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sequently he wants to file a suit or to present a claim of any kind, that he is only required to show that was a mistake: “I did receipt clean; I did accept my goods without protest and they did look like they were undamaged goods, but it is wrong.
I can prove that those goods have not been damaged since I received them and that they were damaged when I did receive them.'
Mr. PERLMAN. Would it not be better, then, to add that to the first sentence, rather than to make it a separate sentence?
Mr. Haight. I had not supposed anybody could read the whole section and give it any other meaning. If that is true I would like to leave it unchanged; if it is not true, we can change it; but it seems to me it is plain that unless notice is given, it is to be assumed that the goods are delivered clean; but if the loss or damage is not apparent, that notice need not be given until three days after.
Mr. PAUL. Three days from when?
Mr. PERLMAN. It is not clear; it is not clear to me; it would be clearer to me to put it in the first part of t.
Mr. Haight. Certainly it is all a part of subsection () and under no circumstance can anybody be barred from suing within 12 months, and it is only this infinitesimal question of whether it is or is not prima facie evidence, and to-day I think you will agree with me, any man who has given you a receipt for anything you have delivered to him is bound by his receipt, and that is really nothing but a declaration of right.
Mr. PERLMAN. He is not bound by it?
Mr. PERLMAN. I think it would be a great deal better if you did not make two separate sentences, but simply have that clause a part of the first sentence.
Mr. Haight. Perhaps we can change the punctuation, and I am satisfied, as Mr. Beecher is, that there will be no difficulty in making perfectly unimportant changes or changes which make more clear the purpose. A change of meaning is one thing, but to make the meaning more clear is a very different thing.
Mr. PERLMAN. Just explain that next sentence to me—“The notice in writing will not be admissible,” etc.
Mr. Haight. "The notice in writing will not be admissible if the state of the goods has at the time of their receipt been agreed to be otherwise than as stated in the notice.”
Suppose goods are seen to be damaged on the dock and the steamship owner says, "I want a survey of those goods right now; they are damaged,” and it is agreed before they are taken away that they are damaged to the extent of $100. The man can not then
away and, six months later, after the goods have all been turned into granulated sugar, we will say, or tanned hides, or something, then make a claim that his damage was a thousand dollars.
Mr. PERLMAN. Suppose that a case of shoes is received at the dock and offered for delivery to the consignee, and the bill of lading calls for 24 pairs of shoes
Mr. Haight. Of course, it never would; it would call for one case of shoes, said to contain 24 pairs.
Mr. PERLMAN. Suppose it says that one case of shoes said to contain 24 pairs. It is nailed up; it is not opened, and the clerk for the consignee, or the agent for the consignee, signs a receipt that he has received a case of shoes containing 24 pairs of shoes in good condition. He signs that receipt, say. When that case of shoes is opened the next day at the place of business of the consignee, say there are only 23 pairs of shoes, or that one or two pairs of shoes are damaged. The receipt having been signed by this authorized agent, what is his position?
Mr. Haight. Absolutely nothing but to show that the shoes were not stolen between the time he received the case and the time he opened it.
Mr. PERLMAN. The burden is on him on the consignee?
Mr. Haight. Certainly, even to-day. That has never been any different. We are trying to codify the law; not to make new law.
Mr. PERLMAN. You are not codifying the law when you say that the notice in writing shall not be admissible if a receipt is given.
Mr. Haight. You are not doing much more. Suppose you and I agree, having opened the box, that there were 23 pairs of shoes there? Mr. PERLMAN. That is quite different. Mr. Haight. Would you subsequently be allowed to say there were only 22 pair? Mr. PERLMAN. I would be allowed to say it. Mr. Haight. But you would not get away with it. Mr. PERLMAN. No.
Mr. Haight. That is what this says.
Mr. PERLMAN. Suppose it is a closed case and my agent says, in a signed receipt, "I have received 24 pairs of shoes in good condition.' What is my position then, in view of this sentence?
Mr. Haight. Just what it would be under the preceding sentence. You have received the goods without giving notice of claim and you subsequently want to give notice of claim, and you have the right to do that. It is only where the thing has been investigated and an agreement reached you say that agreement ought to stand.
Mr. PERLMAN. But you are shifting the burden a good deal to the consignee, just because a receipt is signed, although the merdhandise has not been examined.
Mr. Haight. That is where the burden rests to-day, sir; we are not shifting anything.
Mr. PERLMAN. I know; but the carrier would have a printed receipt and he would present it to the agent of the consignee and, in order to get the merchandise (say the truckman is the agent of the consignee), he signs the receipt and sometimes he does not read it, and would not understand it if he did read it.
