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United Merchants and Manufacturers, Inc., Plaintiff,<BR> v. <BR>United States Lines Company, Defendant.

SCHIMMEL, J.

Martin M. Baxter for defendant. Erwin Millimet for plaintiff. SCHIMMEL, J. This is a motion by the defendant under subdivision 5 of rule 107 of the Rules of Civil Practice to dismiss the complaint. The action was brought to recover damages for an alleged failure of the defendant to make timely delivery of certain goods which were consigned to the plaintiff. On December 15, 1950, there were delivered to defendant in Yokohama, Japan, four cases of silk piece goods for transportation aboard the "SS Pioneer Dale", one of defendant's vessels. The goods were consigned to the plaintiff in New York under the terms of a certain bill of lading issued to the shipper. The vessel arrived in New York on January 21, 1951. The plaintiff says that on that day it presented the bill of lading to the such liability" (emphasis supplied). The word "such" necessarily refers to "liability for loss or damage to or in connection with the goods, arising from negligence, fault or failure in the duties and obligations provided in this section" (emphasis supplied). Section 3 is concerned only with the carrier's obligation to "properly and carefully load, handle, stow, carry, keep, care for, and discharge the goods carried", and not with his obligation to make timely delivery. Plaintiff suggests that the words "in connection with" in subdivision 8 enlarge the meaning of the prohibition against lessening of liability, but I do not believe that these words can be so taken from context. Thus there is nothing in section 3, or elsewhere in the act, to prevent a carrier from limiting his liability for failure to make timely delivery, provided the limitation be a reasonable one. It is not contended, and certainly such a contention would not hold, that a one-year period of limitation for the bringing of suit is unreasonably short or otherwise unconscionable. The action is therefore barred because it was brought after the expiration of the period of limitation provided in the bill of lading. The words "time limited by law" in subdivision 5 of rule 107 of the Rules of Civil Practice apply as well to a limitation of time for the bringing of an action prescribed by agreement of the parties as to a statutory period of limitation (Califano v. Citizens Ins. Co. of New Jersey, 163 Misc. 542, affd. 252 App. Div. 731, motion for leave to appeal denied, 276 N.Y. 687). Accordingly, the motion to dismiss the complaint under subdivision 5 of rule 107 of the Rules of Civil Practice is granted. Judgment may be entered in favor of the defendant.

(On reargument, May 18, 1953.)

Upon reargument: It now appears that plaintiff's counsel, through an oversight on their part, presented to this court the wrong blank form bill of lading. The court decided this motion upon the basis of the "long form" bill of lading which was submitted by plaintiff's counsel. The form of bill of lading which plaintiff's counsel handed to the court and upon the basis of which such counsel sought a decision of the motion is one which is now used by defendant, at least for some of its services. Counsel for the respective parties are now in agreement, however, that at the time of the transaction here involved and for this transaction, another form was used; that such form contained the following provision; "In any event, the carrier and the ship shall be discharged from all liability in respect of loss or damage unless suit is brought within one year after delivery of the goods or the date when the goods should have been delivered". This provision appears to me to apply only to physical loss or damage and not to loss of market; this is so for the reasons indicated in my original opinion. The provision is substantially the same as those of the Carriage of Goods by Sea Act of 1936, subdivision 6 of section 3 thereof (U. S. Code, tit. 46, § 1303, subd. [6]), and should be interpreted like the statute. Indeed, it is reasonable to infer that the bill of lading in question was intended to conform in this respect to the act, and not to deviate from it. Moreover, apart from any statute, such a clause in a bill of lading has been construed to apply only to physical loss or damage and not to loss of market. This is indicated by the authorities cited in my original opinion (Johnson v. Missouri, Kansas & Texas Ry. Co., 107 App. Div. 374; Frey v. New York Central & H. R. R. R. Co., 114 App. Div. 747; McElwain v. Union Pacific R. R. Co., 101 Neb. 484). Accordingly, upon this reargument I hold that the present action, which was commenced more than a year after the delivery of the goods, is not barred by the above-quoted clause of the said "long form" bill of lading. The "long form" bill of lading which plaintiff's counsel by mistake submitted to the court seems to have been put in use after the completion of the contract of shipment here involved. Such bill of lading, upon which the original decision was based, would, of course, bar the present action since it reads as follows: "In any event, the carrier and the ship shall be discharged from all liability for any loss, damage or delay unless suit is brought within one year after delivery of the goods or the date when the goods should have been delivered." (Emphasis supplied.) As indicated in the original opinion, the words "or delay" make all the difference. Upon this reargument the motion of the defendant under rule 107 of the Rules of Civil Practice to dismiss the complaint is denied.

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UNITED MERCHS. & MFRS. v. US Lines Co.
(May 18, 1953)