The opinion of the court was delivered by: CAMPBELL
CAMPBELL, District Judge.
By order of this Court, dated February 6, 1939, the two Admiralty causes Numbers 15,576 and 15,578 were consolidated under the title hereinbefore set forth.
This is a suit by the Isbrandtsen-Moller Company, Inc., a New York corporation, against the Norwegian Motorship Toledo, in rem, and Wilh. Wilhelmsen, alleged to be the owner, and against the Tankfart corporations, the actual owners, in personam. Wilh. Wilhelmsen is managing owner, but not the actual owner. The Tankfart corporations are the actual owners.
Respondents have appeared and security has been given to cover a decree against them, as well as against the ship.
The said respondents are Norwegian corporations, and do not have offices or places of business in the Eastern District of New York, but had chattels or personal property within the Eastern District of New York consisting of the Norwegian Motorship Toledo.
The libellant is seeking recovery on two distinct claims, (1) as time charterer of the ship and (2) as bailee and assignee of the cargo.
It is necessary to keep clearly in mind the two different capacities in which libellant sues, and I will, therefore, consider them separately in their order.
The charterparty, which was on the Government-New York Produce Exchange time form for the carriage of a full cargo on a single trans-Atlantic trip from ports north of Hatteras named by the charterer (Philadelphia, Chester and New York) to continental European ports in the Hamburg-Havre range (London, Antwerp and Rotterdam), governs the relations between the charterer and the shipowner.
The charterparty recites that "hull and machinery and equipment" are "in a thoroughly efficient state" and provides that the owners "agreed to let, and the charterers agreed to hire the said Steamship from the time of delivery for one transatlantic trip" as hereinbefore described. "Charterers to have liberty to sublet the Steamer for all or any part of the time covered by this Charter, but Charterers remaining responsible for the fulfillment of this Charter party". The vessel is to be delivered North of Hatteras "being on her delivery * * tight, staunch, strong and in every way fitted for the service * * *, to be employed in carrying, lawful merchandise, including petroleum or its products, * * * in such lawful trades, between safe port and/or ports * * * in the voyage described above."
Paragraph 1 of the charterparty provides, among other things, that the owners shall "keep the Steamer in a thoroughly efficient state in hull, machinery and equipment for and during the service".
Paragraph 15 provides: "That in the event of loss of time from deficiency of men or stores, fire, breakdown or damages to hull, machinery or equipment, grounding, detention by average accidents to ship or cargo, drydocking for the purpose of examination or painting bottom, or by any other cause preventing the full working of the vessel, the payment of hire shall cease for the time thereby lost * * *."
Paragraph 16 provides: "The act of God, enemies, fire, restraint of Princes, Rulers and People, and all dangers and accidents of the Seas, Rivers, Machinery, Boilers and Steam Navigation, and errors of Navigation throughout this Charter Party, always mutually excepted."
Paragraph 19 of the charterparty, I will discuss further on in my opinion.
There was, under the charterparty, a warranty that the Toledo was seaworthy both at the time of the making of the charter, and of the delivery of the ship to the libellant. The Caledonia, 157 U.S. 124, 15 S. Ct. 537, 39 L. Ed. 644; The Carib Prince, 170 U.S. 655, 18 S. Ct. 753, 42 L. Ed. 1181.
The evidence clearly shows that the ship was not seaworthy at these times.
The charterparty was, however, a private contract and not a contract of common carriage, and the relations between the owner and the charterer are not altered if the charterer chooses to put the ship on the berth and offer her to shippers as a common carrier. In this instance the parties were free to contract as they desired, and the agreement they made is not subject to the considerations of Public policy, which limits the agreement of common carriers. The Fri, 2 Cir., 154 F. 333; The G. R. Crowe, D.C., 287 F. 426, affirmed 2 Cir., 294 F. 506; The Oakley C. Curtis, 2 Cir., 4 F.2d 979; The Westmoreland, 2 Cir., 86 F.2d 96; The Nat Sutton, 2 Cir., 62 F.2d 787; The Elizaeth Edwards, 2 Cir., 27 F.2d 747; The Lawrence J. Tomlinson, D.C., 29 F.2d 797.
