The Sarnia

278 F. 459, 1921 U.S. App. LEXIS 1969
CourtCourt of Appeals for the Second Circuit
DecidedDecember 14, 1921
DocketNo. 44
StatusPublished
Cited by71 cases

This text of 278 F. 459 (The Sarnia) 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
The Sarnia, 278 F. 459, 1921 U.S. App. LEXIS 1969 (2d Cir. 1921).

Opinions

ROGERS, Circuit Judge

(after stating the facts as above). This suit is brought on the part of the shipper to recover damages for injury to the goods shipped, arising from their wrongful stowage above deck, whereas they should have been carried under deck.

[ 1 ] Where goods are shipped under a clean bill -of lading the obligation is that they are to be put under deck, unless there is an express written agreement to the contrary or a custom to the contrary is proven. The Water Witch, 1 Black, 494, 17 L. Ed. 155; The Kirkhill, 99 Fed. 575, 39 C. C. A. 658; The New Orleans (C. C.) 26 Fed. 44; The Gran Canaria (D. C.) 16 Fed. 868; Two Hundred and Sixty Hogsheads of Molasses, 24 Fed. Cas. 445, No. 14,296; Vernard v. Hudson, 28 Fed. Cas. 1162, No. 16,921.

[2] But as silence in a bill of lading as to stowage is not an express contract to carry under deck the shipowner may prove an agreement to carry on deck where a claim for loss is made. The Delaware v. Oregon Iron Co., 14 Wall. 579, 20 L. Ed. 779. It was attempted in the court below to prove that there was an agreement that the shipment might be carried above deck, but the proof offered of such an agreement was not sufficient, and the court found, and we have no disposition to reverse the finding, that no such agreement was made.

[3] This court, therefore, is confronted in this case with a question of law, which is both interesting and important. The question is this: When a shipowner issues a bill of lading which calls for a shipment under deck, and then carries the goods on deck, is his breach of the contract of shipment such as to deprive the shipowner of the benefit [461]*461of the valuation clause? In the court below the view was taken that there was a plain breach of contract, in that the goods had been stowed, above deck, but that this deviation did not vitiate the valuation clause, by which the parties had agreed that the motor cars for purposes of shipment were to be deemed worth $100 apiece on which basis the rate was adjusted. The general rule undoubtedly is that, if the shipowner commits a breach of the contract of affreightment which goes to the essence of the contract, he is not entitled after such breach to invoke the provisions of the contract which are in his favor. We are to inquire whether the valuation clause constitutes an exception to the gen • eral rule.

But it is urged that the question can hardly be regarded as an open one in this court, in view of the decision in Calderon v. Atlas Steamship Co., 170 U. S. 272, 18 Sup. Ct. 588, 42 L. Ed. 1033. In that case goods were shipped from New York to Savinilla on the steamer Ailsa. The goods were not delivered when the ship arrived at destination, but were carried back to New York and then reshipped by the carrier on the steamer Alvo, which was lost at sea in a hurricane. The bill of lading contained a clause designed to limit the liability of the carrier to $100 per package. It was urged that the final loss of the goods was due to hurricane, an extraordinary sea peril, and that there was no liability as the bill of lading exempted from liability from perils of the sea; and it was further contended that, if a liability existed, it could not exceed $100 per package because of stipulations in the bill of lading, as a value in excess of $100 per package had not been disclosed, nor any agreement made at the time of shipment for the payment of freight at an extra rate. The case arose in the Southern district of New York and was heard before District Judge Addison Brown. He held that the case involved the principle of deviation, and that in marine transportation deviation made the carrier liable as an insurer, both because of the carrier’s violation of the contract and because the deviation avoided the shipper’s insurance and he had no opportunity to secure further insurance. The court sustained the validity of the clause as to value and limited the recovery of the cargo owner to the agreed valuation per package, allowing a recovery of $2,900; instead of $5,600, the full value. 64 Fed. 874.

The case was brought on appeal to this court, which affirmed the decision below. This court, in the opinions rendered, considered at length the question of the validity of the valuation stipulation and sus - tained its validity, but said nothing as to the phase of the subject now being considered. 69 Fed. 574, 16 C. C. A. 332. The case was then carried to the Supreme Court, on a writ of certiorari. That court held that the carrier was liable, to that extent agreeing with the courts below; but it reversed the decree, and held the valuation clause invalid, because it stipulated against any liability whatsoever on the part of the carrier where the goods were worth over $100 per package.

The exact question presented in the case now to be decided was not discussed — was not so much as referred to — in the opinion of the District Court, or in those delivered in this court, or in that of the Supreme Court. In the absence of any allusion to the subject in any of [462]*462the opinions in the case, and especially in view of the fact that the opinion of this court was reversed, we feel that this court is free to consider the question now as res integra.

In the present case there is no doubt that the valuation clause inserted in the bill of lading was valid at the time it Was made. It did not stipulate against any liability whatever if the value of each package exceeded $100, but simply provided that the value of each package did not exceed $100. The leading case in the federal courts as to the validity of such a valuation clause is that of Hart v. Pennsylvania Railroad Co., 112 U. S. 331, 5 Sup. Ct. 151, 28 L. Ed. 717. The court held that such an agreement, fairly entered into, where no deceit is practiced on the shipper, is just and reasonable, and not contrary to public policy, and must be upheld. To the same effect are numerous cases, among which are the following: Adams Express Co. v. Croninger, 226 U. S. 491, 33 Sup. Ct. 148, 57 L. Ed. 314, 44 L. R. A. (N. S.) 257; Pierce Co. v. Wells, Fargo & Co., 236 U. S. 278, 35 Sup. Ct. 351, 59 L. Ed. 576; Reid v. Fargo, 241 U. S. 544, 36 Sup. Ct. 712, 60 L. Ed. 1156; Cleveland, Cincinnati, Chicago & St. Louis Railway Co. v. Dettlebach, 239 U. S. 588, 36 Sup. Ct. 177, 60 L. Ed. 453; The Morro Castle (D. C.) 168 Fed. 555; Hohl v. Norddeutscher, 175 Fed. 544, 99 C. C. A. 166; Kuhnhold v. Compagnie Générale Transatlantique (D. C.) 251 Fed. 387; Frederick Leyland & Co., Limited, v. Hornblower, 256 Fed. 289, 167 C. C. A. 461.

■ Conceding, then, the validity of the valuation clause at the time the contract was made, we are brought to inquire whether it was subsequently invalidated by the failure of the carrier to perform his undertaking in accordance with his agreement. In entering upon that inquiry it is important to keep in mind certain principles of law governing contracts of shipment made between the shipper and the shipowner.

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Bluebook (online)
278 F. 459, 1921 U.S. App. LEXIS 1969, Counsel Stack Legal Research, https://law.counselstack.com/opinion/the-sarnia-ca2-1921.