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LEATHER'S BEST, INC. v. TIDEWATER TERMINAL

July 19, 1972

LEATHER'S BEST, INC., Plaintiff,
v.
TIDEWATER TERMINAL, INC., Defendant


Judd, District Judge.


The opinion of the court was delivered by: JUDD

FINDINGS, MEMORANDUM AND ORDER

JUDD, District Judge.

 The cause of action for damages against Tidewater Terminal, Inc. as bailee was tried by this court after remand by the Court of Appeals. 451 F.2d 800 (2d Cir. 1971).

 The case arose from the loss of a container of leather imported from Germany on the S.S. "Mormaclynx" of Moore-Mc-Cormack Lines, Inc. and unloaded onto the pier by stevedores. The terminal area at the pier was operated at the time by Tidewater Terminal, Inc., a wholly owned subsidiary of the shipowner. Tidewater was formed in 1966, after containers came into common use, and was dissolved in 1969 or earlier. The loss occurred between 10:00 a.m. on April 25, 1967 and 9:30 a.m. on April 27, when plaintiff's truckman came to pick up the container.

 After the original trial, the court found that the ship, the owner, and Tidewater were all negligent in the custody of the container and were liable for damages of $500 per bale for 99 bales of leather which had been in the container. The Court of Appeals reversed and remanded as to Tidewater on the ground that the proof of negligence against Tidewater was not adequate to sustain the holding. The Court of Appeals held that, since the loss of the container occurred on land, the claim against Tidewater was a state law claim for tortious conduct and was governed by rules different from those applicable to the maritime claim against the vessel and the owner.

 The Court of Appeals left open for consideration, if Tidewater was found liable, the further question whether it was entitled to the $500 per package limitation of liability which was set forth in the bill of lading.

 The Facts

 After the original trial, this court found the facts substantially as set forth in the Court of Appeals opinion (451 F.2d at 806):

 
The Mormaclynx arrived in Brooklyn on Saturday, April 25, 1967. The container, sealed and undamaged, was unloaded by stevedores and was placed in a large terminal area operated by Mooremac's wholly owned subsidiary, Tidewater Terminal, Inc. ("Tidewater") to await pick up by the shipper. The area was accessible through four gates. Two were open 24 hours a day, supposedly under the continuous supervision of watchmen. The other two were open only from 8:00 A.M. to 4:00 P.M. on weekdays and were similarly guarded at those times. At least one roving watchman was on duty to see that there were no unauthorized persons on the pier and that no one opened any container. Records were kept of all trucks entering and leaving the terminal area.
 
On Monday, April 27, the shipper's truckman arrived at 9:30 A.M. to pick up the container. It could not be located, although the delivery book at the pier had not been signed. The fence around the area bore no signs of tampering. Next day the police found the container empty, at Freeport, L.I., some 25 miles away. The goods have not been recovered, and the details of the theft have never been reconstructed.

 According to Tidewater procedure, a gateman looks at the gate pass and checks off the number of the container before any truck can leave the terminal.

 Review of the record and of the calendar now discloses that April 25, 1967 was in fact a Tuesday, and April 27th was a Thursday, so there was no weekend layover of the container. Moreover, the Delivery and Demurrage Record of Moore-McCormack Lines, Inc. (Universal Exhibit A at the original trial) indicates that the container was not discharged until April 26, 1967.

 The shipment was under a bill of lading which limited the liability of the carrier to $500 for each container, but which this court and the Court of Appeals construed to mean $500 for every package in the container by virtue of the Carriage of Goods by Sea Act, 46 U.S.C. ยงยง 1304(5) and 1303(8).

 The term "carrier" was defined in the bill of lading as follows:

 
[The] word "carrier" shall include the ship, her owner, operator, demise charterer, time charterer, master and any substituted carrier, whether acting as carrier or bailee, and all persons rendering services in connection with performance of this contract; . . .

 The bill of lading also states in paragraph 9:

 
All responsibility of the carrier in any capacity shall altogether cease and the goods shall be considered to be delivered, but subject to the carrier's lien, when put into possession of customs or other ...

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