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General American Transp. Corp. v. Indiana Harbor Belt R. Co.

October 17, 1951

GENERAL AMERICAN TRANSP. CORP.
v.
INDIANA HARBOR BELT R. CO.



Author: Swaim

Before KERNER, DUFFY, and SWAIM, Circuit Judges.

SWAIM, Circuit Judge.

This is an appeal from judgments against the two defendants, Indiana Harbor Belt Railroad Company and Baltimore and Ohio Chicago Terminal Railroad Company, as the initial carriers, for damages in the total amount of $126,285.45 to 66 carloads of knocked-down French box cars which defendants and connecting rail carriers carried from East Chicago, Indiana, to Texas City, Texas. The French box cars were manufactured by plaintiff, General American Transportation Corporation, and shipped over defendnats' lines to French Supply Council, an agency of the French Government, at Galveston, Texas, for export to France. After the arrival of these shipments at Galveston they were diverted to Texas City, Texas, on the order of an agent of the consignee.

Galveston Wharves was the terminal land carrier of freight exported through Galveston and owned and operated the Galveston port facilities. At Texas City the Texas City Terminal Railway Company was the terminal land carrier of freight exported through that port. It owned a spur track extending about five miles from the port to its junction with the lines of the line haul carriers and also owned and operated the port facilities at Texas City.

Gulf, Colorado & Santa Fe Railway Company and Burlington-Rock Island Railroad Company were line haul carriers each having lines running to Galveston and Texas City and connecting with the lines of the terminal carriers at those two ports.

On April 16, 1947, at the time of the Texas City disaster, the 66 carloads of freight here in question had arrived and were located on the premises of the Texas City Terminal Railway Company. Sixty-four of the 66 carloads, units numbered 26 to 41, both inclusive, had, on the order of the consignee, been unloaded on the ground for temporary storage to await the arrival of a ship on which they could be loaded for export. The remaining two carloads, IC-94123 and NYC-706855, had not been unloaded, but one of them had been switched alongside the ship for unloading. Of the 64 cars which had been unloaded, 11 carloads had been reloaded on railroad gondola cars on the order of the consignee for the purpose of switching them alongside the ship on which they were to be exported. While in this situation the shipments on the 66 cars were damaged or destroyed by the Texas City explosions and fires on April 16 and 17, 1947.

The plaintiff contends that the defendants, as initial carriers of interstate shipments on a through bill of lading, were liable under the Carmack Amendment to the Interstate Commerce Act, 49 U.S.C.A. ยง 20(11), for damages as an insurer. On the other hand, the defendants insist that at the time of the explosions and fires their carriage of the goods had terminated and, since it was stipulated that the damage was not caused by neglect or fault of any of the carriers involved, the defendants could not be held liable as warehousemen. These opposing contentions present the principal question for our decision.

The original contract for the sale of these box cars was between the plaintiff and the French Supply Council. By a subsequent exchange of letters between the French Supply Council and the plaintiff it was agreed that the French Supply Council would act as plaintiff's "agents for the purpose of coordinating and effecting the actual delivery to shipside either direct or through the medium of railroad storage-in-transit." The French Supply Council then appointed J. D. Latta, a freight forwarder, to assist it in supervising, directing and controlling transportation of these shipments from inland United States to France. The parties stipulated that "all of the acts, activities, agreements and directions referred to in" the stipulation as having been done by Latta or by his subordinates, Clark or Major, "were acts performed by them, * * * as representatives of the consignee, French Supply Council-Transit Division, and were duly authorized by said consignee."

Pursuant to these arrangements and understandings between the parties, the plaintiff shipped each carload under a Uniform Domestic Straight Bill of Lading which showed French Supply Council, Galveston, Texas, as the consignee; that J. D. Latta, Galveston, was to be notified and that the shipment was for export and was to be stored at the Galveston Wharves in accordance with arrangements with E. H. Thornton, General Manager of Galveston Wharves.

Among the contract terms and conditions of the transportation, inscribed on the reverse side of each bill of lading, were the following:

"See. 1(a) The carrier or party in possession of any of the property herein described shall be liable as at common law for any loss thereof or damage thereto, except as hereinafter provided.

"(b) * * * The carrier's liability shall be that of warehouseman, only, for loss, damage, or delay caused by fire occurring after the expiration of the free time allowed by tariffs lawfully on file (such free time to be computed as therein provided) after notice of the arrival of the property at destination * * * duly sent or given, and after placement of the property for delivery at destination, or tender of delivery of the property to the party entitled to receive it, has been made. Except in case of negligence of the carrier or party inpossession * * *, the carrier or party in possession shall not be liable for loss, damage, or delay occurring while the property is stopped and held in transit upon the request of the shipper, owner, or party entitled to make such request, * * *.

"Sec. 4(a) Property not removed by the party entitled to receive it within the free time allowed by tariffs, * * * after notice of the arrival of the property at destination or at the port of export (if intended for export) has been duly sent or given, and after placement of the property for delivery at destination has been made, may be kept in vessel, car, depot, warehouse or place of delivery of the carrier, subject to the tariff charge for storage and to carrier's responsibility as warehouseman, only, * * *."

Freight on each carload was prepaid by plaintiff at the rate prescribed by Export Freight Tariff 1016-I for transportation from East Chicago, Indiana to Galveston or Texas City, Texas, for export to Europe. Item 1250 of this tariff provided that in the absence of specific provisions therein to the contrary, shipments transported under the tariff would be entitled to such privileges and subject to such charges, rules and regulations as were provided by tariffs lawfully in effect and on file with the Interstate Commerce Commission. Privileges enumerated included, among others, demurrage, diversion, loading, stop-off, storage, switching, unloading, weighing and inspection. Item 60 of Freight Tariff No. 1033-M covering cost of storing, custody and possession provides as follows:

"(a) The cost of warehouse, storage, insurance, cartage or other charges incident to storage of the property at transit station will be at the expense of shipper, consignee or owner; and carriers will not assume any part thereof.

"(b) While shipments are being transited under provisions of this tariff, the custody and possession as between carrier and shipper, consignee or owner shall be that of shipper, consignee or owner."

Item 350-K of Supplement No. 92 to Export Freight Tariff No. 1016-I covers shipside application of export ...


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