THE AFRICA MARU

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Docket Number

Nos. 58, 59.

Attorney(S)

Single Hill, of New York City (Robert E. Hill and Douglas D. Crystal, both of New York City, of counsel), for appellants. Hunt, Hill Betts, of New York City (George C. Sprague, of New York City, of counsel), for appellee Osaka Shoshen Kaisha.

Judges

Martin Thomas Manton

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Smart Summary

Factual and Procedural Background

Two libels were filed by Habicht Braun Co. and others against the steamships Africa Maru and London Maru, and the claimant Osaka Shoshen Kaisha, seeking recovery for cargo damage to walnut meats shipped from Tientsin, China, to New York City in January 1927. The shipments involved transshipment at Kobe, Japan, during rain and snow, and the walnuts were found moldy and damaged upon arrival in Seattle. The District Court entered decrees in favor of the claimants and respondents, and the libelants appealed.

Legal Issues Presented

Whether the damage to the walnut meats was caused by a peril excepted under the bills of lading, such as rain, snow, or sweat, thereby excusing the carrier from liability.
Whether the carrier met its burden of proving that the damage was due to causes excepted in the contract, rather than its own negligence or fault.
Whether the mold damage was caused by an inherent vice in the cargo or by external wetting during transshipment and carriage.
Whether the exceptions in the bills of lading apply to the circumstances of the cargo damage in this case.

Arguments of the Parties

Appellants' Arguments

The walnut meats were received in good condition at Tientsin and were damaged during transit, specifically during transshipment in open lighters exposed to rain and snow at Kobe.
The damage was caused by external wetting, as evidenced by rusted metal bands, blurred ink markings, and mold confined to the exterior layers of the cases.
The damage was not caused by inherent vice or sweat in the ship's hold, as other cargo in the same hold was undamaged and the mold was localized.
The bills of lading do not except mold damage, and the carrier failed to prove that the damage resulted from excepted causes.

Appellee's Arguments

Damage could have resulted from sweat or inherent vice within the cargo, relying on the possibility of moisture in the ship's hold or defects in the walnuts themselves.
Exceptions in the bills of lading for rain, snow, frost, sweat, and climatic effects absolve the carrier from liability for such damage.
Denial that the cargo was unloaded or transshipped during rain or snow, contesting the appellants' claim of exposure to wet conditions.
Assertions that the packaging was sufficient and customary, negating claims of insufficient packing as a cause of damage.

Table of Precedents Cited

Precedent	Rule or Principle Cited For	Application by the Court
The Santa Rita, 176 F. 890, 30 L.R.A. (N.S.) 1210 (C.C.A. 9)	Standards for evaluating deposition evidence in admiralty trials.	The court reviewed depositions with the understanding that the trial judge did not see witnesses, applying admiralty standards in weighing evidence.
Horsley v. Modzelewski, 220 F. 241 (C.C.A. 3)	Admiralty evidentiary standards and burden of proof principles.	Supported the court’s approach to assessing evidence and burden of proof in cargo damage claims.
The Folmina, 212 U.S. 354, 29 S. Ct. 363, 53 L. Ed. 546, 15 Ann. Cas. 748	Carrier’s burden to prove damage caused by excepted perils under the bill of lading.	Applied to hold that the carrier must show damage was due to excepted causes, not its fault.
Liverpool Steam Co. v. Phenix Ins. Co., 129 U.S. 397, 9 S. Ct. 469, 32 L. Ed. 788	Carrier’s liability and exceptions under bills of lading.	Reinforced the principle that damage after shipment is presumed carrier’s responsibility unless excepted causes are proven.
Clark v. Barnwell, 12 How. 272, 13 L. Ed. 985	Burden of proof on carrier to show damage was excepted.	Used to affirm carrier’s burden in damage claims.
Stiles v. Ocean S.S. Co., 34 F.2d 627 (C.C.A. 2)	Carrier liability for cargo damage and burden of proof.	Supported the court’s allocation of burden to the carrier.
Compania Naviera Mexicana v. Sporl, 11 F.2d 777 (C.C.A. 5)	Liability of carrier for cargo damage absent proof of excepted cause.	Applied to affirm that carrier must prove damage was caused by excepted perils.
R. W. Paul, Ltd. v. Northumbrian Shipping Co., 40 Lloyd's L.L. 357 (Kings Bench Division, England)	Carrier liability for cargo damage caused by external wetting rather than inherent vice.	Analogously applied to support the finding that damage was caused by external wetting, not inherent vice.

