Waterman SS Corp. v. United States SR & M. Co.

Decision Date18 June 1946
Docket NumberNo. 11554.,11554.
Citation155 F.2d 687
CourtU.S. Court of Appeals — Fifth Circuit
PartiesWATERMAN S. S. CORPORATION v. UNITED STATES SMELTING, REFINING & MINING CO.

COPYRIGHT MATERIAL OMITTED

Harry F. Stiles, Jr., of New Orleans, La., for appellant.

F. Herbert Prem, of New York City, and Louis C. Guidry, of New Orleans, La., for appellee.

Before HUTCHESON, HOLMES, and LEE, Circuit Judges.

LEE, Circuit Judge.

Waterman Steamship Corporation, respondent below, prosecuted this appeal from a final decree in admiralty awarding U. S. Smelting, Refining & Mining Co., libellant below, damages for the loss of thirteen pieces of structural steel from a shipment of 698 pieces. Libelant, hereinafter called the shipper, delivered the steel to respondent, hereinafter called the carrier, at Baltimore, for carriage on its vessel, the "West Kyska," to the shipper's order at Seattle. The carrier stowed a quantity of this steel on deck, with permission granted by a bill of lading for on-deck stowage, and stowed the remainder under deck. During the course of the voyage thirteen pieces of steel, comprising a part of the on-deck cargo, were lost overboard. This appeal concerns the question of the carrier's liability for the loss of these steel plates.1 The court below held that the thirteen pieces of steel were lost overboard from the West Kyska by reason of the carrier's negligence in failing to properly and carefully stow, carry, keep, and care for the same; and that neither peril of the sea nor peril incident to on-deck stowage was present or responsible for such loss. It awarded damages in the sum of $8,064.18 with interest.

On this appeal the carrier contends:

"I — Where Goods are Shipped under a bill of lading specifically providing for on-deck carriage at `Owner's risk', the cargo owner cannot recover in the absence of a showing of active negligence on the part of the carrier.

"II — In order to recover for loss of cargo carried on deck, the owner of such cargo has the burden of affirmatively proving that the loss was caused by negligence in stowage or care and not only has appellee failed in this respect but on the contrary the evidence shows that due diligence was used.

"III — The loss was occasioned by a latent defect in the pelican hook securing the #1 deck stow for which respondent is not liable.

"IV — The loss was due to peril of the sea for which appellant is not liable.

"V — In the event appellant should be held liable, appellee's recovery should be limited to $500 per piece or package lost but in no event may it exceed the arrived sound market value."

The parties stipulated that the thirteen plates of steel lost were in good order and condition on delivery to the carrier in Baltimore. The parties agree that the carrier was a common carrier of these goods.

The straight bill of lading covering the steel lost provided:

(1) That 771 tons of a total shipment of 1052 tons were loaded on deck.

(2) That goods carried on deck were at "owner's risk."

(3) That the terms "owner's risk" meant that the carrier should not be liable for loss or damages "unless shown to have resulted from some negligence or default of carrier against liability for which it is precluded by law from contracting."

(4) An incorporation of the provisions of the Carriage of Goods by Sea Act, 46 U.S.C.A. § 1300 et seq., Apr. 16, 1936, Chap. 229, 49 Stat. 1207 et seq.

(5) That all risks of loss or damage by perils incident to carriage of goods on deck should be borne by cargo owner, and the provisions of the Carriage of Goods by Sea Act notwithstanding § 1(c) thereof should govern the custody and carriage of such goods.

The 771 tons of deck stow was divided into several piles, each approximately 8 feet high. The steel lost overboard was stowed on a pile to the port side between hatch No. 1 and the rail. Two galvanized chain lashings with links 7/8 of an inch in diameter were stretched from two pad-eyes at the port side of the hatch coaming over the piles of steel to two pad-eyes located at the base of the ship's rail. A "pelican hook" shackled each chain lashing to the pad-eye at the hatch coaming. A turn-buckle between each pelican hook and the chain lashing kept the chain lashing taut. A "pelican hook" is a hook with a ring that holds the two shanks of the hook together. Three wood stanchions braced against the bulwark or rail held the steel pile away from the rail, a distance of 6 feet.

