Summary
The Fifth Circuit held that the filing of an unconditional claim of owner perfected in rem jurisdiction over the vessel in one of two consolidated cargo-damage actions. It concluded that the vessel owner was not personally liable because there was no evidence of actual or apparent authority to issue the bills of lading, but held that the vessel could be liable in rem and remanded for determination of that liability. The court affirmed dismissal of the separate action in which the owner had expressly preserved its jurisdictional objection.
Topics
Practice areas
Questions Presented
- Whether Orient's filing of an unconditional claim of owner, without arrest of the vessel or a bond, established in rem jurisdiction over the M/V Montmartre in the first action.
- Whether the vessel owner's express reservation of its jurisdictional objection preserved the lack of in rem jurisdiction in the second action.
- Whether Orient was liable in personam as the carrier or under apparent authority principles for bills of lading signed by Delpa.
- Whether the M/V Montmartre could be liable in rem for cargo damage even though Orient was not liable in personam and did not authorize issuance of the bills of lading.
Holdings
- An unconditional claim of owner filed by the vessel owner in the first action, without a jurisdictional objection and after the action sought in rem process against the vessel, constituted an appearance on behalf of the vessel and perfected in rem jurisdiction.
- The second action was correctly dismissed for lack of in rem jurisdiction because Orient and the vessel expressly preserved their objection to jurisdiction from the motion to vacate the default judgment through consolidation.
- Orient was not liable in personam because Cactus showed neither actual authority nor apparent authority for Delpa to issue the bills of lading on Orient's behalf.
- The M/V Montmartre could be liable in rem for the cargo damage in the first action even though Orient was not liable in personam and did not authorize issuance of the bills of lading.
Key quotations
“We hold that it does.” (1109)
“When the vessel owner lays claim to the vessel he has appeared on its behalf.” (1111)
“An agent cannot confer authority upon himself.” (1112)
“When cargo has been stowed on board the vessel and bills of lading are issued, the bills of lading become binding contracts of the vessel in rem upon the sailing of the vessel with the cargo.” (1113)
“The sailing of the vessel constitutes a ratification of the bills of lading.” (1113)
Factual background
Cactus purchased steel tubing from Corinth, which arranged shipment from Greece to Houston aboard the M/V Montmartre, owned by Orient and operated through a series of charter arrangements. Nine bills of lading were issued by Delpa "For The Master," and the cargo arrived with damage and shortages. Orient filed claims of owner in both consolidated actions, but only the claim in the first action omitted an express reservation of the objection to in rem jurisdiction.
Procedural history
Cactus brought one action through its subrogated underwriter and a second action for its uninsured loss against the M/V Montmartre, its owner Orient, and Corinth. The actions were consolidated. After a bench trial, the district court found cargo damage and shortage, initially found Corinth liable as carrier, and rejected liability against Orient and the vessel; amended conclusions later found no in rem jurisdiction and awarded Cactus nothing. The Fifth Circuit held that Orient's unconditional claim of owner in the first suit perfected in rem jurisdiction, while the jurisdictional objection was preserved in the second suit; it affirmed the dismissal of the second suit, reversed as to the first suit, and remanded for determination of the vessel's in rem liability.
Remand instructions
Remand to the district court to determine whether the M/V Montmartre was liable in rem for the cargo losses alleged in the first suit, District Court No. H-80-1721. The dismissal of the second suit, District Court No. H-80-1769, for lack of in rem jurisdiction and the ruling that Orient was not liable in personam were affirmed.