OF NELSON & CO. v. United States, 10816.

• Citation: 149 F.2d 692
• Decision Date: 21 May 1945
• Docket Number: No. 10816.,10816.
• Parties: O. F. NELSON & CO., Limited, v. UNITED STATES.
• Court: United States Courts of Appeals. United States Court of Appeals (9th Circuit)

149 F.2d 692 (1945)

O. F. NELSON & CO., Limited, v. UNITED STATES.

No. 10816.

Circuit Court of Appeals, Ninth Circuit.

May 21, 1945.

Farnham P. Griffiths, Charles E. Finney, and McCutchen, Thomas, Matthew, Griffiths & Greene, all of San Francisco, Cal., and Bigham, Englar, Jones & Houston, of New York City, for appellants.

Frank J. Hennessy, U. S. Atty., and Esther B. Phillips, Asst. U. S. Atty., both of San Francisco, Cal., and Arnold Knauth, Atty., Department of Justice, of Washington, D. C., for appellee.

Before DENMAN, HEALY, and BONE, Circuit Judges.

DENMAN, Circuit Judge.

This is an appeal from a decree in admiralty holding the appellee is not liable for injury to and loss of appellants' cocoa beans while being transported by the appellee on or about January 29, 1942, in the harbor of Pago Pago of the Samoan Island of Tutuila, on appellee's Navy's wooden lighter, from appellee's Customs warehouse to the steamer Jupiter.

The cocoa beans were an import from British Samoa and held for transshipment to California where they would again enter the Customs' custody. It was admitted that the beans were held in the Customs warehouse not as a favor extended by the Navy but under the law of the United States requiring it to collect the import tariff on them or confine them until transported to another port of entry. While in the custody of the United States it collected a warehouse charge, also imposed by law.

The Jupiter was operated for the appellee and as appellee's agent and as such was to carry the cocoa beans under commercial bills of lading, previously prepared under appellee's direction, to the port of entry at San Francisco, California.

The burden was upon the appellants to sustain their contention that appellee's carriage was as a common carrier. Since they have failed to make such proof, we hold that appellee carried the cocoa beans as a private carrier and that the burden of proof is upon appellants to show appellee's violation of its obligation as such carrier. However, certain inferences and legal conclusions are to be drawn from the following facts:

(1) That the cocoa beans were in the possession of the appellee in the Customs warehouse of appellee awaiting export, for which the owners of the beans were obligated to the appellee to pay a warehouse charge. Appellee, bailee, was therefore under an obligation to appellants to exercise its best efforts to protect the beans from loss or damage in the war emergency hereafter discussed.

(2) It is admitted that the cocoa beans were in good condition at the time the appellee, as a private carrier bailee, received them from the shippers and that the injury to them occurred while in the carrier's possession during their carriage.

(3) It is admitted that the lighter in which the beans were carried was unseaworthy and that the unseaworthiness was the physical cause of the loss.

(4) While there was no express warranty of seaworthiness of the lighter, there is always an implied warranty of the carrier that the vessel in which the carriage is to be made is seaworthy — an obligation as much on a private carrier as on a common carrier. Commercial Molasses Corporation v. New York Barge Corporation, 314 U.S. 104, 110, 62 S.Ct. 156, 86 L.Ed. 89.

We hence approach this case with the facts showing that the loss of the cocoa beans arose from an admitted breach of the warranty of seaworthiness. To this appellee's contention is that it was excused from inspecting the hull of the lighter to discover her unseaworthiness because of the circumstances arising from the war with Japan and the reasonable military apprehension that the Japanese fleet would attack the Samoan Islands and particularly the harbor of Pago Pago during the period in which the cocoa beans were being transported in the lighter — a defense which under an ordinary bill of lading is provided in the usual clause excepting loss from "The Act of God, enemies, pirate, robbers or thieves, by land or sea, arrests or restraints of princes, rulers or people, * * *."

