Allied International American Eagle Trading Corp. v. S.S. "Yang Ming," Her Engines, Boilers, Etc. v. Yang Ming Marine Transport Corporation

672 F.2d 1055
CourtCourt of Appeals for the Second Circuit
DecidedApril 9, 1982
Docket348, Docket 81-7484
StatusPublished
Cited by36 cases

This text of 672 F.2d 1055 (Allied International American Eagle Trading Corp. v. S.S. "Yang Ming," Her Engines, Boilers, Etc. v. Yang Ming Marine Transport Corporation) is published on Counsel Stack Legal Research, covering Court of Appeals for the Second Circuit primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Allied International American Eagle Trading Corp. v. S.S. "Yang Ming," Her Engines, Boilers, Etc. v. Yang Ming Marine Transport Corporation, 672 F.2d 1055 (2d Cir. 1982).

Opinion

TENNEY, District Judge:

This appeal calls into question the package liability limitation imposed by section 4(5) of the Carriage of Goods by Sea Act (“COGSA”), 46 U.S.C. § 1304(5). The defendant, Yang Ming Marine Transport Corporation (“Yang Ming”), a Taiwanese company, is the owner and operator of the S.S. Yang Ming, on which was shipped a cargo of screws, bolts, nuts, studs, and washers, to be delivered to its purchaser, the plaintiff Allied International American Eagle Trading Corporation (“Allied”). The cargo was never delivered, for which the defendant concedes liability, but the parties disagree on the proper damage limitation. The missing goods were packed on two pallets, one holding nine cartons, the other holding ten drums of cargo. The defendant contends that the pallets should be considered “packages” within the meaning of the statutory $500 limitation, while the plaintiff argues that each carton and drum should be considered a “package.” After a one-day bench trial, the district court made findings of fact and conclusions of law in the plaintiff's favor. Accordingly, the defendant was held liable for the loss of 19 packages, which were valued at $8500. We reverse and hold that, under the circumstances of this case, the two pallets should be considered “packages” under the statute, thus subjecting the defendant to a maximum liability of $1000.

In this case, under the heading “No. of Containers or P’kgs.,” the bill of lading listed eighteen pallets, two cases, and ten drums, with a total listed as “30 Packages.” Under the heading “Description of Packages and Goods,” there is a parenthetical listing of the number of cartons, cases and drums on each pallet, as well as the point of origin and a general legend reading “Screws, Bolts, Nuts, Studs.” Below all of this information, a printed line requires the parties to fill in the “Total Number of Packages or Units (in words),” after which is typed “Thirty (30) Packages Only.” In the opinion below, the court considered the parenthetical descriptions to come under the heading “No. of Containers or P'kgs." We disagree, 1 but even if they had, we are *1057 convinced that the case is controlled by the explicit statements in the bill of lading that the total number of packages was thirty. In order to reach a total of thirty, one must count the pallets as “packages.” 2

Although we find this ease to be governed by a straight-forward contract analysis, it may be helpful for us to review the legal history of “the troublesome conundrum: When is a package not a package?” Mitsubishi Int’l Corp. v. S.S. Palmetto State, 311 F.2d 382, 383 (2d Cir. 1962), cert. denied, 373 U.S. 922, 83 S.Ct. 1523, 10 L.Ed.2d 422 (1963). The statute turns on the meaning of “package,” but nowhere defines the term. Because of the capaciousness of the word, we are left with an overabundance of candidates for informing the standard, “package.” 3 Black’s Law Dictionary defines “package” as “[a] bundle put up for transportation or commercial handling; a thing in form to become, as such, an article of merchandise or delivery from hand to hand.... As ordinarily understood in the commercial world, it means a shipping package.” This definition confirms our intuition about what a package is, but it does little to establish a satisfying legal standard. First, we must discount the phrase, “from hand to hand,” for “Paul Bunyan himself would have had difficulty in delivering three 32'/2 ton crates ‘hand to hand.’ ” Mitsubishi Int’l Corp. v. S.S. Palmetto State, supra, 311 F.2d at 383. But more generally, Black’s does not explain how to set liability when a carton on a pallet is loaded onto a container ship — a bundle within a bundle within a bundle, each “put up for transportation or commercial handling.” The qualification, “[a]s ordinarily understood in the commercial world,” adds a note of common sense, but once the cargo is lost, one finds that the only thing ordinary is that a dispute about how to interpret the package limitation will ensue. And despite the number and length of this court’s opinions on the subject, we still find pockets of legitimate disagreement, presenting appealable issues, in an area where Congress intended to foster certainty and security in the shipping business. Cameco, Inc. v. S.S. American Legion, 514 F.2d 1291, 1297 (2d Cir. 1974).

Starting with the dictionary, “a source of interpretation not to be wholly disregarded although by no means controlling,” Nichimen Co. v. M. V. Farland, 462 F.2d 319, 334 (2d Cir. 1972), this court has derived a working definition of the term, “package,” as “a class of cargo, irrespective of size, shape or weight, to which some packaging prepara *1058 tion for transportation has been made which facilitates handling, but which does not necessarily conceal or completely enclose the goods.” Aluminios Pozuelo Ltd. v. S.S. Navigator, 407 F.2d 152, 155 (2d Cir. 1968). Beyond the common sense application of the term, “package,” the liability limitation must be interpreted in light of section 4(5)’s dual purposes: to limit liability, but to “[make] null and void any agreement reducing the carrier’s liability below that level.” Mitsui & Co. v. American Export Lines, Inc., 636 F.2d 807, 814 (2d Cir. 1981) (footnote omitted). “No doubt the drafters had in mind a unit that would be fairly uniform and predictable in size, and one that would provide a common sense standard so that the parties could easily ascertain at the time of contract when additional coverage was needed, place the risk of additional loss upon one or the other, and thus avoid the pains of litigation.” Standard Electrica, S.A. v. Hamburg Sudamerikanische Dampfschifffahrts-Gesellschaft, 375 F.2d 943, 945 (2d Cir.), cert. denied, 389 U.S. 831, 88 S.Ct. 97, 19 L.Ed.2d 89 (1967) (footnote omitted) [hereinafter “Standard Eléctrica”]. In short, COGSA sought to remedy the inadequate coverage often found in carriers’ adhesion contracts, while establishing a contractual setting which would “ensure uniformity in the basic rights and responsibilities arising out of bills of lading.” Mitsui & Co. v. American Export Lines, Inc., supra, 636 F.2d at 815.

Many decisions through the years have considered whether large pieces of cargo should be deemed “packages” because of wrappings, boards, or skids attached to them to facilitate transportation and/or to protect them during shipping.

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672 F.2d 1055, Counsel Stack Legal Research, https://law.counselstack.com/opinion/allied-international-american-eagle-trading-corp-v-ss-yang-ming-her-ca2-1982.