Opinions of the United
2001 Decisions                                                                                                             States Court of Appeals
                                                                                                                              for the Third Circuit


5-15-2001

Beta Spawn Inc v. FFE Transp Ser Inc
Precedential or Non-Precedential:

Docket 00-1332




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Recommended Citation
"Beta Spawn Inc v. FFE Transp Ser Inc" (2001). 2001 Decisions. Paper 104.
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Filed May 15, 2001

UNITED STATES COURT OF APPEALS
FOR THE THIRD CIRCUIT

No. 00-1332

BETA SPAWN, INC.

v.

FFE TRANSPORTATION SERVICES, INC.,

Appellant

ON APPEAL FROM THE
UNITED STATES DISTRICT COURT FOR THE
EASTERN DISTRICT OF PENNSYLVANIA
(Dist. Court No. 99-CV-00815)
District Court Judge: William H. Yohn, Jr.

Argued on March 8, 2001

Before: ALITO, McKEE, and KRAVITCH,*
Circuit Judges.

(Opinion Filed: May 15, 2001)

       ROBERT C. HOUPT, ESQ.
        (ARGUED)
       Houpt & Wolffe, Ltd.
       45 Darby Road
       Paoli, PA 19301

Counsel for Appellee



_________________________________________________________________
* The Honorable Phyllis A. Kravitch, Senior Judge, United States Court
of Appeals for the Eleventh Circuit, sitting by designation.
       JACK L. COKE, JR., ESQ.
        (ARGUED)
       Suite 800
       8117 Preston Rd
       Dallas, TX 75225

       CHARLES L. HOWARD
       Gollatz, Griffin, & Ewing, P.C.
       16th Floor, Two Penn Center Plaza
       Philadelphia, PA 19102

       Counsel for Appellant

OPINION OF THE COURT

KRAVITCH, Circuit Judge:

FFE Transportation Services, Inc. ("FFE") appeals from
the judgment of the district court finding FFE liable to Beta
Spawn, Inc. for the value of a shipment of mushr oom
spawn damaged during transport. FFE contends that the
district court erred in finding (1) that Beta Spawn
established a prima facie case under the Car mack
Amendment to the Interstate Commerce Act, 49 U.S.C.
S 11706; (2) that FFE's tariff was not applicable to the
shipment at issue; and (3) that FFE had agreed to maintain
the temperature of its trailer at 34 degr ees Fahrenheit1
when transporting the spawn. Because we hold that the
district court ruled correctly on all thr ee issues, we affirm
the judgment of the district court in favor of Beta Spawn on
its claim for damages and against FFE on its counter claim
to recover freight charges.

I. Background

Beta Spawn, a Pennsylvania corporation, supplies
mushroom spawn to the mushroom industry. 2 At all times
_________________________________________________________________

1. All references to "degrees" herein are to the Fahrenheit scale.

2. "Spawn are the `fragments of mycelia used to start a mushroom
culture.' " Beta Spawn v. FFE T ransp. Servs., Inc., No. 99-0815, 

, at *1 (E.D. Pa. Mar. 17, 2000) (citation omitted).

                                 2
relevant to this case, Beta Spawn has been the exclusive
distributor of a variety of spawn from Italy known as
Italspawn. FFE is a common carrier hired by Beta Spawn to
transport a shipment of Italspawn from Camarillo,
California to Beta Spawn's facility in Pennsylvania.

According to the district court's findings, mushroom
spawn are "living, breathing" or ganisms that must be
maintained at a temperature of approximately 36 degrees.
Harry Testa, vice-president of Beta Spawn, testified that
when spawn are exposed to higher temperatur es, they
begin to generate their own heat and to ferment. Spawn
that have begun to ferment are damaged and lose their
viability. Once spawn are exposed to heat, attempts to re-
cool the spawn will not be successful. Because spawn are
fragile, they must breathe filtered air to avoid
contamination. For that reason, spawn ar e packaged in
clear, plastic bags with air filters on each bag.
Condensation and yellow discoloration are signs of
contaminated spawn. Damaged spawn also have a
characteristic odor similar to that of vinegar .

