Haroco Co. v. The Tai Shan

• Decision Date: 31 March 1953
• Citation: 111 F. Supp. 638
• Parties: HAROCO CO., Inc. et al. v. The TAI SHAN et al.
• Court: U.S. District Court — Southern District of New York

111 F. Supp. 638

HAROCO CO., Inc. et al. v. The TAI SHAN et al.

United States District Court S. D. New York.

March 31, 1953.

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Bigham, Englar, Jones & Houston, New York City, for libelants, Henry M. Longley and F. Herbert Prem, New York City, of counsel.

Haight, Deming, Gardner, Poor & Havens, New York City, for respondents, Charles S. Haight, Richard G. Ashworth and Arthur D. Talbot, New York City, of counsel.

DIMOCK, District Judge.

Libelants in these suits had various interests in cargo carried on respondents' ship Tai Shan bound from Taku Bar off the North China coast to North American continental ports. The cargo was damaged by fire while the ship was off the direct route from Taku Bar to North American ports. The "Fire Statute", 46 U.S.C. § 182, has the general effect of absolving the ship from the consequences of fire. It is cargo's contention that conduct of the ship in departing from the direct route amounted to an "unreasonable deviation" and that this deviation rendered the ship liable for the damage caused by the fire despite the Fire Statute.

A deviation is "a departure from the voyage contracted for". American Cyanamid Co. v. Booth S. S. Co., D.C.S.D. N.Y., 99 F.Supp. 232, 236, affirmed on opinion below, sub. nom. Feuer v. Booth Steamship Co., 2 Cir., 195 F.2d 529; Swift & Co. v. Furness, Withy & Co., D.C.D.Mass., 87 F. 345, 348.

The Carriage of Goods by Sea Act in 46 U.S.C. § 1304(4) provides:

"Any deviation in saving or attempting to save life or property at sea, or any reasonable deviation shall not be deemed to be an infringement or breach of this chapter or of the contract of carriage, and the carrier shall not be liable for any loss or damage resulting therefrom: Provided, however, That if the deviation is for the purpose of loading or unloading cargo or passengers it shall, prima facie, be regarded as unreasonable."

The Act uses the word "deviation" in accordance with the above definition, as meaning a mere departure, and where the Act expresses the idea of an unreasonable deviation it uses that characterization. I shall use the same terminology in this opinion.

The Fire Statute on its face gives complete protection to the ship. Unless, therefore, a deviation constitutes something at least as serious as a breach of the contract of carriage, it cannot, in reason, deprive the ship of that protection. The Act, however, as appears above, provides in section 1304(4) that a "reasonable deviation shall not be deemed to be an infringement or breach * * * of the contract of carriage * * *". Hence we must inquire not only whether there has been a deviation but also whether it was unreasonable.

In this inquiry Judge McGohey's opinion in American Cyanamid Co. v. Booth S. S. Co., D.C.S.D.N.Y., 99 F.Supp. 232, affirmed on opinion below sub. nom. Feuer v. Booth Steamship Co., 195 F.2d 529, supra, will well serve as a guide. He said in 99 F.Supp. on page 236:

"The language of a broad liberty clause must, it is true, be interpreted and cut down `to what is fairly applicable to the voyage which has been agreed upon and defined.' And so, the liberty to call must be limited to `ports substantially on the course of the voyage.' `The rule is one of interpretation, by which the meaning of words having a general significance is confined within the particular purpose of the agreement. But in ascertaining the true sense in which general words are used, the words themselves cannot be deprived of all meaning, for this would not be to interpret the agreement but to erase a part of it.'" (Citing cases in footnotes.)

That opinion teaches that we must first ascertain whether there has been a deviation in the sense of a departure from "the voyage contracted for". The "voyage contracted for" may be made up of two elements: first "the voyage which has been agreed upon and defined" and, second, "`what is fairly applicable'" thereto plus "ports substantially on the course of the voyage." The second element may be validly added by the parties through the use of a liberty clause in the bill of lading.

I shall first consider the first of these elements: "the voyage which has been agreed upon and defined." That is obviously the voyage as fixed by geographical description, usually by naming the ports of loading and discharge, as here Taku Bar and, for example, Boston. The direct route between these ports is the "voyage which has been agreed upon and defined" in the absence of a custom "`general and uniform in the business'", Smith v. United States Shipping Board Emergency Fleet Corp., D.C.S.D.N.Y., 2 F.2d 390, 391, which fixes some other route. No such custom has been shown here so that the direct route between Taku Bar and the ports of discharge is the "voyage which has been agreed upon and defined".

