FJ McCarty Company v. Southern Pacific Company

• Decision Date: 07 August 1968
• Docket Number: No. 46592.,46592.
• Citation: 289 F. Supp. 875
• Parties: F. J. McCARTY COMPANY, Inc., Plaintiff, v. SOUTHERN PACIFIC COMPANY, Defendant.
• Court: U.S. District Court — Northern District of California

289 F. Supp. 875

F. J. McCARTY COMPANY, Inc., Plaintiff, v. SOUTHERN PACIFIC COMPANY, Defendant.

No. 46592.

United States District Court N. D. California.

August 7, 1968.

COPYRIGHT MATERIAL OMITTED

William H. King, Hamilton & King, San Francisco, Cal., for plaintiff.

Waldron A. Gregory, Frederick E. Fuhrman, San Francisco, Cal., for defendant.

MEMORANDUM OPINION

ZIRPOLI, District Judge.

FACTS

This is an action by a consignor against an interstate carrier for damages occasioned by the carrier's delivery of a damaged cargo. The consignor alleges that on two occasions a cargo of grapes was injured while being transported by the carrier and that the injury to the cargo caused the damages sought to be recovered.

The plaintiff — F. J. McCarty Co., Inc. — is an exporter of perishable agricultural products such as fresh fruits. Miss Frances J. McCarty is the president and sole owner of the plaintiff.¹ She has one employee. Two shipments of grapes are involved in this case.

Plaintiff entered into the contract for the first shipment with Frutas San Martin C. A. — a South American importer — on June 27, 1966 (Exh. 1). Plaintiff agreed to deliver 1,330 lugs or boxes of Cardinal grapes to Caracas, Venezuela. Plaintiff was to receive $6.60/lug (Exhs. 1, 7). The grapes were to be shipped on July 8, 1966 from New York. Plaintiff purchased the grapes from Guimarra Vineyards near Bakersfield, California, for $4.05/lug on June 29, 1966 (Exhs. 2, 5). On June 29, 1966, a United States Department of Agriculture inspector at Edison, California checked the grapes and found them in good condition (Exh. 3). The grapes were shipped pursuant to a Uniform Domestic Straight Bill of Lading (Exh. 4) and were marked "Expedite for Export".²

Although the grapes were carried by various rail carriers and were handled by at least one trucker and one loading contractor, the parties are agreed that any liability arising as a result of the acts of the aforementioned entities must be borne by Southern Pacific.³

The grapes were to be delivered to Pier 58, North River, New York, New York for shipment to South America on board the Grace Line vessel S.S. Santa Rosa (Exhs. 2, 4).⁴

The exact day on which defendant was to deliver the grapes to the consignee was to be disclosed to the railroad by Gotham Shipping Co., plaintiff's agent and "freight forwarder" in New York. George Ziegler, president of Gotham, kept track of plaintiff's shipments as they neared New York and was responsible for making necessary arrangements at the point of destination. On behalf of the plaintiff, he dealt with the Pennsylvania Railroad, the final rail carrier involved in the transaction, and for whose conduct the defendant is responsible.⁵ On July 5, 1966, Ziegler gave the railroad written instructions concerning the delivery to Pier 58 (Exh. E). The grapes arrived at the Greenville, New Jersey railroad yards of the Pennsylvania (also referred to as the Greenville Piers or Greenville) on July 6, 1966. Greenville Piers was the defendant's customary yard to which goods to be exported were shipped. The vessel — the S.S. Santa Rosa — was to sail on Friday, July 8, 1966. The ship was customarily loaded at Pier 58 on the day prior to sailing. While at the Greenville Piers, the grapes were removed from their refrigerated rail car and were loaded on a refrigerated truck⁶ of the H. W. Thompson Co. for delivery to Pier 58. The unloading and loading took from 11:30 p. m. on July 6 to about 3:30 a. m. on July 7. The unloading and loading while in the railroad yard was done by the New Jersey Contracting Co. At about 8:15 a. m. on July 7, the Thompson Co. truck left the Greenville yard for Pier 58, a distance of about fourteen miles by truck. Frank Cuomo, the truck driver, and his "helper"⁷ arrived at Pier 58 at about 9:00 a. m. They began unloading the 1,330 lugs of grapes between 9:45 and 10:30 a. m. After they had unloaded between 140 and 195 lugs, Harry E. Jennings — a "surveyor" employed by the T. D. Baker & Co., which is in turn employed by the Grace Line to inspect cargo being delivered for loading on board ships — told them he would recommend that Grace Line reject the shipment because of damage to 10 to 15 per cent⁸ of the lugs and grapes.⁹ His estimate was based on an examination of the part of the shipment unloaded and an examination of the manner in which the lugs were sorted on the truck. Cuomo contacted his boss, Harold W. Thompson, who instructed him to return to the Greenville Piers, which he did, arriving at about 1:00 p. m. on July 7. Meanwhile, Jennings had contacted George Ziegler¹⁰ of Gotham Shipping, plaintiff's agent in New York, and told him of his observations and decision. Arrangements were made whereby Grace Line agreed to take the grapes on the morning of sailing if the damaged lugs were separated from the undamaged ones. Jim Mabin, Grace Line's pier manager, had told Ziegler that no space was available on the pier to use for separating the good and bad lugs and plaintiff and her agents had no time on the afternoon of July 7 to secure facilities and personnel to accomplish the required separation. Consequently, Ziegler called Holmes at Greenville and told him of the situation.¹¹ Ziegler ultimately ordered the railroad car and its contents turned over to Victor Joseph & Sons, Inc., who would sell the grapes at auction.¹²

