B-114039, MAY 1, 1953

B-114039, MAY 1, 1953

PRECIS-UNAVAILABLE

WOODCRAFT WORKS LIMITED:

REFERENCE IS MADE TO YOUR LETTERS OF JANUARY 23 AND MARCH 26, 1953, REQUESTING REVIEW OF SETTLEMENT DATED DECEMBER 2, 1952, WHEREIN THERE WAS DISALLOWED YOUR CLAIMS FOR DEMURRAGE WHICH ACCRUED IN THE TOTAL SUM OF $16,042.10 AGAINST CERTAIN CARGOES OF LUMBER DELIVERED TO THE DEPARTMENT OF THE ARMY AT NAHA, OKINAWA, UNDER CONTRACTS NOS. W-92-500 05 AND W-92- 500-G27 1/2, DATED JUNE 21, 1949 AND JUNE 16, 1949, RESPECTIVELY.

YOU CONTEND, IN SUBSTANCE, THAT DUE TO THE INADEQUATE UNLOADING FACILITIES AT THE NAHA HARBOR AND THE CONGESTED CONDITION OF THAT PORT, DISCHARGE OF THE CARGO ABOARD THE S.S. JINTSUGWA MARU AND THE S.S. FUEI MARU, ARRIVING AT NAHA ON JULY 15, 1950 AND SEPTEMBER 14, 1950, RESPECTIVELY, WAS DELAYED OWING TO OCCUPATION OF ALL THE AVAILABLE UNLOADING BERTHS BY VESSELS OF HIGHER PRIORITY. ALSO, YOU CONTEND THAT DESPITE YOUR EFFORTS TO SCHEDULE THE VESSELS IN AT ADVANTAGEOUS TIMES, AND EVEN THOUGH THE BUYER ALLEGEDLY WAS GIVEN ADVANCE NOTIFICATION OF THE SAILING OF THE VESSELS, SO AS TO ARRANGE FOR THEIR CLEARANCE UPON ARRIVAL AT NAHA, NEVERTHELESS, DUE TO THE CONDITIONS MENTIONED, THE UNLOADING OF THE CARGOES WAS DELAYED AND, AS A CONSEQUENCE THEREOF, YOU WERE COMPELLED TO PAY DEMURRAGE ON THE VESSELS TOTALING $16,042.10.

YOU CLAIM REIMBURSEMENT FOR THESE CHARGES UNDER ARTICLE 7 OF THE CONTRACTS WHICH READS:

"DELIVERY, TITLE AND RISK: DELIVERY OF EACH SHIPMENT OF GOODS SHALL TAKE PLACE WHEN BILLS OF LADING ARE ISSUED THEREFOR. TITLE AND RISK OF LOSS AND DAMAGE TO THE GOODS SHALL PASS TO BUYER UPON SUCH DELIVERY."

APPARENTLY, IT IS YOUR POSITION THAT SINCE TITLE TO THE GOODS PASSED TO THE GOVERNMENT UPON LOADING OF THE LUMBER ABOARD THE VESSEL AT A PHILIPPINE PORT AND WHEN THE PREPAID ON-BOARD OCEAN BILL OF LADING HAD BEEN ISSUED FOR ITS TRANSIT TO DESTINATION, THEREAFTER YOUR RESPONSIBILITY WITH RESPECT TO THE CARGO CEASED, AND THE GOVERNMENT THEREUPON BECAME LIABLE FOR ALL COSTS AND EXPENSES INCIDENT TO DISCHARGE OF THE CARGOES AT THE PORT OF DESTINATION, INCLUDING DEMURRAGE THEREON.

WHILE IT IS TRUE THE GOVERNMENT DID ASSUME ALL RESPONSIBILITY FOR "RISK OF LOSS AND DAMAGE" TO THE LUMBER AFTER ITS DELIVERY ABOARD VESSEL AND UPON THE ISSUANCE OF THE PREPAID OCEAN BILL OF LADING ON EACH SHIPMENT, THERE IS NOTHING IN THE CONTRACT, NOR ELSEWHERE IN THE NEGOTIATIONS BETWEEN THE PARTIES, WHICH COULD BE INTERPRETED AS OBLIGATING THE GOVERNMENT FOR THE PAYMENT OF FREIGHT OR DEMURRAGE ON THESE SHIPMENTS. IS NOTED THAT BOTH OF THESE CONTRACTS CONTEMPLATED DELIVERY OF THE LUMBER, WITH ALL FREIGHT PREPAID THEREON, TO NAHA, OKINAWA, AND SUCH RISKS AS WERE ASSUMED BY THE GOVERNMENT UNDER ARTICLE 7, SUPRA, HAD RELATION ONLY TO POSSIBLE LOSS AND DAMAGE TO THE GOODS IN TRANSIT, AND HAVE NO RELATIONSHIP WHATEVER TO YOUR UNEQUIVOCAL OBLIGATION TO BEAR ALL COSTS INCIDENT TO TRANSIT OF THE GOODS TO THE SPECIFIED POINT OF DESTINATION.

DEMURRAGE HAS BEEN DEFINED LEGALLY TO BE AN EXTENDED FREIGHT OR REWARD TO THE VESSEL IN COMPENSATION FOR THE EARNINGS SHE HAS BEEN IMPROPERLY CAUSED TO LOSE, AND LIABILITY FOR IT STANDS UPON THE SAME FOOTING AS LIABILITY FOR FREIGHT. THE M.S. BACON V. ERIE & W.T. CO., 3 FED. 344; 30 AM. ST. REP. 635. ALSO, THE COURTS HAVE RULED THAT LIABILITY FOR DEMURRAGE GENERALLY RESTS UPON A CONTRACT, EXPRESS OR IMPLIED, AND SINCE THE CONTRACT OF CARRIAGE IS MADE WITH THE CONSIGNOR, HE PERSONALLY IS LIABLE FOR DEMURRAGE OR DAMAGES IN THE NATURE OF DEMURRAGE FOR DETENTION BEYOND THE AGREED OR REASONABLE TIME FOR UNLOADING. SEE GAGE V. MORSE, 90 AM. DEC. 155; VAN ETTEN V. NEWTON, 31 N.E. 334. THEREFORE, IN THE ABSENCE OF AN EXPRESS STIPULATION IN THE BILLS OF LADING THAT THE CONSIGNEE (GOVERNMENT) WAS TO PAY DEMURRAGE ON THESE SHIPMENTS, THE LATTER IS NOT BOUND TO RESPOND IN DAMAGES IN THE NATURE OF DEMURRAGE FOR DELAYS IN UNLOADING THESE VESSELS. SEE CROSSMAN V. BURRILL, 179 U.S. 100. INASMUCH AS THE GOVERNMENT WAS NOT A PARTY TO THE CONTRACTS OF CARRIAGE COVERING THESE SHIPMENTS, ANY CONTROVERSY CONCERNING THE PAYMENT OF DEMURRAGE THEREON NECESSARILY IS FOR ADJUDICATION SOLELY BETWEEN YOU, AS THE CONSIGNOR, AND THE OWNERS OF THE VESSELS.

ACCORDINGLY, THE SETTLEMENT OF DECEMBER 2, 1952, DISALLOWING YOUR CLAIMS, IS SUSTAINED.