Interstate Steel Corporation v. SS" Crystal Gem"
| Citation | 317 F. Supp. 112 |
| Decision Date | 16 April 1970 |
| Docket Number | No. 64 AD. 461.,64 AD. 461. |
| Parties | INTERSTATE STEEL CORPORATION, Libelant, v. S.S. "CRYSTAL GEM", her engines, boilers, etc., Sugar Line Ltd., Federal Commerce & Navigation Co., Ltd., Pittston Stevedoring Corporation, Respondents. |
| Court | U.S. District Court — Southern District of New York |
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Hill, Rivkins, Warburton, McGowan & Carey New York City, for plaintiff, Alan S. Loesberg, Vincent J. Ryan, New York City, of counsel.
Healy & Baillie, New York City, for Federal Commerce & Nav. Co., Ltd., Allan A. Baillie, New York City, of counsel.
Bigham, Englar, Jones & Houston, New York City, for Pittston Stevedoring Corp., John L. Quinlan, William P. Kardaras, New York City, of counsel.
Kirlin, Campbell & Keating, Richard H. Sommer, Richard E. Repetto, New York City, for Sugar Line, Ltd.
This suit in admiralty commenced by Interstate Steel Corporation (hereinafter referred to as "Interstate") seeks to recover for damage allegedly sustained to a shipment of 581 coils of hot rolled steel while on board and during discharge from the S.S. CRYSTAL GEM, a vessel owned by defendant Sugar Line Ltd. (hereinafter referred to as the "shipowner"). Trial began on October 22, 1969 and concluded the following day. Post trial memoranda were thereafter submitted by all parties, and at the Court's request proposed findings of fact and conclusions of law were prepared by plaintiff Interstate and defendant Pittston Stevedoring Corporation (hereinafter referred to as the "stevedore"), the discharging stevedore. Having heard testimony, examined the record and exhibits and carefully considered counsels' supporting briefs and applicable authority, the Court makes the following determinations.
1. At all times pertinent hereto, the S.S. CRYSTAL GEM was owned by defendant shipowner.
2. Defendant Federal Commerce & Navigation Co., Ltd. (hereinafter referred to as the "charterer") entered into a time charter of the British flag vessel S.S. CRYSTAL GEM with shipowner, dated April 11, 1963 on the standard Government form, as approved by the New York Produce Exchange.
3. Defendants charterer and shipowner have filed a true copy of this time charter with the Court, and have stipulated that this contract was in existence and governed the relationship between these defendants on the voyage of the S.S. CRYSTAL GEM in September and October 1963.1
4. By Clause 8 of the time charter, it was provided that: "The Captain (although appointed by the Owners), shall be under the orders and directions of the Charterers as regards employment and agency; and Charterers are to load, stow, discharge and trim the cargo at their expense under the supervision of the Captain, who is to sign Bills of Lading for cargo as presented, in conformity with Mate's or Tally Clerk's receipts."
6. Clause 24 of the charter provided that it was subject to the "U.S.A. Clause Paramount" which was to be included in all bills of lading issued thereunder.
7. On August 15, 1963, defendant charterer, as time chartered owner, and The Jordan International Co. (hereinafter referred to as "Jordan") as subcharterer, entered into a charter party to which the bill of lading involved herein refers.2 Clause 33 of this charter party provided that the "U.S.A. Clause Paramount" was to be considered a part of this charter party as though fully incorporated therein.
8. During the term of the charter party with shipowner, defendant charterer directed the vessel to the port of Tampico, Mexico, where it loaded 581 hot rolled steel coils which had been purchased by plaintiff Interstate from the Eastern Steel & Metal Co. of New Haven, Connecticut,3 pursuant to an irrevocable letter of credit dated July 2, 1963.4 The steel had been produced by Altos Hornos de Mexico, S.A., at its mills in Montclova, Mexico.
