A-77437, OCTOBER 6, 1936, 16 COMP. GEN. 338

A-77437: Oct 6, 1936

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THERE IS NO BASIS. IS LIABLE FOR SAID LOSS IN THE ABSENCE OF EVIDENCE ESTABLISHING THE EXERCISE OF DUE CARE AND DILIGENCE BY IT AND ITS EMPLOYEES IN CONNECTION WITH THE FIRE. WHERE COTTON DUCK CANVAS WAS SHIPPED FROM ONE FEDERAL PENITENTIARY TO ANOTHER ON A SHIPPING ORDER SPECIFYING DELIVERY TO THE PENITENTIARY TO WHICH CONSIGNED. THE EXPENSE OF WHICH WAS CHARGEABLE TO "PRISON INDUSTRIES. " WAS NOT DELIVERY TO THE CONSIGNEE. IT APPEARS THAT THE SHIPMENT WAS NOT MADE PURSUANT TO THE TERMS OF A FORMAL CONTRACT. TO "PLEASE HAVE FURNISHED AND DELIVERED TO US. 31 INCHES COTTON DUCK CANVAS 710 NUMBER * * * UNINSURED RATE TO APPLY. * * * GENERAL CONDITIONS AND INSTRUCTIONS APPEARING ON THE REVERSE SIDE OF SAID GOVERNMENT BILL OF LADING PROVIDE IN PERTINENT PART: IT IS MUTUALLY AGREED AND UNDERSTOOD BETWEEN THE UNITED STATES AND CARRIERS WHO ARE PARTIES TO THIS BILL OF LADING THAT.

A-77437, OCTOBER 6, 1936, 16 COMP. GEN. 338

TRANSPORTATION - DELIVERIES SHORT OF DESTINATION - LIABILITY FOR DESTRUCTION BY FIRE WHERE, DUE TO A FERRY STRIKE, IT BECAME NECESSARY TO UNLOAD A SHIPMENT CONSIGNED FROM ONE FEDERAL PENITENTIARY TO ANOTHER FROM THE INITIAL CARRIER'S VESSEL ON A DOCK OF A TERMINAL COMPANY, NOT THE TERMINUS OF THE CARRIER'S LINE AND NOT NORMALLY FURNISHED FOR GENERAL CARGO PURPOSES TO EITHER THE INITIAL OR CONNECTING CARRIER INVOLVED, THERE IS NO BASIS, IN VIEW OF THE BILL OF LADING DELIVERY EXCEPTIONS, FOR HOLDING EITHER THE INITIAL OR THE CONNECTING CARRIER LIABLE FOR THE LOSS OF THE SHIPMENT BY FIRE WHILE ON THE DOCK, BUT THE TERMINAL COMPANY, AS WAREHOUSEMAN, IS LIABLE FOR SAID LOSS IN THE ABSENCE OF EVIDENCE ESTABLISHING THE EXERCISE OF DUE CARE AND DILIGENCE BY IT AND ITS EMPLOYEES IN CONNECTION WITH THE FIRE. WHERE COTTON DUCK CANVAS WAS SHIPPED FROM ONE FEDERAL PENITENTIARY TO ANOTHER ON A SHIPPING ORDER SPECIFYING DELIVERY TO THE PENITENTIARY TO WHICH CONSIGNED, DELIVERY TO THE CARRIER FOR TRANSPORTATION, THE EXPENSE OF WHICH WAS CHARGEABLE TO "PRISON INDUSTRIES," WAS NOT DELIVERY TO THE CONSIGNEE, AND THE FEDERAL PRISON INDUSTRIES, INC., MUST BEAR THE LOSS OCCASIONED THROUGH THE DESTRUCTION BY FIRE OF THE SHIPMENT AFTER HAVING BEEN UNLOADED ON A DOCK SHORT OF DESTINATION BECAUSE OF A FERRY STRIKE.

ACTING COMPTROLLER GENERAL ELLIOTT TO THE COMMISSIONER OF PRISON INDUSTRIES, OCTOBER 6, 1936:

THERE HAS BEEN CONSIDERED A LETTER OF JUNE 10, 1936, FROM THE SECRETARY OF PRISON INDUSTRIES, REQUESTING A DECISION AS TO LIABILITY FOR LOSS BY FIRE ON THE DOCKS AT TACOMA, WASH., OF A SHIPMENT OF COTTON DUCK CANVAS, CONSIGNED TO THE UNITED STATES PENITENTIARY AT MCNEIL ISLAND, SH., FROM THE TEXTILE MILL, UNITED STATES PENITENTIARY, ATLANTA, GA.

