is a logical one, we find that plaintiff received 17,026 pounds of cocoa fewer than were delivered to the carrier in Lagos, Nigeria, by the Nigerian Produce Marketing Board. This amount, when added to the 3026.6229 tons actually received by plaintiff, remains within the 11/2% Tolerance for which the buyer and seller contracted. We find additionally that the bags which were torn were damaged while in the custody of the defendants and/or their agents, servants, and/or employees.
The stevedore, McCarthy, collected sweepings of over 30,000 pounds of cocoa apparently spilled from torn bags from the hull of the YINKA and from the pier at Philadelphia. These sweepings were sold for export, and the proceeds, over $ 18,600, were credited to Nigerian Green Line Ltd.'s account with J. A. McCarthy. This finding corroborates the findings in the preceding paragraph.
The sound market value of Nigerian cocoa beans of the type involved in this action was $ 1.22 per pound in Philadelphia on August 30, 1976, the date of completion of discharge. According to plaintiff's witness, Mr. Zimmermann, that is the date from which plaintiff always calculates damages for shortages, and defendants did not dispute the calculation. Thus, for reasons discussed more fully below, we find defendant Nigerian Green Line Ltd. liable in the amount of $ 20,771.72 as a result of its delivery of torn, mended, and slack bags and the resulting 17,026 pound shortage.
A. Plaintiff's Loss
Defendant first argues that because Internatio received approximately 26 net metric tons in excess of the amount shown on the bill of lading, it has suffered no loss. This argument is unpersuasive. It is axiomatic that a buyer is entitled to receive from a carrier whatever his seller shipped, and that a carrier is bound to carry that which is delivered to it. See pp. 1251-1252, Infra. In this case we have found that the Nigerian Produce Marketing Board actually shipped approximately 3,033 tons of cocoa beans, while plaintiff received only 3,026 tons. Thus regardless of the amounts listed on the bills of lading, plaintiff plainly received less than it was entitled to receive, establishing its loss. We turn then to defendant's other contentions.
B. Bills of Lading
Defendant relies most heavily on a theory of the inviolability of a bill of lading, arguing that plaintiff is not entitled to receive more than is shown on the face of the bill, and that the fact that additional cocoa may have been shipped is irrelevant. Related is the argument that the 11/2% Weight differential customary in the cocoa trade, See pp. 1248 & 1250, Supra, applies only between seller and buyer, and that the carrier contracted only to deliver the exact amount shown on the bill of lading.
It is true that under § 3(4) of the Carriage of Goods by Sea Act (COGSA), 46 U.S.C. § 1303(4), the quantities listed on a bill of lading are prima facie evidence of the amounts shipped. However, prima facie evidence is by definition rebuttable. See, e.g., Dal International Trading Co. v. the S/S MILTON J. FOREMAN, 171 F. Supp. 794 (E.D.N.Y.1959). In order to better understand the parties' contentions in this regard, a discussion of the functions of a bill of lading is appropriate.
A bill of lading for ocean carriage serves three distinct functions: it acts as a receipt for the goods shipped, it embodies the contract for the carriage of those goods, and it serves as documentary evidence of title to the goods. As a document of title, ocean bills are generally negotiable. See generally G. Gilmore & C. Black, The Law of Admiralty 93-100 (2d ed. 1974); 13 Am.Jur.2d Carriers §§ 277-279; 70 Am.Jur.2d Shipping §§ 458-464.
1. The Bill of Lading as a Receipt
In its function as a receipt, a bill of lading, issued by the carrier to the shipper, acknowledges that the goods listed thereon have been delivered to the carrier. In this guise, the recitals of the bill are prima facie evidence of the quantity and condition of the goods shipped. COGSA, 46 U.S.C. § 1303(4). However, the receipt terms are not conclusive and can always be varied by extrinsic evidence. 70 Am.Jur.2d Shipping § 462. See The Delaware, 81 U.S. (14 Wall.) 579, 601, 20 L. Ed. 779 (1871); The Lady Franklin, 75 U.S. (8 Wall.) 325, 329, 19 L. Ed. 455 (1868); Nelson v. Woodruff, 66 U.S. (1 Black) 156, 17 L. Ed. 97 (1861); Spanish American Skin Co. v. The Ferngulf, 242 F.2d 551 (2d Cir. 1957); Amstar Corp. v. the S/S Naashi, 445 F. Supp. 940 (S.D.N.Y.1978); Dal International Trading Co. v. the S/S MILTON J. FOREMAN, 171 F. Supp. 794 (E.D.N.Y.1959); H. W. St. John & Co., Inc. v. The Flying Spray, 149 F. Supp. 737 (S.D.N.Y.1956).