Considerable testimony was offered in an attempt to show a custom whereby if the interval between the delivery date and the cancelling date is a short one, an inference may arise that a fixed sailing date is contemplated and that therefore very likely the ship is going to be put on the berth on line service. It does not seem to me that the evidence offered sustains that contention, but, in any event, I do not think that this constituted notice to the owner that the ship was to be put on the berth, but even if it was the contract of charter between the owner and libellant was a private contract, and was not affected by the fact that the time charterer might put the vessel on the berth as a general ship. Robinson on Admiralty, page 467.
The charterparty did contain an exception in Paragraph 16, supra, which provided "accidents of * * * machinery, * * * throughout this Charter Party always mutually excepted", but the parties of this suit contend for entirely different constructions of this paragraph.
Libellant contends that the exception last quoted does not eliminate or restrict the shipowners absolute warranty of seaworthiness, nor is it equivalent to the usual and clear clause "warranted seaworthy only insofar as use of due diligence can make the vessel seaworthy".
Respondents contend that every provision of the charterparty is subject to the exception, including the agreement that the ship shall be seaworthy.
It is undoubtedly true that the implied warranty of seaworthiness will only be excluded by expressed terms in the contract, so clear as not to admit of any such construction.
It has likewise been held that where the exception is included with many others that relate to the ship during its operation, it will be held that the exception limits the implied contract of seaworthiness, only by accidents occurring after the making of the charter. The Caledonia, supra.
The charterparty in question is on the form which has been largely used, and I find no case in which it has been held that Paragraph 16 eliminates the implied warranty of seaworthiness, therefore, it seems to me that the proper construction is, that the ship and its owner are relieved from accidents occurring to machinery, after the making of the charterparty, even if the ship was unseaworthy at the time of the making of the charterparty and the delivery of the vessel to the charterer. The reference in the charterparty to the Harter Act, 46 U.S.C.A. § 190 et seq., to give the ship the benefit of that Act's defenses, does not destroy or weaken the exceptions. The Westmoreland, supra. That, is especially true in this case, where the evidence shows that due diligence was exercised to make the ship seaworthy.
It is contended on behalf of libellant that the fracture of the web of the crankshaft was not an excepted peril of "accidents of machinery" which relieved the respondents of their contractual and unqualified promise in writing to deliver the Toledo to the libellant at the beginning of this voyage on December 15th, 1938, in seaworthy condition.
It is true that there was a fracture of the web of the crankshaft at the time when the ship was delivered to the charterer, and that the breaking was in an area where the material was poor, and had been poor, from the time the ship was built. This defect was a latent defect. Whether the break was originally started by the propeller blades coming into contact with heavy logs in the Mississippi River, or some other cause, the fact is that the crankshaft was used without any knowledge of its defective condition, although examinations of the kind ordinarily made, were made, without showing the fracture of the web of the crankshaft, and the ship endured the voyage from New Orleans to Philadelphia without showing any defect, and this, of itself, would be quite persuasive with the surveyors, as to the condition of the machinery. This is not, in my opinion, the same as a ship which suffers from gradual decay, but this fracture of the web of the crankshaft took place after the commencement of the charter and while the ship was on its way from Philadelphia to New York, and the fracture of the web of the crankshaft was an accident to machinery. The Miranda, L.R. 3 A. & E. 561.
The libellant, as time charterer, is entitled to an adjustment of hire and bunkers as of the time of the breakdown, as provided by paragraph 15, supra.
In any event, the libellant, as time charterer, could not recover anything in addition to the adjustment of hire and bunkers, except lost freight, which could be only as to the apples, but, even if they were entitled to any recovery, other than that provided in Paragraph 15 supra, which is the stipulated and exclusive measure of damage, there ...