Mr. Haight. Is it your idea that a receipt reading “in apparent good order; 4 cases marked so and so," would bar the man under this sentence in lines 21 to 23?
Mr. PERLMAN. It would not bar him, but he would have a greater burden of proof than the present law placed upon him.
Mr. Haight. No; there would not be the slightest difference that I know of.
Mr. PERLMAN. If you give the carrier an opportunity of placing in his receipt a statement of a fact that does not exist and then you shift the burden to the consignee, who must disprove that fact? As I say, you get a closed case, not opened by the consignee at the time.
Mr. HAIGHT. Yes.
Mr. PERLMAN. Therefore, you can not say absolutely what the contents of the case are.
Mr. Haight. Neither party can say.
Mr. Haight. Then the party is entitled to a receipt that the box is apparently in good order and condition.
Mr. PERLMAN. Not necessarily so.
Mr. Haight. I say it is in apparent good order and condition, and if you are an ocean carrier and you delivered a box that looked to be perfectly áll right, you would want a receipt "in apparent good order and condition.” If the man comes back afterwards and says the box has been opened, it has been robbed
Mr. PERLMAN. But you know of any number of cases where there has been a shifting of the contents of boxes on board the vessel.
Mr. Haight. It is hard to break it open and not to have it show.
Mr. PERLMAN. We have had a recent conviction in New York where it was done, and done regularly.
Mr. Haight. Yes; but what I am trying to make clear to you is this, that this clause to-day imposes upon the carrier a responsibility he has never dreamed of accepting before, that, within 12 months after any goods have been delivered, anybody can make a claim.
Mr. PERLMAN. But you are also placing on the shipper a greater burden than anybody ever dreamed of.
Mr. Haight. Let me make it clear that I am not placing on the shipper any greater burden. I am simply stating the law as it is to-day, except that the shipper has 12 months within which to make his claim and to bring his suit, instead of 30 days, as it is now.
Mr. PERLMAN. I understand that; but you do not, under the present law, say to the shipper, “ If you sign a receipt, it is the same as if you can not give notice and, therefore, the burden is upon you to prove."
Mr. Haight. Mr. Englar here is the champion of the shippers. Is it not true, Mr. Englar, that practically every word of this section is the law to-day, so far as the burden resting upon the man holding possession of the goods to show the goods were not tampered with after he took delivery?
Mr. ENGLAR. I think the burden always rests upon the consignee to prove the goods were damaged before he received them, whether he signs a receipt or not.
Mr. PERLMAN. I understand that.
Mr. ENGLAR. Of course, if he signs a receipt in which he specifically states they are received in good order and condition or in apparent good order and condition, that increases his burden a good deal, because he has to contradict that receipt.
Mr. PERLMAN. As to belief only, as to the question of belief on the part of the court.
Mr. ENGLAR. That is a question of evidence. Personally, I do not think this particular sentence you have been discussing increases that burden materially beyond what I can see it is now.
Mr. Haight. It is the same thing.
Mr. ENGLAR. It is stating it expressly (and you are correct in saying it has never been expressly stated in that way before, as far as I know) and, as so stated, it does not seem to me to place any additional burden on the consignee beyond what he has now.
Mr. PERLMAN. Except it refers to “notice of loss” and not “notice of claim.”
Mr. Haight. The law has always recognized the same condition of affairs as is put down here.
Mr. ENGLAR. Of course, we are very glad to have the privilege of giving a notice at all or, rather, very glad to be allowed or permitted to sue within one year even if we do not give notice. My difficulty has always been to get the notice given, because very often they send a truckman and if he doesn't give the notice you are completely barred, and the point we are interested in is the privilege of suing within
(Thereupon, the committee took a recess until 1.30 o'clock p. m.)
The committee reconvened pursuant to the taking of the recess, Hon. William S. Greene (chairman) presiding.
STATEMENT OF MR. CHARLES S. HAIGHT_Resumed.
Mr. Haight. I had covered, perhaps sufficiently, the three points of objection which the rules have sought to cover. The rules to-day have been debated for over two years. They were first taken up and drafted by the International I aw Association, through their maritime-law committee. They were then the subject of consideration at the meeting of the International Chamber of Commerce in June, 1921; came before The Hague Conference in August, 1921, and were amended and agreed to unanimously by the practical people then present. Bankers, underwriters, shippers, and steamship owners were all there. In November, 1921, the International Shipping Conference was held in London. The steamship owners, through their owners' organizations, were represented, covering certainly over 90 per cent of the tonnage of the world, and the steamship owners said, “We do not like the rules; we think the burden they place upon us is too heavy; we think £100 per package is too much; we think that forcing the burden of proof upon us for pilferage, etc., is unfair; but if our shippers want these rules, we will submit to them, to terminate this long wrangle, provided the rules are made uniform everywhere, so that every steamship owner has the same burden, and it becomes a fixed item of expense which we can properly cover and still go on on an equality from the competitive standpoint.”
