Opinion
No. 142, 143.
December 21, 1925.
Appeals from the District Court of the United States for the Southern District of New York.
Libel by the Loma Fruit Company against the International Navigation Company, Limited, in which the Atchison, Topeka Santa Fé Railway Company and another were impleaded, consolidated with libel by the Loma Fruit Company against G. Warren Co., Limited, in which the Atchison, Topeka Santa Fé Railway Company and others were impleaded. Decree for libelant against the Atchison, Topeka Santa Fé Railway Company primarily in both cases, and in first case against the International Navigation Company secondarily, and in the second case against G. Warren Co. secondarily, and petitions dismissed as to other defendants, and the Atchison, Topeka Santa Fé Railway Company appeals in both cases. Affirmed.
The following is the opinion in the District Court of Ward, Circuit Judge:
"These two suits were tried together. The libelant in the first seeks to recover from the International Navigation Company, owner of the steamship Northland, for damage to five cars of apples, containing 4,680 boxes, under an export bill of lading of the Atchison, Topeka Santa Fé Railway Company from Watsonville, Cal., to Portland, Me., and thence by the steamship Northland to Liverpool, England; and in the second suit it seeks to recover damages for a similar shipment of seven cars of apples, containing 6,496 boxes, under an export bill of lading of the same railroad, from Watsonville, Cal., to Boston, Mass., and thence by Warren Co.'s steamer Sachem to Liverpool, England.
"The respondent in each suit impleaded the Atchison, Topeka Santa Fé Railway Company under the fifty-ninth rule in admiralty, and also the Grand Trunk Railway Company in the first and the Boston Albany Railroad Company and the New York Central Railroad Company in the second. Sterne, the Santa Fé Company's agent at San Jose, signed its printed export bills of lading from Watsonville, Cal., to Liverpool, for each of the inland carriers and also for the ocean carriers separately. It is in this way that the Santa Fé Company, like all other railroads, does the business, as the testimony of Saiz, the company's agent for foreign business, shows. The material provisions on the face of the bills of lading are as follows:
"`The Atchison, Topeka Santa Fé Railway Company Coast Lines, in connection with other carriers on the route, received at Watsonville, Cal., from Loma Fruit Company, the following property, in apparent good order, except as noted (contents and condition of packages unknown), marked, numbered, consigned, and destined as indicated below: Consignee and destination: Loma Fruit Company, Liverpool, England. Party to be notified: Simmons, Shuttleworth Co., Liverpool, England. Marks and numbers: 936 bxs. green apples. Articles: 936 bxs. green apples Newtown pippins. Lighterage free for export. Marine insurance, $1,200. Prem. $1.80. War insurance: $1,200. Prem. $11.40. Route SP Santa Fé CT. Refrigeration to destination. Weight: 46521 (subject to correction). Car: PFE 11281. Ocean rate, forty shillings plus 5 per cent. primage per 40 cubic feet. To be carried to the port (a) of Portland, Me., and thence by steamship Northland, White Star Dom. Line, to the port (b) Liverpool (or so near thereto as ship may safely get, with liberty to call at any usual port of call), and to be there delivered as above consigned or to another carrier on the route to destination, if consigned beyond said port (b), upon payment immediately on discharge of the property of the freight thereon at the rate from Watsonville to Portland of one hundred cents, United States gold currency, per one hundred pounds gross weight and advanced charges, thirteen and 20/100, 13.20, a/c premium marine and war insurance. * * *
"`In witness whereof, the agent signing on behalf of said, the Atchison, Topeka Santa Fé Railway Company coast lines and of the said ocean steamship company, or ocean steamer and her owner, severally and not jointly, hath affirmed to one original bills of lading all of this tenor and date, one of which bills being accomplished, the others to stand void. Dated at San Jose, Cal., this 31st day of March, 1915. [Signed] H.P. Sterne, Agent, on Behalf of Carriers Severally, but Not Jointly.'
"And similar bills of lading for the shipments of apples from the port of Boston, Mass., by the steamer Sachem, Furness-Withy Line, to the port of Liverpool.
"Upon the back are printed separately the general conditions of carriage by the inland carriers and by the ocean carriers; but the particular contract itself, as to the transportation, the goods, their marks, the freight, and the refrigeration, was on the face of the bills of lading. For instance, the exception that the ocean carrier should not be liable for heating, decay, or putrefaction of the shipment, which puts the burden of proof of negligence on the holder of the bills of lading, is met by the carrier's failure to supply the refrigeration required.