All the testimony as to the occurrences causing the damages sued for is by deposition. The Samoan Islands were and are under military control and the appellants were unable to produce any witnesses of the facts leading to the admitted loss of the cocoa beans. Appellee cargo carrier recognized that appellants' cargo so was in its possession as a merchant carrier under the prepared bills of lading and that the court could draw all relevant inferences of fact adverse to it that could be drawn from the failure to produce evidence of the relevant happenings at Pago Pago so within its sole control. The law is summarized in Commercial Molasses Corporation v. New York Barge Corporation, supra, 314 U.S. 110, 111, 62 S.Ct. 161, 86 L.Ed. 89, as follows:

"The burden of proof in a litigation, wherever the law has placed it, does not shift with the evidence, and in determining whether petitioner has sustained the burden the question often is, as in this case, what inferences of fact he may summon to his aid. In answering it in this, as in others where breach of duty is the issue, the law takes into account the relative opportunity of the parties to know the fact in issue and to account for the loss which it is alleged is due to the breach. Since the bailee in general is in a better position than the bailor to know the cause of the loss and to show that it was one not involving the bailee's liability, the law lays on him the duty to come forward with the information available to him. The Northern Belle, 9 Wall. 526, 529, 19 L.Ed. 746; Gulf, C. & S. F. Ry. Co. v. Ellis, 8 Cir., 54 F. 481, 483; Pacific Coast S.S. Co. v. Bancroft-Whitney Co., 9 Cir., 94 F. 180; The Nordhvalen, supra, 6 F.2d 883 at page 886. If the bailee fails it leaves the trier of fact free to draw an inference unfavorable to him upon the bailor's establishing the unexplained failure to deliver the goods safely. Southern Ry. Co. v. Prescott, supra 240 U.S. 632, 640, 36 S.Ct. 469, 60 L.Ed. 836; cf. The America, D.C., 174 F. 724."

To sustain its obligation so to go forward with the facts showing its absence of fault in the loss of the cargo, appellee has produced the depositions of two witnesses. At the hearing of the appeal, appellee supplemented its testimony with two frank admissions of fact to us, of which the findings and opinion below show no evidence that they were made at the district court hearing. These admissions, later considered, are valuable to the appellants and which it would be an injustice to them for us to ignore.

The only other witness is a ship loading expert produced by appellants, whose uncontradicted testimony concerned the simple calculations of the carrying capacity of the lighter whose dimensions were given by appellee's witnesses. Appellants produced no witness with personal knowledge as to the condition of the lighter when it began its loading of the cocoa beans or of the happenings leading to their loss. This, although the testimony shows the lighter just prior to the loading was in the possession of an unnamed naval officer and that one of the boss stevedores was the native governor of Tutuila and another a native of unusual intelligence. All the persons controlling the lighter were under the higher commanding Naval officer in charge of the discharge and ballasting and loading of the fleet of several vessels arriving at Pago Pago, of which the Jupiter was one.

The admissions at the hearing of this appeal, above referred to, are (1) that the sacks of cocoa beans, as bill of lading cargo to be placed in the Jupiter's after hold, were also desired there to aid the ballasting of the Jupiter — that is to aid the trim of the ship by bringing her stern down,¹ and (2) that the distance from the point on the wharf where the lighter was loaded was not over 300 feet from the No. 5 after hold of the Jupiter, alongside which the lighter was to lie in discharging her sacks of cocoa beans. This although appellee's scaled drawing of the warehouse and the Jupiter shows the distance could have been somewhat greater.

In this situation this admiralty appeal is before us under the rule of this circuit stated in The Ernest H. Meyer, 9 Cir., 84 F.2d 496, 501:

"* * * In such a case, and where all or substantially all of the evidence pertinent to the finding is given by deposition, the presumption of its validity is of lesser weight and more easily may be rebutted. The Natal, 9 Cir., 14 F.2d 382, 384: `The rule that findings of fact are entitled to great weight in an appellate court is modified where, as here, they are based wholly upon depositions.'"

In this connection the district court's opinion and findings and conclusions of law give no consideration (1) to the inferences necessarily to be drawn from the failure to produce the evidence of the commander of the port, who had overall charge of the planning, inspection and use of the lighter facilities of the port, responsible for their inspection, or of any person under him, prior to the arrival of the Jupiter and the other vessels. As to these lighters there was, first, appellee's naval obligation to inspect them before the arrival of the vessels to insure their safe discharge and, second, appellee's carrier's obligation to inspect for the seaworthiness of the lighter to carry the cocoa beans safely to the Jupiter for her ballast and cargo. Nor (2) did they consider the fact that the admitted unseaworthiness of the lighter causing the loss violated the appellee's warranty as a private carrier. Nor (3) did they consider the jurisdiction of the court over the appellee's sovereign person to adjudicate the appellants' claim against it, a question which underlies all that was done by that court.

All damage to and loss of this cargo occurred through the unseaworthiness of appellee's lighter due to her seams opening through exposure to the sun of her wooden sides below her load line. Lieutenant Commander Crumpacker frankly...