Francosteel Corp. v. N. v. Nederlandsch Amerikaansche , 57 Cal. Rptr. 867 ( 1967 )

249 Cal. App. 2d 880 (1967) 57 Cal. Rptr. 867

FRANCOSTEEL CORPORATION, Plaintiff and Appellant,
v.
N.V. NEDERLANDSCH AMERIKAANSCHE, STOOMVART-MAATSCHAPPIJ, Defendant and Respondent.

Docket No. 23412.

Court of Appeals of California, First District, Division One.

March 31, 1967.

Stephen McReavy, Ellis J. Adler and Hall, Henry, Oliver & McReavy for Plaintiff and Appellant.

R. Frederic Fisher, Lillick, Geary, Wheat, Adams & Charles and Lillick, McHose, Wheat, Adams & Charles for Defendant and Respondent.

SIMS, J.

Plaintiff has appealed from a judgment dismissing its complaint following the sustaining of a demurrer thereto, without leave to amend, on the grounds that the action is barred by the one-year limitation contained in subsection (6) of section 3 of the United States Carriage of Goods by Sea Act. (Act., Apr. 16, 1936, § 3(6), 49 Stat. 1208, § 3(6), 46 U.S.C.A., § 1303(6).)

The allegations of the complaint are essentially as follows: that defendant, a common carrier of goods by sea, issued certain bills of lading wherein it agreed to carry steel products under deck from Antwerp to certain United States ports; that in wilful breach of these contracts, defendant carried the goods on deck unprotected and exposed to the elements, thus causing them to be in a badly rusted condition when delivered in March 1963 to plaintiff, the holder of the bills of lading; that by reason of defendant's breach of the contract plaintiff has suffered damages in the amount of $12,022.11; and that defendant's conduct constituted a deviation so as to make defendant an insurer of the goods and to deprive it of all defenses under the bills of lading and under the United States Carriage of Goods by Sea Act.

The complaint was filed on March 18, 1965, approximately two years after delivery of the damaged goods. The statutory provision upon which defendant relies reads: "In any event the carrier and the ship shall be discharged from all liability in respect of loss or damage unless suit is brought within one year after delivery of the goods...."^[1]

Plaintiff contends that the on-deck storage of the goods in violation of the agreement to carry them underdeck constitutes a deviation under maritime law; and that the effect of the deviation is to displace the provisions of the bill of lading and the statute, and to make the carrier liable as an insurer, subject to suit until such time as action may be barred by laches. It relies on the law governing restrictive provisions in bills of lading as established prior to the adoption of statutory controls, and asserts that the historical background, legislative history and express terms of the Carriage of Goods by Sea Act demonstrate that its provisions are not to be applied where there is an intentional breach of the contract of carriage, of the nature alleged here. It also asserts that it is inequitable and illogical to permit defendant to claim the benefit of the statutory provision to escape liability for an intentional wrong.

Defendant, in support of the applicability of the statute, derives comfort from two trial court decisions which seemingly support its position, and attempts to draw a favorable analogy from decisions construing other provisions of the act. It also appeals to the circumstances underlying the enactment of the statute, and the express provisions embodied therein; and insists that they demonstrate that reason, common sense and sound public policy necessitate application of the statutory limitations to the claim asserted by plaintiff.

So far as can be ascertained, the case is one of first impression insofar as a deviation or breach of the contract of carriage of the nature asserted by plaintiff is concerned. [1] Resort to the various criteria suggested by the parties leads to the conclusion that a policy of international uniformity dictates that the provisions of rule 6 of article III of the Hague Rules be applied to an action where the alleged deviation is on-deck storage under a clean bill of lading.

Common Law Principles

The common law liability of the maritime carrier has been summarized as follows:

"Where, then, a shipowner receives goods to be carried for reward, whether in a general ship with goods of other shippers, or in a chartered ship whose services are entirely at the disposal of the one freighter, it is implied in common law, in the absence of express contract —

"That he is to carry and deliver the goods in safety, answering for all loss or damage which may happen to them while they are in his hands as carrier:

"Unless that has been caused by some act of God, or of the King's enemies; or by some defect or infirmity of the goods themselves, or their packages; or through a voluntary sacrifice for the general safety:

"And, that those exceptions are not to excuse him if he had not been reasonably careful to avoid or guard against the cause of loss, or damage; or has met with it after a departure from the proper course of the voyage; or, if the loss or damage has been due to some unfitness of the ship to receive the cargo, or to unseaworthiness which existed when she commenced her voyage." (Italics added.) (I Carver, Carriage by Sea (11th ed. 1963 [British Shipping Laws, Vol. 2]), par. 20, p. 20; and see Gilmore & Black, The Law of Admiralty (1957) § 3-22, pp. 119-120; and Knauth, Ocean Bills of Lading (1953) p. 116.)

Prior to statutory regulation, the shipowners were free to contract concerning their liability, and "the carriers developed the `free' contract to a point where it could be said that the carrier accepted the goods to be carried when he liked, as he liked, and wherever he liked." (Knauth, op. cit., p. 116; and see Carver, op. cit., par. 100, pp. 87-88; and Gilmore & Black, op. cit., § 3-23, pp. 120-122.)

[2] In the absence of a specific statutory or a valid contractual limitation, courts in maritime cases apply a doctrine of laches. The rule governing the exercise of the court's discretion has been stated as follows: "It is the sound legal discretion of cultivated reason, in which the circumstances of the parties, of the property, and of the transaction, the wants and convenience of commerce, the demands of public policy, and, most especially, the analogies of the local laws of limitations are fully to be considered and carefully weighed." (Benedict's Admiralty (4th ed. 1910) § 514, p. 345; and see County v. States Marine Lines, Inc. (2d Cir.1966) 355 F.2d 26, 27; and Gilmore & Black, op. cit., § 9-79, p. 628.)

Deviation has been described as follows: "To deviate, lexicographically, means to stray, to wander. As applied in admiralty law, the term `deviation' was originally and generally employed to express the wandering or straying of a vessel from the customary course of the voyage, but in the course of time it has come to mean any variation in the conduct of a ship in the carriage of goods whereby the risk incident to the shipment will be increased, such as carrying the cargo on the deck of the ship contrary to custom and without the consent of the shipper, delay in carrying the goods, failure to deliver the goods at the port named in the bill of lading and carrying them farther to another port, or bringing them back to the port of original shipment and reshipping them. Such conduct has been held to be a departure from the course of agreed transit and to constitute a `deviation' whereby the goods have been subjected to greater risks, and, when lost or damaged in consequence thereof, clauses of exceptions in bills of lading limiting liability cease to apply. [Citations.]" (G.W. Sheldon & Co. v. Hamburg etc. Packetfahrt-Actien-Gesellschaft (3d Cir.1928) 28 F.2d 249, 251; see also Tetley, Marine Cargo Claims (1965) pp. 204-211; I Carver, op. cit., par. 19, p. 19; and II id. [British Shipping Laws, Vol. 3], pars. 705-742, pp. 593-618; Gilmore & Black, op. cit., §§ 3-40/3-42, pp. 156-162; Poor, Charter Parties and Ocean Bills of Lading (4th ed. 1954) § 69, pp. 189-200; Kanuth, op. cit., pp. 240-270.)

"By stowing the goods on deck the vessel broke her contract, exposed them to greater risk than had been agreed and thereby directly caused the loss. She accordingly became liable as for a deviation, cannot escape by reason of the relieving clauses inserted in the bill of lading for her benefit, [fn. omitted] and must account for the value at destination." (St. Johns N.F. etc. Corp. v. S.A. Companhia Geral Commercial (1923) 263 U.S. 119, 124-125 [68 L. Ed. 201, 44 S. Ct. 30]; and see The Delaware (1872) 81 U.S. 579, 598 and 604 [20 L. Ed. 779].)

In St. Johns N.F. etc. Corp. the issue was whether the shipper had assented to storage on deck. In resolving that issue against the carrier, the court held that provisions of the bill of lading, which purported to relieve the carrier of liability for loss or damage from causes beyond his control, and to limit the liability to $100 per package unless otherwise stated, were rendered inapplicable by the deviation.