Plaintiff entered into the contract for the second shipment with Frutas San Martin C. A. on July 20, 1966 (Exh. 10). Plaintiff agreed to deliver 500 lugs of seedless, 500 lugs of Cardinal, and 500 lugs of Ribier grapes — 1500 boxes in all — and was to receive $5.80, $5.55 and $7.60/lug respectively. The grapes were to be shipped on July 29, 1966 from New York on the Grace Line vessel S. S. Santa Paula. Plaintiff purchased the grapes from Guimarra for $3.25, $3.00 and $5.00/lug respectively on July 20, 1966 (Exhs. 11, 12). On July 20, 1966, a United States Department of Agriculture inspector at Edison, California, checked the grapes and found them in good condition (Exh. 13). The grapes were shipped pursuant to a Uniform Domestic Straight Bill of Lading (Exh. 14)¹³ marked "Expedite for Export".¹⁴ The actual procedures and details for the second shipment's handling were similar to those of the first shipment (E. g., Exhs. G, H). The grapes arrived at Greenville on July 27, 1966, and were to be loaded on the S.S. Santa Paula on July 28 for sailing on the 29. The grapes were transferred to a Thompson Co. truck (at which time no damage was noted, Exh. H¹⁵ and were driven to Pier 58 where the shipment was refused in the early afternoon. Frank Cuomo, defendant's agent who tendered delivery as driver of the truck, testified that the consignee refused¹⁶ the shipment before any of the lugs had been unloaded.¹⁷ The reason given Cuomo was "possible damage", although the surveyor did note some actual damage (Exh. 18; cf., Exh. 22).¹⁸ Cuomo testified that the surveyor could see only the last tier of lugs which was stacked to a height of about ten to eleven feet above the ground on which the surveyor stood. The truck returned to Greenville on the 28 of July and the grapes were reloaded into the refrigerated rail car from whence they came. On July 31, the rail car was placed aboard a barge or float and was moved to Pier 28 for delivery to the New York Fruit Auction, which ultimately sold the grapes. When Ziegler was notified that the surveyor at Pier 58 would not recommend acceptance of the second shipment, he spoke with Jim Mabin, who refused to allow the sorting of good and bad lugs on the pier. Mabin did say that the consignee would accept the shipment on the morning of sailing if properly separated. Plaintiff claims that defendant, in injuring the shipments, caused and is liable for the following damages:¹⁹

For the first shipment, plaintiff would have received $8,778.00.²⁰ Plaintiff saved the ocean freight charge to South America of $1,369.90²¹ and the ocean insurance charge of $28.97.²² Therefore, had the first shipment been carried to South America, plaintiff would have net receipts of $7,379.13.²³ Instead, plaintiff received $1,337.14²⁴ from the auction and hence claims damages of $6,041.99.

For the second shipment, plaintiff would have received $9,475.00.²⁵ Plaintiff saved the ocean freight charge of $1,545.00²⁶ and the ocean insurance charge of $31.27.²⁷ Therefore, had the second shipment been carried to South America, plaintiff would have had net receipts of $7,898.73.²⁸ Instead plaintiff received $3,537.76²⁹ from the auction and hence claims damages of $4,360.97.

Defendant concedes that it is liable as to the first shipment for the injury to 147 boxes with crushed tops and 14 boxes with open tops. Defendant concedes liability as to the second shipment for the injury to 16 boxes. Defendant concedes liability for $278.32 for the first and for $54.80 for the second shipment. Defendant contends that if additional liability is imposed, the proper measure of the plaintiff's loss should be determined not by the contract price in South America but by the market value of the grapes in New York. Defendant has submitted Exhibits N-P summarizing its theory of damages. Plaintiff does not contest the accuracy of the computations but does say that the measure is not correct.

DISCUSSION

The court has subject matter jurisdiction of this action, 28 U.S.C. § 1337; 49 U.S.C. § 20(11); Peyton v. Railway Express Agency, 316 U.S. 350, 62 S.Ct. 1171, 86 L.Ed. 1525 (1942); Eazor Express v. Pennsylvania Railroad Co., 214 F.Supp. 695 (W.D.Pa.1963).

Although plaintiff urges the court to hold that the defendant bore the legal duty to separate the undamaged from the damaged cargo, the court is satisfied that the law imposes no such duty upon the carrier. Rather, in a case such as this one, the duty is on the consignee to accept the tender of the partially damaged shipment and to thereafter mitigate damages. See Sunset Motor Lines, Inc. v. Lu-Tex Packing Co.,...