Pine Street Trading Corp. v. Farrell Lines, Inc.

• Citation: 278 Md. 363,364 A.2d 1103
• Decision Date: 14 October 1976
• Docket Number: No. 119,119
• Parties: , 1977 A.M.C. 426 PINE STREET TRADING CORPORATION, etc. v. FARRELL LINES, INC., et al. FARRELL LINES, INC. v. CHESAPEAKE OPERATING COMPANY.
• Court: Court of Appeals of Maryland

Page 363

278 Md. 363

364 A.2d 1103, 1977 A.M.C. 426

PINE STREET TRADING CORPORATION, etc. v. FARRELL LINES, INC., et al.

FARRELL LINES, INC. v. CHESAPEAKE OPERATING COMPANY.

No. 119.

Court of Appeals of Maryland.

Oct. 14, 1976.

John H. Skeen, Jr., and David W. Skeen, Baltimore (Skeen & Roach, Baltimore, on the brief), for Pine Street Trading Corp

George W. Sullivan, New York City (William J. Little, James W. Himes and Little, Hall & Steinmann, P.A., Baltimore, on the brief), for Farrell Lines, Inc.

David R. Owen, Baltimore (James W. Bartlett, III and Semmes, Bowen & Semmes, Baltimore, on the brief) for Chesapeake Operating Co.

Robert V. Barton, Jr., Baltimore (Manfred W. Leckszas and Ober, Grimes & Shriver, Baltimore, on the brief), for Irish Shipping Ltd.

Argued before MURPHY, C. J., and SINGLEY, SMITH, DIGGES, LEVINE and ELDRIDGE, JJ.

ELDRIDGE, Judge.

This case, arising from damages allegedly sustained to the plaintiff's cargo of sugar, involves claims under both federal maritime law and state law.

In October 1969, Pine Street Trading Corporation contracted to purchase a large quantity of beet sugar located in Ireland from the Irish Sugar Company. The Irish Sugar Company arranged with Irish Shipping, Ltd., to transport the sugar to the port of Baltimore pursuant to the terms of Irish Shipping's short form bill of lading, which incorporated by reference the carrier's long form bill of lading and the provisions of the Merchant Shipping Act of Ireland (No. 40 of 1947). The bill of lading was endorsed over to Pine Street as consignee. Upon the cargo's arrival in Baltimore, the sugar was to be unloaded and 'stacked man high on pier' by Chesapeake Operating Company, with whom Irish Shipping had a stevedoring agreement. Pine Street also entered into an agreement with Chesapeake whereby Chesapeake would store all sugar not removed from the marine terminal during the 5 day 'free time' period-the time allowed for removing cargo from the pier During late March 1970, the Irish Poplar, a vessel operated by Irish Shipping, arrived in Baltimore and discharged 17,476 one hundred pound bags of the sugar onto the pier 'apron'-the outer portion of the pier. On May 13, 1970, an additional 10,089 one hundred pound bags of sugar were unloaded from the Irish Spruce, another Irish Shipping vessel, and also stacked on the pier. Subsequent to discharge of the cargo from both ships, Chesapeake removed the cargo to a shed occupying the center position of the pier. The bags in which the sugar was transported were constructed of two tar laminated outer layers of paper, and three inner layers of paper.

before assessment of demurrage charges. By so doing, Pine Street could store its cargo at Chesapeake's pier shed at a rate charged for warehousing, which would be considerably less than that charged for demurrage. Chesapeake also agreed to deliver quantities of sugar to various purchasers according to Pine Street's directions.

On May 7, 1970, subsequent to the arrival of the Irish Poplar but prior to the arrival of the Irish Spruce, a vessel owned by Farrell Lines, Inc., the African Dawn, arrived at Chesapeake's pier. Chesapeake discharged from the African Dawn roughly 500 tons to antimony ore which were contained in bags. During the evening of May 7, 1970, after the discharge of the cargo from the African Dawn was completed, the vessel left the pier.

On May 18, 1970, Mallory W. Lawrence, an inspector for the United States Food and Drug Administration (FDA), visited the Chesapeake pier and found antimony dust on the bags of sugar stored inside the pier shed. Subsequently, a condemnation action was brought by the United States against the bags of sugar remaining on the pier which had been discharged from the Irish Poplar, and also against the sugar received by purchasers of the Irish Poplar shipments, as well as the finished products manufactured by those purchasers using the sugar. The sugar which was discharged from the Irish Spruce was also detained, but since it was still on 'import status,' no condemnation action was necessary. In the condemnation proceedings, the Subsequently, Pine Street brought this action in the Baltimore City Court alleging (1) that Chesapeake was negligent in permitting the sugar bags to be contaminated with antimony ore; (2) that Irish Shipping breached its contract of carriage (the bill of lading) with respect to the shipment of the sugar cargo aboard the Irish Spruce which was discharged while the antimony was still on the pier; and (3) that Farrell Lines was negligent in discharging its cargo of antimony ore which it knew or should have known would contaminate the sugar which was already on the pier. Cross claims were filed by Chesapeake against Farrell Lines, by Irish Shipping against Farrell Lines and Chesapeake, and by Farrell Lines against Chesapeake, all seeking indemnification for any judgments that may be awarded against the cross-claimants in favor of Pine Street, and seeking also recovery of attorney fees and court costs. The cross claims were submitted for determination by the court.

