Summary
In Claussen v. Aetna Casualty & Surety Co., 7 54 F. Supp. 157 6 (S.D. Ga. 1990), Aetna's insurance policy did not cover claims based solely on damage to its insured's property.
Summary of this case from Certain Underwriters at Lloyd's, London v. S. Natural Gas Co.Opinion
No. 2570.
October 21, 1943.
Bigham, Englar, Jones Houston, of New York City (Henry N. Longley and F. Herbert Prem, both of New York City, and Lord Whip, of Baltimore, Md., of counsel), for intervening cargo libellants Atlas Powder Co., Sociedad Anonima Petrola las Mercedes, and New Gold Fields of Venuzuela, Ltd.
Bernard J. Flynn, U.S. Atty., and Thomas J. Kenney, Asst. U.S. Atty., both of Baltimore, Md., for intervening cargo libellants, Arundel Corporation, Hardaway Contracting Co., and Consolidated Engineering Co., Inc.
Sol. C. Berenholtz, of Baltimore, Md., for William G. Kelly and others.
John H. Skeen and Charles F. Stein, Jr., both of Baltimore, Md., for claimant-respondent.
In Admiralty. Libels by William G. Kelly and others against the Steamship Louise, claimed by M.V. Cavalliotis, in which the New Gold Fields of Venezuela, Limited, and others intervened as libellants, for damages to cargo and wages due crew members.
Decree for libellants.
Findings of Fact (Cargo Claims)
1. Libellants and intervening libellants, New Gold Fields of Venezuela, Ltd., Atlas Powder Company, Sociedad Anonima Petrolera Las Mercedes, Arundel Corporation, Consolidated Engineering Co., Inc., and Hardaway Contracting Company, at all material times had the legal status alleged in the libels and intervening libels.
2. Claimant-respondent, M.V. Cavalliotis, is an individual who owned and operated the SS "Louise".
3. During the month of July 1942 libellant, Atlas Powder Company, delivered to the claimant-respondent a number of shipments of explosives in good order, for carriage by claimant-respondent on the SS "Louise" from Wilmington, Delaware, to various Puerto Rican and Venezuelan ports. The claimant-respondent accepted the said merchandise and stowed it on board the SS "Louise" and issued a number of bills of lading to the shipper dated at Philadelphia July 18, 1942.
4. Libellants and intervening libellants owned, or represent the owners of the cargo with authority to file suit on their behalf, as alleged in the libels and intervening libels.
5. The SS "Louise" sailed from Wilmington on July 19, 1942, and arrived in Hampton Roads, Virginia, on July 20, 1942. She lay in that port until August 10, 1942, awaiting the formation of a convoy.
6. While lying at Hampton Roads the master and other officers who had sailed on the vessel from Wilmington to Hampton Roads, left the vessel. A new master was appointed but, after some three days on board, he refused to take command. New first and second mates appointed for the vessel at Hampton Roads, refused to sign articles after remaining on board three or four days, on the ground that the vessel was unseaworthy and they made an entry to that effect in the log book.
7. New officers were eventually secured and the "Louise" sailed from Hampton Roads in convoy, early in the morning of August 10, 1942. During the course of the day the vessel emitted such abnormal quantities of smoke from her funnel that the Commander of the convoy ordered her to leave the convoy unless the smoking was stopped. The abnormal smoking of the vessel resulted from her unseaworthiness by reason of the defective condition of the heater coils in the fuel oil tank which permitted water to become mixed with the fuel oil; and because, although the boilers were designed to be operated under forced draft, they could not be so operated because the blower engine was in unseaworthy condition.
8. During the course of the afternoon of August 10, sea water began to leak into the vessel by way of the ship's deck and side planking although there was no unusual stress of weather. The increasing weight of water in the vessel did not permit her to ride the waves encountered with proper buoyancy but caused her to take the waves over the bow.
9. During the evening of August 10, waves coming over the bow of the "Louise" carried away an ice box made fast to the forward deck and the ice box tore out part of one of the deck planks which was rotten, permitting additional water to enter the vessel forward.
10. At about 11 P.M. on August 10, the master and other officers turned the vessel around and started back for Hampton Roads because in their opinion the safety of the officers, crew, ship and cargo made the return imperative, and the Naval Authorities had directed the vessel to return to Hampton Roads if she encountered difficulties. Water continued to leak into the vessel on the return voyage to Hampton Roads.