In this case, plaintiff has shown that the weights recited on the bill of lading are patently incorrect; rather than actual weights, standardized weights, identical to four decimal places, were used. See pp. 1250-1251, Supra. Plaintiff's method of proving the actual weight shipped by comparing the weights of the damaged bags with the average weight of the sound bags is convincing. The 30,000 pounds of sweeps remaining in the hold and on the pier provide further evidence that an amount greater than that received was shipped. We thus hold that plaintiff has met its burden of proof as to the amount of cocoa to which it is entitled.
2. The Bill of Lading as a Contract
In its role as a contract of carriage, a bill of lading stipulates the rights and obligations of the parties and the terms under which the goods receipted will be carried. Although these terms cannot be varied by extrinsic evidence, See, e.g., The Delaware, 81 U.S. (14 Wall.) 579, 601, 20 L. Ed. 779 (1871), no one has attempted to do so in this case.
The defendant has, however, attempted to argue that the plaintiff is not a party to the bill of lading in its contractual role, and that it therefore has no standing to sue thereunder. This theory is clearly incorrect. The consignee, as owner of the goods, always has a right to sue for their damage or loss. See, e.g., The Vaughan and Telegraph, 81 U.S. (14 Wall.) 258, 266, 20 L. Ed. 807 (1871); The Thames, 81 U.S. (14 Wall.) 98, 108-09, 20 L. Ed. 804 (1871); Lawrence v. Minturn, 58 U.S. (17 How.) 100, 106, 15 L. Ed. 58 (1854); The North Carolina, 40 U.S. (15 Pet.) 40, 48-49, 10 L. Ed. 653 (1841); 2A Benedict on Admiralty § 53.
3. The Bill of Lading as a Negotiable Instrument of Title
In its third aspect, a bill of lading is documentary evidence of title to the goods specified therein. Properly negotiated, transfer of the bill of lading serves to transfer title to the goods. Defendant has argued strenuously that varying the terms of such a negotiable bill would have detrimental effects on an unsophisticated downstream holder of the bill, unfamiliar with the practice of the cocoa trade and therefore unaware of the possibility of a 11/2% Deviation. Indeed, defendant's argument in terrorem is that a bill of lading is like money, and that the result advanced by plaintiff would have a serious adverse impact on the orderliness of the trade.
Troubled by this problem, we posit the following hypothetical situation. Suppose that a chocolate factory in Hershey, Pennsylvania, orders 3,000 tons of raw cocoa to be delivered through the Port of Philadelphia. Suppose further that a strike at that plant makes it impractical for the original consignee to accept the cocoa, so the bill of lading is transferred to a Harrisburg bank in partial satisfaction of a loan. The Harrisburg bank, knowledgeable about the cocoa trade because the chocolate factory is its largest customer, nonetheless has no need for 3,000 tons of cocoa, so transfers the bill to an Arkansas investor who is a chocolate addict and thinks it would be fun to invest in cocoa beans, but who soon realizes he is in over his head. The Arkansas investor, through his equally unsophisticated rural bank, transfers the bill to a broker in Mexico City who deals in cocoa on a regular basis. The Mexican broker's grapevine tells him that the consignor had shipped 3,033 tons of cocoa rather than the 3,000 listed on the bill of lading. The question then arises whether the Mexican investor can sue the Arkansas investor, occasioning suits back along the chain.
However, as stated by the Supreme Court:
A bill of lading is an instrument well known in commercial transactions, and its character and effect have been defined by judicial decisions. In the hands of the holder it is evidence of ownership . . . of the property mentioned in it, and of the right to receive said property at the place of delivery. Notwithstanding it is designed to pass from hand to hand, . . . it is not a negotiable instrument or obligation in the sense that a bill of exchange or a promissory note is. Its transfer does not preclude . . . all inquiry into the transaction in which it originated, because it has come into hands of persons who have innocently paid value for it. The doctrine of Bona fide purchasers only applies to it in a limited sense.
