Alcoa SS Co. v. United States

• Decision Date: 30 April 1948
• Citation: 80 F. Supp. 158
• Parties: ALCOA S. S. CO., Inc. v. UNITED STATES.
• Court: U.S. District Court — Southern District of New York

80 F. Supp. 158

ALCOA S. S. CO., Inc. v. UNITED STATES.

United States District Court S. D. New York.

April 30, 1948.

Wood, Molloy, France & Tully, of New York City (Melville J. France and Henry P. Molloy, Jr., both of New York City, of counsel), for plaintiff.

John F. X. McGohey, U. S. Atty., of New York City (William H. Postner, of New York City, of counsel), for defendant.

LEIBELL, District Judge.

The facts set forth in the above findings warrant the conclusion that the sum of $3,520.52 was illegally withheld by the Comptroller General on February 2, 1946 as a set-off against freight admittedly due for shipments on the SS. Plow City and the SS. Alcoa Trader. The set-off represented a sum which had theretofore been paid by the Comptroller General to the plaintiff as freight on a shipment of lumber on the SS. Gunvor, owned and operated by the plaintiff, which was lost through enemy action on June 14, 1942. The legal question presented involves the interpretation of the provisions of the government bill of lading and of the bill of lading of the carrier. The rules and conditions of the carrier's bill of lading were incorporated into the government's bill of lading by reference, "unless otherwise specifically provided or otherwise stated on" the government's bill of lading.

The carrier's bill of lading contained the customary provision that the freight was to be deemed fully earned and due and payable — goods or vessel lost or not lost — whether freight was to be prepaid or to be collected at destination. If there is nothing in the government's bill of lading, specifically providing to the contrary, i.e., that the freight shall not be earned and due and payable if the goods or vessel are lost, then the sum of $3,520.52 was improperly deducted by the Comptroller General.

The government contends that the provisions in paragraph 1 of the conditions and in paragraph 2 of the instructions, on the back of the government's bill of lading, are so clearly inconsistent with the provisions of paragraph 6 of the terms printed on the back of the carrier's bill of lading (all of which are quoted in the findings) as to bar the carrier from any claim for freight on any shipment which was not delivered at destination, even though delivery was made impossible through the destruction of the carrier's vessel by enemy action.

I am of the opinion that the aforementioned provisions of the bills of lading are not inconsistent. The provisions of its own bill of lading, cited by the government, have to do with the "evidence" that must be presented by the carrier to collect freight showing delivery to the proper person when delivery of the shipment has been made. The provision of the carrier's bill of lading, which declares that the freight is payable "goods or vessel lost or not lost", covers the liability of the shipper for freight if there is no delivery at all because the goods have been destroyed through no fault of the carrier. The two provisions can thus be given effect in respect to the situations to which they apply: the one where there is a delivery of the shipment; the other where the shipment is lost.

A bill of lading is "accomplished" not by transportation of the shipment to its destination. Something more is required; the delivery at destination must be made bona fides to the person apparently having the right to receive the shipment.

The word "accomplished" when used in association, with the term "bill of lading" has had a meaning in mercantile circles which goes back to the time when a bill of lading was prepared and signed in a set. It was customary to insert in bills of lading drawn in sets the provision that one of them "being accomplished, the others to stand void". The duty devolved on the master to make delivery to the rightful owner and if he had no knowledge that any other part of the bill of lading, other than the part presented had been indorsed, he could "properly and safely deliver in accordance with the indorsement and holding of the part presented, without inquiry as to the other". Carver on Carriage of Goods by Sea, Sec. 502. "If upon one of them the shipowner acts in good faith, he will have `accomplished' his contract, will have fulfilled it, and will not be liable or answerable upon any of the others". Glyn v. East & West India Dock Co. (1882), 7 A.C. 591 at p. 599 cited in Sec. 55. See G. H. M. Thompson, "Bills of Lading" p. 211, where he uses the word "executed" as meaning the same thing as "accomplished" — "One bill being executed, the others to be void". See also Leggett, "Bills of Lading" p. 569; and Duckworth, "Charter Parties and Bills of Lading" page 74.

