Dorsid Trading Company v. S/S FLETERO

• Decision Date: 11 April 1972
• Docket Number: Civ. A. No. 69-H-963.
• Citation: 342 F. Supp. 1,1973 AMC 783
• Parties: DORSID TRADING COMPANY v. S/S FLETERO, Her Engines, Boilers, Tackle, etc., et al.
• Court: U.S. District Court — Southern District of Texas

342 F. Supp. 1

1973 AMC 783

DORSID TRADING COMPANY v. S/S FLETERO, Her Engines, Boilers, Tackle, etc., et al.

Civ. A. No. 69-H-963.

United States District Court, S. D. Texas, Houston Division.

April 11, 1972.

Michael S. Wilk, Hirsch, Westheimer & Block, Houston, Tex., for plaintiff.

Robert C. Davee, Eastham, Watson, Dale & Forney, Houston, Tex., for defendant ELMA.

Theodore Goller, Fulbright, Crooker & Jaworski, Houston, Tex., for defendant Strachan Shipping Co.

MEMORANDUM AND ORDER

CARL O. BUE, Jr., District Judge.

The plaintiff, Dorsid Trading Company, brought this suit against the S/S FLETERO, its owners, operators and charterers, and Strachan Shipping Company, the discharging stevedore, to recover the sum of $14,845.27 as alleged damages caused by rust and improper handling to a shipment of oil well tubing and casing. The cargo was carried on board the vessel from Buenos Aires, Argentina, to Houston, Texas, under Bills of Lading Nos. 6 through 17 inclusive, and discharged in Houston during the period May 17 through May 21, 1968.

The plaintiff (Dorsid) is a Texas corporation, which at all times material hereto and for several years previously has been engaged in business as an importer of steel products from Argentina and other nations for distribution and sale to the wholesalers of steel products in the Houston area. Defendant Empresa Lineas Maritimas Argentinas (ELMA) is a foreign corporation which was the owner and operator of the S/S FLETERO and the carrier under the bills of lading. Defendant Strachan Shipping Company (Strachan) is an independent stevedoring contractor which was employed by ELMA to discharge cargo from the S/S FLETERO including the cargo made the subject matter of this suit on or about May 17, 1968.

On or about April 14, 1968, the shipper, Dalmine Siderca, an Argentine company engaged in business in Argentina as an exporter of steel products, delivered to the carrier ELMA at Buenos Aires a cargo consisting of 9,642 pieces of oil well tubing and casing for carriage to Houston aboard the FLETERO. ELMA was a carrier of that shipment within the meaning of the United States Carriage of Goods by Sea Act, 46 U.S.C. § 1300 et seq., and the ocean carriage involved in this action is subject to that Act.

The FLETERO arrived at the Port of Houston on or about May 17, 1968. The pipe consigned to Dorsid was discharged by Strachan directly from the vessel into open rail cars and motor trucks engaged by Dorsid for carriage to the premises of Consolidated Bonded Warehouses in Houston, pursuant to instructions received from Dorsid. Both Dorsid and Consolidated Bonded Warehouses are corporations in which the stock is wholly owned or controlled by Mr. Sidney Slavin, the president of both companies, and his wife.

Each bill of lading, numbers 6 through 17, under which this shipment of pipe was carried contained on its face the following typed clause:

Material is acknowledged as being loaded into vessel with couplings all facing forward and shall be discharged in the same manner.

Dorsid's claim for bending and handling damages to the pipe and for rust damage, an aggregate amount exceeding $14,000, was paid by its cargo underwriters in return for a full assignment of Dorsid's interests in such claim. The cargo underwriters in turn negotiated a full settlement for $2,500 and released ELMA. Dorsid now contends that it retained for its own account a separate claim in the sum of $689.85 representing its costs of turning 404 pieces of oil well casing so that all of the couplings faced in the same direction, pursuant to the above clause in the ocean bills of lading.

In accordance with the requirement of COGSA, 46 U.S.C. § 1303(6), Dorsid notified ELMA through its agent Strachan on May 20, 1968, within three days of delivery, of claims "for any and all damages and/or shortages on the above shipment," referring to bills of lading Nos. 6 through 17. See plaintiff's Exhibit 11. It is now contended by the carrier that, while this letter was notice for bending and rust damages and shortages to the pipe itself, it was not proper notice for any claim of damages for mishandling or turned couplings.

In addition to the question of proper notice, there are great discrepancies in the evidence as to what amount of "turned" or mishandled pipe actually existed, as to where and at what point in time the alleged turning occurred, and as to what amount, if any, of actual damage was sustained by reason of the alleged mishandling.

I.

