Newport News Shipbuilding & Dry Dock Co. v. United States

• Decision Date: 01 July 1929
• Docket Number: No. 2685.,2685.
• Citation: 34 F.2d 100
• Parties: NEWPORT NEWS SHIPBUILDING & DRY DOCK CO. v. UNITED STATES.
• Court: U.S. Court of Appeals — Fourth Circuit

34 F.2d 100 (1929)

NEWPORT NEWS SHIPBUILDING & DRY DOCK CO. v. UNITED STATES.

No. 2685.

Circuit Court of Appeals, Fourth Circuit.

July 1, 1929.

Roscoe H. Hupper and F. H. Skinner, of Newport News, Va. (Burlingham, Veeder, Masten & Fearey, Chauncey I. Clark, and Ira A. Campbell, all of New York City, E. M. Braxton, of Newport News, Va., and P. Fearson Shortridge, of New York City, on the brief), for appellant and cross-appellee.

F. R. Conway, Asst. Admiralty Counsel, U. S. Shipping Board, of Washington, D. C., and H. H. Rumble, Sp. Asst. to the Atty. Gen. (Paul W. Kear, U. S. Atty., of Norfolk, Va., J. Frank Staley, Sp. Asst. to the Atty. Gen., and Arthur M. Boal, Admiralty Counsel, U. S. Shipping Board, of Washington, D. C., on the brief), for appellee and cross-appellant.

Before WADDILL, PARKER, and NORTHCOTT, Circuit Judges.

NORTHCOTT, Circuit Judge.

This is an appeal by Newport News Shipbuilding & Dry Dock Company from an interlocutory decree in admiralty, entered October 6, 1927, in the District Court for the Eastern District of Virginia, in favor of United States of America, holding the shipbuilding company liable on the ground of negligence for the damages sustained by the United States by reason of a fire on board the steamship America, on March 10, 1926, while the ship was undergoing repairs at the yard of the company at Newport News. A cross-appeal from the decree was taken by the United States.

The parties will be hereinafter referred to as the United States and the shipyard.

The United States, owner of the steamship, America, desired to have certain repairs made on the vessel, and advertised for bids under specifications. The bids when received were found to be for a greater sum than the owner wished to pay for the repairs, and the specifications were changed and a readvertisement was had. The respondent shipyard was low bidder in both instances, and secured the contract for a much less sum than it had bid under the first specifications.

The first specifications required the carrying, by the shipyard, of insurance on the hull of the vessel, while under repair, in the sum of $2,000,000. The premium on a commercial insurance policy for that sum, protecting both the owner and the contractor, was $5,000, and that sum was included in the first bid of the shipyard. The second set of specifications, among other changes, included this provision as to insurance:

"Sheets No. 13, No. 14, and No. 15, Article X of the Contract Form are revised to the extent that the Owner will continue the present hull, machinery, and equipment insurance upon the vessel during the period the vessel is at the Contractor's yard, but the Contractor will be required to place at its own expense a Builder's Risk Insurance for the amount of this contract, and for such of the owner's material removed from the vessel, or as may be placed in storage at the Contractor's plant."

The shipyard eliminated the $5,000 item in its second bid, and the United States got the benefit of that sum.

The contract was awarded to the shipyard, and a contract, dated January 4, 1926, was signed in writing. The pertinent parts thereof are set out in the able opinion of the learned judge below, and are as follows:

"Article X.

"Protection and Insurance.

"1. The Contractor shall at all times provide protection adequate in the judgment of the General Manager of the United States Lines, or other duly authorized representative of the United States Lines, to protect fully the vessel, the work and all of the property of the United States Lines at Contractor's plant or on the vessel, provided, however, that the exercise of judgment by the General Manager of the United States Lines or other duly authorized representative of the United States Lines provided for in this paragraph, and protection furnished by the Contractor in accordance therewith, shall not release the Contractor from any liability or responsibility it may be under, irrespective of the provisions of this paragraph and howsoever arising.