Captain Wood testified that from Wilmington, California, to San Francisco to Seattle, the vessel encountered no weather but such as one would expect for that season of the year; that the thirteen plates of steel were lost overboard on May 3, 1941, three days out of San Francisco, about twenty miles west of Gray's Harbor; that neither vessel nor deck cargo sustained other damage or loss during that leg of the voyage; that neither the two chain lashings nor the four pad-eyes nor the two shackles, to which the chain lashings were made fast on one end, broke; that on that day the two pelican hooks, that secured the two lashings on the stow on the port side of hatch No. 1 to the pad-eyes at the base of the hatch coaming, bent in such a fashion that permitted the release of the lashings. As a result, the full weight of the upper half of the steel pile, at about the level of the lowermost 3 feet of stow, sheered off the three port stanchions; and the loose steel at the top of the pile slid to port over the braces and the rail into the sea.

Captain Wood further testified that the wind at the time the steel went overboard was force 3 on the Beaufort scale (8 to 12 miles, gentle) and a heavy westerly swell was striking the ship about two points forward to port beam; that the vessel was rolling heavily but running at full normal speed of 10½ knots on a course of 341 Standard compass; that just before the cargo was lost he observed the sea was "apparently building up gradually," but that there was nothing unusual in the sky; that he was preparing to alter the West Kyska's course in order to prevent her rolling "so heavily"; and that at the time the steel went overboard, after a very severe roll to port, the next wave jerked the vessel "kind of short" and caused a twisting motion as "she righted herself too sudden." The master was positive that no water came aboard on the roll which he so described as unusual.

The parties stipulated that if one F. A. Finch, surveyor of the Board of Under-writers of New York, had had the opportunity to testify, he would have said that at the port of Baltimore, Maryland, the lashings and accompanying gear appeared then to be in good and proper condition.

The parties also stipulated that if certain representatives of the respondent had had the opportunity to testify, they would have said that neither the pelican hooks nor the turnbuckles were ever subsequently delivered to respondent, and were, so far as known by respondent, still on said vessel; and that the United States had taken control of the West Kyska on August 26, 1943.

The shipper's construction engineer testified that upon discharge by the West Kyska of libellant's steel shipment at Seattle, the cargo checked thirteen pieces short, and that the replacement value of said pieces F.O.B. Seattle was $8,064.18, which sum libellant actually disbursed in order to provide forthwith the necessary substitute pieces for carrying on dredge construction at Nome, Alaska; and that the value of the pieces in Seattle was the replacement value.

An appeal in admiralty is a trial de novo, and the findings of fact made by the court below are not binding on this court.2 Since the court below took no oral testimony and took all testimony on depositions, no opportunity was afforded the lower court to see and hear the witnesses; hence, we have no reason to give weight to the lower court's findings of fact.3

The bill of lading incorporates by reference the provisions of the United States Carriage of Goods by Sea Act. While the Act does not apply either to carriage of goods not in foreign trade4 or to cargo carried on deck under provisions in the bill of lading for on-deck carriage,5 the parties may by the terms of their bill of lading agree that its provisions shall apply to cargo carried on deck between ports of the United States.6 Section 4(2) of the Act provides that "Neither the carrier nor the ship shall be responsible for loss or damage arising or resulting from * * * (c) Perils * * * of the sea * * *; or (p) Latent defects not discoverable by due diligence * * *." Upon the carrier is placed the burden of going forward to show a peril of the sea or a latent defect; it also has the risk of non-persuasion.7

"* * * The reason for the rule is apparent. He is a bailee intrusted with the shipper's goods, with respect to the care and safe delivery of which the law imposes upon him an extraordinary duty. Discharge of the duty is peculiarly within his control. All the facts and circumstances upon which he may rely to relieve him of that duty are peculiarly within his knowledge and usually unknown to the shipper. In consequence, the law casts upon him the burden of the loss which he cannot explain or, explaining, bring within the exceptional case in which he is relieved from liability. * * *"8

A true latent defect is a flaw in the metal and is not caused by the use of the metallic object. "A latent defect is one that could not be discovered by any known and customary test."9

"A comparative local weakness must be based upon some visible defect in the material, or should be shown under a test to be fairly pronounced, in order to indicate that bursting was not due to wear and tear or inevitable depreciation, rather than to what can be termed a latent defect in any workable sense."10

A true latent defect is not a gradual deterioration but is a defect in the metal.11 The ship owner has the burden of showing that the latent defect was not discoverable.12

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