In June 1997, Beta Spawn sold a truckload shipment of
Italspawn (the "June Shipment") to Peterson's Ranch in
Camarillo, California.3 Louis Peterson, an officer and
director of Mushrooms, Etc. who received the shipment in
California, testified that some of the boxes containing the
spawn were torn and crushed at the time of arrival.
Nevertheless, Peterson used spawn out of those damaged
boxes to grow his first crop of mushr ooms.

In September 1997, Peterson agreed to sell 16,000 units
of the Italspawn back to Beta Spawn. These spawn had
been stored for three months in a facility that was nearby,
but not on, the farm premises and, accor ding to Peterson,
had remained refrigerated the entir e time. Peterson testified
that about three weeks after the spawn wer e shipped to
Beta Spawn, he used a remaining portion of the June
Shipment to grow a successful crop of mushrooms. That
portion, however, was not stored in the same facility as the
spawn sold to Beta Spawn.
_________________________________________________________________

3. Peterson's Ranch, also known by the name "Mushrooms, Etc.," is a
mushroom farm.

                               3
On behalf of Beta Spawn, Testa contacted Michael Conn
of FFE to arrange for the shipment of the spawn fr om
California to Beta Spawn's facility in Pennsylvania. During
their conversation, Testa and Conn verbally agreed that
FFE would transport the spawn at a temperatur e of
approximately 34 degrees. FFE had shipped spawn for Beta
Spawn before and had always transported the spawn in a
trailer maintained at 34 degrees.

On September 23, 1997, FFE entered into a bill of lading
/contract of carriage with Mushrooms, Etc. of California for
the transportation of the spawn to Pennsylvania.
Mushrooms, Etc. requested that FFE pr ovide it with less-
than-truckload ("LTL"), "chilled" service. Beta Spawn, as
consignee, agreed to pay FFE $2,685.36 for the shipment
upon delivery. The bill of lading, prepar ed by Peterson
Ranch, called for the transport of 16,000 units of spawn,
packed in 400 boxes. The spawn were packed in clear
plastic bags, three bags to a box, separated by cardboard
dividers. Each cardboard box contained holes to permit air
circulation. Peterson loaded the boxes into FFE's
refrigerated trailer on 10 pallets, 40 boxes to a pallet.
Initially, the boxes were only secured to the pallets with
clear plastic tape, but after the pallets wer e loaded onto the
truck, William Forbito, the driver for FFE, shrink-wrapped
the boxes to prevent their falling over during transport.

Forbito testified that when he picked up the spawn, he
asked Peterson at what temperature he was to maintain the
shipment. After Peterson responded "it goes chilled,"
Forbito recorded the word "chill" on the bill of lading.
Forbito also wrote the words "T emp. 34 degrees" on the bill
of lading. At trial, Forbito explained that when he accepted
the spawn in California, he took the temperature inside one
of the boxes and found it to be 34 degrees.

Forbito also gave testimony regarding the condition of the
boxes. He stated that the bottom "two layers" of boxes on
every pallet "were bubbled out like they'r e getting ready to
bust open. The boxes was [sic] torn, they were crushed.
And boxes open." Forbito did not recall seeing any actual
torn bags of spawn. After observing the damaged condition
of the boxes, Forbito called his dispatcher and was told he
could accept the load as long as he noted the damage on

                               4
the bill of lading. Forbito then took exception to the
condition of the entire load by writing "400" on the bill of
lading.

Peterson testified that before the boxes wer e loaded onto
FFE's trailer, he opened one of the boxes and removed a
bag of spawn for inspection. Peterson's inspection of that
bag consisted of a visual examination of the spawn's
coloring and a "sniff test" through the air filter on the bag
for the odor of spawn fermentation. Based on these tests,
Peterson determined that the spawn wer e in good condition
because there was no yellowish tint and no odor . Peterson
also looked through cracks of the torn boxes in order to see
whether the bags in those boxes were ripped or open.
Peterson testified that he saw no open bags.

