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TANKER HYGRADE NO. 24, INC. v. TUG DYNAMIC

October 27, 1955

THE Tanker HYGRADE No. 24, Inc., as owner of The Barge Hygrade No. 24, Libelant,
v.
THE Tug DYNAMIC, Conners-Standard Marine Corporation, Claimant-Respondent



The opinion of the court was delivered by: ABRUZZO

On October 1, 1953, an interlocutory decree was entered holding the claimant-respondent liable for damages sustained by the libelant's tank barge Hygrade No. 24 while in tow of the tug Choctaw. The claimant-respondent's tug Dynamic forced the barge against the bank of the New York State Barge Canal which resulted in this decree. This decree was affirmed by the Circuit Court. A Commissioner was appointed to hear the claim of damages and report to this Court. The Commissioner filed his report on May 18, 1955, and libelant has filed exceptions to the report. The claims set forth by the libelant are as follows:

(1) $ 16,530, the fair and reasonable costs of repairing the damage including the sum of $ 3,150 for gas freeing, steaming and cleaning the barge. (Libelant claims this was agreed upon by a survey and insists that this amount could not be disallowed or reduced by the Commissioner. The claimant-respondent did not sign this survey. It will be noted, therefore, that this survey is the estimated cost of the repairs.)

 (2) The sum of $ 3,375.68 demurrage for detention of this barge while she was undergoing repairs.

 (3) The libelant claims full costs and interest.

 The claimant-respondent resisted the claim of $ 16,530 which included the $ 3,150 for gas freeing, steaming and cleaning, resisted the demurrage claim for $ 3,375.68, and contends that interest and costs should not be awarded to the libelant because of circumstances which will be alluded to further on in this opinion.

 The Commissioner in his report made the following allowances: $ 10,852.40 for repairs to the barge, $ 1,800 for gas freeing, and left the question of interest and costs to this Court.

 The libelant's claim is somewhat confused by the claim and chain of ownership of the Hygrade No. 24. Tanker Hygrade No. 24, Inc., was the owner of this barge. It was the only vessel it owned. At the time of the damage, Spentonbush Fuel Transport Service, Inc., was operating agent for this tanker and arranged the cargoes on a commission basis. Ira S. Bushey & Sons, Inc., was the sole stockholder of the corporation, Tanker Hygrade No. 24., Inc., and the Spentonbush Fuel Transport Service, Inc. The confusion which I have referred to has resulted from the fact that all of the accounting work of these two corporations, Bushey subsidiaries, was done under the supervision and control of Ira S. Bushey & Sons, Inc., who repaired the barge. More confusion was created when the insurance company paid $ 15,530 ($ 16,530, less $ 1,000 deductible average) to libelant in lieu of its responsibility for the damage based on the fact that the surveyors' estimated damages indicated that the estimated repairs would amount to the sum of $ 16,530. From that amount the libelant paid $ 3,150 for gas freeing, steaming and cleaning the barge, retained $ 1,500 as working capital because it sustained a claimed loss of income during the period of detention while the barge Hygrade No. 24 was being repaired, and after the deduction of a small towing charge which is not of any consequence the Hygrade corporation remitted $ 10,852.40 to its parent corporation, Ira S. Bushey & Sons, Inc. It appears that the $ 1,500 retained by libelant was never entered on Bushey's books nor posted on any ledger or sales book. It further appears from the testimony that the comptroller of Bushey testified that Bushey usually entered a bill in an original entry book and finally transferred it into a sales book.

 The libelant claims that the admission of the survey in evidence setting forth the estimated and agreed price of repairs must be accepted as the amount to be allowed for these repairs. There are cases upon which damages can be allowed for estimated repairs even though they are never made. That point is not at issue because where a vessel has been repaired a libelant can only be compensated for the actual cost of the repairs. The Catharine v. Dickinson, 17 How. 170, 58 U.S. 170, 15 L. Ed. 233. Of the $ 15,530 paid by the insurance company it appears from the books of the Bushey company that $ 10,852.40 was paid to it for repairs, and I find the Commissioner was justified in making that particular allowance.

