Milos Zajicek v. United Fruit Company, Etc., Third Party v. Panama Free Port Corporation, Third Party

459 F.2d 395, 1972 U.S. App. LEXIS 10049, 1972 A.M.C. 1746
CourtCourt of Appeals for the Third Circuit
DecidedApril 17, 1972
Docket29196
StatusPublished
Cited by8 cases

This text of 459 F.2d 395 (Milos Zajicek v. United Fruit Company, Etc., Third Party v. Panama Free Port Corporation, Third Party) is published on Counsel Stack Legal Research, covering Court of Appeals for the Third Circuit primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Milos Zajicek v. United Fruit Company, Etc., Third Party v. Panama Free Port Corporation, Third Party, 459 F.2d 395, 1972 U.S. App. LEXIS 10049, 1972 A.M.C. 1746 (3d Cir. 1972).

Opinions

JOHN R. BROWN, Chief Judge:

Carrier1 prepared for issuance a set of bills of lading covering a shipment of sandal straps from New York to Cris-tobal, Panama. This set, which we refer to as First Issue, showed the order consignee to be the Panamanian agent of the Peruvian buyer of the goods. Shortly thereafter, to correct misdescription of the goods and to carry out Shipper’s 2 instructions to change the consignee to Shipper’s order, the Carrier issued and delivered a new set (called Second Issue) of ladings. In the meantime, although no originals of First Set had ever been executed or delivered, Carrier routinely but mistakenly sent non-negotiable copies of them to its Cristobal office. This error was compounded by its failure to send non-negotiable copies of Second Set, the true and only bills of lading, to the Cristobal office.

And thereby hangs this tale. For assuming First Set to be the true and only outstanding bills, Carrier’s agent delivered the goods on surrender of a non-negotiable copy of First Set against a so-called letter of indemnity by Free Port.3 By now, of course, the goods were gone, so was Shipper’s security. A few weeks later Shipper, wondering about his goods, came to the Canal Zone — with originals of Second Set in hand — in search of his goods. After much effort and several investigatory trips to the Canal Zone and New York, they were never found. This suit against Carrier and Free Port followed but, unfortunately not until 16 months after actual delivery of the goods —a fact which turned an otherwise open and shut case of palpable carrier liability into one of considerable difficulty on problems of applicability of COGSA and the statutory (and contractual) one-year limitation for suit.

The District Judge in findings which none can, or do, assail held each liable jointly and severally but with indemnity to Free Port against Carrier. Only Carrier appeals — a fact which eliminates all of the difficult problems Shipper’s tardiness injected. We affirm.

Carrier Bungles

The facts in this case are really undisputed. Shipper’s claim is for misde-livery of a cargo of sandal straps shipped from New York to Cristobal, Panama on Carrier’s S/S Telde. In April, 1966, Shipper purchased the sandal straps from the Atlas Trading Corporation and subsequently on May 2, 1966, sold them to Chia Hermanos of Lima, Peru. The purchase price of $24,189.94 was on a landed cost basis and included freight, import taxes and delivery expenses. As part of the sale Shipper assumed the duty of having the goods shipped to Lima. The first leg was to be accomplished by shipment on S/S Telde sailing from New York bound for Cristobal, Panama, on about July 8, 1966. As is customary the Atlas Corporation, Shipper’s forwarder, prepared First Set bills of lading for issuance by Carrier. The cargo and the covering unexecuted bills of lading were delivered to Carrier’s pier. In effect the consignee was to order of Purchaser.4 Because First Set misde-scribed the goods and Shipper wanted clean bills, Carrier was informed that a new set of bills would be submitted. Before this was done Shipper cabled instructions to change the name of the consignee, thus countermanding his original instruction as to consignee shown in First Set.

[398]*398The Second Set was then prepared, correcting the description of the goods and most importantly changing the name of the consignee to order of Shipper.5 Carrier’s managing clerk did not take notice of the changed consignee.

No original bills of lading were issued or delivered for First Set showing Peru-bras S.A. (order) as the consignee. But Carrier did retain several non-negotiable. copies. Several of these were forwarded to Carrier’s Cristobal office. In the meantime on receipt of three originals of Second Set, Atlas processed and forwarded them to Shipper’s agent in Peru. Carrier’s Cristobal office did not receive any copies of Second Set, the only valid documents, nor did it receive any notification that Second Set existed or had been issued and delivered.

S/S Telde sailed from New York on July 9, 1966 and arrived in Panama on July 15, 1966 shortly after which the cargo was discharged onto the dock at Cris-tobal where it was placed in the Panama Canal Company warehouse. The goods were held in the custody and possession of the Panama Canal Company, subject to the order of the Carrier and remained in the warehouse for approximately ten days.

On July 25, 1966, Free Port requested that Carrier release the shipment to it against non-negotiable copy of the First Set one of which Carrier’s agent had sent to Free Port as notification of the shipment’s arrival. Free Port did not have any original bill of lading to surrender.

Carrier demanded and received from Free Port a letter of indemnity6 after which the shipment was accordingly released to Free Port. The shipment was then taken into the Colon Free Zone where it was entered as being the property of Perubras S.A. (the order party in First Set). The goods were then delivered to a freight-forwarder, who as far as is known, shipped the goods out of Panama.

On August 15, 1966 Shipper’s agent arrived to take delivery of the shipment and presented the original bills of lading to Panama Free Port. Shipper and his agent made several inquiries about the shipment but were never able to discover its whereabouts. On January 10, 1968, over 17 months after actual delivery and 16 months after Shipper had knowledge of the misdelivery, he filed suit in the District Court for the Canal Zone, Cris-tobal Division against Carrier and Free Port.

From the adverse judgment against it Carrier contends that (i) under COGSA as incorporated in the bills of lading the suit is time-barred under the statutory and contractual one-year limitation, (ii) Free Port is not entitled to judgment over and against Carrier because it was negligent in not obtaining a customary letter of indemnity from Pe-rubras S.A., (iii) Carrier, instead of indemnifying Free Port, should on its third-party complaint have received full indemnity from Free Port under the letter of indemnity, and (iv) the damages were excessive.7

[399]*399 Carrier’s COGSA Attack

Carrier from the outset strenuously urged that COGSA, having been expressly incorporated by the bills of lading8 for post-discharge activities, automatically incorporated the statutory9 and contractual10 one-year time bar for suits.

Notwithstanding the arguments which rest on the sound propositions that (i) COGSA may become a part of the contract of affreightment through express incorporation11 and (ii) that where COGSA is applicable it covers misdeliv-eries 12 as well as non or damaged deliveries, we find it unnecessary to reach these substantial questions or the equally countervailing contention that what the right hand had extended in the COGSA incorporation (note 8, supra) the left hand had taken back in a couple of “except as may be otherwise specifically provided herein” clauses,13 the effect of [400]*400which would be contractually withdrawing this post-discharge occurrence from COGSA.

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Bluebook (online)
459 F.2d 395, 1972 U.S. App. LEXIS 10049, 1972 A.M.C. 1746, Counsel Stack Legal Research, https://law.counselstack.com/opinion/milos-zajicek-v-united-fruit-company-etc-third-party-v-panama-free-ca3-1972.