We turn first to the question of proper notice. If the Court accepts defendant ELMA's theory that the letter of May 20 was not notice as to mishandling or turning, section 1303(6) of COGSA creates a prima facie case that the cargo was delivered by the carrier in the condition described in the bills of lading, Otis McAllister Export Co. v. Grancolumbiana (New York), Inc., 216 F.Supp. 756, 757 (E.D.La.1963). See also, W. Poor, Charter Parties and Ocean Bills of Lading § 64 at 164 (5th ed. 1968). From the proof forthcoming at the trial, this Court is convinced that the notice letter sent by the plaintiff was sufficiently broad so as to encompass a claim for mishandling or turning damage, and the Court therefore finds that the notice requirements of section 1303(6) were met. However, even though this Court finds that sufficient notice was given, plaintiff must still satisfy his burden by demonstrating not only that cargo was received by the carrier in good condition, but also that such cargo arrived at its destination in a damaged state. Interstate Steel Corp. v. S/S "CRYSTAL GEM", 317 F.Supp. 112, 118, 1970 A.M.C. 617 (S.D.N.Y. 1970).

Insofar as proof of damage is concerned, the Court notes that defendant ELMA had no opportunity to sight the pipe before it was unloaded by plaintiff's crews at the yard of Consolidated Bonded Warehouses, although delivery was actually complete when the pipe was loaded into rail cars and trucks from the ship's tackle. Calcot, Ltd. v. Isbrandtsen Co., 318 F.2d 669 (1st Cir. 1963), 1963 A.M.C. 1993. The failure of the plaintiff to prove damage at the time of delivery is especially critical in a case such as this one in which the alleged "damage", or "turning" manifests itself as a result of actions entirely unrelated to the initial alleged mishandling.

There is testimony to the effect that two surveys were made of the shipment of pipe in order to assess the extent of damage (testimony of Sidney Slavin; defendant ELMA Exhibit 3). Mr. Slavin testified that Captain R. L. Wynne conducted a survey on or about June 19, 1968, but Mr. Slavin had no recollection of Captain Wynne's findings. Captain George J. Salter, an independent marine ship and cargo surveyor, was employed by ELMA to determine the cause and extent of alleged damage to the shipment of pipe in question. On June 27, 1968, he conducted a survey on the premises of Consolidated Bonded Warehouses accompanied by Mr. Slavin. He reported minimal handling damage (physical damage) to 177 pieces of tubing and estimated that the cost of repairs to return the pipe to a serviceable condition would be between $700 and $800. No mention of mishandling or turning was made to Captain Salter; and no findings were made by the Surveyor in this regard. In fact, his testimony was to the effect that he had never handled a claim for mishandling or turning, nor could he recall any consignee other than Dorsid making such claim.

The delivery receipts executed upon transfer of the pipe from the vessel to rail cars and trucks reflect that a total of 115 pieces were stowed in the ship with the coupling ends reversed, despite the notation to the contrary in the typed claused, quoted supra, in the bills of lading. However, the receipts do not reflect whether these pipes were turned by Strachan during the discharge operations so that all pipes were unloaded into rail cars and trucks with all couplings facing forward.

Other documentary evidence present further inconsistencies. For example, the receiving reports issued by Consolidated Bonded Warehouses upon delivery from rail and truck carriers, reflect that only 76 pieces of pipe had coupling ends turned in the wrong direction. However, the report further reflects that all 76 pieces were transported in the same rail car, leading to the conclusion that the car itself had been turned at some point between the vessel and the warehouse. See defendant Strachan's Exhibit 1, Receiving Report No. 2102.

A third document, prepared by Mr. Allen Westheimer, former employee of Dorsid, purports to be a summary damage report in regard to the bills of lading at issue here. This report is in no way consistent with either the delivery receipts or the receiving reports noted, supra. A total of 404 pieces from bills of lading nos. 8, 9, 13 and 14 are listed therein as having coupling ends reversed. After a considered review and comparison of these records, this Court finds this particular document to possess little, if any, probative value. The document was not a record kept in the normal course of business, and the written or verbal information from which it was prepared is not ascertainable and therefore cannot be substantiated. See the testimony of Mr. Westheimer and plaintiff's exhibit No. 15.

Assuming that sufficient notice of the mishandling claim was given to defendants by Dorsid so as to forestall a prima facie case arising against the plaintiff, this Court finds that Dorsid has failed to meet its burden of showing that any pipes were delivered from the vessel with the coupling ends "turned the wrong way", Interstate Steel Corp. v. S. S. "CRYSTAL GEM", 317 F.Supp. 112, 122, 1970 A.M.C. 617 (S.D.N.Y.1970). In short, the plaintiff has entirely failed to prove that any pipes were discharged from the vessel in "damaged" or "turned" condition. Miami Structural Iron Corp. v. Cie Nationale Belge De T. M., 224 F.2d 566, 568 (5th Cir. 1955).

II.

Another aspect of plaintiff's case is also found to be...