Federazione Italiana Dei Cors. A. v. Mandask Compania de V.

• Decision Date: 16 January 1968
• Docket Number: Docket 31131.,No. 141,141
• Citation: 388 F.2d 434
• Parties: FEDERAZIONE ITALIANA DEI CORSORZI AGRARI et al., Plaintiffs-Appellees and Appellants, v. MANDASK COMPANIA DE VAPORES, S. A., Defendant-Appellant and Appellee.
• Court: U.S. Court of Appeals — Second Circuit

388 F.2d 434 (1968)

FEDERAZIONE ITALIANA DEI CORSORZI AGRARI et al., Plaintiffs-Appellees and Appellants, v. MANDASK COMPANIA DE VAPORES, S. A., Defendant-Appellant and Appellee.

No. 141, Docket 31131.

United States Court of Appeals Second Circuit.

Argued October 25, 1967.

Decided January 16, 1968.

Edward L. Smith, New York City (Kirlin, Campbell & Keating, Walter P. Hickey, and David A. Nourse, New York City, on the brief), for plaintiffs-appellees and appellants.

David C. Wood, New York City (Hill, Betts, Yamaoka, Freehill & Longcope, Eugene F. Gilligan, and Francis L. Gannon, New York City, on the brief), for defendant-appellant and appellee.

Before FRIENDLY, KAUFMAN and ANDERSON, Circuit Judges.

ANDERSON, Circuit Judge.

This action to recover for the loss of a cargo of soybean oil was originally tried before the late Judge Archie O. Dawson, who entered judgment in favor of the plaintiffs but limited liability.¹ On appeal, this court reversed and remanded because the findings of fact did not make clear apparent inconsistencies between the issue of defendant's due diligence in making the vessel seaworthy and the issue of limitation of liability² nor were those two issues discussed in the opinion at all.

At the second trial the shipowner defendant denied unseaworthiness, claimed due diligence in its effort to assure seaworthiness of the vessel when it broke ground to put to sea and claimed that any liability should be limited. In addition, as it did in the first trial the defendant relied principally upon the defense of fire, not caused by the design or neglect of the owner, as provided in the fire statute, 46 U.S.C. § 182, and in the fire exception of the Carriage of Goods by Sea Act (COGSA), 46 U.S.C. § 1304(2) (b) (1958). Judge Croake concluded that the fire had nothing to do with the loss of the vessel and cargo, that the ship was unseaworthy, that the owner had not shown due diligence in making the ship seaworthy, and he denied limitation of liability.³ We affirm.

The trial court made detailed findings of fact and it is not necessary to do more than summarize them for the purpose of this opinion. The tank vessel Perama was built in 1936 for the American Oil Co. After remaining idle for almost two years in a very run-down condition, she was sold in 1956 to the defendant-appellant, who put her in the yard of the Alabama Drydock and Shipbuilding Company for reconditioning, renewals and repairs, which cost $890,000. After this work had been completed and between January 18, 1957 and March 9, 1957, she carried a cargo of gas oil from Houston, Texas to Thameshaven, England, and returned in ballast to New Orleans, Louisiana. There she went into the Todd Shipyard for repairs, most of which were to remedy some small cracks which had appeared in the transverse bulkheads. The Perama then went to Baton Rouge, Louisiana, where she loaded the cargo in suit for carriage to Genoa, Italy. She left Baton Rouge on March 15, 1957 for the Gulf of Mexico. En route she was required to anchor for two hours to repair her steering gear. When out in the Gulf at 1400 on March 17, the Perama hove to after shutting down her engines to effect repairs to the lubricating oil pump in her engine room. At about 0130 on March 18th, before the repairs had been fully completed, fire and smoke were observed in the area of the tanker's after pump room and after cofferdam, accompanied by an explosion-like sound. The Captain noted in the log that the fire was put out by 0240, although some smoke still remained. At 0315 a second explosion-like noise occurred, with considerable vibration in the stern of the ship. There were no evidences of fire or smoke coinciding with or following this sound, but a diagonal crack, three to four feet long, appeared in the hull in the engine room. The fissure ran down to the floor of the engine room and sea water poured through it and up through the floor plates. A vertical crack of about the same length also appeared in the forward bulkhead of the engine room. This bulkhead was also the after side of the port fuel tank, and through the crack a mixture of water and fuel oil also discharged into the engine room. There was also evidence that sea water was entering through a crack in the pump room. Before leaving the tanker, the Perama's Captain observed another crack in the after deck on the starboard hand through which cargo oil was leaking. The court inferred from the trim of the ship until shortly before she sank that cracks had opened up and let in sea water in the forward part of the vessel. In connection with the observed cracks no standard damage control procedures were adopted except for an effort with the pumps to keep ahead of the intake of water, which proved to be ineffective. As sea water flooded the engine room, the Captain ordered the ship abandoned. Distress calls had been sent out by radio, and a vessel which responded, sought to tow the Perama to more shoal water for grounding but at 1631 on March 18th the tanker sank in water too deep for salvage of vessel or cargo.