The opinion of the Circuit Court of Appeals, which was affirmed, is informative in that it sets forth the reasons for the rule, as follows: "The cargo was laden on deck contrary to the requirements of the clean bill of lading issued therefor, and by reason thereof the bill of lading and all its clauses were wiped out, and the ship cannot claim the benefits of any limitations therein contained. [Citation.] To so stow the cargo was a deviation which changed the character of the voyage so essentially that the shipowner who has deviated cannot claim the benefits of the terms of the bill of lading. It vitiates and avoids the contract of carriage. [Citations.] The same rule prevails in England. [Citation.] The reason therefor is that the exemption clauses and limitation in the bill of lading are for the benefit of the carrier who has control of the shipments after its delivery to him. By his bill of lading he declares the manner and place of carriage. The shipper having this notice, understands the reasons attendant upon the character of the transportation, and accepts the limitations and dangers. Freight rates are fixed accordingly. The shipper protects himself accordingly with insurance. When the carrier voluntarily varies from the method or place of carriage contracted for, he leaves the shipper with unknown risks against which he has not insured and he cannot recover on the insurance which he obtains. The shipowner is in the same position as in the case of deviation in route. [Citation.]" (The St. Johns N.F. (2d Cir.1922) 280 F. 553, 556-557; and see The Sarnia (2d Cir.1921) 278 F. 459, 462-466, cert. den. 258 U.S. 625 [66 L. Ed. 797, 42 S. Ct. 382], in which the stowage on deck invalidated a stipulation as to the value of the shipment.)^[2]

Other cases unequivocally declare the principle that deviation strips the ship of all excuses, and imposes upon her the liability of a common carrier, i.e., of an insurer. (Farr v. Hain S.S. Co. (2d Cir.1941) 121 F.2d 940, 944; The Pelotas (5th Cir.1933) 66 F.2d 75, 77; Rudy Patrick Seed Co. v. Kokusai Kisen Kabushiki Kaisha (S.D.N.Y. 1935) 12 F. Supp. 727, 731, revd. (2d Cir.1936) 85 F.2d 17, on grounds the alleged deviation was authorized.)

In United States v. Wessel, Duval & Co. (S.D.N.Y. 1953) 115 F. Supp. 678, the provisions of the Carriage of Goods by Sea Act were incorporated in a charter party between the parties to which the statute itself would not apply. In considering the effect of the incorporation of the provisions contained in section 3(6), the court observed: "The argument is that if the alleged breaches of duty on the part of Wessel Duval amounted to a deviation then Wessel Duval would be deprived of the protection of the one-year limitation in section 3(6) of the Carriage of Goods by Sea Act. That provision reads: `In any event the carrier and the ship shall be discharged from all liability in respect of loss or damage unless suit is brought within one year after delivery of the goods or the date when the goods should have been delivered.' Those words `in any event' may well result in preserving this statutory limitation even though the ship has been guilty of a deviation. Here, however, the Act has effect only as an agreement of the parties; if the agreement that, unless suit is brought within one year, the ship shall be discharged goes by the board when the ship is guilty of a deviation, the agreement that unless suit is so brought the ship shall be discharged `in any event' will go by the board too. The words `in any event' have no greater sanctity than the rest of the clause.

"The authorities indicate and I hold that deviation does deprive the ship of the protection of a provision in the contract of carriage limiting the time for suit or claim. Sidney Blumenthal & Co. Inc. v. United States, D.C.S.D.N.Y., 21 F.2d 798, not reviewed by the appeal reported 2 Cir., 30 F.2d 247; Rudy Patrick Seed Co. v. Kokusai Kisen Kabushiki Kaisha, D.C.S.D.N.Y., 12 F. Supp. 727, reversed on other grounds 2 Cir., 85 F.2d 17; General Electric Co. v. Argonaut S.S. Line, D.C.E.D.N.Y., 7 F. Supp. 720; but see Singer Hosiery Mills v. Cunard White Star, Ltd., 199 Misc. 389, [102 N.Y.S.2d 762]." (115 F. Supp. at p. 684.) The court found, however, that the alleged failure of the defendant to make the ship seaworthy, upon which the plaintiff relied, was not a deviation.

The cases cited in Wessel, Duval & Co. do support the principle that deviation abrogates contractual provisions which purport to limit the time within which an action may be commenced for loss or damage to the goods which were the subject of the contract of carriage. (See also Kemsley, Millbourn & Co. v. United States (2d Cir.1927) 19 F.2d 441, 442.)

Before further examining the effect of on-deck stowage of cargo in violation of the terms of the contract of carriage upon contractual and statutory provisions limiting the carrier's obligations, note should be taken of qualifications to the broad statements contained in the foregoing cases involving deviation.

"Deviation originally meant (and still means in most jurisdictions) an intentional change in the geographical route of the planned voyage." (Tetley, op. cit., p. 19; and see Gilmore & Black, op. cit., § 3-42, pp. 161-162; Knauth, op. cit., p. 241.) The extension of the doctrine in the United States to include nondelivery, deck carriage, and overcarriage, and the failure to distinguish between an intentional and a negligent change in the geographical route of a planned voyage has been criticized. It is suggested that deviation under the Hague Rules is best considered as an intentional change in the geographical route of the planned voyage. (Tetley, op. cit., pp. 17-24, passim; and see Gilmore & Black, op. cit., § 3-42, p. 161.)

The harsh effects of the doctrine of deviation which "substitutes one contract — an `insurer's liability' contract implied by law in the cases — for another contract, that made by the parties under the Harter Act or Carriage of Goods by Sea Act and expressed in the bill of lading" (Knauth, op. cit., p. 242), also has been disparaged by some observers with a plea that it be strictly limited to where the deviation is unreasonable, intentional and contributes to the loss (id., p. 243; and see Gilmore & Black, op. cit., §§ 3-40/3-42, pp. 156-162, passim).

Legislative History

Dissatisfaction of American shipping interests with the exculpatory clauses in bills of lading used by the carriers led to the adoption of the Harter Act of 1893. (Act, Feb. 13, 1893, ch. 105; 27 Stat. 445; 46 U.S.C.A., §§ 190-196.) This act prohibits stipulations relieving the carrier from liability for negligence and for failure to exercise due diligence in making the vessel seaworthy, but in turn provides for limitation of liability for errors of navigation, dangers of the sea, acts of God, etc., if the owner had exercised due diligence to make the vessel seaworthy. (See I Carver, op. cit., pars. 240-243, pp. 204-208; Gilmore & Black, op. cit., §§ 3-23/3-24, pp. 120-124; Knauth, op. cit., pp. 118-122.)

International recognition of these principles was ultimately effected at the International Convention for the Unification of Certain Rules of Law relating to Bills of Lading at Brussels, August 15, 1924, which modified and adopted the "Hague Rules." (51 Stat. 233, U.S. Treaty Series No. 931.) In 1936 the United States incorporated the "Hague Rules" with some clarifying amendments as the Carriage of Goods by Sea Act, and in 1937 it ratified the Brussels Convention subject to two understandings. (See Tetley, op. cit., pp. 284-296 and 297-302; and Knauth, op. cit., pp. 127-131.)

Acknowledgedly, Harter and Cogsa were designed to redress the inequality of bargaining power between carrier and shipper. Plaintiff contends that this intention, as openly asserted in the Senate when the latter act was presented and adopted, compels a construction favorable to the shipper, and precludes divesting him of rights he would enjoy in the absence of the statute unless it expressly takes them away. This approach overlooks the fact that both enactments are predicated upon compromising the demands of the carriers for exoneration, and the demands of the shippers for the imposition of even greater responsibility on the carriers. "Neither the Hague Rules nor the [Brussels] Act of 1924 lay down a complete code of law covering the carriage of goods under bills of lading. They simply replace a conventional contract by a legislative bargain. The general principles of English law are still applicable to the carriage of goods except as modified by the Act." (I Carver, op. cit., par. 232 at p. 198; and see Gilmore & Black, op. cit., § 3-24 at p. 123; and Knauth, op. cit., pp. 128-129.)

