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MIDDLE EAST AGENCY, INC. v. THE JOHN B. WATERMAN

June 22, 1949

MIDDLE EAST AGENCY, Inc., et al.
v.
THE JOHN B. WATERMAN et al.



The opinion of the court was delivered by: LEIBELL

Libelant, Middle East Agency, Inc. of New York City, was the owner of eleven TD-9 Tractors which were shipped uncrated in good order from Honolulu, T. H. to the port of New York on the S.S. John B. Waterman on March 7, 1947.

Libelant, Frazer Duntile Co., Ltd., of Ottawa, Canada, was the owner of a rock crusher which was shipped in good order (knocked down), in 21 items, on the same vessel for the port of New York. Five large parts of the rock crusher were shipped on skids; other parts were shipped in eleven crates and four cases; and one large piece was shipped as such.

 The eleven tractors and the rock crusher items were stowed in the No. 3 lower hold. They were improperly stowed and were badly damaged on the voyage to New York. Respondents have not really contested the charge of improper stowage.

 The No. 3 lower hold had two deep tanks at the after end. They extended up to the lower 'tween deck. The coamings on the tank hatches had 8 inch vertical plates. The large (9' x 12') steel covers of the two deep tank hatches, in which there was water for ballast, were not dogged down before the ship sailed for New York. There were double bottom fuel oil tanks beneath the floor of the No. 3 lower hold. The manhole covers of the fuel oil tanks were on the floor of the No. 3 lower hold, slightly elevated.

 During a storm on March 25th in the vicinity of Cape Hatteras it was learned that the cargo had shifted in the No. 3 lower hold. The vessel developed a list. On arrival at the Port of New York the No. 3 lower hold was examined and it was found that the tractors and the parts of the rock crusher had broken loose; that the manhole plates on the starboard double bottom fuel oil tank had been sheared off by the shifting tractors and machinery; that an undogged steel cover of the port deep tank had been lifted by the surge of the water in the tank due to the rolling of the vessel and had skidded to the starboard side; that the starboard deep tank cover was in place but not secured; that about 8 feet of water from the port deep tank had spilled over from the 'tween decks down into the No. 3 lower hold and had flowed into the double bottom fuel oil tanks, whose manhole plates had been sheared off; that fuel oil had become mixed with the water and covered the No. 3 lower hold, and broken tractors and the machinery parts, with a heavy oily sludge. Frank E. Bagger, an expert ship and engineer surveyor, who inspected the No. 3 lower hold in New York on April 2, 1947, described it as one of the worse messes he had ever seen. Photographs, Exs. 11A to 11-I.

 All of the tractors were damaged or broken: six were broken in parts; the others were so badly broken that two consisted only of the Diesel power unit, and all that remained of three were small broken pieces. All were covered with fuel. Some of the parts had fallen into the fuel oil tank.

 The cases and crates containing parts of the rock crusher were demolished. No parts of the wooden skids were distinguishable. The machinery was bare. The 21 items of the rock crusher listed in the bill of lading were delivered in 43 pieces. Some of the larger items did not appear to be damaged but all were coated with fuel oil.

 The respondents plead as special defenses that the bills of lading for these two shipments contained express statements that they were subject to the provisions of the Carriage of Goods by Sea Act, 46 U.S.C.A. § 1300 et seq. The First special defense alleges that if the loss resulted from unseaworthiness it was not due to the want of due diligence on the part of the carrier to make the ship seaworthy. T. 46 U.S.C.A. § 1304, subd. 1. The Second separate defense is based on subdivision (2)(a) of Section 1304 and alleges that the damage resulted from the acts, neglect and default of the master or servants of the carrier in the navigation or in the management of the ship. In the Third separate defense, based upon subdivisions (2)(c) and (d) of said section, it is alleged that the damage resulted from perils, dangers, and accidents of the sea and Act of God. The Fourth separate defense, based on subdivision (2)(q) of said section, alleges that the damages resulted from causes arising without the actual fault or privity of the carrier and without the fault of neglect of the agents or servants of the carrier.

 The vessel was unseaworthy in that the steel covers of the two deep tank hatches were not dogged down. The stormy weather was encountered off Cape Hatteras on March 25th and 26th. There were very heavy seas, a heavy rain squall and at times a windforce of 9 and 10 on the Beaufort Scale. But that kind of weather in the North Atlantic at that time of the year, The Schickshinny, D.C., 45 F.Supp. 813, at page 187, should have been anticipated in the stowage of this cargo. The damage was not due to the perils of the sea or an Act of God. 'A common carrier has the burden of proof to bring the loss within an exception.' Edmond Weil, Inc., v. American West African Line, 2 Cir., 147 F.2d 363, 366; Petition of Howard, D.C., 53 F.Supp. 556. The unseaworthiness of the vessel and the improper stowage caused the damage to this cargo.