Later, some of the British interests opposed the rules, especially with reference to full cargoes, and the board of trade in Great Britain brought the owners and the shippers together and said to them, “If it is possible for you two to agree in terms of an international code, so that we can get international uniformity, well and good. The Prime Minister has agreed that the British dominions will obtain legislation in favor of the shippers. If you can not agree, we will give you what we promised, and that will be the Harter Act, and there are a lot of points which will not be covered for the shipper, because if we live up to our promise we will do nothing more; but if you two interests can agree upon something that will do more, we will accept The Hague rules as a substitute for the Harter Act.
They eventually did agree. Then we had the international conference called by the Comité Maritime Internationale. It is the organization which promulgated the York-Antwerp rules on collision, safety, etc. That conference took place in October last in London, and we had the practical, trained men in the business; they were not lawyers. Boards of trade, chambers of commerce, underwriters, and bankers were there in person, and we got more amendments, as Mr. Beecher pointed out this morning, bringing the thing to what everybody wanted. We got a unanimous agreement on the language.
Then the rules went to Brussels before the diplomatic representatives of 24 commercial nations and again international unanimity was accomplished, not without difficulty, and with still further amendments.
To-day I believe the rules come as close to a fair settlement of the long controversy as it is humanly possible to get, and I would like to make it very plain to you, Mr. Chairman and members of the committee, that this is not a code which has been drafted by theorists or by lawyers, but a practical agreement which has been reached by the interests engaged in the business.
In every international shipment you must have five different interests and sometimes they are all nationals of a different country. You have the seller of the goods, the shipper; you have the ocean carrier; you have the discounting banker; you have the cargo underwriter, and then the buyer abroad. It is not possible, in my judgment, to reach anything like international uniformity if those practical people do not first agree. If they do agree upon any line that is fair, it does not make much difference precisely where you draw the line, if only you do draw a line somewhere. If a banker knows what his security is, he can loan his money. If every bill of lading is different and every law is different, he never can know what security he is going to get. If the cargo underwriter knows how much the carrier is responsible for, he can fix his premiums scientifically. If the shipowner knows what his liability is, he can insure against it and guard against it, and the shipper is equally helped if he has the uniformity.
As I stated this morning, these rules (as I think every man will agree who has studied them), are nothing but a codification of the Harter Act, with the three points covered which the Harter Act has never touched. The Harter Act does not, under the construction of our Supreme Court, bar the shipowner from agreeing upon the value of his package and, if he agrees it is only worth $100, the Harter Act does not help the man whose package is worth much more. The Harter Act does not affect the claims clause and the man can still put into his bill of lading a clause requiring that the claim must be presented before he takes the goods away, or that he must sue within 30 days, and it is good; the Harter Act does not stop it. There is simply a change in the burden of proof. So that, as I see it, we have codified the Harter Act in such form that all the rest of the world, the code countries, can accept our American law in this form, because they can read a code and they can not read the common law; they do not understand it.
Now, in my judgment, it is not necessary to worry about the details. If every nation has a different law, it is impossible to get any system at all; with a uniform code, it will not be possible for us to work out standard bills of lading in the regular trades. To-day, a bill of lading which is perfectly lawful in Great Britain, subjects a man to a fine of $2,000 for every bill he issues in this country, and you can not get a system out of conflicting provisions of that character. When the law is the same, it will be possible to have on your liner bill of lading from New York to the United Kingdom, practically word for word, every bill alike in its ordinary parts and, in the end, it will come to that in my judgment.
I would like to add just one word as to the necessity of confining the international code to international transit. Mr. Beecher, this morning, said that he had become convinced that, as an international code, it could only cover from the time of loading to the time of discharge. That has been brought out repeatedly in our international discussions. So much depends upon the law of the country where you are discharging-upon the physical conditions. In one place, you have to discharge all of your goods, in Constantinople, for instance, to the customs officials and, in many countries, it is required that you can not discharge anywhere else. Down in South America you have broker discharges and millions of conditions and different kinds of troubles. In some places, goods can only be loaded in surf boats that come out from the beach and the steamship owner says, “I can not accept responsibility for that stuff, to be rowed through the surf out to my ship. I will be glad to put it aboard, but you have to carry it out at your own risk.” And the various physical conditions are almost impossible to provide for in a code. So that the plan of the rules is this: Leave the law as it is to-day in every country, regulating the obligation of the carrier while he holds the goods as a bailee, before loading and after discharge. So that in America and everywhere else, whatever the law is to-day, as to the obligations of the carrier after he receives the goods and before he puts them aboard the ship, those obligations still persist. But let us get international uniformity upon the obligations for the international transit.
