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UNITED STATES v. WESSEL DUVAL & CO.

July 26, 1954

UNITED STATES
v.
WESSEL DUVAL & CO., Inc. and four other cases. THE EDWARD RUTLEDGE



The opinion of the court was delivered by: RYAN

Five separate suits in the admiralty were consolidated for trial and it was stipulated that the evidence received would be the record of the trial of each of these suits.

All the claims alleged in these suits arose from the operation of the S. S. Edward Rutledge during the period the vessel was under bareboat charter by her owner the United States Maritime Commission to Wessel, Duval & Co., Inc., a New York corporation.

 The Edward Rutledge is a Liberty ship, registered in 1942 at Wilmington, North Carolina. She is a dry cargo vessel, of steel construction, two decks, 422 feet long, 57 feet broad, 35 feet deep; 7,177 gross tons, 4,375 net tons and 10,550 tons dead weight capacity. The vessel was under bareboat charter to Wessel Duval under Contract No. MCc-41846 and Addenda 1-13 from June 3, 1947 until she was redelivered in September 23, 1949. Shortly thereafter the vessel was laid up at Mobile, Alabama.

 Wessel Duval time chartered The Edward Rutledge to the United States Department of the Army under three separate contracts:

 Contract No. w-16-048tc410 in effect from January 19, 1948 to September 18, 1948;

 Contract No. w-16-048tc557 in effect from September 19, 1948 to May 17, 1949;

 Contract No. w-16-048tc642 in effect from May 18, 1949 to September 14, 1949.

 This last contract was not operative from June 14, 1949 to July 1, 1949 when the vessel was used by the United States Department of the Navy. The vessel was redelivered under the time charter to Wessel Duval in September, 1949.

 On January 16, 1948 shipping articles were signed for a voyage of The Edward Rutledge from Mobile, Alabama to European ports via Cuba and return. The vessel then proceeded from Mobile to Cardenas, Cuba where she was delivered to the United States Department of the Army under time charter No. w-16-048-tc410 on January 19, 1948. during the period from August 5, 1947 to the date of departure from Mobile the vessel had been in United States ports the following times:

 August 5-August 13, 1947 -- Mobile, Ala.

 October 4-October 10, 1947 -- Mobile, Ala.

 October 11-October 14, 1947 -- Pensacola, Fla.

 January 7-January 17, 1948 -- Mobile, Ala.

 At Cardenas a cargo of sugar was loaded for carriage to Germany. After the loading and on January 26, 1948 while undocking The Edward Rutledge stranded in soft mud. She was departing for Havana, she had pilots aboard; lines were cast off the dock at 5:18 p.m.; five minutes later she was clear of the dock; at 5:30 p.m. she was aground in soft mud. There were no tugs available; lines were run to the dock with the assistance of a launch and by heaving on the lines she was pulled off the mud and moored alongside the dock. She waited for daylight as there was no night navigation out of the harbor. The water was not deep enough to permit examination of her bottom by a diver, but from such inspection as could be made under the circumstances it was determined that the vessel was safe and seaworthy to proceed to Havana. The following morning -- January 27 at 7:44 a.m., -- she was again undocked and put on slow astern; a line fouled her propeller and the engine was stopped. At 8:52 a.m. the vessel was put on full ahead, at 9:01 a.m. she was on full speed astern on the telegraph but the engine went ahead; the order was repeated on the telegraph, and at 9:03 a.m. the vessel again went aground on soft mud, this time forward and the engines were stopped. Again, a launch was employed to take lines ashore to the dock but efforts to free her and get her afloat through the use of lines and the engine were not successful. The Master decided to wait until the tide came in; at 6:25 p.m. lines were again sent to the dock and finally at 9:45 p.m. the vessel was afloat and anchored for the night; a survey of her then made found her fit to proceed. At last on January 28, 1948 at 7:20 a.m. the vessel departed for Havana arriving at 5:45 p.m. the same day.