One salient fact does stand out. The international complexion of the Hague Rules suggests that consideration be given to international uniformity in the construction of the act. "It is important to remember that the Act of 1924 was the outcome of an International Conference and that the rules in the Schedule have an international currency. As these rules must come under the consideration of foreign Courts it is desirable in the interests of uniformity that their interpretation should not be rigidly controlled by domestic precedents of antecedent date, but rather that the language of the rules should be construed on broad principles of general acceptation." (Lord Macmillan in Stag Line, Ltd. v. Foscolo, Mango & Co. (House of Lords, 1931) [1932] App.Cas. 328 at p. 350; and see Lord Atkin, id., at pp. 342-343; Robert C. Herd & Co. v. Krawill Machinery Corp. (1959) 359 U.S. 297, 301 [3 L. Ed. 2d 820, 79 S. Ct. 766]; Tetley, op. cit., pp. 25-27 and 29; I Carver, op. cit., pars. 231-232, pp. 196-197; and (1965) First Supplement; and Knauth, op. cit., pp. 136-137.)

The core of Cogsa is found in sections 3 and 4. The former deals with the responsibilities and liabilities of carrier and ship. Subsection (1) defines the carrier's duty to provide a seaworthy ship, properly manned, equipped and supplied, and fit and safe for the reception, carriage and preservation of the cargo. Subsection (2) defines the carrier's duty of care with respect to the goods themselves from loading to discharge. Subsections (3), (4), (5) and (7) deal with the issuance of and contents of the bill of lading, and the legal consequences flowing therefrom. Subsection (6) is the subject of this controversy (see fn. 1, supra). Subsection (8) renders null and void and of no effect any attempt to relieve or lessen the obligations imposed on the carrier by the act.

Section 4 provides for the rights and immunities of the carrier and ship. Subsection (1) grants immunity for loss or damage resulting from unseaworthiness, unless caused by want of due diligence of the carrier. Subsection (2) establishes 17 categories of uncontrollable causes of loss. Subsection (3) exonerates the shipper from responsibility for loss or damage sustained by the carrier or the ship where the shipper is free from negligence. Subsection (4) delimits the consequences of reasonable deviation.^[3]

One commentator has observed: "The Act of 1936 applies the test of reasonableness to voyage clauses and deviations, as to other situations. Under the 1936 Act, it will always be a question whether any deviation is reasonable and hence excusable. The new Act therefore seems to have enlarged the rights of the carrier in this respect." (Knauth, op. cit., p. 255.)

Subsection (5) provides for a limitation of $500 per package unless a higher value is declared by the shipper.^[4] Subsection (6) defines the rights and obligations of the carrier and shipper in regard to inflammable, explosive or dangerous cargo when shipped either with or without the consent and knowledge of the carrier.

Existing Precedents

[3] Unless it is otherwise inapplicable, the one-year provision of section 3(6) will bar any action for loss or damage to goods which have been carried unless it is commenced within one year of the delivery. (See Western Gear Corp. v. States Marine Lines, Inc. (9th Cir.1966) 362 F.2d 328, 330-331, and cases cited; American Oil Co. v. Steamship Ionian Challenger (2d Cir.1966) 366 F.2d 509, 510; and Hellyer v. Nippon Yesen Kaisya (S.D.N.Y. 1955) 130 F. Supp. 209.)

The "loss or damage" referred to in the statute does not include, however, the right of a cargo owner to recover from the vessel or the carrier indemnity for salvage which he has paid. It is applied to instances involving damage directly to the cargo and to cases where there has been a delay in, or failure of, delivery or departure. (States Steamship Co. v. American Smelting & Refining Co. (9th Cir.1964) 339 F.2d 66, 68-69, cert. den. 380 U.S. 964 [14 L. Ed. 2d 155, 85 S. Ct. 1109].)

In Potter v. North German Lloyd (N.D.Cal. 1943) 50 F. Supp. 173 an action was brought on May 26, 1941 to recover the value of used household furniture shipped from Hamburg, Germany, in July 1939 and destined for Portland, Oregon, but never delivered because the vessel stopped and abandoned the voyage in Costa Rica upon the outbreak of the war in September 1939. The goods, which were there transferred to another ship for storage, were lost when the second ship was burned and scuttled some 18 months later. The defendant, among other defenses, relied upon the provisions of section 3(6) of Cogsa. The plaintiff claimed the delay constituted an unlawful deviation which nullified and rendered all bill of lading defenses unavailable to defendant.

The court acknowledged that the retention of the goods in Costa Rica for a period over 17 times the duration of the usual voyage originally intended, was "a strong circumstance which, if not justified by the defendant's privileges under the bill of lading defenses on which defendant strongly relies, would make defendant's position most difficult with respect to plaintiff's contention that there was a deviation by reason of such long delay." (50 F. Supp. at p. 173.)

It concluded: "If however the one-year time limit for bringing suit provided in the Carriage of Goods by Sea Act, 46 U.S.C.A. § 1303(6), applies to this case, the decision of it will be necessarily controlled by such statutory time limit with the result that plaintiff's action will be defeated whether the question as to deviation and its related questions are decided in plaintiff's favor or not.

"There can be no question but that the courts of this country, as required by 46 U.S.C.A. § 1300, have been applying to carriage contracts for ocean shipments in foreign trade to and from American ports the Carriage of Goods by Sea Act, supra, and Section 1303(6) thereof which in material part provides that: `In any event the carrier and the ship shall be discharged from all liability in respect of loss or damage unless suit is brought within one year after delivery of the goods or the date when the goods should have been delivered. ...' (Italics supplied.) See The Argentino, D.C., 28 F. Supp. 440, 442 (Syl. 2); The Zarembo, D.C., 44 F.Supp 915, 921 (Syl. 11, 12); The Cypria, D.C., 46 F. Supp. 816, 820 (Syl. 6, 7). Said section 1303(6) does apply to this case." (Id., pp. 173-174.)

[4] [See fn. 5] Upon finding that the goods "should have been delivered" more than a year before suit was filed, the court dismissed the suit.^[5]

Singer Hosiery Mills v. Cunard White Star, Ltd. (1951) 199 Misc. 389 [102 N.Y.S.2d 762], involved overcarriage of goods which were shipped from Belfast to New York, but returned and then reshipped again to the destination. The action was commenced 17 months after the actual delivery of the goods in poor condition. The defendant's answer asserted both the provisions of section 3(6) of Cogsa and a clause in the bill of lading which incorporated similar provisions of the British Carriage of Goods by Sea Act of 1924.

The municipal court observed: "The manner in which the shipment was made was a substantial deviation from the contract of carriage as provided in the bill of lading and constituted an overcarriage. In my opinion, this deviation made the carrier an insurer. [Citations] ... There is no question that under the maritime law and under New York State law, as quoted above, a substantial deviation by the carrier from performance as required by the bill of lading has serious effects upon the agreement between the parties. If the carrier breaches its contract, it should be estopped from claiming advantages which accrue to it solely by reason of the contract. The courts hold that such exceptions are invalidated." (199 Misc. at p. 391 [102 N.Y.S.2d at pp. 764-765].)

It concluded: "However, I feel that the entire contract is not nullified and those provisions remain which have not been affected by the breach which occurred. Be that as it may, the question of shipments by sea to or from ports of the United States is a matter of Federal regulation, more especially so when the shipment is governed by a bill of lading. The Carriage of Goods by Sea Act (U.S. Code, tit. 46, § 1300 et seq.) regulates the rights and obligations of the carrier and the shipper in the instances and in the particulars provided for in the act. Subdivision (6) of section 1303 provides: [quoting the provisions relied on by defendant herein].

"This provision of the Act is all inclusive; it is of the substance of the rights between the parties. Granting that a breach has occurred and even assuming that the provisions of the bill of lading have been nullified and the carrier has become an insurer, under our Federal law which governs this action, the shipper, unless he has in some manner been relieved from the one-year limitation, is bound to begin the action for a breach within one year after delivery of the goods or when the goods should have been delivered.

"There are no facts set forth showing that the consignees were lulled into a sense of security, misled, imposed upon, deceived or had been subjected to any fraudulent practice which prevented them from instituting this action within one year after delivery of the machinery. The bill of lading expressly states that the carrier and the ship are discharged from liability unless suit is brought within one year after delivery of the goods or the date when the goods should have been delivered and there is no reason why the consignees should not be held to compliance with this provision of the bill of lading and the similar provision contained in the Carriage of Goods by Sea Act. (Switzerland General Ins. Co. of Zurich v. Navigazione Libera Tirestina S.A., 2 Cir.1937, 91 F.2d 960; Potter v. North German Lloyd, N.D.Cal. 1943, 50 F. Supp. 173; Matter of Wheeler, 191 Misc. 33, 35 [76 N.Y.S.2d 159]; Zonite Products Corp. v. Mediterranean Navigation Co., 183 Misc. 962 [54 N.Y.S.2d 603].)" (Id., pp. 391-392 [102 N.Y.S.2d at pp. 765-766].)