The government bill of lading in the case at bar was not drawn in the form of a set. Paragraph 2 of the Instructions on the back of the bill of lading directed that a "Shipping order, original bill of lading, and memorandum bill of lading should be used in making a shipment". That paragraph also stated that "Only one original bill of lading will be issued for a single shipment". The paragraph then goes on to state what shall be done with the documents: the shipping order shall be furnished the initial carrier; the original bill of lading and memorandum copies shall be signed by the agent of the receiving carrier, returned to the consignor and the original promptly mailed to the consignee. Then, "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 services will be paid".

It is clear that the government did not intend to pay on presentation of any of the memorandum copies of the bill of lading; they were to be "used as administration officers direct". The government required presentation of the original bill of lading, with the consignee's certificate duly signed. To meet a situation where the original bill of lading was lost or destroyed, paragraph 4 of the Instructions provided that the carrier shall be furnished by the consignee with a "Certificate in Lieu of Lost Bill of Lading", on the standard form prescribed therefor "which when finally consummated by acknowledgment of the `Certificate and Waiver by the Transportation Company' shall accompany the bill for services submitted by the carrier to the officer charged with the settlement of the account".

The words "accomplished" and "accomplishment", in relation to the bill of lading, appear in paragraph 6 of the Instructions on the government's bill of lading, which deals with loss or damage to property while in the possession of the carrier. Paragraph 6 provides that "such loss or damage shall when practicable, be noted on the bill of lading or certificate in lieu thereof, as the case may be before its accomplishment". But "should the loss or damage not be discovered until after the bill of lading or certificate has been accomplished, the proper officer shall be notified as soon as the loss or damage is discovered * * *".

If the government wanted to negative the provisions of paragraph 6 of the terms of the carrier's bill of lading, in relation to the payment of freight "Goods or vessel lost or not lost", it could have done so in a single sentence by providing that no freight shall be payable if the shipment is lost. The government prepared the form of its own bill of lading. If it is indefinite or ambiguous, that is not the fault of the plaintiff. If it permits of more than one interpretation, the plaintiff is entitled to the more favorable interpretation.

The question of the right of a carrier to payment of freight where the cargo is lost with the destruction of the vessel or where the carrier is unable to present a bill of lading properly accomplished, was before the Comptroller of the Treasury during the First World War. In Volume 24, Decisions of the Comptroller of the Treasury, p. 707 (May 27, 1918) it was held that the liability of the government for freight charges would arise "when the shipment is actually made, whether delivered to destination or lost with the destruction of the vessel". On April 7, 1942 the Comptroller General rendered an opinion to the Secretary of the Navy (Vol. 21 D.C. G. p. 909) in which he held that where the carrier claimed charges without being able to present evidence of delivery, it could be required to show the facts and circumstances it relied upon as relieving it from the duty "to effect delivery and to obtain, receipt from the consignee". There are decisions of the Comptroller General in December 1942 and subsequent thereto refusing payment of freight where the goods shipped were lost by enemy action and so not delivered at destination. But there do not appear to have been any to that effect in June 1942 or prior thereto. The SS. Gunvor was lost June 14, 1942. The payment of freight on the shipment of lumber on the SS. Gunvor was made September 15, 1942. When the plaintiff received the shipment on the SS. Gunvor in June 1942, it was entitled to rely on the prevailing interpretation of these bills of lading provisions in relation to payment of freight, where the vessel is lost.

There is nothing unusual or unconscionable about the provisions of paragraph 6 of Alcoa's bill of lading. Although the common law rule was that freight was earned only if the shipment was delivered (The Louise, D.C., 58 F.Supp. 445), nevertheless for many years bills of lading have contained the provision that freight was considered earned, vessel lost or not lost. And such provisions have been upheld where the loss was not due to the negligence of the carrier. Allanwilde Transport Corp. v. Vacuum Oil Co., 248 U.S. 377, at page 385, 39 S.Ct. 147, 63 L.Ed. 312, 3 A.L.R. 15. The government knew of this practice when it prepared its own form of bill of lading, standard form No. 1059, approved by the Comptroller General August 24, 1928.

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