Forbito set the temperature of the trailer at 34 degrees
and transported the shipment of spawn to Cudahy,
California, where he loaded it onto another trailer that was
also set at 34 degrees. A different driver then carried the
shipment from California to Chicago. When the driver
arrived in Chicago, approximately 100 boxes wer e crushed,
but the temperature of the product was 34 degrees. In
Chicago, boxes were removed from the truck, placed in a
warehouse and later reloaded onto another truck bound for
Pennsylvania. When the boxes left Chicago, appr oximately
20 of the boxes had "leaking product exposed."

The shipment of spawn arrived at Beta Spawn's facility in
Pennsylvania on September 29, 1997. Testa, who was
present when it arrived, described the shipment as a "big
mess." Specifically, he stated that "the bags were broke [sic]
on quite a few boxes" and that "[t]her e were a distinct odor
that the spawn had started to sour." T esta checked the
temperature of the spawn in approximately 10 boxes and
found it to be between 48 and 58 degrees, which meant the
spawn were no longer viable. Thus, Testa refused to accept
delivery and notified FFE of Beta Spawn's claim for
damages.

Beta Spawn originally brought its claim against FFE for
damage to its freight in the Court of Common Pleas of
Delaware County, Pennsylvania. FFE removed the case to
federal court and filed a counterclaim for its freight

                               5
charges. The district court held a bench trial and granted
judgment in favor of Beta Spawn. This appeal followed.

II. Standard of Review

This court has plenary review over the district court's
choice and interpretation of legal standar ds and its
application of those standards to the facts of the case. See
Louis W. Epstein Family P'ship v. Kmart Corp., 

,
765-66 (3rd Cir. 1994); Polselli v. Nationwide Mut. Fire Ins.
Co., 

, 750 (3rd Cir . 1994). We review the district
court's findings of fact for clear error . See Country Floors,
Inc. v. P'ship of Gepner and Ford, 930 F .2d 1056, 1062 (3rd
Cir. 1991) (citing Fed. R. Civ. P. 52(a)).

III. Discussion

A. Beta Spawn's Prima Facie Case

To establish a prima facie case against a common carrier
under the Carmack Amendment to the Interstate
Commerce Act, 49 U.S.C. S 11706,4 a plaintiff must prove
the following three elements: "(1) delivery of the goods to
the initial carrier in good condition, (2) damage of the goods
before delivery to their final destination, and (3) the amount
of damages." Conair Corp. v. Old Dominion Fr eight Line, Inc.,

, 531 (3rd Cir. 1994) (citation omitted); see also
Missouri Pacific R.R. Co. v. Elmore & Stahl , 

,
138 (1964). After a bench trial, the district court found that
Beta Spawn succeeded in establishing each of these
elements.

FFE's main argument on appeal is that ther e was no
competent evidence for the trial court to find that the
spawn were delivered to FFE in good condition.5
Specifically, FFE contends that under the law of this
_________________________________________________________________

4. The district court found that this action was controlled by the
Carmack Amendment. The Carmack Amendment imposes liability on a
common carrier for the actual loss or injury to goods in an interstate
commerce shipment. See 49 U.S.C. S 11706.

5. FFE does not contest the district court'sfindings as to the last two
elements.

                               6
circuit, a shipper must prove by "dir ect evidence" that the
merchandise was in good condition when tender ed to the
carrier if such merchandise was not visible or open to
inspection at the time it was tendered. In support of its
contention, FFE points to Blue Bird Food Prods. Co., v.
Baltimore & Ohio R.R. Co., 

(3rd Cir. 1973)
("Blue Bird I") appeal after remand, 

(3rd Cir.
1974) ("Blue Bird II"). W e believe that FFE's reliance on Blue
Bird is misplaced.