9. On September 25, 1963, defendant charterer issued a "clean on board" negotiable bill of lading at Tampico, Mexico, indicating that the cargo of 581 hot rolled steel coils were shipped "in apparent good order and condition". The bill of lading was signed by charterer's agents, Representaciones Maritimas, S. A. but not by the Master of the vessel.5
10. The cargo of steel coils was consigned to plaintiff Interstate for carriage to Chicago, Illinois.6
11. In consideration of charterer omitting to clause the bill of lading as follows:
"All cargo loaded from open quai and all coils showing signs of rust in various stages" Jordan agreed to hold charterer harmless from any and all consequences that might arise from the bill of lading not having been claused as indicated.7
12. The steel coils were stowed in the Nos. 2, 3 and 4 holds of the S.S. CRYSTAL GEM.
13. Plaintiff did not inspect the coils prior to the arrival of the vessel at the port of Chicago on October 25, 1963.
14. Prior to the discharge of the cargo by defendant stevedore, which had been employed by defendant charterer to unload the coils, an initial inspection of the cargo in the No. 2, 3 and 4 holds was made by William J. Coakley, a marine surveyor who represented both plaintiff and its cargo insurer, The Hartford Fire Insurance Company of New York,8 and George E. Fanning, a marine surveyor representing the interests of the defendant charterer.
15. The steel coils were bound by two 2-inch-wide bands around the circumference and four bands of about an inch and a quarter in width through the eye and around the coil at 90-degree intervals. In addition, the outer laps at the end of the coils were tack-welded to the next inside lap to protect the edges of the steel from the strapping.9 These bindings provided adequate packaging for the ocean voyage involved herein.10
16. The coils showed no evidence of shifting in stowage.11 There was evidence, however, of some broken bands and small amounts of telescoping and edge crimping which apparently occurred either prior to or during loading of the cargo at Tampico, Mexico.12
17. Additionally, rust in varying degrees was noted on the coils in the No. 2, 3 and 4 holds,13 with excessive rust conditions observed on 42 coils located beneath the hatch coaming of the No. 3 hold.14
18. Samples of steel strapping and paper wrapping material from the excessively rusted coils were submitted by Mr. Coakley to the Factory Standards Laboratory Inc. of Chicago, Illinois, for chemical analysis.15 The Chloride Anion Test performed on these samples revealed a heavy concentration of chloride or salt water present.16
19. A subsequent inspection revealed that the surface of 34 of these coils had been pitted by seawater, a result not attributable to light atmospheric rust.17 This damage was caused by water entering the hatch covers of the No. 3 hold as evidenced by rust streaks on the inner coaming directly above the excessively rusted coils.18
20. With respect to the claim for rust damage, plaintiff seeks recovery only for those coils damaged by seawater rust.19
21. Discharge by defendant stevedore of the 581 coils of hot rolled steel commenced on October 26, 1963 and was completed on the morning of the following day.
22. Both Mr. Coakley and Mr. Fanning witnessed the cargo being discharged.20
23. Stevedore used bare wire slings without the use of spreader bars or other protection to discharge the cargo. An overhead crane rapidly lowered the steel to the dock, which resulted in the coils striking each other and the ground upon impact.21
24. Both Mr. Coakley and Mr. Fanning complained about the improper methods used in discharging the cargo to Mr. Metcalf, defendant Pittston's chief stevedore.22 No corrective action was taken with respect to these complaints, and stevedore continued its negligent discharge of the cargo, which resulted in considerable damage to the coils,23 consisting of deep edge cutting, denting to coil sheets, broken bands and telescoping.
25. Approximately 10 per cent of the total damage sustained by the coils, excluding heavy rusting, occurred prior to discharge.24
26. On October 27, 1969, the Master of the S.S. CRYSTAL GEM objected to the manner in which the coils were being discharged, and notified defendant stevedore in writing of the damage caused by such improper methods.25
27. A joint survey with respect to the ascertainment of damages was held at numerous times in November and December of 1963.26 In attendance were: Mr. Coakley, representing the cargo insurers; Mr. Fanning, representing defendant charterer; Captain F. B. Hunt, representing defendant stevedore; George E. Leithner, representing defendant shipowner; and R. P. Evans, representing plaintiff Interstate.27
28. It was jointly agreed among all the surveyors that 25 per cent of the coils were to be examined and inspected in detail in order to ascertain the damage sustained by all the coils,28 and that this percentage would be applied to the total number of coils.29
29. A tally, based on this agreement, appears in Mr. Coakley's survey report.30
30. Telescoping damage of three inches or less was not considered by the surveyors since the machinery at the particular plant processing the coils could handle a coil telescoped up to three inches.31 In addition, items in plaintiff's claim considered in the category of mill defects, such as edge lamination, were not considered.32
31. The following was determined by the surveyors with respect to damages:
32. The...
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