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Commodity Credit Corp. v. Norton.

decided.: April 1, 1948.

COMMODITY CREDIT CORPORATION
v.
NORTON.



Author: Kalodner

Before MARIS, O'CONNELL and KALODNER, Circuit Judges.

KALODNER, Circuit Judge.

This is an action to recover damages for the loss of certain castor seed oil transported by rail from Norfolk, Va., to Edgewater, N.J. The defendant is Trustee of the last in a series of carriers.

The appeal herein is prosecuted directly from the entry of judgment on a jury verdict against the plaintiff in the court below, there having been no motion for a new trial or for judgment in accordance with the plaintiff's motion for directed verdict.*fn1

The questions presented for determination are (2) whether the record required the direction of a verdict for the plaintiff, and (2) whether the trial judge erred in his charge to the jury on the nature and extent of the liability of the defendant.

The oil cargo in controversy arrived by ship at Norfolk in bad condition. To permit further rail transportation, the plaintiff's agents at Norfolk had the barrels in which the oil arrived recoopered and the loose oil put into second hand barrels.The shipment was then delivered to the Norfolk and Western Railway Company which loaded it in four cars*fn2 and issued its through bill of lading therefor acknowledging receipt in apparent good order and condition. The facts as to the recoopering and repackaging were made known to the railroad's representatives. The oil completed its journey in the same cars, but on arriving at Edgewater a goodly portion of it had leaked out of the barrels and some of the barrels were found in a badly broken condition and collapsed.

The plaintiff relies on the defendant's liability as a common carrier, asserting that liability to be an insurer's, and upon the presumption, said to be effective where the delivering carrier is sued, that the damage occurred on its line. On the basis of the record made below, it is contended that the defendant is liable as a matter of law because (1) the barrels were in actual good order and condition when received and were delivered in bad condition; (2) if the barrels were defective, the defect was patent; (3) if the defect was latent, it had become patent, during the course of the transportation and (4) defendant was negligent in the handling and care of the shipment and such negligence was the proximate cause of the loss.

Examination of the record discloses the following:

A member of the firm which accomplished the recoopering of the barrels testified, by deposition, that the recoopered barrels would withstand ordinary rail transportation, although he conceded that under certain conditions the hoops would creep, the staves would loosen, and the oil would leak. In contradiction a veteran cooper testified, also by deposition, that he had worked on most of the barrels involved and that those barrels would not withstand ordinary rail transportation. There was conflicting testimony as to whether the barrels were properly stowed in the cars: a surveyor for the plaintiff said that there was inadequate bracing and dunnage, and an experienced railroad man produced by the defendant said that the method of stowage was usual and proper. Finally, the defendant adduced evidence that the four cars were shopped at Hagerstown, Md., where the barrels were found to have been leaking; that one car, C&O #8088, was shopped at Allentown, Pa., and the barrels therein were found to have been leaking; that there was no report of leakage in any of the cars between Allentown and Green Pond Junction on the lines of the Central Railroad of New Jersey; that there was no report of any leakage on the defendant's line between Green Pond Junction and Little Ferry Junction; and that a personal inspection was made of the train of which these cars were a part on the defendant's line between Little Ferry Junction and Edgewater, but no leakage was discovered. There was also evidence from which it could be inferred that while in the possession of the carriers the oil cargo did not meet any accident and was not handled roughly.

Although we do not specifically refer to all the evidence in the case, what we have recited reveals the kind of conflict on all material issues which must be resolved by the jury. The learned trial judge, therefore, in our opinion, did not err in denying the plaintiff's motion to direct the verdict.

We reach then, the plaintiff's assertion of error in the charge. Early in the charge, the jury was instructed that a common carrier is an insurer "except in such a case where, as asserted here, the goods were shipped in containers which seemed to be, to reasonable observation proper, but which contained defects which were not observable, latent defects, which defects caused the loss." After discussing the matter of burden of proof and the facts, the learned trial judge said,

"Now, then, if you believe from the evidence that the barrels, to all seeming, were in a state proper for shipment and that there were no patent or openly observable defects, and that the railroad company accepted them and placed them on the cars required for their shipment, - four cars, as the Court recalls it - and if you find from the evidence that the stowage or stowing of these cars was proper, and if you find that there was nothing unusual in the method of transport, then you would ask yourselves whether or not the questions which I indicated to you have been met; whether or not there was on observable defect, and whether there was rough handling such as would put the responsibility on the carrier. If you find that there was the ordinary, acceptable handling in the shipment, in the transfers of these various railroads, and if you find that there was no observable defect, then you will apply to those facts, if you so determine, the rule which I have outlined, and there would seem to the Court to be no legal responsibility on the part of the defendant company. * * * If you find, further, that, having accepted goods which were in proper shape for shipment, that the railroad was then guilty of any mishandling or improper stowage such as would constitute negligence, and that was the proximate cause of the leakage, then you properly could be said to be entitled to find responsibility on the part of the defendant."

Preliminarily, it must be noted that we are here dealing with an interstate shipment, and that the service of the defendant "was that of a common carrier furnishing a necessary link in the transportation under the through bill of lading." Galveston Wharf Co. v. Galveston, Harrisburg & San Antonio Ry. Co., 1932, 285 U.S. 127, 134, 52 S. Ct. 342, 344, 76 L. Ed. 659. The bill of lading, of course, was issued pursuant to the Carmack Amendment, 34 Stat. 593, 595, as amended, 49 U.S.C.A. ยง 20(11). Since it was issued in respect of an interstate shipment pursuant to an act of Congress, "the bill of lading is an instrumentality of such commerce, and the question whether its provisions have been complied with is a federal question to be determined by the application of federal law." Chesapeake & Ohio R. Co. v. Martin, 1931, 283 U.S. 209, 213, 51 S. Ct. 453, 455, 75 L. Ed. 983. Moreover, "The connecting carrier is not relieved from liability by the Carmack Amendment, but the bill of lading required to be issued by the initial carrier upon an interstate shipment governs the entire transportation, and thus fixes the obligations of all participating carriers to the extent that the terms of the bill of lading are applicable and valid." Georgia, Florida & Alabama R. Co. v. Blish Milling Co., 1916, 241 U.S. 190, 194, 195, 36 L.Ct. 541, 543, 60 L. Ed. 948.The principles of the cited cases have recently been reaffirmed. Illinois Steel Co. v. Baltimore & O.R. Co., 1944, 320 U.S. 508, 510, 511, 64 S. Ct. 322, 88 L. Ed. 259; see Mexican Light & Power Co., Ltd., v. Texas Mexican Ry. Co., 1947, 331 U.S. 731, 733, 67 S. Ct. 1440. And although answerable only for damage occurring on its own line, the last carrier, on making delivery in bad condition, is subject to a presumption that the damage occurred on its line. Chicago & Northwestern R. Co. Whitnack Produce Co., 1922, 258 U.S. 369, 42 S. Ct. 328, 66 L. Ed. 665.

In the instant case, as in Galveston Wharf Co. v. Galveston, Harrisburg & San Antonio Ry. Co., supra, the bill of lading privides*fn3 that the carrier in possession of the property covered should be as at common law*fn4 for any ...


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