 399; Longley, Common Carriage of Cargo 32-33 (1967). If we adopted the viewpoint that such a LASH Barge was not a ship under CO......
-
B. Elliott (Canada) Ltd. v. John T. Clark & Son
...of which would be contractually withdrawing this post-discharge occurrence from COGSA." (Emphasis in original). Zajicek v. United Fruit Company, 459 F.2d 395, at 399. Elliott points to ¶ 126 of the bill of lading as an exception to ¶ 1 that takes this post-discharge occurrence out of the go......