IT APPEARS THAT THE SHIPMENT WAS NOT MADE PURSUANT TO THE TERMS OF A FORMAL CONTRACT, BUT RESULTED FROM A WRITTEN REQUEST OF JULY 9, 1935, FROM THE WARDEN, UNITED STATES PENITENTIARY, MCNEIL ISLAND, WASH., TO "PLEASE HAVE FURNISHED AND DELIVERED TO US, FROM PRISON INDUSTRIES, THE FOLLOWING * * *.' GOVERNMENT BILL OF LADING PI-801, DATED OCTOBER 7, 1935, ON WHICH THE SHIPMENT MOVED, NAMED AS THE FUND CHARGEABLE WITH THE FREIGHT INVOLVED,"PRISON INDUSTRIES.' IT FURTHER PROVIDED AS FOLLOWS:

RECEIVED FROM FEDERAL PRISON INDUSTRIES, INC., ATLANTA, GA., BY THE ARROW LINE S.S. CO. THE PUBLIC PROPERTY HEREINAFTER DESCRIBED, IN APPARENT GOOD ORDER AND CONDITION (CONTENTS AND VALUE UNKNOWN), TO BE FORWARDED SUBJECT TO CONDITIONS STATED ON THE REVERSE HEREOF, FROM JACKSONVILLE, FLA., TO MCNEIL ISLAND, WASHINGTON, BY THE SAID COMPANY AND CONNECTING LINES, THERE TO BE DELIVERED IN LIKE GOOD ORDER AND CONDITION TO WARDEN, U.S. PENITENTIARY, MCNEIL ISLAND, WASHINGTON, VIA ARROW LINE AMER. S.S. DOROTHY CAHILL VOY. 16-WB-235 * * * 1 BALE 10.85 OZ., 31 INCHES COTTON DUCK CANVAS 710 NUMBER * * * UNINSURED RATE TO APPLY. * * *

GENERAL CONDITIONS AND INSTRUCTIONS APPEARING ON THE REVERSE SIDE OF SAID GOVERNMENT BILL OF LADING PROVIDE IN PERTINENT PART:

IT IS MUTUALLY AGREED AND UNDERSTOOD BETWEEN THE UNITED STATES AND CARRIERS WHO ARE PARTIES TO THIS BILL OF LADING THAT---

2. UNLESS OTHERWISE SPECIFICALLY PROVIDED OR OTHERWISE STATED HEREIN, THIS BILL OF LADING IS SUBJECT TO THE SAME RULES AND CONDITIONS AS GOVERN COMMERCIAL SHIPMENTS MADE ON THE USUAL FORMS PROVIDED THEREFOR BY THE CARRIER.

PARAGRAPHS 25 AND 26 OF COMMERCIAL B/L NO. J-11, ISSUED OCTOBER 10, 1935, BY THE SOUTH ATLANTIC STEAMSHIP LINE, AS AGENTS FOR THE ARROW LINE, FOR LINE PURPOSES ONLY, IN CONNECTION WITH THE SHIPMENT IN QUESTION READ IN PART AS FOLLOWS:

NO CLAIM SHALL, UNDER ANY CIRCUMSTANCES WHATEVER, ATTACH TO THE SHIPOWNER FOR FAILURE TO NOTIFY CONSIGNEE OR OTHERS CONCERNED OF THE ARRIVAL OF THE GOODS.

GOODS DESTINED FOR POINTS BEYOND PORT OF DISCHARGE ARE SUBJECT TO ALL CONDITIONS, STIPULATIONS, AND EXCEPTIONS EXPRESSED IN THE CUSTOMARY FORM OF BILL OF LADING, IN USE AT THE TIME OF SHIPMENT BY CARRIER OR CARRIERS COMPLETING THE TRANSIT. UPON DELIVERY OF THE GOODS FROM THE SHIP'S TACKLE AT PORT OF DISCHARGE THE SHIPOWNER'S RESPONSIBILITIES AS SUCH CEASE AND BECOME THOSE OF A FORWARDING AGENT ACTING WITHOUT COMPENSATION AND SOLELY FOR THE OWNER OF THE GOODS. * * * IN EVENT OF THE USUAL MEANS OF CONVEYANCE FROM PORT OF DISCHARGE TO THE PLACE OF DESTINATION AND THE DELIVERY OF THE GOODS THEREAT BEING DELAYED, IMPEDED, INTERRUPTED, OR SUSPENDED BY * * * STOPPAGE OR DISTURBANCE OF LABOR, * * * OR OTHER CONDITIONS BEYOND THE SHIPOWNER'S CONTROL, THE SHIPOWNER MAY IN ITS SOLE DISCRETION AND OPTION FORWARD THE GOODS TO ANY OTHER PLACE APPARENTLY NEAREST ACCESSIBLE, THIS TO BE CONSIDERED A FINAL DELIVERY; OR MAY STORE AND WAREHOUSE THE GOODS AT THE RISK AND EXPENSE OF THE GOODS, FORWARDING SAME TO DESTINATION AS SOON AS PRACTICABLE. * * *

