American Tobacco Company v. Goulandris

• Decision Date: 09 April 1959
• Citation: 173 F. Supp. 140
• Parties: AMERICAN TOBACCO COMPANY, R. J. Reynolds Tobacco Company, and Liggett & Myers Tobacco Company, Libelants, v. Basil GOULANDRIS, Nicholas Goulandris, and Leonidas Goulandris, doing business as "Goulandris Brothers" and General Steam Navigation Company, Ltd. of Greece, Respondents. BANK OF GREECE, Lekas & Drivas, Inc., Pompeian Olive Oil Corporation, and Victor Cory Company, Libelants, v. Basil GOULANDRIS, Nicholas Goulandris, and Leonidas Goulandris, doing business as "Goulandris Brothers" and General Steam Navigation Company, Ltd. of Greece, Respondents. Basil GOULANDRIS et al., Cross-Libelants, v. R. J. REYNOLDS TOBACCO COMPANY and Liggett & Myers Tobacco Company, Cross-Respondents. Basil GOULANDRIS et al., Cross-Libelants, v. BANK OF GREECE, Lekas & Drivas, Inc., Pompeian Olive Oil Corporation, and Victor Cory Company, Cross-Respondents.
• Court: U.S. District Court — Southern District of New York

173 F. Supp. 140

AMERICAN TOBACCO COMPANY, R. J. Reynolds Tobacco Company, and Liggett & Myers Tobacco Company, Libelants, v. Basil GOULANDRIS, Nicholas Goulandris, and Leonidas Goulandris, doing business as "Goulandris Brothers" and General Steam Navigation Company, Ltd. of Greece, Respondents.

BANK OF GREECE, Lekas & Drivas, Inc., Pompeian Olive Oil Corporation, and Victor Cory Company, Libelants, v. Basil GOULANDRIS, Nicholas Goulandris, and Leonidas Goulandris, doing business as "Goulandris Brothers" and General Steam Navigation Company, Ltd. of Greece, Respondents.

Basil GOULANDRIS et al., Cross-Libelants, v. R. J. REYNOLDS TOBACCO COMPANY and Liggett & Myers Tobacco Company, Cross-Respondents.

Basil GOULANDRIS et al., Cross-Libelants, v. BANK OF GREECE, Lekas & Drivas, Inc., Pompeian Olive Oil Corporation, and Victor Cory Company, Cross-Respondents.

United States District Court S. D. New York.

April 9, 1959.

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Bigham, Englar, Jones & Houston, New York City, for libelants and cross-respondents, John W. R. Zisgen, Owen C. Torrey, Jr., New York City, of counsel.

Kirlin, Campbell & Keating, New York City, for respondent, General Steam Navigation Co. Ltd., of Greece, L. de Grove Potter, Michael F. Whalen, Alfred J. Skidmore, New York City, of counsel.

Hill, Betts & Nash, New York City, for respondents and cross-libelants, Goulandris, James E. Freehill, Herbert D. Schedler, Francis P. Kelly, New York City, of counsel.

RYAN, District Judge.

These suits in Admiralty were filed as early as May, 1941; they come before us consolidated for trial in March, 1958. This opinion has been written after reviewing over 20,000 pages of depositions, "condensed" by the proctors into an agreed digest of more than 2,000 pages; truly, the machinery of the law grinds slowly in our human attempts to accomplish justice.

The suits arise out of admitted and undisputed damage to cargo which was carried on the Steamship Ioannis P. Goulandris from Turkish and Greek ports, via the Suez Canal and the Cape of Good Hope, to Norfolk, Newport News and New York on a passage which began in October, 1940 and ended in May, 1941. Much of the factual background and some of the legal problems presented by the suits are similar to those dealt with in prior litigation conducted in this District Court in American Tobacco Co. v. The Katingo, Hadjipatera, D.C., 81 F.Supp. 438, modified and affirmed, 2 Cir., 194 F.2d 449 (certiorari denied, American Tobacco Co. v. Hadjipateras, 343 U.S. 978, 72 S.Ct. 1076, 96 L.Ed. 1370).

The first suit was filed by the American Tobacco Company for damage to four shipments totaling 9,302 bales of tobacco shipped at Izmir, Turkey and consigned to Newport News; by R. J. Reynolds Tobacco Company for damage to five shipments, totaling 18,397 bales of tobacco, 3,600 being shipped at Izmir, the remainder at Cavalla and Salonica, and all consigned to Newport News; and by Liggett & Myers Tobacco Company for damage to one shipment of 5,000 bales of tobacco, shipped at Izmir and consigned to New York. The damages sustained by the shipments involved in this suit are alleged to approximate $1,000,000.

The second suit was filed by Bank of Greece for damage to four shipments, totaling 7,350 bales of tobacco, 4,284 of which were shipped at Salonica, 1,956 at Piraeus, and all consigned to New York; by Lekas & Drivas, Inc. for damage to 315 packages of cheese shipped at Salonica and consigned to New York; by Pompeian Olive Oil Corporation for short delivery of and damage to a shipment of 315 drums of olive oil shipped at Izmir and consigned to New York; and by Victor Cory Company for damage to 500 drums of olive oil shipped at Izmir and consigned to New York. (As against General Steam Navigation Co. Ltd. of Greece, the Cory claim has been dismissed). The damages sustained by the shipments involved in this suit are alleged to exceed $150,000.

The third suit, a cross-libel was filed by the owners of the vessel against R. J. Reynolds Tobacco Company and Liggett & Myers Tobacco Company for contribution in general average to sacrifices of the vessel owners, alleged to have been made during the voyage.

