goods arising from negligence, fault or failure in the duties and obligations provided in this Article or lessening such liability otherwise than as provided in these Rules, shall be null and void and of no effect."

While nice distinctions may arise as to the precise application of Articles III and IV to the point under consideration, the Court is of opinion that the true intent of this legislation was to do away with the subtleties of draughtsmanship in the preparation of exception clauses and to declare that all exceptions, extraneous to the Article, imposed by a shipowner, should be included in and merged with the general provision of subsection (q), above quoted, leaving the burden of disculpating himself from liability for negligence upon the person claiming the benefit of such exception.

TEMPERLEY, loc. cit., at p. 46, seems to be of this opinion:

"The 'omnibus' clause (Article IV, Rule 2(q), is wide enough to give carriers all the protection they could get by express exceptions, the only difference being that under Article IV., Rule 2(q), the carrier will have to negative negligence by his servants, whereas if the claim was covered by an express exception, the onus would be on the goods owner to prove that the carrier or his servants had been negligent, for the exception to be displaced, and it is only in exceptional cases that the onus of proof is important."

The distinction between subsections (a) to (p), and subsection (q), of Rule 2, Article IV, seems to be that in the former group of exceptions where the cause of the damage is shown to fall within one of these exceptions, the onus of proof is shifted from the shoulders of the shipowner to those of the goods owner, whereas when the alleged cause of damage arises under subsection (q), the burden of proof does not shift, but remains where it was— upon the shipowner.

The defence resting upon the bill of lading exception referred to can have no separate effect and becomes merged in the exceptions contemplated by Article IV, Rule 2(q). In other words, such clause does not give to the carrier any greater protection than he has under said subsection (q). (See City of Baroda vs. Hall Line [1926], 42 T. L. R. 717.) The breakage must have a cause and it is for the shipowner to show what that cause is. He has elected to say that it was due to a peril of the sea.

The solution of the problem thus left for determination is to be found in the combined application and interpretation of Articles III and IV, Rule 2. Article III, Rule 2, provides:

"Subject to the provisions of Article IV., the carrier shall properly and carefully load, handle, stow, keep, care for and discharge the goods carried."

The obligations so enunciated and imposed upon the carrier must be read in the light of and subject to the immunities provided in his favour by Article IV, Rule 2 (above quoted), amongst which is to be found the Exception of Perils of the Sea (paragraph c), now under consideration.

It is to be observed at once that the obligations of the carrier go far beyond the mere initial careful stowage of the cargo. He is held to "keep, care for and discharge the goods carried."

The efforts of the defendant were directed mainly to showing that the original stowage of the cargo was proper and adequate, in accordance with the usual practice and free from any carelessness or negligence. But the primary obligation of the carrier, under Article III, Rûle 2, is not excused by such evidence alone. If cargo is shipped in good condition, but is delivered damaged in a manner which was or ought to have been preventible, the carrier is clearly chargeable with breach of his duties under Article III, Rule 2, and the burden of showing that he is exempt from liability, under Article IV, Rule 2. must rest upon him. (Gosse Millerd Limited vs. Canadian Government Merchant Marine, 1929 A. C. at p. 234, per Lord SUMNER.)

The defendant has not explained the cause of the accident. The evidence indicates that the initial stowage was good, that the containers of the molasses were in good condition and properly supplied with the necessary vents. The fact remains, however, that, notwithstanding such preliminary precaution, the goods sustained an almost total loss while in the care and custody of the carrier. To bring itself within the Exception of Subsection (c) of Rule 2, Article IV, the defendant has sought to show that the storm through which the vessel passed was of such intensity as to constitute a peril of the sea. The wider language of the Exception, "perils, dangers and accidents of the sea, or other navigable waters," does not, in effect, go beyond the simple and general phrase "Perils of the sea." (POLLOCK, Bill of Lading Exceptions, 2nd Ed., page 40.)

46935-36- -7

It is as difficult to frame as it is to find a satisfactory definition for the term. Many have been attempted, and of the number, perhaps that given by SCRUTTON, 12th Ed., p. 257 (inspired, no doubt, by the language of LORD HERSHELL, in the Xantho, 12 A. C. p. 509), is the most comprehensive:

"Any damage to the goods carried by seawater, storms, collisions, stranding, or other perils peculiar to the sea or to a ship at sea, which could not be foreseen and guarded against by the shipowner or his servants as necessary or probable incidents of the adventure."

