Gulf Italia Company, Libellant-Appellee v. American Export Lines, Inc.

The libellant filed a libel in admiralty against American Export Lines, Inc., to recover for damage to a caterpillar tractor which was carried on respondent’s steamship Exiria from New York to Palermo in August 1954. The tractor was damaged while being unloaded. Respondent conceded responsibility, but maintained that its liability is limited by the $500. limit-of-value provision in § 1304(5), and a similar provision in the bill of lading.1 The tractor was prepared for shipment by putting waterproof papering over some of its parts and by partially encasing the super-structure with wooden planking. The tread portions of the tractor were uncovered and the tractor was not attached to a skid. The tractor was described in the bill of lading as “semi-boxed.” Judge Cashin held that the tractor was not a “package” and that the limitation on liability must be computed on the basis of “customary freight unit.” There were 34.6 such units; consequently respondent’s liability was limited to $17,300., and the issue as to computation of damages was referred to a master. Judge Cashin’s opinion is reported, D.C., 160 F.Supp. 956956 .. Respondent has appealed.

Section 4(5) of the Act divides “the transportation of goods” into two categories: “packages” and “goods not shipped in packages.” Plainly the tractor was not shipped in a package, unless the covering of certain portions of it make it a “package” within the meaning of the Act. Apparently the appellant contends that any preparation of goods for ocean transportation converts the goods into a “package.” Such a construction of the section would cause “a shipper who attempts to minimize possible harm to his property by putting protective covering on sensitive parts,” to be placed in a worse position than a shipper who makes no effort to reduce the possibility of loss from inclement weather or pilfering. We agree with Judge Cashin that “such result would hardly foster good commercial practices.”2 Any test dependent upon extent of external covering would lead to uncertainty and increase litigation. We cannot believe that Congress intended “package” to be defined in a way to produce such a result. The District Court was correct in holding that the tractor was not a “package.”

With respect to the words “customary freight unit” appellant argues that “unit” refers to shipping unit not freighting unit. Such construction is foreclosed by Petition of Isbrandtsen Company, Inc., 2 Cir., 201 F.2d 281, 286:

“The authorities have construed the words ‘customary freight unit’ to refer to the unit upon which the charge for freight is computed and not to the shipping unit.”

See also Stirnimann v. The San Diego, 2 Cir., 148 F.2d 141, 143; Waterman S. S. Corp. v. U. S. Smelting, Refining & Mining Co., 5 Cir., 155 F.2d 687, certiorari denied 329 U.S. 761, 67 S.Ct. 115, 91 L.Ed. 656; The Bill, D.C.Md., 55 F.Supp. 780, 783, 55 F.Supp.. Cf. Studebaker Distributors, Ltd. v. Charlton S. S. Co. Ltd. [1938], 1 K.B. 459.

Decree affirmed.