Baker Oil Tools, Inc. v. Delta Steamship Lines, Inc.
| Decision Date | 15 October 1974 |
| Docket Number | Civ. A. No. 72-H-834. |
| Parties | BAKER OIL TOOLS, INC., Plaintiff, v. DELTA STEAMSHIP LINES, INC., and Port of Houston Authority of Harris County, Texas. |
| Court | U.S. District Court — Southern District of Texas |
Brown & Teed, William C. Bullard, Houston, Tex., for plaintiff.
Royston, Rayzor, Cook & Vickery, Kenneth D. Kuykendall, Houston, Tex., for defendant Delta Steamship Lines, Inc.
Fulbright & Crooker, Jack L. Allbritton, Houston, Tex., for defendant Port of Houston Authority of Harris County, Texas.
This suit in admiralty, 28 U.S.C. § 1333, concerns the unexplained disappearance of four boxes of oil field equipment from City Dock 19 in the Port of Houston. The equipment was on the dock awaiting transport from Houston to Port Gentil, Gabon, aboard the S.S. DEL RIO, a vessel owned and operated by Delta Steamship Lines, Inc., (Delta). The claims and parties are as follows. The shipper and owner of this cargo, Baker Oil Tools, Inc., (Baker), filed suit against Delta for $21,916.00 — the oil field equipment's estimated full market value. Delta answered denying liability and lodged a third-party complaint against the Port of Houston Authority of Harris County, Texas, (Port), the operator of City Dock 19. Baker than amended its complaint joining the Port as a defendant. Finally, the Port, while denying liability either as a defendant or third-party defendant, filed a cross-claim against Delta for any amount that Baker might ultimately recover from the Port.
Common Market Forwarders, Inc., (Common Market), a Houston forwarding agent, was engaged by the purchaser, Elf-Societe de Patroles D'Afrique Equatoriall, to arrange for the ocean shipment of this cargo from Houston to Port Gentil. On July 20, 1971 Common Market received an export invoice from Baker indicating that the equipment was ready for shipment. Upon receipt of this document, Leon Templet, a Common Market employee, consulted the available shipping digests or schedules for the vessel with the earliest time of arrival at Port Gentil. He was concerned with the earliest possible arrival time because the purchaser had indicated a desire for quick delivery.
Templet selected the S.S. DEL RIO and on or about July 20, 1971 made arrangements with Delta by telephone for space aboard the vessel. This type of oral booking is not unusual in the Port of Houston for small shipments.1 Templet testified that when he made the oral booking he was advised by a Delta representative that the S.S. DEL RIO would sail from Houston on August 4, 1971 and arrive at Port Gentil on September 1, 1971.
After making the oral booking, Templet sent a business form containing delivery instructions to Baker's Houston facility. This communication, which was received by Baker on July 26, 1971 directs that the cargo be delivered as soon as possible to City Dock 19 for transport aboard the S.S. DEL RIO. Baker was advised that the vessel would sail on August 4, 1971.
Baker delivered the cargo by truck to City Dock 19 on July 30, 1971. Consistent with Port procedure, the truck was unloaded by Port employees and the cargo was placed in the berth assigned to the receiving vessel. A clerk employed by Delta signed a dock receipt on the day of delivery indicating that the cargo had been tendered to Delta by the Port. This receipt was given pursuant to Port of Houston Tariff No. 8, Item 49, which provides as follows:
The next major event occurred on August 16, 1971 when Templet became concerned because he had not received an on board bill of lading and checked a Delta shipping schedule. It indicated that the S.S. DEL RIO had not yet arrived at the Port of Houston and that Port Gentil had been cancelled as a port of call. He immediately located another vessel, the S.S. MISSOURI, which was scheduled to sail for Port Gentil on August 16, or 17, 1971, and set about having the cargo transferred from Delta's berth to the berth of the S.S. MISSOURI. Templet contacted Delta to discuss the contemplated transfer and to determine exactly where the cargo was located. These arrangements were apparently acceptable to Delta and Templet issued a work order to the Port authorizing the move. Had the cargo been at Delta's berth on August 16th as supposed, the entire matter would probably have ended on an amicable note. It was nowhere to be found, however, and this litigation ensued.
