Erlbacher v. Republic Homes Corporation

• Decision Date: 26 January 1959
• Docket Number: No. 16050.,16050.
• Citation: 263 F.2d 217
• Court: U.S. Court of Appeals — Eighth Circuit
• Parties: Robert W. ERLBACHER and Mrs. Mabel Erlbacher, d/b/a Missouri Dry Dock & Repair Company, Appellants, v. REPUBLIC HOMES CORPORATION, Appellee.

263 F.2d 217 (1959)

Robert W. ERLBACHER and Mrs. Mabel Erlbacher, d/b/a Missouri Dry Dock & Repair Company, Appellants, v. REPUBLIC HOMES CORPORATION, Appellee.

No. 16050.

United States Court of Appeals Eighth Circuit.

January 26, 1959.

Stephen N. Limbaugh, Cape Girardeau, Mo. (Rush H. Limbaugh and Limbaugh & Limbaugh, Cape Girardeau, Mo., were with him on the brief), for appellants.

Paul A. Gaudet, New Orleans, La. (Deutsch, Kerrigan & Stiles, Brunswick G. Deutsch, New Orleans, La., William S. Stone, New Orleans, La., Milton I. Goldstein and Goldstein & Price, St. Louis, Mo., were with him on the brief), for appellee.

Before JOHNSEN, VOGEL and MATTHES, Circuit Judges.

VOGEL, Circuit Judge.

We are concerned here with a suit in admiralty for the loss of a yacht called Mermaid II. Republic Homes Corporation, owner of the yacht, appellee herein, alleged in its libel and complaint by which the action was started that the loss of Mermaid II was due to fire caused by an explosion while the vessel was in the appellants' dry dock for repairs; that such loss was due solely to the negligence and incompetence of the appellants and their employees and agents. Judgment was found for Republic Homes Corporation in the sum of $10,000.00 plus interest and costs.

The testimony indicated the following: In October, 1955, the yacht Mermaid II, while proceeding down the Mississippi River, ran aground near Cape Girardeau, Missouri, and thereby sustained substantial damage. It was towed to the appellants' shipyard at Cape Girardeau, where negotiations were entered into for its repair. In addition to taking care of the damage resulting from the grounding, appellants, at the request of the appellee, made certain other repairs. The yacht was left in the exclusive care and custody of the appellants. All repairs were not completed until December 15, 1955. On December 14, 1955, appellants' yard superintendent reported the imminence of completion to appellee's secretary-treasurer, Warren J. Durkin, and directed attention to the danger of damage by ice if the yacht was left there. Durkin was unable to make the trip and accept the yacht at that time, so it was agreed that a test run and redelivery was to be made after the Christmas holidays. It was understood, however, that because of the danger of ice the appellants would not be responsible for damage caused thereby. A man employed by the appellants was to go on board each day, entailing a labor cost, the amount of which was to be determined later. Appellee agreed to accept delivery of the yacht on January 7, 1956.

On January 5, 1956, appellants' yard foreman boarded Mermaid II to ascertain what cleaning should be done before the yacht was to be delivered to its owner on January 7, 1956. He failed to inspect the engine compartment, although he knew that an open-face radiant electric heater had been placed between the engines to keep them from freezing during cold weather and that that compartment had been closed for an extended time. He sent two laborers aboard to scrub down the decks. One of the laborers heard the sound of a motor running. He saw a stream of water being discharged through a hull fitting leading from the engine compartment in the outboard side of the vessel as she lay moored at appellants' yards. He investigated and found the odor of very strong fumes and noticed liquid spewing in the vicinity of a small motor. Being inexperienced and not knowing what to do, he went ashore and reported to the foreman, who directed him to turn off the electric power, which the appellants had undertaken to furnish from shore. The foreman failed to determine what motor was running or whether the laborer, whom he knew to be inexperienced, was aware of how or where to shut off the power. The laborer returned to the yacht and while looking around in the wheelhouse in an effort to find out where to shut off the power an explosion occurred, followed by fire. As a result Mermaid II became a total loss.

