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Du Pont De Nemours International S.A. and E. I. Du Pont De Nemours & Co. v. Mormacvega

January 7, 1974

DU PONT DE NEMOURS INTERNATIONAL S.A. AND E. I. DU PONT DE NEMOURS & CO., INC., PLAINTIFFS-APPELLANTS,
v.
S.S. MORMACVEGA, HER ENGINES, BOILERS, ETC., AND MOORE-MCCORMACK LINES, INC., DEFENDANTS-APPELLEES.



Appeal by shipper and consignee of synthetic resin liquid from judgment for cargo loss entered in their favor in the Southern District of New York, Charles L. Brieant, Jr., District Judge, to the extent that the judgment limited their recovery against ocean carrier to $500 per package pursuant to a limitation of liability clause in the ocean carrier's bill of lading as authorized by COGSA. Affirmed.

Author: Timbers

Before: HAYS, FEINBERG and TIMBERS, Circuit Judges.

TIMBERS, Circuit Judge:

Once again we have before us for construction the $500 per package limitation of liability clause of Moore-McCormack's ocean carrier bill of lading as authorized by COGSA. This time the issue presented - apparently one of first impression - is whether the stowage of a container on the deck of a modern containerized cargo vessel pursuant to a clean bill of lading, absent a contractual provision or a universal custom to the contrary, constitutes an "unreasonable deviation" from the contract of carriage so as to deprive the carrier of its limitation of liability provided for in the bill of lading. The district court held that it did not. We agree. We affirm.

I.

The action below, invoking the admiralty and maritime jurisdiction of the district court, was commenced July 30, 1968. It was brought by E. I. Du Pont de Nemours & Co., Inc. and Du Pont de Nemours International, S.A. (Du Pont), the shipper and consignee, respectively. They sued Moore-McCormack Lines, Inc. (Mormac) and the S.S. Mormacvega. Mormac is the carrier that owned and operated the Mormacvega. Du Pont sought to recover $109,966.18 damages for the loss overboard at sea of an ocean shipping container of 38 pallets of a synthetic resin liquid known as "Teflon". After a bench trial at which Mormac in effect admitted liability but relied on the limitation of liability provision in its bill of lading, a judgment was entered on November 28, 1972 in the Southern District of New York, Charles L. Brieant, Jr., District Judge, awarding Du Pont $19,000 plus interest from May 6, 1967. Du Pont now appeals from the judgment in its favor to the extent that it limited the shipper's recovery against the carrier to $500 per package pursuant to the limitation of liability clause in the bill of lading as authorized by Section 4(5) of the Carriage of Goods by Sea Act (COGSA), 46 U.S.C. ยง 1304(5) (1970).

The facts as found by the district court may be briefly summarized. In April 1967, Du Pont booked cargo for two 40 foot ocean shipping containers on the Mormacvega bound from New York to Rotterdam. The containers were delivered on April 28 by Du Pont's freight forwarding agent to Mormac's stevedoring department at a pier in New York. Mormac issued a clean bill of lading. The vessel sailed from New York for Europe on April 30. Unknown to Du Pont, the containers were stowed on the Mormacvega's deck in the area of her No. 5 hatch. At about midnight on May 5/6, 1967, one of the containers of 38 pallets of "Teflon" was lost overboard at sea.

The Mormacvega was built in 1964 as one of the "Constellation" class of vessels intended for the carriage of general cargo. Stowage was determined on what is commonly known as a "break-bulk" basis, i.e. various units of freight were received from the shipper and stowed by Mormac with such dunnage as the situation warranted.

In 1966 the Mormacvega was reconstructed, refitted and converted into a combination "break-bulk" and containerized cargo vessel. At that time containerized shipping, although still in an embryonic stage, was gaining acceptance in the North Atlantic trade.*fn1 Substantial structural changes were made in Mormacvega to permit on deck stowage of ocean shipping containers. These modifications included installation of a flume tank stabilization system to dampen the vessel's roll, modification and strengthening of the hatches and installation on deck of support pedestals and related fittings which permitted stowage and lashing of containers three tiers high.*fn2

As a result, the Mormacvega in effect was converted into a new vessel fitted in all material respects as if she originally had been designed and constructed as a combination cargo ship. Following her reconstruction, the Mormacvega was surveyed by the American Bureau of Shipping. Its inspection report indicated that the conversion was accomplished in a workmanlike manner and that it was effective for the safe carriage of ocean shipping containers on deck.

The Mormacvega was equipped to carry approximately 135 "forty foot equivalent" containers,*fn3 i.e. containers measuring 40 feet in length, 8 feet in height and 8 feet in width. The conversion contemplated that most of these would be stowed on deck. There was space in the hold, however, to accommodate the equivalent of approximately 35 containers.

To determine whether a particular container would be stowed on or below deck, a procedure dictated primarily by the practical necessities of the trade and to some extent by chance was used. If there was a large amount of break-bulk cargo, few if any containers would be stowed below. If the break-bulk cargo permitted container stowage in the hold, Mormac considered other factors in determining container placements. Whenever possible, depending on the port of call at which a given container was to be unloaded and the time of its delivery for onloading, heavier containers were stowed below to maintain optimum stability of the vessel. Containers with flammable or explosive materials generally were stowed on deck. Cargo which was likely to suffer from exposure to the elements was stowed below to the extent possible. Cargo which was delivered to the pier after the loading process had begun of necessity was stowed on deck.

In view of this procedure and the fact that cargo often was received at the pier before a complete stowage plan had been formulated or after initial placements made change impractical, it was impossible for Mormac to determine with any degree of certainty where a given container would be stowed. For this reason, it was Mormac's practice, and that of other carriers, to issue clean bills of lading to shippers even when it was possible or likely that a given container would be stowed on deck. This was so even when a shipper had made a specific request for below deck stowage.*fn4 It was therefore consistent with ...


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