Baker Oil Tools, Inc. v. Delta S. S. Lines, Inc.

Decision Date10 November 1977
Docket NumberNo. 75-3678,75-3678
Citation1978 A.M.C. 370,562 F.2d 938
PartiesBAKER OIL TOOLS, INC., Plaintiff-Appellee, v. DELTA STEAMSHIP LINES, INC., Defendant Third Party Plaintiff-Appellant, v. PORT OF HOUSTON AUTHORITY OF HARRIS COUNTY, Texas, Defendant-Appellee, Harris County Houston Ship Channel Navigation District, Third Party Defendant-Appellee.
CourtU.S. Court of Appeals — Fifth Circuit

Kenneth D. Kuykendall, Houston, Tex., for Delta S. S. Lines, Inc.

Thomas A. Brown, William C. Bullard, Houston, Tex., for Baker Oil.

Jack Allbritton, Houston, Tex., for Port of Houston and third party defendant-appellee.

Appeal from the United States District Court for the Southern District of Texas.

Before GODBOLD, TJOFLAT and HILL, Circuit Judges.

TJOFLAT, Circuit Judge:

In the proceedings below, the district court held Delta Steamship Lines, Inc. (Delta) liable as a common law bailee for the loss of oil field equipment received for overseas shipment from Baker Oil Tools, Inc. (Baker), and entered judgment for the full value of the equipment. The district court also decided against Delta on its third party complaint which sought to shift the burden of loss to the Port of Houston Authority (Port). 1

In this appeal, Delta claims error in the trial court's disposition of both the main case and the third party proceedings. As for the main case, Delta contends that Baker's claim should be dismissed for want of subject matter jurisdiction on the theory that a common law bailment action cannot be entertained by a federal court in the exercise of its admiralty jurisdiction. 2 Alternatively, Delta contends that if subject matter jurisdiction is present the trial court erred in not limiting liability to $500 per package in accordance with its contract with Baker for the shipment of the equipment. As regards the third-party proceedings, Delta contends that the trial court should have found the Port ultimately responsible as Delta's bailee, or, if not, liable over to Delta for breaching an independent duty to exercise due care in the maintenance of security measures. We reject each of Delta's contentions and affirm.

A brief review of the evidence is necessary to place Delta's contentions in proper perspective. On the day Baker's equipment arrived at the wharf, employees of the Port unloaded the equipment from Baker's trucks and placed it on the berth assigned to the Delta ship designated to carry the cargo. A dock receipt was then signed by a Delta clerk. When a bill of lading failed to issue from Delta (so to indicate that the cargo had been loaded on the ship), inquiry disclosed that the port of call to which the cargo was to be shipped had been cancelled by Delta without notice to Baker. Other shipping arrangements were made but by then the cargo could not be found. The district court found from these essentially undisputed facts that initially Baker and Delta had entered into a contract for the shipment of the goods and that the terms of the contract were those embodied in the bill of lading that Delta was to issue when the goods were loaded aboard ship. Among those terms was a provision limiting Delta's liability for loss to $500 per package as authorized by the Carriage of Goods by Sea Act, 46 U.S.C. § 1300 et seq. (1970) (COGSA). 3 The court went on to find, however, that Delta's unilateral cancellation of the port of call operated to terminate the limitation provision and that Delta continued to maintain custody of the equipment with the full liability exposure of a common law bailee. Since the goods thereafter disappeared while in Delta's custody and Delta was unable to establish a lawful excuse for their disappearance, the court proceeded to impose liability on the bailee for the value of the goods. We can find no error in the district court's analysis of the bailment issue.

As regards subject matter jurisdiction, we observe that Congress, in passing the Harter Act, 46 U.S.C. § 190 et seq. (1970), has treated pre-loading bailments as within the ambit of maritime law. 4 When Delta accepted custody of Baker's equipment for the purpose of shipping, it assumed all of the obligations imposed by that Act which include the custodial responsibilities that devolve upon a common law bailee. See Isthmian S. S. Co. v. California Spray Chemical Corp., 300 F.3d 41, 45-46 (9th Cir. 1962); see also David Crystal, Inc. v. Cunard S. S. Co., 339 F.2d 295, 297-98 (2d Cir. 1964). Although the district court did not expressly undertake to find a basis for the exercise of admiralty jurisdiction, it is obviously present in this case. 5

With respect to Delta's third party claim, we find the district court's disposition to be unassailable. The Port's responsibility as temporary custodian, while moving the goods from Baker's trucks to the Delta berth, ended when the Delta clerk accepted delivery of the goods and signed the dock receipt. 6 There is nothing whatever in the record to support Delta's contention that the Port thereafter breached any duty to Delta. The Port at no time undertook to store and care for the equipment, and there is no probative evidence to support Delta's contention that the equipment disappeared as a result of the Port's negligence in failing to maintain routine security measures.

AFFIRMED.

1 The district court's opinion is reported at 387 F.Supp. 617 (S.D.Tex.1974).

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