Court's Reasoning and Analysis

The court analyzed the evidence concerning the condition of the walnut meats at shipment and arrival, noting that the cargo was received in good order in Tientsin and found damaged with mold localized on the exterior of the cases after transshipment during rain and snow. The court found that signs of wetting—such as rusted metal bands and blurred ink—were consistent with exposure to fresh water during transshipment rather than internal sweating or inherent vice. The court rejected the appellee’s claim that sweat in the hold caused the damage because other cargo in the same hold was undamaged and the damage was localized rather than widespread. The court emphasized that the burden was on the carrier to prove that damage was caused by excepted perils under the bills of lading, which it had not done. The court also found no persuasive evidence that the damage resulted from inherent vice or insufficient packing. The court cited analogous precedent from English law that held carriers liable when damage was clearly caused by external wetting rather than defects in the cargo itself. Finally, the court concluded that the exceptions in the bills of lading for rain, snow, and climatic effects do not excuse the carrier’s failure to exercise reasonable care during transshipment to keep the cargo dry.

Holding and Implications

The court REVERSED the decrees of the District Court that had favored the claimants and respondents.

This decision holds the carrier liable for the damage to the walnut meats, concluding that the damage resulted from the carrier’s failure to protect the cargo from external wetting during transshipment. The court did not establish a new legal precedent but applied existing principles regarding carrier liability and burden of proof under bills of lading. The direct effect is a ruling in favor of the appellants, allowing recovery for cargo damage.

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THE AFRICA MARU. THE LONDON MARU. HABICHT BRAUN CO. et al. v. OSAKA SHOSHEN KAISHA (two cases).

MANTON, Circuit Judge.

Appellants' libels were filed to recover for cargo damage to two shipments, aggregating 2,800 cases of walnut meats, shipped in January, 1927, from Tientsin, China, to New York City. The first libel is for damage to 800 cases which were loaded on the appellee's vessels Chosa Maru and Kanan Maru. These cases were transshipped to the Africa Maru at Kobe. An open lighter was used during a fall of rain and snow, and the boxes, it is claimed, were wetted. The second libel is for damage to 2,000 cases shipped from Tientsin in the same month on the steamships Chosa Maru, Kanan Maru, and Busho Maru, and also transhipped in open lighters at Kobe to the steamship London Maru during a fall of rain and snow. When the walnuts arrived at Seattle, they were found in a moldy and damaged condition. They were discharged there, to be reconditioned and sold to avoid further loss. The cases containing the walnut meats, which were discharged, were found to show clear signs of having been wetted. The external marks were blurred and smeared, and the metal strips around the cases were rusted. Tests made show wetting was due to fresh, and not salt, water.

In the Africa Maru shipment, there is a claim of supporting evidence of sweat in the hold from which the walnut meats were discharged. But the testimony satisfactorily establishes that the 800 cases contained in this shipment were damp externally; that the ink markings had run, the bands were rusted, and the mold was apparently on the outside of the cases. If there had been sufficient sweat in this hold of the vessel to cause these manifestations of wetting, it is clear that similar signs would have been present on some 575 other cases of walnut meats which were in the same hold. It is unlikely that sweat would have collected in one portion of the hold, and of such magnitude as to cause the damage herein referred to, and not subject the other cases to the same sweat and damage. Moreover, it appears that other commodities consisting of cotton rags and peas which were not damaged by mold were in the same hold, while all of the 800 cases of walnuts had to be reconditioned.

There was no claim of sweat in the hold of the London Maru where its cargo was placed and found damaged. It was also established that other cases of walnuts shipped in the same hold came through undamaged.

In the damaged cases, the mold in all instances was confined to a layer of from one-half to an inch or two inches thick along the side, bottom, or ends of the cases in juxtaposition to the side of the case showing indication of wetting. Where the layer of mold was cut or scraped off, the nuts on the inside were sweet and clean. This would tend to establish that the damage did not result from internal, but rather from external, causes. It is admitted that the walnuts were received in apparent good condition at Tientsin. The transshipment at Kobe is conceded, as is their damaged condition when delivered at Seattle.

The evidence was taken largely by deposition, and the trial judge did not have the advantage of seeing and hearing the witnesses. We therefore have examined the weight to be given to these depositions, viewing them in the light of an admiralty trial judge. The Santa Rita, 176 F. 890, 30 L.R.A. (N.S.) 1210 (C.C.A. 9); Horsley v. Modzelewski, 220 F. 241 (C.C.A. 3).

The bills of lading do not grant exceptions for mold damage. They do, however, contain the following exceptions:

"2. * * * perils of the sea * * * and all and every other danger, accident of land, seas, rivers and/or navigation of whatsoever nature and kind always excepted.

"* * * The ship and/or carrier shall not be liable for the consequences of * * * rain; * * * snow; frost; climatic effects; * * * decay; * * * injury caused by * * * heating, * * * breakage; * * * insufficient packing; * * * sweat. * * *"

"7. * * * all perishable goods, * * * are taken solely at the risk of the shipper, consignee and/or owner of the goods."

