Pacific Micronesian Line, Inc. v. NEW ZEALAND INSURANCE COMPANY, 21946.

• Decision Date: 21 June 1968
• Docket Number: No. 21946.,21946.
• Citation: 397 F.2d 236
• Parties: PACIFIC MICRONESIAN LINE, INC., Appellant, v. NEW ZEALAND INSURANCE COMPANY, Ltd., Appellee.
• Court: U.S. Court of Appeals — Ninth Circuit

397 F.2d 236 (1968)

PACIFIC MICRONESIAN LINE, INC., Appellant, v. NEW ZEALAND INSURANCE COMPANY, Ltd., Appellee.

No. 21946.

United States Court of Appeals Ninth Circuit.

June 21, 1968.

Walter Ferenz (argued), of Barrett, Ferenz, Trapp & Gayle, Oakland, Cal., and Agana, Guam, for appellant.

E. R. Crain, of Crain & Benson, Agana, Guam, for appellee.

Before BARNES, JERTBERG and DUNIWAY, Circuit Judges.

BARNES, Circuit Judge:

This case is before us for the second time. The facts are set out in full in our earlier opinion of August 31, 1966, reported at 366 F.2d 333. Briefly, the action concerns a quantity of rice which was listed on a bill of lading by the defendant-appellant, Pacific Micronesian Line, Inc., but was not delivered to the Truk Trading Company as specified. The plaintiff-appellee, New Zealand Insurance Company, Ltd., brought suit as Truk's insurer and subrogee against appellant, on the basis of the latter's failure to deliver. In our previous decision we held that 49 U.S.C. § 102¹ and Guam Civ.Code § 2128g² were applicable to the controversy, and we stated,

"The effect of these two statutory provisions is the same: In certain limited circumstances they permit a carrier to avoid liability for failing to deliver goods, or for delivering goods which do not meet the description of the carrier\'s bill of lading, by showing that the carrier never received the goods which are listed on the bill of lading. The circumstances in which the defense of non-receipt by the carrier is available to the carrier are limited to those where the consignee or holder of the bill of lading has not relied on the description in the bill of lading or has not paid value for the goods relying on the description in the bill of lading." 366 F.2d at 336.

We cited cases to show that 49 U.S.C. § 102

"was intended to protect one who in reliance on the recitals of the bill of lading had acquired the same or the property represented thereby for value or who had otherwise altered his position to his detriment by reason thereof." Strohmeyer & Arpe Co. v. American Line S. S. Corp., 97 F.2d 360, 362 (2d Cir. 1938).

We then reversed the judgment of recovery which had been rendered by the District Court of Guam, and remanded for further proceedings and for a determination as to whether the Truk Trading Company had paid for the rice that was not delivered or had otherwise parted with value in reliance on appellant's bill of lading and to its detriment.

Appellant now urges that the district court again erred in rendering judgment for the appellee "when the only new evidence established payment after knowledge of the loss."

Appellant concedes that Truk in fact paid for the missing rice and was reimbursed for the expenditure by the appellee under the insurance contract in effect between the two parties. And the testimony of Truk business manager Henry T. Chatroop, taken on the second trial, is unequivocal that he would not have paid for the shipment had it not been for the bill of lading issued by the appellant. Record, vol. 3, at 16, 22-23. It is true that before payment was made to the consignor Truk knew of the shortage. But in view of all the circumstances, with Truk buying FOB Guam, dealing on an open account basis...