"The Santa Fé Company engaged the ocean freight space, and it is quite clear that ordinary stowage only was to be given, because neither of the steamers in question had any refrigerating equipment, and one of the freight contracts expressly stated ordinary stowage. The sharply contested question of fact is whether Sterne promised Baker, general manager of the libelant, refrigeration on the steamers. The testimony satisfies me that he did. Baker and Mrs. Kirkland, libelant's secretary (formerly Miss Wood), so testify. While apples shipped in cold weather, which have not been long in cold storage, may go without refrigeration from Watsonville, Cal., to Europe, apples which have been some four months in cold storage, like those in question, and are shipped in April, do require refrigeration. It is most improbable that the libelant would have shipped them without refrigeration to destination. Finally, the export bills of lading issued by the Santa Fé Company called for refrigeration to destination, which was stated to be Liverpool.
"The shipments were from Watsonville, under memorandum bills of lading of the Southern Pacific Railroad Company, to Stockton on the Santa Fé's line, which memorandum bills of lading were exchanged, on delivery of the shipments to the Santa Fé Company, for that company's straight export bills of lading from Watsonville to Liverpool. The memorandum bills of lading signed by the Southern Pacific Company were filled up by Miss Wood, who testified she was present at the conversation in which Sterne promised ocean refrigeration to Baker, and that she used these words intending to cover that contract: `Ice full to destination. Lighterage free for export. Space reserved by Santa Fé.'
"When the memorandum bills of lading were exchanged for the Santa Fé Company's export bills, Sterne himself substituted the following language: `Refrigeration to destination,' in place of `Ice full to destination,' on the Southern Pacific Company's memorandum bills of lading. The destination of the shipments was certainly Liverpool, and the words `Refrigeration to destination' were much more applicable to a contract for refrigeration throughout, as the libelant claims, than the words `Ice full to destination,' which is more appropriate to refrigerated cars than for steamers, which are refrigerated by cold air.
"The ocean carriers would not have loaded these shipments aboard their steamers without first receiving copies of the export bills of lading, and I find that they did in each case receive those copies before shipment. They must be taken to have had notice that refrigeration to Liverpool was called for. Though this was not in accordance with the freight contract made between them and the Santa Fé Company, I think, by receiving and carrying the shipments, they ratified and were bound by the bills as between themselves and the libelant. Reclamation for any loss they incurred as a result of the misdescription in the bill of lading would have to be made against the Santa Fé Company.
"But it is said on behalf of the Santa Fé Railway Company that Sterne had no power to alter the company's tariff rates, or to give any shipper preferences or privileges not given to all. Hamlen v. Illinois Central R. Co. (D.C.) 212 F. 324; Chicago Alton R.R. Co. v. Kirby, 32 S. Ct. 648, 225 U.S. 155, 56 L. Ed. 1033, Ann. Cas. 1914A, 501. This is quite true but engagement of ocean freight space is no part of the inland transportation, nor subject to the tariff regulations. Armour Co. v. United States, 28 S. Ct. 428, 209 U.S. 56, 52 L. Ed. 681; Pacific Mail S.S. Co. v. Western Pacific R.R. Co., 251 F. 218, 163 C.C.A. 374. The Santa Fé Railway Company engaged the ocean transportation in order to get the export business. To say that it had no authority to sign for the ocean carrier is going very far, in view of the immense business done under such export bills of lading, which the agents of the railroad companies do sign for the ocean carriers. Certainly it could not guarantee the performance by the ocean carrier of its contract, nor would it be liable for nonperformance. Hamlen v. Railroad Co., supra. The ground of liability is quite different, viz. that it broke its freight contract with the ocean carrier in giving the libelant bills of lading calling for refrigeration on the steamers. No fraud is imputed to the Santa Fé Company, nor is any liability as a common carrier alleged. Mistake as to the actual contract for the ocean freight space, or failure to recollect the terms of it, would be a quite sufficient explanation.
"Furthermore it is contended that, even if Sterne had authority to sign for the steamship company, he had none to sign upon terms different from those which the steamship company had given him, and therefore the Santa Fé Company cannot be impleaded, because this breach of its freight contract is nonmaritime. Aktieselskabet Fido v. Lloyd Braziliero (C.C.A.) 283 F. 62; Central Leather Co. v. The Goyaz (D.C.) 281 F. 259.
