Appeals by shippers of woolen piece goods from judgment for cargo damage in their favor entered in the Southern District of New York, Kevin T. Duffy, District Judge, to the extent the judgment limited shippers' recovery against independent contractor of stevedore to $500 per package pursuant to a limitation of liability clause in the ocean carriers' bills of lading. Reversed and remanded.
Feinberg, Timbers and Van Graafeiland, Circuit Judges.
The contract provision to be construed on this appeal is no stranger to this Court. It is the $500 per package limitation of liability clause in the ocean carriers' bills of lading.
The issue arises this time on appeals by shippers from a judgment for cargo damage in their favor entered September 3, 1974 in the Southern District of New York, Kevin T. Duffy, District Judge, to the extent the judgment limited the shippers' recovery against an independent contractor of a stevedore to $500 per package pursuant to the limitation of liability clause in the ocean carriers' bills of lading. The district court held that the stevedore's independent contractor whose negligence caused the damage was entitled to the benefit of the limitation on the carriers' liability provided for in the bills of lading.
We hold that the independent contractor was not entitled to that limitation since it was not a beneficiary under the limitation of liability clause. Accordingly, we reverse and remand for entry of a new judgment in favor of the shippers without regard to the limitation clause in the bills of lading.
Cutting through the procedural morass that has nothing to do with the issue to be determined on this appeal, the relevant facts are simple, straightforward and essentially undisputed.
On July 27, 1970, the S.S. Tosaharu Maru tied up at Pier 6 in Brooklyn. It was owned by Yamashita-Shinnihon Steamship Co., Ltd. (the carrier). It had come from Japan. Its cargo consisted of woolen piece goods, in bales and cartons, consigned to the shippers, Toyomenka, Inc. (Toyomenka), Marubeni-Iida (America), Inc., and Murilspun, Ltd. (the latter two shippers referred to as Marubeni). All but one of the bales and cartons*fn1 were unloaded by the stevedore, International Terminal Operating Co., Inc. (ITO), pursuant to its contract with the carrier. The bales and cartons were placed in the bale area of the Pier 6 shed.
ITO had contracted with McRoberts Protective Agency (McRoberts) to guard the bales and cartons against being stolen or mislaid while they were in the pier shed awaiting delivery. The 42 bales and cartons here involved were found to be missing after they had been unloaded and placed in the pier shed.
In February and March 1971, the shippers, invoking the admiralty and maritime jurisdiction of the district court, commenced two cargo damage actions against the carrier, claiming non-delivery of the cargo of woolen piece goods.*fn2 The carrier in turn impleaded ITO and McRoberts in third-party complaints in each action, claiming indemnification on the ground that the loss was caused by negligence arising from a breach on the part of ITO and McRoberts of their warranties that the stevedoring and related terminal services would be performed in a workmanlike manner.*fn3 The pleadings in due course were closed.*fn4 The consolidated actions proceeded to trial.
On September 3, 1974, the court filed a memorandum of decision holding the carrier liable to the shippers but limiting the carrier's liability to $500 per package pursuant to the bills of lading. It directed entry of judgment in favor of Toyomenka in amount of $14,000 ($500 for each of 28 packages) and in favor of Marubeni in amount of $7,500 ($500 for each of 15 packages). It granted indemnification to the carrier against McRoberts in amount of $21,000, since it found that the loss of the bales and cartons*fn5 resulted from McRoberts' failure properly to guard them while they were in the pier shed awaiting delivery.*fn6
The shippers appeal only to the extent that the judgment limits their recovery to $500 per package. On this appeal there is no issue with respect to the carrier's duty to deliver the cargo which had been consigned to the shippers, nor with respect to the carrier's limitation of liability to $500 per package under the bills of lading, nor with respect to the finding that the loss of the cargo in question resulted from McRoberts' negligence. The sole issue before us is the correctness of the court's holding that the shippers' ...