Oxford Shipping Co. v. New Hampshire Trading Corp.

In 1978, Avon Trading Corporation (Avon) (defendant) contracted with Yulsan, a Korean firm, to provide 20,000 tons of scrap metal. However, Avon planned to provide only 17,000 tons. Avon solicited a scrap dealer, New Hampshire Trading Company (TC) (defendant) to issue a letter stating that it had provided Avon several thousand tons more of scrap metal than it actually had. Avon contracted with Oxford Shipping Company (Oxford) (plaintiff) to transport the scrap metal. Oxford then contracted with Tager Steamship Agency (Tager) (defendant) to issue bills of lading documenting how much the scrap weighed. On the day of the shipment, Tager, relying on TC’s letter, issued a bill of lading overestimating how much scrap metal had been loaded onto Oxford’s ship. While the ship was en route, Avon employees tried to solicit Oxford’s employees to put water ballasts onto the ship to make it appear that the scrap metal weighed more. The Oxford employees refused to do so but did not report the situation to Oxford superiors. When the ship reached Yulsan, Yulsan immediately realized that the scrap was not 20,000 tons. However, Yulsan had already paid Avon the agreed-upon price. In response, South Korean officials seized Oxford’s ship. Oxford then filed suit against Avon, TC, and Tager based on contract, negligence, and fraudulent-misrepresentation claims to recover damages resulting from the seize. The district court found that Tager, as an agent of Oxford, had breached its fiduciary obligation by negligently issuing the bill of lading. However, the court held that Oxford was unable to recover against any of the companies because its employees, also agents, had been negligent. Therefore, the court concluded that the contributory negligence of one set of agents, i.e., the Oxford employees, was imputed onto Oxford and prohibited it from recovering against another set of negligent agents, i.e., Tager and the other companies. Oxford appealed.