"Exceptions to the petition on this ground were overruled by Judge Mayer, and his decision is the law of the cases. No opinion of his has been shown me, and therefore I do not know what his reason was; but, as the Santa Fé Company asks me to express an opinion, I will say that I agree with his conclusion. It is to be borne in mind that the ocean carriers were parties to two different contracts: First, the agreements for freight space made with the Santa Fé Company; and, second, the bills of lading with the libelant. The freight engagements between the ocean carriers and the Santa Fé Company were clearly maritime contracts, upon which they could maintain a suit in admiralty. They imported that the Santa Fé Company was to sign bills of lading for an exporter in California, which should bind the ocean carrier to transport his shipment of apples to Liverpool under ordinary stowage. When that company signed and delivered the bills of lading to the libelant calling for refrigeration on the steamers, though they bound the ocean carriers to the libelant, they violated the freight agreement which the ocean carriers had made with the Santa Fé Company. If they are, as a result, made liable in damages to the libelant, I think they may look for indemnification to the Santa Fé Company, and implead it under the fifty-ninth rule.
"The late Judge Addison Brown, with his characteristic equitable instinct, established this procedure in admiralty in the case of the Hudson (D.C.) 15 F. 162, decided February 7, 1883, and on March 26th of the same year the Supreme Court adopted it in rule 59, 112 U.S. 743. The rule applied only to collision cases, but it was constantly extended by analogy, in the courts of this circuit, to cases which come within its purpose of avoiding a multiplicity of actions. See Public Bath No. 13 (D.C.) 61 F. 692; Dailey v. City (D.C.) 119 F. 1005; The No. K1, 150 F. 111, 80 C.C.A. 65. In these cases the party impleaded was under no direct liability to the libelant, but was liable to the respondent by way of remedy over. This practice has been expressly covered in new rule 56 of the Supreme Court, which allows a person to be impleaded `who may be partly or wholly liable either to the libelant or to such claimant or respondent by way of remedy over, contribution, or otherwise growing out of the same matter.' Of course, such liability must be of a maritime nature. Aktieselskabet Fido v. Lloyd Braziliero, supra.
"It is also objected that the apples in question were affected by what is known as browning blight, and that their condition on arrival at Liverpool was due to it, and not to want of refrigeration on the steamers. This disease does not show itself on the exterior of the apple, but is a still unexplained condition arising in the interior, first shown by a sparkling or crystallized appearance, which may progress until the apple becomes soft and mushy. The evidence is that this threatened injury does not make such apples unsalable until some two weeks after delivered from the steamer; in other words, that they could be sold at public auction, as the custom is in Liverpool, and could be consumed as sound within that period of time. Mr. Baker, on cutting open some of the apples on a car not shipped, found this sparkling appearance and refused to ship any more. There are some speculative opinions expressed by an expert connected with the State Agricultural Experiment Station at Geneva and in a report of the Department of Agriculture at Washington as to the character and nature of this disease, which cannot be said to be very conclusive down to the present time. That refrigeration on the steamers would retard the disease in apples shipped in the month of April seems to me very clear. I cannot say how many of the apples were affected by this browning blight when delivered to the steamers, or whether, if such of them as were so affected had been given refrigeration, they would not have arrived in a marketable condition, or in a better condition than they did. The amount of damages will be a question for the commissioner.
"My conclusions are:
"First. That the apples were injured for want of refrigeration on the steamers.
"Second. That the ocean carriers respondent are liable to the libelant for breach of the export bills of lading as to the refrigeration.
"Third. That the Santa Fé Company is liable over the ocean carriers for breach of the freight contract.
"Fourth. That, the freight contracts being maritime and wholly maritime, the Santa Fé Company was properly impleaded under the fifty-ninth rule.
"Fifth. That neither the Grand Trunk Railway Company, nor the Boston Albany Railroad Company, nor the New York Central Railroad Company are liable in the premises.
"The petitions impleading the Grand Trunk Railway Company, the Boston Albany Railroad Company, and the New York Central Railroad Company will be dismissed, at the cost of the petitioner. The libelant may take the usual interlocutory decree in each case against the Atchison, Topeka Santa Fé Railway Company primarily, and in the first case against the International Navigation Company, Limited, secondarily, and in the second case against G. Warren Co., secondarily."
A.S.H. Bristow, of New York City (William Mann, of New York City, of counsel), for appellant Atchison, T. S.F. Ry. Co.
Burlingham, Veeder, Masten Fearey, of New York City (Roscoe H. Hupper, of New York City, of counsel), for appellees International Nav. Co., Limited, and G. Warren Co., Limited.
Oudin, Kilbreth Schackno, of New York City (James T. Kilbreth, of New York City, of counsel), for appellee Loma Fruit Co.
Before HOUGH and MANTON, Circuit Judges.
Decrees affirmed, upon the opinion of Ward, Circuit Judge, in the lower court.