Opinion of the Court. GULF, MOBILE & NORTHERN RAILROAD CO. v. HELVERING, COMMISSIONER OF INTERNAL REVENUE. CERTIORARI TO THE UNITED STATES COURT OF APPEALS FOR THE DISTRICT OF COLUMBIA. No. 413. Argued November 13, 1934.-Decided December 3, 1934. Amortized discount on bonds of one corporation held by another cannot be deducted from gross income in their consolidated tax return. Old Mission Portland Cement Co. v. Helvering, ante, p. 289. 63 App. D. C. 244; 71 F. (2d) 953, affirmed. CERTIORARI * to review the affirmance of an order of the Board of Tax Appeals, 22 B. T. A. 233, sustaining a deficiency assessment. Mr. George E. H. Goodner for petitioner. Mr. Robert N. Anderson, with whom Assistant Attorney General Wideman and Messrs. Sewall Key and A. F. Prescott were on the brief, for respondent. MR. JUSTICE STONE delivered the opinion of the Court. Certiorari was granted in this case "limited to the question of the right of the taxpayer to deductions on account of amortization of bond discount." At various dates between 1913 and 1916, Meridian & Memphis Railway Company sold its thirty-year 5% gold bonds at a discount. During the years 1924 to 1926, inclusive, while petitioner was the owner and holder of the entire bond issue, it joined with the Meridian & Memphis in filing consolidated income tax returns as affiliated corporations. In each year the latter deducted from gross income the amortized bond discount. The deductions were disallowed by the Commissioner. His action was sustained by the Board of Tax * See Table of Cases Reported in this volume. Appeals, 22 B. T. A. 233, and by the Court of Appeals for the District of Columbia. 71 F. (2d) 953. The question presented is the same as that decided this day in No. 107, Old Mission Portland Cement Co. v. Helvering, ante, p. 289. The judgment of the court below was therefore right and is Affirmed. MR. JUSTICE BUTLER and MR. JUSTICE ROBERTS think the judgment should be reversed. SCHNELL ET AL. v. THE VALLESCURA. CERTIORARI TO THE CIRCUIT COURT OF APPEALS FOR THE SECOND CIRCUIT. No. 134. Argued November 14, 1934.-Decided December 3, 1934. 1. The provision of § 3 of the Harter Act, relieving vessels and their owners from the consequences of "fault or error in navigation or management" of the vessels, does not relate to damage caused to cargo by failure to care for it properly on the voyage, e. g., failure to give proper ventilation to a shipment of onions, causing decay. P. 303. 2. It is the general rule that a carrier by sea who delivers in bad condition cargo that he received for shipment in good condition must bear the loss unless he can bring himself within some common law or stipulated exception to his general liability. P. 303. 3. To such exceptions the law itself annexes a condition that they shall relieve the carrier from liability for loss from an excepted cause only if in the course of the voyage he has used due care to guard against it; and this is recognized and continued in the first section of the Harter Act, which makes it unlawful to insert any clause in a bill of lading whereby the carrier shall be relieved of liability for negligence. P. 304. 4. A stipulation in a bill of lading excepting liability for damage to perishable cargo by "decay" relates to decay due to inherent defects in the cargo or caused by excepted perils of the sea; it leaves the carrier liable for decay resulting from negligent stowage of the cargo or failure to care for it properly during the voyage. P. 305. 296 Argument for Respondent. 5. It appeared by the evidence that decay of a cargo of onions was the result of poor ventilation caused by closure of hatches and ventilators for many hours during the voyage, and that for a specified part of this time the closure was proper because of bad weather, but for the rest of the time it was improper. Held that the burden was on the carrier to show how much of the damage was. due to the sea peril (excepted in the bill of lading); and that, failing in this, the ship was liable for the entire loss. P. 306. 