Commercial Transport Corp. v. Martin Oil Service, Inc.

• Decision Date: 04 January 1967
• Docket Number: No. 15546.,15546.
• Citation: 374 F.2d 813
• Parties: COMMERCIAL TRANSPORT CORPORATION, Libelant-Appellant, v. MARTIN OIL SERVICE, INC. and Petroleum Sales & Construction Company, Respondents-Appellees.
• Court: U.S. Court of Appeals — Seventh Circuit

374 F.2d 813 (1967)

COMMERCIAL TRANSPORT CORPORATION, Libelant-Appellant, v. MARTIN OIL SERVICE, INC. and Petroleum Sales & Construction Company, Respondents-Appellees.

No. 15546.

United States Court of Appeals Seventh Circuit.

January 4, 1967.

COPYRIGHT MATERIAL OMITTED

Edward B. Hayes, William K. Johnson, Chicago, Ill., for libelant-appellant. Lord, Bissell & Brook, Chicago, Ill., of counsel.

Stuart B. Bradley of Bradley, Eaton, Jackman & McGovern, Chicago, Ill., for respondents-appellees.

Before SCHNACKENBERG, KNOCH and CUMMINGS, Circuit Judges.

CUMMINGS, Circuit Judge.

This is an admiralty proceeding brought by libelant to recover for damage to two of its gasoline tank barges sustained during a fire at respondent's¹ dock on the Sag Canal near Blue Island, Illinois. Respondent filed a cross-libel for damages to its dock and other property. The questions before us are whether libelant or respondent is entitled to any damages, and, if so, the proper measure of damages.

In early December 1957, BA 2003 and BA 2014 were loaded with gasoline in Houston, Texas. These barges were owned by libelant Commercial Transport Corporation ("Commercial"), a Delaware corporation with its principal office and place of business in Texas. Both were rather old steel barges and were pitted and pinholed, having been operated in the brackish waters of the Gulf of Mexico where barges deteriorate rapidly. Before leaving Houston, before and after being loaded with gasoline, the barges were checked by gauging (or measuring) their compartments for their water content. No measurable amount of water was then present.

On December 8, 1957, the two barges were towed by Commercial from Houston, arriving on Peoria Lake, Illinois, on December 21, 1957. At that time, the barges were delivered to Commercial's towboat Davy Crockett, whose crew discovered over a foot of water at the bottom of the No. 3 starboard tank of BA 2003. This meant that there was a hole in the hull of the barge that permitted the water to enter. As the District Court found, the damage to this barge had occurred between Houston and Peoria Lake. Later, it was discovered that the hole in the barge was 35 feet long and up to two inches wide, and about 12 inches above the keel of the barge. With this condition, a "water seal" had formed, with the water inside tank No. 3 under the gasoline cargo high enough to cover the hull hole, preventing further leaking of gasoline therefrom.

On the same day that these barges were delivered to the Davy Crockett, the presence of the excess water in tank No. 3 of BA 2003 was recorded in that towboat's log. Although Coast Guard regulations require a carrier to report serious damages to tank barges,² no such report was made to the Coast Guard. There are five locks between Peoria and the destination dock of respondent Martin Oil Service, Inc. ("Martin"), which is an Illinois corporation with its principal office and place of business in Illinois. Barge 2003 would not have been permitted to proceed through those locks without transferring its cargo to other compartments or to another barge if its unseaworthy condition had been reported to the authorities.

Near Joliet, Illinois, the two barges were delivered to the towboat Spencer, which was supplied by Commercial to deliver the barges to Martin. At 1:30 A.M. on December 24, Commercial notified Martin to expect the barges. The Spencer delivered the barges to Martin's dock near Blue Island, Illinois, at 2:30 A.M. that same morning, without affording Martin any notice of the unseaworthiness of barge 2003. The Spencer departed before Martin discovered that condition. Before its departure, the Spencer took none of the precautions required by the Coast Guard regulations, such as insuring that a qualified officer or licensed tankerman was on duty during the transfer of the gasoline from the damaged barge.³

Between 3:00 and 4:00 A.M., one of Martin's employees, Rex Lantrip, gauged barge 2014 and then barge 2003. The gauging was done with a graduated measuring tape with a weight, or "bob", on the end of it. During the gauging process, Lantrip discovered that tank No. 3 of barge 2003 contained 13½ inches of water, showing that the tank had a hole below the water line of the barge. At that time, this tank was oozing traces of gasoline, occasionally bubbling into the Sag Canal. Lantrip notified another Martin employee, Benedict Opyt, of the condition of tank No. 3. In the unexplained absence of his foreman, Opyt was in charge of unloading these barges. He had been employed as an assistant tankerman for four years, not receiving his license as a tankerman until April 1958. His foreman, Mike Wawczak, was a licensed tankerman and was normally in charge of the barge unloading crew. Upon learning of the leak in tank No. 3, Opyt telephoned Wawczak at his home. Wawczak agreed that the best unloading procedure would be to lighten barge 2003 by first pumping all its tanks except tank No. 3 and then pumping that tank. This was a common procedure for unloading "leakers" such as this barge. Besides notifying Opyt of the excess water in tank No. 3, Lantrip reported it to Martin's Secretary by telephone, and that official authorized the unloading of the two barges.

