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May 27, 1977.

UNIROYAL, INC., Defendant.

The opinion of the court was delivered by: BRIEANT


BRIEANT, District Judge.

 By its complaint filed July 30, 1975, plaintiff Koninklijke Nedlloyd ("Nedlloyd"), an ocean carrier, seeks to recover $2,350.15 in freight charges for the transportation of four shipments of cargo owned by the defendant, Uniroyal, Inc. ("Uniroyal") from New York to various ports in the Persian Gulf. Uniroyal asserts that it paid all sums now claimed by plaintiff to Eastern Cargo Forwarders, Inc. ("Eastern"), an ocean freight forwarder, and that Eastern failed to remit these sums to the plaintiff. Eastern is presently in bankruptcy, and the carrier now seeks to hold the shipper liable for these freight charges.

 The Court has subject matter jurisdiction pursuant to 28 U.S.C. § 1333. A non-jury trial was held before me on November 16, 1976. Post-trial briefs have been submitted and considered.

 The Parties

 Plaintiff Nedlloyd is a foreign corporation organized under and existing by virtue of the laws of the Kingdom of the Netherlands. It owns and operates ocean-going vessels which are engaged in the carriage of cargo in the foreign commerce of the United States. Plaintiff is a member of the "8900" Lines Conference, which establishes rules, regulations, and rates for its member carriers, all of whom transport cargo from the Port of New York and the other Atlantic and Gulf Coast ports to ports in the Persian Gulf. Nedlloyd Lines, Inc. is plaintiff's general agent in the Port of New York.

 Defendant Uniroyal is a corporation organized under the laws of the State of New Jersey and is a major producer of tires and chemicals. During 1973 and 1974, Uniroyal exported approximately 5,000 to 6,000 separate shipments each year from the East and Gulf Coast ports of the United States, and it paid various carriers over $500,000.00 in freight charges each year.

 While not a party to the lawsuit, Eastern's activities should be described. It was the freight forwarder employed exclusively by Uniroyal on all outbound shipments from the Port of New York from 1968 until September 1974.Approximately 50 to 60% of Eastern's gross income was derived from services in connection with the Uniroyal account, described below.


 Familiarity is assumed with the uncontested facts which have been stipulated to in the Amended Pre-Trial Order, signed November 16, 1976. On June 20, 1967, Uniroyal entered into a "Shipper's Credit Agreement" with the "8900" Lines Conference. This agreement gave member carriers of the Conference such as Nedlloyd permission to extend credit to Uniroyal or its freight forwarder for freight charges for a period of fifteen (15) business days following departure of the carrying vessel. Without such an agreement the freight charges would be payable upon issuance of Nedlloyd's freight invoice (or Due Bill) at the time the Bill of Lading is released.

 Unlike many shippers, Uniroyal would book space directly on Nedlloyd's vessels, and would also arrange for all of the inland transportation from plant to pier. These are services which may be performed by a freight forwarder, but Uniroyal's practice was to have its own Traffic Department attend to such matters. However, Uniroyal did contract with Eastern to have the latter prepare all of the documentation, including bills of lading, dock receipts, customs declarations, consular invoices and any necessary banking documents. The Bill of Lading would be drawn up by Eastern from the information supplied by Uniroyal, and would then be carried by Eastern to Nedlloyd's general agent in New York. The agent would check the bill against the cargo lifted by the ship, and the Bill of Lading would then be issued, assigned a serial number and released to Eastern's messenger after he had initialed the Due Bill covering the freight charge.

 For its services, Eastern was paid a flat fee per shipment. It billed Uniroyal for this service charge, and for the freight which, as noted, under the terms of the Credit Agreement was due to Nedlloyd fifteen (15) business days after sailing.

 Under normal circumstances, in accordance with a custom or practice which developed, Uniroyal did not put Eastern in funds until well after the fifteen (15) days had run. Prior to 1974, Eastern on occasion would advance funds to cover the freight charges, although its general practice was to make a payment to the carriers by its own check only after it had received payment from Uniroyal.

 In early 1974 Eastern began to have cash flow problems. It began to delay payments to the carriers well beyond the time when Uniroyal remitted funds. What is more, specific payments no longer corresponded with whether or not Uniroyal had paid a particular Eastern bill, but depended on which carrier was the loudest in its demands for funds.

 For example, on March 7, 1974, Nedlloyd carried a shipment of defendant's goods from New York to Bahrain. Nedlloyd apparently was not one of those carriers which complained most vigorously over Eastern's late payments. By late May or early June with this freight invoice still unpaid, Mr. Freeley, the freight cashier learned from rumor "on the street" that Eastern might be in some financial difficulties. He asked his supervisor for, and apparently received, permission to contact Uniroyal to inform it that Eastern was delinquent. It is not clear that Uniroyal ever actually learned of Eastern's dilatory actions with respect to the March shipment, because soon thereafter, Mr. Freeley suffered a heart attack and was away from work for seven weeks. Eastern finally paid the freight on the March invoice on June 10, 1974, well after the authorized fifteen (15) business day payment period had expired.

 The four shipments concerned in this action were made in May, June and July of 1974, substantially in accordance with the procedure outlined above. On May 24th, Nedlloyd issued Bœ 0626 covering the carriage of 26 cartons of tubes to Kuwait on board the NEDER EEMS. The freight invoice was $72.13. On June 11th the plaintiff issued and released Bœ 5015 and Bœ 0529, the former covering 15 truck tires, and the latter 85 other tires with 316 cartons of tubes for shipment aboard the MISSISSIPPI LLOYD to Qatar and Bahrain. The freight invoices issued in connection with the June 11th bills were $72.63 and $1,140.20, respectively. Finally, Bœ 0024 dated July 17, 1974 covered the carriage of 58 cartons of batteries on board the MERSEY LLOYD to Abu Dahbi. The freight charge was $1,065.19, making a total for all four shipments of $2,350.15.

 On all of the Bills of Lading and freight invoices, Uniroyal was listed as the shipper and Eastern was stated to be the forwarder. However, Eastern was carried in Nedlloyd's accounts receivable records as the payor or debtor on these invoices. Each Bill of Lading contained the legend "Freight to be Prepaid". Because Uniroyal had signed the Shipper's Credit Agreement permitting the carrier to extend credit to the shipper or to the forwarder, Nedlloyd issued and released the ...

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