B-114472, JUL. 10, 1956

B-114472, JUL. 10, 1956

TO FURNESS, WITHY AND CO. LTD.:

REFERENCE IS MADE TO YOUR LETTER OF SEPTEMBER 15, 1955, IN EFFECT REQUESTING RECONSIDERATION OF OUR DECISION OF MARCH 16, 1955, B-114472, SUSTAINING THE DEDUCTION OF $160 IN MAKING PAYMENT OF YOUR BILL NO. 1117 IN ORDER TO ADJUST YOUR LIABILITY FOR DAMAGE TO A SHIPMENT OF RUBBER TRANSPORTED ABROAD THE "CINGALESE PRINCE" FROM PENANG, BRITISH MALAYA, TO NEW YORK, NEW YORK, DURING MAY AND JUNE, 1951, AND REQUESTING FAVORABLE ACTION ON OTHER CLAIMS OF A SIMILAR NATURE. YOU URGE THAT THE SET-OFFS SHOULD NOT HAVE BEEN MADE, SINCE THE GOVERNMENT DID NOT BRING SUITS WITHIN ONE YEAR FROM THE DATE OF OUTTURN AS REQUIRED UNDER SECTION 3 (6) OF THE CARRIAGE OF GOODS BY SEA ACT, 46 U.S.C. 1303 (6), AND FURTHER, THAT THE DAMAGE WAS OF A PRESHIPMENT NATURE. YOU SUBMITTED A NUMBER OF EXCERPTS FROM CASES IN SUPPORT OF YOUR POSITION.

WE HAVE REVIEWED THE MATTER CAREFULLY, AND HAVE FOUND NOTHING REQUIRING MODIFICATION OF OUR PREVIOUS HOLDING. WITHOUT REGARD TO THE QUESTION WHETHER THE GOVERNMENT IS BOUND BY THE LIMITATION ON SUITS CONTAINED IN THE CARRIAGE OF GOODS BY SEA ACT, WE ARE OF THE OPINION THAT SUCH LIMITATION APPLIES TO SUITS ONLY, AND DOES NOT PRECLUDE THE GOVERNMENT'S RECOVERING DAMAGES BY SET OFF. SEE SON SHIPPING CO. V. DEFASSE AND TANGHE, 199 F.2D 687, IN WHICH THE UNITED STATES COURT OF APPEALS FOR THE SECOND CIRCUIT HELD THAT A REQUEST FOR ARBITRATION WAS NOT BARRED BY THE LIMITATION, SINCE ARBITRATION IS NOT A SUIT. SEE ALSO THE OPINION OF THE COURT IN UNITED STATES V. THE SOUTH STAR, 115 F.SUPP. 102, AFFIRMED 210 F.2D 44, INDICATING THAT THE LIMITATION "IS A TIME LIMITATION ON THE RIGHT TO BRING AN ACTION FOR THE LOSS OR DAMAGE.'

SINCE THERE IS NO INDICATION ON ANY OF THE BILLS OF LADING THAT THE GOODS WERE RECEIVED BY THE CARRIER IN DAMAGED CONDITION, AND SINCE THE GOODS WERE FOUND TO BE DAMAGED UPON OUTTURN, THE FAILURE OF THE CARRIER TO DELIVER THE CARGOES IN GOOD ORDER AND CONDITION RAISES A PRESUMPTION OF LIABILITY, AND THE CARRIER HAS THE BURDEN OF BRINGING ITSELF WITHIN THE EXEMPTION FROM LIABILITY OR SHOWING THAT THE DAMAGE WAS NOT ITS FAULT. SEE UNIVERSAL LEAF TOBACCO CO. OF CHINA V. BANK LINE, LTD., 115 F.SUPP. 353, AND ORIENT INSURANCE CO. OF CHINA V. FLOTA MERCANTE DEL ESTADO, 102 F.SUPP. 729, AFFIRMED 198 F.2D 740. THE CARRIER HAS PRESENTED NO SUBSTANTIAL EVIDENCE IN ANY CASE THAT THE DAMAGE WAS NOT ITS FAULT. ACCORDINGLY OUR PREVIOUS DECISION ON YOUR BILL 1117 IS REAFFIRMED. NOTICE OF ACTION ON THE OTHER CLAIMS WILL BE FURNISHED SHORTLY.