11. At no time during the voyage of the "Louise" did the wind exceed a velocity of 19 miles per hour.
12. The "Louise" arrived back at Hampton Roads on August 12. Upon her return Inspectors of the United States Bureau of Marine Inspection came on board, examined the vessel and removed her license because in their opinion she was unseaworthy. By special permit the vessel sailed from Hampton Roads to Baltimore where she arrived on August 15, 1942.
13. As repairs of the "Louise" were required which could not be effected without discharge of the vessel, all of the cargo was discharged at Baltimore. During the course of the discharge, the hold 'tween deck collapsed because of its rotten and unseaworthy condition.
14. An examination of the SS "Louise" after the discharge of cargo, established that the deck and side planking of the vessel was rotten in a number of places and to such an extent as to permit the entry of large quantities of water. This rotten condition, as well as the rotten condition of the 'tween deck, existed at the time the cargo was loaded at Wilmington and the vessel sailed on her voyage.
15. Much of the cargo at the top of the stow was wet with sea water which had leaked through rotten places in the deck planking; and the bottom two tiers of cases were also wet with sea water to a height of about 2 feet above the ceiling, as the result of leakage through the ship's side planking as well as the deck planking.
16. After the cargo was discharged at Baltimore the vessel was inspected by Inspectors of the Bureau of Marine Inspection who had examined the vessel shortly after she was purchased by claimant-respondent and who had designated the repairs required at that time to put the vessel in seaworthy condition. These Inspectors found that many of the repairs and renewal of planking, beams, etc., set out as required to make the vessel seaworthy and as a condition precedent to the issuance of a license by the United States Government, had not been effected and that the insufficiency of the repairs had been concealed by paint.
17. Such repairs as had been effected on the "Louise" had been carried out under the personal supervision of claimant-respondent.
18. The voyage of the "Louise" was broken up at the port of Baltimore. She never again had a license from the United States of America and she never again sailed from port under the ownership or control of claimant-respondent.
19. The cargo discharged from the "Louise" at Baltimore never went forward to the contractual ports of destination either on the "Louise" or on any other vessel owned or controlled by claimant-respondent or at claimant-respondent's expense.
20. Atlas Powder Company had prepaid the freight to claimant-respondent for carriage of all of the cargo from Wilmington to the contractual ports of destination. The cost of the discharge of the cargo at Baltimore and the cost of guarding it subsequent to discharge, was borne by the cargo owner.
21. 518 cases of dynamite had become so immersed in sea water as to be extremely volatile and dangerous and this condition required that they be destroyed as a matter of safety. The expense of this destruction was borne by the cargo owners.
22. The SS "Louise" was unseaworthy when she loaded her cargo at Wilmington and when she sailed on her voyage, and that unseaworthiness existed by reason of claimant-respondent's lack of due diligence.
23. The loss of and damage to libellants' and intervening libellants' cargo and the breaking up of the voyage did not result from a peril of the seas but resulted directly from the unseaworthiness of the SS "Louise" existing by reason of claimant-respondent's lack of due diligence.
Conclusions of Law
1. The United States Carriage of Goods by Sea Act, 46 U.S.C.A. § 1300 et seq., by its own terms controls the rights and liabilities of the parties so far as concerns the shipments consigned to the Venezuelan ports. As all the bills of lading contain a Clause Paramount incorporating the Carriage of Goods by Sea Act, that Act also controls the rights and liabilities of the parties so far as concerns the shipments consigned to Puerto Rico.
2. Under the provisions of section 3(1) of the Carriage of Goods by Sea Act, a carrier is bound to exercise due diligence to make his ship seaworthy. Under the provisions of section 4(1) of the Act, whenever loss or damage has resulted from unseaworthiness, the burden of proving the exercise of due diligence shall be on the carrier.
3. As the voyage of the "Louise" was broken up and the cargo of the libellants and intervening libellants sustained loss and damage as the result of the unseaworthiness of the "Louise" existing by reason of claimant-respondent's lack of due diligence, libellants and intervening libellants are entitled to recover their damages from the SS "Louise" and from respondent.
Findings of Fact (wage claims)
1. The libellants, William G. Kelly, Francis Jones, John F. Sundstrom, R. Ackerson, H.S. Bridges, S.J. Ram, Vasily Bashkiroff, H.H. Fickle, Frank Sinjosi Collados, Rudolph Alvera, Edwin Millin, Conley P. Johnson, Jess Rumble, were members of the crew of SS "Louise" an American merchant vessel owned and operated by M.V. Cavalliotis, claimant-respondent, and signed written shipping articles dated July 16, 1942, which were opened at Wilmington, Delaware, for a voyage from that port to various ports in Puerto Rico and Venezuela.
