Sicula Oceanica, SA v. Wilmar Marine Eng. & Sales Corp.

• Decision Date: 07 July 1969
• Docket Number: No. 26106.,26106.
• Citation: 413 F.2d 1332
• Parties: SICULA OCEANICA, S.A., Appellant, v. WILMAR MARINE ENGINEERING & SALES CORPORATION, Appellee.
• Court: U.S. Court of Appeals — Fifth Circuit

413 F.2d 1332 (1969)

SICULA OCEANICA, S.A., Appellant, v. WILMAR MARINE ENGINEERING & SALES CORPORATION, Appellee.

No. 26106.

United States Court of Appeals Fifth Circuit.

July 7, 1969.

Alfred M. Farrell, Jr., Benjamin W. Yancey, New Orleans, La., for appellant; Terriberry, Rault, Carroll, Yancey & Farrell, New Orleans, La., of counsel.

Henry J. Read, New Orleans, La., for appellee; Montgomery, Barnett, Brown & Read, New Orleans, La., of counsel.

Before WISDOM, THORNBERRY, and GOLDBERG, Circuit Judges.

WISDOM, Circuit Judge:

This action in admiralty was tried without a jury and was submitted to the district court entirely on depositions and documents.¹ The appellant's burden, under Fed.R.Civ.P. 52(a), of showing that the trial judge's findings of fact are "clearly erroneous" is not as heavy, therefore, as it would be if the case had turned on the credibility of witnesses appearing before the trial judge. Galena Oaks Corp. v. Scofield, 5 Cir. 1954, 218 F.2d 217. Caradelis v. Refineria Panama, S.A., 5 Cir. 1967, 384 F.2d 589.² However, regardless of the documentary nature of the evidence and the process of drawing inferences from undisputed facts, the reviewing court must apply the "clearly erroneous" test. 2B Barron & Holtzoff (Wright ed.) § 1132 p. 523; § 1133; McAllister v. United States, 1954, 348 U.S. 19, 75 S. Ct. 6, 99 L.Ed. 20. We have gone over the record word by word. We are "left with the definite and firm conviction that a mistake has been made". United States v. United States Gypsum Co., 1948, 333 U.S. 364, 68 S.Ct. 525, 92 L. Ed. 746.

The dispute between the parties arose as a result of a written contract dated April 7, 1965, between Wilmar Engineering & Sales Corporation, represented by Raymond G. Willhoft, Secretary-Treasurer of the company, and Sicula Oceanica, S.A. (Siosa), represented by Dr. Aldo Grimaldi, General Agent and part owner of Siosa.³ The contract obligated Wilmar to clean the tanks of the M/V Perseo by April 13, 1965, for "the maximum price of $31,000". The vessel, which had been carrying oil, had to be clean for the carriage of grain "to the satisfaction of inspectors of the National Cargo Bureau and the Board of Trade".⁴ The inspectors "rejected" the vessel on several occasions but finally "passed" it on April 27, 1965. Wilmar's men had worked on the tanks until April 25, when the Perseo's master refused to allow them to come aboard. Wilmar sued Siosa for $62,690.88, the balance allegedly due as costs for cleaning the tanks. Siosa counter-claimed for damages of $51,045.91 for breach of contract and breach of the warranty of workmanlike performance. The district court denied the counterclaim and awarded Wilmar $46,776.41.

The district court held that the written contract was voidable because it was "based upon a mutual mistake of fact concerning the condition of the tanks". The court found:

When the contract was entered into Wilmar, through its representative, Willhoft was given to understand that the vessel had been completely butterworthed⁵ and that nothing remained to be done but to clean out the residue left after butterworthing had been completed. Wilmar was not advised of the fact that the butterworthing had not, in fact, been completed and that much more than a "clean-up" job was involved. * * * Neither Wilmar nor Grimaldi were aware of the fact that the tanks had not been properly butterworthed and that instead of petroleum residues remaining merely at or near the bottom of the tanks as would normally have been the case had the butterworthing process been properly completed, the complete inside of the tanks still contained petroleum residues which had to be cleaned off.

The court stated that "the evidence shows that there was, in fact, an affirmative representation made by Siosa that the tanks of the vessel Perseo had been completely butterworthed on the voyage from Europe, and that the tanks were thus ready for the final cleaning up, the only job which Wilmar actually contracted for". The court found that the parties entered into an oral contract on April 11, 1965, superseding the written contract, providing for Wilmar to be paid only the actual costs of labor and material for cleaning the tanks. This contract, the court held, "was not * * * conditioned upon approval by a third party or upon completion within a certain time".

I.

