one ship to another, notwithstanding attempt from Cullen, Allen & Co., for shipment to contract against liability during transhipment, since company, after issuing through bill of lading, could not thereafter contract against such liability. 2. Shipping 141(1)-Steamship company held liable for negligence in lightering potatoes in freezing weather, notwithstanding shipment at owner's risk. Steamship company, whether or not a common carrier, held liable for negligence in lightering potatoes during freezing weather without providing sufficient covering; provision of bill of lading that shipment was at sole risk of owners not covering negligence of carrier. Appeal from the District Court of the United States for the Southern District of New York. Receivership proceeding by Wendell P. Colton against the New York & Cuba Mail Steamship Company, wherein John M. McCauley filed a claim. Decree for claimant, and defendant and Henry E. Cabaud, as substituted receiver, appeal. Affirmed. McCauley, the appellee herein, filed his claim against the New York & Cuba Mail Steamship Company and its receiver in equity for damages to a shipment of Irish potatoes. The matter was referred to Hon. Wallace Macfarlane, as special master, who reported that the claimant should have damages in the sum of $6,189.50 because of the negligence of the defendants. This report was confirmed by Judge Goddard by an order providing for a decree against the steamship company for the above amount, and from that decree the defendants appeal. Affirmed. on board the steamship Regina, now ly- The contract also had stamped on it the clause: "Ship not accountable for damage by frost." The potatoes reached New York in good order on March 28, 1923, and were discharged by the Regina on an open lighter furnished by the Ward Line on the afternoon of March 28th and during the succeeding night and early morning. The temperature was about 10° above zero and a northwest wind was blowing. Not only was an open -lighter unfitted for transportation of such perishable cargo in extremely cold weather, but there seems to have been no sufficient attempt to protect the potatoes on the lighter by properly battened tarpaulins. The only evidence is that of McCauley's associate, Sullivan, who testified that "the tarpaulin cover was just thrown on top; the edges of it were flapping in the wind," and that of Quigley, McCauley's foreman, who Cook, Nathan & Lehman, of New York said there were "no ropes on the tarpaulin City (Edgar M. Souza and Louis M. Loeb, tying it down; just a piece spread over the both of New York City, of counsel), for top; it was not held at all; the appellee. wind was blowing it up and down." The tesBefore L. HAND, SWAN, and AUGUS- timony of the witness Cole was to the same TUS N. HAND, Circuit Judges. Rogers & Whitaker, of New York City (Horace L. Cheyney and William J. Dean, both of New York City, of counsel), for appellants. AUGUSTUS N. HAND, Circuit Judge. The claimant purchased, subject to inspection, 3,627 bags of Irish potatoes, which had been shipped on the White Star steamship Regina, and received from his vendor a duly indorsed bill of lading issued by the agents of the New York & Cuba Mail Steamship Company (known as the Ward Line). This document, designated on its face as "New York & Cuba Mail Steamship Line Through Bill of Lading," read as follows: "Received in apparent good condition effect. The Ward Line had been warned by McCauley against using an open lighter for transshipment in such cold weather, and had said that the open lighter was the only one available, but agreed to cover the lighter with heavy tarpaulins and not to load during the night of the 28th of March. The shipment was exposed during the loading at night, and afterwards uncovered, except for an old piece of tas pulin, which partly covered the top and was flapping in the wind. As an inevitable result of such neglect of care of the cargo a substantial portion of it 27 F.(2d) 671 was badly frostbitten. McCauley examined it at the Ward Line pier and found the good potatoes could not be separated from the bad. The extent of the freezing could not then be determined, and governmental regulation did not permit Irish potatoes to be landed in this country. By the time they had reached Havana the whole shipment was more or less tainted by the potatoes that had been badly frozen. After the potatoes were loaded from the lighter upon the Ward Line steamer Orizaba, they were transported to Havana, where the whole shipment was sold at a loss, as compared with the sound value of $6,189.50. It was sufficiently proved that the claimant made every attempt promptly to dispose of the potatoes to various Havana dealers at a better price, but could get no one but the person to whom he sold to purchase the damaged goods. The evidence and findings of the master completely dispose of the contention that there was sufficient care shown in the transshipping of the cargo, and also of the contention that there was a neglect on the part of McCauley in selling the potatoes in Havana without separating the worthless ones from the others. The claimant had the burden of proof but amply sustained it in every way. Therefore the only matters for serious consideration are two questions of law: (1) Was the Ward Line acting as a common carrier in lightering the potatoes? (2) Was the Ward Line liable for its negligence, whether acting as a common car rier or not? [1] The contention that the voyage was split up into three stages, and that the obligation of the Ward Line was satisfied by furnishing a proper lighter as agents for the purpose of transshipment, is contrary to the entire conception of a "through bill of lading." The Ward Line issued a through bill of lading, and after doing this proceeded to contract against its liability during transshipment. This it could not do (The Kensington, 183 U. S. 268, 22 S. Ct. 102, 46 L. Ed. 190; Santa Fé R. Co. v. Grant Bros., 228 U. S. 184, 33 S. Ct. 474, 57 L. Ed. 787), and for this reason alone the decree must be affirmed. The defendants have attempted to distinguish Insurance Company of North America v. North German Lloyd Co. (D. C.) 106 F. 973, affirmed (C. C. A.) 110 F. 420, because there the carrier furnished an unseaworthy lighter, which capsized before the cargo was loaded on the ship. In that case there was a clause in the contract of carriage, "that the carrier shall have liberty to convey goods 27 F.