 The libelant is entitled to recover the reasonable costs of gas freeing, steaming and cleaning as an incident to the repair work. Claimant-respondent does not dispute that the work was necessary but does resist the amount demanded, to wit, $ 3,150. There is some testimony before the Commissioner that gas freeing might have been done for less than that amount. There is testimony that the Socony-Vacuum Oil Company used a system or method called the Butterworth system for gas freeing and cleaning barges such as this and that its charge for a barge of this type was $ 1,800. Claimant-respondent contends that the libelant should have used the Butterworth system, thereby saving approximately $ 1,350. The evidence as to whether Socony-Vacuum Oil Company would do the work is not definite. It does appear that Socony does not show a desire to take outside work -- in other words, they use this system on their own boats and only take outside work if they have the time, and then it further appears that when they have the time they have more or less of a waiting list, so to speak, and would take a job from whatever client they chose. In view of the indefiniteness of the evidence that the libelant could have had the barge gas freed and cleaned by Socony-Vacuum, the amount it actually paid, to wit, $ 3,150 must be allowed. It must be observed that the time that the libelant might have to wait for Socony-Vacuum to do the work would add demurrage charges which might be more than the difference between $ 1,800 and $ 3,150.

 The libelant is entitled to compensation for demurrage. The cases so hold. The Potomac, 105 U.S. 630, 26 L. Ed. 1194; The Conqueror, 166 U.S. 110, 133, 17 S. Ct. 510, 41 L. Ed. 937.

 With respect to demurrage, the proof again becomes confusing. The Hygrade No. 24 was booked continuously for the season of 1948, to wit, from the opening of the Canal season to the close of the Canal season. There is evidence from the witness Keegan that all of the oil required to be carried under this booking and which Hygrade No. 24 had been doing exclusively had been carried. Nevertheless, we cannot be unmindful of the fact that during the period of detention the Hygrade No. 24 did not carry any oil. Whether it would have worked daily or spasmodically does not clearly appear from the evidence. There is evidence that its average profit was $ 198.72 a day when it was working. There are 19 days involved in this demurrage claim. It cannot be said, in view of the proof, that the libelant is entitled to the $ 198.72 a day that it made pursuant to its Canal booking agreement. Because of the indefiniteness of the proof as to whether or not the Hygrade No. 24 would have worked every day, an allowance of $ 125 a day for 19 days seems to be reasonable under the circumstances.

 Costs are discretionary, The Pocohontas, 2 Cir., 111 F.2d 451, but it is undoubtedly the rule that a successful libelant is entitled to its costs, proper disbursements, the expense of the damage reference including the Commissioner's report, and the charge of the reporter for the minutes of the hearings.

 Libelant claims interest from July 30, 1948, the day of the collision, on all of the items except the demurrage, and upon this item it claims interest from August 27, 1948, the last day of the detention period. The claimant-respondent contests this claim on the ground that the libelant first relied on a survey which was not signed by the claimant-respondent; secondly, because the check of $ 10,852.40 paid to Bushey was not produced until a great many pages of testimony had been taken although subpoenaed (the claimant-respondent contends that had these checks been produced it could have made a deposit in that amount, but I do not see the force to this argument because it could have made a deposit immediately after the decree was signed by this Court); and, thirdly, for the reason that the reference was needlessly prolonged by the libelant.

 The libelant is entitled to interest on the cost of its repairs from the date of July 30, 1948, up to a date which I will proceed to fix. It is entitled to interest from August 27, 1948, on the demurrage up to a date which I will now fix. A notice of trial and note of issue was filed in this action on March 17, 1949. On April 6, 1949, the case was marked ready on the call calendar. On January 5, 1953, it was marked ready on the reserve calendar. On February 2, 1953, the case was adjourned to February 6, 1953, and eventually on October 1, 1953, an interlocutory decree was entered with findings of fact and conclusions of law. It would seem to me that twelve months for any possible appeal and the Commissioner's hearings, if held expeditiously, would be sufficient. The Court will not arbitrate the reasons for these delays. That the hearings before the Commissioner were ...


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