## Facts

- Mississippi Shipping Co. owned the S.S. *Del Sud*, a cargo vessel carrying goods from South American ports to New Orleans on a multi-port voyage.
- Before calling at Santos, Brazil, the *Del Sud* had already loaded cargo at other South American ports and then stopped at Santos to take on additional cargo.
- As the *Del Sud* left the Santos dock, part of the vessel rolled down onto the dock and the hull was fractured in way of a cargo space.
- The crew did not detect the fracture at Santos, and the vessel proceeded to Rio de Janeiro.
- At Rio de Janeiro, the vessel loaded additional cargo and the crew observed substantial amounts of water entering the bilges, but their efforts failed to locate the structural source of the leak.
- The *Del Sud* continued to New Orleans. During discharge, cargo owners discovered seawater damage to cargo stowed in the affected area.
- Zander & Co. and other cargo owners sued Mississippi Shipping in admiralty for cargo damage under COGSA bills of lading, claiming the carrier failed to exercise due diligence to make the vessel seaworthy.
- The district court entered judgment for the cargo owners, finding Mississippi Shipping failed to exercise due diligence in connection with seaworthiness.
- Mississippi Shipping appealed to the Fifth Circuit.

## Issues

1. Under COGSA, did Mississippi Shipping carry its burden to show due diligence to make the *Del Sud* seaworthy before and at the beginning of the voyage as to the cargo damaged by seawater?
2. Could Mississippi Shipping avoid liability by characterizing the Santos casualty as an “act, neglect, or default” in the navigation or management of the ship under COGSA § 1304(2)(a), despite the later failure to discover and correct the resulting hull defect?

## Decision

- The Fifth Circuit affirmed the district court’s judgment for the cargo owners.
- The court treated the hull fracture as making the ship unseaworthy in fact while cargo was at risk from seawater entry into a cargo space.
- The carrier did not prove due diligence where the vessel had sustained a serious dockside impact, later showed abnormal bilge water, and yet the ship proceeded without finding and repairing the structural source of leakage.
- The court rejected the carrier’s attempt to use the § 1304(2)(a) navigation-or-management exception as a complete shield when the loss was tied to an uncorrected unseaworthy condition and insufficient inspection and remedial action.

## Legal Principles

- Under COGSA § 1303(1), the carrier must exercise due diligence to make the ship seaworthy before and at the beginning of the voyage; the carrier bears the burden of proving due diligence when relying on COGSA defenses.
- A structural breach or hole in way of a cargo space that permits seawater to enter is an unseaworthy condition connected to cargo damage.
- COGSA § 1304(2)(a) may excuse loss caused by an act or fault in the navigation or management of the ship, but it does not excuse a failure to act with due diligence to discover and correct an unseaworthy condition that threatens cargo.
- When events during the voyage (such as a recent impact and unexplained water in the bilges) signal possible hull damage, reasonable inspection and corrective steps are part of the carrier’s due-diligence obligation.

## Conclusion

Mississippi Shipping Co. v. Zander & Co. holds that a carrier remains liable under COGSA when a dockside casualty leaves the ship with a hull fracture that allows seawater into a cargo space and the carrier fails to conduct reasonable investigation and repair before continuing the voyage, and the carrier cannot avoid that result by pointing to the navigation-or-management exception alone.


Mississippi Shipping Co. v. Zander & Co., 270 F.2d 345, 1959 AMC 2143 (1959)