After holding that jurisdiction existed by virtue of 28 U.S.C.A. § 1333, the trial court concluded:

2. At the time of loss the Mermaid II was in the exclusive custody and control of respondents. It is well settled that owners of a shipyard who take a vessel into their custody and control are bailees. As such, the loss of the yacht while in respondents' custody and control raised a presumption of negligence on their part.

3. Respondents offered no proof to indicate that anything other than their own negligence led to the explosion, and the resulting loss, of Mermaid II.

4. The loss of Mermaid II was caused by the negligence of respondents.

Appellants' primary contention on the question of liability is to the effect that after the completion of the repairs the character of the original bailment changed and appellants thereupon became gratuitous bailees. In support of such contention, appellants cite cases involving gratuitous bailments, such as the leaving of valuables with a hotel after having paid for lodgings and having checked out. There being no compensation to the bailee, the rule that the hotel would be required to respond only for any loss in event it acted without good faith or the loss occurred through gross negligence on its part was applicable. Such cases are not appropos here. The court specifically found on substantial testimony that the repairs were completed in mid-December, 1955, but that the appellee agreed to accept delivery after the Christmas holidays and that in the interim the appellants agreed that they would continue to care for the yacht, excepting that they would not be responsible for damage caused by ice in the river. Durkin testified:

"That it was there and they would take care of it until we got there, that the repairs were finished and they would take care of it until we got there. With reference to charges for the care of the vessel during that time, Mr. Connolley stated that to put a man on board every day would entail a labor cost. The statement was that we would worry about that when the time came. I agreed to accept delivery of the yacht the 7th of January."

The appellants, having taken Mermaid II into their exclusive care and custody, became bailees. While the evidence may be somewhat conflicting, the court's determination that the appellants would continue to care for the yacht until it was called for after the Christmas holidays and that the bailment therefore continued, excepting that the appellants would not be responsible for damage caused by ice in the river, is based upon substantial testimony and must be accepted here. Higgins v. Kitterman, 8 Cir., 1958, 257 F.2d 861; Wilson v. New York Life Insurance Co., 8 Cir., 1958, 250 F.2d 649. That evidence indicated that at the time of the explosion the appellants had equipment aboard the yacht. They sent an employee on board daily to inspect. A charge was to be made therefor. Two of their laborers were actually engaged in cleaning up the yacht at the time of the explosion. We think that there can be no doubt but what the relationship of bailor and bailee for their mutual benefit, which began in October, continued and was in existence at the time of the explosion.

Under these circumstances, the rule governing the liability of the bailee would appear to be clear. Excepting as to damage caused by ice, which was specifically excluded, the bailment created a duty on the part of the appellants to exercise due care to see that the yacht be not damaged or destroyed. The burden of establishing negligence on the part of the bailee was, of course, on the bailor and that burden did not change through the trial. Proof that the yacht was delivered to the bailee in good condition and was damaged while in the exclusive possession and control of the bailee, however, established a presumption of negligence. Thereafter it became necessary, if the bailee would overcome that presumption, to go forward with the evidence and show that due care was exercised. Judge Learned Hand, in Alpine Forwarding Co. v. Pennsylvania R. Co., 2 Cir., 1932, 60 F.2d 734, 736, stated the rule thusly:

"The bailor, upon proving the bailment and injury, is entitled to the benefit of a presumption of fault which the bailee must meet by showing, either how the barge was injured, or that however that was, it was not due to his neglect. Cummings v. Pennsylvania R. Co., 2 Cir., 45 F.2d 152; Schoonmaker Conners Co. v. Lambert Transp. Co., 2 Cir., 268 F. 102."

Mr. Chief Justice Stone, speaking for the Supreme Court in Commercial Molasses Corp. v. New York Tank Barge Corp., 1941, 314...