The I. C. White

• Decision Date: 05 February 1924
• Docket Number: 2158.
• Citation: 295 F. 593
• Parties: THE I. C. WHITE. THE BLANCHE C. PENDLETON. PAN-AMERICAN PETROLEUM & TRANSPORT CO. v. KENNEALLY.
• Court: U.S. Court of Appeals — Fourth Circuit

295 F. 593

THE I. C. WHITE. THE BLANCHE C. PENDLETON. PAN-AMERICAN PETROLEUM & TRANSPORT CO. v. KENNEALLY.

No. 2158.

United States Court of Appeals, Fourth Circuit.

February 5, 1924

A Howard Neely, of New York City, and H. H. Little, of Norfolk Va. (Burlingham, Veeder, Masten & Fearey, of New York City Hughes, Little & Seawell, of Norfolk, Va., and Chauncey I Clark, of New York City, on the brief), for appellant.

Braden Vandeventer, of Norfolk, Va. (Hughes, Vandeventer & Eggleston, of Norfolk, Va., on the brief), for appellee.

Before WOODS, WADDILL, and ROSE, Circuit Judges.

ROSE Circuit Judge.

In a collision occasioned solely by the fault of the steamship I. C. White, the schooner Blanche C. Pendleton was totally lost. The only question here in controversy is how much her owner is entitled to recover. She was a four-masted schooner, 183.2 feet long, 36.11 feet broad, and 17.5 feet deep. Her gross tonnage was 880; her net, 805. She had a dead weight carrying capacity of from 1,350 to 1,400 tons. She was built at Belfast, Me, and first put in commission in June, 1920. At the time she was under construction, shipbuilding prices were at or about their peak, and she cost $155,000. She was about 19 months old when she went down, and previous to the collision had been in first-class condition.

To what is her owner entitled? Both sides agree that he should get whatever is required to make good his loss. They differ as to the method of determining what that is. Her owner says that, subject to a small deduction for her depreciation during her short life, he should be paid what, at the time she was sunk, it would have cost to replace her. The respondent's view is different. It asserts that between June, 1920, and January, 1922, ships to a greater extent, perhaps, than anything else, had experienced that decline in value which during that period affected so many commodities. It claims that at the time the schooner was sunk, she would have brought in the market less than 25 per cent. of what she cost to build, and that this sum of somewhere between $30,000 and $35,000 is the maximum it can be called upon to pay. Her owner admits that the general rule is that the measure of damages in a case of total loss is the market value of the ship at the time the wrong was done, but it says that this method of arriving at its damage cannot be here applied for two reasons: First, that when she went down, and for an appreciable time before and after, there was no market for ships, and consequently there is no way of finding out what her market value was: second, that, even if buying and selling of ordinary ships had been actively going on, the prices they brought would have thrown no light upon her value, because it insists that she was of such peculiar construction that she was in a class to herself. Her owner claims he had need of precisely such a craft. Her place could not be supplied by any one of the usual types of ships, and it therefore may rightfully insist on receiving such a sum as would have paid the cost of building another like her, giving credit, however, for the gain it would have made by getting a brand new schooner in place of one 19 months old.

These contentions of the owner were accepted by the commissioner charged with the ascertainment of the damage done. He saw and heard many witnesses. He prepared and submitted an elaborate, careful, and learned report, which the District Court confirmed after hearing all the respondent could urge against it. The presumption in favor of his findings is strong. They must stand, unless we are convinced that there is substantial error in them. In awarding damages, the aim is to put the injured party back in the pecuniary position he occupied before the wrong was done. If property has been taken away from him, he should have it or its equivalent restored to him, if that be possible. If things of the kind he has lost are being freely traded in, so that he can go into the open market and buy them, the fair measure of what he should receive is the sum which would purchase articles of the character, quantity, and quality of those taken from him. It is ordinarily so much easier to apply this method of measuring damage, and it is so much less likely to do injustice, that the law insists that it shall be used whenever possible. It governs, not only in the case of standardized commodities, but in such things as ships, in which, perhaps, no two were ever precisely alike, although there are numerous types, the differences between the individual specimens of which are relatively unimportant Dr. Lushington said many years ago:

'It is the market price which the court looks to, and nothing else, as the value of the property;' i.e., ship. ' It is an old saying that the worth of the thing is the price it will bring."' The Clyde, Swaby, 23.

The law is still the same as it was in his day. It is unnecessary here to repeat the full and critical examination of the decided cases and the opinions of the text-writers, made a decade ago, by the Circuit Court of Appeals for the Ninth Circuit (Alaska Steamship Co. v. Inland Navigation Co., 211 F. 840, 128 C.C.A. 366), and which has recently been brought down practically to date by the Circuit Court of Appeals for the Second Circuit in The Cushing, 292 F. 560.

The market value yardstick cannot be applied to a ship of so peculiar construction that, while it profitably serves some need of its owner, nobody else has occasion for it. If it were offered for sale, it would very probably bring little more than its junk value. In such case, its owner would be entitled to the cost of its replacement less depreciation, if the evidence showed that it was earning for him a fair...