Obviously loss at sea, in its widest sense, may be regarded as due to a peril of the sea, but it is not every such occurrence which gives the shipowner immunity. It is only those which, according to the foregoing definition, “could not be foreseen and guarded against by the shipowner or his servants" that will afford him immunity under the exception. The storm was violent, but it never reached the proportions, alleged in defendant's defence, of a "hurricane.” Up to and preceding the time of the loss, it is rated in the vessel's log books as a "moderate gale," developing some time after the loss had been discovered into a "whole gale." A moderate gale at that season of the year, and in those waters, was not such an event as could not be foreseen or guarded against. Every seaman expects his vessel to encounter and overcome, without damage to ship or cargo, storms of the violence noted. No deck or structural damage was caused to the vessel, nor has it been shown that damage occurred to cargo stowed in any other part of the vessel. The matter is entirely one of degree. To hold otherwise would be to say that any storm a sea must constitute such a peril of the sea as would bring the exception into operation. Will anyone say that a ship of the size and staunchness of the Lady Drake should not carry her cargo safely through a "moderate gale?" But the defendant has not proven that the damage resulted from the intensity of the storm. This is merely inferred and that inference is no stronger than the inference which the plaintiff asserts that the loss may have been due to ineffective stowage. The precise cause of the loss is a matter of conjecture. It may, with equal possibility, be ascribed to disturbance of the stowage and failure to keep same effective after leaving Bermuda, insufficiency of package, inadequacy or blocking of vents in the containers, or other reasons. Initial proper stowage does not necessarily

imply continued effective stowage.

It is not for the Court to speculate as to the precautions which the master should or could have adopted. The weather conditions encountered were undoubtedly severe, but to say that they were such as could not be foreseen or guarded against would be inexact. The Court is of opinion that in the absence of specific evidence that stress of weather caused the damage, the shipowner has failed to establish such a prima facie case of perils of the sea as would, upon authority, cast the burden upon the goods owner of showing a fault or negligence on the part of those in charge of the ship.

CARVER, Carriage by Sea, 7th Ed., No. 78, at p. 114:

"The burden of proving that a loss which has occurred has been due to an excepted cause has been held to fall upon the shipowner who seeks to excuse himself. (Taylor vs. Liverpool & G. W. SS. Co., 1874, 43 L. J., Q. B. 205; L. R., 9 Q. B. 546; Smith vs. Bedouin Steam Nav. Co., 65 L. J., P. C. 8; [1896] A. C. 70.

"Thus, in case of doubt whether damage to a cargo has arisen from bad stowage, or from excepted perils of the sea, the shipowner relying on the exception has had to prove that the perils of the sea caused it. And where it has appeared that two causes have contributed to the loss, one of which only has been excepted, the shipowner has had to distinguish between the damage which was and was not due to that. (The Roma [1884], 51 L. T. 28, p. 32; The Alexandra [1866], 14 L. T. 742; Adam vs. Morris [1890], 18 Sess. Cas. (4th) 153)."

Not only under the Rules, but at common law, a shipowner, who fails to bring himself within an exception, must remain liable for a loss which he cannot explain. In their recent work upon the Carriage of Goods by Sea Act, 1924, Williamson & Payne, 1934, report the decision in the case of Pendle & Rivet, Limited vs. Ellerman Lines, Limited (1927), 33 Com. Cas. 70, as follows: "A case of goods was sent from London to Piraeus, where on its arrival it was opened and found to contain nothing but old newspapers. The cause of the disappearance could not be ascertained. The shippers contended that the goods must have been abstracted while in the carrier's custody, while the carrier contended that he had used proper care and delivered the case in the condition in which received. It was held on the evidence that the case when shipped was intact and that the goods were lost when in the carrier's custody;

and he was not protected, since he has been unable to show that the loss was not due to the fault or neglect of his agents or servants."

The analogy is not perfect, because no defence of stress of weather constituting a peril of the sea was urged, but the holding is interesting as showing how far the shipowner must go to explain the loss.

