462 F.2d 319 (2nd Cir. 1972), 624, Nichimen Co. v. M. V. Farland

Docket Nº:624, 854, 72-1018, 72-1256.
Citation:462 F.2d 319
Party Name:NICHIMEN COMPANY, Inc., Plaintiff-Appellee, v. M. V. FARLAND, her engines, boilers, etc., and A/S VIGRA, Defendants-Appellants-Appellees, v. SEABOARD SHIPPING CO., Ltd., Defendant-Appellant.
Case Date:May 12, 1972
Court:United States Courts of Appeals, Court of Appeals for the Second Circuit
 
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462 F.2d 319 (2nd Cir. 1972)

NICHIMEN COMPANY, Inc., Plaintiff-Appellee,

v.

M. V. FARLAND, her engines, boilers, etc., and A/S VIGRA, Defendants-Appellants-Appellees,

v.

SEABOARD SHIPPING CO., Ltd., Defendant-Appellant.

Nos. 624, 854, 72-1018, 72-1256.

United States Court of Appeals, Second Circuit.

May 12, 1972

Argued April 12, 1972.

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David L. Maloof, New York City (Donald M. Kennedy, and Donovan, Donovan, Maloof & Walsh, New York City, of counsel), for plaintiff-appellee.

M. E. DeOrchis, New York City (Chester D. Hooper, and Haight, Gardner, Poor & Havens, New York City, of counsel, for defendants-appellants-appellees.

William Warner, New York City (Symmers, Fish & Warner, New York City, of counsel), for defendant-appellant.

Before FRIENDLY, Chief Judge, and SMITH and OAKES, Circuit Judges.

FRIENDLY, Chief Judge:

This is an admiralty action brought in the District Court for the Southern District of New York by Nichimen Company, Inc. of New York, N. Y., against the M. V. Farland, her owner A/S Vigra, and her time charterer, Seaboard Shipping Co., Ltd. (Seaboard), for damage to 142 coils of steel, part of a shipment from Wakayama, Japan, to New Haven, Connecticut, in December, 1964. The ship and her owner, contesting liability to Nichimen, sought indemnity from the charterer if liability should be imposed. Judge Bonsal awarded the consignee damages of $75,353.66 with interest against the charterer and the owner and directed the charterer to indemnify the owner for any sums paid by the latter, to pay the owner $3,664.70 with interest for charter hire wrongfully withheld, and to pay the owner's reasonable legal fees of $10,750 incurred in resisting Nichimen's claim. Although we consider some of the issues more difficult than did the district judge and reach our results by different reasoning, we affirm the conclusions with respect to liability, and also with respect to indemnity and payment of the withheld charter hire. However, we hold that the defendants were entitled to the $500 per package limitation of § 4(5) of the Carriage of Goods by Sea Act (COGSA), and direct that the judgment be reduced accordingly.

I.

The Facts

With three small exceptions, which will be covered in the course of this opinion, it would be an exercise in futility to endeavor to improve on Judge Bonsal's statement of the facts, 333 F.Supp. 691, 693-696 (1971). Accordingly, we quote it in extenso:

Plaintiff, a wholly owned subsidiary of Nichimen Co., Ltd., purchased 280 coils of steel from Nichimen Co., Ltd. (of Tokyo, Japan) by invoice dated December 15, 1964 and irrevocable letter of credit payable on presentation of clean on board bills of lading.

On August 8, 1963, Vigra, as owner of the FARLAND, had entered into a time charter with Seaboard as charterer. Clause 8 of that time charter provided:

"8. . . . The Captain (although appointed by the Owners), shall be under the orders and directions of the Charterers as regards employment and agency; and Charterers are to load, stow, and trim the cargo at their expense under the supervision of the Captain, who is to sign Bills of Lading for cargo as presented, in conformity with Mate's or Tally Clerk's receipts."

On December 7, 1964, a "Freight Contract" was entered into between Seaboard as "Time-chartered Owners" and plaintiff as "Charterers" whereby Seaboard agreed to supply a minimum of two holds of the FARLAND for the transportation of plaintiff's steel coils from Wakayama, Japan to New Haven, Connecticut. The rate of freight was "$9.00 (nine dollars) U. S. Currency per long ton F.I.O. fully prepaid in New York on telegraphic advice of completion of loading and signing Bills of Lading." The "Freight Contract" provided further that:

"The carrier does not assume the care, custody, control or safety of, and shall not be liable for the cargo until after it is loaded on board the vessel, nor for demurrage, storage or any other charges that may accrue against shipment while awaiting delivery to vessel.

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"Subject to provisions of carrier's bill of lading form currently in use in connection with shipments to destination named above."

The coils consigned to plaintiff were loaded on board the FARLAND, a six hold self-trimming bulk carrier, at Wakayama, Japan, on December 14-15, 1964. The FARLAND had no 'tween deck.

