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CITIES SERV. OIL CO. v. THE CHAMPOEG

October 21, 1952

CITIES SERVICE OIL CO.
v.
THE CHAMPOEG et al.



The opinion of the court was delivered by: WRIGHT

The libel herein filed contains two causes of action arising out of two shipments of petroleum products in the Tanker Champoeg pursuant to voyage charter parties entered into between the libelant and the respondent. The first cause of action relates to the alleged contamination of kerosene while still aboard the vessel and the second cause of action relates to a shortage in delivery of Aviation gasoline, kerosene and slop. In addition to a defense on the merits as to both causes of action, respondent also claims that the first cause of action is time-barred. The issues of fact and law having come on to be heard on the pleadings and proofs of the parties and due deliberation having been had, the court now makes the following findings of fact and conclusions of law.

Findings of Fact Common To Each Cause of Action

 1. This action was commenced by the filing of the libel on July 9, 1948.

 2. At all times material to this action, libelant was a corporation having its principal office for the transaction of business at 70 Pine Street, Borough of Manhattan, City, County and State of New York.

 3. At all times material to this action, libelant owned the cargo involved in each cause of action herein.

 4. At all times material to this action, each of the shipments involved herein were to be carried and delivered subject to the terms of the charters for the respective voyages. The terms of the charters pertinent to the two causes of action herein are as follows:

 '6. Safe Berth. Shifting. The Vessel shall load and discharge at any safe place or wharf, or alongside vessels or lighters reachable on her arrival, which shall be designated and procured by the Charter, provided that the Vessel can proceed thereto, lie at and depart therefrom always safely afloat, any lighterage being at the expense, risk and peril of the Charterer. The Charterer shall have the right of shifting the Vessel at ports of loading and/or discharge from one safe berth to another on payment of all towage and pilotage shifting to the next berth, charges for running lines on arrival at and leaving that berth, wharfage and dockage charges and expense, customs overtime and fees, and any other extra port charges or port expenses incurred by reason of using more than one berth. Time lost to the Vessel on account of shifting shall count as used laytime except as otherwise provided in WSA Rate Orders and Rate Advices.

 '7. Pumping in and out. Hoses. (a) The cargo shall be pumped into the Vessel at the expense, risk and peril of the Charterer, and shall be pumped out of the vessel at the expense of the Vessel, but at the risk and peril of the Vessel only so far as the Vessel's permanent hose connections where delivery of the cargo shall be taken by the Charterer or consignee. The Vessel, after discharging shall, if requested by the Charterer, clear shore pipelines of oil by pumping water through them, the time consumed to count as used laytime. The Vessel shall furnish her pumps and the necessary steam for discharging in all ports where the regulations permit of fire on board, as well as necessary hands. Should regulations not permit fires on board, the Charterer or consignee shall supply, at its expense, all steam necessary for discharging as well as loading, but the Owner shall pay for the steam supplied to the Vessel for all other purposes. If cargo is loaded from lighters, the Vessel, if permitted to have fires on board, shall, if required, furnish steam to lighters at Charterer's expense for pumping cargo into the Vessel.

 '(b) Hoses for loading and discharging shall be furnished by the Charterer and shall be connected and disconnected by the Charterer, or at the option of the Owner, by the Owner at the Charterer's risk and expense. Laytime shall continue until the hoses have been disconnected.

 '(c) Unless notation or exception is made in writing on the bill of lading, or other shipping document before departure of the Vessel from the dock or place at which the said cargo is delivered, receipt of the cargo shall be deemed prima facie evidence of right delivery of the entire cargo as described in the bill of lading; further, that upon failure or refusal by the Charterer or its representative to execute or except to the ullage reports prepared by the Vessel, the figures stated in said ullage reports shall be deemed prima facie correct and binding upon the parties hereto.