2. The libellants were employed for the aforesaid voyage in the respective capacities, and on the respective dates, alleged in the Libel, at the base pay, set forth in the Libel, plus bonus in accordance with all applicable decisions of the War Emergency Board, as stipulated in the articles. The SS Louise sailed from Hampton Roads, Virginia, that being the last port which she touched prior to her commencing the voyage in question, on August 10, 1942, with all the libellants aboard, carrying a cargo of explosives, destined for various ports, in Puerto Rico and Venezuela.
3. The vessel experienced no difficulty until about 1 P.M. of August 10, 1942, when there was excessive smoke being discharged from the stack. At 3 P.M. of the same day the Commander of the convoy ordered her out of the convoy if she could not reduce her smoke.
4. During the afternoon of August 10 sea water began to leak into the vessel by way of the deck and side planks, although there was no unusual stress of weather. The vessel did not ride the waves, but dived into the seas and took green water over her bow, and during one of these experiences an ice-box, made fast to the forward deck, was carried away, tearing out part of one of the deck planks which was rotten, permitting additional water to enter the vessel.
5. At 11:07 P.M. on August 10 the master turned the vessel about, because in his opinion, which was shared by the first and second officers, the safety of the crew, ship and cargo made such action imperative. On her return, she sailed at half speed, but water continued to leak into her, and at 4 A.M. on August 11 the pumps caught up with the water, and they were then able to control it.
6. At no time during the voyage did the wind velocity exceed nineteen miles per hour.
7. The SS Louise arrived back at Hampton Roads on August 12, and the Local Inspectors of the United States Bureau of Marine Inspection and Navigation and other officials connected with the office of the Captain of the Port, boarded her, and after examining her, reached the conclusion that she was unseaworthy and they withdrew her certificate of seaworthiness.
8. That at the time that the certificate of seaworthiness was withdrawn the SS Louise was in a safe harbor.
9. That an agreement was then entered into between the claimant-respondent and the libellants, whereby the latter were entitled to receive the sum of One Hundred ($100.00) Dollars each as extra compensation for sailing the vessel to Baltimore. That the libellants in pursuance of the said agreement delivered the vessel safely at the port of Baltimore.
10. That the SS Louise was unseaworthy when she sailed from the port at Hampton Roads on August 10 and she was compelled to turn back because she could not make the intended voyage.
11. The intended voyage was broken up by reason of the fact that the SS Louise could not with safety make the voyage which she intended to make by reason of her unseaworthy condition.
12. The libellants were paid off and discharged, not because of any wrongful conduct on their part but by reason of the breaking up of the voyage.
13. The libellants, through their proctor, orally demanded of the claimant-respondent payment of One Hundred ($100.00) Dollars each, plus a month's pay for each libellant who had not earned a month's wages, at the time that they, together with the claimant-respondent were in the office of the United States Shipping Commissioner at Baltimore, which the claimant-respondent failed and refused to pay. That the claimant-respondent, through the Deputy Shipping Commissioner, then paid the libellants their actual earned wages on a per diem basis, which was accepted by the libellants under protest.
Conclusions of Law.
1. That the agreement to pay the libellants One Hundred ($100.00) Dollars each as extra compensation for sailing the SS Louise from Hampton Roads to Baltimore is valid and enforceable, and they are entitled to recover One Hundred Dollars each in accordance with that agreement.
2. That those libellants who had not earned a month's wages at the time of discharge are entitled to receive as compensation one month's wages as provided by 46 U.S.C.A. § 594.
In the above case I have made separate findings of fact and conclusions of law with respect to (1) the cargo claims and (2) the wage claims. I think the findings will be found in sufficient detail both as to ultimate facts and evidentiary facts, to tell the whole story; but I will add a few general comments.
The vessel was clearly unseaworthy at the start of the voyage, and a considerable part of the damage to the cargo was caused by this unseaworthiness. Some of the testimony was by deposition and some in open court. Taken together it established the unseaworthiness of the ship beyond any reasonable doubt.