The parties here, however, have added the second element to that voyage by the use of liberty clauses in the bills of lading. They provide:

"Received, * * * certain cargo * * * to be transported under or on deck by the vessel herein named and bound for the port or ports as stated on the reverse side hereof, via other port or ports, though out of the usual or geographical route, and via Panama Canal, Suez Canal, Cape of Good Hope, Cape Horn or Straits of Magellan, or otherwise, and subject to vessels engagements not hereby disclosed, and though altering the voyage or involving a deviation therefrom, and to be delivered * * * at the port of destination named on the reverse side hereof * * *.

"* * * * * *

"It Is Mutually Agreed as follows—

"* * * * * *

"The carrier shall have liberty * * to proceed to, or toward, or stay at any ports or places whatsoever or by any route whatsoever, although in a contrary direction to or out of the route to or beyond the port of discharge, once or oftener in any order, backwards or forwards, for any purpose whatsoever, and all such ports, places and sailings shall be deemed to be included within the intended voyage and shall not be deemed to be a deviation (this liberty is not to be considered as restricted by any words in this contract, whether written or printed).

"* * * * * *

"Clause Paramount—This Bill of Lading shall be governed by the laws of the United States of America including the Carriage of Goods by Sea Act of the United States, approved April 16, 1936, * * *.

"* * * * * *

"It Is Also Mutually Agreed As Follows:

"29. * * *

"The carrier reserves the right to deviate from the intended route or to change the route, before, at or after sailing on the voyage, and/or at any stage thereof, in the event that circumstances shall arise which render it advisable or desirable in the judgment of the master of the vessel to deviate from or change the said route. * *

"Port Of Shipment: Taku Bar.

"Port Of Destination Of The Goods e. g. Boston."

The American Cyanamid opinion further teaches that, after determining the scope of "the voyage which has been agreed upon and defined", we can give some meaning to such a broad liberty clause but it must be cut down "to what is fairly applicable to the voyage which has been agreed upon and defined" and be limited to "ports substantially on the course of the voyage".

In this case, the broad liberty clause, cut down to what is fairly applicable to the voyage which has been agreed upon and defined, and limited to ports substantially on the course of the voyage, does not, in my opinion, give liberty to call at the Philippines. Hence there was a departure from the course of the voyage or, under technical terminology, a deviation.

We therefore pass to the question whether the deviation was an unreasonable one. There again, it seems to me, the broad provisions of the bill of lading can be given some effect but may not be given such complete effect as to permit unlimited deviation. Surely if the parties cannot validly give absolute liberty to extend the scope of "the voyage which has been agreed upon and defined" they cannot validly accomplish the same result by giving absolute liberty to deviate from "the voyage contracted for". While thus the absolute liberty to deviate, given in this case, cannot be completely effective, the fact that the parties used words which would literally effect such liberty may be considered with other circumstances in the course of determining whether the deviation in question was reasonable.

On this question the burden is on the ship to show that the deviation was reasonable. That follows from the fact that the deviation was for loading cargo since the Carriage of Goods by Sea Act quoted above, 46 U.S.C. § 1304(4) contains the proviso: "Provided, however, That if the deviation is for the purpose of loading or unloading cargo or passengers it shall, prima facie, be regarded as unreasonable."

Usage is one of the factors which may be lawfully considered in determining this question of the reasonableness of a deviation. While as above indicated, no custom can substitute anything for the direct route as the "voyage which has been agreed upon and defined" unless such custom is "`general and uniform in the business,'" so that no usage of lesser extent is material on the question of whether or not there is a deviation, Smith v. United States Shipping Board Emergency Fleet Corp., D.C.S.D.N.Y., 2 F.2d 390, supra, it by no means follows that a less-than-uniform usage is immaterial on the question whether the deviation is reasonable. It cannot be gainsaid that a deviation which was adopted by 80% of all vessels would be more nearly reasonable than one adopted by only 8%. In other words one of the factors in reasonableness is usage.

Turning now to an examination of the facts bearing upon the question of reasonableness, the Tai Shan was engaged as a general ship in the Barber-Wilhelmsen Line service between the Far East and the United States. This service began in 1929 and has been maintained continuously since then except during the years from 1941 to 1947.

The Tai Shan arrived at Taku Bar on September 22,...