According to uncontroverted testimony of an expert witness, there was no need to unload these barges immediately upon arrival, for the gas leakage was minimal at that time. However, at 4:25 A.M., Martin began to pump gasoline out of all the tanks of barge 2014. Except for damaged tank No. 3 the pumping of barge 2003 commenced at 4:35 A.M. Before any unloading commenced, Opyt had noticed the bubbling of gasoline from barge 2003's tank No. 3 into the Sag Canal. During the unloading, Opyt checked the depth of the water in starboard tank No. 3 every 15 or 20 minutes. At 6:45 A.M., only four or five inches of water were left in tank No. 3, the barge had risen one foot, and Opyt then looked over the side of the vessel and noticed that this tank was leaking much more gasoline than previously. Despite the presence of a great quantity of gasoline on the canal waters by then, Martin did not call the Coast Guard or the nearby Blue Island fire department. However, at 6:45 A.M., Opyt started pumping tank No. 3 and stopped pumping the other tanks of barge 2003.⁴ This pumping was at maximum speed and was done in conjunction with a second telephone conversation with Opyt's supervisor, foreman Mike Wawczak, at his home. Opyt's call woke Wawczak and was made when Opyt observed all the gasoline flowing from tank No. 3 at 6:45 A.M. It is Commercial's position that Martin should have started pumping tank No. 3 as soon as the water level of that tank had dropped from 13½ inches to 12 inches, thereby breaking the "water seal". This could have been observed by a careful watch of the amount of gasoline leaking from the barge into the Sag Canal, but insofar as the record discloses, there was no observance of the leaking of gasoline from tank No. 3 after Opyt's first observation at 4:35 A.M. until his second observation at 6:45 A.M.

Between 6:30 A.M. and 7:00 A.M., the towboat F. B. Payne, with two barges in two ahead of it, sighted Martin's dock. Soon thereafter, the F. B. Payne and its two passed the two barges at Martin's dock at "dead slow speed". As the F. B. Payne passed these barges, there was a sudden fire on the water, consisting of burning gasoline at the head of barge 2003. The towboat proceeded to South Chicago, although the fire spread completely across the canal and along both sides of the two. The flames were then 8 to 10 feet above the water, but after the two cleared the fire, the flames rose 500 to 600 feet.

The fire, of undetermined origin, occurred at 7:15 A.M. while tank No. 3 was still being pumped. By then, at least 6,485 gallons of gasoline had leaked onto the surface of the Sag Canal. The fire spread to Martin's pumphouse, where the first explosion occurred. Soon thereafter, barge 2003 exploded, later partially sinking. The fire lasted for several hours. As a result, barge 2003 was severely damaged and the companion barge was damaged to a lesser degree. Substantial damage was also inflicted upon Martin's dock and other property. Martin had taken no precautions to prevent this fire. After it broke out, Martin called the fire department of nearby Blue Island. The fire chief of that community had unsuccessfully previously recommended that Martin install certain fire preventive measures. He summoned a Chicago fire-boat to help combat the holocaust.

Prior to this accident, Martin had received other "leakers", although most of them were not leaking as badly as barge 2003. Similar pumping methods had been employed to unload those "leakers" without any ensuing fires. However, Martin normally does not accept barges in the condition of barge 2003 without having the approval of an insurance inspector. No such approval was sought in this instance. Of the barges regularly received by Martin at that time, at least one out of three was a "leaker".

According to Herbert McDonald, another member of Martin's unloading crew, his foreman, Mike Wawczak, who was supposed to be in charge of unloading these barges, did not come to the dock until after the fire started. At that time, Wawczak stated "it wouldn't have happened if they Martin's maintenance crew had done it the way I told them to", apparently referring to his instructions telephoned earlier from his house to Opyt.

The trial court found Commercial and Martin both at fault and allowed neither party to recover. Although Commercial has appealed, Martin has filed no cross-appeal. We agree with the trial court that each party was at fault. However, under well-settled principles of maritime law, Commercial was entitled to recover half its damages.

Commercial's Fault

In reviewing the findings of the admiralty court, the "clearly erroneous" rule governs. In re Rapp's Petition, 255 F.2d 628, 632 (7th Cir. 1958)....