Baker's claim for the full value of the lost cargo is predicated on a simple bailment theory. This equipment was delivered to Delta pursuant to an agreement for ocean transport and disappeared while resting in Delta's assigned berth. "It is common ground that an ocean carrier responsible for the cargo under the contract of carriage, is liable for the loss of the cargo as a result of negligence and that a bailor makes out a prima facie case of negligence merely by showing delivery of the goods to the bailee and failure to return at the required time." Leather's Best, Inc. v. S.S. Mormaclynx, 451 F.2d 800, 812 (2d Cir. 1971), citing R. Brown, Personal Property, § 87 at 363 (1955). On the facts before this Court, Baker has unquestionably made a prima facie case and Delta has failed to come forward with any explanation of how the goods might have disappeared.
In defense, Delta insists that its duties and responsibilities should, as a matter of law, be determined according to the provisions of its standard bill of lading rather than by the law of bailment. Reliance on the standard bill of lading is of little help to Delta on the issue of liability for negligence, but, as will be discussed below, it makes a great deal of difference with respect to the amount of damages allowable.
Paragraph three (3) of Delta's standard bill of lading extends the provisions of the Carriage of Goods by Sea Act, 46 U.S.C. § 1300 et seq. (Cogsa) to cargo in the custody of the carrier prior to loading and after discharge. "The provisions stated in said Act (except as may be otherwise specifically provided herein) shall govern before the goods are loaded on and after they are discharged from the ship and throughout the entire time the goods are in the custody of the Carrier." Cosga inter alia imposes responsibility upon the carrier for the loss of cargo due to negligence, but provides that "Neither the carrier nor the ship shall in any event be or become liable for any loss or damage to or in connection with the transportation of goods in an amount exceeding $500 per package . . ." 46 U.S.C. § 1304(5). emphasis supplied.2
Baker's prima facie, case, discussed above in a simple bailment context, applies with equal force under Cogsa. It has been established that the cargo was delivered in good order to Delta's berth and subsequently disappeared. If Cogsa controls, in order to escape liability Delta must show that the loss resulted from one of the statutory exceptions set out in 46 U.S.C. § 1304. Tupman Thurlow Co., Inc. v. S.S. CAP CASTILLO, 490 F.2d 302 (2d Cir. 1974); G. Gilmore & C. Black, The Law of Admiralty, § 3-43 (1957); 70 Am.Jur.2d, Shipping § 552. The requisite showing has not been made as absolutely no evidence was produced at trial to account for the loss.
Baker is thus entitled to an award of damages against Delta under either the law of bailment or the standard bill of lading and Cogsa. The real controversy between these two parties is over the amount of the award. An ordinary bailor could successfully assert a claim for the full market value of the equipment — estimated at $21,916.00. If the bill of lading and Cogsa govern, Delta's liability would be limited to $2,000.00. The cargo was shipped in four separate boxes which were "packages" within the meaning of 46 U.S.C. § 1304(5) quoted above.
Bills of lading are normally issued in the Port of Houston only after the cargo is actually aboard the vessel, and none was issued in this case. But, the absence of an executed bill of lading does not end the inquiry as evidenced by Luckenbach S.S. Co., Inc. v. American Mills Co., 24 F.2d 704 (5th Cir. 1928). In Luckenbach the shipper sought a judgment against the carrier for the market value of 1,450 costs which were destroyed by fire while on a wharf awaiting shipment. No bill of lading had been issued at the time of the fire, but one was issued later covering a portion of the shipment which had been safely loaded aboard prior to the conflagration. This bill of lading contained a clause exempting the carrier from liability for loss by fire.
The shipper argued that the carrier was in effect an insurer of the cots and could not seek shelter in a bill of lading issued after the loss occurred. The court disagreed, stating that the bill of lading could be looked to as evidence of the contract between the parties entered into at the time the goods were delivered and accepted.
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