Hewlett v. Barge Bertie, In Rem Evelyn

• Decision Date: 28 November 1969
• Docket Number: No. 12671.,12671.
• Parties: Latham B. HEWLETT, Appellant, v. BARGE BERTIE, in rem, TUG EVELYN, her engines, etc., in rem, and C. G. Willis Co., Inc., in personam, Appellee.
• Court: U.S. Court of Appeals — Fourth Circuit

418 F.2d 654 (1969)

Latham B. HEWLETT, Appellant, v. BARGE BERTIE, in rem, TUG EVELYN, her engines, etc., in rem, and C. G. Willis Co., Inc., in personam, Appellee.

No. 12671.

United States Court of Appeals Fourth Circuit.

Argued December 3, 1968.

Decided November 28, 1969.

Morris H. Fine, Norfolk, Va., (Fine, Fine, Legum & Fine, Norfolk, Va., on brief), for appellant.

R. M. Hughes, III, Norfolk, Va. (Seawell, McCoy, Winston & Dalton, Norfolk, Va., on brief), for appellee.

Before HAYNSWORTH, Chief Judge, and SOBELOFF and BRYAN, Circuit Judges.

ALBERT V. BRYAN, Circuit Judge:

Computation of pecuniary damages recoverable for a ship's injury in a maritime collision centers this cause. The minim of the injury here, however, obscures and tempts neglect of the importance of the issue.

Without dispute, the facts are that barge BA-1401, afloat and made fast alongside a pier in the Elizabeth River at South Norfolk, Virginia, on September 28, 1960 was struck by another barge then in tow of tug Evelyn. The offending towboat and tow were libeled by Latham B. Hewlett, owner of the BA-1401, for reimbursement of the injuries alleged to have been sustained by his barge. As claimant of the attached or arrested accused vessels, C. G. Willis Co., Inc., answered.

Waiving the traverse in the answer, the respondents confessed negligence at trial and relied exclusively on absence of injury. The admiralty court only allowed the libelant "the sum of $1.00 by way of nominal damages" with costs. He appeals.

The basis of the decision was that as the BA-1401 had been declared a constructive loss two years before, the District Court was of the opinion that a subsequent injury could not sustain a claim. The declaration followed upon her misfortune on November 11, 1958, when she foundered in Chesapeake Bay near the mouth of the Potomac River. See Hampton Roads Carriers, Inc. v. Allied Chemical Corp., 329 F.2d 387 (4 Cir. 1964). Raised and refloated by the present libelant as contractor-salvor in June 1959, the repair and recovery cost of the barge was estimated to exceed both her 1958 purchase price of $40,000.00 and current insurance of $45,000.00. In these circumstances she was released to Hewlett in satisfaction of his claim for services. After $1305.76 was expended upon her in temporary repairs, such as leak stoppages, she was brought to Norfolk.

The barge was used or useable for carrying pilings or logs — weather-proof cargo. She was engaged on one occasion as a pontoon or caisson in lifting a steamer from the river bottom. In this task the barge was allowed to fill, settle beside the sunken ship and then attached to her. When pumped out, the barge's buoyancy brought the steamer to the surface.

Admittedly, the barge had no market value as an instrument of navigation and could be sold only for scrap. The skin of the barge was not pierced in the collision, and the only mark of impact was a dent in her starboard side. It produced no harmful effect upon the barge's seaworthiness or carrying capacity.

Our concern is the acceptance by the instance court of the respondent's defense to the damage claim, i. e. "the barge was a constructive total loss and that no real or actual damages have been shown, thus restricting the recovery to nominal damages". The decree on review purports to fix "nominal damages", but this is in reality a dismissal of the libel, for admiralty does not recognize nominal damages. Herbst v. The Asiatic Prince, 97 F. 343, 345 (SDNY 1899, opinion by Judge Addison Brown). Presently, the Court stated, "We find no precedent for allowing damages where a vessel, deemed a constructive total loss, suffers still further damage." Apparently, the award of $1.00 was the product of this proposition. It is, we think, an untenable postulate; if accepted, it could result in unjust deprivations.

Actually, the case does not commence with the barge as a constructive loss, as the admiralty judge believed. True, that was her status more than a year previous, but only as between the owner and the salvor. Even this, however, was not a decree of outlawry. She was not a derelict, to be jostled about with impunity. Indeed, as a sheer-hulk she had a demonstrated utility for the libelant. Slightly more than a year previous, to repeat, $1305.76 had been expended in restoration. The accused tugboat and tow cannot escape liability by recall of the past ill luck of the BA-1401. Nor are they relieved by showing that she has not suffered in utility value or in market value.

