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July 21, 1954

SCHROEDER BROS., Inc. et al.

The opinion of the court was delivered by: EDELSTEIN

This is an action in admiralty for cargo loss and damage sustained by shipments of fresh chestnuts, delivered to claimant-respondent (hereinafter called respondent) as a common carrier, at the ports of Genoa and Naples, in the latter part of October and the early part of November 1948, for carriage to New York, on the motor vessel Saturnia, owned and operated by the respondent. The cargo was stowed both in the refrigerated chambers of the vessel and in her unrefrigerated common holds. The Saturnia arrived at New York on November 14, 1948, but was unable to discharge cargo because of a longshoremen's strike. She returned to Naples, arriving on November 26. Respondent made a conditional offer to shippers to permit discharge of the chestnuts at Naples, but after a good deal of confusion, which is the subject of dispute, the vessel proceeded on the same day to Genoa. At Genoa the respondent engaged a chestnut expert to examine the cargo and he reported that they were healthy, although 'stanca', or tired, and still able to support the voyage 'provided that during the navigation it is maintained in sufficient aeration, above all to avoid infiltrations of dampness.' From Genoa the Saturnia proceeded again to New York, for a third transatlantic voyage, arriving on December 10, and when the chestnuts were discharged, after having been in stowage from 37 to 41 days, they out-turned damaged; that is, the shipments were in whole or in part, affected by one or more of the following conditions: hot, warm, sweated, moist, mouldy, sprouted and decomposed.

The shipments having been transported between Italian ports and the port of New York, the rights of the parties are governed by the U.S. Carriage of Goods by Sea Act, 46 U.S.C.A. § 1300 et seq. In order to make out a prima facie case, the shipper must prove that his goods were loaded in good condition and out-turned damaged. 'The burden then lies with the carrier to exculpate itself by proving (a) that the harm resulted from an 'excepted cause', a cause for which it is statutorily not liable, or (b) that it exercised due diligence to avoid and prevent the harm'. American Tobacco Co. v. The Katingo Hadjipatera, D.C., 81 F.Supp. 438, 445, modified and affirmed, 2 Cir., 194 F.2d 449; General Foods Corp. v. The Troubador, D.C., 98 F.Supp. 207; Union Carbide & Carbon Corp. v. The Walter Raleigh, D.C., 109 F.Supp. 781, affirmed, 2 Cir., 200 F.2d 908; see Schnell v. The Vallescura, 293 U.S. 296, 55 S. Ct. 194, 79 L. Ed. 373. The respondent here relies on the statutory exceptions of strike and inherent vice, 46 U.S.C.A. § 1304(2)(j) and (m). If a carrier establishes that damage is caused by one of the enumerated exceptions, it will not be held liable unless it appears that its negligence contributed to the damage, and the burden of proof upon that issue is upon the libellant. Schnell v. The Vallescura, supra; Pettinos v. American Export Lines, D.C., 68 F.Supp. 759, affirmed, 3 Cir., 159 F.2d 247.

 There is no dispute that the chestnuts out-turned damaged at New York, and I hold that the libellants have established that they were in good condition when delivered to the carrier. Respondent contends that the libellants failed to establish proper preshipment treatment of the chestnuts and further failed to prove the essential element of moisture content. See American Tobacco Co. v. The Katingo Hadjipatera, supra, 81 F.Supp. at page 447. But in view of the testimony of respondent's expert, Dr. Vitagliano, I have no hesitancy in crediting the testimony of libellants' experts to the effect that proper and customary preshipment treatment was given. Dr. Vitagliano displayed only a limited acquaintance with the subject and the character and content of his testimony left much to be desired. There was no precise proof of moisture content, but there was adequate proof that the chestnuts were dry, proof as adequate as the shippers could be expected to produce in the circumstances. But the dispositive fact on this issue is the fact that when respondent's expert examined the chestnuts in Genoa, after they had been in stow for about 24-27 days, he found them in good condition, and Dr. Vitagliano, himself, testified that if the preshipment treatment were improper, mould would develop within 20 days. Libellants' experts testified that mould would develop within a 'few days'.