Singer was followed, for the principle that the provisions of section 3(6) are all inclusive, in a trial court decision in Albert v. Isbrandtsen Co. (1957) 7 Misc. 2d 67 [160 N.Y.S.2d 772]. In that case the court held that the provisions of the act applied to bar an action for damages which ensued following the failure to deliver a bill of lading. The dock receipt which had been given incorporated by reference the provisions of a bill of lading which in turn made the provisions of Cogsa applicable. The court stated: "While defendant may have breached the contract in that it did not deliver the bill of lading, the entire contract is not nullified and the provisions not affected remain in force [citation]." (7 Misc.2d at p. 69 [160 N.Y.S.2d at p. 774]. An appeal was dismissed (1960) 12 App.Div.2d 581 [214 N.Y.S.2d 236].)

Singer has been recognized by the United States Court of Appeals for the Ninth Circuit as standing for the proposition "that the statute of limitations in the Carriage of Goods by Sea Act has been strictly applied by the Courts to bar untimely suits." (Western Gear Corp. v. States Marine Lines, Inc., supra, 362 F.2d 328 at p. 330; and see States Steamship Co. v. American Smelting & Refining Co., supra, 339 F.2d 66, 69.)

The United States District Court for the Southern District of New York has not been so charitable. In United States v. Wessel, Duval & Co., supra, 115 F. Supp. 678, as set forth above, it is suggested that Singer is a mutation of the general rule that a deviation deprives the carrier of a contract provision limiting the time for suit. (115 F. Supp. at p. 684.) In Jones v. The Flying Clipper (S.D.N.Y. 1953) 116 F. Supp. 386, the court suggested that Potter and Singer each conflicted with dictum in Switzerland General Ins. Co. v. Navigazione Liberia Triestina, S.A. (2d Cir.1937) 91 F.2d 960, 963, which indicated that a deviation would deprive the carrier of the benefit of the time limitation clause. (116 F. Supp. at p. 390.) Finally, in Hellyer v. Nippon Yesen Kaisya, supra, 130 F. Supp. 209, the two cases are referred to as standing for the proposition that "the failure to deliver the subject matter of the contract has been held not to constitute such a fundamental breach as to vitiate the contract between the parties." (130 F. Supp. 211; and see Tetley, op. cit., pp. 199, fn. 6, and 200, fn. 10.)

The foregoing authorities raise a doubt as to whether Potter and Singer stand for the proposition that the limitations period of section 3(6) applies despite any deviation, or merely establish that a failure to deliver, or an overcarriage is not such a breach of the contract (or deviation) as to render the contract a nullity and to take the case out of the operation of the statute.

Plaintiff also asserts that even though the bill of lading is not displaced when the breach (or deviation) is unintentional and involuntary (see The Malcolm Baxter, Jr. (1928) 277 U.S. 323, 332-333 [72 L. Ed. 901, 48 S. Ct. 516]), the carrier cannot escape liability by the clauses in the contract or statute when the breach is intentional. (St. Johns N.F. etc. Corp. v. Companhia Geral Commercial, supra, 263 U.S. 119, 124.)

It was observed above that on-deck stowage under a clean bill of lading is not universally considered a deviation, and it has been suggested that deviation, which would create rights apart from the provisions of the Hague Rules or of bills of lading based thereon, be limited to geographical deviation which is more generally recognized. Nevertheless, it has been postulated that whether on-deck stowage in violation of the contract of carriage be termed "deviation" or not, the carrier should not have the benefit of article III, rule 6 under such circumstances.

"The carrier contracts to carry cargo under deck and a clean bill of lading is an undertaking to that effect. It is submitted that unauthorized carriage on deck is a breach sufficient to annul the contract.

"Thus, if goods are carried on deck and no statement to that effect appears on the face of the bill of lading, then the bill of lading contract is null, or can be annulled, because the whole nature of the contract has been vitiated. As a result the Rules do not apply, there being no contract of carriage. The carrier, therefore, does not have the benefit of the Rules, including the per package limitation or the one year delay for suit." (Tetley, op. cit., p. 19.)

Other commentators suggest a contrary conclusion insofar as the time within which suit may be brought is concerned. "A goods-owner will lose any remedy he has against the carrier unless he issues a writ against him within one year, ..." (I Carver, op. cit., par. 274, p. 233; italics added.) "Can any event stop the running of the one-year limit? The Convention and Act are silent as to suspension of the running of the one-year limit upon the right to sue. No suspension of the time is granted. The time limit being statutory, it is absolute in the terms of the statute." (Knauth, op. cit., p. 276 and see pp. 275-277.)

"It has sometimes been questioned whether this time limitation is applicable in cases of deviation. The decisions hold that it is, and this is sustainable on two grounds: (1) a statute is not displaced by a deviation, (2) the paragraph commences with the words `in any event,' indicating that the statutory bar applies no matter what has happened. [Citing Potter and Singer].

"The language of the statute that `the carrier and the ship shall be discharged from all liability' unless suit is seasonably brought indicates that the liability is extinguished, and that the carrier's defence is not merely one of procedure.

"Under our admiralty practice, suit may be commenced by the filing of a libel without service of process. Consequently, it is only in a very rare case that this provision could cause any injustice." (Poor on Charter Parties (4th ed. 1954) supra, § 64, pp. 160-161.)

Defendant turns to the express language of the statute and urges that the words "in any event" signify that the one-year clause is to be applicable "under any circumstances and in all situations." In United States v. Wessel, Duval & Co., supra, the court in suggesting that deviation would deprive the carrier of a contractual limitation predicated on section ***KML*** other regulations as are not in conflict with general laws." (See In re Farrant, 181 Cal. App. 2d 231 [5 Cal. Rptr. 171]; In re Portnoy, 21 Cal. 2d 237 [131 P.2d 1]; Remmer v. Municipal Court, 90 Cal. App. 2d 854 [240 P.2d 92].) [4a] Unquestionably, therefore, the board of supervisors, or the people of Stanislaus County at a general election, could enact supplementary ordinances relative to the subject, which are not in conflict with state laws.

It is essential at this stage to examine the contents of the ordinance. At the very beginning, in section 1, it is made clear that there is no attempt to interfere with the state enactments relative to gambling. The ordinance neither purports to overrule nor to modify the action of the Legislature concerning certain specified gambling games. (Pen. Code, § 330.) In re Hubbard, 62 Cal. 2d 119, 125 [49 Cal. Rptr. 393, 396 P.2d 809], holds that the State of California has not preempted the entire field of gambling or gaming, and that, pursuant to article XI, section 11, of the California Constitution, a local legislative body may supplement section 330 and other provisions of the Penal Code with ordinances which do not conflict with the state laws on the subject.

Subdivisions (a) and (b) of section 2 of the ordinance prohibit the keeping, conducting or maintenance of commercial gambling houses, as follows, while subdivision (c) of the same section prohibits gambling in such public commercial resorts:

"SECTION 2: Unlawful Games:

"(a) Gambling House Prohibited: No person shall keep, conduct or maintain any house, room, apartment or place, used in whole or in part as a gambling house or place where any game is played, conducted, dealt or carried on with cards, dice, dominos or other devices, for money, checks, chips, credit, or any representative of value, as the result of which game chance is any determining factor, except as set forth in SECTION 3 hereunder. The word `cards' as used in this article is not intended to and shall not include games known as bridge or whist.

"(b) Permitting Use as a Gambling House: No person shall knowingly permit any house, room, apartment or place owned by him or under his charge or control to be used in whole or in part as a gambling house or place of playing, conducting, dealing, or carrying on any game, played with cards, dice, dominos or other device, for money, checks, chips, credit or any representative of value, as the result of which game chance is any determining factor, except as set forth in SECTION 3 hereunder.

"(c) Betting: No person shall deal, operate, attend, play or bet at or against any game, as the result of which game chance is any determining factor, which game is played, conducted, dealt or carried on with cards, dice, dominos, or other device, for money, checks, chips, credit or any representative of value, in any house, room, apartment, or place, except as set forth in SECTION 3 hereunder and the subsections thereunder."

Section 3 of the ordinance is devoted to exceptions in the following language:

"SECTION 3: Exceptions: The following exceptions are made to the provisions of SECTION 2 and the subsections thereunder.

