Opinion ID: 381814
Heading Depth: 2
Heading Rank: 3

Heading: Events In Mobile: Part I

Text: 17 While the flour was in the State Docks warehouses, ADM employed Superintendence, Inc., to sample and test-weigh the flour and to prepare Certificates of Quality which ADM needed to collect payment of the purchase price. One of the tests employed by Superintendence involved taking a small amount 10 of grain out of 2% of the bags, by means of a grain probe. The grain samples were then sent to Superintendence laboratories for testing. 18 On September 19, 1974, Stevenson presented the M/V Arizona for loading at Mobile. Loading began the following morning. A second Stevenson vessel, the M/V Southwall, began loading three days later, on September 23. In preparation for these loadings, Superintendence took, between September 4 and September 20, 1974, samples of the flour intended for the ships. As each sample was drawn, it was sent to a Superintendence laboratory to be analyzed. However, none of the samples were analyzed until September 24, several days after loading of the ships had begun. Although during loading, no one observed any apparent infestation of the flour, id. at 96, late on September 24, Superintendence's laboratory announced that it had found evidence of live internal infestation by flour beetles in 36 and 1/2 railcar lots, 19 of which had already been loaded. Stevenson immediately declared a temporary halt to the loading. At that point, the Southwall was almost completely loaded while the Arizona was considerably less complete, perhaps only half-loaded. 19 A number of conversations between agents of Stevenson, of ADM, St. John personnel (representing Bolivia), and Superintendence, among others, ensued. ADM instructed Superintendence to fumigate the 17 and 1/2 infested lots which had not been loaded and to hold those lots in the warehouses until the next shipment. Nothing was agreed concerning the 19 infested lots aboard the ships, however. Stevenson resumed loading of the ships, with apparently clean flour, but also decided that on board fumigation of the flour would be necessary before the ships sailed. During these events, the various parties or their agents were in nearly continuous communication with one another, both orally and by telex, concerning the infestation discovered, fumigation, and related matters. On September 26, the Southwall (with 5 and 1/2 of approximately 37 lots known to be infested) was fumigated. The next day, the Arizona (with 13 and 1/2 of approximately 90 lots known to be infested) was similarly fumigated. 20 One important subject of the discussions between the parties during this period concerned the extent to which the on board bills of lading should be claused by Stevenson. In order for ADM to collect its purchase price and Stevenson its freight under their respective irrevocable letters of credit, Stevenson had to issue clean bills of lading-bills of lading declaring the shipments in apparent good order and condition. 11 Stevenson's first inclination was to clause the bills of lading to indicate live infestation of the flour. Even after fumigation of the ships, Stevenson initially took the position that it could not issue clean bills of lading unless ADM provided Stevenson with a letter of indemnity holding Stevenson harmless. ADM refused, however, reiterating that it had delivered only good, clean flour to Mobile and was not in any way responsible for the infested flour. Subsequently, Stevenson obtained a report from the fumigating company indicating that all infestation had been killed. ADM, moreover, assured Stevenson that flour containing dead infestation met the contracts' specifications. Consequently, after informing the parties or their agents of those developments, Stevenson released clean bills of lading for the Arizona and Southwall cargoes. On September 30, 1974, the ships set sail for South America. Shortly thereafter, ADM received its purchase price and Stevenson its freight under their respective letters of credit.