The opinion of the court was delivered by: COXE
This is a suit for damages for alleged breach of a time charter, dated August 10, 1937, by which the Norwegian Motor Ship 'Tento' was chartered to the respondent for a period of about twelve months from the time of delivery. The vessel was delivered at Sandefjord Harbor, Norway, on December 31, 1937, and was ordered by the respondent to proceed towards St. John, N.B., and, when five days off from there, to communicate by radio with the respondent at New York for further orders.
Shortly after delivery a small shaft, about 10 inches long and 1 1/8 inches in diameter, belonging to the lubricating oil pump of the No. 1 auxiliary motor, broke. The vessel thereupon put in for repairs at Siggrunn, which was near the shipyard at which the vessel had just been overhauled. The repairs were quickly made, and occasioned a delay, all told, of less than two days and a half, after which the vessel proceeded on her voyage. In the intervening period between the signing of the charter and the delivery of the vessel the charter market had fallen, and the respondent seized upon this minor breakdown to repudiate the entire charter on the asserted ground that there had been a breach of the warranty of seaworthiness of the vessel. The critical question in the case is whether this repudiation of the charter by the respondent was justified.
The suit was commenced in January 1940, but its prosecution was considerably delayed by the war, and the trial did not take place until April 1947, with final submission in July 1947. In the meantime depositions of various foreign witnesses were taken by both sides, and the present record consists mainly of these depositions, supplemented by the oral testimony of expert witnesses and an officer of the respondent at the trial.
The charter was signed on behalf of the owner in the name of E. B. Aaby, and the suit was originally brought in the names of E. B. Aaby and E. E. Aaby's Rederi Aktieselskabet, a Norwegian corporation to which the vessel and the charter had been transferred. In the early stages of the litigation it was discovered that E. B. Aaby had died on November 12, 1936, prior to the execution of the charter, and some doubt was thought to exist as to whether the suit could be maintained in the names of the original libelants. An investigation was accordingly made, as a result of which it was ascertained that on E. B. Aaby's death all of his property had passed to Jenny Aaby, his widow, who continued for a short time to carry on the business in his name, as permitted by Norwegian law, and that in the latter part of 1937 she transferred the 'Tento' and the charter to the corporate libelant. It also appeared that Mrs. Aaby had died on January 7, 1940, leaving three children, to whom all of her property descended, and who became the sole stockholders of the corporate libelant. A supplemental and amended libel was thereupon filed, substituting the three Aaby children as libelants in place of E. B. Aaby, but without disturbing the corporate libelant, and the respondent makes no contention that the present libelants are not fully qualified to maintain the suit.
Under the terms of the charter, the vessel was chartered to the respondent 'from the time of delivery, for about 12 (twelve) calendar months'; there was the usual warranty that on delivery the vessel would be 'tight, staunch, strong and in every way fitted for the service'; and the charter hire was fixed 'at the rate of $ 2.00 (Two) U.S. Cy. per ton on vessel's total deadweight carrying capacity, * * * '.
Clauses 1, 14, 15 and 16, insofar as pertinent, are as follows:
'1. That the Owners shall * * * keep the vessel in a thoroughly efficient state in hull, machinery and equipment for and during the service * * * .'
'14. That, if required by charterers, time not to commence before November 14 1937 and should vessel not have given written notice of readiness on or before December 31 1937 but not later than 4 P.M., Charterers or their Agents to have the option of cancelling this Charter at any time not later than the day of vessel's readiness.
'15. 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; and, if upon the voyage the speed be reduced by defect in or breakdown of any part of her hull, machinery or equipment, the time so lost, and the cost of any extra fuel consumed in consequence thereof, and all extra expenses shall be deducted from the hire.
'16. * * * 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. * * * '
The 'Tento' was a Diesel-engine, twin-screw cargo vessel of 4917 gross tonnage, built at Oslo in 1921, and having the highest class rating in Lloyd's during 1937 and 1938. In the Fall of 1937 the vessel was due for her periodical Lloyd's survey, and for that purpose she was completely overhauled on the shipyard of Framnaes mek Vaerksted A/S at Sandefjord, Norway, between December 15 and December 31, 1937. This shipyard had been in the business of building and repairing ships for about fifty years, and was a large yard with an excellent reputation. During the overhaul, the main engines were repaired, all parts of the machinery were inspected and examined, the lubricating oil pump of the No. 1 auxiliary motor was opened up, cleaned, overhauled and put together again, and the various parts, including the shaft, were found to be in satisfactory condition. This work was performed under the direct supervision of Per Bjorn Roli, Lloyd's surveyor, and Nicolay W. Coch, the owner's consulting engineer, both of whom testified by deposition. After the work was completed, the engines and the auxiliaries were tested under working conditions, and Per Bjorn Roli, Lloyd's surveyor, certified that the 'vessel is in good condition in our opinion eligible to remain as now classed', and issued the usual classification certificates therefor.
Pursuant to the requirement of Clause 14 of the charter, the owner of the 'Tento' gave written notice on December 29, 1937, to Sir William Reardon Smith & Sons (London), Ltd., the respondent's London agent, of the readiness of the vessel for delivery 'Sandefjord, Friday thirty-first December twelve noon with about 240 tons bunkers'. This notice of readiness was apparently relayed by the London agent to the respondent in New York, and on December 30, 1937, the respondent cabled its London agent as follows: 'Tento instruct delivery at outermost point Sandefjord harbor outward pilotage only our account accepting vessel if delivers prior four peem 31st dispatching towards St. Johns (sic) NB radioing Statemarine New York five days off St. Johns (sic) for further orders but if misses cancelling date and hour would preffered release vessel and would consider ourselves fortunate'.
The above cable was received by the London agent at 7:30 A.M. on December 30, 1937, and at 10:30 A.M. on the same day the London agent sent the respondent's representative at Sandefjord a cable reading in part as follows: 'Tento please take delivery on time charter stop vessel to deliver at place we nominate we elect outermost point Sandefjord harbour only outward pilotage our account stop cancelling four peem Friday thirty first if delivers later decline accept stop vessel and machinery must be perfect condition act in conjunction surveyor Ellingers of Oslo whom understand there stop * * * .'
The respondent, in answer to an interrogatory annexed to the libel, stated that there was a fall in the time charter market between the time when the charter was executed and January 3, 1938, of 'fifty cents a tone ...