Commonwealth Petrochemicals, Inc. v. S/S Puerto Rico

607 F.2d 322, 1979 A.M.C. 2772
CourtCourt of Appeals for the Fourth Circuit
DecidedSeptember 19, 1979
DocketNo. 78-1749
StatusPublished
Cited by19 cases

This text of 607 F.2d 322 (Commonwealth Petrochemicals, Inc. v. S/S Puerto Rico) is published on Counsel Stack Legal Research, covering Court of Appeals for the Fourth Circuit primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Commonwealth Petrochemicals, Inc. v. S/S Puerto Rico, 607 F.2d 322, 1979 A.M.C. 2772 (4th Cir. 1979).

Opinion

JAMES DICKSON PHILLIPS, Circuit Judge:

En route from Baltimore, Maryland to San Juan, Puerto Rico, an electrical transformer aboard the S.S. Puerto Rico was damaged. The covering bill of lading incorporated the provisions of the Carriage of Goods by Sea Act (COGSA), 46 U.S.C. §§ 1300-1315, and limited the carrier’s liability to $500 per package. The transformer was defined as being one package in the long form bill of lading that was incorporated by reference into the short form bill given to the shippers. The district court refused to give effect to this definition and held the carrier liable for the full amount of the damage to the transformer, $13,901.01.

On the carrier’s appeal, three issues are presented for decision. May the parties to a domestic contract of ocean carriage incorporate the provisions of COGSA and at the same time define a term of that statute in a manner that may be inconsistent with the interpretation that has been placed upon it by the courts? If so, may this be done through the use of two bills of lading, a short form given to the shipper incorporating COGSA and a long form incorporated by reference in the short form which provides the possibly inconsistent definition? And finally, was this effectively done in the case at bar? We answer all three issues in the affirmative and reverse.

I

The pertinent facts and the proceeding below may be briefly stated. The transformer measured more than 10 feet in each dimension and weighed 47,700 pounds. It was bolted to an iron skid and then loaded, with a second such transformer, on a special flat-bed trailer for the land journey from Rome, Georgia to Baltimore. The iron skids were in turn bolted to the trailer and the transformers were further fixed in place with heavy chains. When it arrived in Baltimore, the trailer was loaded on the S.S. Puerto Rico and during the voyage to San Juan one of the transformers was damaged.

The shippers, Commonwealth Petrochemicals, Inc. and Fluor Engineers and Constructors, Inc., then brought this action against the S.S. Puerto Rico in rem and its owner pro hac vice, Puerto Rico Maritime Shipping Authority, in personam to recover for the damage. The carrier admitted liability and the case was submitted to the district court on the pleadings and a stipu[324]*324lated set of facts, the only issue for decision being the measure of damages.1 The carrier sought to limit recovery to $500 on the theory that the bill of lading 2 and the Carriage of Goods by Sea Act3 incorporated by reference therein,4 permitted limitation to $500 per package and that the partially enclosed transformer had been defined as one package. The district court concluded that by incorporating COGSA, the parties had also incorporated the judicial construction of the term “package” as used in 46 U.S.C. § 1304(5), and that under those constructions the transformer did not constitute a package. Commonwealth Petrochemicals, Inc. v. S/S Puerto Rico, 455 F.Supp. 310 (D.Md.1978). It therefore entered judgment in the full amount of the damage and this appeal followed.

II

Congress has twice legislated comprehensively with respect to the relative rights and liabilities of ocean-going carriers and shippers. The first enactment, The Harter Act, 46 U.S.C. §§ 190—196, passed in the late 1800’s originally covered all contracts of ocean carriage to or from the ports of the United States, but the subsequent enactment of COGSA in 1936 narrowed its scope. COGSA is the American version of an international convention commonly [325]*325called the Hague Rules which was based in large part on the Harter Act. When Congress enacted COGSA, it felt that the problems of domestic and foreign commerce required discrete treatment, the need for uniformity being greater in the international trade, H.Rep. No. 2218, 76th Cong., 1st Sess., quoted in PPG Industries, Inc. v. Ashland Oil Co.—Thomas Petroleum Transit Division, 527 F.2d 502, 505 n.12 (3d Cir. 1975), and therefore limited COGSA’s applicability to voyages in foreign commerce, expressly preserving Harter for domestic trade. It did not, however, stop there, for it permitted the parties to domestic contracts of carriage to elect to subject their agreement to COGSA rather than Harter by expressly incorporating COGSA therein. The parties did so in this instance.

Section 1312 of COGSA provides:

This chapter shall apply to all contracts for carriage of goods by sea to or from ports of the United States in foreign trade. As used in this chapter the term “United States” includes its districts, territories, and possessions. The term “foreign trade” means the transportation of goods between the ports of the United States and ports of foreign countries. Nothing in this chapter shall be held to apply to contracts for carriage of goods by sea between any port of the United States or its possessions, and any other port of the United States or its possessions: Provided, however, That any bill of lading or similar document of title which is evidence of a contract for the carriage of goods by sea between such ports, containing an express statement that it shall be subject to the provisions of this chapter, shall be subjected hereto as fully as if subject hereto by the express provisions of this chapter .

46 U.S.C. § 1312. Relying on the language that COGSA should apply to contracts of domestic carriage when incorporated therein “as fully as if subject hereto by the express provisions of this chapter,” the district court reasoned that the transformer did not constitute a “package” within the meaning of § 1304(5) of COGSA5 and that to give effect to the contractual definition would lessen the carrier’s liability in violation of 46 U.S.C. § 1303(8).6 In this we conclude the district court erred.

We have held that when COGSA does not apply of its own force but is incorporated into a maritime contract by reference, it does not have “statute rank”; rather, it is merely part of the contract, a term like any other. United States v. M/V Marilena P, 433 F.2d 164, 170 (4th Cir. 1969).7 In Pannell v. United States Lines Co., 263 F.2d 497, 498 (2d Cir. 1959), the United States Court of Appeals for the Second Circuit held that when COGSA does not apply ex proprio vigore, effect should be given to the parties’ definition of package even if that definition is contrary to that which would control if COGSA were directly applicable. We find Pannell’s reasoning compelling.

Free access — add to your briefcase to read the full text and ask questions with AI

Related

Maersk Line, Ltd. v. United States
460 F. Supp. 2d 678 (E.D. Virginia, 2006)
Caterpillar Overseas, S.A. v. Marine Transport Inc.
900 F.2d 714 (Fourth Circuit, 1990)
Ferrex International, Inc. v. M/V Rico Chone
718 F. Supp. 451 (D. Maryland, 1988)
Enterprise, Inc. v. M/V SAM HOUSTON
706 F. Supp. 451 (E.D. Louisiana, 1988)
Croft & Scully Co. v. M/v Skulptor Vuchetich, Etc.
664 F.2d 1277 (Fifth Circuit, 1982)
North River Insurance Co. v. Fed Sea/Fed Pac Line
647 F.2d 985 (Ninth Circuit, 1981)
Croft & Scully Co. v. M/V SKULPTOR VUCHETICH
508 F. Supp. 670 (S.D. Texas, 1981)
American & Far Eastern Trading Co. v. Sea-Land Service, Inc.
493 F. Supp. 125 (N.D. California, 1980)
Commonwealth Petrochemicals, Inc. v. S/S Puerto Rico
607 F.2d 322 (Fourth Circuit, 1979)

Cite This Page — Counsel Stack

Bluebook (online)
607 F.2d 322, 1979 A.M.C. 2772, Counsel Stack Legal Research, https://law.counselstack.com/opinion/commonwealth-petrochemicals-inc-v-ss-puerto-rico-ca4-1979.