Trans-Amazonica Iquitos, SA v. Georgia Steamship Co., Civ. A. No. 2411.

• Decision Date: 24 November 1971
• Docket Number: Civ. A. No. 2411.
• Parties: TRANS-AMAZONICA IQUITOS, S. A., Plaintiff, v. GEORGIA STEAMSHIP COMPANY and Georgia-Pacific Corporation, Defendants.
• Court: U.S. District Court — Southern District of Georgia

335 F. Supp. 935

TRANS-AMAZONICA IQUITOS, S. A., Plaintiff, v. GEORGIA STEAMSHIP COMPANY and Georgia-Pacific Corporation, Defendants.

Civ. A. No. 2411.

United States District Court, S. D. Georgia, Savannah Division.

November 15, 1971.

Supplemental Order November 24, 1971.

Edward T. Brennan, Adams, Adams, Brennan & Gardner, Savannah, Ga., for Trans-Amazonica Iquitos, S. A.

Frank S. Cheatham, Jr., Savannah, Ga., for Georgia Steamship Co. Walter C. Hartridge, II, Edwin D. Robb, Jr., Bouhan, Williams & Levy, Savannah, Ga., John T. Kochendorfer, Bigham, Englar, Jones & Houston, New York City, for Georgia-Pacific Corp.

ORDER

LAWRENCE, Chief Judge.

In October, 1968, the Island Sun, bound to Savannah from Trinidad, grounded on a coral reef about a mile and a half east of Cat Island in the Bahamas. She is a constructive total loss. The vessel carried a cargo of lumber. Georgia-Pacific Corporation was consignee of the shipment.

Trans-Amazonica Iquitos had time-chartered the freighter from her owner. It brought suit against Georgia-Pacific and Georgia Steamship Company for the charter hire. The latter is a wholly-owned subsidiary of Georgia-Pacific.¹ It sub-chartered the Island Sun from Trans-Amazonica for the voyage to Savannah.

The action for the hire was subsequently settled. We are concerned here with the counterclaim of Georgia-Pacific against Georgia Steamship Company and Trans-Amazonica for the value of the cargo of hardwood lumber which was badly damaged by salt water.

Georgia Steamship Company contends that it was neither owner, operator, demise charterer, time charterer or substitute carrier of the Island Sun and that there was no privity between it and Georgia-Pacific upon which to predicate liability under the Carriage of Goods by Sea Act. I do not see how it can be maintained that the subsidiary did not occupy a carrier status vis-a-vis the parent corporation. Bills of lading were issued on its printed form to Georgia-Pacific. They recite: "RECEIVED by GEORGIA STEAMSHIP CORPORATION, hereinafter called the carrier, from the shipper hereinafter named, the goods or packages . . ." The fact that Trans-Amazonica was to furnish the master and crew and was in control of the vessel does not relieve Georgia Steamship Company of its contractual obligations as carrier.

Georgia Steamship Company's main defense at the trial was the clause of the Carriage of Goods by Sea Act which says that neither the carrier nor the ship shall be responsible for loss or damage arising by the neglect or default of the master or servants of the carrier "in the navigation or in the management of the ship." 46 U.S.C.A. § 1304(2)(a).² The evidence focused on whether the Island Sun ran aground as a result of the selection by the master of an unsafe course past Cat Island. Georgia Steamship Company claims that it is exempt because of faulty navigation by her master. Trans-Amazonica adopts the same line. Georgia-Pacific maintains that the evidence does not show negligent navigation but, on the contrary, sustains the theory that the Island Sun drifted on the reef after power failure.

To recover for damages to cargo the shipper or consignee need prove no more than that the goods were received by the carrier and were not delivered. Georgia-Pacific produced the bills of lading and proved non-delivery. This established a prima facie case for recovery and shifted to the carrier the burden of proving that the shipment was lost through some cause for which it is exempted from liability. Commercial Molasses Corp. v. New York Tank Barge Corp., 314 U.S. 104, 62 S.Ct. 156, 86 L.Ed. 89; Edmond Weil, Inc. v. American West African Line, 2 Cir., 147 F.2d 363; Bunge Corp. v. Alcoa S. S. Co., D.C., 133 F.Supp. 311; Daido Line v. Thomas P. Gonzalez Corp., 9 Cir., 299 F.2d 669; Dods Shipping Limited of Nassau v. Karobi Lumber Company, 5 Cir., 397 F.2d 570; Schroeder Bros., Inc. et al. v. The Saturnia and Italia Societa Anonima Di Navigazione, 2 Cir., 226 F.2d 147; Interstate Steel Corp. v. S. S. "Crystal Gem", D.C., 317 F.Supp. 112.

