Orient Mid-East Lines, Inc. v. Cooperative for ARE, Inc.

• Decision Date: 06 February 1969
• Docket Number: No. 21833-21836.,21833-21836.
• Citation: 410 F.2d 1006
• Parties: ORIENT MID-EAST LINES, INC., Appellant, v. COOPERATIVE FOR AMERICAN RELIEF EVERYWHERE, INC., et al., Appellees. ORIENT MID-EAST LINES, INC., Appellant, v. SEVENTH DAY ADVENTIST WELFARE SERVICE, INC., et al., Appellees. ORIENT MID-EAST LINES, INC., Appellant, v. CHURCH WORLD SERVICE, INC., et al., Appellees. ORIENT MID-EAST LINES, INC., Appellant, v. LUTHERAN WORLD RELIEF, INC., et al., Appellees.
• Court: U.S. Court of Appeals — District of Columbia Circuit

410 F.2d 1006 (1969)

ORIENT MID-EAST LINES, INC., Appellant, v. COOPERATIVE FOR AMERICAN RELIEF EVERYWHERE, INC., et al., Appellees.

ORIENT MID-EAST LINES, INC., Appellant, v. SEVENTH DAY ADVENTIST WELFARE SERVICE, INC., et al., Appellees.

ORIENT MID-EAST LINES, INC., Appellant, v. CHURCH WORLD SERVICE, INC., et al., Appellees.

ORIENT MID-EAST LINES, INC., Appellant, v. LUTHERAN WORLD RELIEF, INC., et al., Appellees.

Nos. 21833-21836.

United States Court of Appeals District of Columbia Circuit.

Argued December 12, 1968.

Decided February 6, 1969.

Mr. Wharton Poor, New York City, of the bar of the Court of Appeals of New York, pro hac vice, by special leave of court, with whom Mr. Stanley O. Sher, Washington, D. C., was on the brief, for appellants.

Mr. Allen Van Emmerik, Atty., Department of Justice, with whom Asst. Atty. Gen., Edwin L. Weisl, Jr., Messrs. David G. Bress, U. S. Atty., and Alan S. Rosenthal, Atty., Department of Justice, were on the brief, for appellee, United States.

Mr. William D. Donnelly, Washington, D. C., entered an appearance for appellee, Seventh Day Adventist Welfare Service, Inc., in No. 21,834.

Mr. Alexander B. Hawes, Washington, D. C., entered an appearance for appellees, Cooperative for American Relief Everywhere, Inc., in No. 21,833, Church World Service, Inc., in No. 21,835 and Lutheran World Relief, Inc., in No. 21,836.

Before BAZELON, Chief Judge, and TAMM and ROBINSON, Circuit Judges.

TAMM, Circuit Judge:

Appellant petitions this court seeking recovery of "second freights"¹ which it alleges are owed it by the appellees under shipping contracts.² Briefly, appellant is a ship operator who, at times relevant to this litigation, operated two ships loaded with relief cargoes which had been donated by some of the appellees for delivery overseas.³ In the winter months of 1964 the appellant's two ships were loaded with their cargoes at various Great Lakes ports. Both ships proceeded through the Great Lakes, arriving at the lakeward entrance to the Seaway shortly after the Seaway had closed its 1964 navigation season due to the cold weather. Unable to reach their destination, appellant's ships were forced to spend the winter at a Toronto berth (J.A. 81a, 86a). When appellant's ships could proceed no further due to the closing of the Seaway, it claimed that the voyage was terminated due to elements beyond its control and that "all freights were earned" (J.A. 50a). Further, it asked for storage fees for keeping the goods throughout the winter and, as previously mentioned, demanded second freights for the completion of the originally scheduled voyage once the Seaway was cleared. Appellant also sought and recovered freight payments (as well as interest thereon for delay in payment) which were due to it prior to the ice closure and these claims are not in issue in this litigation.

This case was tried in our district court without a jury and the trial judge issued an opinion and a supplemental opinion finding in favor of the appellees on all claims (284 F.Supp. 34 (1968)). More specifically, the district court held that appellant did not exercise "reasoned judgment" in failing to heed repeated warnings of the possibility of ice closure of the Seaway and that therefore it was not entitled to recover second freights or storage fees from the appellees (284 F. Supp. 34, at 44, 46). We affirm.

The dispositive issues in this litigation are largely factual. Appellant argues that the exculpatory clauses in the bills of lading exempt it from liability even if it was negligent in its contract performance (see note 2, supra). The district court found, however, that these clauses did not afford appellant a carte blanche in fulfilling its contract obligations in any way it pleased. To the contrary, it found that, notwithstanding the exculpatory language, appellant was contractually bound to exercise reasonable judgment and that it had not done so in this instance. The district court explicitly held that: (284 F.Supp. 34, 43)

there is a common standard of conduct prescribed if a carrier is to be afforded the protection of the exculpatory provisions. The Court finds that standard to be that to afford itself the protection of the exculpatory clauses of the bills of lading the carrier must exercise reasonable judgment under the circumstances existing and reasonably foreseeable at the time the judgment is made. In other words the exculpatory clauses do not confer a license to disregard the likely or the obvious.

We agree with the trial court's characterization of the standard of care required of appellant and we are of the view that it did not adhere to that standard.⁴

The District Court's conclusion as set out above was bottomed largely upon the fact that the Seaway had issued several warnings regarding the possibility of an early close of the Seaway. This conclusion was derived from an analysis and evaluation of all the testimony adduced during the trial. The trial judge found it significant, and we agree, that on November 2, 1964, the Seaway issued a notice (J.A. 43a-44a), as a warning to all carriers, stating that the formal closing date of the Seaway was November 30, 1964, and that "weather and ice conditions could force the Seaway to be closed earlier * * *" (J.A. 44a). In addition, on November 25, 1964, a similar notice was issued to appellant (J.A. 46a-48a). Thereafter, the Seaway Authority sent telegrams to the Shipping Federation of Canada and the Dominion Marine Association (J.A. 284a-290a) warning of a possible early closure and listing a comparison of water temperatures which reflected the fact that 1964 was running considerably colder than 1963. Finally, various witnesses testified at the trial as to the warnings issued to appellant. Among those who testified was Captain John Butt (Senior Ship Inspector of the Seaway Authority), who testified that he called appellant's general agent (Mr. Pendias) personally to warn him of the impending freeze. The trial judge evaluated all the evidence before him, including the credibility of all the witnesses who testified. We find on the...