Knott v. Botany Mills

Background

A New Jersey wool company and a New York firm shipped bales of wool from Buenos Ayres on a British steamship owned by a private owner. The wool was stowed forward; later the ship took on wet sugar aft. Because a temporary bulkhead was not tight and the ship’s trim changed, sugar drainage reached and damaged the wool. The bills of lading tried to exempt the carrier from liability for negligence and said the contract would be governed by the ship’s flag law. Lower courts awarded damages to the wool owners, and the case reached this Court.

Reasoning

The Court addressed two plain questions: whether the loss came from careless loading or from ship navigation, and whether the Harter Act covers foreign ships arriving in the United States. The Court found the damage resulted from negligent stowage and changes in loading, not from navigation errors, so the loss fell under the Harter Act's prohibition on clauses that relieve carriers from negligence liability. The Court also held that the Act’s first section applies to foreign vessels on voyages that end at U.S. ports, so the exemption and choice-of-law clauses were void.

Real world impact

The ruling means shippers whose goods arrive in U.S. ports on foreign vessels cannot be denied recovery when cargo is harmed by negligent loading or stowage through clauses in bills of lading. Carriers must take proper care in stowing and monitoring cargo and cannot rely on a ship-flag choice-of-law clause to avoid responsibility under the Harter Act.