70 F. (2d) 261, reversed. CERTIORARI * to review the reversal of a decree in admiralty finding a ship liable for damage to a cargo of onions. Mr. Joseph Joffe, with whom Mr. Louis Joffe was on the brief, for petitioners. An exception in a bill of lading does not exempt the ship from liability for loss or damage from an excepted peril to which its negligence contributed. Where the nature of the case precludes the ascertainment of the amount of damages with certainty, or where it seems impossible to distinguish between the consequences that were lawfully originated and those unlawfully imposed, the wrongdoer must bear the entire loss, or make the separation himself. Hamilton Shoe Co. v. Wolf Bros., 240 U. S. 251, 260–262; Westinghouse Co. v. Wagner Mfg. Co., 225 U. S. 604, 622; Jenkins v. Pennsylvania R. Co., 67 N. J. L. 331, 336; Story Parchment Co. v. Paterson Co., 282 U. S. 555, 563-565; Speyer v. The Mary Belle Roberts, 22 Fed. Cas., No. 13240; The Atlas, 93 U. S. 302, 317. Mr. Homer L. Loomis for respondent. The damage having been decay, the risks of which were expressly assumed by the shipper, the petitioners were entitled to recover only on showing that the carrier could *See Table of Cases Reported in this volume. Argument for Respondent. 293 U.S. by the exercise of due skill and care have averted the decay. Damage due to inherent vice, defect or disease of the thing carried, independent of the act of man, is included within damage resulting from Act of God, from liability for which the carrier is exempted at common law. Warden v. Greer, 6 Watts (Pa.) 424; Nugent v. Smith, 1 C. P. D. 19, 423, 441; Clark v. Barnwell, 12 How. 272, 282. Special contracts relieving the carrier from liability for damage that generally happens, or as often as not may happen, without negligence on his part or on the part of any other human actor, are deemed reasonable and liberally construed. York Co. v. Central Railroad, 3 Wall. 107; Cau v. Texas & Pacific Ry. Co., 194 U. S. 427. And particularly is that true of damage developing from within the goods themselves, such as decay. Clark v. Barnwell, supra, at p. 282; Railroad Co. v. Lockwood, 17 Wall. 357, 380; The Florinda, 31 F. (2d) 262, 264; The Toyohashi Maru, 13 F. (2d) 871. In such case there is no room for the presumption of the common law that the particular kind of damage complained of happened by reason of the negligence of the carrier, or that because he or his servants had the goods in their exclusive possession at the time the decay set in, they were in any better position than the shipper himself to explain the cause of such decay. It was particularly appropriate, therefore, in the carriage on long ocean voyages of goods particularly susceptible to decay, that the parties should by agreement substitute their own more rational presumption for that of the common law. In view of the Spanish onion's high susceptibility to decay, in view of the fact that such decay can only develop from infection by, and rapid multiplication of, bacteria and spores operating in mysterious and uncertain fashion upon the inner tissues of the onion, and in view of the fact 296 Argument for Respondent. that there is no way of determining whether the onion is so infected or diseased by examining it from the outside, until the decay is well advanced, all as shown by the uncontradicted proofs herein, it becomes at once obvious that, for the carrier to have attempted their transportation across the Atlantic under any other sort of an arrangement, would have been most unreasonable. And certainly it was at the very least fitting and proper that the carrier's common-law insurer risk of decay should be assumed by the shipper, and by him placed, if he felt so advised, with an insurance company especially organized and equipped to bear such risks. Once the damage has been shown to fall prima facie within the exception, the burden is upon the goods' owner to show, not merely negligence on the part of the carrier, even though concurring negligence, but, in addition, that such negligence was the efficient cause of the loss; that the loss could have been avoided or prevented by the exercise of due skill and care on the part of the carrier. Clark v. Barnwell, 12 How. 272, 280; Transportation Co. v. Downer, 11 Wall. 129, 133; Cau v. Texas & Pacific Ry. Co., 194 U. S. 427, 432; The Isla de Panay, 292 Fed. 723, aff'd, 267 U. S. 260; United States v. M. Levy's Sons, 288 Fed. 544, 545; Wertheimer v. Pennsylvania R. Co., 1 Fed. 232, 234; Wolff v. The Vaderland, 18 Fed. 733, 739. The rule that, where damage has certainly resulted from a given wrong but is uncertain in amount, he that has caused the damage must be content with an approximation thereof, or, if that be impossible, bear the whole loss (Hamilton Shoe Co. v. Wolf Bros., 240 U. S. 251), applies only where the damages are "definitely attributable to the wrong "; it has no application to "such as are not the certain result of the wrong." Story Parchment Co. v. Paterson Co., 282 U. S. 555, 562-563. The fault of the carrier here complained of was at worst a fault in management of ship from responsibility |