As to the cargo loss, and the liability of the ship therefor, it is admitted that the carriage was subject to the Carriage of Goods by Sea Act, 46 U.S.C.A. § 1300 et seq. By it the burden of proof is on the shipper to show unseaworthiness, and when this has been shown the burden of proving the exercise of due diligence to make the ship seaworthy and thus escape the consequences of the loss, is put upon the ship. In this case the shipowner's principal contention is that he did exercise due diligence; but I find from the whole evidence that he did not.
The ship had a wooden hull, 167 feet long, 28 foot beam and 13 feet depth, and was 530 tons gross. She was built in 1922 at Milford, Delaware, and had been first used as a trawler, but for 15 years prior to 1942 had been tied up at a dock in Baltimore. In 1941 she was surveyed for insurance or purchase or both by Capt. Schillp, a marine surveyor of long experience. He reported adversely on her condition and said that he found her timbers so affected throughout with dry rot that she was a "dead ship". In 1942 she was purchased by the present owner, the owner-claimant in this case, for $20,000. He obtained an estimate from the Bethlehem Company of $150,000 to repair and re-equip her. He considered this estimate extravagantly high and proceeded to have repairs made to her hull largely under his own supervision. He had had little if any practical experience with ships as for many years he had been engaged in New York as an importer of merchandise, which business was substantially discontinued on the outbreak of the war. He expended about $30,000 in repairs to the hull and about $40,000 in new equipment, etc., thus making his total investment in the vessel about $90,000.
To support the owner's contention that he exercised due diligence to make the ship seaworthy, he relies principally on the fact that he obtained a so-called "load line certificate" and also an official marine inspection certificate before the ship sailed from Baltimore to take on its cargo at Philadelphia, Pennsylvania, and Wilmington, Delaware. The surveyor who acted in the matter of the load line certificate was called as a witness. No doubt he was a competent man but his testimony given in court did not impress me with the thoroughness of the particular inspection. The official marine survey and certificate was under the official superintendence and responsibility of Commander Cabernagel of the local Coast Guard. His personal testimony in court was very convincing that the particular certificate was issued by mistake or inadvertence probably due to insufficient personnel in his office at the time, which was some months after the beginning of the present war. It is unnecessary to discuss this in detail. Of course these certificates are entitled to very considerable weight but I reached the conclusion after hearing the testimony that they were not conclusive; and the evidence as a whole satisfied me that sufficient care had not been taken in the particular case as a basis for the issuance of the certificates.
The shipowner's duty to make the ship seaworthy was a non-delegable duty and furthermore there was sufficient evidence in the case to show that some of the repairs ordered by the assistant to Commander Cabernagel had not been properly done.
Counsel for the shipowner relies largely on the proposition that as all the bills of lading were issued to the Atlas Powder Company (although the consignees and the ports of delivery were varied), the carrier in this case should be treated as a private and not a common carrier, with the result that the burden of proving negligence on the part of the carrier causing loss was upon the cargo owners. See Commercial Molasses Corp. v. New York Tank Barge Corp., 314 U.S. 104, 62 S.Ct. 156, 86 L.Ed. 89. I think it very doubtful indeed whether, in the circumstances of this case, especially as the shipment was explicitly made subject to the Carriage of Goods by Sea Act by endorsement of the paramount clause on the bills of lading, the burden of proof to show lack of due diligence on the part of the shipowner, was imposed on the cargo claimants. But even if it was, that is immaterial in this case because, after all the evidence had been submitted, I was satisfied from a preponderance of the evidence that the shipowner had not exercised due diligence to make the ship seaworthy for the voyages contemplated.
It is urged that the ship left the convoy not by reason of her unseaworthy condition but because she could not keep up with the convoy and was ordered to leave by the convoy master; but I find the true fact to be that in the condition the ship was in she was unable to safely encounter the not unusual weather that prevailed at the time she left the convoy; and that her leaving the convoy was due to her particular condition and not to orders of the convoy master.
As to the wage claims, I think the testimony in the case fully supports the contention of the members of the crew that they are entitled in addition to what they received when paid off at Baltimore (under their protest) to a full month's extra wages, and the further special payment promised them of $100 each to stay by the ship on the voyage back to Baltimore from Norfolk. Looking at the condition of the ship when she left Norfolk after her return from the convoy and the fact that she was loaded with dynamite which may have been damaged by sea water (a fact afterwards ascertained upon unloading in Baltimore) I find that the promise of the owner to pay the extra compensation was based on adequate and fair consideration. His entry on the log that he agreed to pay the extra compensation under duress is not fairly supported by the evidence.