Horn v. Cia de Navegacion Fruco, SA

Citation404 F.2d 422
Decision Date01 April 1969
Docket NumberNo. 22167.,22167.
PartiesHeinrich C. HORN, Claimant of the M/S HEINZ HORN, Appellant, v. CIA de NAVEGACION FRUCO, S. A. and J. R. Atkins, d/b/a Alabama Fruit and Produce Company, Appellees. CIA de NAVEGACION FRUCO, S. A. and J. R. Atkins, d/b/a Alabama Fruit and Produce Company, Appellants, v. Heinrich C. HORN, Claimant of the M/S Heinz Horn, Appellee.
CourtUnited States Courts of Appeals. United States Court of Appeals (5th Circuit)

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John H. Tappan, Mobile, Ala., for appellants.

Rae M. Crowe, W. Boyd Reeves, Mobile, Ala., for appellees.

Before RIVES, GEWIN and GODBOLD, Circuit Judges.

Certiorari Denied April 1, 1969. See 89 S.Ct. 1272.

RIVES, Circuit Judge:

Upon petitions for rehearing filed by the respective parties, the original opinion and decision of this Court are withdrawn and changed so as to read as hereinafter set forth. In other respects the petitions for rehearing are denied.

Substitute Opinion and Decision

All parties have appealed from the decree rendered in four consolidated admiralty cases.1 These disputes arose from the time charters of two sister ships for the transport of bananas, and the subsequent delivery of some parts of the banana shipments in excessively ripened condition.

Cia de Navegacion Fruco, S.A. (Fruco) chartered from Heinrich C. Horn (Horn) two refrigerated vessels for the carriage of bananas between Ecuador and the Gulf Coast of the United States. The M/S HEINZ HORN was chartered April 30, 1962, under a time charter patterned after the New York Produce Exchange Charter Party.2 A similar time charter was executed by the same parties, on May 15, 1962, affecting the M/S MARIE HORN. J. R. Atkins, president of Fruco, and its principal shareholder is guarantor for Fruco on both charters.

Two libels for cargo damage arose from two of the voyages under the HEINZ HORN charter, voyage no. 1 and voyage no. 4. That vessel was delivered under charter to Fruco on June 3, 1962, at Mayaguez, Puerto Rico. She proceeded to Puerto Bolivar, Ecuador, to commence her initial voyage under the charter. En route to Puerto Bolivar, pursuant to Fruco's request, the vessel took on Daniel Christian, Fruco's representative, who was inexperienced in the banana trade and who was placed on board the HEINZ HORN to observe and to learn.

The vessel arrived in Puerto Bolivar June 10, 1962. Loading of bananas commenced June 11 and was completed early on June 13, under the supervision of Chief Mate Schultz. Apparently no cargo other than bananas was loaded. The master of the vessel, Captain Rudolph Horn, signed two clean bills of lading for the cargo on June 12, 1962. Atkins, doing business as Alabama Fruit and Produce Company (Alabama Fruit) had previously furnished letters of credit covering this cargo and the sale was completed, f. o. b. Ecuador, on June 12, 1962.

The HEINZ HORN sailed from Puerto Bolivar early on the morning of June 13, directed toward Mobile, Alabama, with its cargo consigned to Alabama Fruit. Captain Horn left the ship at the Panama Canal due to illness; Chief Mate Schultz became acting master. He and the second mate were thereafter the only officers aboard; a normal complement of officers was a captain and three mates.

The vessel docked in Mobile on the night of June 21. When unloading commenced the next morning, many of the bananas were found to be ripe or ripening to such an extent that they were of no use to the importer. The greater damage was in the number two hold where the bananas had been packed in boxes. Damage was less severe in the number one hold, where the bananas had been stowed by the stem, as well as in boxes.

Under the terms of the charter party, the HEINZ HORN was to sail on the orders of Fruco, the charterer. Fruco did not issue a sail order to depart from Mobile until June 29. During the period between unloading of the cargo from voyage no. 1 and that re-sail date, the vessel went on dry dock for inspection for slightly more than one day; the dry-dock time admittedly was at the expense of Horn, as owner. Upon arrival in Puerto Bolivar for the second voyage, the HEINZ HORN stood by for two days awaiting bananas for loading. The vessel's delay in leaving Mobile occasioned the absence of any bananas ready for loading in Ecuador. Fruco has treated those two days, as well as the period after arrival in Mobile, as being a period of off-charter, and it has declined to pay the charter hire for those times, amounting to a total of $5,594.39. Additionally, Fruco and Atkins, its guarantor, have withheld payment of charter hire in the amount of $25,946.76, as a result of Atkins' claim for bad cargo.