 The respondent vigorously argues that the damage was the result of the New York longshoremen's strike, under the statutory exception, which resulted in the inability to discharge the cargo after its first transatlantic crossing. The argument does have force, but I have reached a contrary conclusion. After the failure to discharge cargo at New York because of the strike, respondent sent a circular letter to shippers notifying them of the expected arrival at Naples of the Saturnia on November 26, and further stating that if the shippers desired to have their cargo unloaded they would have to give timely instructions to its Naples agent and present complete sets of bills of lading, or, in lieu thereof, bank guarantees. (The bills of lading, unknown to the parties in Italy, had already been surrendered by the consignees, libellants' agents.) Before the vessel's arrival at Naples a representative of the shippers conferred with the respondent's agent and reached an agreement for the discharge of the common hold chestnuts, providing for the presentation by the shippers of certain bank guarantees. The shippers appeared on the dock early in the morning of the ship's arrival, and what thereafter occurred is a welter of confusion. But the common hold chestnuts were not discharged. The respondent contends that the shippers did not want their chestnuts unloaded, nor did they comply with the conditional offer to discharge (an agreement being denied). Suffice it to say that I am not convinced that the shippers did not want their chestnuts discharged, although the apparent display of volatile temperament does obscure the issue somewhat. But I do find an agreement to discharge and compliance with both that agreement and with respondent's conditional offer. Respondent urges that the bank guarantees provided for in the offer (and in the agreement) were not produced. It is true that most of the guarantees acquired by the shippers were of the 'fidejussione' variety, which the respondent was unwilling to accept on the ground that it provided insufficient protection. However, two of the shippers did produce the proper type, 'garanzia'. These guarantees were apparently ignored. I conclude that the respondent was not interested in compliance with the condition of the production of bank guarantees, that it waived such of condition, and that the nonpresentation of guarantees was not the reason why the Saturnia did not discharge her common hold cargo at Naples. The cargo was not discharged because the respondent, for its own reasons, desired to advance its sailing time and was unwilling to afford the shippers the time and opportunity to have their common hold cargo discharged. Since the chestnuts were in good condition at that time, as disclosed by the later inspection in Genoa, and since the respondent was unjustified in refusing to permit discharge of the common hold chestnuts in Naples, I find that the strike was not the cause of damage, but that on the contrary the respondent's refusal was the proximate cause of the loss and damage suffered by that cargo.

 However, even if it be considered that the respondent did bring itself within the statutory strike exception, I am nevertheless of the opinion that the libellant has satisfactorily borne the burden of proving negligent stowage contributing to the loss. There was a mass of conflicting and sometimes inconsistent expert testimony on the issue of stowage and its is a tedious task to pick one's way through the maze in order to come to a satisfactory conclusion. The major bone of contention was whether it was necessary to use dunnage in the stowage of chestnuts, living, respiring organisms which give off moisture and gases during the respiration process. If there is inadequate circulation of air around and through the containers, heat and mould will result. The shippers were entitled to the 'usual and ordinary stowage sufficient to meet conditions reasonably to be anticipated.' The Terne, D.C., 1 F.Supp. 537, 542; Spang Chalfant & Co. v. Dimon S.S. Corp., 2 Cir., 57 F.2d 965; The Hog Island, D.C.E.D.N.Y., 43 F.2d 243. The conditions encountered, involving three transatlantic journeys, were perhaps not reasonably to be anticipated. But the question remains whether the stowage was usual and ordinary. The fact that unusual conditions were met and the cargo damaged does not dictate a causal relationship, nor does the fact that after the usual first crossing, or even second, the cargo was undamaged prove that the stowage was up to the usual and ordinary standard. There was a conflict in the testimony of stowage experts on whether dunnage was usually employed in the stowage of chestnuts. On the evaluation of their testimony alone, I reach the conclusion that the usual and normal stowage of chestnuts requires the use of dunnage in order to effect the necessary ventilation, both in the common holds and in the refrigerated compartments, compare The Hog Island, supra. Certain engineering testimony reinforces this conclusion. While there is no evidence precisely indicating that the usual and normal carriage contracted for imports the same conditions of stowage that would prevail in a shore warehouse, nevertheless it is established, by witnesses on both sides, that there is no difference between the application of refrigeration principles to a problem of stowage aboard a ship and stowage in a shore warehouse. The requirements for the successful refrigerated stowage of chestnuts ashore include dunnage, and chestnuts so stowed will remain in sound condition for a much longer period than here involved. Therefore, it seems reasonable to conclude that dunnage is necessary to the successful stowage of chestnuts aboard ship in refrigerated compartments, and I am the more inclined to credit such testimony and to disbelieve contrary testimony. Indeed a witness for the respondent testified that chestnuts stowed in a refrigeration compartment should outturn 'relatively cool', and admittedly some of the libellants' did not. The stowage in the common holds was the same as the stowage in the refrigerated chambers. And if the type of stowage in the refrigerated chambers caused the damage of the chestnuts, the same type of stowage in the common holds contributed to the damage of the chestnuts there stowed. Regardless of the legal incidence of the burden of proof, libellants have proved that inadequate stowage caused damage to the chestnuts in both the common holds and the refrigerated compartments and certainly, the respondents have not met any burden of proving the contrary.