"2. Without limiting by the provisions hereof any liability of the contractor, howsoever arising, it is understood that from the delivery of the vessel to the Contractor until its re-delivery to the United States Lines, after the completion of the work or while the work hereunder is being performed, the Contractor shall be responsible for and protect and save harmless the United States of America, the United States Shipping Board, the United States Shipping Board Emergency Fleet Corporation, the United States Lines and the vessel, against all losses (provided, however, that the United States Lines will continue the present hull, machinery and equipment insurance upon the vessel during the period the vessel is at the Contractor's yard, but the Contractor shall, at its own expense, protect the United States Lines through a Builder's Risk Insurance, for the amount of this contract, and for such of the United States Lines' material removed from the vessel, or as may be placed in storage at the Contractor's plant), accidents, injuries and/or damages of any nature to the vessel (except demurrage which is provided for hereinunder and provision relating to liquidated damages) and/or the vessel's equipment and/or its cargo and/or its movable stores and/or to the crew or property thereof, through any act or default or neglect of the Contractor, and/or of any of the Contractor's agents or employees, or in any other case where losses, accidents, injuries or damages shall have been due to causes within the control of the Contractor, or where such losses, accidents, injuries or damages could have been prevented by the Contractor by the exercise of a degree of care exhibited in high grade repair yard practice, including (but not limited by such specific mention, the generality of this requirement), the following precautions:

"The Contractor shall take precaution to protect the ship from fire in every possible way, including the prompt removal of rubbish, care in the use of inflammable materials and torches, care of electric wiring, strict prohibition against smoking, and in all other ways to prevent fires and add to the safety of the ship. The United States Lines reserves the right to permanently refuse admittance to the ship, or expel therefrom any of the Contractor's employees who violate the rules laid down from time to time to carry out the intent of these clauses.

"The Contractor shall maintain an efficient system of inspection over the activities of welders, acetylene burners, painters and similar workmen employed by him under this contract, so as to minimize the danger of fires occurring through carelessness or otherwise. He shall have at all times while such work is in progress, a line of fire hose, under pressure, available in each section involved and at least one man on duty at all such times solely for the purpose of operating this hose in emergency. In addition, the Contractor will provide chemical fire extinguishers in ample quantities (and sand boxes or other approved oil fire extinguishers and at all locations where directed) to supplement the hose protection. Wherever steel plates are being burned through under this specification, adequate provision must be made to prevent sparks coming in contact with inflammable material; and the Contractor will be required to adopt such other reasonable measures in this connection as may be directed by the United States Lines.

"Wherever a rivet forge is being used over a wood deck, it shall be set in a tight, shallow, metal-lined pan, at least four feet by five feet to protect wood deck from cinders, coals and hot rivets. If, in spite of this precaution, burned spots occur on the deck in the vicinity of the rivet forges, contractor shall patch or replace the deck in a suitable manner approved by United States Lines' representative, to remove such burns.

"3. For the purpose of this contract, the vessel shall be considered as having been delivered to the Contractor when access thereto has been afforded the Contractor, whether the vessel be at the Contractor's plant, at anchor in a stream or harbor, tied up at a wharf, dock, pier, loading or discharging berth, in dry dock or elsewhere and in whatever condition; and for the purposes of this contract, the vessel shall be considered as being in the possession of the Contractor until the work hereunder shall have been completed to the satisfaction of the United States Lines, irrespective of where or in what condition the vessel may be. Completion of this contract shall include the removal from the vessel of all the Contractor's tools, equipment, etc., and all rubbish.

"4. The Contractor shall at its own expense protect and save harmless the United States of America, the United States Shipping Board Emergency Fleet Corporation, the United States Lines, and the vessel, from all claims and liabilities ordinarily covered by proper casualty or liability insurance, and Workmen's Compensation Insurance. It is expressly understood that the workmen engaged upon the work hereunder shall at all times be employees of the Contractor and/or sub-contractors, and not of the United States of America, or of the United States Shipping Board, or of the United States Shipping Board Emergency Fleet Corporation, or of the United States Lines.

"5. The Contractor shall be responsible for the safety and proper keeping of materials, equipment and supplies furnished by the United States Lines for the purpose of being installed in the vessel or used in the work. In the event of loss or damage to such materials or supplies after being furnished by the United States Lines and before being installed or used, the Contractor shall replace the articles or repair the damages at his own expense."

Paragraphs 6, 7, 8, 9, and 10 are omitted as immaterial.

"11. The United States Lines reserves the right to maintain at its own expense, officers, watchmen and crew on board the vessel who shall be...