Pacific Atlantic SS Co. v. United States, Civ. No. 6932.

• Decision Date: 26 February 1954
• Docket Number: Civ. No. 6932.
• Citation: Pacific Atlantic SS Co. v. United States, 120 F. Supp. 753 (D. Or. 1954)
• Parties: PACIFIC ATLANTIC S. S. CO. v. UNITED STATES.
• Court: U.S. District Court — District of Oregon

120 F. Supp. 753

PACIFIC ATLANTIC S. S. CO. v. UNITED STATES.

Civ. No. 6932.

United States District Court D. Oregon.

February 26, 1954.

Erksine Wood, John D. Mosser and Wood, Matthiessen, Wood & Tatum, Portland, Ore., for libelant.

Keith R. Ferguson, Sp. Asst. to the Atty. Gen., for respondent.

SOLOMON, District Judge.

Libelant, the bareboat charterer of the S. S. Marquette Victory, is seeking to recover for the cost and time of repairs to the vessel, allegedly resulting from a failure of the propulsion machinery due to latent defects or locked in stresses. Respondent, as owner of the vessel, interposed a number of defenses, one of which is that the libel was not timely filed.

Both parties agree that the libel was filed pursuant to the provisions of the Suits in Admiralty Act, 46 U.S.C.A. § 741 et seq., and that § 5 of such Act, 46 U.S.C.A. § 745, provides in pertinent part:

"Suits as authorized by this chapter may be brought only within two years after the cause of action arises * * *."

They also agree that expiration of the period of statutory limitation bars the remedy and extinguishes the substantive right created by the Act. Alcoa Steamship Co. v. United States, D.C.N.Y.1950, 94 F.Supp. 406, 408.

A finding of when the cause of action arose will therefore determine the jurisdiction of this Court.

The charter party was entered into on July 13, 1950. Part II, Clause 2(b) of such charter contains the provision upon which libelant relies, both for its right of action and for fixing the date of the accrual of this right of action. The pertinent portion reads as follows:

"* * * the owner shall nevertheless be responsible for the cost and time of repairs or renewals occasioned by latent defects in the vessels, their machinery, or appurtenances, or defects due to locked in stresses in the vessels existing at the time of delivery, not recoverable under the terms and conditions of the American Hull form of Policy (American Institute of Marine Underwriters 7/1/41) containing no deductible average clause."

The vessel was delivered to libelant on August 12, 1950, on January 25, 1951, while on a voyage, the main propulsion gears of the vessel failed. By April 1, 1951, all repairs and renewals necessitated by the breakdown were completed. The only available replacement gears were in possession of respondent, and, before supplying these gears for the repair of the S. S. Marquette Victory, respondent demanded that libelant return a similar set of gears. Such similar set was returned on January 18, 1952. On March 7, 1952, libelant was billed $22,203.68 for these replacement gears. Libelant completed its adjustment with its hull underwriters for damages resulting from the failure on May 25, 1952. On August 6, 1952, libelant billed respondent $38,896.13 for the balance of the cost and time of repairs not recovered from its hull underwriters. Respondent denied liability for this claim on January 27, 1953. The libel was filed in this court on April 13, 1953.

Libelant contends that the cause of action did not arise until at least May 25, 1952, when the amount "not recoverable from the hull underwriters was determined and that it did not in fact commence until January 27, 1953, when for the first time respondent breached its agreement to be responsible for the cost and time of the repairs not recoverable from the hull underwriters and refused to pay the amount thereof."

In other words, libelant predicates its right to recover on two alternative theories:

First, Part II, Clause 2(b) of the charter is an indemnity agreement and requires a presentation of libelant's claim to its underwriters and a rejection by such underwriters as a condition precedent to the bringing of any action against respondent.

Second, the cause of action did not arise until the claim was presented to respondent and payment refused, that being the first occasion that the Government breached its contract to pay.

Respondent, on the other...