IT APPEARS THAT THE SHIPMENT IN QUESTION WAS DISCHARGED BY THE S.S. DOROTHY CAHILL NOVEMBER 19, 1935, AT THE WATERSIDE MILLING CO. TERMINAL, TACOMA, WASH., AND IT IS STATED BY THE SOUTH ATLANTIC STEAMSHIP LINE IN A LETTER OF JUNE 1, 1936, THAT BALFOUR GUTHRIE AND CO., WHO ARE AGENTS FOR SAID TERMINAL, SENT THE USUAL ARRIVAL NOTICE TO THE WARDEN, UNITED STATES PENITENTIARY, MCNEIL ISLAND, WASH. HOWEVER, DUE TO THE PUGET SOUND FERRY STRIKE CONDITIONS, IT IS ALLEGED TO HAVE BEEN IMPOSSIBLE TO FORWARD THE CARGO IN THE USUAL MANNER TO MCNEIL ISLAND. IT FURTHER APPEARS THAT THE CARGO WAS DESTROYED BY A FIRE AT THE WATERSIDE MILLING CO. TERMINAL JANUARY 7, 1936, AFTER HAVING LAIN ON THE DOCK OF SAID TERMINAL FOR MORE THAN 30 DAYS.

THE EVIDENCE ESTABLISHES THAT THERE EXISTED NO SPECIAL AGREEMENT BETWEEN THE ARROW LINE AND THE PRISON INDUSTRIES, INC., OR THE CONNECTING CARRIERS, THAT THE LIABILITY OF THE FORMER SHOULD EXTEND OVER THE WHOLE ROUTE TO THE DESTINATION OF THE GOODS. IN THE ABSENCE OF SUCH AN AGREEMENT, USAGE, OR STATUTE TO THE CONTRARY, THE LIABILITY OF THE INITIAL CARRIER, RECEIVING GOODS CONSIGNED TO A POINT BEYOND THE TERMINUS OF ITS OWN LINE, TERMINATES WHEN IT TRANSPORTS THE GOODS TO THE END OF ITS LINE AND DELIVERS THEM TO A CONNECTING CARRIER TO BE TRANSPORTED TO THEIR DESTINATION. SEE 10 C.J. 517, 518; RAILROAD CO. V. MANUFACTURING COMPANY, 16 WALL. 318; INSURANCE COMPANY V. RAILROAD COMPANY, 104 U.S. 146; MYRICK V. MICHIGAN CENTRAL RAILROAD COMPANY, 107 U.S. 102; STEWART V. TERRA HAUTE AND I.R. CO., 3 FED.REP. 768; AND CINCINNATI N.O. AND T.P. RY. CO. V. N.K. FAIRBANKS AND CO., 90 FED.REP. 467.

THE QUESTION, THEREFORE, ARISES WHETHER UNDER THE FACTS INVOLVED, THE DELIVERY OF THE CARGO BY THE ARROW LINE TO THE WATERSIDE MILLING CO. TERMINAL CONSTITUTED A COMPLETE DELIVERY TO THE CONNECTING CARRIER, THE PUGET SOUND FREIGHT LINES, SUCH AS WOULD OPERATE TO RELEASE SAID ARROW LINE FROM FURTHER LIABILITY. THE PUBLISHED TARIFFS ON FILE IN THIS OFFICE, COVERING THE PERIOD INVOLVED FAIL TO SHOW THAT THE WATERSIDE MILLING CO. TERMINAL, WHICH IS A GRAIN TERMINAL, NORMALLY FURNISHED TERMINAL FACILITIES FOR GENERAL CARGO TO EITHER THE ARROW LINE OR TO THE PUGET SOUND FREIGHT LINES. WESTBOUND FREIGHT TARIFF NO. 1-C, R. C. THACKARA, AGENT, ISSUED OCTOBER 6, 1935, EFFECTIVE NOVEMBER 10, 1935, SHOWS THAT THE ARROW LINE DOCKS REGULARLY IN TACOMA, WASH., AT THE PORT DOCK AND AT THE WASHINGTON COOPERATIVE EGG AND POULTRY DOCK, AND SINCE THE USE OF THE WATERSIDE MILLING CO. TERMINAL WAS MADE NECESSARY BY STRIKE CONDITIONS, WHICH PREVENTED THE ARROW LINE FROM USING ITS REGULAR DOCKING FACILITIES, THE DELIVERY AS MADE MUST BE CONSIDERED COMPLETE UNDER THE QUOTED EXCEPTIONS FROM DELIVERY CONTAINED IN THE BILL OF LADING. SEE THE TORONTO, 174 FED. 632.