It is not disputed that the cargo was delivered to the carrier in good order and that subsequently it was entirely lost when the ship sank in fair weather and calm seas. Under these circumstances it is presumed that the loss was occasioned by the unseaworthiness of the Perama. Commercial Molasses Corp. v. New York Tank Barge Corp., 314 U.S. 104, 62 S.Ct. 156, 86 L.Ed. 89 (1941); South, Inc. v. Moran Towing and Transportation Co., 360 F.2d 1002 (2 Cir. 1966); Lekas & Drivas, Inc. v. Goulandris, 306 F.2d 426 (2 Cir. 1962). The defendant-appellant could therefore escape liability only by sustaining the burden of proving one of its defenses⁴ which were that the facts brought the case within the fire exception under the COGSA or the provisions of the fire statute, or that it had exercised due diligence to make the Perama seaworthy before she broke ground and put to sea, or that it was entitled to limitation of liability.

The fire defense was rejected by both of the trial judges who had heard the case. Both found that the loss of the cargo was not caused by any fire or an explosion resulting from fire. Judge Croake found himself in substantial agreement with Judge Dawson's findings concerning the fire and its effect, though we are concerned on this appeal only with the findings and conclusions of Judge Croake.

The appellant's attacks on the findings are for the most part differing interpretations of the evidence of what those present on the vessel heard and observed and did from the time the engines of the Perama were shut down until she sank. This kind of attack resolved itself into a battle of experts who gave sharply conflicting exegeses of the events in the last twenty-seven hours in the life of the vessel. The defendant-appellant argues that a fire of unexplained origin sprang up in the after cofferdam and pump room and heated the fuel oil in adjoining tanks, causing it to vaporize and explode so violently that it opened breaches in the ship's side and let in sea water which sank her. The trial court concluded, however, that the fire did not produce such an explosion. It noted what is a commonly known phenomenon testified to by some of the expert witnesses, that the cracking of steel hull plates or the rending of a steel bulkhead may make a noise like a violent explosion. There was evidence from which the court could have found and did find that the fire was confined to the after cofferdam and pump room; that it did not generate heat of sufficient intensity to vaporize the fuel oil; that the damage to the ship's adjacent internals was not characteristic of that caused by an explosion; that no explosion took place in the fuel tanks; that the flames were subdued in approximately an hour, though the smoke continued a little longer; that the second explosive noise occurred about a half-hour after the flames of the first fire had been put out; and that no fire or smoke coincided with or followed the second noise, but cracks appeared in the hull of the ship and a bulkhead in the engine room. From these and other facts found from the evidence and stated in its opinion the trial court concluded that the fire did not cause the openings in the ship's hull which let in the sea water. We cannot say that it committed clear error in so doing. The conclusion is fully supported by findings based on competent evidence. The court was not bound to accept the interpretations of the appellant's experts as against those of the appellees. Their function was to aid the court, and it was within the province of the court to accept and use only the explanations and opinions which in its judgment were most logical and consistent with the facts it found. The appellant's claimed fire defense did not avail to meet the presumption in favor of the appellees.

The trial court found that the presumption of unseaworthiness not only remained unrebutted but that the greater persuasiveness of the plaintiffs' evidence carried "the claim of unseaworthiness beyond the area of legal presumption and into the domain of evidentiary proof." A great deal of time was consumed in the trial and large parts of the briefs submitted on this appeal were devoted to analyses of the chemistry and structure of steel plates used in various parts of the vessel, the susceptibility of the steel plates made during World War II to brittle fractures due to deficiencies of manganese, and to the improved plates...