Blue Bird I involved a shipper who r elied solely upon a
bill of lading, which represented that the carrier had
received the shipment in "apparent good order," in order to
prove that the goods had been tendered in good condition.
See Blue Bird 

. The district court found
such proof insufficient to establish the condition of the
goods because the goods were in a sealed trailer and
therefore not open for inspection. Bluebird Food Prods. Co.
v. Baltimore and Ohio R.R. Co., 329 F . Supp. 1116, 1118
(E.D. Pa. 1971), vacated 

(3rd Cir. 1973). The
district court stated rather broadly, however , that "[w]here
merchandise is sealed in a trailer, and the contents are not
open and visible, the plaintiff must establish by direct
evidence that the goods were delivered to the carrier in good
order." 

r emanding the case for the district
court to determine whether the trailer was indeed sealed,
we affirmed the district court's finding that a bill of lading
was insufficient to prove the condition of goods which had
been in a sealed container. See Blue Bir d 

. Nevertheless, because the shipper in Blue Bird
exclusively relied on the bill of lading, this court never
reached the issue of what type of evidence--in addition to
a clean bill of lading--would establish that the merchandise
had been delivered in good condition.6

Other courts, apparently focusing on the "direct evidence"
requirement in the district court's opinion, have cited Blue
_________________________________________________________________

6. We explicitly stated in Blue Bird II, "[t]he issue presented is whether
the introduction of a bill of lading with the notation `Received . . . the
property described below, in apparent good order . . .' is sufficient to
establish the good condition of the lading at the time it was delivered by
the shipper to the carrier." Blue Bir d 

.

                               7
Bird for the proposition that wher e goods are not open and
visible, a shipper may present only dir ect evidence, as
opposed to circumstantial evidence, in or der to establish
the condition of its goods. See, e.g. , D.P. Apparel Corp. v.
Roadway Express, Inc., 

, 4 (1st Cir. 1984) ("In
fact, where the contents of the shipment ar e not visible or
open for inspection, additional direct and affirmative proof
is necessary to show that the cloth was in good condition
when delivered to Roadway") (citing, inter alia, Blue Bird 

); see also Ed Miniat, Inc. v. Baltimore
and Ohio R.R. Co., 

, 1282 (D.C. Cir. 1978)
("Under section 20(11) [of the Carmack Amendment], the
burden of establishing the condition of the beef when
entrusted to the railroad clearly lies on the shipper and
discharging this burden requir es some direct evidence of
this condition.") (citations omitted).

In our view, however, the holding in Blue Bird, and even
the "must establish direct evidence" language in the district
court's opinion, were simply directed at making shippers
produce evidence, other than a clean bill of lading, to
establish the condition of goods which were not open and
visible for the carrier's inspection. Accordingly, we reject the
view that Blue Bird renders all circumstantial evidence
irrelevant where the goods are not open and visible.7 See
Fine Foliage of Fla., Inc. v. Bowman Transp., Inc., 

, 1038 (11th Cir. 1990) ("Wefind no support for [the
carrier's] assertion that a judge may not r ely on
circumstantial evidence to establish the original condition
of goods when that evidence is substantial and r eliable.").
Although a bill of lading, by itself, is not sufficient to
establish the condition of goods that were neither visible
nor open to inspection, a shipper may rely on other reliable
evidence--direct or circumstantial--which is "sufficient to
establish by a preponderance of all the evidence the
_________________________________________________________________

7. It is logical that courts would prohibit a shipper's reliance on a
clean
bill of lading alone where goods are not open and visible, because the
condition of such goods are unknown to the carrier. See Pillsbury v.
Illinois Cent. Gulf R.R., 

, 244 (8th Cir. 1982) ("Where goods
are shipped under seal, the condition of the goods cannot be within the
carrier's knowledge."). It does not necessarily follow, however, that
reliance on all other circumstantial evidence should be disallowed.