"(a) Private Games: Said provisions shall not apply to occasional private games, otherwise lawful, carried on for purely social purposes in a private home. Neither shall said provisions apply to otherwise lawful games, other than card games, conducted by a private group of customers, for the sole purpose of determining which member of said group shall pay for food, refreshments or beverages for immediate consumption by the group.

"(b) Benevolent Organizations Licensed: A license may be issued in the reasonable discretion of the Sheriff to any incorporated or chartered fraternal, labor, benevolent or charitable organization or to any religious association, which organization or association has been continuously carrying on within the County the activities for which it was organized for a period of not less than two (2) years immediately preceding making application therefor. Said license shall authorize such organization or association to conduct a game room or rooms wherein games not in conflict with any State law may be played and conducted, incidental to the other activities of such organizations, but in conformity with the provisions of this subsection. No advertising or advertising signs shall be permitted in connection with said operation. The licensee shall have a paid attendant in such room at all times when games are in progress, and it shall be his duty to report to the licensee any violation of law.

(1) Members Only: No such game room shall be open to the public, but shall be used only by the members of the respective organization or association licensed and shall be maintained in the building principally used by the licensee."

Sections 4 and 5 prescribe an application to the sheriff for licenses to conduct private card games in their quarters by incorporated or chartered fraternal, labor, benevolent, charitable and religious organizations; such licenses shall be on a one-year basis and may be renewed annually by the sheriff, except that if a written objection to the issuance of any license is filed with the sheriff, or if he recommends denial, the application must be referred by the sheriff to the board of supervisors who may then determine whether the license shall be issued. The right is given to the board of supervisors to refuse to issue a license if in their opinion "... the conduct of the particular game room would be or is inimical to the public health, morals, safety, peace or general welfare." If a license is revoked, the former holder must wait a year before filing a new application. The board of supervisors is forbidden to deny, suspend or revoke a license unless a hearing has been first held and notice given by the sheriff at least 10 days before the date of the hearing "addressed to the applicant or licensee at the address appearing on its application."

Section 6 of the ordinance provides that all portions of any ordinance in conflict with this one are repealed, and section 7 states that anyone violating any provision of the ordinance shall be deemed guilty of a misdemeanor for which a penalty is prescribed of a fine "not to exceed Five Hundred Dollars ($500.00) or by imprisonment in the County Jail not to exceed six (6) months, or by both such fine and imprisonment."

It should be noted in passing that the elimination of bridge and whist by section 2(a) finds approval in In re Allen, 59 Cal. 2d 5 [27 Cal. Rptr. 168, 377 P.2d 280, 97 A.L.R. 2d 1415]; and in any event, since plaintiffs, as well as everyone else, are authorized by this provision to permit the playing of these two games, the provision does not in any way furnish a ground for their present attack.

[5] Respondents question whether the plaintiffs are in a position to raise the question of the constitutionality of the ordinance; they are partially right in this respect. The keeping of a commercial gambling house and gambling itself are separate and different offenses. (38 C.J.S., Gaming, § 90, p. 154.) As commercial cardroom operators, plaintiffs are entitled to question whether they are unconstitutionally discriminated against by reason of the fact that they are forbidden to carry on all of the same gambling games in their commercial cardrooms that are permitted to private organizations by the exceptions contained in section 3 of the ordinance; they sue wholly as operators of commercial cardrooms; they do not sue as individuals desiring to play any such games. We are necessarily limited to the inquiry whether or not the people of Stanislaus County, voting at a general election, have a constitutional right to enact this ordinance as against the owners or operators of commercial gambling houses. It is the maintenance of public gambling places on a commercial basis that is eliminated by this ordinance, and the only ground upon which the plaintiffs may base their attack is what they allege in their complaint. The plaintiffs seek in vain to attack the enactment from the standpoint of some hypothetical individual gambler by arguing that the ordinance will prevent those individuals from playing such games who cannot, or will not, join a benevolent or charitable organization or who were dissatisfied with playing them occasionally as private social games; they say that those who are precluded from joining such organizations by race, color, or religion cannot immediately form a lodge or fraternal society of their own and get permission to play, for to be entitled to a license such an organization would have to be in existence for at least two years preceding the application; they argue that privileges are thus being granted to arbitrarily selected classes, and that there is no reasonable distinction justifying the theoretical exclusion of such hypothetical persons.

The plaintiffs have no right to attempt to speak for persons other than themselves and their attack must necessarily be limited to their own businesses as the conductors of cardroom gambling and to the allegations contained in their complaint.

The general rule applicable to this situation is thus stated in 11 California Jurisprudence, Second Edition, section 69, pages 396-398: "In order to raise the question of the constitutionality of a statute or ordinance alleged to be discriminatory in nature or operation, the party complaining must show that he is a party aggrieved, in that he is an individual or member of the class discriminated against. In other words, if one would successfully assail a law as unconstitutional, he must show that the feature of the act complained of operates to deprive him of some constitutional right, or the enjoyment of some constitutional privilege, unless there is some reason why he should be excepted from the general rule. It follows that the constitutionality of police regulations should be raised by parties who claim to be injuriously affected."

In considering the facts involved in Murphy v. California, 225 U.S. 623, 631 [56 L. Ed. 1229, 1233, 32 S. Ct. 697, 699], the United States Supreme Court passed similarly on the question whether or not the defendant was entitled to raise the question of discrimination as between the owners of a hotel with 25 rooms and one having less than 25 rooms, saying: "If, as argued, there is no reasonable basis for making a distinction between hotels with twenty-five rooms and those with twenty-four rooms or less, the plaintiff in error is not in position to complain, because, not being the owner of one of the smaller sort, he does not suffer from the alleged discrimination."

That the plaintiffs are necessarily restricted in their arguments to points applicable to them as commercial cardroom operators is well established. (Estate of Johnson, 139 Cal. 532, 534 [73 P. 424, 96 Am. St. Rep. 161]; People v. Globe Grain & Mill Co., 211 Cal. 121, 128 [294 P. 3]; In re Weisberg, 215 Cal. 624, 630 [12 P.2d 446]; Fox-Woodsum Lumber Co. v. Bank of America etc. Assn., 7 Cal. 2d 14, 22 [59 P.2d 1019]; Franklin v. Peterson, 87 Cal. App. 2d 727, 730-731 [197 P.2d 788]; In re Durand, 6 Cal. App. 2d 69, 70 [44 P.2d 367]; Hooker v. Burr, 137 Cal. 663, 671 [70 P. 788, 99 Am. St. Rep. 17]; Ex parte Quong Wo, 161 Cal. 220, 233-234 [118 P. 714]; In re Willing, 12 Cal. 2d 591, 597 [86 P.2d 663]; Ray v. Parker, 15 Cal. 2d 275, 283 [101 P.2d 665]; People v. Naumcheff, 114 Cal. App. 2d 278, 280 [250 P.2d 8]; California State Auto. etc. Bureau v. Downey, 96 Cal. App. 2d 876, 907 [216 P.2d 882]; Max Factor & Co. v. Kunsman, 5 Cal. 2d 446, 468 [55 P.2d 177]; Aikins v. Kingsbury, 247 U.S. 484 [62 L. Ed. 1226, 38 S. Ct. 558]; Aikins v. Kingsbury, 170 Cal. 674 [151 P. 145]; In re Zhizhuzza, 147 Cal. 328 [81 P. 955]; DuBois v. Land, 212 Cal. App. 2d 563, 567 [28 Cal. Rptr. 167]; People v. Walton, 70 Cal. App. 2d 862, 865-866 [161 P.2d 498].)

The issue to be determined then in this case is whether or not an ordinance of the County of Stanislaus applicable outside of the city limits of incorporated cities in that county, and which forbids commercial cardrooms maintained for the purpose of gambling therein, is unconstitutionally discriminatory in that private persons and certain qualified religious, labor and fraternal organizations, in their homes or in private club rooms, may carry on social games at which the element of chance is incidentally involved.