 '16. Cleaning (b) If the Vessel may not pump ballast water or slops overboard or otherwise dispose of them at or en route to the port of loading, the Charterer shall provide facilities for that purpose and charges for handling, storage or disposal of ballast water and/or slops shall be for the Charterer's account. Time consumed discharging ballast water or slops shall not count as laytime. Any delay by the Charterer in furnishing facilities for the disposal of ballast water or slops shall count as laytime.

 '18. General Exceptions Clause. Neither the Vessel nor the Master nor owner shall be or shall be held liable for any loss of or damage or delay to the cargo or for any failure in performing hereunder arising or resulting from:- Any act, neglect or default of the Master, pilots, mariners or other servants of the Owner in the navigation or management of the vessel; barratry; fire, unless caused by the personal design or neglect of the owner; collision; stranding; perils, dangers or accidents of the seas or other navigable waters; saving or attempting to save life or property; wastage in weight or bulk or any loss or damage arising from inherent defect, quality or vice of the cargo; any act or omission of the Charterer, shipper, consignee, owner of the goods or holder of the bill of lading, their agents and representatives; insufficiency of packing; insufficient or inadequacy of marks; explosion, bursting of boilers, breakage of shafts or any latent defect in hull, machinery, equipment or appurtenances; unseaworthiness of the vessel whether existing at the beginning of the voyage or developing during the voyage unless caused by want of due diligence on the part of the Owner to make the vessel seaworthy or to have her properly manned, equipped, and supplied; leakage; shrinkage; evaporation; change in quality of the cargo; handling or transportation losses; difference between actual or reported intake and outturn quantities; stowage or contact with or leakage from other cargo; discoloration; contamination; deterioration; any consequence arising out of shipping more than one grade of cargo; or from any other cause arising without the actual fault or privity of the Owner. And neither the Vessel, her Master or Owner, nor the Charterer shall, unless otherwise in this Charter expressly provided, be responsible for any loss of or damage or delay to or failure to discharge or deliver the cargo arising or resulting from:- Act of God; act of war; act of public enemies, pirates or assailing thieves; arrest or restraint of princes, rulers or people; seizure under legal process provided bond is promptly furnished to release the vessel or cargo; strikes, lockouts, stoppage or restraint of labor from whatever cause whether partial or general; or riot or civil commotion. No exemption afforded the Charterer under this clause shall relieve the Charterer of or diminish its obligations for payment of any sums due the Owner under other provisions of this Charter.

 '23. Limitation of Liability (b) The Owner and the vessel in all matters arising under this Charter Party or any bill of lading issued hereunder shall be entitled to the like privileges, rights, and immunities as are contained in Sections 3(6), 4 and 11 of the Carriage of Goods by Sea Act of the United States approved April 16, 1936 (46 U.S.C.A. § 1303(6), 1304, 1310).'

 5. At all times material hereto, the United States of America was the owner of and operated, managed and controlled the SS Champoeg, a tanker of the type known as T-2, as a merchant vessel of the United States of America.

 6. In so far as United States of America is concerned, libelant elected to proceed under the libel in accordance with the principles of suits in rem, without the preclusion of any relief in personam.

 7. Each of the charter parties being singed by respondent, Tankers Company Incorporated, as agent for respondent United States of America, and not as principal, libelant has abandoned the issue as to liability of respondent, Tankers Company Incorporated, and has agreed to withdraw the libel as to respondent Tankers Company Incorporated.

 8. Libelant admits with respect to each shipment, that no loss, contamination or shortage occurred prior to the arrivals of the tanker Champoeg at the ports of discharge.

 9. The issues to be tried as formulated by the Court at pre-trial conference are as follows:

 (1) (a) Whether or not the first cause of action alleged in the libel is barred by the terms of the charter party in view of the circumstance that the action was not commenced within one year from the time the shipment was delivered at destination.

 (1) (b) Conversely, whether or not the action was timely commenced, in so far as the first cause of action is concerned, in that it was filed within two years from the time the alleged cause of action arose, which is the period set forth in the Suits in Admiralty Act, 46 U.S.C.A. § 741 et seq.

