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VAN EKRIS & STOETT, INC. v. S.S. RIO PARAGUAY

November 1, 1983

VAN EKRIS & STOETT, INC., and MARSHALL COFFEE DIVISION OF BALFOUR MACLAINE INTERNATIONAL, Plaintiffs, against S.S. RIO PARAGUAY, S.S. RIO OLIVIA, their engines, boilers, etc., ITAYPYTE S.P.L. and EMPRESA LINEAS MARITIMAS ARGENTINAS S.A., Defendants.


The opinion of the court was delivered by: LEVAL

OPINION AND ORDER

PIERRE N. LEVAL, U.S.D.J.

 This is an action by a purchaser and consignee of goods against the ocean carrier Empresa Lineas Maritimas Argentinas S.A. (ELMA), based on ELMA's bills of lading. The parties have stipulated to bifurcated trial of certain issues upon submitted documents and proofs. The question submitted for adjudication is whether an exculpatory clause in ELMA's bills of lading exempted ELMA from liability for damage that occurred before the cargo came into ELMA's actual possession. This opinion constitutes the court's finding of fact and conclusions of law on that issue.

 I. Facts

 On or about June 15, 1979, the plaintiffs contracted with Salvador Benega Mendoza (the shipper) of Asuncion, Paraguy to purchase ten shipments of coffee totaling 8,500 bags. Purchase was on C & F basis, which requires the buyer to pay upon presentation of documents showing that the goods have been placed in the hands of a carrier for prepaid shipment to the purchaser. The coffee was to be shipped from Asuncion to New York or New Orleans. Each of the shipments was covered by an irrevocable letter of credit which expressly permitted transshipment at Buenos Aires and was payable upon the presentation of certain documents including clean on board ocean bills of lading. Each letter of credit was by its terms subject to the Uniform Customs and Practice for Documentary Credit, International Chamber of Commerce Publication No. 290 (1974 Revision).

 Mendoza arranged for the coffee to be shipped from Asuncion to Buenos Aires on a river craft, the Rio Paraguay, owned by Itaypyte S.P.L., a Paraguayan entity, which is not subject to jurisdiction here. Itaypyte issued clean bills of lading. Mendoza arranged with Paramundo, ELMA's agent in Asuncion, for transportation by ELMA from Buenos Aires to New York. While the cargo was on its way from Asuncion to Buenos Aires aboard the Rio Paraguy, Mendoze delivered to Paramundo Itaypyte's bills of lading for the river trip from Asuncion to Buenos Aires and Paramundo issued to Mendoza ELMA's bills of lading covering carriage from Asuncion to New York.

 ELMA's bills of lading issued by Paramundo contained a number of pertinent provisions and notations. *fn1" The terms of carriage began as follows:

 Received from the shipper, by Empresa Lineas Maritimas Argentinas . . . the goods . . . herein mentioned, in apparent good order and condition . . . to be transported to the port of discharge named herein. . . ."

 The vessel named at the head of the bills was the "Rio Gualeguay or substitute," and freight was shown as paid for both Asuncion to Buenos Aires and Buenos Aires to New York. Under the heading "Description of the Merchandise" was printed "Received on Board". The particulars of the cargo were typed in below, followed by this typewritten note:

 Note: Merchandise loaded in Asuncion, Paraguay on board the vessel Rio Paraguay to be transshipped in Buenos Aires to the vessel Rio Gualeguay or substitute. The bills were executed at the bottom by the stamp and signature of ELMA.

 The bills were executed at the bottom by the stamp and signature of ELMA. The terms of carriage written on the reverse included Clause 16 "Through Cargo and Transshipment":

 In case the carrier issues a bill of lading covering transportation by a local or other carrier prior to the goods being delivered to or put into the physical custody of the carrier, it shall not be under any responsibility of liability whatsoever for any loss or damage to the goods occurring prior to or until the actual receipt or custody of the goods by it at the port or place of transshipment. . . .

 The shipper Mendoza submitted plaintiff's ten letters of credit, together with ELMA's bills of lading, to his bank, which in turn presented them to the issuing banks. The issuing banks honored and paid the credits, charging plaintiff's account.

 When the Rio Paraguay arrived in Buenos Aires, water was found in the cargo hold. The cargo was discharged, tallied, segregated and recoopered, then transported to ELMA's warehouse and subsequently shipped to the plaintiffs. Of the 8,500 bags originally shipped, 4,173 bags of coffee were in good condition, 1,422 ...


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