Olivier Straw Goods Corporation v. Osaka Shosen Kaisha, 173.
| Decision Date | 02 March 1931 |
| Docket Number | No. 173.,173. |
| Citation | 47 F.2d 878 |
| Parties | OLIVIER STRAW GOODS CORPORATION v. OSAKA SHOSEN KAISHA. |
| Court | U.S. Court of Appeals — Second Circuit |
Hunt, Hill & Betts, of New York City (John W. Crandall, of New York City, of counsel), for appellant.
Bigham, Englar, Jones & Houston, of New York City (Henry M. Longley and Ezra G. Benedict Fox, both of New York City, of counsel), for appellee.
Before L. HAND, SWAN, and AUGUSTUS N. HAND, Circuit Judges.
The libelant sued the respondent, a carrier, to recover damages for failure of the latter to deliver at New York 18 cases of hemp braid which had been placed in the hands of the respondent at Yokohama for transportation. The goods were in storage when the great earthquake of September 1, 1923, occurred, and were stolen by looters in the ensuing confusion. The libelant was the owner of the merchandise, and is the indorsee of an "on board" bill of lading issued on August 30, 1923. On a former appeal 27 F.(2d) 129 we decided that the holder in due course of such a bill of lading could recover where drafts issued against it had been honored without knowledge that the merchandise had not been placed on board, and we said that the respondent carrier was estopped by its conduct and by the representations in the bill of lading from showing that the hemp braid had not been shipped as the bill of lading indicated but was in fact stolen from the respondent on shore.
Upon the reversal of the former decree dismissing the libel 27 F.(2d) 129, the cause proceeded to trial on an agreed statement of facts which set forth (1) the sound value of the merchandise at the port of destination had it been shipped as agreed; (2) the invoice value plus insurance and freight, in case the eighteenth clause of the bill of lading be applied requiring that "all admitted claims shall be adjusted * * * on the basis of the market value of sound similar goods on the date of the steamer's arrival at the port of discharge, * * * or, at the carrier's option on the basis of the Invoice Value plus freight and insurance"; (3) the value limited by the ninth clause of the bill of lading to a certain sum per package.
The trial judge held that the misrepresentation contained in the bill of lading prevented "respondent from availing itself of the valuation clause as also of any other exceptions inserted for its benefit," and fixed the damages at the sound value of the merchandise at the port of destination, had it been shipped as agreed. From a decree for the libelant awarding damages upon the basis of the sound value of the merchandise at the port of destination, the respondent appeals.
The question before us is whether the estoppel to deny that the merchandise was shipped as recited in the bill of lading is to go so far that we must treat that instrument as binding in respect to provisions inserted therein for the benefit of the shipowner.
The decisions in this country and England which we especially relied on upon the former appeal proceeded on the theory of estoppel. Thus in Higgins v. Anglo-Algerian S. S. Co. (C. C. A.) 248 F. 386, the carrier had issued a clean bill of lading and had taken security from a shipper who had delivered to the steamer cases of dates stained, discolored, and damaged by rain. We there held that the carrier was estopped by its fraud from proving as against an innocent purchaser of the bill of lading that the goods were not in good condition when received and that it could not under such circumstances insist upon the observance of a provision in the bill of lading requiring notice of claim before removal of the goods. The English decisions have likewise spoken of estoppel as the basis of liability when a misrepresentation in a bill of lading is involved. Martineau v. Royal Mail Steam Packet Co., 17 Com. Cas. 176; Brandt v. Liverpool, Brazil & River Plate S. N. Co., 1924 1 K. B. 575; Silver v. Ocean S. S. Co., 1930 1 K. B. 416.
It is certainly difficult to apply the doctrine of estoppel half way; or, in other words, to hold it effective in order to charge the carrier with liability for goods never on board, but ineffective so far as exceptions in the bill of lading which benefit the carrier are concerned. Yet that is exactly what was done in Higgins v. Anglo-Algerian S. S. Co., supra. The same thing was done in Brandt v. Liverpool Brazil & River Plate S. N. Co., supra, where zinc ashes that had been wet were shipped under a clean bill of lading. The Court of Appeal refused to allow the carrier to invoke an exception covering losses due to a prolongation of the voyage, where the delay was caused by the removal of the ashes at an intermediate port owing to their wet condition. In Silver v. Ocean S. S. Co., supra, the carrier issued a clean bill of lading for goods shipped in damaged condition. The Court of Appeal said, per Scrutton, L. J., that the shipowners were "estopped by their statement that the cans were shipped in apparent good order and condition from proving that they were insufficiently packed," and held that they could not invoke an exception in the bill of...
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