The attack on such an ordinance is made on the grounds that it violates the Fourteenth Amendment of the federal Constitution and also article I, sections 11 and 21, of the California Constitution. In County of Los Angeles v. Southern Cal. Telephone Co., 32 Cal. 2d 378, 389 [196 P.2d 773], it is said: "... the test for determining the validity of a statute where a claim is made that it unlawfully discriminates against any class is substantially the same under the state prohibitions against special legislation and the equal protection clause of the federal Constitution." (People v. Western Fruit Growers, Inc., 22 Cal. 2d 494, 506 [140 P.2d 13]; McCreery v. McColgan, 17 Cal. 2d 555 [110 P.2d 1051, 133 A.L.R. 800].)

Article I, section 21, of the California Constitution reads as follows: "No special privileges or immunities shall ever be granted which may not be altered, revoked, or repealed by the Legislature; nor shall any citizen, or class of citizens, be granted privileges or immunities which, upon the same terms, shall not be granted to all citizens."

Well-known general rules with respect to presumptions as to constitutionality are thus expressed in 11 California Jurisprudence, Second Edition, section 74, pages 407-408: "The undisputed general rule is that all presumptions and intendments are in favor of the constitutionality of statutes; that all doubts are to be resolved in favor of and not against the validity of a statute; that before an act of a co-ordinate branch of the government can be declared invalid by the judiciary for the reason that it is in conflict with the constitution, such conflict must be clear, positive, abrupt, and unquestionable; and that in case of fair, reasonable doubt of its constitutionality, the statute should be upheld, and the doubt resolved in favor of the express wishes of the people as set forth in the statute. The same presumptions that favor the constitutionality of an act passed at a regular session of the legislature apply also to acts passed at a special session, to ordinances, to the statutes of sister states, and to federal statutes."

The same and other equally familiar rules are thus stated approvingly in State of California v. Industrial Acc. Com., 48 Cal. 2d 365, 371-372 [310 P.2d 7], quoting from an earlier Supreme Court case: "... in Sacramento M.U. Dist. v. Pacific Gas & Elec. Co. (1942) 20 Cal. 2d 684, 693 [5] [128 P.2d 529], it is declared that `Wide discretion is vested in the Legislature in making the classification and every presumption is in favor of the validity of the statute; the decision of the Legislature as to what is a sufficient distinction to warrant the classification will not be overthrown by the courts unless it is palpably arbitrary and beyond rational doubt erroneous. [Citations.] A distinction in legislation is not arbitrary if any set of facts reasonably can be conceived that would sustain it.' Further, In re Herrera (1943) 23 Cal. 2d 206, 212 [2] [143 P.2d 345], the rule is again quoted that `The authority and the duty to ascertain the facts which will justify classified legislation must of necessity rest with the legislature, in the first instance, to whom has been given the power to legislate and not to the courts and the decision of the legislature in that behalf is ordinarily conclusive upon the courts. Every presumption is in favor of the validity of the legislative act....' (See also Jersey Maid Milk Products Co. v. Brock (1939) 13 Cal. 2d 620, 636 [1] [91 P.2d 577].) In Lockheed Aircraft Corp. v. Superior Court (1946) 28 Cal. 2d 481, 484 [171 P.2d 21, 166 A.L.R. 701], involving the constitutionality of section 1101 of the Labor Code, it was once more pointed out that `All presumptions and intendments favor the validity of a statute and mere doubt does not afford sufficient reason for a judicial declaration of invalidity. Statutes must be upheld unless their unconstitutionality clearly, positively and unmistakably appears. [Citations.]' And in Lelande v. Lowery (1945) 26 Cal. 2d 224, 232 [6], 234 [7] [157 P.2d 639, 175 A.L.R. 1109], the court declared that `When the classification made by the Legislature is questioned, if any state of facts reasonably can be conceived that would sustain it, the existence of that state of facts is presumed, and one who assails the classification must carry the burden of showing that it is arbitrary. [Citations.] ... [I]t is not our concern whether the Legislature has adopted what we might think to be the wisest and most suitable means of accomplishing its objects. [Citations.]' (See also City of Walnut Creek v. Silveira (1957) 47 Cal. 2d 804, 811 [306 P.2d 453].)"

[6] It is, of course, the duty of the courts to uphold the legislative acts of the government if it can be done in conformity with constitutional requirements. (11 Cal.Jur.2d, Constitutional Law, § 76, p. 410.)

The principles applying to acts of the state Legislature are also applicable to the legislation of those organs of local government which enact municipal ordinances. (People v. Walton, supra, 70 Cal. App. 2d 862; Sheward v. Citizens' Water Co., 90 Cal. 635 [27 P. 439]; 11 Cal.Jur.2d, Constitutional Law, § 79, pp. 413-415.)

With respect to the classification of persons as to which a given law or ordinance might be applicable, 11 California Jurisprudence, Second Edition, Constitutional Law, section 272, pages 717-718, states as follows: "Neither the equal protection clause of the United States Constitution nor the provisions of the state constitution requiring all laws of a general nature to have a uniform operation, prohibiting the granting of special privileges and immunities, and prohibiting the enactment of local or special laws where a general law can be made applicable prevent classification by the legislature or require that statutes operate uniformly with respect to persons or things that are in fact different. Thus, it is not true that any law designed to operate upon a particular class of persons or property necessarily involves special legislation, or is wanting in uniformity of operation, or denies to a person the equal protection of the laws, within the meaning of the constitutional guaranties relating to those subjects. If the law is to bear equally upon all persons, the legislature must classify whenever there exists a reason which may rationally be held to justify a diversity of treatment. In the matter of classification for legislative purposes, the states retain a wide discretion. And the test for permissible classification is substantially the same under the state prohibitions against special legislation and the equal protection clause of the federal Constitution."

[7] In considering this ordinance, it is to be presumed that the legislative body made inquiry in due course to determine whether there were evils to be remedied, and that the classification recognized in the ordinance was the result of such inquiry. (In re Girard, 186 Cal. 718 [200 P. 593].) [8] In reviewing a situation of this kind, this court may resort to its judicial knowledge of contemporaneous conditions. The case of Martin v. Superior Court, 194 Cal. 93, 100-101 [227 P. 762], has the following to say: "A law is not special legislation merely because it does not apply to all persons. It is a settled principle of constitutional law that the legislature may classify for the purpose of meeting different conditions, naturally requiring different legislation, in order that legislation may be adapted to the needs of the people. If the law is to bear equally upon all persons, the legislature must classify whenever there exists a reason which may rationally be held to justify a diversity of legislation. In other words, different persons, different localities, and different governmental organizations and agencies may justly be found by the legislature to stand in different relations to the law and if the same law were, in such a situation, to be applied to all alike, it would not bear equally upon each of them. (Darcy v. Mayor etc. of San Jose, 104 Cal. 642 [38 P. 500]; In re Sumida, 177 Cal. 388 [170 P. 823].)

"The classification, however, must not be arbitrarily made for the mere purpose of classification, but must be based upon some distinction, natural, intrinsic, or constitutional, which suggests a reason for and justifies the particular legislation. That is to say, not only must the class itself be germane to the purpose of the law but the individual components of the class must be characterized by some substantial qualities or attributes which suggest the need for and the propriety of the legislation. Subject to these limitations a law is general despite the fact that it operates only upon a class of individuals or things, if it applies equally to all persons or things within the class to which it is addressed. [Citations.]

"The power to thus classify necessarily carries with it a wide discretion in the exercise thereof. The authority and the duty to ascertain the facts which will justify classified legislation must of necessity rest with the legislature, in the first instance, to whom has been given the power to legislate and not to the courts and the decision of the legislature in that behalf is ordinarily conclusive upon the courts. Every presumption is in favor of the validity of the legislative act and the legislative classification will not therefore be disturbed unless it is palpably arbitrary in its nature and neither founded upon nor supported by reason. (In the Matter of a Proceeding to Validate the Sutter-Butte By-Pass Assessment No. 6 of the Sacramento and San Joaquin Drainage Dist., 191 Cal. 650 [218 P. 27].) It follows that in any given case if the existence of a state of facts of which the court may take judicial notice seems to have been made the basis of a particular piece of legislation and if it may be reasonably said that such facts afford good ground for the making of a particular classification the legislative enactment will be upheld although the reason therefor does not appear prima facie in the law itself."

[9] With respect to some businesses which deal in products or activities essential to the public welfare, the legislative branch of government may control anything which relates to, or affects, the health of the community generally; fair examples of this kind of business thus subject to regulation are dairies, canneries, clothes cleaning establishments, and similar institutions whose conduct if loose or inattentive might affect the health, or well being, of members of the community. But there is another type of business which deals not with essentials but chiefly with matters of entertainment, the continuance of which is not essential to the health and well-being of the people, and the tendency of which is immoral or vicious; these businesses the legislative body may absolutely prohibit. (Ex parte Tuttle, 91 Cal. 589 [27 P. 933].)