Now, whether Congress will want to impose upon every warehouseman an obligation of £100 or $500 per package, as a warehouseman, or not, I do not know. As to the carrier, who is engaged in carrying, if these rules go through, he will have to accept a responsibility of approximately $500 per package.
Mr. EDMONDS. Does the Harter Act apply to-day to a warehouseman?
Mr. Haight. The Harter Act can not apply to the ordinary warehouseman, no, sir; and we have, out of our 48 States, 44 States where warehousemen acts have been
passed as State legislation, and I do not know of any warehouseman act which does not come approximately to the same thing as the Harter Act.
Mr. EDMONDS. Under the Harter Act, at the present time, where does the obligation of the shipowner start?
Mr. Haight. I think it starts with the receipt of the goods and the issuance of the bill of lading
Mr. EDMONDS. I mean under your code, where would it start?
Mr. Haight. The Harter Act would still stay precisely where it is. In effect, up to the time the goods are put on the ship, then all of the Harter Act requirements (speaking 99 per cent) remain in force and these additional burdens are also im posed upon the carrier.
Mr. EDMONDS. Then if the shipowner receives the goods at his pier, although the ship is not there, and he issues a bill of lading at that time, the bill of lading would not take effect until the goods were put on the boat?
Mr. Haight. His bill of lading, Mr. Edmonds, will take effect, but he is not required by these rules to put into his bill of lading a provision that holds him responsible for £100 per package. But whether he has it in his bill of lading or not, after he loads his boat, these rules will force upon him £100 liability:
Mr. EDMONDS. What law will be in force as to his wharf liability?
Mr. Haight. The Harter Act will still remain in force and be just as effective as it is to-day for the period before loading and after discharge.
Mr. EDMONDS. Notwithstanding that bill of lading was issued ?
Mr. Haight. You can not escape in any way from the provisions of the Harter Act by putting anything in the bill of lading. If you do, it is void; if you try to, it is void. What I honestly think is this that, after we get these rules, gradually the steamship owners will give to their shippers, before loading and after discharge, the same provisions that the Harter Act gives in many, many, cases--nine times out of ten.
Mr. EDMONDS. What modifications of the Harter Act does this make, so far as the ship is concerned?
Mr. Haight. Well, before loading and after discharge, none at all. During the period of transit, Mr. Beecher has referred to one really important difference. Under the Harter Act to-day, it is provided that if an owner has used due diligence to make the ship seaworthy, he is not responsible for errors of navigation or in the management of the ship. The rules say that he must exercise due diligence to make his ship sea worthy, properly manned and equipped, and properly to stow his cargo, and he must pay all the damages resulting from his failure to do that. Mr. Beecher gave you one illustration of a defective compass. The law to-day, as Australia has enforced it in several instances, is this: My ship must have a fog horn to be seaworthy. A sailing vessel must have an automatic fog horn to be seaworthy. If she goes out from port on a sunshiny day and has a collision, if there is not any fog and has not been for months, perhaps, still in Australia the cargo interest would say, “I want to be paid my damage, because I have found that your fog horn would not work.' “Well,” the owner says, “there was not any fog. Never mind,” says the shipper, “the law is if you have exercised due diligence, you are relieved from errors of navigation; but since you did not have a proper fog horn, you do not get that benefit. Please pay me in full.”
Now, nobody who is honest with himself, will do otherwise than to admit that is a very hypercritical situation and, in the 30 years that the Harter Act has been applicable in this country, I do not know of a single case which, in the end, turned on that point. Do you, Mr. Englar?
Mr. Englar. I have only had one in 15 years. Mr. Haight. The Fri came pretty close to it, but the circuit court of appeals went off on another point. But it is so unimportant as compared with the great principle of uniformity that I think these little trivial details can all be forgotten. If we draw the line definitely, so that every nation in the world draws it in the same place, we can all of us go on doing our business.
I do not want to be thought to advocate a surrender of American principles improperly, for the sake of getting an agreement with the rest of the world; but this is a case like our rules of the road. We knew that we had to have an international agreement so that every ship which blew a single whistle would mean the same thing, so that we had an international conference here in Washington and we agreed that one whistle would mean I am directing my course to starboard; two whistles, I am directing my course to port. And, after we got that international agreement, the United States and every other nation passed a statute making that agreement effective.
Our Postal Union is precisely the same thing. We can not put a new stamp on every letter which goes from New York to a far part of Russia, every time it crosses a foreign border: so that we have an international postal union and we agree upon our terms and we make it effective.