The coils, which weighed from 3-9 tons each, were strapped by 1 1/4"' × 1/16"' steel bands-two around the circumference and five passing through the eye at equal intervals. This is the usual manner of strapping steel coils, and the strapping was sufficient for this type of cargo. Edge protectors consisting of steel strips were also used.

While plaintiff paid the cost of loading the coils on board the FARLAND under the "Freight Contract," the coils were stowed and lashed under the supervision of a "specialist" who was hired by Aall & Co., Ltd. ("Aall & Co."), Seaboard's port agent at Wakayama. One hundred forty-two coils were stowed in Hold No. 2 from the after bulkhead and forward in six rows, two tiers high. The forward row was not fully stowed, however, as there was an opening at the center which was shored off with heavy lumber. One hundred thirty-eight coils were stowed in Hold No. 4 from the after bulkhead and forward in three rows, three tiers high. In both Holds Nos. 2 and 4, the coils were stacked up at the after end and the remainder of the hold was left empty. All of the coils were stowed on the round with their ends facing fore and aft and were lashed with wire, turnbuckles and open turnbuckle hooks. The lashings were secured to pad eyes welded to the side bulkheads in Hold No. 2 and to pad eyes welded to the after bulkhead in Hold No. 4. According to the master of the FARLAND, "very little" wood was used, but some wood, in dimensions of 1 × 2, 2 × 4, 2 × 5, and 1 × 6, was used between some of the coils as dunnage to prevent them from shifting. The wire, turnbuckles, hooks, pad eyes, and wood were provided by Aall & Co., Seaboard's agent. The master testified in his deposition that Seaboard's "specialist" directed that the coils be stacked at the after end of Holds Nos. 2 and 4 because the FARLAND was scheduled to stop at Vancouver, British Columbia, en route to New Haven to load Seaboard's lumber in all six holds and Seaboard desired as much space as possible in the bottom of Holds Nos. 2 and 4 to operate fork lifts when loading the lumber.

Nippon, Kaiji, Kentei, Kyokai, general marine surveyors, attended aboard the FARLAND on December 14-15, 1964, at the request of the shipper, Nichimen Co., Ltd., and reported on December 21, 1964 that the stowage of the cargo was proper and done in the best possible way to ensure safe transportation and delivery. In a deposition, the master of the FARLAND expressed his opinion that the coils had been properly stowed and lashed.

Upon completion of the loading on December 15, 1964, a bill of lading on Aall & Co.'s form was issued with respect to the 280 steel coils consigned to plaintiff. The bill of lading was signed by Aall & Co. "For and on behalf of the Master", and stated that the coils were shipped "in apparent good order and condition" by Nichimen Co., Ltd. on board the FARLAND for carriage from Wakayama to New Haven. The master testified that he did not see the bill of lading but that the usual practice was for Seaboard, or its agent, to sign the bills of lading on his behalf. The bill of lading was endorsed on the face as follows:

"Freight payable as per the terms and conditions of the Charter Party and/or the freight engagement.

"All the terms and conditions of the governing Charter Party and/or the Freight Engagement are herewith incorporated."

The Chief Mate signed a mate's receipt for the 280 coils.

The FARLAND sailed from Wakayama on December 15, 1964 for Vancouver

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with approximately 2,000 metric tons of cargo aboard out of her carrying capacity of 16,220 metric tons. On the 18th of December, the FARLAND encountered a storm. According to the vessel's rough log, the winds increased during the day and by 2200 on the 18th, the winds had reached force 8 on the Beauford Scale (34-40 knots). The log entry for 2400 on the 18th states, "Ship is working heavily in the sea. Hull is shaking in trembling. Some water shipped." The log indicates that at 0120 on the 19th, the wind direction was east at force 10 (48-55 knots) and that the vessel's speed had been reduced; she was "lying on weather, pitching and some rolling." At 0500 on the 19th, the wind was E-NE and had reached force 11 (56-63 knots) and the vessel was "Lying in weather with steerage. Rolling and violent pitching." There follows an entry in the log which indicates that at 0815 on the 19th it was discovered that part of the cargo had shifted in Hold No. 2.

The master testified that at 0815 on the 19th "the whole cargo was shifted from the after end of the number 2 hold and spread all over the hold in one wave." He testified that this one wave, the height of which he estimated at 60 feet, lifted the FARLAND up, broke over her and dropped her "just like she fell off a rock." His inspection of the coils in Hold No. 2 shortly after 0815 on the 19th revealed that the lashings were broken. The master testified that the crew of the FARLAND had tightened the turnbuckles on the lashings in Hold No. 2 every day prior to the 19th.

At 1030 on the 19th, the following radio-telegram was transmitted by the FARLAND to Seaboard in Vancouver: "CARGO IN NO TWO HOLD SHIFTED AND DAMAGED STOP AT THIS POINT NO DAMAGE TO THE SHIP SECURING OF SHIFTED CARGO...

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