                               8
condition of the goods upon delivery." Pillsbury 

(8th Cir. 1982). Thus, even assuming that the
shipment in the present case was not open and visible,8 the
only difference between Beta Spawn's evidentiary burden
here, as opposed to in a case where goods are open and
visible, is that Beta Spawn cannot rely solely on the bill of
lading to establish the spawn's condition.

Unlike the plaintiff in Blue Bird , Beta Spawn does not
rely on the bill of lading as proof that it tendered the spawn
to FFE in good condition. Instead, it mainly r elies upon the
testimony of Peterson, an officer and director of
Mushrooms, Etc. Peterson testified that he successfully
used a portion of the remaining Italspawn fr om the original
June Shipment three weeks after the 16,000 units of spawn
were shipped to Pennsylvania. Although we r ecognize that
Peterson's success is not conclusive proof as to the
condition of the spawn at issue because the two portions of
spawn were kept in separate facilities, it does carry some
weight in that all the spawn were stored under similar
conditions. Peterson testified that the spawn--both on and
off the farm--were refrigerated for the entire summer and
never removed from the coolers. Further more, the cooler in
which the spawn at issue were stored had a backup
_________________________________________________________________

8. The district court made no finding as to whether the shipment of
spawn was open and visible. FFE asserts in its brief that the shipment
was not open to inspection because the spawn wer e contained in closed
boxes and because FFE's policy prohibited drivers from opening closed
boxes. We do not agree that such evidence necessarily establishes that
the spawn were not visible and open to inspection. In contrast to the
goods in Blue Bird, the spawn here were not in a sealed trailer.See Blue
Bird 

. Although FFE's policy did not permit
drivers to inspect the contents of closed boxes, there is no evidence that
FFE was prohibited by Beta Spawn from per forming such inspection.
The only evidence that FFE would have been hinder ed from opening the
boxes is that the boxes had been secured to the pallets with tape
wrapped around them. The boxes were not, however, shrink wrapped
when delivered to Forbito. Furthermor e, Forbito, FFE's driver, testified
that when the boxes were loaded onto the truck, some of the boxes' top
lids were open such that he could see some of the bags of spawn.
Nonetheless, because we hold that Blue Bir d does not prohibit Beta
Spawn from relying on circumstantial evidence, we need not affirmatively
decide whether or not the spawn were open and visible.

                               9
generator in case of power outage. Peterson visited the
facilities where the spawn were stor ed every three to four
days.

Peterson's assertion that he maintained the spawn at a
proper temperature during the summer was corroborated to
some degree by Forbito's testimony that when he received
the spawn, the temperature inside the boxes was 34
degrees and by evidence that the temperatur e was at 34
degrees when the truck reached Chicago. As Testa testified,
once spawn is exposed to heat, an attempt to r e-cool the
spawn will not be successful. Therefore, the fact that the
boxes were at 34 degrees on the day they were tendered to
FFE and on the day they reached Chicago tends to show
that the spawn previously had been stor ed at the proper
temperature and were in good condition when tendered to
FFE.

In addition, Peterson personally examined one of the bags
of spawn before it was loaded onto FFE's trailer. There was
no "characteristic odor" of spawn fermentation nor did the
bag have a yellowish tint which signifies damaged spawn.
Peterson's testimony that the bag contained good pr oduct
was direct evidence only as to the condition of the spawn in
that particular bag, but was circumstantial evidence of the
spawn's condition in the other bags, as the bags had all
been stored and loaded together. FFE asserts that there
was insufficient proof that the spawn wer e in good
condition in light of the fact that Forbito took exception to
all four hundred boxes on the bill of lading and testified
that the bottom two layers of boxes on every pallet were
crushed, torn or open. Peterson testified, however, that he
looked through the cracks where the boxes were torn and
did not see any ripped bags. In addition, Peterson testified
that even if boxes were torn, it was still possible for the
spawn to remain undamaged. In fact, when Peterson
initially received the June Shipment fr om Beta Spawn, he
successfully used spawn which had arrived in tor n boxes to
grow his first crop of mushrooms.