The material from which to draw inferences as to the actual cause of the loss is neither satisfactory nor adequate in the present case. But, while it can form no part of the finding, if the Court were inclined to speculate on the subject, the conclusion might be reached that some disturbance in the original stowage of the cargo occurred, rendering it less stable and secure, which might have been met by a closer supervision on the part of the crew, particularly in view of the admittedly heavy weather which the vessel had encountered and was about to encounter.

The language of Mr. Justice ROCHE, when dealing with somewhat similar circumstances, in the case of Cooper Stewart Eng. Co. vs. Canadian Pacific Railway (1933), 45 Ll. L. L. R. at pp. 248 and 249, is instructive. He says:

"But methods (of stowage) depend for their excellence not merely on their design but on the way in which they are carried out, and the Defendant Company entirely failed to satisfy me that the method was properly carried out in this case. On the contrary, I am satisfied that it cannot have been properly carried out."

At page 249, the learned Judge continues:

"The two things of which I am satisfied are these: Firstly, that there was no weather which possibly could have disturbed, or actually did disturb, the cargo if it had been properly stowed; and, secondly, I am satisfied that the only reasonable explanation is that the method of stowage, however excellent it might be, was not in this case properly effected. In those circumstances, I am not satisfied that the accident was due to any peril of the sea, and only for these reasons, in my view, the Plaintiffs are entitled to judgment."

For the purposes of the present case, the foregoing observations apply as well to the initial as to the continued efficient condition of the stowage.

By way of illustration only, as a measure of greater security, bags of sugar, available in No. 2 hold, might have been piled upon the barrels and puncheons to block or provide against any movement of the cargo. This had been done, in fact, in No. 1 hold, where no damage took place.

Looking at the case in its broadest aspect, in the light of the documents submitted, the defendant has delivered the goods in a very different condition from that in which it received them, and has therefore broken its contract. It had pleaded an excuse resting upon the exceptions in the contract, but has failed to bring itself within the scope of such exceptions. In the language of BANKES, L. J., in Hourani vs. Harrison (1927), 32 Com. Cas. at p. 316:

"So far as the burden of proof is concerned, it is plain that the obligation is laid upon the person seeking the benefit of the exception to establish not only that the loss has been without his actual fault or privity, but also that it has been without the fault or neglect of his agents or servants."

In support of the views above expressed, the following cases, cited on behalf of the plaintiff, may be referred to: Frederick Luckenbach, 1927 A. M. C. 143; Cooper Stewart Co. vs. C. P. R., 45 LI. L. L. R., p. 246; Chaudière, 1931 A. M. C. 533.

For these reasons:

Considering that the plaintiff has established the essential allegations of his action and that the defendant has failed to substantiate its defence;

Seeing the admission of the parties that if the action is to be maintained, judgment should go in favor of the plaintiff for the sum of $4,549.03, with interest from March 28th, 1931:

Doth maintain the plaintiff's action; doth dismiss the defendant's defence, and doth condemn the defendant to pay to the plaintiff the sum of four thousand five hundred and forty-nine dollars and three cents ($4,549.03), with interest thereon from March 28th, 1931, and costs.

TYPICAL PRESENT-STYLE EXCEPTION CLAUSE

12. The carrier shall not be liable, as carrier or otherwise, for any loss, damage, delay, or default, whether occurring during transit or before, or after or during or while awaiting loading, transshipment, discharge, delivery, or other disposition of the goods, or on board or in lighters or craft, or on wharf

