Stafford Allen & Sons Ltd v Pacific Steam Navigation Company
| Jurisdiction | England & Wales |
| Judge | LORD JUSTICE DENNING,LORD JUSTICE BIRKETT,LORD JUSTICE PARKER |
| Judgment Date | 19 April 1956 |
| Judgment citation (vLex) | [1956] EWCA Civ J0419-2 |
| Court | Court of Appeal |
| Date | 19 April 1956 |
[1956] EWCA Civ J0419-2
In The Supreme Court of Judicature
Court of Appeal
Lord Justice Denning
Lord Justice Birkett and
Lord Justice Parker
MR G.G. HONEYMAN, Q.C., and MR J. S. WORDIE (instructed by Messrs Hill, Dickinson & Co., London and Liverpool) appeared on behalf of the Appellants (Defendants below).
MR H.V. BRANDON (instructed by Messrs Clyde & Co.) appeared on behalf of the Respondents (Plaintiffs below).
In February of 1952 shippers in corinto, on the west coast of Nicaragua in central America, shipped ten boxes of ipecaouanha roots for transport to London, England, on a bill of lading issued by the Grace Line. The goods were carried from Corinto down the west coast to the Panama Canal, and then through the Canal to Cristobal, a port in the Canal Zone, on the east coast. At Cristobal they were transhipped into a steamer, the "Samanco", for transport to London, that steamerbeing owned by the Pacific Steam Navigation Company. In the course of transit from Cristobal to London, the goods were damaged, and for the purposes of this action we have to assume that they were damaged by the negligence of the shipping company. The owners of the goods now claim damages against the shipping company for the negligence.
The company set up an exception saying that they are not liable for any negligence. The question is whether there is any such exception to avail them.
The transit from Cristobal to London was on the terms of the regular bill of lading used by the steamship company. The regular bill of lading used in that particular service at that time was that of the Royal Mail Lines Limited (North Pacific Coast Service) which was expressly governed by English law. There was an exemption clause in that bill fo lading, which, primafacie, would be wise enough to exempt the company from liability for negligence, but there was at the end a Clause Paramount, clause 29. That Clause Paramount was plainty inserted by the company so as to comply with the local law about shipments from the coast of the American continent. The clause Paramount, 29a, said with regard to Canada: "With respect to shipments…. from a port in Canada all the terms, provision and conditions of the Canadian Water Carriage of Goods act, 1936, and the Sehedule thereto are to apply to the contract contained in this bill of lading". I need not go further with the canadian clause because we are not concerned with it. Then 29b: "U.S.A.: With respect to shipments (other than live animals and deck cargo) from a port in the United States, all the terms and provisions of the Carriage of Goods By Sea Act, 1936, of the United States are to apply to the contract contained in this bill of lading".
If that Clause Paramount applies to this shipment from Cristobal to London. it means that the shipping company are not entitled to avail themselves of the exception, because theUnited States Carriage of Goods By Sea Act. 1936, by section 3, subsection 8, makes such an exemption clause null and void and of no effect.
So the sole question, as it turns out, in this case, is whether this shipment from Cristoball in the Panama Canal Zone was a shipment from "a port in the United States" within the meaning of that Clause Paramount. In ordinary use the term "United States" means the continental area of the United States of America, and does not include outlying possessions such as the Panama Canal Zone. But in construing this clause we must have regard to the law of the port of shipment. We must, I think, attribute to the ship-owning company an intention to do what is lawful by the local law. If the law of the Panama Canal Zone requires a shipowner to insert a Clause Paramount so as to deprive the shipowner himself of the benefit of the exempting clause, we should construe the Bill of Lading so as to comply with that law rather than to ignore it.
What, then, is the law of the Panama Canal Zone on this matter? It is said to be contained in the United States Carriage of Goods By Sea Aot, 1936, which says in section 13 that: "This Act shall apply to all contracts for the carriage of goods by sea to or from the ports of the United States, in foreign trade". Then there are these important words: "As used in this Act the term 'United States of America' includes its districts, territories, and possessions". Later on the section provides for a clause to be inserted in every bill of lading: "Provided further that every bill of lading or similar document of title which is evidence of a contract for the carriage of goods by sea from ports of the United States, in foreign trade, shall contain a statement that it shall have effect subject to the provision of the Act".