 At Havana a diver removed parts and pieces of a line from the propeller and after examination of her bottom while she lay in water and after survey an underwriter's certificate of seaworthiness issued subject to dry dock at the owner's earliest convenience. After completing the loading of her cargo at Havana the vessel departed on February 5, 1948 to Germany. The cargo was discharged at Bremerhaven, and before she departed for Cuba and while at Bremerhaven she was surveyed on March 1, and 2, 1948 and given a further underwriter's seaworthy certificate. En route, instructions were received to proceed to Santiago, Cuba and she arrived there on March 26, 1948.

 On the return voyage the Rutledge on approaching Santiago passed to the west of Hogsty Reef and navigated using Chart 0948.

 At Santiago, she loaded 60,000 bags of sugar which were received on board in good order and condition; the loading was completed at 4:10 p.m. on Saturday, April 10, 1948. The vessel had cleared for Kingston, Jamaica for bunkers and thence to Germany where the sugar cargo was to be discharged; this was voyage No. 4 of the vessel under the bareboat charter to Wessel Duval.

 Before she sailed from Santiago and about 8:10 p.m., April 10, the Chief Officer William Noll dropped dead. After the Master had made arrangements for proper disposition of the body and the the effects of the deceased, the vessel sailed at 1:47 a.m. Sunday morning -- April 11 -- for Kingston without having obtained a replacement for the dead mate. She secured to the oil dock at Kingston at 11:50 a.m., April 12, completed bunkering at 7:20 p.m., cast off at 9:35 p.m., dropped her pilot and departed for Germany at 11:05, p.m., on April 12, 1948. The next morning at about 5, nine stowaways were found on board; she returned to Kingston, landed the stowaways and finally sailed at 1:15 p.m. on April 13, 1948.

 The Edward Rutledge, delayed by her return to Kingston, was obliged to navigate through a large part of the Bahamas at night instead of going through in daylight. The Master had laid the course from Kingston to pass to the east of Hogsty Reef and out through Caicos Passage. The night was dark and clear, the moon obscured by clouds, the sea moderate, wind force around 4 or 5. A bearing was taken at 9:15 p.m. on April 14, at Southwest Point and from then on the vessel proceeded by dead reckoning. The projected course of The Edward Rutledge would have brought her close enough to the location of Hogsty Reef Light to have enabled those on board to see the light if it had been functioning. She was being navigated on the theory that Hogsty Reef Light was lighted; in fact it had been discontinued on July 27, 1947.

 The Edward Rutledge went aground on Hogsty Reef at 2/08 a.m. on April 15, 1948. After the stranding the vessel and her cargo were salved by Merritt, Chapman Scott Corp. and Merritt Chapman Lindsay, Ltd.; 7,826 bags of the sugar cargo were necessarily jettisoned in the operation. The vessel after being salved was obliged to put back to Havana, and although she had been pulled off Hogsty Reef was able to proceed to Havana under her own power. There, after underwriter's survey and on surveyor's recommendation temporary repairs were made. On May 5, 1948 The Edward Rutledge was given an underwriter's certificate of seaworthiness to proceed to Germany. The United States loaded the vessel while she was being repaired with about 9,046 bags of sugar to replace those which had been jettisoned. She left Havana for Germany on May 6, 1948. Shortly after leaving port her condenser lost vacuum and she put back to Havana. She again set sail on May 11, 1948 for Germany with a further underwriter's certificate of seaworthiness given her that day. She finally arrived at Bremerhaven on June 2, 1948, and while her cargo was being discharged she was surveyed and granted an underwriter's certificate of seaworthiness to depart for New York with a partial cargo.

 The remainder of the vessel's service under the time charters to the United States appears to have been uneventful insofar as it gave rise to the claims asserted in these five suits, save only that in November, 1948 at Seattle, Washington, the holds of the vessel were cleaned, and that a claim for charter hire has been made by Wessel Duval for the period July 9, 1948 to August 12, 1948 when the vessel was laid up for repairs occasioned by the Hogsty Reef stranding and the additional 'fringe' claims hereinafter referred to.

 It is from the foregoing that the litigation now before us flows.