 (2) Were there contaminations and/or shortages and/or losses as complained of in the libel and if so, did they occur in whole or in part after or before the cargo left the permanent hose connections of the vessel?

 (3) If it be found that there were contaminations and/or shortages and/or losses as complained of in the libel and that they occurred in whole or in part before the cargo left the permanent hose connections of the vessel, was the cause thereof one for which the respondent is or is not liable under the terms of the contracts of carriage?

 10. Libelant owns, among other petroleum terminals, a bulk petroleum products terminal located at East Braintree, Massachusetts, where petroleum products are received from large tankers and pumped through various designated main pipelines and intersecting lines leading from the dockhead at the tanker berth to shore tanks. In addition to the terminal berth for the discharge of tank vessels, the plant also includes a barge berth, the center line of the barge pier extending at right angles from the tanker pier approximately sixty-five feet from the tanker berth dockhead. The purpose of the barge berth is to load oil barges from shore tanks. The layout of the East Braintree plant is on a hill and slopes down toward the waterfront. Oil products may be gravitated from the tanks and loaded into barges at the barge berth or at the tanker pier solely by force of gravitation and without using electrical or steam power. The tanks at East Braintree are so much higher than a ship at the discharging berth that by reversing a few of the valves aboard the ship, petroleum products can be gravitated from the shore tanks into the ship solely by power of gravitation.

 11. The tanker transfer dock is equipped with three sets of hoses, each set consisting of three lengths of approximately thirty feet. Previous to the arrival of a ship, which usually is split cargo, the hoses are connected on the dock end of the line to the particular line which is going to be used in the discharge of the vessel arriving. If the vessel is carrying a split cargo of kerosene, No. 2 fuel oil and gasoline, one hose is connected to the kerosene line, another hose to the No.2 fuel oil line, and another to the gasoline line. On the end of each hose is a flange and on the ship is a flange, and these flanges are put together and bolted, and in that way connected to the discharge pipes of the ship.

 12. At the dockhead there were four twelve inch and one ten inch cargo lines. At the time of the discharge of the Champoeg, these cargo lines were connected with two cross-over lines equipped to permit the introduction of air. One of these cross-over lines was used to clean the hose to the ship after discharging was finished. The other was used for the purpose of blowing out the main cargo discharge lines.

 13. The cross-over line at the dockhead used to clean out hose connecting the ship's discharge lines to the shore lines, was equipped with high pressure valves. Each one of the five pipelines on the dock had one of these high pressure valves installed between the flange or hose connection and the master valve or dockhead valve. Behind these valves were another series of check valves.

 14. Libelant proved that no leakage occurred, and no contamination resulted from either of the two cross-over air lines at the dockhead. Each line had a gate valve and also a check valve connected to it. The check valve prevented a reverse flow in the line. High pressure valves were proved to be fit and proper.

 15. Approximately sixty or sixty-five feet shoreward on the four twelve inch and one ten inch main pipelines, the lines are intersected with six inch lines which terminate at the barge loading section of the barge berth. Near the point of intersection, each six inch line is equipped with a gate valve. There are no valves on the twelve inch lines at the point where such lines are intersected by the six inch branch lines leading to the barge loading terminal. The valves on the six inch branch lines are closed when the barge berth is not occupied. To load a barge, after the product reaches the terminal of the six inch pipelines, a hose, supplied by the barge, is swung over from the barge and connected to the terminal of the appropriate six inch pipeline. In other words, the petroleum product would go through the twelve inch line as far as the branch line which goes to the barge pier, and then it would go through the valve there over to the valve on the end of the barge pier and then through the hose into the barge.

 16. The pipelines running to the various storage tanks usually are kept full with a particular petroleum product. This results in an accurate computation of petroleum products delivered to the plant by tankers. It eliminates the uncertainty which would arise if a pipeline were empty before receiving a petroleum product and full after the receipt of such product. In other words, the pipeline is full when a vessel starts loading, and full when a vessel completes loading. In this manner a vessel receives credit for delivery of the full pipeline at the commencement of discharge, ...


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