Thus, considering all the evidence presented to the
district court, we hold that the court did not err in finding
that Beta Spawn met its burden of proof that the spawn
were delivered to FFE in good condition.

                               10
B. Applicability of FFE's Tariff

Once a plaintiff has established a prima facie case under
the Carmack Amendment, the burden shifts to the carrier
to prove that it was free from negligence and that the
damage was caused solely by "(a) the act of God; (b) the
public enemy; (c) the act of the shipper himself; (d) public
authority; (e) or the inherent vice or natur e of the goods."
Missouri Pacific R.R Co. v. Elmore & Stahl, 

,
137 (1964) (citation and internal quotation marks omitted).
The district court found that no such proof was offered at
trial. FFE does not directly challenge thatfinding, but in an
apparent attempt to rebutt Beta Spawn's prima facie case
and to recover its freight charges, argues that its tariff
regulated the temperature at which the trailer was to be
maintained. See City of New Orleans v. S. Scrap Material
Co., 

, 48 (E.D. La. 1980) ("A tariff confers
rights and imposes duties as a matter of law. Carriers,
shippers, and consignees are bound by the pr ovisions of a
tariff duly filed by the carrier.") (citations omitted).

According to the record, FFE publishes a tariff that sets
regulations for, inter alia, goods that are shipped with
protective services. Section C of the tarif f provides that an
LTL shipment, shipped "cooler and so stated on the Bill of
Lading by the shipper," must be maintained at an air
temperature of between 35 and 60 degrees. The
temperature inside the boxes of spawn when they reached
Pennsylvania was between 48 and 58 degrees. Thus, FFE
argued at trial that it provided the r equisite services in that
the spawn arrived at a temperature that fell within the
range prescribed by the tariff. The district court rejected
this argument on the ground that FFE's tariff did not apply
to the shipment.

On appeal, FFE maintains that the inclusion of the word
"chill" on the bill of lading meant that the parties agreed
that the tariff provision regulating the transportation of LTL
shipments of "cooler" commodities applied to the shipment
of spawn. Yet, it is undisputed that the wor d "chill" is not
found anywhere in FFE's tariff. FFE asserts that the word
"chill" is synonymous with "cooler" because FFE's Claims
Director, Raymond Flemming testified that to him, the word
"chill" meant the same as "cooler." Although Flemming's

                               11
testimony may prove that Flemming understood the word
"chill" to signify "cooler," it does not necessarily establish
Peterson's understanding of the word. Accor dingly, we hold
that the district court did not err by finding that FFE's tariff
was not applicable to the shipment in this case.

C. Agreement to Maintain Temperature at 34 Degrees

FFE also argues that it was clearly err oneous for the
district court to find that FFE had agreed to maintain its
trailer at 34 degrees while transporting Beta Spawn's
goods. The district court found that such agr eement existed
based on (1) prior business dealings between FFE and Beta
Spawn involving the transport of spawn; (2) a "verbal
agreement" between FFE and Beta Spawn that FFE would
transport the spawn at 34 degrees; (3) the pr esence of the
words "chill" and "34 degrees" noted on the bill of lading by
Forbito; and (4) the temperature of FFE's trailer when it
arrived in Chicago. FFE objects to this reliance on extrinsic
evidence by the district court because the bill of lading, as
prepared by Peterson, did not contain an agreement to
maintain the trailer at 34 degrees.

Under Pennsylvania law, "[w]here the contract or
agreement is unambiguous, parole evidence of prior
inconsistent terms or negotiations is inadmissible to
demonstrate intent of the parties." Harley-Davidson, Inc. v.
Morris, 

, 148 (3rd Cir . 1994); see also Gianni v.
Russell & Co., Inc., 126 A 791, 792 (Pa. 1924). 9 Likewise, in
its role as contract of carriage, the ter ms and provisions of
a bill of lading cannot be varied by extrinsic evidence, and
all negotiations leading up to the written agr eement are
presumed to be merged therein. See Internatio, Inc. v. M/V
Yinka Folawiyo, 

, 1252 (E.D. Pa. 1979);
see also EF Operating Corp. v. American Bldgs, 

, 1050 (3rd. Cir. 1993) ("As a contract, [a bill of lading]
is subject to general rules of construction under contract
law.") (citations omitted). Where a contract provision is
ambiguous, however, extrinsic evidence may be properly
admitted in an attempt to resolve the ambiguity. In re
Herr's Estate, 

, 34 (Pa. 1982).
_________________________________________________________________

9. As the parties do not dispute that Pennsylvania law governs the
interpretation of the agreement, we will apply Pennsylvania law.