As correctly stated in 40 Opinions of the Attorney General of California at page 48 "... it is important to note that gambling is an activity, like the sale of intoxicating liquor, which is subject to strict regulations or absolute prohibition. (In re O'Shea, 11 Cal. App. 568 [105 P. 776]; People v. Haughey, 48 Cal. App. 2d 506 [120 P.2d 121]; Murphy v. California, 225 U.S. 623, 56 L. Ed. 1229, 32 S. Ct. 697.)" Commercial cardrooms fall within this latter classification; and the appropriate legislative body may absolutely prohibit the operation of cardrooms devoted to gambling. Such commercially operated cardrooms, in the opinion of the legislative branch of government, are actual or potential menaces to the peace and welfare of the general public and they may be regulated by law, even to the point of elimination. They tend to attract professional gamblers and other people who have no regular beneficial employment but who hope to be gainers without working and entirely by chance, thus promoting idleness and the gambling spirit. Such attraction is so overtly present in businesses of this kind that the peace officers of a city or county where such commercial cardrooms used for gambling are permitted are frequently over-burdened in carrying out their duty to maintain law and order. Gambling in its worst aspects is encouraged in such places.

On the contrary, in social cardrooms of labor, fraternal and religious organizations the tempo of the games is under relative control, and the people participating in them do so normally for their own amusement. The critical circumstances that frequently accompany activities in commercial cardrooms are normally absent in most organizations of the permissive type. There is a vast difference between card games supervised and played in the social rooms of the organizations specified in section 3 of the ordinance, and those operated commercially for general participation by the public at large.

In re Girard, supra, 186 Cal. 718, 722-723, held that the provision of law permitting trustees created by a will or by a court order in a judicial proceeding to sell securities issued by such trustees without a permit, while forbidding the same practice in the situation of a trust created by an instrument in writing between individuals, was not unconstitutional, the court saying "We cannot declare a law unconstitutional in the matter of discrimination unless there is no rational doubt that it improperly discriminates between persons similarly situated. We must presume that the legislature made inquiry to determine whether or not there were evils which required regulation, and that upon such inquiry it was ascertained that the mischief sought to be corrected was being done under the form of trusts created by private individuals and not under the form of testamentary trusts or trusts declared in judicial proceedings. The trust here involved is a striking example of the practices which the legislature intended to prevent. The corporation commission[er] is required to investigate concerning the assets of such a trust and to refuse to permit it to do business unless upon such investigation he finds that the proposed plan of business is not unfair, unjust, or inequitable, and that the company intends to fairly and honestly transact its business, and that the securities it proposes to issue and the methods to be used in disposing of the same are not such as in his opinion will work a fraud upon the purchaser."

In support of the ruling, the court refers in the opinion to In re Spencer, 149 Cal. 396, 401 [86 P. 896, 117 Am. St. Rep. 137, 9 Ann.Cas. 1105], holding that a classification of children with respect to denying their employment in certain occupations depended upon the facts and that it was for the Legislature to ascertain and determine the facts.

In an opinion in the case of In re Lawrence, 55 Cal. App. 2d 491 [131 P.2d 27], the Court of Appeal of the Second Appellate District held that an ordinance of Long Beach prohibiting "pin games" or "marble games" was within the police power of the city, even though such games were permitted by ordinance in private houses and in certain delineated amusement zones. In the course of the opinion it was held that the reasonableness of the classification was largely one resting in the discretion of the legislative body and that the court should not interfere where such discretion has been sensibly exercised. (See also Sharpe v. Johnson, 81 Cal. App. 2d 939 [185 P.2d 340].)

The holdings of the courts in this state permitting gambling on race horses by approved mechanical means in restricted race track areas, while prohibiting betting on race horses any place else, go a long way toward approving the classification made by the voters of Stanislaus County in this instance. There is no question that the policy of this state is against commercial betting, or that it is illegal to place a bet on a race horse outside the limited areas at race tracks; nevertheless betting is permitted through the use of the totalizer at race courses.

In People v. Sullivan, 60 Cal. App. 2d 539, 543-544 [141 P.2d 230], the following quotation is taken from People v. Haughey, 48 Cal. App. 2d 506, 511 [120 P.2d 121]: "`However, "The policy of the state toward commercial gambling is clear and unequivocal. A mere superficial reference to the Penal Code reveals that commercial gambling in all of its phases has been uniformly condemned for many years.... There is nothing in the Horse Racing Act indicating the slightest intention to depart from the public policy of the state condemning commercial gambling. To the contrary, a determination to adhere to such policy is obvious." (In re Goddard, 24 Cal. App. 2d 132, 140, 141 [74 P.2d 818].) If the legislature had intended to reject this long established policy of the state prohibiting commercial gambling such an intention would have been indicated in the act and the subsequent amendment; the statute, however, when read in its entirety, shows a specific intention to retain the general prohibitions.'" The court in the Sullivan case then said: "There can be no question of the right of the Legislature under the police power to regulate gambling, which includes betting on horse racing. We must next consider the reasonableness of the classification made by the statute." The court proceeded to approve the classification made by the Legislature, saying that the classification is general in its application and that it "... applies uniform rules of conduct for all those coming within the scope of its application and may not be challenged because of any denial of equal protection of the law to those on whom it operates because others differently situated and within a different legal classification may not be affected by its terms."

[4b] That the exceptions in the Stanislaus County ordinance are legitimate subjects of legislative differentiation was, it seems to us, conclusively established in the litigation involving a South Pasadena ordinance forbidding the maintenance of commercial pool rooms. The origin of that constitutional inquiry is first reported in Ex parte Murphy, 8 Cal. App. 440 [97 P. 199]. The denial of a writ of habeas corpus by the appellate court was later approved by the California Supreme Court in a memorandum opinion reported as In re Murphy in 155 Cal. 322 [100 P. 1134]. The litigation ended in the United States Supreme Court (Murphy v. California, supra, 225 U.S. 623 [56 L. Ed. 1229, 32 S. Ct. 697]); the upper court reviewed the judgment affirming the conviction in the Recorder's Court of South Pasadena for keeping billiard or pool tables for hire, or public use, in violation of the ordinance and the lower court's judgment was affirmed.

The South Pasadena ordinance was entitled "An Ordinance for police regulation relating to billiard halls, pool rooms, and places where billiards and pool tables are kept for hire or public use in the city of South Pasadena." The Court of Appeal stated that it was clear that the measure was not adopted to raise money for the city, but that the purpose was to prohibit, that the authority to enact the ordinance was found in article XI, section 11, of the California Constitution allowing a city or a county to make police regulations not in conflict with general laws, and that illustrations of the exercise of this power are contained in ordinances prohibiting the sale of intoxicating liquors, and the suppression of gambling. That court also said that the business of conducting a public billiard hall and pool room was not per se a nuisance; the petitioner had insisted that unless the business were held to be immoral or a nuisance per se it was not subject to the exercise of the city's police power to the extent that it could be prohibited, but that billiard halls and pool rooms fall within a class, "the conduct of which might, by reason of the character of the business, prove obnoxious or injurious to health," and that as to such businesses, which might include laundries, canneries, and soap factories, the power of a municipality is to "regulate" only; the court disagreed with this argument and said that citizens possess no inherent right "to conduct for profit a public place intended purely for the amusement of its patrons, the tendency of which is immoral or vicious." The opinion quotes from a prior case where it is said that "`Any practice or business the tendency of which as shown by experience is to weaken or corrupt the morals of those who follow it, or to encourage idleness instead of habits of industry, is a legitimate subject for regulation or prohibition.' (Ex parte Tuttle, 91 Cal. 589 [27 P. 933], ...)" Continuing, the appellate court held that a public pool room, because of its environment, might be a danger to the morals of the citizens and, consequently, that it is subject to regulation even to the point of absolute prohibition even though it is not a nuisance per se. It was also stated that measures of regulation might be adequate in some communities, while in others absolute suppression of the business might be necessary, but that "the extent to which the power shall be exercised is a matter for the legislative body of the municipality to determine."