 The first of these suits was filed by -- (1) Merritt-Chapman & Scott Corporation, Libelant v. United States and Wessel, Duval & Co., Inc., Respondents, United States, Respondent-Impleaded, Wessel, Duval & Co., Inc., Respondent-Impleaded. (A. 163-394). And, (2) Merritt-Chapman Lindsay, Ltd., v. United States of America and Wessel, Duval & Co., Inc., United States of America, Respondent-Impleaded. (A. 164-153).

 These libels were filed against the United States as the owner of the cargo and against Wessel Duval as bareboat charterers of The Edward Rutledge, claiming award for salvage services rendered the vessel in freeing her from Hogsty Reef.

 Apparently the Merritt-Chapman interests had some doubt as to which of their companies would be a proper libelant; they filed two separate suits as a protective measure. However, the reasons which prompted the separate suits are now immaterial; the claims of both Merritt-Chapman companies have been settled and they are no longer interested parties. The pleadings and the decrees of settlement in both are parallel.

 The settlement was based on the proportionate values shown in the General Average statement, the United States contributing $ 44,779 and Wessel Duval contributing $ 25,221 to the total settlement amount of $ 70,000. In the final decree setting forth the settlement and by stipulation the United States and Wessel Duval expressly reserved their rights against each other to await the determination of liability with respect to the Hogsty stranding.

 The stipulation provided:

 '5. This stipulation is without prejudice to the right of either party to contend as per its pleadings, in any of the five suits listed above, that the other party's share of the total salvage award agreed to at $ 70,000. was larger than the amount the other party has by this stipulation agreed to pay.

 '6. This stipulation is also without prejudice to the right of the United States of America to contend in any of the five suits listed above, that it is relieved from liability to contribute in general average because of the unseaworthiness of the Edward Rutledge.'

 Each of the respondents answered admitting liability for salvage and requesting the court to fix the amount. Each respondent petitioned under the 56th Rule, 28 U.S.C.A.; Wessel Duval in substance praying that the United States should contribute in general average for its share of the salvage award, and the United States praying that Wessel Duval should pay or reimburse the United States for the amount of salvage the United States is required to pay. It appears that these two suits filed by the Merritt-Chapman companies now have pertinence solely as to the question of the liability over of the respondents one to the other; and these claims over are asserted in the other suits.

 (3) Wessel, Duval & Co. Inc. v. United States of America, (A. 165-223).

 Following redelivery under the bareboat charter in September, 1949 and after the United States put the vessel in the laid-up fleet at Mobile, this suit in rem was started in Alabama where the ship was then. The suit was removed to the Southern District of New York.

 In this suit Wessel Duval seeks recovery for general average contribution in the Hogsty Reef Stranding. Particularly, Wessel Duval asserts:

 (a) Claim for contribution toward general average expenses of salvage expenses, sacrifices of hull, jettisoning of cargo;

 (b) Indemnity to the extent of Wessel Duval's general average liability for the salvage services;

 (c) Indemnity to the extent of Wessel Duval's liability for pending freight.

 The United States has pleaded as a -- First Defense --

 (a) General denial;

 (b) That the stranding and expenses incurred by reason thereof were due to:

 (1) unseaworthiness;

 (2) improper manning, equipping and and supplying;

 (3) breaches of time charter; and as a --

 Second Defense --

 (c) That the stranding was due to breaches of contract on the part of Wessel Duval;

 (d) that the United States is entitled to set off, recoup or recover any amount which it may be required to pay Wessel Duval and all damages and expenses incurred by the United States as a result of said stranding.

 (4) United States of America v. Wessel, Duval & Co., Inc. (A. 169-342).

 Following the filing of libel (A. 165-223), the United States filed suit against Wessel Duval -- A. 169-342. The libel alleges three separate causes of action. The first seeks recovery for alleged breach of the time charter w-16-048tc410 predicated on claims of failure of Wessel Duval to put the vessel in a seaworthy condition or to use due diligence to do so, resulting in the Hogsty Reef stranding, occasioning thereby cargo loss, expense to salvage and protect cargo, loss of use of the vessel and other damage. Specifically, the damages claimed are:

 (a) the loss of sugar jettisoned; (b) causing the United States to be liable for salvage service; (c) causing the United States to incur loss and expenses in preserving cargo after the strand; (d) causing loss of the use of the vessel to the United States.

