Ingersoll Milling Machine Co. v. M/V Bodena

829 F.2d 293 (1987)

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Ingersoll Milling Machine Co. v. M/V Bodena

United States Court of Appeals for the Second Circuit
829 F.2d 293 (1987)

Facts

Ingersoll Milling Machine Company (Ingersoll) (plaintiff) agreed to ship equipment to Korea. Ingersoll hired Gryphon Shipping Service, Inc. (Gryphon) to arrange the shipment. Gryphon engaged Taiwan International Line, Ltd. (Taiwan) (defendant) to transport the equipment on Taiwan’s vessel. No mention was made at the time of Ingersoll’s cargo being stowed on deck. Ingersoll also hired freight forwarder J.E. Bernard & Company (Bernard) (defendant) to assist with the shipment, including by processing export documents, delivery orders, and ocean bills of lading; preparing advance shipment notifications; handling monies advanced by the shipper; and coordinating shipments to the vessel. Ingersoll also asked Bernard to provide clean onboard bills of lading. Bernard prepared two master ditto forms for the bills of lading. Bernard sent one ditto to Mid-Gulf Shipping, Inc. (Mid-Gulf), Taiwan’s agent, for Mid-Gulf to prepare bills of lading. A ditto also was used to prepare an advanced notice of shipping. Neither the ditto nor the advanced notice mentioned stowage. Before sailing, Mid-Gulf added the notation “on deck shipper’s risk” to the ditto and then used the revised ditto to create bills of lading. Ingersoll received the bills of lading but either did not notice the reference to on-deck stowage or did not understand its legal meaning. Bernard also received the bills of lading but did not examine them. Ultimately, 17 of Ingersoll’s boxes were stowed on deck and were severely damaged in transit. Ingersoll sought full indemnity for the damaged shipment from its open-cargo insurer, Fireman’s Fund Insurance Company (FF) (defendant). Ingersoll’s policy provided for less coverage for on-deck cargo than for below-deck cargo. FF denied Ingersoll’s claim, asserting that Ingersoll had originally notified FF that the cargo would be stored below deck. Ingersoll sued FF, Taiwan, and Bernard. The district court found Taiwan, Bernard, and FF jointly and severally liable to Ingersoll. Taiwan, Bernard, and FF appealed. Taiwan argued that (1) Ingersoll did not specify below-deck storage, (2) Ingersoll waived any below-deck storage right, and (3) the bills of lading modified the contract of carriage to permit on-deck storage. Bernard argued that there was no admiralty jurisdiction and that it did not breach its contractual duty to provide clean bills of lading. FF argued that the policy’s more limited coverage for on-deck cargo applied and that Ingersoll violated the doctrine of uberrimae fidei (also known as uberrima fides).

Rule of Law

Issue

Holding and Reasoning (Pierce, J.)

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