(2d)-43 in lighters to and from the ship, and to discharge into lighters at the risk of the owner of the goods." But the court, in spite of that clause, held, following Bulkley v. Naumkeag Steam Cotton Co., 24 How. 386, 16 L. Ed. 599, that the lighter was simply a substitute for the ship, and the carrier was liable. The decision depended on a finding that the North German Lloyd was a common carrier throughout the service, and had not exercised due diligence to make the lighter seaworthy, so as to come within the exemptions of the Harter Act (46 USCA §§ 190-195). To the same effect is The Seaboard (D. C.) 119 F. 375, and The Ogeechee (D. C.) 248 F. 803. Here the carrier failed to take proper care of the cargo, either by providing a covered lighter, or by waiting until the severe cold abated, or by having sufficient tarpaulins and properly fastening them down. In none of these acts of negligence did McCauley acquiesce. He had to take what the Ward Line furnished, and he showed unusual diligence in giving warning against the dangers that imperiled the cargo. In Smith v. Booth (C. C. A.) 122 F. 626, also referred to by the defendants, James E. Ward & Co. issued through bills of lading to shippers of a cargo of rice from Liverpool to Havana. By the terms of the bills of lading the rice was to be delivered by the Teutonic unto, James E. Ward & Co. at New York, and by them to be forwarded by one of their steamers on the terms of the bills of lading of their company, at risk of shippers. This court held that the through bills of lading embraced obligations of James E. Ward & Co. in three capacities: (1) As initial carriers; (2) as intermediate carriers in making transshipment upon conditions not expressed, but implied from the nature of the undertaking; (3) as ultimate carriers upon conditions to be expressed in further bills of lading. Ward & Co. employed a lighterage company to transship the rice at the port of New York, which negligently overloaded the cargo, so that it was lost. We there held Ward & Co. liable, without apparently deciding whether they were common carriers, or mere bailees of the cargo, on the ground that they neglected, through their agents, the lighterage company, to use ordinary care. In neither event was the clause "at risk of shippers" considered applicable, because it related only to bills of lading to be issued by the line that was to carry the cargo from New York to Havana, and when the loss occurred no such bills of lading had issued, nor were they to take effect until the rice was delivered to the Havana steamer. The bill of lading in Smith v. Booth, supra, closely resembled the present one, but the freighter was held liable because, even if not a common carrier, he was guilty of negligence, and the clause exempting him from liability did not apply to the transshipment. The Wildenfels (C. C. A.) 161 F. 864, relied on by the defendants, is not in point. The opinion indicates no employment of the lighter as a separate step in a through contract of carriage, and the lighter was not herself a common carrier. The Fri (C. C. A.) 154 F. 333, and The Maine (D. C.) 161 F. 401, and (C. C. A.) 170 F. 915, are to the same effect. It was authoritatively decided in Bulkley v. Naumkeag Steam Cotton Co., 24 How. 386, 16 L. Ed. 599, that when the carriage begins from the lighter's point of departure the lighter is the substitute for the ship, and the liability arises as soon as the lighter receives the goods. We are unable to see how it can make a difference here that the lighter was the second step, instead of the first, in a through contract. Insurance Company of North America v. North German Lloyd, supra. [2] But, irrespective of whether the Ward Line was a common carrier, the defendants were properly held liable for their own negligence. The words, "at the sole risk of the owners of the goods," in a contract prepared by the Ward Line, which seeks to limit its liability, are to be strictly construed. Smith v. Booth (C. C. A.) 122 F. at p. 628. They do not in terms cover the negligence of the carrier, and were not held sufficient to avoid liability in Vitelli v. Cunard S. S. Co. (C. C. A.) 203 F. 697, and The Ogeechee (D. C.) 248 F. 803. Furthermore, as the master said, transshipment in an open lighter, with no adequate tarpaulins, was not "by the usual means" called for by the contract of affreightment. The decree is affirmed. AACHEN & MUNICH FIRE INS. CO. v. Circuit Court of Appeals, Second Circuit. July 17, 1928. No. 247. 