Dinamis Trading shipped 1,175 cartons of perfume from Venezuela to Borealis Trading’s warehouse in Miami via the co-defendants, SeaFreight Line Ltd and SeaFreight Agencies Inc. The goods never reached the consignee, and the plaintiff paid the insured amount of USD 583,573.06 - approximately USD 487 per carton - to its assured for the loss. Interested Underwriters (the plaintiff, as subrogee) then sued the co-defendants. The trial Court, applying the statutory loss limitation provisions in 46 USC ss 1300 ff (COGSA), granted summary judgment, finding that a container filled with eight pallets (each containing 140 cartons of perfume) and 55 loose cartons of perfume constituted 63 'packages' for the purposes of COGSA's USD 500 package limitation.

The plaintiff appealed.

Held: Appeal allowed. The trial Court's decision is reversed.

The Court found ample evidence in the record that each carton of perfume was a 'package', and thus there was a total of 1,175 packages.

Congress included no definition of 'package' in COGSA. Generations of judges had done their best to bring order to the case law and applied prior decisions to new methods of packaging and transporting goods by sea. Cartons of orange juice, men's jackets, and all manner of goods had been characterised as 'packages', while other decisions had focused on which party - shipper or carrier - prepared the goods for shipment, or on the visibility of the shipped goods to the carrier. In a case such as this, the bill of lading referred to both the container and other units susceptible of being COGSA packages, and was therefore inherently ambiguous.

Applying these terms from the bills of lading to the cartons of perfume on pallets for shipment in a container, the plain and ordinary meaning of the terms was obvious. The cartons were the 'packages' placed on pallets, which were in turn placed in a container for shipping. Had the parties described the goods simply as eight pallets of perfume and 55 loose cartons, the co-defendants were likely to have prevailed. But on the original bill of lading and the later, unsigned bill of lading on the defendants' form, the parties thought it important to specify the total number of cartons being shipped. The co-defendants obtained a summary judgment based on a case in which the on-board bill of lading referred to the pallets as 'packages'. The original bill of lading and other unsigned versions evidenced no such intention or agreement in this case.