Carle & Montanari, Inc. v. AMERICAN EXPORT ISBRANDTSEN L.

• Decision Date: 25 September 1967
• Docket Number: No. 66 Ad. 163.,66 Ad. 163.
• Citation: 275 F. Supp. 76
• Parties: CARLE & MONTANARI, INC., Plaintiff, v. AMERICAN EXPORT ISBRANDTSEN LINES, INC. and John W. McGrath Corporation, Defendants.
• Court: U.S. District Court — Southern District of New York

275 F. Supp. 76

CARLE & MONTANARI, INC., Plaintiff, v. AMERICAN EXPORT ISBRANDTSEN LINES, INC. and John W. McGrath Corporation, Defendants.

No. 66 Ad. 163.

United States District Court S. D. New York.

September 25, 1967.

Bigham, Englar, Jones & Houston, New York City, for plaintiff; F. Herbert Prem, New York City, of counsel.

Haight, Gardner, Poor & Havens, New York City, for defendant American Export Isbrandtsen Lines, Inc.; M. E. DeOrchis, New York City, of counsel.

Joseph F. McGoldrick, New York City, for defendant John W. McGrath Corp.; Martin J. McHugh, James M. Leonard, New York City, of counsel.

MEMORANDUM

BONSAL, District Judge.

Plaintiff, the consignee and owner of a shipment consisting of one case containing a machine described as a Chocolate Roller Refiner, instituted this admiralty action on February 16, 1966 seeking to recover from the defendant carrier, American Export Isbrandtsen Lines, Inc. (the carrier), and the defendant stevedore, John W. McGrath Corporation (the stevedore), for damages to the shipment. All material facts have been stipulated from which it appears that on or about August 3, 1965 the case containing the machine was loaded on board the S.S. EXPORT CHALLENGER in Genoa, Italy and the bill of lading was issued therefor. The shipment arrived in the Port of New York on or about August 13, 1965 and, while the cargo was being unloaded by the stevedore, the case containing the machine fell from, or was dropped from, the ship's gear and was damaged as a consequence of the negligence of the stevedore. It is further stipulated that the full amount of plaintiff's damages is $7,000, and that the liability of the carrier is limited to $500 pursuant to 46 U.S.C. § 1304(5) and the bill of lading, and that the sole issue to be decided by the court is whether the liability of the stevedore is also limited to $500 under the bill of lading. Plaintiff moves for summary judgment against the stevedore for $7,000, the full amount of its damages.¹

Plaintiff contends that the stevedore is liable for the full amount of its damages, while the stevedore and the carrier contend that under the bill of lading, the stevedore's liability is limited to $500. The parties have stipulated that if plaintiff's contention is sustained, a final judgment may be entered against the stevedore for $7,000, and if the stevedore's contention is sustained, a final judgment may be entered against the stevedore for $500. Excellent briefs have been submitted to assist the court in reaching its decision.

Clauses 1 (a) and 17 of the bill of lading read in relevant part as follows:

"1. (a) * * * The terms of this bill of lading constitute the contract of carriage, which is between the Shipper, Consignee and owner of the goods, and the owner or demise charterer of the vessel designated to carry the goods. It is understood and agreed that, other than said shipowner or demise charterer, no person, firm or corporation or other legal entity whatsoever (including the Master, officers and crew of the vessel, all agents and all stevedores and other independent contractors whatsoever) is, or shall be deemed to be liable with respect to the goods as carrier, bailee or otherwise howsoever, in contract or in tort. If, however, it shall be adjudged that any other than said shipowner or demise charterer is carrier or bailee of the goods or under any responsibility with respect thereto, all limitations of and exonerations from liability provided by law or by the terms hereof shall be available to such other. In contracting for the foregoing exemptions, limitations and exonerations from liability, the Carrier is acting as agent and trustee for the other above mentioned. Emphasis supplied.

"17. In case of any loss or damage to or in connection with goods exceeding in actual value the equivalent of $500 lawful money of the United States, per package, or, in case of goods not shipped in packages, per shipping unit, the value of the goods shall be deemed to be $500 per package or per shipping unit. The Carrier's liability, if any, shall be determined on the basis of a value of $500 per package or per shipping unit * * *, unless the nature of the goods and a valuation higher than $500 per package or shipping unit shall have been declared in writing by the shipper upon delivery to the Carrier and inserted in this bill of lading and extra freight paid."

The parties to a bill of lading may extend a contractual benefit to a third party by clearly expressing their intent to do so. Herd & Co. v. Krawill Machinery Corp., 359 U.S. 297, 79 S.Ct. 766, 3 L.Ed.2d 820 (1959); Cabot Corp. v. SS Mormacscan, supra; Virgin Islands Corp. v. Merwin Lighterage Co., 177 F. Supp. 810 (D.C.V.I.1959). Therefore, if clause 1(a) of the bill of lading expresses an intent to extend the benefit of the $500 per package limitation of liability to the stevedore, then the stevedore's liability must be so limited.

In interpreting clause 1(a), the italicized words in the third sentence, "other than said shipowner or demise charterer is carrier or bailee of the goods or under any responsibility with respect thereto," must be read together with the second sentence...