 The real issues presented at the trial were based on the Fifth and Sixth defenses, which plead the limitation of liability provisions of the Carriage of Goods by Sea Act, T. 46 U.S.C.A. § 1304(5) *fn1" , and paragraph (r) *fn2" of the bill of lading.

 The Fifth defense alleges: '36. If the respondents are held liable for any loss or damage to or in connection with the transportation of the goods mentioned in the amended libel, they plead the benefit of the limitation of liability for which provision is made in the aforesaid Carriage of Goods by Sea Act.' And that: 'No value of the goods mentioned in the amended libel was declared by the shipper and inserted in the bills of lading.'

 The Sixth defense alleges: '38. If the respondents are held liable for any loss or damage to or in connection with the transportation of the goods mentioned in the amended libel, they plead the benefit of each of the foregoing provisions (of paragraph r of the bill of lading), except the provisions for pro rata adjustment for partial loss or damage.'

 The respondent, the carrier, has the burden of proving by a fair preponderance of the evidence, the two special defenses for limitation of liability.

 As to the tractors, respondent contends that its liability should be limited to $ 500 for each tractor. Libelant argues that respondent's limitation of liability should be fixed at $ 500 for each measurement ton (40 cubic feet of space) occupied by each tractor. This was the freight unit on which the freight charges were calculated. Libelant contends also that it was the 'customary freight unit' applicable to tractors which are shipped as is, uncrated and uncased.

 The rock crusher was shipped 'knocked down', in 21 items. Of these, there were 11 items crated; 4 items were cases; 1 item was an uncrated and uncased piece of machinery; and 5 of the pieces of machinery were on separate skids. A skid ordinarily is a frame or base of timber used as a support, like a heavy wooden sleigh. The piece of machinery is attached to the skid by bolts or steel wire. Rollers can be put under the skid to move it to its position in the hold of a ship. A skid also serves to protect the machinery from damage. Photographs of the five pieces of the rock crusher machinery on skids, taken at the dock at Honolulu, are exhibits 16A to 16-I inclusive.

 As to the 21 items of rock crusher parts which are described in the bill of lading respondent contends that its maximum liability is $ 500 per crate, case, skid or piece, under both the bill of lading and the Carriage of Goods by Sea Act. Libelant does not seriously challenge that contention, as to the crates and cases, but does argue that as to machinery attached to skids or shipped simply as a piece the $ 500 limitation should be based on the 'customary freight unit', because an uncrated and uncased piece of machinery or a piece of machinery on skids is not a 'package'.

 Some skids are placed beneath the bottom of a container, which may be a case (Ex. 16, p. 109) or a crate (Ex. 13, p. 72). A piece of machinery, in addition to being securely bolted to skids may be 'blocked to prevent undue strain on the skid bolts (Ex. 13, p. 166)'. A plain skid generally consists of several long parallel pieces of heavy timber, with transverse pieces to hold them in position, such as figures 184 and 196 at pages 337 and 339 of Exhibit 14. The skids to which parts of the rock crusher were attached are clearly shown on the photographs, Exhibits 16A to 16-I. The skids, for Items 1, 2 and 3 of the bill of lading, were plain bases consisting of two long squared timbers, placed parallel to each other, to which the pieces of machinery were bolted. There do not appear to have been any transverse timbers joining the parallel pieces. The skids for the two main shafts with mantel, items 4 and 14 of the bill of lading, consisted of two long squared timbers, placed parallel to each other, across which were three shorter transverse pieces, on which the round shafts rested in a groove, and to which the shafts were attached by wire cables. The shafts were protected by wooden 2/4 s at the place where the wire cables encircled the shaft. Does the fact that a large piece of machinery is shipped on a skid, not cased or crated, put it in the class of 'packages' under the provisions of the Carriage of Goods by Sea Act and of paragraph r of the bill of lading? I believe that it does and that the five pieces of machinery on skids in the case at bar should be classed as five 'packages'.

 Respondent's contention is based on an interpretation of the words 'customary freight unit' which would give the words 'freight unit' the same meaning as a piece of freight or an item of freight, so that 'customary freight unit' would mean the unit in which that type of cargo is customarily shipped. On the other hand, libelant's contention is based on an interpretation of the words 'customary freight unit' which would give to the words 'freight unit' the same meaning as a unit for freight ...


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