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December 10, 1951

J. C. PENNEY CO., Inc.

The opinion of the court was delivered by: GODDARD

This is a suit in admiralty brought by J. C. Penney Company, Inc., against the American Express Company, Inc. (hereinafter called Express Company), American Export Lines, Inc. (hereinafter called Export Lines), and the Steamship Exchange for damages to 14 cases of mixed rayon and cotton tapestry fabrics on a voyage from Genoa, Italy, to Boston and New York City.

Respondent Export Lines owned and operated the Exchange during the voyage in which we are interested.

Respondent Express Company owns all of the stock of an Italian corporation known as American Express Company, S.A.I., and is a wholly owned subsidiary of American Express Company, a New York unincorporated association. Each of these companies had something to do with the shipment here involved. For the purposes of the present action only, it has been stipulated that they are to be treated as though they were one.

 Since 1940 the Express Company has acted for libelant in arranging abroad for the transportation, loading, and clearance through outgoing customs, etc., of shipments of goods bought abroad by libelant from foreign concerns.

 Libelant purchased the cases of fabrics from Molteni & Figli, Nibionno, Italy, for importation to St. Louis under a contract of sale by which Molteni was required to deliver the goods to respondent Express Company or its correspondent forwarding agents, who were to act for libelant in dispatching the cases. They were part of a large purchase that was divided into four partial shipments. The shipment with which we are concerned was the second shipment.

 After securing from respondent Express Company a quotation of the then current ocean freight rates applying to such shipments, libelant sent shipping directions to Molteni & Figli requesting shipment via the services of the Express Company.

 On September 6, 1946, Molteni turned over to its forwarding agent, Vio & C. of Monza, Italy, its first partial shipment under the contract. This shipment is not the shipment involved in the present action. In accordance with arrangements previously made by American Express Company, Vio forwarded the goods to Vesin, who was respondent Express Company's port correspondent in Genoa. Vesin arranged the clearance of the shipment through outgoing customs and the loading of the shipment on board an Export Lines steamship, the Explorer. The Explorer issued a set of on-board bills of lading covering the shipment, which were turned over to Vio by Vesin. The bills of lading, Molteni's draft and other documents required by the letter of credit, which had been issued by the Chase Bank in New York, were presented to the Italian correspondent bank in Monza. The latter bank negotiated the draft and airmailed the draft and documents to the Chase Bank, which paid the draft and transmitted the documents to libelant prior to October 9, 1946, the date of arrival of the shipment. On October 14, 1946, libelant mailed the bills of lading to American Express Company in New York, requesting it to arrange the shipment of the goods In Bond from New York to St. Louis.

 On September 20, 1946, American Express Company wrote to libelant and suggested that libelant have its letter of credit amended to stipulate that payment would be made against American Express Company through bill of lading, evidencing shipment of the merchandise from Italy to St. Louis via either New York or Boston. The reasons given for suggesting this change were that ' * * * when a shipment is covered by an American Express Company through bill of lading, our Milan office consign the shipments on the ocean bill of lading direct to the American Express Company at U.S. Port of arrival and they send to us the original ocean bill of lading which enables us to make the In Bond entry and arranged the reforwarding to St. Louis upon arrival of the steamer, and delivery in St. Louis is made against surrender of the original through bill of lading issued by the American Express Company properly endorsed. * * *

 'When there is an available sailing from Italian port to Boston, it is more advantageous to use this route as no cartage charges are incurred at Boston whereas such charges are incurred at New York.'

 Libelant made the suggested change and wrote the Express Company- 'We trust this arrangement will facilitate and expedite the handling of these shipments for our account.'

 On November 9, 1946, Molteni delivered to its forwarder, Vio, the second partial shipment (which is the one with which we are concerned). Vio delivered the goods to Vesin, Express Company's correspondent in Genoa, who then booked space for the shipment on Export Lines' steamship Exchange, arranged for the loading of the goods on board, cleared the shipment through Italian port formalities, and procured the issuance of the Export Lines' on-board bill of lading. On November 16, 1946, the 14 cases of fabrics were received on board the Exchange at Genoa, and stowed in No. 1 'tween deck.

 On November 19, 1946, American Express issued at Milan American Express bills of lading in duplicate and mailed them to Molteni. These bills were presented to the Italian Bank with Molteni's draft and were then forwarded to the Chase Bank in New York. After the draft had reached New York and had been presented and paid, but prior to the arrival of the Exchange in New York, the Chase Bank delivered to the American Express bills of lading to libelant.

 When the hatch was opened after the arrival of the Exchange on December 8, 1946 at New York, the cases of fabrics were found to have been damaged by sea water.

 Libelant was the owner of the goods at all times material to this action. The shipment was in good order and condition when delivered to the Steamship Exchange at Genoa. The fourteen cases were stowed in No. 1 upper 'tween deck, and the damage occurred on the ...

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