This was an appeal against a decision of the Trial Division of the High Court granting the respondent summary judgment on the ground that the appellant's claim was time-barred by the terms of the contract of carriage contained in a bill of lading which, among other things, required suit for 'loss or damage' to be brought within one year after the delivery of the goods. The ship's log showed that discharge of the cargo of scrap metal was completed on 18 May 1967. Suit was filed by the appellant on 28 May 1968. See Guerrero & Family Inc v Micronesian Line Inc [1969] TTLawRp 72, 5 TTR 156 (CMI1752).]

Held: The trial Court judgment is affirmed.

The appellant approaches the question from two directions:

1. That the bill of lading issued by the respondent for the carriage of the cargo in question with its one-year limitation did not bind the appellant; and
2. That 'partial performance' of an 'entire and indivisible' contract of affreightment, evidenced by the bill of lading, did not start the time running within which a suit could be brought.

As to the first of these questions, it is argued that the bill of lading is not binding as a contract, because the appellant did not assent to it, because the 'plaintiff' was 'an uneducated, unlettered, trusting and dependent Micronesian of Chamorro descent' and that '[u]nder the circumstances, the probability that plaintiff knowingly assented to the term on the reverse of the bill of lading is non­existent'. However, it is abundantly evident that the appellant is a Micronesian corporation 'duly organized and doing business under the laws of the Trust Territory' according to para 1 of the appellant's complaint, and not an individual, Chamorro or otherwise. The Court rejects any suggestion that the bill of lading was not binding upon the shipper but did obligate the carrier. Acceptance of a bill of lading without objection is assent to it: Wells Fargo & Co v Neiman-Marcus Co [1913] US SC 88, 227 US 469, 33 S Ct 267; 13 Am Jur 2d, Carriers, s 273. The record shows the bill of lading contained on its face the customary provision that upon accepting the bill, the shipper agrees 'to be bound by all of its stipulations, exceptions and conditions'.

Since the bill of lading was the contract between the parties, regardless of the physical and mental condition of a corporate agent or employee, is it proper to argue that 'partial performance', that is delivery of part of the scrap metal described on the face of the bill, did not permit the respondent to start the time limitation running? The bill of lading provided for shipment from Saipan to Okinawa: 'One lot said to be 1,000 S/T of scrap metal, 2,000,000 lbs. F.I.O.' Delivery of 'one lot' was full performance and started time running. But assuming, as the appellant argues, that delivery of the cargo carried was only a portion of 1,000 tons (and there is nothing in the record to substantiate this), did the time within which suit could be brought start to run when performance was complete by delivery of 'one lot', or when the respondent notified the appellant that it intended to breach the contract at the time of partial performance, or at the time performance should have been complete? This argument, which clearly is one of law rather than of fact, is not only a contradiction in terms as to the nature of a suit for breach of contract but, more importantly, misconstrues the nature of a bill of lading as a contract for carriage.

In Pollard v Vinton 105 US 7, 26 L Ed 998, the US Supreme Court, speaking of the nature and effect of a bill of lading, said:

It is an instrument of two-fold character. It is at once a receipt and a contract. In the former character; it is an acknowledgment of the receipt of the property on board his vessel by the owner of the vessel; in the latter, it is a contract to carry safely and deliver. The receipt of the goods lies at the foundation of the contract to carry and deliver. If no goods are actually received, there can be no valid contract to carry or to deliver.

In an earlier decision the same Court said in The Delaware v Oregon Iron Co [1871] US SC 37, 81 US 579, 20 Fed 779, 783:

Bills of lading when signed by the master, duly executed in the usual course of business, bind the owners of the vessels if the goods were laden on board or were actually delivered into the custody of the master, but it is well settled law that the owners are not liable if the party to whom the bill of lading was given had no goods or the goods described in the bill of lading were never put on board or delivered into the custody of the carrier or his agent.

Again, it is said in Strohmeyer v American Lines SS Corp 97 F 2d 360:

The bill of lading delivered has not the legal effect contended for by the appellant. It imports a receipt of goods to be transported and delivered at the place of destination, but it extends only to the goods actually received or within the control of the carrier or their representatives.

Regardless of how many tons of scrap metal 'one lot' might be, the contract, evidenced by the bill of lading, provided for delivery of the cargo loaded on board. A contract of carriage is 'entire and indivisible', as the appellant suggests. It is made for one cargo for one voyage. There is no provision in the bill or evidence of an understanding between the parties that there be more than one shipment or more than one bill of lading. To suggest that the time-bar provisions of the contract did not begin to run when the cargo was discharged ignores the applicable law.

The appellant also argues that the theory of equitable estoppel should prevent the respondent's employment of the time bar. The trial Court could find no allegations raising issues of facts pertaining to estoppel. Clearly, estoppel is not applicable.

Whatever merits there may have been to the claim, the appellant waited too long to assert it, and a Court may not consider it until it is shown that the time bar may be avoided. This Court, just as the trial Court, was not in a position to consider the appellant's claims or the respondent's answers to the claims. The bar of limitations is decisive. A similar holding was made by Holmes J in Ellis v Davis [1923] US SC 29, 260 US 682, 43 S Ct 243, when he said: 'We find it unnecessary to consider other defenses besides the contract limitation, as we agree with the court below that that disposes of the case.'

The appellant urges that the contract limitation in the bill of lading is invalid. The appellant suggests that the time bar is a foreign statute of limitations, since it is the same time limitation provided in the Federal Carriage of Goods by Sea Act (COGSA), 46 USC ss 1300 ff, and that COGSA is not applicable to the Trust Territory. The limitation that the respondent relies upon is contained in the contract between the parties, not in any Federal statute. That this is appropriate is pointed out by the US Supreme Court in Missouri, K & T R Co v Harriman Brothers [1913] US SC 95, 227 US 657, 33 S Ct 397, 401:

The policy of statutes of limitations is to encourage promptness in the bringing of action, that the parties shall not suffer by loss of evidence from death or disappearance of witnesses, destruction of documents, or failure of memory. But there is nothing in the policy or object of such statutes which forbids the parties to an agreement to provide a shorter period, provided the time is not unreasonably short. That is a question of law for the determination of the Court ... . Such limitation in bills of lading are very customary and have been upheld in a multitude of cases.

Finally, the appellant asserts that it is entitled to a refund of prepaid freight, because there was not a carriage of the quantity of scrap metal for which freight was paid. Applicant interprets the limitation in the contract for recovery for 'loss or damage (including misdelivery or conversion) unless suit is brought within one year after the delivery of the goods' to apply only to loss of goods or damage to goods. It is too narrow an interpretation. All loss or damage under the contract is involved, not just loss or damage to the goods. All claims arising out of the contract between the parties are barred by the failure to bring suit within one year from the date of the discharge of the cargo.