 The second statutory exception relied upon by the respondent is defense of inherent vice is raised, and condition for a much longer period than it appears that the damage arose internally, it self-evidently calls into question the good condition of the goods upon shipment * * *' and under The Niel Maersk, 2 Cir., 91 F.2d 932, certiorari denied, 302 U.S. 753, 58 S. Ct. 281, 82 L. Ed. 582, '* * * the shipper must affirmatively establish the good condition at time of shipment of goods damaged by heating, where the carrier claimed the cause to have been inherent vice.' American Tobacco Co. v. The Katingo Hadjipatera, supra, 81 F.Supp. at page 446. As I have already indicated, the libellants have met their burden. The respondent may not avoid liability on the ground of inherent vice.

 Accordingly, I make the following findings of fact and conclusions of law.

 Findings of Fact.

 1. In the latter part of October and the early part of November, 1948, 58 shipments of fresh chestnuts were delivered to claimant-respondent, hereinafter referred to as 'respondent', at the ports of Naples and Genoa for carriage to the port of New York on the motor vessel Saturnia, owned and operated by respondent; bills of lading were issued therefor by duly authorized agents of respondent, and agreed freight charges paid thereon.

 2. The 58 shipments contained a total of 12,064 cases and barrels, of which 7,721 were stowed in the refrigerated chambers of the Saturnia and the remaining 4,883 in her unrefrigerated 'tween decks and lower holds. All of the common hold shipments were loaded at Naples. All of the shipments loaded at Genoa, and some of those loaded at Naples were stowed in the refrigerated compartments.

 3. Upon Completion of the loading at Naples on November 3, 1948, the Saturnia proceeded to New York, arriving there on November 14, 1948; but, because of a longshoremen's strike, no cargo was discharged and the vessel returned to Naples and Genoa. The Saturnia arrived at Naples on November 26, 1948, at 6:00 a.m. and proceeded to Genoa on the same date at 1:00 p.m. She thereafter returned to Naples, from which port she proceeded to New York for a third voyage with libellants' shipment still on board.

 4. Upon the discharge of libellants' shipments from the Saturnia at New York between December 10 and 13, 1948, every consignment was damaged by one or more of the following conditions: heated, sweating, moist, mouldy and decomposed. Some of the shipments were discharged from the refrigeration compartments hot. A quantity of the cargo was condemned and ordered dumped by Federal health authorities; and a further quantity was reconditioned and sold below sound market values.

 5. By written notice given six days before the return of the Saturnia to Naples, respondent informed the shippers that the vessel would discharge their cargo at that port if timely instructions were given and bills of lading or bank guarantees made available. Prior to the arrival of the Saturnia at Naples, the shippers, through their forwarding agents, or Dr. Serafino, their counsel, demanded the discharge of the common hold chestnuts and agreed with Mr. Desda, respondent's agent, for the discharge of the same. Of the 18 shipments of Naples common hold chestnuts bank guarantees for 15 had been secured by their shippers before the Saturnia's arrival at Naples. Two of the said guarantees, in form acceptable to respondent, were delivered to respondent prior to the Saturnia's return to Naples, but respondent did not make delivery of the shipments covered thereunder.

 6. On the early morning of November 26, 1948, the date of the Saturnia's return to Naples, the shippers assembled on the dock with their vehicles to remove their respective lots of chestnuts. At 11 o'clock a.m. they were invited to go aboard the vessel, where they were informed that for absolutely necessary reasons, and because of orders received from respondent's home office at Genoa, the vessel would sail at 1:00 p.m. that day. The shippers protested the early sailing and notified respondent that it would cause them very serious loss; a formal protest was thereupon written on board the vessel and signed by the ...

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