To illustrate, although an automobile through age or misfortune may have no value in the market save for scrap, and although still another nick in its paint or shape may not appreciably reduce the usefulness or dollar-value of the car, nevertheless its checkered career and disreputable appearance do not assure absolution to one who negligently further scars the vehicle. The owner is entitled to have the automobile free of even that dent. De minimis non curat lex does not, semble, apply to damages but only to injury. Fullam v. Stearns, 30 Vt. 443, 455 (1857).

"Restitutio in integrum" is the precept in fixing damages, and "where repairs are practicable the general rule followed by the admiralty courts in such cases is that the damages assessed against the respondent shall be sufficient to restore the injured vessel to the condition in which she was at the time the collision occurred; * * *" The Baltimore, 8 Wall. 377, 75 U.S. 377, 385, 19 L.Ed. 463 (1869)¹.

The workable guides to this end, generally stated, are these. If the ship sinks and is beyond recovery, the damages are her value just before she sank, plus interest thereon until payment. If she is not a complete loss and repossession or repairs are both physically and economically feasible, then the reasonable cost of recovery, including repairs and an allowance for deprivation of use, is the measure. But if the reclamation expense including repairs exceeds the ship's just value at the time of the casualty, or if repairs are not both physically and economically practicable, then it is a constructive total loss, and the limit of compensation is the value plus interest. O'Brien Bros. v. The Helen B. Moran, 160 F.2d 502 (2 Cir. 1947).

The case at bar comes closer to the second category — the loss was not complete, repairs were physically practicable, but the question remains whether they were economically so. The answer depends on whether the repair cost was more than the value of the barge. Libelant has shown a fair estimate for the repairs to be between $2895.00 and $3000.00. If this expense was beyond the fair and reasonable monetary value of the vessel to the owner, then the recovery is limited to such value. Cf. The Nyland, 164 F.Supp. 741, 743-744 (D.C. Md.1958).

When, as here, the tortfeasors assert that the value is less than the cost of repairs, they have the burden to establish that fact. The respondents have failed to do so. Consequently, the case stands on the proof of the repair cost, and the libelant is entitled to a decree in that amount.

The District Court made no finding of value. It merely found that the BA-1401 had no value save for sale as scrap, but this is not the equivalent of fixing a figure of value. Moreover, it is erroneous. It is refuted by the other uncontested findings of her continuing utility.

Apparently, the chief factor influencing the District Judge in this determination was the absence of any market for the sale of the barge. That problem, however, cannot justify withholding all value from libelant's vessel. Zvolanek v. Bodger Seeds, Ltd., 5 Cal. App.2d 106, 42 P.2d 92 (1935). The special value to the owner is a consideration of substance. The Nyland, supra, 164 F.Supp. 741.

"It may be that property destroyed or lost has no market value. * * * it does not follow from this, nor is it the law, that the plaintiff must be turned out of court with nominal damages merely." Southern Express Co. v. Owens, 146 Ala. 412, 41 So. 752, 755-756 (1906). If there is no market value, other indicia of value must be looked to. Standard Oil Co. v. So. Pacific Co., 268 U.S. 146, 155, 45 S.Ct. 465, 69 L.Ed. 890 (1925); The President Madison, 91 F.2d 835, 845 (9 Cir. 1937); The I. C. White, 295 F. 593, 595 (4 Cir. 1924). Among other factors is the use value to the owner. As was said in Bishop v. East Ohio Gas Co., 143 Ohio St. 541, 56 N.E.2d 164, 166 (1944):

"Market value is the standard which the courts insist on as a measure of direct property loss, where it is available, but that is a standard not a shackle. When market value cannot be feasibly obtained, a more elastic standard is resorted to, sometimes called the standard of value to the owner. This doctrine is a recognition that property may have value to the owner in exceptional circumstances which is the basis of a better standard than what the article would bring in the open market."

See, too, 12 A.L.R.2d 911, 913.

Even if the cost of repairs be limited to the diminution in value of the ship rather than to her entire value, our decision would, for at least two reasons, not be different. The first point of our conclusion here is that no such values were proved. Beyond that, however, the second point is that in admiralty, the cost of repairs is the equivalent of value-diminution. "Damage less than total loss is compensated by reference to cost of repairs. * * *" Gilmore & Black, Admiralty 436; Pan-American Petroleum & Transport Co. v. United States, 27 F.2d 684, 685 (2 Cir. 1928):

"* * * Strictly the measure of damages in collision is the difference in value between the ship before and after the collision, but the cost of the necessary repairs and the loss of earnings while they are being made have long been regarded as its equivalent. * * *"

Furthermore, the cost of repairs is considered an accurate measure. Diminution in value is always dependent upon an opinion, while repairs are not quite so speculative. This distinction was noted in ...