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Berisford Metals Corp. v. Salvador

December 16, 1985

BERISFORD METALS CORPORATION, PLAINTIFF-APPELLANT-CROSS-APPELLEE,
v.
S/S SALVADOR, HER ENGINES, BOILERS, ETC., AND A/S IVARANS REDERI, DEFENDANTS-APPELLEES, CROSS-APPELLANTS



Appeal by plaintiff from an order of the Southern District of New York, Gerard L. Goettel, Judge, limiting the liability of the defendant carrier and its ship for loss of cargo to $500 per package under § 4(5) of the Carriage of Goods By Sea Act, 46 U.S.C. § 1304(5). Defendant carrier and its ship cross-appeal from the denial of their request that the action be dismissed. The order is reversed and the case is remanded with directions to enter judgment for the full amount of plaintiff's loss.

Author: Mansfield

MANSFIELD, Circuit Judge:

Berisford Metals Corporation (Berisford), plaintiff in this cargo-loss action, appeals from an order and judgment of the Southern District of New York, Gerard L. Goettel, Judge, granting its motion for summary judgment against the ship S/S Salvador and A/S Ivarans Rederi (Ivarans), its owner and operator, for loss of 70 bundles of tin ingots valued at $483,214.90 but applying the limitation of liability provisions of § 4(5) of the Carriage of Goods by Sea Act, 46 U.S.C. § 1304(5)*fn1 (COGSA), to limit the defendants' liability to $500 per bundle, or a total of $35,000. Defendants cross-appeal from the district court's denial of their motion for dismissal of the action. We reverse the judgment to the extent that it limits defendants' liability to $500 per bundle and remand the case with directions to enter judgment in Berisford's favor for the full value of the lost cargo. We affirm the district court's denial of defendants' motion to dismiss the complaint.

The material facts are not in dispute. On June 23, 1983, Berisford contracted to purchase from Paranapanema International Ltd. (Paranapanema), located in Sao Paolo, Brazil, 50 metric tons of grade A tin ingots in bundles at a price of $13,340 per metric ton (a price later changed by the parties to $13,300 per metric ton). The terms were F.O.B. vessel at Santos, Brazil, for shipment to New York in January 1984.*fn2 Payment was to be made net cash 45 days after ocean bill of lading date against presentation of a "full set of shipping documents," which, in conjunction with the F.O.B. vessel term, was understood by the parties as requiring a clean on board bill of lading.

Pursuant to the contract Paranapanema delivered 100 bundles, each containing 30 tin ingots and steel-strapped onto wooden pallets, to Ivarans' agent at Santos, Agencia de Vapores Grieg, S.A. (Grieg), which maintains a terminal located about 5 kilometers from the dock where cargo would be loaded onto Ivarans' ship. Grieg acknowledged receipt of the bundles on December 29, 1983. Grieg stuffed the 100 bundles into four 20-foot containers at its terminal, as follows:

Container No. NICU 901692 35 bundles

Container No. NICU 703002 35 bundles

Container No. IVLU 904540 9 bundles

Container No. IVLU 902420 21 bundles

The containerization was carried out "at ship's convenience", to which Berisford did not object. Clause 6 of the bill of lading later issued by Ivarans authorized the carrier to stow goods "as received or, at Carrier's option, by means of containers or similar articles of transport used to consolidate goods".

After stuffing of each container its doors were closed, locked and sealed. On January 3, 1984, the containers were transported by Grieg to a Brazilian government-controlled storage yard located near the loading dock. Upon delivery of the containers to that yard they appeared, from the sound and handling of the trucks used to transport them, to be loaded, not empty. The government storage yard issued receipts indicating weights approximately equaling those listed on the shipping documents. At that point the seals and locks appeared unchanged.

On January 4, 1984, the containers were removed from the yard and loaded by stevedores aboard the vessel. On the same date Grieg, acting on behalf of Ivarans and the Master of the S/S Salvador, issued a clean on board bill of lading stating that the ship had received "100 bundles of steel strapped on wooden skids containing 3000 refined tin ingots, "Mamore" brand, with a minimum purity of 99.9%". The gross weight was stated on the bill to be "50,647" kilos and the net weight as § 49.845" kilos. Par. 3 of the conditions on the back side of the bill of lading provided that the provisions of COGSA would apply throughout "the entire time the goods [would be] in the carrier's custody, including the period of carrier's custody before loading on and after discharge from the ship". The bill further stated that unless a higher value had been declared in writing prior to delivery and inserted in the bill, the $500 limit per package specified by COGSA would govern the carrier's liability. See note 1, supra.

Upon the loading of the four containers aboard the ship, neither Ivarans nor its agent Grieg verified the contents or made a tally of the 100 bundles represented by the bill of lading to be in the containers. After being loaded aboard the ship, the containers were not shifted from their place of stowage until the ship arrived in New York on January 19, 1984, at the Red Hook Terminal in Brooklyn. There the four containers were discharged on January 20, 1984, and placed on the ground outside Pier 11 to await stripping. On January 24, 1984, Universal Maritime Services, Ivarans' stevedore, opened the four containers by using a bolt cutter or pliers to cut the seals and found that two of them supposed to contain 70 bundles were empty. Before being broken the seals of the containers appeared to be intact, with no evidence of tampering; in fact, the seals were pitted and rusted. Neither the floors of the two containers nor the snow-covered ground around them near Pier 11 revealed any evidence of recent removal of any cargo from the containers. Each bundle would have weighed approximately 1100 lbs .

On January 27, 1984, Berisford wrote U.S. Navigation, Ivarans' New York agent, charging Ivarans with responsibility for the loss of the 70 bundles. On February 7th Mr. K. W. Hansen, a marine surveyor retained by U.S. Navigation to investigate the loss, rendered a written report which stated that in his ...


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