St. Johns Shipping Corporation v. S a Companhia Geral Commercial Do Rio De Janeiro/Opinion of the Court

The General Commercial Company, Limited, doing business as commission merchant and exporting concern at New York, in May, 1918, old 800 barrels of rosin c. i. f. to the respondent, a Brazilian corporation. and procured a written freight reservation or agreement from the agents of the schooner St. Johns N. F. to carry the goods to Rio de Janeiro, 'on or under deck, ship's option,' and subject 'to terms of bills of lading in use by steamer's agents.'

The rosin was loaded on board June 11th and clean receipts without indorsement concerning stowage-were given therefor. A day or two later, upon prepayment of freight, the ship issued a clean bill of lading in the usual form. It contained no reference to the prior freight agreement. The goods were placed on deck, but neither the shipper nor the consignee knew this until after the loss occurred. There was no general custom at the port so to stow goods of this kind for such a voyage. The vessel was a general ship carrying many kinds of merchandise and no charter party question is involved. She sailed from New York June 19th. Before reaching Rio de Janeiro she encountered a storm and for sufficient cause the master jettisoned the rosin in order to relieve her. The loss resulted directly from the on deck stowage; the under deck cargo was safely delivered.

Respondent libeled the schooner and demanded the value of the goods at destination. It claims that by issuing the clean bill of lading the vessel in effect notified the shipper that she had exercised the option specified by the freight agreement and would stow underdeck; also, that the ship broke her contract as by deviation and thereby lost the benefit of limitation or relieving clauses in the bill.

The owners maintain that as the freight agreement gave an option as to place of stowage it was unnecessary for the bill of lading to specify the action taken in respect thereto, and that silence did not amount to a promise to carry under deck. Moreover, that consent to deck stowage sufficiently appeared by the bill of lading read with the freight agreement and therefore there was no departure and no ground for assessing damages.

The court below sustained the position of the respondent and decreed accordingly. The St. Johns N. F. (C. C. A.) 280 Fed. 553.

We find no conflict between the written original freight contract and the bill of lading. The former referred to a bill thereafter to be issued and made the place of stowage optional with the ship. When issued under such circumstances the bill amounted to a declaration that the option had been exercised and the goods would go under deck.

We are not dealing with a case arising under a general port custom permitting above deck stowage notwithstanding a clean bill, with notice of which all shippers are charged. When there is no such custom and no express contract in a form available as evidence, a clean bill of lading imports under deck stowage. The Delaware, 14 Wall. 579, 602, 604, 605, 20 L. Ed. 779. Upon this implication respondent had the right to rely. To say that the shipper assented to stowage on deck is not correct. It gave the vessel an option, and the clean bill of lading amounted to a positive representation by her that this had been exercised and that the goods would go under deck.

By stowing the goods on deck the vessel broke her contract, exposed them to greater risk than had been agreed and thereby directly caused the loss. She accordingly became liable as for a deviation, cannot escape by reason of the relieving clauses inserted in the bill of lading for her benefit, and must account for the value at destination. Generally, the measure of damages for loss of goods by a carrier when liable therefor is their value at the destination to which it undertook to carry them. Lawrence v. Minturn, 17 How. 100, 111, 15 L. Ed. 58; Mobile & Montgomery Ry. Co. v. Jurey, 111 U.S. 584, 596, 4 Sup. Ct. 566, 28 L. Ed. 527; New York, etc., R. R. Co. v. Estill, 147 U.S. 591, 616, 13 Sup. Ct. 444, 37 L. Ed. 292; Chicago, etc., Ry. Co. v. McCaull-Dinsmore Co., 253 U.S. 97, 100, 40 Sup. Ct. 504, 64 L. Ed. 801; Royal Exchange Shipping Co. v. Dixon, 12 App. Cas. (1887) 11; The Sarnia (C. C. A.) 278 Fed. 459; 3 Hutchinson on Carriers, § 1360; Carver on Carriage of Goods by Sea (6th Ed.) § 287.

The decree below is affirmed.