The petitioner in the Murphy case argued that the ordinance was void, because it was class legislation in that it did not apply to proprietors of hotels having 25 or more furnished bedrooms and using a general register for guests, but the court stated that this argument was not valid, because the ordinance was directed at persons keeping billiard halls and pool rooms for hire or public use, and its provisions applied to all who fell within that class; that it prohibited everyone from engaging in that business; that the provisions did not apply to an individual keeping a pool table in his house for the use of himself and guests or to the major hotel keeper who maintained tables for use of guests only.

The California appellate court in the Murphy case, supra, finally said at page 448 of 8 Cal. App.: "`The law is well settled in this state as has been shown by the authorities already cited, that where a business is not a useful occupation, such as conducting a saloon, and many kindred places, the Supreme Court has always upheld the power that has been vested in a board or in a person to say whether such person shall have a license or not. Consequently, the many authorities cited by petitioner which involve the right to conduct lawful and useful businesses, such as ... [laundries or dairies] and other cases of similar character, have no application to the case at bar.'"

In the United States Supreme Court opinion in the Murphy case, it is stated that there was no contention that the provisions permitting hotels of a certain size to maintain a room in which their regular registered guests might play were evasively inserted as a means of permitting the proprietors to keep tables for hire, and it was not claimed that the ordinance was being unequally enforced, and that if the hotel owner allowed his rooms to be used for playing billiards by other than regular guests or if the tables were to be used for hire, he would be guilty of a violation of the ordinance.

It is clear then that the county, exercising its police power could enact a proper ordinance to forbid commercial card-rooms, while allowing card playing in private homes or in the private quarters of certain organizations, so long as the rooms were not operated for hire.

The appellants, among other things, cite two cases from foreign jurisdictions, which they believe help their position. We cannot join them in this belief. One of the cases is Fairchild v. Schanke, 232 Ind. 480 [113 N.E.2d 159]. In that case, the Indiana enactment which was being construed on its face stated that it was applicable to eliminate all gambling for profit; it then sought to make exceptions similar to those made in the present ordinance, but the Supreme Court there held that, in view of the statement in the statute that all gambling under certain conditions was banned, there was no opening to make the attempted exceptions. The second case is Harriman Institute of Social Research, Inc. v. Carrie Tingley Crippled Children's Hospital, 43 N.M. 1 [84 P.2d 1088]. In the construction of the statute involved in that New Mexico case, the Supreme Court of that state pointed out that the statute permitting a lottery at a state fair "when all the proceeds of such fair shall be expended in this state ... for charitable purposes" did not authorize the operation of such a device for less than all of the proceeds. Neither of these cases, in view of the differentiation of facts and the statutes involved, is helpful to the appellants.

It is our view that the people of Stanislaus County were within their rights in enacting the ordinance in question insofar as any attack upon it by the plaintiffs in this case is concerned.

The judgment is affirmed.

Stone, J., and Gargano, J., concurred.

NOTES

[1] The full text of subsection (6) is as follows: "Unless notice of loss or damage and the general nature of such loss or damage be given in writing to the carrier or his agent at the port of discharge before or at the time of the removal of the goods into the custody of the person entitled to delivery thereof under the contract of carriage, such removal shall be prima facie evidence of the delivery by the carrier of the goods as described in the bill of lading.

"If the loss or damage is not apparent, the notice must be given within three days of the delivery.

[*] "Said notice of loss or damage may be endorsed upon the receipt for the goods given by the person taking delivery thereof.[*]

"The notice in writing need not be given if the state of the goods has at the time of their receipt been the subject of joint survey or inspection.

"In any event, the carrier and the ship shall be discharged from all liability in respect of loss or damage unless suit is brought within one year after delivery of the goods or the date when the goods should have been delivered:

[*] "Provided, That if a notice of loss or damage, either apparent or concealed, is not given as provided for in this section, that fact shall not affect or prejudice the right of the shipper to bring suit within one year after the delivery of the goods or the date when the goods should have been delivered.[*]

"In the case of any actual or apprehended loss or damage the carrier and the receiver shall give all reasonable facilities to each other for inspecting and tallying the goods." (Act, Apr. 16, 1936, § 3(6), 49 Stat. 1208, § 3(6), 46 U.S.C.A., § 1303(6), asterisks designate provisions not found in the Hague Rules, Article III, rule 6, as amended at the Brussels Convention of 1924, but added to the United States Carriage of Goods by Sea Act, which is hereinafter referred to as Cogsa.)

[2] Gilmore & Black, The Law of Admiralty (1957) notes: "The reason for the old rule seems to have been that the cargo lost its insurance when the vessel deviated, so that it was felt appropriate and just to put the vessel in the insurer's position. But at present cargo policies usually contain clauses which provide that, in the event of deviation, the risk shall be `held covered,' notwithstanding. If and when the cargo owner learns of a deviation, it becomes his duty to notify the insurance company, and to pay an additional premium to be arranged." (§ 3-41, p. 161.)

[3] Subsection (4) provides: "Any deviation in saving or attempting to save life or property at sea, or any reasonable deviation shall not be deemed to be an infringement or breach of this Act or of the contract of carriage, and the carrier shall not be liable for any loss or damage resulting therefrom: [*]Provided, however, That if the deviation is for the purpose of loading or unloading cargo or passengers it shall, prima facie, be regarded as unreasonable."[*] (Asterisks designate a proviso added to Hague Rules Article IV, rule 4 in the United States act.)

[4] Subsection (5) provides in part: "Neither the carrier nor the ship shall in any event be or become liable for any loss or damage to or in connection with [*]the transportation of[*] goods in any amount exceeding [*]$500[*] per package [*]lawful money of the United States, or in case of goods not shipped in packages, per customary freight unit,[*] or the equivalent of that sum in other currency, unless the nature and value of such goods have been declared by the shipper before shipment and inserted in the bill of lading. This declaration, if embodied in the bill of lading, shall be prima facie evidence, but shall not be [binding or] conclusive on the carrier." (Asterisks designate matter added or substituted, and brackets matter deleted in United States act.)

[5] Defendant asserts that because the matter is one involving concurrent jurisdiction of state and federal courts, and because it necessitates the interpretation of a federal statute, this court is bound to follow the decisional law of the Potter case, supra. (See Urie v. Thompson (1949) 337 U.S. 163, 174 [93 L. Ed. 1282, 69 S. Ct. 1018, 11 A.L.R. 2d 252]; In re Hallinan (1954) 43 Cal. 2d 243, 250 [272 P.2d 768]; Showalter v. Western Pacific R.R. Co. (1940) 16 Cal. 2d 460, 471 [160 P.2d 895]; Mackenzie v. Hare (1913) 165 Cal. 776, 779 [134 P. 713, Ann.Cas. 1915B 261, L.R.A. 1916D 127], affd (1915) 239 U.S. 299 [60 L. Ed. 2d 297, 36 S. Ct. 106]; United Concrete Pipe Corp. v. Laborers' Local No. 89 (1964) 231 Cal. App. 2d 315, 318 [41 Cal. Rptr. 816]; B.C. Richter Contracting Co. v. Continental Cas. Co. (1964) 230 Cal. App. 2d 491, 497 [41 Cal. Rptr. 98]; Monarch Wine Co. v. Butte (1952) 113 Cal. App. 2d 833, 834 and 837 [249 P.2d 291]; and Crenshaw Bros. v. Southern Pac. Co. (1919) 40 Cal. App. 603, 612 [181 P. 252].)

The doctrine of federal supremacy manifested by the foregoing cases in no way dictates that a state appellate court is bound to follow the precedent of a federal trial court. In fact the law of this state declares that under such circumstances "the decisions of the lower federal courts on federal questions are merely persuasive." (Rohr Aircraft Corp. v. County of San Diego (1959) 51 Cal. 2d 759, 764 [336 P.2d 521], revd., without comment on this point, (1960) 362 U.S. 628 [4 L. Ed. 2d 1002, 80 S. Ct. 1050]; and see People v. Estrada (1965) 234 Cal. App. 2d 136, 145 [44 Cal. Rptr. 165, 11 A.L.R. 3d 1307].) Nor are the federal courts, when directed to apply state law, bound by the legal precedent of a state trial court which does not have binding force on other courts within the state. (King v. Order of United Commercial Travelers (1948) 333 U.S. 153, 161-162 [92 L. Ed. 608, 68 S. Ct. 488].)