The fourth suit, a cross-libel, was filed by the vessel owners against Bank of Greece and the other libelants in the second suit for the same purpose. The contributions claimed in the third and fourth suits total $184,213.36.

Each libelant had the individual or corporate status ascribed to it in the libels.

Libelants, except Pompeian Olive Oil Corporation and R. J. Reynolds Tobacco Co., were owners at the time of the loss and damage of the shipments with respect to which they have filed suit and are entitled to sue thereon.

Libelant R. J. Reynolds Co. was the party beneficially interested in, and we have found was entitled to sue for the damage for which it claims in the libel.

Proof of the right of libelant, Pompeian Olive Oil Corporation, to sue for damage to the shipments for which it makes claim has been expressly reserved by stipulation for future determination.

Respondents, Basil, Leonidas and Nicholas Goulandris, were brothers, residents of Greece and, at the times relevant, each owned a 30% interest, respectively, in the S.S. Ioannis P. Goulandris. A 10% interest in various shares in the vessel was owned by a number of other persons not parties to the cargo damage suits.

Goulandris Brothers (Hellas) Ltd. is a corporation organized and existing under the laws of the Kingdom of Greece which acted as agents and managers in Greece for vessels owned by the three Goulandris brothers and other persons. The firm of Goulandris Brothers (Hellas) Ltd. managed the vessel on the voyage in suit on behalf of and with the authority of the owners.

Respondent, General Steam Navigation Co. Ltd. of Greece (hereinafter referred to as "Greek Line") is a corporation organized and incorporated in Piraeus in July 1939. "Greek Line" acted as agent for the owners of the vessel for the collection of freight in connection with this voyage.

The S.S. Ioannis P. Goulandris was a 3 island type vessel, having a raised forecastle and poop and a bridge housing amidships. The vessel was a single screw coal-burning cargo vessel of 2,223 net registered tons and 3,750 gross tons, built in 1910 at Stockton, England. She was equipped with Scotch boilers and a triple expansion engine. She was 362 feet long with a beam of 51 feet and a molded depth of 26½ feet, and had a speed of 8 knots, fully loaded, under normal conditions with good weather and good coal.

The vessel was classified 100A1 by Lloyd's in February, 1940.

The vessel had 5 holds, Nos. 1 and 2 and the crossbunker forward of the engine room, and Nos. 3 and 4 aft of the engine room. A 'tweendeck space over the No. 2 hold extended partly over the No. 1 hold and a 'tweendeck space over the No. 3 hold extended partly over the No. 4 hold.

The No. 1 hold was 58 feet long with an after beam of 51 feet, a forward beam of 18 feet 4 inches and a mean depth of 23 feet, 6 inches. The No. 2 'tweendeck extended forward 13 feet 4 inches over the after part of the No. 1 hold.

The No. 2 hold was 76 feet, 6 inches long with a mean beam of 51 feet and a mean depth of 20 feet 6 inches. The No. 2 'tweendeck began 13 feet 4 inches forward of the forward bulkhead of the No. 2 lower hold and extended aft to the wooden thwartship partition consisting of 3-inch thick planking, caulked with cotton and covered with glued paper which divided the after 'tweendeck and main deck hatches in half.

The No. 3 hold was 60 feet long with a mean beam of 51 feet and a mean depth of 20 feet 3 inches. The No. 3 'tweendeck began at the forward bulkhead dividing it from the engine space and extended aft to approximately 14 feet aft of the thwartship bulkhead separating the No. 3 from the No. 4 hold.

The No. 2 and No. 3 'tweendecks were approximately 40 feet wide and 8 feet high.

The No. 4 hold was 59 feet 6 inches long with a forward beam of 49 feet 6 inches, a mean beam of 27 feet and a mean depth of approximately 20 feet. The No. 3 'tweendeck extended over the forward part approximately 14 feet.

The poop was a small compartment with a cubic capacity of 6,222 feet, a height of 10 feet and with a large hatch 14 feet by 11 feet 11 inches.

Each hold had a centerline, removable, wooden bulkhead running fore and aft but not across the square of the hatch. The centerline bulkheads divided the holds into port and starboard halves except for the hatch square. The centerline bulkheads were constructed of 10-inch boards, 2½ inches thick, running fore and aft with spaces between the boards of ¼ to 1 inch. The bulkheads extended in the Nos. 1 and 2 holds from the tank tops to points varying from 1 foot to 3 inches from the undersides of the overhead deck beams. In the No. 3 hold the bottom of the centerline bulkheads rested on top of the shaft tunnel and the section of the bulkhead aft of the hatchway was about 6 feet long with the top about 6 feet from the overhead deck beams because there were no boards in this part. Many of the boards of the centerline bulkheads were broken and chipped, leaving open spaces in the bulkheads.

The Nos. 2 and 3 'tweendecks had centerline, removable, wooden bulkheads constructed like those in the holds running fore and aft, but not across the hatch squares, which divided the 'tweendecks into port and starboard halves. The bulkheads touched the overhead deck beams at some points and at others were separated by at least a foot.

The depth of the vessel's frames in all cargo compartments was 10 inches, to which were attached 1-inch temporary, wooden, cargo battens about 1 foot apart, fastened by means of cleats on the frames. All cargo was thus at least 1 foot from the vessel's skin or shell plates.

There were no permanent wooden ceilings over the double bottom tanks except in the square of the hatch in No. 2 hold. The bottoms of Nos. 1, 2 and 3 holds, except...