Interocean S.S. Corp. v. New Orleans Cold Storage and Warehouse Co., Ltd., 88-3017
| Decision Date | 17 February 1989 |
| Docket Number | No. 88-3017,88-3017 |
| Citation | 865 F.2d 699 |
| Parties | , 8 UCC Rep.Serv.2d 154 INTEROCEAN STEAMSHIP CORPORATION and Transport Intermediaries Mutual Insurance Association, Ltd., Plaintiffs-Appellees, v. NEW ORLEANS COLD STORAGE AND WAREHOUSE COMPANY, LTD., and NOCS International, Ltd., Defendants-Appellants, v. MELLON BANK INTERNATIONAL, Third-Party Defendant-Appellee. |
| Court | U.S. Court of Appeals — Fifth Circuit |
Bruce A. North, Douglas A. Kewley, Lawrence J. Molony, Molony, North & Hanewinckel, Metairie, La., for defendants-appellants.
Andrew T. Martinez, Terriberty, Carroll & Yancey, New Orleans, La., for Interocean, et al.
Raymond J. Salassi, Jr., Anne Horton Breaux, New Orleans, La., for Mellon Bank.
Appeal from the United States District Court for the Eastern District of Louisiana.
Before CLARK, Chief Judge, and TIMBERS, * and RUBIN, Circuit Judges.
The district court held a customhouse broker and warehouse responsible for misdelivering shipped beef without receiving negotiable bills of lading. Because the broker and warehouse had no duty to provide for proper delivery, we reverse that judgment.
ABC Containerline N.V., owner of the M/V Ellen Hudig, issued two negotiable bills of lading to Wesfarmers Export, Ltd. for two containers of frozen boneless beef to be transported from Melbourne, Australia, to New Orleans. The bills of lading were "to order" with instructions to notify John Thallon & Company, an importer who had agreed to buy the meat from Wesfarmers. Upon receiving the original negotiable bills of lading, Wesfarmers forwarded them, as well as non-negotiable duplicates, to Mellon Bank International in New York. Mellon Bank transmitted copies of these bills to Thallon.
A month later, Thallon notified New Orleans Cold Storage International, Inc. (NOCSI), its customhouse broker, that the two containers were on board the M/V Ellen Hudig. Thallon sent NOCSI the original meat certificates, commercial invoices, and copies of the bills of lading so NOCSI could "handle the ... documents" and clear the cargo through customs "in the usual manner." Thallon informed NOCSI that "Delivery Instructions" and "Original[ ] ... Bill(s) of Lading ... will follow."
Wesfarmers' two containers of frozen boneless beef, in addition to forty similar containers aboard the M/V Ellen Hudig, arrived at the port in New Orleans on April 23, 1985. Interocean Steamship Corporation, ABC's steamship agent, informed Thallon of their arrival, and sent New Orleans Cold Storage and Warehouse Company (Warehouse) a copy of the ship's manifest. Interocean hired Warehouse, NOCSI's parent company, to receive, strip, and tally the cargo from all 42 containers on board the M/V Ellen Hudig.
NOCSI cleared the two containers of beef through United States Customs and delivered them to Warehouse on April 30, 1985, as Thallon instructed. NOCSI delivered the containers, however, without their original, negotiable bills of lading; NOCSI never received the original bills from Thallon despite his notice that they were "to follow," and never notified Warehouse or Thallon of their absence.
After delivery, Warehouse stripped the containers, tallied the meat, and placed it in refrigerated storage. It then reported the quality and quantity of goods received to Interocean. Warehouse was to store the meat without charge until May 24, after which fees would be assessed against the ultimate cargo owner or Thallon.
On May 2, Warehouse sent Thallon non-negotiable receipts for the frozen beef. On May 6, at Thallon's oral request and expense, Warehouse delivered the contents of one container of beef to Texas A & M Food Service, and delivered the contents of the other container to Portion Control on May 21. Warehouse executed both deliveries without obtaining negotiable bills of lading and without informing ABC, Interocean, or NOCSI.
Wesfarmers, the holder of the original bills of lading, made claim against ABC for the loss of two containers of boneless beef. ABC asserted that it was due indemnity by Interocean, its steamship agent, and Interocean made claim against NOCSI and Warehouse for misdelivering the cargo without their negotiable bills of lading.