The crucial words of the Act for present purposes are these: "'The United States' includes its districts, territoriesand possessions". The Panama Canal zone is not a "district" of the United States like the District of Columbia. It is not, I imagine, a "territory", if we accept the ruling to that effect in the case in the Appellate Court of Illinois of Macomber & Whyte Rope Company v. United Fruit Company, reported in 225 Illinois Appellate court Reports, page 286. The question is whether the Canal Zone is a "possession" of the United States. We have been supplied on this point with an agreed statement of facts relating to Cristobal and the Canal Zone, and we have been referred to all the relevant authorities int he United States on the subject.
Cristobal is a port on the eastern shore of Limon Bay near the entrance to the Panama Canal from the Caribbean Sea; and the Zone is a stretch of land in the Isthmua of Panama estending generally five miles on each side of the centre line of the Panama Canal. The rights of the United States of America in and over the Zone derive from a Treaty in 1903, Article 3 of which says that the "Republic of Panama grants to the United States all rights, power and authority within the Zone…. which the United States would possess and exercise if it were the sovereign of the territory…. to the entire exclusion of the exercise by the Republic of Panama of any such Sovereign rights, power or authority".
The United States Supreme Court in 1930 in the case of Luckenbach S.S. Co. v. United States, 280 United States Reports, at page 173, held that a port in the Panama Canal Zone was a "foreign port". That was a special decision on a special Statute. It arose out of the fact that there was a subsidy in respect of the carriage of mails from certain ports within the United States to foreign ports. If there was carriage to the ports of Panama or to Colon which are not in the Canal Zone but in the Republic of Panama, the shipowners would get the subsidy. It was argued that if the mails went to Balboa or Cristobal,which are in the Canal Zone next door to those ports, the subsidy would not be payable. That would be contrary to a long current of practice, and the Supreme Court held that the subsidy was payable to the shipowners whether the mails were carried to Panama or Colon in the Republic of Panama, or to Balboa or Cristobal in the Canal Zone. The case is not of general applicaiton
Relieved of that case, it seems to me that, if we give the word "possession" in this Act its ordinary meaning, then the Canal Zone is a possession of the United States. In a book on the American Law of Ocean Bills of Lading, Mr Arnold Knauth, dealing with this definition in the 1936 Act, at page 149 says: "The term'United States' includes the Canal Zone at Panama, Alaska, Hawaii, Midway, and Guam", and other places. In "The Canal Zone Code", which is a publication embodying all the laws applicable to the Canal Zone, in the Cumulative Supplement No. 2, at page 12, the compiler states in regard to this 1936 Act: "It would seem that this Act is applicable to contracts for the carriage of goods by sea to or from the ports of the Canal Zone, in foreign trade". In the course of the case, enquiry was made on behalf of the parties of the United States authorities on the matter, and a report by them tells us that the Panama Canal Company has successfully maintained the applicability of the Act to the Canal Zone in two or three law suits in the United States District Court for the District of the Canal Zone. The decisions are unreported, the cases being decided on demurrer or in similar ways.
On the material which has been put before this Court, it seems to me that the term "United States" in the 1936 Act includes the Panama Canal Zone. If this conclusion is right, it means that the local law affecting shipments from cristobal requires the shipowners to insert in the bill of lading a paramount clause bringing into operation the United States Carriage of Goods by Sea Act, 1936. That is a most material circumstancewhich we must bear in mind construing this Paramount Clause.
So construed, it seems to me that a "port in the United States" in the clauses means a port in the United States, its districts, territories or possessions. Cristobal is such a port. The Paramount Clause, therefore, brings into operation the terms and provisions of the United States Carriage of Goods By Sea Act, 1936, and by those provisions the exempting clause is rendered null and void.
For these reasons, it seems to me that...
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