Article by Benjamin W. Yancey
The story of pre-Harter Act carriage, leading to the Harter Act, and in turn to the Hague Rules, is so familiar to the practicing admiralty lawyer that it is only with great diffidence and reticence that one approaches it at all. It was first told in 1920 and has been repeated many times since then. Why tell it again? A relatively brief and rather elementary resumé might bring into sharper focus the great difference between the Harter Act-Hague Rules philosophy and the attitudes and philosophy which now are being advanced in certain areas. This review is not intended to be, and is not, a detailed and learned recitation of familiar history; it is no more than a cursory introduction to the current situation surrounding the Visby and Hamburg Rules.
The classical attitudes of Great Britain and the United States toward the common carrier's ability to contract against liability for its own negligence in cargo damage cases were, at least on the surface, quite different. They were, however, similar to the extent that at common law the liability of the public carrier was strict, and, apart from express contract, the British public carrier was, with certain exceptions, absolutely responsible for the safety of the goods while they remained in his hands as carrier. The only important exceptions to absolute responsibility, in the absence of contract, were the “act of God” and of the “King's enemies,” and some defect or infirmity of the goods themselves. The general maritime law of the United States was essentially the same. The classic statement, of course, is The Propeller Niagara, holding that common carriers by water, in the absence of any legislative provision prescribing a different rule, are, in general, insurers, liable in all events except for the act of God, or the public enemy, or by some other cause, without any negligence, and expressly excepted in the bill of lading.
The common carriers' legal duties could be modified, within limits, by agreement. The nineteenth century British rule was that a shipowner was given certain latitude to contract out of his liability for negligence, and, in some instances, even for unseaworthiness, but only if he did so in absolutely clear, unambiguous, and unequivocal terms. Clauses of adequate specificity, leaving the carrier free from the effects of the negligence of his own servants or agents, were enforceable. Under general maritime law of the United States, the carrier could not contract against its own negligence. Such a provision was supposed to be against our public policy. The efficacy of this rule was considerably diluted by the holdings of our courts on the question of the burden of proof. If the carrier brought the cause of the loss or damage within one of the perils excepted in the carrier's bill of lading, then cargo had the burden of proving that the carrier's negligence caused or contributed to the loss, in which event the carrier was liable. In the pre-discovery days, that burden of proof was a very real defensive weapon, and a source of serious difficulty for the cargo claimant. A predictable result of this situation was a great proliferation of oppressive exemptive clauses under which, if the burden of proof were literally applied and the carrier could bring the cause of loss within one of those exemptive clauses, the damaged cargo bore the burden of proving that the loss resulted from the carrier's negligence. In a very significant number of cases, this burden was impossible for cargo to bear. These exemptive clauses included the following: thieves; heat, leakage, and breakage; contact with other goods; perils of the seas; jettison; damage by seawater; frost; decay; collision; strikes; benefit of insurance; liberty to deviate; sweat and rain; rust; prolongation of the voyage; nonresponsibility for marks or numbers; removal of the goods from the carrier's custody immediately upon discharge; limitation of value; time for notice of claims; and time for suit.
Clauses that were particularly oppressive included the very low limitation or valuation clauses, those allowing extremely short times for the presentation of notice of loss, damage, or claims, and very short time for the filing of suit. All of these clauses were valid “if reasonable”; the notions of the courts in those days as to reasonableness were rather stringent in the carrier's favor. Thus, clauses limiting liability to $100 per package were valid if the cargo were given a choice of freight rates. An invoice valuation clause was invalid in the absence of a choice, but valid when it was a “true valuation clause,” even in the absence of a choice. Clauses limiting the time to present a claim to periods as short as days were valid in some circumstances. So too were suit periods as short as three months. The “benefit of insurance” clause, purporting to give the carrier the benefit of cargo's insurance and thus cutting off the cargo underwriters' right of subrogation, was troublesome as well. This type of clause was held valid and is thus worth mentioning. However, it was successfully nullified by the cargo underwriters' invention of the loan receipt, which was also held valid.
About the Author
Benjamin W. Yancey. Professor of Law, Tulane University; B.A., M.A., LL.B., Tulane University; Member, Louisiana Bar; Senior Partner, Terriberry, Carroll, Yancey & Farrell, New Orleans, Louisiana.
Citation
57 Tul. L. Rev. 1238 (1983)