The opinion of the court was delivered by: LEIBELL
1. At all times hereinafter mentioned and at the time of the trial the libelant, General Motors Corporation, was a Delaware corporation with an office and place of business at No. 1775 Broadway, Borough of Manhattan, City of New York.
2. At all times hereinafter mentioned and at the time of trial, claimant-respondent, Linea Sud Americana, was a Delaware corporation with an office and place of business at No. 82 Beaver Street, Borough of Manhattan, City of New York, and was the owner of the s/s Olancho, a merchant ship engaged in the co mon carriage of merchandise for hire by sea in foreign trade between, among others, the port of New York and the port of Buenos Aires.
3. At all material times Garcia & Diaz was the agent at New York and Garcia & Diaz, Ltda, was the agent at Buenos Aires for the vessel and respondent.
4. The s/s Olancho was, during the currency of process herein, within the jurisdiction of this Court.
5. The s/s Olancho was built of steel in 1920, at the Fuller Yard, Wilmington, North Carolina. It was constructed on the Isherwood plan, that is, with the main framing running longitudinally. The vessel is of 6,501 gross tons, 4,016 net register tons, with registered dimensions of 395.3 feet by 55.1 feet by 31.4 feet and is of the 3-island type, with two decks, five hatches and holds. The vessel has a triple expansion engine, with steam supplied by oil-burning boilers, and can do 10 knots.
6. Claimant-respondent purchased the s/s Olancho in the late summer of 1946.
7. The libelant, General Motors Corporation, on or about January 20, 1948, delivered to the respondent and the s/s Olancho in New York the shipments described in the libel, subject to the terms, conditions, exemptions, exceptions and limitations contained in the bills of lading issued therefor, including the United States Carriage of Goods by Sea Act, to be transported to the port of Buenos Aires and there delivered.
8. The shipments described in the libel were received by the claimant-respondent in apparent good order and condition and loaded on board the s/s Olancho in the No. 1 lower hold, afterpart, wing to wing, on or about January 20, 1948. Packages of general cargo were stowed on top of the goods in question, and drums of asphalt forward thereof.
9. The s/s Olancho sailed from New York on January 29, 1948. On January 31, 1948, water was discovered in the No. 1 lower hold. The master thereupon altered course for Bermuda where the vessel arrived on February 2, 1948. Divers were engaged and they discovered a small hole in a shell plate on the port side of No. 1 lower hold, designated C-3, through which sea water was entering. The sea water ultimately reached a height of 9 feet on the starboard side, 4 1/2 feet on the port side and 6 feet at the cofferdam in No. 1 hold and came in contact with the bundles and cases etc. shipped by libelant. Asphalt from some drums, stowed forward, was deposited on the bundles and cases and automobiles comprising the shipment.
10. The diver engaged by respondent's marine surveyor, J. H. Parker, in Bermuda, made a survey of the underwater portion of the ship on February 3rd and 4th, 1948, directly under No. 1 hold on both sides. He found a hole about 2 inches by 3/4 inch on the port side forward, which he characterized as a 'small rust hole'.
11. The hole was plugged temporarily by the diver. It was in port plate C-3 from forward in the way of No. 1 Hold. The hole was about 18 inches from the second double frame from the forward bulkhead, and about 6 inches above the second bilge stringer or longitudinal, which was also wasted for an area of about 10 inches by 4 inches. The surveyor recommended that when the vessel was next drydocked, the defective shell plating and stringer in No. 1 Hold be renewed.
12. The plates of the Olancho are named by letters from the bottom of the ship starting with the keel plate, the next one on each side thereof designated the 'A' strake, then the 'B' strake, 'C' strake, etc., going up the sides of the ship, and the numbers starting from the bow and stern and numbering toward the middle of the ship. The C-3 plate is the third from the bow and the third from the keel.
13. Enough cargo was removed from No. 1 Hold at Bermuda to permit access to the inside of the plate, for temporary repairs by driving a wooden plug into the hole, patching with cement and bolting pieces of steel thereon. The repairs were completed on February 8, 1949. A Lloyd's certificate was issued, and the vessel sailed from Bermuda on February 10, 1948. There was no further leakage in the No. 1 Hold.
14. Libelant's cargo was discharged at Buenos Aires on or about March 13, 1948. At delivery, the cases and bundles etc. were found to be wet from sea water and stained by asphalt as a result of the leakage on the New York to Bermuda leg of the voyage.
15. When the s/s Olancho returned to New York, claimant-respondent had the C-3 port plate removed in three sections from the vessel's hull, and has stored it in a warehouse on South Street, in New York City.
