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March 8, 1957

HECHT, LEVIS & KAHN, Inc., Libellant,

The opinion of the court was delivered by: SUGARMAN

Hecht, Levis & Kahn, Inc., sues the Isthmian Steamship Company for damage to a cargo of rubber carried on the S.S. Steel Recorder.

At the opening of trial, the Rubber Corporation of America was substituted as party libellant, and Isthmian Lines, Inc., was substituted as party respondent. The pleadings are amended accordingly.

The cargo here involved is a shipment of 500 tons of No. 1 ribbed smoked sheet rubber. It comprised 20 lots, each of 224 bales. One lot was accepted by the consignee despite trifling damage; the suit concerns the remaining 19 lots.

 The rubber was purchased by Hecht, Levis & Kahn, Inc., from Anglo French & Bendixsens Ltd., Singapore. Payment was made by sight drafts on Hecht, Levis & Kahn, Ltd., London, for 70,666.92 pounds sterling, which was paid prior to the arrival of the goods at New York and after the consignee had received the bills of lading.

 Hecht, Levis & Kahn, Ltd., was the parent corporation of both Hecht, Levis & Kahn, Inc., and Anglo French & Bendixsens Ltd. However, each of the three corporations involved in the transactions was managed by its own officers independently of the others and all of their dealings, in so far as the issues of this suit are affected, were at arm's length.

 One lot of 224 bales of rubber was loaded at Singapore on February 15, 1954. Nineteen lots were loaded at Port Swettenham on February 17 and 18, 1954. The S.S. 'Steel Recorder,' after visiting several other ports of call, departed for the United States and arrived in New York on May 4, 1954. The vessel's itinerary had been altered en route to include loading of cargo at Calcutta which extended the length of the voyage. The lot loaded at Singapore was moved at Calcutta to make room for other cargo. No claim, however, is made that the prolonged voyage was related to the damaged condition of libellant's rubber. When the rubber was unloaded, nineteen lots were found to be damaged by contact with fresh water.

 The bales were made up of sheets of rubber imprinted with a diamond or wobble pattern, each sheet being approximately 1/4' thick, 19' wide and 60' long in extended state, but folded over to a length of approximately 24' for shipment. In making up the bales, stacks of these folded sheets were enveloped in sheets of the same rubber. The package was sealed by lapping and folding the ends of the wrappers and punching them in with a heated iron or by applying latex sealer. The dimensions of a bale was approximately 19'x19'x24'. The exterior was given a coating of talc or talc and tapioca flour compound which was brushed on in a wet state and dried quite promptly. The purpose of this coating was to prevent the bales from adhering together while in stow. The shipping marks were finally stencilled over this coating.

 The bills of lading under which the cargo in suit was carried and on which the consignee relied in making payment are clean of exceptions and recite that the rubber was in apparent good order and condition when taken aboard.

 The damage was caused by fresh water entering the bales at the folds in the wrapper sheets, resulting in deterioration inside at the edges of the sheets and in the wrapper sheets. I find that the water was not in the bales at the time that they were wrapped and that the wetting occurred after the bales were made up. The problem is -- when?

 The libellant produced no evidence on its direct case, of the condition of the goods when they were accepted for carriage on the S.S. Steel Recorder. It relied solely on the recital in the bills of lading that the bales of rubber were in apparent external good order and condition. *fn1"

 But a libellant sustains his burden by solely relying on the clean bill of lading only when the condition of the goods on outturn is utterly inconsistent with the represented apparent good condition at the time of lading. *fn2"

 Where the bad condition on outturn is consistent with apparent good order and condition on lading, the libellant's prima facie case must contain proof of either (a) bad order and condition on lading, (b) good internal condition on lading or (c) negligence in stowing or carriage.

 For obvious reasons the respondent forbore moving for dismissal at the end of libellant's direct case. *fn3" It proved *fn4" that the cargo was loaded in the manner customarily employed at Singapore and at Port Swettenham. At the time the goods were received aboard the S.S. Steel Recorder, the inspection given by the ship's officers, which was reasonable under all the circumstances, revealed that the cargo was in fact in apparent good order and condition. The holds were properly ventilated during the voyage. At no time was sweat present in the cargo compartments. No sanitary or fresh water lines running through the holds were faulty in any manner, nor could rain have been the cause of the wetting of the libellant's rubber. Precautions were observed to prevent this source of moisture from contaminating the cargo. The evidence militates against the probability of rain, descending through the hatches, being the source of the water found in this rubber.

 The rubber stowed in No. 4 shelter deck turned out sound except for bales in 'the middle of the pile,' according to the third mate of the S.S. Steel Recorder. Respondent's expert witness, who surveyed the cargo in suit when the stow was broken in New York and who was in attendance during the discharge of this rubber, found no distinct pattern of damage through the stow. On the contrary he found that the irregular position of the damaged bales in the stow was consistent with a pre-loading wetting and inconsistent with water coming in ...

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