The opinion of the court was delivered by: BONSAL
Plaintiff, the owner of an electric generator, brings an action in admiralty against defendant, the owner of the S.S. MORMACOAK, for damage to the generator when it was dropped during discharge from the vessel in Fortaleza, Brazil, and fell into the sea.
Defendant contends: (1) that the damage to the generator was the result of one of the causes enumerated in § 4(2) of the Carriage of Goods by Sea Act ("COGSA"), 46 U.S.C. § 1304(2) for which defendant is not liable; and (2) that the liability, if any, of defendant is limited to $500 pursuant to § 4(5) of COGSA, 46 U.S.C. § 1304(5).
By agreement between the parties, the issue of limitation of any liability was first tried to the court, defendant indicating that it would concede liability in the event the court held that its liability was limited to $500.
It appears from the stipulation of the facts that on or about June 23, 1964, the defendant received the generator, one of two which along with a control unit comprised a power plant, in apparent good order and condition at its Brooklyn, New York terminal, for carriage to Fortaleza, Brazil. A dock receipt issued on plaintiff's letterhead included the following handwritten entries:
No. and Kind of Package Said to Contain
3 Pieces One Power Plant Consisting of
(2) Generator Units
(1) Control Unit
Thereafter, on June 23, 1964, defendant issued its on deck bill of lading, No. 6, evidencing the contract of carriage between the parties. The bill of lading included the following entries:
No. of Pkgs. Shipper's Description of Packages and Goods
3 Pieces One Power Plant Consisting of:
(2) Generator Units
(1) Control Unit
The power plant was loaded on board the S.S. MORMACOAK, the 2 generators being stowed on deck. Each generator was enclosed in a metal housing and was mounted on a steel base. Plaintiff's "specifications" for the power plant state that "the generating unit is mounted on a fabricated rolled steel base with provisions for lifting and jacking and is enclosed in a sound-insulated, weatherproof steel enclosure."
Freight was paid for the entire shipment on the following basis:
Berth term rate $ 24,750.00
Surcharge at $8.00 per ton w/m 2,500.20
Total freight paid $ 27,250.20
The vessel arrived at Fortaleza on July 7, 1964 and proceeded to discharge the power plant. One of the two generators was discharged without incident. However, while the second generator was being discharged by use of the ship's gear, it fell into the sea causing damage in excess of $500.
Issues presented are: whether the generator was a "package," or, if not, whether the power plant was a "customary freight unit" within the meaning of § 4(5) of COGSA, which provides:
"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 * * * or in the case of goods not shipped in packages, per customary freight unit * * * unless the nature and value of such goods have been declared by the shipper before shipment and inserted in the bill of lading."
COGSA does not apply ex proprio vigore to the carriage of "cargo which by the contract of carriage is stated as being carried on deck and is so carried." § 1(c) of COGSA, 46 U.S.C. § 1301(c); Pannell v. The S.S. American Flyer, 157 F. Supp. 422 (S.D.N.Y. 1957), modified on other grounds sub nom., Pannell v. United States Lines Company, 263 F.2d 497 (2d Cir.), cert. denied, 359 U.S. 1013, 79 S. Ct. 1151, 3 L. Ed. 2d 1037 (1959). However, its terms are incorporated by reference in clause 6 of the bill of lading, which provided:
"6. In respect of goods carried on deck and stated herein to be so carried, all risks of loss or damage inherent in such carriage, shall be borne by the shipper and consignee but in all other respects shall be governed by the terms of this bill of lading and the provisions stated in the United States Carriage of Goods by Sea Act, 1936, notwithstanding Sec. 1(c) thereof."
In view of Clause 6, the provisions of COGSA became part of the contract evidenced by the bill of lading. Pannell v. United States Lines Company, supra at 498.
Clause 13 of the bill of lading provided:
"13. In case of any loss or damage to or in connection with goods exceeding in actual value $500 * * * per package, or, in the case of goods not shipped in packages, per customary freight unit, the value of the goods shall be deemed to be $500 per package or per unit, on which basis the freight is adjusted and the carrier's liability in any capacity, if any, shall be determined on a value of $500 per package or per customary freight unit, unless the nature of the goods and a valuation higher than $500 shall have been declared in writing by the shipper upon delivery to the carrier and inserted in this bill of lading and extra freight paid if required * * *."
Since no higher value was declared by the plaintiff, defendant is entitled to limitation of liability to $500 if the generator constituted a "package" or if the power plant of which the ...