THE TOLUMA, 431.
| Decision Date | 07 August 1934 |
| Docket Number | No. 431.,431. |
| Citation | 72 F.2d 690 |
| Parties | THE TOLUMA. THE SUCARSECO. |
| Court | U.S. Court of Appeals — Second Circuit |
Kirlin, Campbell, Hickox, Keating & McGrann, of New York City (W. H. McGrann, of New York City, of counsel), for libelant-appellee Aktieselskabet and The Toluma.
Bigham, Englar, Jones & Houston, of New York City (D. Roger Englar and Leonard J. Matteson, both of New York City, of counsel), for libelants-appellants West India Oil Co. and J. H. Senior, Agent, American Insurance Co., and others.
Before MANTON, SWAN, and CHASE, Circuit Judges.
During the night of November 22, 1926, the Norwegian steamship Toluma, bound from New York with a general cargo for South American ports, was in collision at sea off the Chesapeake Capes with the American steamship Sucarseco, also bound from New York with a general cargo but for Pacific Coast ports via the Panama Canal. Both ships were damaged. The Sucarseco proceeded on her voyage, but the Toluma was so injured that her master, prudently to save further loss to ship and cargo, put into Norfolk, Va., for repairs. There the cargo of the Toluma had to be in part discharged to permit the necessary repairs to the ship to be made. After such repairs were made, the discharged portion of the cargo was reloaded and the Toluma then completed her voyage and delivered her cargo.
These suits in admiralty were brought in the Southern district of New York as a result of the collision and its attendant consequences. A libel was filed by Aktieselskabet Cuzco, owner of the Toluma, against the Sucarseco to recover the damages sustained by that ship. A cross-libel was filed by Submarine Boat Corporation, as owner, and Transmarine Corporation, as charterer in possession of the Sucarseco, against the Toluma, Aktieselskabet Cuzco, her owner, and Grace Line, Inc., her charterer, to recover for the damage to the Sucarseco. And a libel was filed by West India Oil Company et al., as the owners, shippers, and underwriters of cargo on the Toluma, against the receivers of the owner and of the charterer of the Sucarseco to recover their damages, including contributions by cargo in general average.
These suits were all ordered consolidated and were heard together in the District Court on a "Stipulation of Agreed Facts." From the decree entered, the cargo interests alone have appealed, and the sole question presented is whether there was error in not allowing cargo on the Toluma to recover from the Sucarseco contributions made by cargo in general average.
It is agreed by all parties that both ships were seaworthy and that the collision was caused by faulty navigation for which both were equally at fault. No question involving the correctness of the general average adjustment is before us.
The bills of lading, under which all the Toluma's cargo now interested was carried, contained the so-called Jason clause, and the cargo has made the contributions, required under that clause, in accordance with the general average statement.
Cargo was permitted to recover below only for physical damage sustained. This limited recovery to the damage caused by extra handling, as there was no actual harm done the cargo at the time of collision. Recovery of the general average contributions was denied on the ground that the rights of an owner of cargo against a ship at fault for a collision with the carrying vessel are derivative only, and on the additional ground that an obligation to contribute in general average under the Jason clause rests wholly on a special contract to which the noncarrying vessel is not a party, and that such damage is too remote to be recoverable.
The precise issue before us on this appeal seems not to have been squarely raised before, though we are given to understand that it has often been mooted and avoided by compromise. However, the principles which must govern the decision are well established. This court decided, before the Harter Act (46 USCA §§ 190-195) was passed, that a cargo owner might recover from the carrying ship which was solely at fault for a collision contributions made in general average, and this on the ground that they were a part of the cargo damage. The Energia (C. C. A.) 66 F. 604. The effect of that decision, which is of present importance, is that, in a suit by cargo for collision damages, no distinction purely as an element of damage is to be made broadly between physical cargo damage and damages sustained by cargo by reason of general average contributions. The two stand, generally speaking, on the same footing. This was recognized in Ralli et al. v. Societa Anonima di Navigazione, etc. (D. C.) 222 F. 994; Erie & Western Transp. Co. v. City of Chicago (C. C. A.) 178 F. 42, and Gray's Harbor Tugboat Co. v. Petersen (C. C. A.) 250 F. 956. The same rule obtains in England. The Minnetonka (1905) Prob. Div. 206.
Furthermore, cargo is not at fault for a collision in which the carrying ship is involved with another, and may recover its provable damages from the noncarrying vessel when the fault of that ship is a contributing cause. The New York, 175 U. S. 187, 20 S. Ct. 67, 44 L. Ed. 126; The Atlas, 93 U. S. 302, 23 L. Ed. 863.
When both ships in collision are at fault and cargo has recovered from the noncarrying vessel, the owners of that ship may recover from the carrying vessel one-half of the cargo damages on a division of the total damage for the purpose of determining ultimate recovery as between the two ships. And when the balance between the ships has been struck, there is a single recovery from the other ship by the ship which has proved the greater loss. The North Star, 106 U. S. 17, 1 S. Ct. 41, 27 L. Ed. 91. Nor is this method of computing the damages and obtaining the balance for a single recovery done away with by the provisions of the Harter Act. The Chattahooche, 173 U. S. 540, 19 S. Ct. 491, 43 L. Ed. 801.
Were it possible to apply these principles without taking other factors into account, the right of recovery of the general average contributions here made would be plain. Because of the comparatively small amount of damage sustained by the Sucarseco, that ship and those interested in her have no financial interest in the outcome of this appeal anyway, and, as it happens, the Toluma is making the real defense of the Sucarseco in the action by Toluma's cargo, for Toluma will be adversely affected by a recovery by her cargo from Sucarseco which will increase the Sucarseco's claim in the division of collision damages between the two ships.
It is claimed that these general average contributions cannot be recovered in full...
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