 In the second cause of action the United States claims that the stranding was a general average situation and that Wessel Duval is required to contribute in general average and sues for that contribution. The third cause of action which was added by amendment allowed on trial alleges that the foregoing recited alleged failures of Wessel Duval constituted egregious fault and such variation from the terms of the contract as to amount to deviation.

 The answer in substance (a) denies the first cause of action; (b) admits that a general average occurred and joins with the libelant in requesting a general average statement be made; (c) defends on the ground that due diligence was used to make seaworthy; (d) defends on the ground that the loss, if any, was caused by errors of navigation; (e) affirmatively defends on the ground that the one-year statute of limitation of the Carriage of Goods by Sea Act, 46 U.S.C.A. § 1300 et seq., bars the first cause of action; (f) as a setoff (also denominated counterclaim) seeks damages from the United States for failure to pay hire, for failure to return the vessel in like good order and condition, and for failure to contribute in general average following the stranding at Cardenas; (g) pleads the provisions of Article 12c of the Charter Party under which the United States in substance contracts to pay hire for loss of time provided Wessel Duval on request transferred to the United States such claims as Wessel Duval may have as against persons causing the loss; (h) joins with the United States in its request for general average; (i) pleads limitation of liability; and (j) for a further setoff (also denominated counterclaim) pleads that the United States has failed to pay further charter hire.

 (5) Wessel, Duval & Co., Inc. v. United States of America (A. 172-156).

 Wessel Duval then filed a cross-libel against the United States, and therein asserted claims for:

 (a) failure of the United States to pay charter hire for the vessel;

 (b) failure to return the vessel in like good order and condition;

 (c) claim for cleaning holds on or about November, 1948, at Seattle, Washington (this amendment was allowed on trial);

 (d) claim for general average contribution in connection with the grounding of the vessel at Cardenas.

 In the first cause of action it is alleged that the claims pleaded in this cross-libel came within the disputes clause (Article 24 of the Charter Party); that the United States waived the disputes clause by filing suit and that Wessel Duval was prevented from instituting suit on the contract until September 4, 1951, when the United States instituted suit against Wessel Duval by filing suit numbered (4) above (A. 169-342). For a second cause of action Wessel Duval pleads that under Article 12c of the Charter Party the United States is obliged to pay hire when the vessel is detained provided Wessel Duval will assign to the United States its claim against any third party causing the detention and that the United States is obliged to indemnify Wessel Duval.

 The United States answers (a) with a general denial, (b) pleads the disputes clause as a complete defense, (c) pleads the statute of limitations under the Admiralty Act and Public Vessels Act, 46 U.S.C.A. § 781 et seq., and (d) pleads as a partial defense (also denominated counterclaim) the cost of discharging sand ballast from the vessel.

 Prior to trial, motions addressed to the pleadings in A. 169-342 and A. 172-156 came on to be heard before Judge Dimock. His decision is reported at D.C., 115 F.Supp. 678.

 It is to be noted that in United States v. Wessel Duval (A. 169-342) the amended answer sets off claims for breach of contract by the United States in failing to contribute in general average as a result of the stranding at Cardenas and in failing to return the vessel at the end of the time charter in like good order and condition and to pay charter hire, and that these same claims are alleged in the amended cross-libel filed by Wessel Duval v. United States (A. 172-156), as the basis for affirmative recovery against the government. This duplication of pleading was brought about no doubt by belief of the proctors for Wessel Duval that a counterclaim may not be set up in an answer. See Local Admiralty Rule 16, but see Sup.Ct.Admiralty Rule 50, 28 U.S.C.A.

 Judge Dimock held on motion to the exceptive allegations to the libel filed in A. 169-342 that the time charter incorporated the 1-year limitation of Section 3(6) of the Carriage of Goods by Sea Act, 46 U.S.C.A. § 1303(6), so as to bar claims alleged for cargo loss or damage stated in the first cause of action of this libel. The judge further held that although the two-year Suits in Admiralty limitation, 46 U.S.C.A. § 745, barred Wessel Duval from affirmative recovery on its claims in A. 169-342 and A. ...


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