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Gartland S. S. Co. v. Utah-Idaho Sugar Co.

November 30, 1937


Appeal from the District Court of the United States for the Eastern District of Wisconsin; Ferdinand A. Geiger, Judge.

Author: Sparks

Before EVANS and SPARKS, Circuit Judges, and LINDLEY, District Judge.

SPARKS, Circuit Judge.

This action in libel sought recovery for damage to, and shortage of, a cargo of sugar, carried in the steamer "Back Bay" from Milwaukee to Buffalo. The libelant, Utah-Idaho Sugar Company, was the owner of the cargo. The action was in rem against the steamer and in personam against D. Sullivan & Company, which was the agent of the owner. The Gartland Steamship Company filed claim to the steamer as its owner, answered the libel, and impleaded National Terminals Corporation by petition under Admiralty Rule 56. With its answer and petition it filed a proper stipulation with sufficient surety in full compliance with that rule. Sullivan & Company answered, and the impleaded respondent answered both the petition and libel, and libelant answered the petition.

At the conclusion of the hearing upon the liability of the parties the court made special findings of fact, stated its conclusions of law, and entered its interlocutory decree.

Among other matters, not here material, the court found substantially the following facts: On November 22, 1933, libelant entered into an agreement with respondents and claimant wherein respondents and claimant agreed to transport on the steamer "Back Bay," from Milwaukee to Buffalo, and there deliver in the same condition as when received, a quantity of sugar at the rate of fourteen cents a hundred pounds; that said cargo should be insured in the name and for the benefit of libelant and that the premiums therefor should be paid out of the agreed rate.

There was no agreement that the cargo would be insured for the benefit of respondents or claimant, and there was no "shipper's load and count" agreement entered into. The insurance was obtained, naming libelant as the beneficiary, and each policy provided that it would be void in the event of any agreement by the assured giving any carrier the benefit thereto.

Respondents and claimant employed the impleaded respondent to stevedore the cargo at Milwaukee for sixty cents a ton, and likewise employed the Buffalo Freight Terminal and Warehouse Company to stevedore the cargo at Buffalo.

Pursuant to the agreement libelant delivered to respondents and claimant at Milwaukee on November 28, 1933, 4,412,625 pounds of sugar, packed variously in white sacks, burlap bags, and bales, all in good condition, for transportation and delivery at Buffalo.

The impleaded respondent stevedored the cargo at Milwaukee, and loaded it into the steamer "Back Bay," for which it was paid by the claimant. The work was done under the direction and control of the officers of the steamer, and in its performance the impleaded respondent at all times exercised due care.

The lading of the vessel was completed after midnight on November 30, 1933. Detailed bills of lading were not then ready, and to expedite the movement of the vessel respondents and claimant issued a bill of lading for approximately 4,624,750 pounds, consisting of approximately 44,000 bags and bales, and directed impleaded respondent to issue and deliver to libelant detailed ladings showing the exact amount received. These directions were complied with, and thereafter respondents and claimant issued their invoice for freight for the transportation in the amount of $6,177.68, being for 4,412,625 pounds at $2.80 per ton. This amount was paid by libelant, and out of it was paid the insurance premiums.

The steamer arrived at Buffalo on December 3, and in due course the cargo was discharged and delivered, but a large part of it was in a damaged condition, the sacks being dirty, stained and torn, and the sugar caked. A part of the cargo was not delivered at all. The amount of damage sustained by libelant was advanced to it by the insurers as a loan, repayable out of any recoveries.

Upon these findings the court concluded: (1) That the insurance policies did not insure, or inure to the benefit of appellant or its libelled boat; (2) that in stevedoring the cargo at Milwaukee the appellee, National Terminals Corporation, was the employee of appellant; (3) that in issuing and delivering to appellee, the libelant, the detailed bills of lading, appellee, the stevedore, was appellant's agent; (4) that the respondent steamer "Back Bay" and appellant were responsible and liable to libelant for the loss and damage sustained by libelant with respect to the cargo; (5) that appellee, the stevedore, was not responsible or liable to appellant for the damage.

The decree, entered on April 17, 1936, awarded recovery from the steamer, her owner and stipulators for the damages, interest and costs, and condemned the steamer and her stipulators therefor. The determination of the amount of damages was reserved, and appellant's petition ...

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