Pollard v. Vinton, 105 U.S. 7, 8, 26 L. Ed. 998 (1881). See also 70 Am.Jur.2d Shipping § 464. Thus the transferee takes whatever title is held by the transferor, including any rights or liabilities attached thereto. The right which is passed with the bill of lading in the instant case is a cause of action against the carrier, on the bill of lading, for delivery of the cocoa delivered to it and which it transported pursuant to that bill. Only the carrier has had physical contact with the cocoa, which remains on the pier at Philadelphia. An action will lie only against the carrier, and can be brought by the party with title to the cocoa, I. e., the ultimate holder of the bill of lading. If in our hypothetical case the Mexican broker were to sue the vessel, the vessel could not claim prejudice.
A further problem, as between parties in the chain of transfer, is whether differing amounts might have been paid for the bill of lading depending on the actual amount of cocoa shipped, and whether an unsophisticated buyer would therefore be at a disadvantage. This argument assumes, however, that cocoa bills of lading somehow find their way into Aunt Tillie's portfolio, a suggestion which we consider unlikely. A buyer of a bill of lading such as that under consideration here is much more likely to be a cocoa or other commodity broker or a financial institution with the expertise and resources necessary to discover the custom in the cocoa trade. Thus we do not consider this possibility a persuasive argument for denying plaintiff's recovery.
Despite all its various arguments, the fact remains that defendant has cited no case, and we have found none, which refuses to allow a party to present evidence which would vary or contradict the receipt aspects of a bill of lading. Because the plaintiff has shown that 3,033 net metric tons of cocoa beans packaged in sound bags were loaded onto the M/V YINKA FOLAWIYO, it is entitled to recover from the carrier the difference between that amount and the amount received.
C. Adequacy of Packaging
Despite the holding above, defendant can escape liability for plaintiff's loss if it can show that the loss was caused by one of the exceptions listed in 46 U.S.C. § 1304. The Nigerian Green Line has therefore attempted to show that the damage was a result of some inherent vice in the product, 46 U.S.C. § 1304(2)(m), or of insufficient packaging, 46 U.S.C. § 1304(2)(n). To that end, evidence was presented to the effect that it is a normal occurrence for cocoa bags to break during shipment, and that this is an anticipated peril in the trade. Indeed, it has been so found. Because it is not the cocoa itself which leads to the loss, the inherent vice theory is inapposite. The packaging theory, however, merits consideration.
In Bache v. Silver Line, Ltd., 110 F.2d 60 (2d Cir. 1940) (L. Hand, J.), the carrier was found not liable for damage to a cargo of rubber where the evidence showed that the rubber was stowed in the customary manner and there was no evidence that that custom was unreasonable. The decision was presented as a compromise, where both parties knew the goods would be "somewhat exposed" and the shipper could have specified a different method. In The Rita Sister, 69 F. Supp. 480 (E.D.Pa.1946), the carrier was exempted under 46 U.S.C. § 1304(2) (n) from liability for breakage to a number of bottles of a cargo of brandy, when the evidence showed that the brandy had come aboard in sound condition and was carefully stowed. In another brandy case, Kasser Distillers Products Corp. v. Companhia de Navegacao Carregadores Acoreanos, 76 F. Supp. 796 (S.D.N.Y.1948), the carrier was absolved from liability for breakage despite evidence that the bottles were packed according to the custom at the time, because the custom did not necessarily establish sufficiency of packaging.
At first glance, these cases would seem to lead to the conclusion that the Nigerian Green Line could at least arguably escape liability for damage to this cargo of cocoa. However, sufficiency of packaging is a factual issue, to be decided anew in each case, with the carrier having the burden of proof. See, e.g., Lekas & Drivas, Inc. v. Goulandris, 306 F.2d 426, 429 (2d Cir. 1962). In the case at bar, the Nigerian Green Line has undermined its own argument by admitting liability for loss due to torn, mended, and slack bags up to the amount shown on the bill of lading. By regularly employing coopers to resew torn bags and by recognizing claims for shortages, the Line has shown by their own practices that they do not consider the normal mode of cocoa packaging deficient, or at least liability-producing. Nor have they shown that this particular shipment was packed in a manner more slipshod than the normal, for cocoa beans are apparently always shipped in jute or burlap bags. The cases cited above are thus distinguishable, and defendant's argument on insufficiency of packaging must fail.
As we noted at the outset, we sympathize with defendant's concern for standardization and predictability in negotiable bills of lading. Nonetheless, we are unpersuaded by defendant's in terrorem arguments,
and find that plaintiff has successfully established a shortage of 17,026 pounds of cocoa beans, with a corresponding loss of $ 20,771.72.
An appropriate order follows.