The events surrounding the second, third and fifth voyages of the HEINZ HORN under Fruco's charter produced no issue for this litigation.3 Voyage no. 4 produced another delivery of excessively ripened bananas to Atkins, d/b/a Alabama Fruit. The HEINZ HORN was loaded with bananas at Guayaquil, Ecuador, on September 2 and 3, 1962. This shipment of bananas was loaded by the stem; none were in boxes. Both holds were utilized. The masters of the vessel at that time, Captain Heinz Freytag, rejected a large number of bananas brought to the ship, on the ground that they were too far along in the ripening process to be shipped. Captain Freytag signed a clean bill of lading for 8,170 stems, consigned to Alabama Fruit, and the ship sailed the morning of September 3. En route to Mobile, some two days out from Guayaquil, the master jettisoned 335 stems of bananas, after inspecting the holds and finding these stems to be so far along in the ripening process as to "infect" the remainder of the cargo.

The HEINZ HORN docked in Mobile on September 11. Unloading commenced the following morning. Many stems of bananas were found to be too ripe to sell. The remaining bananas were sold at a reduced rate due to their ripened condition.

The HEINZ HORN made one further voyage under the charter with Fruco. On September 21, 1962, Alabama Fruit, through Atkins, notified Horn's agent that it felt "it best for you to take the ships back and cancel the charter at the end of the present voyage." In that letter, Atkins referred to a telephone conversation to that effect between himself and Horn's agent, purportedly held that same day. Subsequently, Fruco sent a confirmation telegram to the Horn agents.4

The MARIE HORN was redelivered to the owner on September 27; she had been chartered for a minimum period of four months, or until November 12, 1962. Thus her redelivery was some 46 days prior to the expiration of the minimum time. The HEINZ HORN charter was for a minimum three-month period, which expired September 3. Redelivery of that vessel to the owner was effected October 3. HEINZ HORN went on hire for another charter October 4. MARIE HORN had been booked September 3 for delivery to another charterer October 1.

Libel was filed by Fruco, as charterer, against HEINZ HORN and Horn with regard to the first voyage. Atkins, d/b/a Alabama Fruit, subsequently joined in that libel. Atkins filed a similar libel against the same respondents with regard to voyage no. 4, to which Fruco was added by amendment as a party libelant. Horn filed two separate libels, as owner of the HEINZ HORN and of the MARIE HORN, respectively, seeking charter hire allegedly due on each vessel. In connection with the first libel, filed as a result of voyage no. 1, the HEINZ HORN, after being put under seizure, was released under bond of $40,000.

The district court, after consolidation, awarded Atkins $31,261.64 for cargo damage resulting from voyage no. 1, and $18,495.73 for cargo damage with regard to voyage no. 4, or a total of $49,757.37. Horn was awarded a total amount of $30,864.71. This included $25,946.76 for charter hire withheld as security for cargo damage on voyage no. 1, $3,651.29 for charter hire for time HEINZ HORN was tied up in Mobile after voyage no. 1, and $1,266.66 for charter time due for the two days HEINZ HORN lay awaiting cargo in Puerto Bolivar prior to voyage no. 2. Interest of 6% per annum was granted on each award, to date from relevant dates. All parties have appealed. We affirm in part and reverse in part.

I.

The delicate nature of bananas necessitates special care in transportation. Bananas customarily are cut in a hard green state and are shipped under such refrigeration as will delay the ripening process. The ripening temperature for bananas is generally a pulp temperature of 60 to 62 degrees Fahrenheit. Banana shippers regard a transport temperature of 53 to 55 degrees Fahrenheit as appropriate. Temperatures below 52 degrees Fahrenheit have a deleterious chilling effect on the fruit. The general effort is to transport the bananas at a low temperature, retarding the ripening process, but safely above the level at which the fruit is chilled.

The ripening process of the banana produces several effects on the fruit, including a color change from grass green to yellow, and, ultimately, to brown. Ripening bananas exude, inter alia, ethylene gas and heat, both of which tend to accelerate the ripening of other bananas in proximity. See Lucayan Transports v. McCormick Shipping Corp., 5th Cir. 1951, 188 F.2d 202, 204.

For all of these reasons, a ship properly equipped to transport bananas will provide stowage holds cooled by a refrigeration system which maintains a properly low temperature and which exhausts the heat and gases that encourage ripening.

Usually, prior to taking on a load of bananas, the carrier ship will cool its holds to an appropriate temperature. The cooling system may sometimes be operated during loading, even with the hatches open. Once loading is completed and the hatches are closed, the ship is expected to "pull down" the hold temperature and that of the bananas to the necessary level within approximately eight hours. The maintenance of the proper temperature thereafter depends on a close control of the...

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