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Princess Pat v. National Carloading Corp.

June 15, 1955


Author: Finnegan

Before MAJOR, FINNEGAN and SWAIN, Circuit Judges.

FINNEGAN, Circuit Judge.

In 1946, Princess Pat, Ltd., plaintiff - Illinois corporate manufacturer of cosmetics, was marketing its products in Brazil through USABRA, its subsequent exclusive Brazilian distributor. Defendant, National Carloading Corporation, incorporated in Delaware, is a foreign and domestic freight-forwarder acting, here, through one of its divisions called Judson-Sheldon. Judgment was entered below, May 13, 1954, on a jury's verdict for $16,000 in favor of plaintiff, and defendant seeks to have that recovery set aside, or, in the alternative that the judgment be reversed and a new trial ordered.

Parol and documentary evidence were introduced below in support of several issues framed by plaintiff's complaint, defendant's counterclaim and answer. An amended complaint and an answer filed thereto, implemented the original pleadings. A finding of not guilty was directed for plaintiff on defendant's counterclaim amounting to $233.61 for various freight, transfer charges, et seq.

Stripped of non-essentials, this is an instance of plaintiff-manufacturer exporting its product to Brazil by hiring defendant to carry an 18 case shipment of such items. Through one of its own employees, plaintiff obtained shipping space for those goods aboard a Delta Line vessel, loading at New Orleans, and advised defendant accordingly. In short, plaintiff wanted to have its 18 cases delivered, as a unit, alongside the S.S. Cuba Victory for loading. Instead plaintiff's cases were put on a New York pool car and taken to that eastern port. Three events thereafter occurred: (i) the shipments were separated into two parts, (ii) the required consulate documents were not legalized before departure, and (iii) case No. 12 was erroneously designated as case No. 2 on the export documents.

There being a preferential Brazilian tariff rate applicable to bulk cosmetics, plaintiff packaged its own products for shipment in 18 cases marking them so as to indicate the inter-relationship, i.e., "case No. 1 of 18 cases," "case No. 2 of 18 cases." et seq. Defendant accepted possession of these items on November 7, 1946 and initialed a memorandum bill of lading, the original of which discloses on its face, inter alia: "* * * Contract C-3197 On the SS Cuba Victory - Delta Line - Loading Nov. 6, - 16 - Consigned to Judson Sheldon Corporation, * * * Marks: USABRA Rio De Janeiro No. 1 to 18 INC."

To these errors plaintiff attributes penalties amounting to $4,389.33 for non-compliance with Brazilian customs regulations and loss of seven months marketing time. Defendant moved for a more definite statement and clarification of several allegations contained in plaintiff's complaint and as a result plaintiff responded by stating, in substance: (i) its goods were ctually delivered and sold to USABRA who obtained possession of the products from Brazilian Custom's officer July 21, 1947, (ii) the contract price was $8,917.68, and that plaintiff claimed damages "sustained * * * on loss of profits as a result of the negligence of the defendant in the amount of $50,000.00." For its defense to plaintiff's pleadings, defendant admits it is a freight forwarder under 49 U.S.C.A. §§ 1001-1022; asserts plaintiff prepared its own bill of lading November 7, 1946, but denies plaintiff advised that the shipment was to be forwarded to the Port of New Orleans until on or about November 12, 1946; admits it caused the shipment to be forwarded to the Port of New York on or about November 9, 1946; that after advising plaintiff of that movement, plaintiff did not order its shipment returned or otherwise object to forwarding to New York, but authorized defendant to place the shipment aboard an ocean steamship for delivery at Rio de Janeiro, Brazil; denies that loading of the shipment on two different steamships constituted a breach of the bill of lading contract. As its third and further defense, the forwarder alleged that the damages, if any, were caused by plaintiff's own acts and omissions resulting from inaccurate and improper descriptions of these products; that defendant is exempt from liability under § 1(b), of the Uniform Bill of Lading contract:

"No carrier or party in possession or all or any of the property herein described shall be liable for any loss thereof or damage thereto or delay caused by the act of God, the public enemy, the authority of law, or the act or default of the shipper or owner, or for natural shrinkage * * *."

Invoking Rule 36, Fed.R.Civ.Proc., 28 U.S.C.A., plaintiff sought an admission of various facts from defendant. Among several items contained in plaintiff's notice were ones which, in substance, sought an admission from defendant that Brazilian customs, regulations and laws provided that bulk shipments of cosmetics must be accompanied by the precise quantity of containers and labels necessary for packaging the goods, and another in which defendant was asked to admit that the absence of five cases from the original shipment constituted a breach of the regulations and delayed release of the shipment from customs. Defendant, responded to the notice to admit facts, answering several, and objecting to the foregoing on the grounds they, requiring an interpretation of laws and regulations of a foreign country, were questions of law, not fact. Under the trial judge's order directing defendant to answer these two propositions, defendant replied in writing that it did not possess sufficient information upon which to form a belief of the truth or falsity of such statements, hence neither admitted nor denied them. Plaintiff, after counsels' opening statements to the jury, seized upon these responses and admissions and urged them. The trial judge denied defendant leave to amend. At the conclusion of its case, plaintiff read these statements to the jury. Defendant now claims prejudicial error because its replies were treated as admissions and leave to amend was denied.

On May 13, 1954, the day counsel argued to the trial jury, plaintiff filed an amended complaint containing inter alia an allegation: "That notwithstanding its obligation in the premises, the defendant failed and refused to make out and prepare proper shipping and consular documents." When the evidence was closed, defendant moved to "withdraw the evidence from the consideration of the jury" and to have the trial court, "instruct the jury to return a verdict for the defendant or in the alternative to strike" the aforesaid paragraph on the plaintiffs' amended complaint, and for the trial court to instruct the jury "to disregard all evidence relating to the allegations contained therein." This motion was denied as was defendant's motion for judgment in accordance with its motion for directed verdict or for a new trial. Subsequently, defendant answered plaintiff's amended complaint.

Because the trial judge overruled its motions and refused to permit amendments of answers to plaintiff's notice to admit facts, and construed them as admissions defendant asks us to set aside the judgment or reverse it and order a new trial.

No evidence was presented by defendant at the trial below. Plaintiff's export manager, E. Horwitz, testified about conversations in 1946 with A. G. Zimmerly, manager of defendant's export department of Judson Sheldon Division. Horwitz told Zimmerly that plaintiff had a fairly large shipment of cosmetics for a new Brazilian distributor and discussed shipping strikes at the port of New York. Plaintiff's export manager indicated that he (Horwitz) was thinking of using the port of New Orleans to avoid possible delay at New York.

"Q. What did Mr. Zimmerly say to you as best you can recall?

"A. Well, as best I recall, he gave me the customary assurance that as soon as the shipment was turned over to Judson Sheldon they would do their best to carry out ...

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