16. The C-3 plate was located at the turn of the bilge, above the longitudinal of the bilge on the curved side of the ship. Usually there is a ceiling of wood over the bilge itself and a diagonal limber board extending from that longitudinal up somewhat on the side of the ship, covering the part of the plate where the hole developed. The bilge ceiling and the diagonal limber board were removable. The sides of the ship also had wooden battens, a framework to keep packaged cargo from contact with the sides of the ship.
17. A small triangular piece of the plate (Exhibit 9), cut about 6 inches from the hole, shows corrosion and wastage in places on the inner surface to a thinness of about 3/16 inch. The corrosion and wastage were not due to the method employed in manufacturing the steel. It was due to accumulation of sweat and debris above the longitudinal and the failure to keep the longitudinal and the plating immediately above it clean and the failure to protect the inner surface of the plate with paint or bitumastic or other protective application.
18. The hole in plate C-3 was a corrosion hole. It and the other corrosion and wastage in the plate in that immediate area had been years in developing on the inner side. It was the result of gradual general deterioration from the use of the plate during the 27 years of the vessel's life and the lack of proper cleaning and painting and other protective coating.
19. The C-3 plate was probably one of the ship's original plates. When new it was .60 inch thick. Ordinarily the maximum life of such hull plates is thirty years. Where the corrosion and wastage in a .60 inch shell plate reduces its thickness to .43 inch (13.76/32 inch) the plate should ordinarily be renewed.
20. Examination by the Court of a portion of the C-3 plate which had been preserved, showed deep corrosion and pitting on the inner surface approximately 32 inches long and 6 inches wide in the area where the hole was found. This area is shown on a sketch (Ex. I) and a mold (Ex. J) prepared by respondent's expert, Mr. Wilson, at the Court's request.
21. From December 19th to December 29th, 1947, prior to the voyage in suit, the s/s Olancho was on drydock at the Bethlehem Steel Company's Shipyard at Hoboken, New Jersey, where she underwent a special Lloyd's survey No. 3 and was extensively repaired.
a. Representatives of the owners, representatives of Lloyd's Register of Shipping, and representatives of Bethlehem Shipyard surveyed the vessel. Written specifications were prepared and the Bethlehem Steel Company agreed to do the work.
b. Captain Richard G. Wylie, claimant-respondent's marine superintendent, examined the shell plates and walked around the hull, underneath, accompanied by surveyors of Lloyd's who were appointed to the job and several of the yard men. At this time, plates, which from the outside showed any signs of wear or corrosion were tapped with a testing hammer. The hammer testing was not necessarily limited to those plates.
c. Mr. James A. Moore, surveyor for Lloyd's Register of Shipping, conducted what is known as a 'special survey', a drydocking survey, which a vessel must pass every four years in order to comply with the Lloyd's classification society rules. This survey includes an examination of the hull, the shell plating, the deck, the holds, the rudder and the double-bottom tanks, among other things. He made a general examination of the shell plating. The thickness of the plates was determined by drilling. Mr. Moore was present daily, on and off; saw that the work was done; and inspected the vessel to insure that the repairs required by the survey were completed. He went inside the vessel and examined the plates for leakage, during a hose test of the plates where rivets were renewed or a drilled hole plugged and welded. Thereafter he issued a Report of Survey for Repairs, etc., No. 48262 (Exs. C-1, C-2), wherein the ship is described as then being in a safe condition and eligible to continue as classed. A Classification Certificate (Ex. D) was made, certifying that he surveyed the s/s Olancho while afloat and in drydock, and that he had transmitted a report to the Committee of Lloyd's Register of Shipping, London, stating that all repairs recommended by him were completed to his satisfaction.
d. Mr. Richard D. Warren, hull foreman at Bethlehem Shipyard, was in charge of the hull work performed on the s/s Olancho. He had 15 to 25 men working under him. He would visit the job several times a day. Mr. Warren made some examination of the shell plating, both inside and outside, and except for one plate which he picked up on his reading and which was replaced, he did not see any defects, wastage, or corrosion on the s/s Olancho's shell plating.
e. Mr. Ronald Jones, the 'Snapper' in Bethlehem Shipyard's hull department, worked under Mr. Warren and was in charge of the men who did the hull work on the Olancho. He worked solely on the Olancho for about eight days, eight hours a day. He first went around with Mr. Moore, Lloyd's surveyor, and with the usual testing hammer sounded for weak spots in the s/s Olancho's plates. Jones observed quite a few of the water hose tests after the holes were tapped and ...