Alcoa Co v. United States

• Court: U.S. Supreme Court
• Writing for the Court: REED
• Citation: Alcoa Co v. United States, 338 U.S. 421, 70 S.Ct. 190, 94 L.Ed. 225 (1949)
• Decision Date: 19 December 1949
• Docket Number: No. 271,271
• Parties: ALCOA S.S. CO., Inc. v. UNITED STATES

338 U.S. 421

70 S.Ct. 190

94 L.Ed. 225

ALCOA S.S. CO., Inc.

v UNITED STATES.

No. 271.

Argued Nov. 15, 1949.

Decided Dec. 19, 1949.

Mr. Melville J. France, New York City, for petitioner.

Mr. Samuel D. Slade, Washington, D.C., for respondent.

Mr. Justice REED delivered the opinion of the Court.

It is principle of American maritime law that ocean carrier freight charges are not earned unless and until the goods are delivered to destination.¹ But contractual provisions establishing the shipper's liability for freight regardless of actual delivery have been uniformly held valid,² and have become common stipulations in carriers' bills of lading. Shipments of government property are made subject to the conditions of the carrier's usual contract of carriage unless the government standard form bill of lading specifically provides otherwise.³ At bar is the single question of contract interpretation whether a carrier's 'Goods or Vessel lost or not lost' provision survives the terms of the government standard form bill of lading. Has the government bill provided against liability for freight charges on public goods lost at sea?

On June 13, 1942, petitioner's ship, S. S. Gunvor, shipped a cargo of lumber at Mobile, Alabama, bound for Trinidad under a government form bill of lading. On her first day out she was torpedoed by enemy submarine. Ship and cargo were a total loss. In spite of the carrier's failure to deliver the shipment, the bill of lading was surrendered to it, and its claim for freight on the lost cargo was paid by the War Department on September 15, 1942. On audit, however, the Comptroller General disallowed the payment on the ground that the freight had not been earned, and the sum was offset against other claims admittedly owing to petitioner. Petitioner instituted this suit under the Tucker Act (see 28 U.S.C.A. §§ 1346, 2401, 2402) in the United States District Court for the Southern District of New York to recover the freight claimed. The case in no way concerns liability for the value of the cargo lost. Reversing the conclusion of the District Court, 80 F.Supp. 158, the Court of Appeals for the Second Circuit found in the provisions of the standard government form bill of lading a 'carefully devised plan' to pay freight charges only if the shipment actually arrives at destination.⁴ We granted certiorari because determination of the issue raised here will guide adjustment of a large body of similar claims now pending. 338 U.S. 813, 70 S.Ct. 80.

Review of existing case law and prevailing commercial usage respecting the earning of freight provides no assistance in solving the narrow problem raised by the specific contract now before us. Further, in view of our conclusion in the case, we need not decide whether we may properly consider the Government's extensive argument regarding past administrative practice, nor rule upon its relevance or weight. As to petitioner's citation to two instances where, allegedly, claims similar to this were honored by the Comptroller General, we agree with the court below that a case of consistent administrative practice has not been made out, if indeed such practice is a relevant consideration. We therefore deal only with the bare words of the contract.

A brief statement of the general scheme of payment of carrier charges under the government bill of lading will facilitate discussion of the niceties in the draftsmanship. The standard form bill of lading is filled out by the consignor at the time of shipment, signed by the carrier's agent and transmitted to the consignee. The consignee, upon receipt of the goods shipped, endorses the consignee's certificate printed on the bill and hands the bill over to the carrier. The carrier then submits to the appropriate agency the endorsed bill and a standard form government voucher in support of its claim for the freight charges. Setting forth the details of this disbursing machinery, there are printed on the reverse of the bill of lading 'General Conditions and Instructions,' clearly referred to upon the face of the bill.⁵

'Condition 2' of the government bill provides the initial basis for the controversy here: 'Unless otherwise specifically provided or otherwise stated hereon, this bill of lading is subject to the same rules and conditions as govern commercial shipments made on the usual forms provided therefor by the carrier.' Clause 6 of petitioner's bill of lading provides that: 'Full freight to destination * * * and all advance charges against the Goods are due and payable * * * as soon as the Goods are received for purposes of transportation; * * * Goods or Vessel lost or not lost * * *.'

It is therefore conceded by all parties that under these two quoted provisions, the United States is obligated to pay freight on the lost Gunvor cargo unless the terms of the government bill 'specifically' negative the carrier's provision. With due regard to the principle of strict construction against the draftsman of a contract, we have concluded that the terms of the government bill of lading are inconsistent with petitioner's Clause 6, and that the United States is not liable for freight on this lost public property.

Occupying first place among the 'Conditions' to the bill, and central to the issue here, is the payment provision. '1. Prepayment of charges shall in no case be demanded by carrier, nor shall collection be made from consignee. On presentation to the office indicated on the face hereof of this bill of lading, properly accomplished, attached to freight voucher prepared on the authroized Government form, payment will be made * * *.'

The simple provision against 'prepayment' does not, we think, force the conclusion that freight will be paid only on delivered goods. This clause seems to us not to forbid accrual of the freight charge obligation in advance of delivery, but only to prohibit payment in advance.⁶ But it does seem clear that the second sentence of 'Condition 1' expressly conditions payment upon submission of two documents, the bill of lading 'properly accomplished,' and a freight voucher prepared on the authorized government form. If the carrier is put on express notice that fulfillment of either of these conditions posits actual delivery of the cargo, petitioner's 'lost or not lost' provision must be held vitiated. In fact, both specifically contemplate actual delivery.

I.

It is petitioner's construction that the bill of lading condition has been fully satisfied. 'Accomplishment' he argues to be a technical term of ancient use in the law of the sea signifying no more than surrender of the bill to the carrier by the consignee or other authorized holder. This may be conceded immediately, and indeed the government bill seems to imply this usage where the term is used alone. But in this one provision on the bill the term is not used alone. Payment is not conditioned upon submission of an 'accomplished' bill of lading; the bill must be 'properly accomplished.'⁷ Unless the modifier be held to mean nothing, it can only be inferred that more than bare 'accomplishment' is contemplated. The requisites to a 'properly accomplished' bill are specifically set forth. We italicize the pertinent words.

Reference to 'Instruction 2' informs the carrier that: 'The consignee on receipt of the shipment will sign the consignee's certificate on the original bill of lading and surrender the bill of lading to the last carrier. The bill of lading then becomes the evidence upon which settlement for the service will be made.' This consignee's certificate, printed on the face of the bill, is denominated a 'Certificate of Delivery,' and is introduced by the words: 'I have this day received * * * the public property described in this bill of lading, in apparent good order and condition, except as noted on the reverse hereof.' 'Condition 6' recites that: 'Receipt of the shipment is made subject to the 'Report of Loss, Damage, or Shrinkage' noted hereon.' and 'Instruction 6' calls for notation of all loss or damage before accomplishment if possible. In sum, 'the' evidence upon which the carrier may rely for payment is the 'accomplished,' or surrendered, bill of lading, accompanied by the 'Certificate of Delivery' signed 'on receipt of the shipment,' with the 'receipt' subject to the loss or damage report.

The entries made in the situation...