United States of America, Plaintiff-appellee, v. Central Gulf Steamship Corporation, a Corp., and Robert H.wall, Inc., a Corp., Defendants-appellants, 456 F.2d 1281 (5th Cir. 1972)

Central Gulf Steamship Corporation appeals from a judgment against it resulting from damage to a portion of a cargo of flour owned by the United States which Central Gulf agreed to carry from the Port of New Orleans to Port Said, United Arab Republic.

The flour was packaged in bags at various manufacturing points in the United States and transported to New Orleans by rail car, arriving during the week ending June 30, 1964. Defendant had agreed to lift the cargo on that date, but because of breakdowns and delays in foreign ports it was unable to load until July 29, 1964, when the vessel GREEN RIDGE called at New Orleans and lifted all but 14,805 bags which it left behind. Central Gulf did not call for the remaining bags until August 13, 1964, when the vessel GREEN VALLEY called at New Orleans. In anticipation of the vessel's arrival, the Department of Agriculture requested its Plant Quarantine Division to inspect the flour. On August 10, 1964, some six weeks after Central Gulf assumed custody of the flour, Plant Quarantine inspected the flour and found it heavily infested with four species of insects. The District Court, 321 F. Supp. 945, found that the cargo was in good order and condition when received by Central Gulf in New Orleans and that "While the 1,800 [damaged] bags of flour were in defendants' custody, the flour became infested with insects." The District Court held that "The infestation of said 1,800 bags of flour was proximately caused by defendants' fault, negligence and omission and by the breach of their contractual obligations owing to the Government." We hold that the District Court's findings are not clearly erroneous and affirm. See Fed. R. Civ. P., Rule 52(a); Chaney v. City of Galveston, 5 Cir., 1966, 368 F.2d 774.

Central Gulf signed delivery receipts stating that the flour was in "apparent good order and condition" when delivered to it by various rail carriers. Moreover, the United States affirmatively proved that the flour was in good order and condition upon delivery to Central Gulf, without reference to the receipts. Central Gulf stored the flour in a warehouse it had leased. It was under obligation to care for the cargo entrusted with it. The loss occurred while the cargo was in the care and custody of Central Gulf, which offered no explanation as to how the damages occurred. Central Gulf argues that these minute insects are an inherent vice of flour for which it could sustain no liability. The evidence presented showed that the insects created an inherent problem, not necessarily an inherent vice. The District Court found that the loss was occasioned by Central Gulf's failure to properly care for the cargo entrusted to its custody. Central Gulf was an experienced carrier which handled numerous shipments of bagged flour out of southern ports of the United States.

We have carefully reviewed the other claims of error and find them to be without merit.

Affirmed.