Burden of proof is of crucial significance since we are left to surmise and speculation as to what happened to the Island Sun. After she stranded, the crew was taken to Nassau. The owner, Avgi Shipping Company, would not allow them to discuss the matter. From the Bahamas, the master and seamen evaporated into thin air as far as this case is concerned. For aught I know, these seafaring Greeks have voyaged to the nethermost reaches of the river Lethe upon whose banks they drink the waters of forgetfulness about the events near Cat Island on or about October 3, 1968. They have left us with a mystery of the sea somewhat reminiscent of the brigantine Mary Celeste which was found in the Atlantic off Spain in 1872 abandoned by a crew which was never seen or heard from again.

At the conclusion of the trial I held the case open in order to ascertain whether the Island Sun sent out any distress signals and whether the Bahamian equivalent of the coast guard made any investigation or report as to her stranding. I am informed that there is no evidence of radio signals nor an official investigation. I also gave Georgia-Pacific the opportunity to depose a resident of Cat Island who apparently saw the vessel go on the reef. However, nothing developed along that line. In trying to solve this maritime mystery I have only circumstantial evidence and opinions.

Emanuel Perera, an employee of Georgia Steamship Company, is master of a vessel plying between Savannah and South America. He testified that the direct and safest course from Trinidad is through Mona Passage to about latitude 20 and thence on a direct course to Savannah. This carries a vessel 120 to 135 miles east of Cat Island. Captain Perera said that the Island Sun was far off her proper course. Another witness for Georgia Steamship Company was John W. Bachrach, a marine surveyor who holds a master's license. He testified that a prudent course would have taken the vessel about 120 miles east of Cat Island.

Thomas Newman who was a witness for Georgia-Pacific was formerly master of a vessel and had sailed these waters for twenty years. He testified that he had navigated five to ten miles east of Cat Island which is a prudent course depending on the weather. Three to five miles out the depth is 25 to 30 fathoms. At that point, it drops precipitately to 2,000 to 2,500 fathoms. The Island Sun is 217 feet in length and has a draft of about 14 feet. Mr. Newman who is now a marine surveyor surveyed the Island Sun after she stranded. He concluded that there had been a loss of power and that the vessel had drifted in sideways on her port side. He deduced this from tracks left by the ship in scraping along the coral heads. She was facing southwesterly. Her two bow anchors were out and were in vertical position, indicating that they were lowered after the freighter ran aground. The current sets westward in this area at a speed of nearly ½ knot. The compass was in good order. The Island Sun was equipped with radar and a radio-direction finding apparatus. There is no evidence as to the time of day she stranded. Cat Island is a conspicuous landmark because of its hilly terrain.

Trans-Amazonica was in far better position than Georgia-Pacific to ascertain and explain what happened off Cat Island. It is the carrier's burden to explain the loss of the goods. The Vallescura, 293 U.S. 296, 304, 55 S.Ct. 194, 79 L.Ed. 373. "It is almost impossible for the shipper to prove that the carrier was negligent or lacked due diligence because as a practical matter all evidence on those issues is in the carrier's hands." Encyclopaedia Britannica, Inc. v. S. S. Hong Kong Producer, 2 Cir., 422 F.2d 7, 16. Failure to produce an important witness in an admiralty case may raise an inference that his testimony would have been unfavorable to a party by whom he should have been called. O. F. Shearer & Sons v. Cincinnati Marine Service, Inc., 2 Cir., 279 F.2d 68; The Alpin, D.C., 23 F. 815. I must conclude that had explanation been forthcoming it would not have been helpful to Georgia Steamship Company and Trans-Amazonica. They have failed to carry the burden of proving that the exemption as to navigational error relieves them.

Since the trial they appear to have shifted the emphasis of their defense away from the navigation exemption. They continue to rely on such exception but now there is more concentration on that part of COGSA which says that "Neither the carrier nor the ship shall be liable for loss or damage arising or resulting from unseaworthiness unless caused by want of due diligence on the part of the carrier to make the ship seaworthy * * *." 46 U.S.C.A. § 1304(1).

Georgia Steamship Company and Trans-Amazonica argue that "seaworthiness" speaks of the time of sailing and not afterward and that the obligation to exercise "due diligence" exists only before and at the beginning of the voyage. Poor on Charter Parties and Ocean Bills of Lading, § 65, p. 166; 46 U.S.C.A. § 1304(1); Isbrandtsen Co. v. Federal Ins. Co. et al., D.C., 113 F.Supp. 357. They argue that the burden is on Georgia-Pacific to show that the Island Sun was unseaworthy when she left Port of Spain and that such condition was the precipitating cause of her stranding. Since nothing in the way of evidence to that effect was produced by Georgia-Pacific it is contended that no burden ever arose on the part of Georgia Steamship Company (or Trans-Amazonica) to prove the exercise of due diligence to make the vessel seaworthy.

There are at least two troubles with this argument. First, there is no satisfactory evidence that the Island Sun was seaworthy when she sailed from Trinidad, a fact which was up to the carrier and owner to establish. Further, I disagree with the contention as to where the burden of proof lies in respect to showing diligence. It is not on the cargo owner. Both the statute and case law make it clear that the persons...