1. War 12-Recovery of sum which defendant failed to remit to Germany held not barred on ground of prior seizure by Alien Property Custodian (50 USCA Appendix § 12). Contention that plaintiff had no cause of action on defendant's failure either to transmit money by wireless to plaintiff's home office in Germany or to pay over such money to plainseizure by Alien Property Custodian, held without merit, in view of amendment to the Trading with the Enemy Act of March 28, 1918 (50 USCA Appendix § 12), and letter of Alien Property Custodian expressly disclaiming any interest in sum of money sought to be recovered. tiff as thereafter demanded because of prior 2. Limitation of actions 46(2)-Recovery of money which defendant failed to remit to Germany held not barred by limitations on theory of breach of contract to establish foreign credit. Where there was no unconditional promise by remitting money to plaintiff's home office by trust company to establish a foreign credit in Germany, and condition upon which trust company agreed to establish credit never happened by reason of stoppage of its cables, held that no breach of contract to establish a foreign credit had occurred, and hence action for recovery of money, which defendant failed to remit to Germany by wireless, was not barred by statute of limitations. 3. Banks and banking 1881/2-Complaint held to state cause of action for balance of account which defendant failed to remit to Germany. Complaint, alleging breach by defendant of agreement to transmit money by wireless from plaintiff's account in defendant bank to plaintiff's home office in Germany, and that defendant failed to carry out terms of agreement, and alleging service on defendant of written notice of rescission and demand and failure to pay, held to state a sufficient cause of action to recover balance of account, since it showed that plaintiff sought to recover balance which defendant had refused to pay, and bringing of action constituted a sufficient demand. In Error to the District Court of the United States for the Southern District of New York. Action by the Aachen & Munich Fire Insurance Company against the Guaranty Trust Company of New York to recover the sum of $43,137.72, which defendant had failed either to transmit by wireless to plaintiff as directed or to pay over to plaintiff as thereafter demanded. Judgment for defendant (24 F. [2d] 465), and plaintiff brings error. Reversed. See, also, 24 F. (2d) 463. 1 On March 26, 1917, and prior thereto, the Aachen & Munich Fire Insurance Company, in addition to its general bank account, maintained in the Guaranty Trust Company an account known as the "special foreign account." This account was used by the United States branch of the insurance company for remittances to the home office at Aachen, Germany. On March 26, 1917, the United States manager of the insurance company wrote to 27 F.(2d) 674 the Guaranty Trust Company, and that company received on the same date, a letter saying: "Please remit to the Aachen & Munich Fire Insurance Company at Aachen, Germany, to-day by wireless, 250,000 marks at .69 or better, and charge the equivalent against the special foreign account of the company." On March 26, 1917, the Guaranty Trust Company acknowledged the order contained in the letter of March 26, in a letter to the insurance company: "To Aachen & Munich Fire Ins. Co., 80 Maiden Lane: In making a cable transfer it is fully understood and agreed that no liability shall attach to us nor to our correspondents for any loss or damage in consequence of any delay or mistake in transmitting the message, or for any cause beyond our control. "Aachen. "Cable transfer. Payable to Aachen & Munich Fire Ins. Co., on account of yourselves: Marks 250,000, at 69. Total 12.72 $43,137.72 "E. L. R. "Payment will be effected by Berliner Handelsgesellschaft, Berlin. "Owing to censorship and other conditions of war causing delays beyond our control, this company reiterates its declination of responsibility in the matter of delays and miscarriages, and sends all cable orders or repetitions thereof at the clients' costs and risk in change of rates or as to any other damage whatsoever sustained by the client. "Guaranty Trust Company of New York, "W. P. Edmund, V. P.” gust, 1922. On November 23, 1922, the insurance company wrote the Guaranty Trust Company a letter stating that, "as the order to effect the transfer in question appears to be still open, we beg to formally withdraw same." After the passage of the Trading with the Enemy Act, the amount due in the account of the insurance company with the Guaranty Trust Company was paid over to the Alien Property Custodian, with the exception of the $43,137.72 involved in the above radio transfer. The Alien Property Custodian, on November 18, 1918, made a demand, which was served on plaintiff's manager, for the transfer and payment of all assets of the plaintiff. The defendant had already reported to the Alien Property Custodian, on or about December 13, 1917, the various balances to the credit of plaintiff, with the exception of the $43,137.72, which was doubtless not reported upon the theory that it was not due to the enemy alien. On March 9, 1924, the insurance company brought this action against the Guaranty $43,125.00 Trust Company. The complaint alleged that on or about March 26, 1917, the defendant, at the request of the plaintiff, agreed to transmit to it at Aachen, Germany, by wireless, 250,000 marks at .69 or better from the funds of the plaintiff on deposit with the defendant in New York, and that the defendant, on or about that date, charged against the funds of the plaintiff on deposit with the defendant at New York $43,137.72, of which $43,125, was represented by the defendant to be the equivalent of the 250,000 marks transmitted, and $12.72 was a charge made for the expense of transmission; that the defendant failed to carry out the terms of this agreement and did not transmit to the plaintiff at Aachen, Germany, or otherwise, the said $43,125, or any part thereof, which the defendant had received from the plaintiff for transmission; that the plaintiff did not