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F. JACOBUS TRANSP. CO. v. GALLAGHER BROS. SAND & G

March 26, 1958

F. JACOBUS TRANSPORTATION COMPANY, Inc., as charterer in possession of THE Scow DOROTHY CREAN, Libellant,
v.
GALLAGHER BROTHERS SAND & GRAVEL CORPORATION, Respondent



The opinion of the court was delivered by: HERLANDS

The questions before the Court are presented by exceptions filed to the second and third affirmative defenses contained in the respondent's second amended answer. For the reasons expressed in this opinion, the exception to the second defense is overruled, and the exception to the third defense is sustained.

I.

This is a libel for damage to the scow Dorothy Crean. The libel alleges that, on or about November 15, 1955, the libelant chartered the Dorothy Crean to the respondent for an indefinite period, at a fixed daily rate, 'with the understanding that the said scow was to be returned to the libellant by the respondent, upon the termination of the charter period in the same good condition as when received, ordinary wear and tear only excepted.'

 The scow was returned to libelant on or about September 5, 1956 in a badly damaged condition, not due to ordinary wear and tear, but due to the alleged result of the respondent's negligence.

 II.

 The respondent's second amended answer denies the material allegations of the libel, except that it admits: (a) Prior to September 2, 1956, libelant supplied the Dorothy Crean to respondent for transportation of respondent's cargoes; (b) The scow capsized while carrying respondent's cargoes; (c) Any resulting damage was not caused by ordinary wear and tear.

 The second amended answer sets up the following three affirmative defenses:

 1. The first affirmative defense: Libelant agreed to supply a competent crew for the scow. The scow capsized while and because it was unattended. Any damage is attributable to libelant's negligence.

 2. The second affirmative defense: For more than ten years before 1956, libelant and respondent met annually to discuss the terms and conditions under which libelant would furnish vessels to respondent during the ensuing year for the transportation of respondent's sand and gravel. At these meetings, the parties would often alter or modify some of the terms, conditions and rates that had been in effect during the preceding year. The terms, conditions and rates not so altered were continued in force for the following year.

 In February 1952, the parties agreed that libelant would insure each of the scows it supplied and respondent would be named as the assured. In March 1953, all of the terms and conditions were continued as they had been, except for rate changes.

 In the spring of 1953, libelant informed respondent that it might substitute vessels other than those originally agreed upon and that none of the substitutes might be insured. The existing agreement was then 'modified to the extent that, as to those vessels of libelant for which libelant did procure marine insurance, respondent was to be named as an assured and that in any event respondent's liability for damage to a vessel supplied by libelant should not exceed such amount as was covered by insurance which respondent might have covering its hulls, tower's liability insurance covering its tugs, and protection and indemnity insurance covering its equipment, and that respondent was not to be liable to libelant for any injury, losses or damage to a scow furnished by libelant, howsoever occurring, beyond the extent to which respondent's liability was included within such insurance.' (Emphasis supplied.)

 In February or March of 1954, 1955 and 1956, this particular term of the agreement was continued without change. There was no agreement as to the amount or type of insurance. Respondent's prayer is that the Court limit its liability in accordance with the foregoing contractual terms.

 3. The third affirmative defense: Respondent invokes the limitation of liability statutes. 46 U.S.C.A. sections 182 to 186 (sections 4282 to 4286 of the ...


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