Court Opinion

ID: 9418545
Source: CourtListenerOpinion
Date Created: 2023-08-02 22:30:26.853846+00
Date Added: 2024-06-11T17:22:05.281392
License: Public Domain

Mb. Justice Sutherland,
dissenting.
I am. unable to agree with the opinion just delivered. It seems to- be conceded, but in any event I think it must be conceded, that if the bills of lading had contained a'recital that the merchandise was received in good condition the ship would have been estopped from asserting that in fact it was in bad condition. Higgins v. Anglo-Algerian S. S. Co,, 248 Fed. 386. Here, I think, the circumstances are such as to make the omission of a recital *274upon the subject the equivalent of a statement of good condition.
The shipment was accepted and the bills of lading issued by the ship’s agent1 who testified that he was aware of the bad condition of the merchandise and that the letters of guarantee were taken with the-understanding that no notation to. that effect would be made on the bills. They were what are known as “ clean bills,” which meant, in this case at least, according to the evidence, bills which “ a banker will accept and attach to a draft and on which he will make payment against a letter of credit, and which indicates that the merchandise was in good condition when it was received from [by] the steamship company.” Without going into detail, I think it is fairly to be deduced from the evidence that the usages of the trade required a notation, and the evidence is clear that a notation of bad condition would have been made except for the letters of guarantee. The master of the Panay testified: “ If a letter of guarantee is given me relieving me or the ship of all responsibility, as was done *275in this case, no notation will be put on the bill of lading, but if there is no letter of guarantee given, then a notation will be put on the bill of lading.”
Consignees had instructed their bankers in Spain to pay the purchase price of the goods only upon presentation of clean bills of lading, and there is evidence to the effect that if bills are issued with a notation of bad condition they will not be accepted by insurance companies or bankers in Spain, but if such note be omitted they will pass, upon the assumption that the goods have been shipped in apparent good order and condition. Upon this assumption, the bills were passed and payment made. Under these circumstances, the omission of the notation in respect of .the condition of the . goods was nothing short of a suppression of the truth in order to further the fraudulent designs of the shippers. Upon every principle of fair •dealing it should be regarded as the equivalent of a false notation of. good condition which the ship is estopped to deny as Against the claims of the consignees who relied upon it. To hold otherwise is to permit the wrongdoer , to take advantage of his own misconduct, which a court 'of admiralty cannot allow with due regard for those equitable principles by which it is governed.
I am authorized, to' say that .the Chief Justice and Me. Justice Yan Devanter concur in this dissent.

 Section 4 of the Harter Act makes it the duty of the owner, master or agent of the vessel to issue a bill of lading. The bills of lading recite that the merchandise in questioiuhas been shipped on “the Spanish steamer Isla de Panay’band purport to be issued by the “Agent of the Steamer.” The agent at Seville who issued the bills, in one plg-ce calls himself an agent of-/the company and in 'another place speaks of “ this agency for the S. S. Isla" de Panay.” The fact is that the question of agency was not seriously in issue in the trial court, and the statements in the evidence relating thereto were njore or- less casual, -/but enough appears to make it clear to my mind that the relation of .agent to the ship was fairly established. A point is made of the fact'that the bills of lading were delivered 'at Seville while the merchandise was delivered to the Panay at' Cadiz..- But delivery of the merchandise at Seville to the small steamer belonging to the same owner, for the sole purpose of transshipment,/was in effect a delivery to. the Panay. Bulkl'ey v. Naumkeag- Steam Cotton, Co., 24 How. 386; The City of Alexandria, 28 Fed. 202, 205-206.