Louis-Dreyfus v. Paterson Steamships

• Decision Date: 21 July 1930
• Docket Number: No. 327.,327.
• Citation: 43 F.2d 824
• Parties: LOUIS-DREYFUS et al. v. PATERSON STEAMSHIPS, Limited.
• Court: U.S. Court of Appeals — Second Circuit

43 F.2d 824 (1930)

LOUIS-DREYFUS et al. v. PATERSON STEAMSHIPS, Limited.

No. 327.

Circuit Court of Appeals, Second Circuit.

July 21, 1930.

D. Roger Englar and Bigham, Englar, Jones & Houston, all of New York City, Burke & Desmond, of Buffalo, N. Y., Henry N. Longley, of New York City, Thomas C. Burke, of Buffalo, N. Y. and Ezra G. Benedict Fox, of New York City, for appellants.

Theodore C. Robinson and Holding, Duncan & Leckie, all of Cleveland, Ohio, for appellee.

Before L. HAND, CHASE, and MACK, Circuit Judges.

L. HAND, Circuit Judge.

The libellants at Duluth shipped a parcel of wheat upon two ships of the respondent and received in exchange bills of lading, Duluth to Montreal, "with transshipment at Port Colbourne, Ontario." These contained an exception for "dangers of navigation, fire and collision," but nothing further which is here relevant. The respondent exercised its right of reshipment, unladed the wheat at Port Colbourne, stored it in an elevator, and reladed thirty-five thousand bushels in another ship, the Advance, belonging to one Webb, chartered by the respondent's agent, the Hall Shipping Company, for that purpose. This ship safely carried her cargo until she reached the entrance to the Cornwall Canal in the St. Lawrence River, where she took the ground, stove in her bottom and sank. The suit is for the resulting damage to the wheat.

The respondent defended on the ground that the strand, not being due to any fault in management, was a danger of navigation. Failing this, it relied upon the Harter Act (46 USCA §§ 190-195) and the Canadian Water-Carriage of Goods Act (9-10 Edward VII, Chap. 81), which covers among other ships those "carrying goods from any port in Canada to any other port in Canada" (section 3). It requires every bill of lading "relating to the carriage of goods from any place in Canada to any place outside Canada" to recite that the shipment is subject to the act (section 5), and, like section three of the Harter Act (46 USCA § 192) provides that "if the owner of any ship transporting merchandise or property from any port in Canada exercises due diligence to make the ship in all respects seaworthy and properly manned, equipped and supplied, neither the ship, nor the owner, agent or charterer" shall be liable "for faults or errors in navigation or in the management of the ship" (section 6). The respondent tried to prove that the Advance was seaworthy, and was therefore within both statutes. Finally it argued that it was not in any event a through carrier, and that its liability therefore ended upon delivery of the wheat on board the Advance at Port Colbourne.

To begin with the last defense, we think it clear that the respondent was a through carrier. It relies upon those cases in which one railway, connecting with another at its terminus, gives a through bill of lading, sometimes with, sometimes without, stipulation that liability shall cease at delivery. In such a case the receiving carrier is generally not liable beyond its own line. Myrick v. Michigan Central R. Co., 107 U. S. 102, 1 S. Ct. 425, 27 L. Ed. 325; Penn. R. Co. v. Jones, 155 U. S. 333, 15 S. Ct. 136, 39 L. Ed. 176. The case at bar is not like that; it is true that the two ships which first lifted the wheat could not go through the Welland Canal, and that transshipment was inevitable from the outset, but it did not follow that the respondent would not carry all the wheat to Montreal in its own ships; and so indeed it did except about 55,000, out of 300,000, bushels. Four out of the six vessels used belonged to it, and it chartered the two others, of which the Advance was one, apparently for its convenience. It was liable for her miscarriage, quite as though it had owned her Colton v. N. Y. & Cuba Mail S. S. Co., 27 F.(2d) 671 (C. C. A. 2); she was its selection, the means which it used to perform its obligation.

The parties are indeed at odds as to whether the respondent really did charter the Advance. On the issue of through carriage the libellants insist that the respondent is to be charged because of her; on that arising under the Canadian act (section 6), they say that the respondent was not a charterer. The respondent takes the reverse position in each issue. We decide as to both that the respondent was a charterer. The ship was, as we have said, chartered by the Hall Shipping Company, a corporation which had secured the original space for the libellants, but which quite generally acted for the respondent in the details of its business. The evidence is too plain for question that it was for the respondent that it fixed the Advance to complete the carriage, and the respondent became as much a principal, though undisclosed, as though its own officers had struck the bargain. The fact that the libellants at the outset paid a commission to the Hall Company for securing the space at Duluth, might, if it stood alone, justify us in concluding that it was the libellants' agent, but the answer, the interrogatories, and the testimony show beyond shadow of question that this was not the case.