The burden was on the appellee to establish that the damage sustained was due to a cause excepted in the bill of lading. The Folmina, 212 U.S. 354, 29 S. Ct. 363, 53 L. Ed. 546, 15 Ann. Cas. 748; Liverpool Steam Co. v. Phenix Ins. Co., 129 U.S. 397, 9 S. Ct. 469, 32 L. Ed. 788. And where the goods, admitted to have been received in apparent good condition, were delivered damaged after the voyage, the burden is on the carrier to show that it was occasioned by one of the perils or causes for which it was not responsible. Clark v. Barnwell, 12 How. 272, 13 L. Ed. 985; Stiles v. Ocean S.S. Co., 34 F.2d 627 (C.C.A. 2); Compania Naviera Mexicana v. Sporl (C.C.A. 5) 11 F.2d 777.

The mold was found not to have existed throughout the cases, and the nuts in the center of the boxes were in good condition. This, we think, establishes that the mold was not due to an inherent vice in the nuts. If due to a defect or vice in the nuts, mold and consequent damage would have been found throughout the cases. Instead the mold was confined either to the top, bottom, or the end, but never mixed throughout the case. Moreover, an expert witness competent to speak states that this mold, which was found, did not result from sweating or heat, nor from an inherent vice. There is also proof that mold would result from water, wetting from external source, which came in contact with the cases under favorable conditions for mold growth. Nor do we find persuasive proof or argument for the claim that the damage was caused by an inherent vice. It is said that the season in which these nuts were grown was a rainy one, but no proof establishes that other nuts suffered from mold either in shipment or at home.

Under somewhat similar circumstances, the Kings Bench Division in England, in R. W. Paul, Ltd., v. Northumbrian Shipping Co., 40 Lloyd's L.L. 357, held a carrier liable for cargo damage. There a shipment of maize was placed in a deep tank which was separated into port and starboard compartments by a bulkhead running fore and aft. When the maize was unloaded on the port side, it was found to be in good condition. On the starboard side it was in good condition until the last seven feet, which meant about 100 tons, which was all bad. At this point there was a substantial crust marking the beginning of the place where the maize had been damaged by wetting of some sort. The libelant contended that the maize was damaged by sea water, although no evidence was produced as to how the water got in there. The ship was tight; there were no defects in any pipes that passed through the plates, nor in the plates or bulkheads. There was no trace of any leak into the deep tank. The ship contended that a proper inference was that the damage was due to moisture in the maize itself. The court found that the season in which the maize was grown was wet, damp, and muggy, and that at the time of shipment and succeeding days the weather was damp and humidity very high, all favorable to the development of harmful moisture in the grain. But the court, pointing out that the damage was congregated in one portion and not scattered throughout, held that the moisture content of the maize itself was not responsible for the damage and refused to excuse the carrier from liability on the theory that it was caused by an inherent vice. The court said:

"Now, when one comes to realize that the whole of one side was good, and that all of it was good on the other side except the bottom 100 tons, it is almost impossible for the ordinary mind to escape the conclusion that the cause of the trouble in the part which was bad was something which happened to it from below, after it all was loaded, because to imagine that a defect in the grain itself, which must have been unevenly distributed in any view because only 100 tons out of 300 tons went bad, might by the merest chance have so sorted itself out in the process of this indistinguished loading so that all the bad, or all that was possibly contaminable by bad, should have got to the bottom of it, and all that was good or beyond the reach of contamination should have got to the other side, so that there was none bad there — it is not as if there was some bad on one side here and there — is the most difficult thing; it is the most difficult thing for the ordinary man to conceive; and therefore one is almost driven, apart from something very startling, to come to the conclusion that whatever happened, whatever the cause of the disaster was, it was something that happened after the maize was loaded."

Nor is there merit in the suggestion that the cases were insufficient. The containers used were the usual and customary boxes. The appellee's witnesses testified that they were of the same type as all other shipments. They were in good condition.

The weather record shows rain and snow during the days of transshipment. Appellee submits depositions denying the fact that cargoes were unloaded during rain or snowy weather. But it would seem that there was no other occasion for the cases to have become wet, with the result above mentioned. However, the storage of wet or even damp cases in the humid atmosphere of a ship's hold on a winter voyage, where ventilation is restricted, would produce conditions favorable to mold growth. Exceptions to damage or loss by rain, frost, or snow, in the bills of lading, will not, under the circumstances, excuse for the neglect in transshipment to use reasonable care in keeping the cases dry. On this record it is clear to us that the appellee has not sustained its burden, under the circumstances, of showing that the mold found at Seattle was not due to its fault.

The decrees are reversed.