Farrell Lines, Inc. v. Highlands Insurance Co.

532 F. Supp. 77, 1982 AMC 1430 (1982)

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Farrell Lines, Inc. v. Highlands Insurance Co.

United States District Court for the Southern District of New York
532 F. Supp. 77, 1982 AMC 1430 (1982)

Facts

Farrell Lines, Inc. (Farrell) (defendant) was a carrier that received 556 cartons of shoes onto its cargo vessel in New York City for delivery to the port of Monrovia, Liberia. The National Port Authority of Monrovia (NPA) was a governmental entity that had total control over the operation of that port. Under NPA policy, cargo coming into the port was unloaded onto a pier, placed under NPA control, transported to an NPA warehouse, and later released to the consignee. When Farrell’s vessel arrived at the port and the cartons were unloaded onto the pier, seven cartons were noted as missing and 24 cartons as damaged and pilfered, for a loss of about $5,100. Several weeks later, when the cargo was received at the NPA warehouse, 100 cartons were noted as missing and 256 cartons were damaged and pilfered, for a loss of approximately $60,000. Highlands Insurance Co. (Highlands) (plaintiff) paid the full amount of the loss to the shipper and then filed suit as a subrogee against Farrell to recover for the loss. Farrell commenced an action for declaratory judgment limiting its liability to only the initial loss, not the total amount that was noted once the cargo arrived at the NPA warehouse. The actions were consolidated before the district court.

Rule of Law

Issue

Holding and Reasoning (Weinfeld, J.)

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