or in warehouse, at any port or place, occasioned by any of the following excepted causes, throughout this contract always excepted: By causes beyond the carrier's reasonable control; by dangers or accidents of the sea or other waters or canals and of navigation or transportation of whatsoever nature or kind; by fire or explosion from any cause wheresoever occurring; by barratry, theft, or embezzlement of master or crew; by act of God; by enemies, pirates, robbers, or thieves; by arrest or restraint of governments, princes, rulers, or peoples; by prolongation of the voyage; by legal process or stoppage in transit; by fumigation or other treatment required by quarantine or sanitary authorities; by pestilence, riots, wars, rebellions, by strikes or stoppage of labor, or labor troubles, of carrier's employees or others; by explosion or bursting of boilers, damage from steam, breakage of shafts, accidents to or from machinery or breakage or derangement thereof; by any latent or other defect in hull, machinery, or appurtenances of the vessel or unseaworthiness thereof, although existing at time of shipment or transshipment or at the beginning of the voyage, provided due diligence shall have been exercised to make the same seaworthy; by collision, grounding, or stranding; by heating, heat of holds, or effects of climate; by ice, earthquake, sea water, wetting, rain, or spray, frost, decay, putrefaction, ferment, rust stains, sweat, floods, or freshets; by giving away, falling, or destruction of wharf, shed, or warehouse; by damage incident to transportation; by change of character, loss of weight or contents, drainage, leakage, breakage, shrinkage, or wastage; by cooperage or mending; by vermin or rat damage; by stowage or contact with, or smell, evaporation, leakage, escape of contents, or taint from other goods, the vessel being privileged to carry any other articles, whether hazardous or not, and livestock, as cargo or otherwise, on and/or under deck; by nature of the goods or cargo, or insufficiency of packages; by explosion of any cargo, whether shipped with or without disclosure of its nature or condition; by obliteration, error, insufficiency, or absence of marks, numbers, address, or description; by land damage, risk of craft, hulk, or transshipment; by faults or errors in navigation or management of the vessel, provided due diligence shall have been exercised to make the vessel in all respects seaworthy and properly manned, equipped, and supplied; by any act or omission of shipper or owner of the goods, or of his agent or representative. Flour, meal, corn, rice, and other foodstuffs in sacks, being subject to minor loss of contents notwithstanding due care, it is mutually agreed that to the extent of one-twentieth of the original weight loss of contents of any such package shall be deemed without carrier's fault, and the carrier shall not be responsible therefor.

AMERICAN "NOTICE" AND "SUITS" CLAUSE LITIGATIONS SINCE 1922

STATEMENT OF R. C. FULLBRIGHT, HOUSTON, TEX., ON BEHALF OF THE AMERICAN COTTON SHIPPERS' ASSOCIATION

Mr. FULLBRIGHT. My name is R. C. Fullbright; I reside in Houston, Tex. I am appearing here for the American Cotton Shippers' Association. This is an association of cotton merchants throughout the country, and, as you know, they are very large exporters of the principal agricultural commodity of the South.

We were not a party to the conference which Colonel Barber spoke of this morning. We have, however, met with them in their meeting this morning and previous to that time and considered this legislation, and have endorsed it. I merely want to make two observations that have really been brought out by the interrogations by the chairman, who certainly has a splendid grasp of the scope of this bill and its purpose. One is the question whether it might entail an additional burden on insurance. The cotton shippers have to keep their commodity 100 percent insured; and if they thought it was going to mean an increase in the cost of insurance, I am sure they would not be here in support of the measure. Now, the reason we feel it would not increase the cost is because these exemptions that inure to the benefit of the shipper, such as the value per package and the other matters that have been mentioned here, in turn inure to the benefit of the Marine Insurance Co.; and it has been our feeling, if no other matter entered into it, that there would not only be no increase in insurance cost, but ultimately we might hope to reduce it.

Of course, the note that has been introduced here this morning shows a discordant note. We do not feel, however, even if that should turn out to be so bad as our underwriter representative states, it would have the effect of really increasing the insurance cost.

I might say it is also of very great importance to us to have a document that is satisfactory to the bankers, because all of our cotton exportation has to be financed through the banks, and almost altogether through the banks of this country, and we are, of course, anxious to do everything that will facilitate the exportation of this commodity.

The international aspect of the matter which has been brought up by the chairman in his questions which he asked of Mr. Haight, we do not consider of so great importance, particularly to the cotton industry. We do want a bill of lading that we think will facilitate our banking facilities, our discounting of it, and our handling of it from this country to various countries of the earth.

Of course, within recent years, we have some competition from other countries from cotton that is being transported in vessels of other flags; but certainly the principal exporters in our group feel that with the passage of this bill by America and with the existing rules being adopted by statute in Great Britain, we have right there the principal cotton-carrying nations, and it will largely take care of the situation as far as we are concerned.

I simply wish to endorse what Colonel Barber had to say. I personally have been connected with this subject for a good many years, during part of the time with the National Industrial Traffic League. I thank you.