Interocean and Wesfarmers settled, subrogating to Interocean Wesfarmers' and ABC's remaining rights. The district court found that Mellon Bank committed "[n]o actionable improprieties," but held NOCSI and Warehouse jointly liable for the misdelivery: NOCSI was "obliged to inform Warehouse that it had not received and surrendered for cancellation the negotiable bills of lading," and Warehouse, "in a better position [than Interocean] to prevent the misdelivery," was "obliged not to--even as a result of unintentional misdelivery through mistake--deliver the meat to Portion Control and Texas A & M." 1 NOCSI and Warehouse appeal.
NOCSI contends that it had no duty to inform Warehouse that it had not received the original bills of lading. As a customhouse broker, NOCSI has a duty under 19 U.S.C. Sec. 1641(b)(4) to "exercise responsible supervision and control over the customs business that it conducts." Neither the statute nor the applicable regulations 2 clarifies this obligation further; neither mentions any duty imposed on a customhouse broker with respect to original bills of lading.
It is undisputed, however, that customhouse brokers do not ordinarily need to possess or even have access to original bills of lading to perform their limited function of clearing cargo through customs. The United States Customs Service is interested only in a ship's manifest and invoices for cargo, not in original bills of lading. Original bills of lading, vital to the delivery of and payment for shipped goods, play no role in inspection by customs. When, occasionally, NOCSI receives a bill of lading, it perfunctorily forwards the bill to the appropriate steamship agent. NOCSI cannot, therefore, be held responsible for failing to procure original bills of lading that play no part in the performance of its duties.
Nor did NOCSI have a duty, based upon the customary practice in the industry, to inform Warehouse that the original bills of lading had not been delivered to it. Peter Low, an expert steamship witness upon whose testimony Interocean relies, stated that if "documents are missing, [the customhouse broker ordinarily] ... make[s] efforts to find out where they are ... and get them or work up some kind of a certificate to present to the steamship line." Nowhere does Low intimate that a customhouse broker customarily informs a warehouse of the absence of original bills of lading. That NOCSI was a subsidiary of Warehouse cannot, by itself, establish that NOCSI had a duty to inform Warehouse that the bills of lading had not been presented.
NOCSI's only contractual relationship was with Thallon, for whom it served as customhouse broker. NOCSI, therefore, had no contractual duty to inform Warehouse that it did not receive the original bills.
Interocean, like NOCSI, knew that the original bills of lading were outstanding. While NOCSI, as customhouse broker, had no reason to keep apprised of the location of the bills, Interocean, as steamship agent, should have been keenly interested in the original bills, since it rarely releases cargo without them. Given Interocean's greater interest in, and equivalent knowledge of, the facts concerning the original bills of lading, and the absence of statutory, customary, or contractual obligation requiring NOCSI to transmit this information to Warehouse, it was erroneous for the district court to impose on NOCSI a duty to inform Warehouse of the status of the original bills.
Warehouse claims that it is not responsible for misdelivering the frozen boneless beef: Interocean was responsible solely for issuing the steamship release and assuring proper delivery, and Warehouse owed a duty only to Thallon to act reasonably.
A party's obligation to prevent misdelivery of shipped goods derives, in part, from the terms of the bill of lading. The "contract of carriage" 3 between a shipper and carrier enunciates the responsibility of the carrier to deliver enumerated goods to a specified location. As "contracts of adhesion" between the carrier and shipper, these bills are "strictly construed against the carrier." 4
Under the applicable bills of lading, the carrier, ABC Containerline N.V., was responsible for delivering the frozen boneless beef from "h[ouse] to p[ier]." The bills stipulated:
A carrier's responsibility ... shall terminate without notice as soon as the goods leave the ship's tackle at the Port of Discharge ... where the Carrier is authorized to make delivery.... Any responsibility of the Carrier ... after leaving the ship's tackle ... shall not exceed that of an ordinary bailee.... [T]he Carrier shall not be liable for loss ... arising or resulting from ... misdelivery ... of ... the goods occurring while the goods are not in the actual custody of the carrier.
Once the containers had reached the designated locale, left the ship, and arrived at the warehouse, the terms of these bills of lading were satisfied. The contract did not give rise to any further obligations absent a "specif[ic] ... agreement" by the carrier and shipper. 5
In order to effectuate "proper delivery" to the pier under the Harter Act, 6 ABC, through its shipping agent, Interocean, retained Warehouse to strip the containers. The contractual relationship by which Warehouse stripped containers did not transform it, however, into a "party to the contract of carriage and ... liable for breach of that contract;" Warehouse "had not signed the bill[s] of lading[, but] was merely performing the function of caring for the cargo until delivery--a contractual duty owed to the shipper in the first instance by [the carrier]" who is responsible for its agent's acts. 7 There is no evidence in the record of any other contractual arrangement between Warehouse and...
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