We find that time was of the essence to the shipowner: performance of the tank cleaning by the terminal date fixed in the contract was a vital element in the agreement of the parties. All of the while the Perseo was in New Orleans and in Baton Rouge Siosa was under the compulsion of meeting deadlines, as Wilmar knew. The contract of April 7 provided:

Work will probably be completed by Monday night midnight April 12th. Anyway vessel must be in Baton Rouge by 12 noon on April 13. Normal overtime rate will be charged if necessary. Emphasis added.

The first sentence is indefinite as to the completion date because Willhoft hoped to finish the work before the twelfth. Wilmar was protected by the provision that its services would be calculated at the rate of $4.20 a man-hour, which included profit. Siosa was protected by the agreement on a maximum price of $31,000 and by the requirement that the job be finished by the thirteenth, at the latest, in Baton Rouge. It is undisputed that Grimaldi informed Willhoft that the Perseo had to be in Baton Rouge on July 13 to enable Siosa to comply with a charter committment.

On March 12, 1965, Siosa had time-chartered the Perseo to Tradex Export, S.A. for three consecutive voyages to carry grain. The charter provided that the Perseo was to be inspected and approved for grain by official inspectors before 12 noon on April 8, 1965, at the loading port (later designated as Baton Rouge). Failure of the vessel to pass inspection gave the charterer the option of cancelling.

To prepare for carrying grain instead of oil, the crew chemically cleaned and butterworthed the Perseo's tanks on the sea voyage. Grimaldi testified that at the time he expected the ship to be ready to load her grain cargo by April 8. Siosa had purchased cleaning equipment and chemicals for butterworthing from Gamlen, a European firm that specialized in tank cleaning, and employed a Gamlen technician to supervise the work while the vessel was at sea. The butterworthing was not effectively completed because of bad weather and other difficulties, such as clogged condenser pipes.⁶ Siosa diverted the ship to Bermuda where new pipes, flown over from England, were substituted for the clogged pipes and where ten Bermudians were hired to help the crew in cleaning the tanks. After forty-eight hours in Bermuda, the ship sailed on March 31. The crew and the Bermudians continued to work on the tanks during the voyage to New Orleans.

Grimaldi boarded the Perseo April 6 at Pilottown, near the mouth of the Mississippi River. At his request, that morning a Mr. Peterson, head of a tank cleaning firm, came aboard to examine the tanks. He stated that he could not clean the tanks in only two days, and he declined to undertake the job without first making tests with chemicals. Grimaldi, realizing that the charter deadline of April 8 could not be met, cabled his office in Genoa, saying that he needed three or four more days of cleaning at a cost of $20,000 to $30,000. The charterer granted an extension to April 15, but with a reduction in the freight rate of 25 cents a ton for each of three voyages.

Grimaldi then arranged a meeting with Raymond G. Willhoft, Secretary-Treasurer of Wilmar. Willhoft came aboard on the night of the sixth, sometime between eleven and midnight, accompanied by his foreman, Jones, and an assistant-foreman, Gasquet. According to Grimaldi, Willhoft changed into his overalls and spent forty-five minutes inspecting the tanks. Captain Monti, the master, and Mike Piccolo, a ship chandler who acted as an interpreter, also testified that Willhoft inspected the tanks. At that time Willhoft told Grimaldi that he estimated that the work could be done in five or six days at an estimated cost of $24,000 to $27,000. He left the ship about four in the morning. Willhoft returned the next day with his foreman, Jones. According to Grimaldi and Captain Monti, Willhoft made a second inspection accompanied by the chief mate and second mate. The contract was signed about noon. Grimaldi said that he "actually saw Willhoft, his foreman, and my first officer go down and come out of the tanks." Willhoft's overalls, gloves, and shoes were "dirty with grease" and oil.

Willhoft denied that he entered any tank before signing the contract. He also denied that he had been told of any difficulties that might have impeded the butterworthing. But he must have known about some of the difficulties for he testified:

Q. Was the ship equipped for Butterworthing operations at sea?

A. No, because each tank only had one butterworth opening and that was right alongside the expansion trunk, which is the main entrance to and from each tank. It was right alongside so the hose didn\'t do any good. They couldn\'t put the Butterworth machine in the far corners of the tanks, only in that one area, so consequently they couldn\'t hit the other areas. * * *

A. Most ships have four Butterworth openings. They use the expansion trunk for one and one opening in each corner of each tank.

Jones, the foreman, testified that he accompanied Willhoft the first time he went aboard the Perseo. Jones said that he and Gasquet inspected the tanks while Willhoft talked business in the Captain's cabin. They went down only about six feet into the tanks because the ladders were slippery with oil and grease. Jones noticed that there was grease and oil residue on the upper areas of the tanks, on the shelves (frames), and on the skin of the ship. Jones had butterworthed and therefore knew that if the tanks had been completely butterworthed, they would have been cleaned in the upper areas; only the...