                               12
A contract is ambiguous if "it is reasonably or fairly
susceptible of different constructions and is capable of
being understood in more senses than one and is obscure
in meaning through indefiniteness of expr ession or has a
double meaning." State Highway and Bridge Auth. v. EJ
Albrecht Co., 

, 230 (Pa. Commw. Ct. 1981)
(citation omitted). Upon examination of the bill of lading, we
conclude that the words "chill" and "T emp. 34 degrees"
written by Forbito render the agreement ambiguous.10 To
begin with, the word "chill" gives no indication as to the
exact temperature intended by the parties, and there is no
explanation of its meaning on the bill of lading. The lack of
clarity surrounding the word "chill" is demonstrated by the
parties' differing interpretations of the word. FFE asserts
that "chill" meant that the parties intended that the
shipment be kept at the temperature requir ed under its
tariff for "cooler" commodities. Y et Forbito testified that
when he wrote down "chill" after asking Peterson for the
proper temperature to ship the spawn, he believed "chill"
meant "34 to 37 degrees." Likewise, it is unclear whether
"Temp. 34 degrees" indicates the temperature inside the
boxes at the time they were tendered to FFE or the
_________________________________________________________________

10. FFE argues that we should not look to the words "chill" and "Temp.
34 degrees" on the bill of lading because, as an independent contractor,
Forbito had no authority to enter into agreements to bind FFE. The
record reflects, however, that Forbito drove exclusively for FFE, was
given authority by FFE to transport the shipment of spawn, specifically
asked Peterson at what temperature the spawn was to be shipped, and
was the only representative of FFE to sign the bill of lading. Thus, even
assuming Forbito had no actual authority to add ter ms to the bill of
lading regarding the proper temperature of the shipment, we believe
there is sufficient evidence that he had apparent authority to do so. See
Leidigh v. Reading Plaza Gen'l, Inc., 

, 667-68 (Pa. Super. Ct.
1994) ("[T]his court has found apparent authority to be established with
a showing of (1) limited authority given to the agent by the principal;
and
(2) conduct of the agent which demonstrates to the third-party the
agent's apparent authority to bind the principal."). FFE apparently
recognizes such authority on the part of Forbito because it argues in its
brief that we should rely on the word"chill," written by Forbito, as
evidence that the parties intended for FFE's tarif f to apply.

                               13
11. Forbito testified that he took the temperature of some of the boxes at
the time they were loaded onto his truck in California and found it to be
34 degrees. But, when asked on cross-examination, "And when you write
on here, chill, temperature 34, that's to keep the product at 34
degrees?," Forbito replied, "At 34 degrees, right."
temperature at which FFE agreed to transport the spawn.
Forbito's testimony supports both interpretations.11

Because we perceive ambiguity in the wor ds "chill" and
"Temp. 34 degrees," we conclude that the district court
properly considered extrinsic evidence in determining the
existence of an agreement to maintain the trailer at 34
degrees. Accordingly, we agree with its findings that FFE
did not provide the requisite services under the agreement
and that FFE is not entitled to recover shipping charges.

IV. Conclusion

Based on the foregoing reasons, we affir m the judgment
of the district court in favor of Beta Spawn on its claim for
damages and against FFE on its counterclaim to recover
freight charges.

AFFIRMED.

A True Copy:
Teste:

       Clerk of the United States Court of Appeals
       for the Third Circuit

                                14