learn of defendant's failure to perform its aforesaid agreement within a reasonable time, or until on or about October, 1922, when for the first time, after the termination of a state of war between the United States and Germåny, the plaintiff was placed in a position to ascertain the disposition of the funds which it had formerly had on deposit with the defendant, whereupon the plaintiff served upon defendant written notice of rescission dated November 23, 1922; that prior to the commencement of the action the plaintiff duly demanded of the defendant that it return to the plaintiff the sum of $43,137.72, with interest, but the defendant refused to On March 26, 1917, the Guaranty Trust Company drew up a cable for wireless transmission to Berliner Handelsgesellschaft, in which they directed the latter bank to telegraph "Aachen & Munich Fire Insurance Company, Aachen account, New York 250,000 marks." On the same date the Guaranty Trust Company delivered to the Western Union Telegraph Company for transmission to the Sayville wireless station the above message, which the Western Union forwarded to the wireless station. The trust company learned of the interception of their outgoing radiogram some time after this country had joined the Allies in the war against Germany, but the plaintiff had no knowledge that the order for the remittance had not been executed until some time in Au return the same, and now retains it, to the any disability at the time the cause of acdamage of the plaintiff. tion, if any, accrued. To this cause of action the defendant interposed the defense "that the alleged cause of action set forth in the complaint did not accrue within six years next preceding the commencement of this action." Plaintiff sued out a writ of error, assigning as error, among other things, the finding of the court that the statute of limitations was not suspended during the period of war between the United States and Germany, Section 27 of the Civil Practice Act of and the refusal to direct judgment in favor the state of New York provides: of the plaintiff for the relief demanded in the complaint. "Effect of War on Right of Alien. Where a person is disabled to sue in the courts of the State by reason of either party being an alien subject or citizen of a country at war with the United States, the time of the continuance of the disability is not a part of the time limited for the commencement of the action." The limitation occasioned by war is set forth in section 28 of the Civil Practice Act: "Sec. 28. Disability Must Exist When Right Accrues. A person cannot avail himself of a disability unless it existed when his right of action or of entry accrued." Upon a motion for summary judgment, the District Court said: "The cause of action accrued on March 26, or within a reasonable time thereafter. If the period from March 26, 1917, to April 6, 1917, when a state of war was declared, was a reasonable time, the cause of action then accrued and the statute began to run. In either event, the defense of the statute of limitations raises a substantial issue." The trial court said: "Assuming the contract to remit marks by wireless on March 26, 1917, not to have been broken until a reasonable time after that date, did the breach occur before commencement of war on April 6, 1917? A reasonable time within which to execute the transfer of credit certainly expired before war commenced. To require ten days for the transfer of credit by wireless would be quite unreasonable, and plaintiff's counsel does not even argue the point. I am therefore constrained by the law of the case to sustain the statutory bar as a defense to the action." A judgment was directed dismissing the complaint, upon the ground that the contract was broken by the defendant on March 26, 1917, or within a reasonable time thereafter; that a reasonable time for the performance of the contract expired before April 6, 1917, when a state of war between the United States and Germany was declared; that the cause of action, if any, accrued prior to April 6, 1917; and that the six-year statute of limitations was not suspended during the war, because the plaintiff was not under AUGUSTUS N. HAND, Circuit Judge (after stating the facts as above). Upon the foregoing facts three contentions may be made on behalf of the defendant: (1) That the plaintiff is vested with no right of action, because of the seizure of the claim in question by the Alien Property Custodian on November 18, 1918. (2) That the cause of action set forth in the complaint is for the breach of a contract which occurred before the plaintiff was under any disability because of the war; that by reason of section 28 of the New York Civil Practice Act it could not avail itself of any disability caused by the war, inasmuch as such disability did not exist when the right of action accrued, and that the claim was barred by the statute because more than six years had elapsed between the date of the breach and the time the action was brought on February 9, 1924. (3) That, if the plaintiff seeks to recover upon any other theory than for the breach of a contract to establish a credit in Germany, recovery may not be had under the pleadings in the case. [1] In respect to the contention that the plaintiff has no cause of action by reason of the prior seizure by the Alien Property Custodian, it would seem to be a complete answer that the latter official, by letter to the defendant in October, 1923, expressly disclaimed any interest in the sum of money sought to be recovered herein and said: “A careful examination of our records discloses the fact that this sum was never reported to this office, and was, therefore, not demanded. |