government alleged that the sugar was 'adulterated' because it contained 'an added poisonous and deleterious substance, namely, antimony dust, which may render' the sugar 'injurious to health,' and that it was held under insanitary conditions, in violation of 21 U.S.C. § 342(a)(1) and (4). Pine Street did not contest the condemnation actions; rather, it signed consent decrees of condemnation.

The trial court awarded summary judgment in favor of Irish Shipping against Pine Street; subsequently Irish Shipping dismissed its cross claim against Chesapeake. A jury trial then ensued on Pine Street's claims against Farrell Lines and Chesapeake. Chesapeake produced expert testimony to the effect that antimony ore is not, in fact, a poisonous substance. Chesapeake argued, therefore, that Pine Street, by failing to contest the condemnation proceedings, had failed to mitigate any damages that may have resulted from Chesapeake's negligence in permitting the antimony dust to come near the sugar cargo. Evidence was also produced tending to show that because of the construction and manner of storage of the bags of sugar, antimony dust could not have contaminated the vast At the close of the plaintiff's evidence, the trial court granted a directed verdict in favor of Farrell Lines against Pine Street. The jury thereafter returned a verdict for Pine Street against Chesapeake in the amount of $1.00. The remaining cross claims were denied by the trial court. Pine Street appeals to the Court of Special Appeals, contesting, on several grounds, the jury's award of $1.00 in damages in its favor, and contesting also the granting of summary judgment in favor of Irish Shipping, and the granting of the directed verdict against it in favor of Farrell. Farrell appealed the denial of its cross claim against Chesapeake in which it sought attorney's fees and expenses. Chesapeake has not appealed either from the jury's verdict of liability against it in favor of Pine Street, or from the trial court's denial of its cross claim against Farrell. We issued a writ of certiorari prior to a decision by the Court of Special Appeals.

majority of the bags, and that any danger of contamination could have been obviated by vacuuming the bags.

I Pine Street v. Chesapeake

The claim of Pine Street against Chesapeake is based upon (1) Chesapeake's failure 'to perform properly its duty as warehouseman to care for, store and protect' the sugar cargo which had arrived on board the vessel Irish Poplar, (2) Chesapeake's failure to properly 'store, care for and protect' the sugar cargo which had arrived on board the vessel Irish Spruce, and (3) Chesapeake's negligence in permitting the cargo of antimony ore from the vessel African Dawn to contaminate the sugar cargo of the plaintiff.

Preliminarily, we note that Pine Street's claims against Chesapeake are controlled by state law rather than by federal maritime law. The only contractual relationship alleged between Pine Street and Chesapeake involved Chesapeake's agreement to store the sugar cargo as warehouseman. Such a contract 'is nonmaritime in nature and does not fall within maritime jurisdiction.' Howmet Corporation v. Tokyo Shipping Co., 320 F.Supp. 975, 977 (D.Del.1971).

See Pillsbury Flour Mills Co. v. Interlake S.S. Co., 40 F.2d 439 (2d Cir. 1930). Moreover, no maritime tort seems to have been alleged. The activities of Chesapeake which were alleged by Pine Street to constitute negligence all appear to have occurred on Chesapeake's pier. It is well settled that a pier is, for purposes of maritime jurisdiction, an extension of land. See Victory Carriers, Inc. v. Law, 404 U.S. 202, 206-207, 92 S.Ct. 418, 30 L.Ed.2d 383 (1971).

On this appeal, Pine Street raises several contentions relating 'principally to whether the issue of plaintiff's duty to mitigate damages or avoid the consequences of defendant's negligence was improperly presented to the jury as a result of certain of the trial court's rulings on evidence and instructions.' While we do not agree with all of the contentions raised by Pine Street, we do believe that the trial court committed reversible error in connection with its instructions to the jury on the issue of mitigation of damages.

Pine Street argues that the trial court erred in refusing to instruct the jury, as requested by Pine Street, that 'in considering the reasonableness of plaintiff's decision not to contest the government's forfeiture proceedings by a full trial of the issues,' the jury should consider that the FDA, in such proceedings, 'is not required to establish that a product it seeks to condemn of certainty will affect the public health but only that it may affect it . . ..'

Under 21 U.S.C. § 334, the government may condemn any article of food which is found to be adulterated. Section 342 of Title 21 provides that 'A food shall be deemed to be...