Banque de Depots, a Swiss bank, brought an action against Bozel, a Brazilian exporter, seeking a money judgment because Bozel had allegedly misapplied the bank’s funds. The bank obtained an order seizing 1,300 metric tons of calcium silicon located in a Louisiana port. The calcium silicon was shipped under ocean bills of lading by Bozel from Rio de Janeiro to New Orleans for transit to three purchasers, none of whom were domiciled in Louisiana. The documents were still in the hands of the collecting banks and had not yet been negotiated to the buyers. Bozel asked the court to free the goods because he was not the owner of the bills of lading.
LOBRANO, JUDGE
Bozel asserts that…title to the cargo follows the bills of lading, and once those were transferred to the collecting banks, they [Bozel] were no longer the owner of the cargo.
The Bank asserts that … only bills of lading which are “duly negotiated” transfer ownership of goods … They contend that the bills of lading may have been transferred to the collecting banks, but they were not “duly negotiated” … since there was no value given prior to the attachment …
We agree that Louisiana law governs the ownership of the cargo when it reached Chalmette, La. Article 2 of the UCC has not been adopted in Louisiana, hence the courts must look to the Louisiana Civil Code in determining the ownership of movables …
The holder of a duly negotiated bill of lading acquires title to the document and title to the goods described therein. It is clear that once a carrier has issued a negotiable bill of lading for goods being placed in commerce, the intent of the law is to protect those who subsequently become holders through “due negotiation.” Part and parcel of that intent is the protection afforded the [carrier] in relinquishing possession of the goods to the holder of the document. Thus, although goods in the possession of a [carrier] may have been seized, if the document’s negotiation has not been enjoined or the document is not in its possession, [Louisiana law] permits the [carrier] to surrender the goods to the duly negotiated holder. The law protects that holder from acquiring goods that are subject to a seizure. Any other conclusion would lead to the absurd result of requiring the holder, prior to his purchase of the bill of lading, to check every jurisdiction through which the goods passed to determine if it has been seized by judicial process. This would defeat the purpose of our commercial laws.
The record is clear that on May 14, 1990, the date of the seizure, the negotiable bills of lading were outstanding. They were not in the hands of the carrier and their negotiation had not been enjoined. As discussed, the validity of the attachment must be determined as of the date it was issued. The Bank cannot cure this defect by seeking to impound the bills of lading after it obtained the seizure. To hold otherwise would create an impossible contradiction in our commercial laws since the “seized” goods would still be subject to the legal effects of the unimpaired “due negotiation” of the corresponding bills of lading. The legal “capture” of the bills of lading is a prerequisite to the seizure of the goods.
We order that the writ of attachment be dissolved.
Decision. A court-ordered seizure of goods in transit cannot stand when the title to the goods is represented by a bill of lading and the bill of lading itself was not seized by the court order.
Comment. The Swiss bank was attempting to assert jurisdiction over Bozel by seizing its cargo in the United States. Although this attempt failed, the court stated that the bank was free to continue to find other ways to get jurisdiction over Bozel.
What are the policy reasons for not allowing a creditor, such as Banque do Depots, to seize cargo that is being shipped to a buyer under a bill of lading?