NO GROUNDS EXIST FOR HOLDING THE CONNECTING CARRIER, THE PUGET SOUND FREIGHT LINES, LIABLE FOR THE LOSS IN QUESTION SINCE THE CARGO NEVER CAME INTO ITS CUSTODY EITHER DIRECTLY OR CONSTRUCTIVELY, DELIVERY NOT HAVING BEEN MADE BY THE ARROW LINE AT THE USUAL TERMINAL OF TRANSFER, DUE TO CONDITIONS OVER WHICH IT HAD NO CONTROL.

WHILE GOODS ARE HELD IN STORAGE IN WAREHOUSES NOT OPERATED BY A CARRIER, THE CUSTODY AND POSSESSION AS BETWEEN CARRIER AND CONSIGNEE OR OWNER, IS THAT OF THE CONSIGNEE OR OWNER. PROPRIETY OF OPERATING PRACTICES, NEW YORK WAREHOUSING, 198 I.C.C. 134, 140. THE GENERAL RULE WITH RESPECT TO THE LIABILITY OF A WAREHOUSEMAN, FOR THE PROTECTION OF GOODS IN HIS CUSTODY FROM LOSS OR INJURY BY FIRE, IS THAT HE IS UNDER A DUTY TO EXERCISE ORDINARY CARE. 67 C.J. 507. THERE IS NO EVIDENCE BEFORE THIS OFFICE THAT WOULD TEND TO RELEASE THE TERMINAL FROM LIABILITY, SINCE IT HAS NOT BEEN ESTABLISHED THAT THE FIRE DID NOT RESULT FROM NEGLIGENCE OF EMPLOYEES OF SAID TERMINAL, NOR IS THERE ANY EVIDENCE THAT SUCH EMPLOYEES EXERCISED DUE CARE AND DILIGENCE IN CONNECTION WITH THE RESCUE OF THE CARGO FROM THE FIRE, OR WHETHER SAID TERMINAL HAD TAKEN THE PROPER PRECAUTIONS TO PREVENT THE INCEPTION OR SPREAD OF THE FIRE. ACCORDINGLY, THE NECESSARY STEPS WILL BE TAKEN BY THIS OFFICE TO STATE A CLAIM AGAINST SAID TERMINAL AND TO PROCEED WITH THE COLLECTION THEREOF TO THE EXTENT WARRANTED BY THE FACTS AND LAW AS FINALLY DEVELOPED.

THE QUESTION AS TO LIABILITY--- AS BETWEEN FEDERAL PRISON INDUSTRIES, INC., AND THE UNITED STATES PENITENTIARY, MCNEIL ISLAND--- FOR THE VALUE OF THE CARGO DESTROYED BY FIRE IS DEPENDENT UPON OWNERSHIP THEREOF AT DATE OF DESTRUCTION. THE WORDING OF THE ORDER UNDER WHICH SHIPMENT WAS MADE SPECIFIED "DELIVERY TO US," OR DELIVERY TO UNITED STATES PENITENTIARY, MCNEIL ISLAND, WASH., AND THE DELIVERY TO THE CARRIER, FOR TRANSPORTATION AT THE SELLER'S EXPENSE, TO SUCH PLACE, IS NOT DELIVERY TO THE BUYER, THE CARRIER UNDER SUCH CIRCUMSTANCES BEING THE AGENT OF THE SELLER. SEE 55 C.J. 367, 370, AND AUTHORITIES THEREIN CITED. SINCE THE GOODS IN QUESTION WERE NEVER DELIVERED TO THE UNITED STATES PENITENTIARY, MCNEIL ISLAND, WASH., TITLE THERETO DID NOT PASS FROM PRISON INDUSTRIES, INC. ACCORDINGLY, THE LOSS OF THE CARGO IN QUESTION MUST BE REGARDED AS THAT OF THE FEDERAL PRISON INDUSTRIES, INC. ..END :