States Steamship Co. v. American Smelting & Refining Co.

• Decision Date: 05 April 1965
• Docket Number: No. 19274.,19274.
• Citation: 339 F.2d 66
• Parties: STATES STEAMSHIP COMPANY et al., Appellant, v. AMERICAN SMELTING & REFINING COMPANY, Appellee.
• Court: U.S. Court of Appeals — Ninth Circuit

339 F.2d 66 (1964)

STATES STEAMSHIP COMPANY et al., Appellant, v. AMERICAN SMELTING & REFINING COMPANY, Appellee.

No. 19274.

United States Court of Appeals Ninth Circuit.

December 4, 1964.

Certiorari Denied April 5, 1965.

Gilbert C. Wheat, H. Donald Harris, Jr., Lillick, Geary, Wheat, Adams & Charles, San Francisco, Cal., for appellant.

Stephen McReavy, Lee H. Cliff, Hall, Henry, Oliver & McReavy, San Francisco, Cal., William G. Symmers, Symmers, Fish & Warner, New York City, for appellee.

Before ORR, JERTBERG and MERRILL, Circuit Judges.

Certiorari Denied April 5, 1965. See 85 S.Ct. 1109.

ORR, Circuit Judge.

In this appeal we have one question for decision, to wit: Is appellee's claim time-barred by the one-year limitation provision of Section 3(6) of the Carriage of Goods by Sea Act of 1936 (COGSA)? (46 U.S.C. § 1303(6)). We affirm the trial court in its determination that it is not.

Libelant-Appellee is the American Smelting and Refining Company (herein Asarco). The Respondent-Appellant is the States Steamship Company (herein States).

The facts have been stipulated. They are:

"* * * 3. At all times mentioned herein States owned and operated the vessel formerly known as the SS CHARLES E. DANT.

"4. On November 27, 1956 approximately 8400 tons of copper concentrates were laden aboard the SS CHARLES E. DANT at Poro Point, La Union, Philippines, consigned to Asarco at Tacoma, Washington.

"5. Asarco acquired title to said copper concentrates when they were loaded aboard the SS CHARLES E. DANT and at all times hereinafter mentioned was the owner and consignee of said concentrates.

"6. The Bill of Lading constituting the contract of affreightment which governs the rights and liabilities of the parties hereto, insofar as it is applicable, is attached as Exhibit A.

"7. Shortly after departure from Poro Point on November 27, 1956 the SS CHARLES E. DANT took a serious list, necessitating salvage services which were rendered and which enabled the vessel to continue the voyage.

"8. Said salvage services were rendered pursuant to a Salvage Agreement entered into by States on behalf of the vessel and her cargo * * *. Security was given to salvor on behalf of the vessel and her cargo in order to release the vessel and cargo from the salvor\'s lien.

"9. On January 17, 1957 Asarco entered into an Average Agreement with States in order to obtain possession of the cargo * * *

"10. On or before February 11, 1957 said shipment of copper concentrates was delivered to Asarco at Tacoma, Washington.

"11. The amount of the salvage award was arbitrated between salvor on the one hand and Asarco and States, on the other, in accordance with the Salvage Agreement. On October 28, 1958 the Salvage Award became final. Thereafter Asarco and States each paid to salvor its respective share of the amount awarded by the arbitrators.

"12. On March 16, 1959 Asarco filed the libel in this action to recover its portion of salvage paid.

"13. States plead, in defense, the one-year statute of limitations contained in the United States Carriage of Goods by Sea Act of 1936, Section 3(6), 46 U.S.C. § 1303(6).

"14. If the court concludes that this cause is time-barred, the libel should be dismissed with prejudice.

"15. If the court concludes that this cause is not time-barred, States is liable in personam and as claimant of the SS CHARLES E. DANT in such amount as may be determined by the Court or agreed by the parties."

Section 3(6) of COGSA provides:

"Unless notice of loss or damage and the general nature of such loss or damage be given in writing to the carrier or his agent at the port of discharge before or at the time of the removal of the goods into the custody of the person entitled to delivery thereof under the contract of carriage, such removal shall be prima facie evidence of the delivery by the carrier of the goods as described in the bill of lading. If the loss or damage is not apparent, the notice must be given within three days of the delivery.

"Said notice of loss or damage may be endorsed upon the receipt for the goods given by the person taking delivery thereof.

"The notice in writing need not be given if the state of the goods has at the time of their receipt been the subject of joint survey or inspection.

"In any event the carrier and the ship shall be discharged from all liability in respect of loss or damage unless suit is brought within one year after delivery of the goods or the date when the goods should have been delivered: Provided, That if a notice of loss or damage, either apparent or concealed, is not given as provided for in this section, that fact shall not affect or prejudice the right of the shipper to bring suit within one year after the delivery of the goods or the date when the goods should have been delivered.

"In the case of any actual or apprehended loss or damage the carrier and receiver shall give all reasonable facilities to each other for inspecting and tallying the goods." (emphasis provided)

Appellant's contention is, basically, that "loss or damage" as used in the above cited statute covers any claim for damages by a shipper where liability is based upon a carrier's breach of its contract of affreightment. Appellant cites cases in support of its contention, wherein intangible damage to the cargo interest — such as late delivery or misdelivery — has been held to be loss or damage within the meaning of Section 3(6). It argues that this case is one in which an intangible injury to the cargo appears and hence it comes within the unmodified and unrestricted "loss or damage" provision.

Viewing the context in which the limitation provision is set, we feel that logic and sound analysis require that "loss or damage" be interpreted in a narrower sense than contended for by appellant. The wording compels the conclusion that said provision was intended to apply only to claims which relate directly to a breach of a carrier's duty to make timely delivery of the goods in good order and condition.

The cases are not at variance with this view. The limitation provision of Section 3(6) has been applied mainly to instances involving damage directly to the cargo. It has also been applied where there has been delay in, or failure of, delivery or departure. See Commercio Transito Internazionale, Ltd. v. Lykes Bros. Steamship Company, 243 F.2d 683 (2d Cir. 1957); Badhwar v. Colorado Fuel and Iron Corp., 138 F.Supp. 595 (S.D.N.Y.1955), aff'd, 245 F.2d 903 (2d Cir. 1957), cert. denied, 355 U.S. 862, 78 S.Ct. 95, 2 L.Ed.2d 68 (1957); Singer Hosiery Mills of New York v. Cunard White Star, Ltd., 199 Misc. 389, 102 N.Y.S.2d 762 (1951); Albert Isbrandtsen Company, 7 Misc.2d 67, 160 N.Y.S.2d 772 (1957). In the above cited cases the damage arose directly from and was related directly to a failure to make a proper delivery of the cargo owner's goods.

This Act, derived from the terms of the Brussels Convention of 1924, has been adopted by many nations, but in no case that has come to our attention has it been held that an action by a cargo owner to recover salvage paid is within the limitation provision here under consideration. A contention similar to this, however, was presented in the case of Goulandris Bros., Ltd. v. B. Goldman & Sons, Ltd., 1957 2 Lloyd's Rep. 207 (Q.B.D., Com.Ct.), and was rejected. There, at page 222, the court stated that "the loss or damage referred to must be loss or damage which is related to the cargo owner's goods." Appellant states that the rule in Goulandris was overturned by the subsequent House of Lords decision in Anglo-Saxon Petroleum Company v. Adamastos Shipping Company, Ltd., 1957 1 Lloyd's Rep. 79 (Q.B.D.), 1957 2 All E.R. 311...