Lucayan Transports v. McCormick Shipping Corp., 13218.

• Decision Date: 18 April 1951
• Docket Number: No. 13218.,13218.
• Parties: LUCAYAN TRANSPORTS, Limited, v. McCORMICK SHIPPING CORP. McCORMICK SHIPPING CORP. v. LUCAYAN TRANSPORTS, Limited. THE J. G. MacRALLON.
• Court: U.S. Court of Appeals — Fifth Circuit

188 F.2d 202 (1951)

LUCAYAN TRANSPORTS, Limited, v. McCORMICK SHIPPING CORP.

McCORMICK SHIPPING CORP. v. LUCAYAN TRANSPORTS, Limited.

THE J. G. MacRALLON.

No. 13218.

United States Court of Appeals Fifth Circuit.

April 18, 1951.

Cody Fowler, Walter Humkey, Miami, Fla., for appellant.

Douglas D. Batchelor, David W. Dyer, Miami, Fla., for appellee.

Before HOLMES, BORAH and RUSSELL, Circuit Judges.

BORAH, Circuit Judge.

This proceeding in admiralty originated in the district court upon a libel filed by McCormick Shipping Corporation against the vessel J. G. MacRallon, her engines, boilers, tackle, apparel, and equipment, to recover advance charter hire paid by libellant under a charter which it rescinded, and for damage to a cargo of bananas. In a cross-libel Lucayan Transports, Ltd., the respondent and claimant owner, seeks damages, claiming wrongful rescission of the charter. The parties will be referred to as libellant and respondent.

On July 23, 1947 libellant entered into a time charter with respondent for the steamship J. G. MacRallon for a period of twelve months at $15,800 per month, of which charter hire $30,800 was paid prior to delivery of the vessel. When the charter was executed the MacRallon was in the process of being converted to a refrigerated banana carrier. The charter was on the regular Baltic and International Maritime Conference Uniform Time-Charter form and contained the following warranty: "Vessel is equipped with adequate insulation and refrigeration machinery for carrying bananas. Four carrier units will deliver high humidity air of 52 to 54 degrees to the holds in such volume as to maintain a hold temperature of about 55 degrees. Diffusers will be so connected that alternate units may be used in emergency to offset breakdown of other alternate units. The refrigeration system will be sufficient to allow for insurance coverage of cargo at a reasonable premium rate. Provided owners have exercised due diligence in maintaining refrigeration machinery and equipment, owners shall not be responsible for losses and damage to cargo resulting from break-down of said machinery or equipment, howsoever, or wheresoever occurring."

The MacRallon was delivered to libellant on November 14, 1947, and she was directed to proceed to Puerto Barrios, Guatemala, where loading of a cargo of bananas for the account of libellant's agent, Southeastern Terminal & Steamship Company, was commenced on November 20th. When loading was completed on the morning of November 22nd, the vessel proceeded on her initial trip to Miami, arriving there in the afternoon of November 25, 1947. On arrival, because of congestion at libellant's docks, the MacRallon was directed to tie up temporarily at the Causeway Terminal. Shortly thereafter Southeastern's assistant manager came aboard and looked over the deck cargo, inspected such of the fruit as he could see in the various holds by removal of the hatch covers and took pulp temperatures of the fruit. These tests disclosed temperatures ranging from 64 to 75 degrees. Sixty degrees is a ripening temperature for bananas and in refrigerated cargoes normally there should be only a difference of one degree between space and pulp temperatures. Here the variation was between six and eighteen degrees. Despite the foregoing, and though he also observed some yellow fruit, Southeastern's representative was not apprehensive as to the condition of the cargo. He explained that the bananas which he saw and pulped were immediately beneath the uninsulated hatch covers and in contact with the uninsulated hatch coamings, where high temperatures and accompanying ripening were to be expected. But the truth of the matter is that the hatch covers were insulated; the hatch coamings did not extend downward below the deck proper; and the bananas were between two and three feet below the underdeck level.

On the evening of November 27, libellant's vice-president ordered the escape hatches closed, save for a small crevice of about one-quarter inch.¹ This was done notwithstanding the known presence of ripe fruit and CO2 gas and obviously this did not help the situation. Bananas are an extremely delicate fruit and those produced in Guatemala are generally considered to be the most difficult to successfully handle in transit. Having the lowest carrying qualities, they must be cut in a green state when they are about three-fourths developed. In the beginning they consist of about 75% water and 25% starch and in the chemical process of ripening the starch changes to sugar. In this process the fruit generates heat and exudes CO2 gas and as the ripening of the fruit progresses the gas and heat given off hastens the ripening of other bananas in proximity. Once started, this ripening process is difficult if not impossible to stop because the gas has no way of escaping from the holds except in small quantities.

On November 26, the MacRallon was moved to Southeastern's docks but there were insufficient railroad cars available for transshipment and the vessel could not be unloaded. On the following day the small deck cargo was unloaded. On November 28, unloading of the hold cargo was begun and discharge was completed on the following day. When unloaded, because of its ripening condition, the cargo produced only 2,863 saleable stems and on November 29th these stems were shipped by rail to Washington, D. C. Upon arrival, some seventy-two hours later, they were rejected by the consignee and disposed of at salvage, yielding only a small return.

On November 28, libellant notified respondent that it was rescinding the charter and promptly thereafter filed the present libel, seeking judicial sanction of the rescission and return of the $30,800 charter hire which it had paid. For a second and separate cause of action libellant alleged delivery of the cargo of bananas in good order and condition to the MacRallon, unseaworthiness and improper equipping and outfitting of the vessel, and the bad outturn of the cargo at Miami by...