Source: https://law.justia.com/cases/federal/appellate-courts/F2/260/181/428473/
Timestamp: 2019-04-19 17:21:18+00:00

Document:
Derby, Cook, Quinby & Tweedt, Carter Quinby, Lloyd M. Tweedt, San Francisco, Cal., for appellant.
Lillick, Geary, Wheat, Adams & Charles, Harry L. Haehl, Jr., George W. Hellyer, Jr., San Francisco, Cal., for appellee.
Before STEPHENS, Chief Judge, and DENMAN Senior Circuit Judge and BARNES, Circuit Judge.
Appellant, an importer of coffee from Callao, Peru, to San Francisco, hereafter Importer, appeals from a decision holding valid an invoice valuation provision in the bill of lading for coffee carried in the Motorship Marie Bakke. It is agreed that the amount recoverable for appellee's admitted negligence in the carriage of the coffee, causing a loss of part of it and injuring some of it, would be lessened under this provision by $3,555.83 below that recoverable if the damage were based on the value on arrival at San Francisco.
"(5) Neither the carrier nor the ship shall in any event be or become liable for any loss or damage to or in connection with the transportation of goods in an amount exceeding $500 per package lawful money of the United States, or in case of goods not shipped in packages, per customary freight unit, or the equivalent of that sum in other currency, unless the nature and value of such goods have been declared by the shipper before shipment and inserted in the bill of lading. This declaration, if embodied in the bill of lading, shall be prima facie evidence, but shall not be conclusive on the carrier.
"By agreement between the carrier, master, or agent of the carrier, and the shipper another maximum amount than that mentioned in this paragraph may be fixed: Provided, That such maximum shall not be less than the figure above named. In no event shall the carrier be liable for more than the amount of damage actually sustained."
Here there was no declaration of a higher value in the bill and no agreement about another greater maximum amount.
In the admiralty proceeding of the American Trading Co. v. Steamship Harry Culbreath, 1952 A.M.C. 1170 the United States District Court for the Southern District of New York reached a similar conclusion as to an identical clause, confirming an excellent opinion of the Commissioner which summarized the prior decisions, including its prior decision in E. S. Ullmann-Allied Co. v. The George E. Pickett, D.C., 77 F. Supp. 988, 1948 A.M.C. 453.
What Cogsa does is restore the basis of recovery for the usual carriage of goods to the value at the point of destination as it was at common law and in admiralty before the Harter Act, 46 U.S. C.A. § 190 et seq. St. Johns N. F. Shipping Corp. v. S. A. Companhia Geral, etc., 263 U.S. 119, 125, 44 S. Ct. 30, 68 L. Ed. 201.
"In operation the clause only eliminates prospective profit, and limits the damage to the owner's actual loss in the transaction. It may even operate to his advantage if the market value at destination is less than the invoice value * * * the [invoice value] clause as here worded is not against public policy and should be given effect."
"The particular question [of invoice value] is not likely to again arise as the subject is now regulated by the Carriage of Goods by Sea Act, § 4(5), 46 U.S.C.A. § 1304(5)."
Three years after the Harry Culbreath decision, the same rule was announced by the Exchequer Court of Canada in a case arising under the English Carriage of Goods by Sea Act 1924. Nabob Foods Ltd. v. Cape Corso (owners), 1954 Lloyd's Law List Reports, Vol. II, p. 40. The case is persuasive authority since the pertinent parts of the English and American statutes are identical, both having been derived from the Brussels Convention of 1924. In addition, the Canadian Court reached its decision largely on the basis of American cases construing Cogsa, there being no English or Canadian cases in point.
"8. Any clause, covenant or agreement in a contract of carriage relieving the carrier or the ship from liability for loss or damage to or in connection with goods arising from negligence, fault or failure in the duties and obligations provided in this article or lessening such liability otherwise than as provided in these Rules shall be null and void and of no effect." 1954 Lloyd's Law List Reports, Vol. II, p. 41.
"But all that aside and apart from authority, looking at Clause 9 of our Bill of Lading, I find it impossible to say that this clause is not directed to liability; and, moreover, is not a clause that in this particular case lessens liability. As I have pointed out, except under special agreement, liability is for the arrived sound market value. It may be, though, I need not decide the point, that if this Bill of Lading declared that the arrived sound market value was to be taken at £900, that would govern, even though I might conclude that the real market value was £1000. However, this Clause 9 does not say anything like that. It purports to substitute for the arrived market value something entirely different; in other words, an entirely new measure of damages for the common law measure. In this case that measure lessens the carrier's liability, and so in my view the clause cannot be given effect to."
"* * * whereby the obligations of the master, officers, agents, or servants to carefully handle and stow her cargo and to care for and properly deliver same, shall in any wise be lessened, weakened, or avoided."
What Cogsa is additionally concerned with is the liability for damages which arises after the obligation to carry safely is breached.
"* * * shall issue a bill of lading and shall be liable to the lawful holder of it `for any loss, damage, or injury to such property * * * and no contract, receipt, rule, regulation, or other limitation of any character whatsoever, shall exempt such common carrier * * * from the liability hereby imposed' and further that the carrier `shall be liable * * * for the full actual loss, damage, or injury * * * notwithstanding any limitation of liability or limitation of the amount or recovery or representation or agreement as to value in any such receipt or bill of lading * * *" Chicago, M. & St. P. Ry. Co. v. McCaull-Dinsmore Co., 253 U.S. 97, 99, 40 S. Ct. 504, 64 L. Ed. 801.
The bill of lading provision was that "the amount of any loss or damage for which any carrier is liable shall be computed on the basis of the value of the property at the place and time of shipment under this bill of lading, including freight charges, if paid." The District Court held that the phrase "liable * * * for the full actual loss, damage or injury" meant the liability as at common law based on the value at destination and held the value at place of shipment clause was invalid. McCaull-Dinsmore Co. v. Chicago, M. & St. P. Ry. Co., D.C., 252 F. 664, 666. The judgment was affirmed by the Court of Appeals in 8 Cir., 260 F. 835 and by the Supreme Court in 253 U.S. 97, 40 S. Ct. 504, 64 L. Ed. 801.

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