However, the respondent says that even though a through carrier, it was not a common carrier as to the Advance, whose cargo occupied the full reach of her holds. The issue is important primarily because upon it depends the burden of proof to show negligence in navigation; and we are content for argument to assume that she was a private carrier, even though the respondent was generally engaged in the business of common carriage. We think that the libellants have carried the burden. It is extremely unlikely that the Advance should have taken the ground where and when she did, unless the local pilot then in charge had been negligent. At the trial he was not called, and the master, who was with him on the bridge, had no explanation except somewhat faintly to suggest that the ship had been carried off to port by the river currents. He had already cautioned the pilot that he was keeping up too far to the left, and when the ship lost way, she sagged over to port, and her bottom on that side was impaled upon some rock or lost anchor, which stove a small hole through her planks. We cannot hold it good navigation to let a ship go ashore which in calm water is passing through a well-known channel, subject only to those currents which are, or should be, known to the navigator. To be sure, such things can happen; there are twists of current, like those of the sea, against which prudence will not defend, but in the case at bar their existence rests merely in supposition. We know that the ship was out of position, that her loss of way was to be expected, that ships commonly pass through the channel without injury, that nothing unusual here interfered with navigation. This makes a situation from which we must infer fault unless good proof exculpates the navigator. There is none, and indeed the master remained in doubt even at the trial as to whether to blame the pilot. We cannot therefore agree with the finding of the District Judge that the strand was a "danger of navigation"; on the contrary, we think that the libellants have shown negligence.

We shall assume arguendo that section three of the Harter Act (46 USCA § 192) did not cover the case; verbally it only includes "vessels transporting merchandise or property to or from any port in the United States." The point is not raised in any event, since there is no proof of the seaworthiness of the vessels clearing from Duluth, which lifted the wheat. If the Advance is to be identified with these, the substitution being ignored, at least all three ships concerned must be shown to be seaworthy. Quite other considerations control as to section six of the Canadian act. We pass the point that the bills of lading did not incorporate that statute; section five only requires such a recital in case of a shipment from a Canadian, to an outside, port, and apparently even in those cases it is only directory. Verbally at least section six covered the situation; the Advance was "transporting goods" "from" a Canadian port, and the respondent was the charterer, as we have said.

The important question is whether we should look to Canadian law at all. Here is a contract of carriage, made in Minnesota without any relevant exceptions, to be performed partly in the United States and partly in Canada; the carrier fails in performing that part of it which is to take place in Canada; he does not safely transport the grain from the entrance of the canal to Montreal. The law of the place of that performance excuses him for those faults in navigation which have caused the loss. Does that law control? Liverpool, etc., Co. v. Phenix Ins. Co., 129 U. S. 397, 9 S. Ct. 469, 32 L. Ed. 788, decided that the validity of a provision in a contract of carriage, limiting the carrier's common-law duty, was to be determined by the law of the place where the contract was made, and this is well-settled law (section 366, Tentative Restatement No. 4, Conflict of Laws; American Law Institute), even when the parties expressly stipulate that all questions shall be decided according to some foreign law, which would require a different result (Oceanic Steam Nav. Co. v. Corcoran (C. C. A. 2) 9 F.(2d) 724, 57 A. L. R. 163). It is of course only an instance of the usual rule that the law of the place where promises are made determines whether they create a contract (section 353, Op. Cit.); that law alone attaches any legal consequences to acts within its territory.

On the other hand, it is always said that as to matters of performance the law of the place of performance controls (Andrews v. Pond, 13 Pet. 65, 78, 10 L. Ed. 61; Scudder v. Union National Bank, 91 U. S. 408, 23 L. Ed. 245; Pritchard v. Norton, 106 U. S. 124, 1 S. Ct. 102, 27 L. Ed. 104; Hall v. Cordell, 142 U. S. 116, 12 S. Ct. 154, 35 L. Ed. 956), though in application the boundaries of this doctrine are not easy to find, as the last two cases cited illustrate very well....