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Esso Standard Oil Co. v. Kaposia

decided: September 30, 1958.


Author: Lumbard

Before CLARK, Chief Judge, and SWAN and LUMBARD, Circuit Judges.

LUMBARD, Circuit Judge.

This is an appeal from an interlocutory decree of the District Court for the Southern District of New York, Archie O. Dawson, J., sitting in admiralty, by which the respondent, American Tankers Corporation (American), was adjudged liable for damage resulting from the contamination of fluid cargo owned by libellant, Esso Standard Oil Company (Esso). The district court found that the contamination resulted from the negligence of American's employees on board the respondent tanker, the SS. Kaposia, in the course of discharging the cargo to Esso's terminal at Harkness Point, Philadelphia on July 25, 1951. The only questions presented for our decision are whether certain findings of fact, which are basic to the decision and which rest largely on the district court's evaluation of expert testimony, are clearly erroneous within the meaning of Rule 52(a) of the Federal Rules of Civil Procedure, 28 U.S.C.A. We find that none of the contested findings is clearly erroneous and consequently we affirm the decision below.

It was not disputed here or in the district court that the contamination occurred through the intermixture of Esso Gasoline with Essoheat Medium, a heating oil, in the heating oil lines and shore tanks in the course of the discharge of both cargoes from the Kaposia. Nor is it disputed that the intermixture could only have occurred through the fault of either libellant's or respondent's employees. Under the charter the liability of respondent is limited to injury to cargo occurring through its own fault or the fault of its servants before the cargo passed the vessel's permanent hose connections in the course of discharge.*fn1 The district court found that the contamination did occur through the fault of respondent's employees on the Kaposia as a result of the improper opening of four valves to permit the cross-connection of the cargo lines servicing the separate ship's tanks containing heating oil and gasoline. Before proceeding to examine respondent's contentions we must state very briefly the relevant physical structure of the Kaposia and the receiving structure at the Harkness Point terminal.

The Kaposia was a modified T-2 tanker, with three cargo systems known as the port, center and starboard systems. Each system was served by a separate pump, and each pump fed a separate permanent discharge hose on deck. Although these systems were separate, they could be cross-connected in two ways: by cross-over valves in the pump room; and by cross-overs at tank 5 from the starboard to the center system, and at tank 7 from the center to the port system. The district court apparently found that the record would only support the possibility of intermixture on the ship resulting from the opening of the cross-overs at tanks 5 and 7, and consequently we will not discuss further the possibility of contamination as a result of a cross-over at the pump room.

On shore, to accommodate the three-cargo tanker, there were three independent cargo lines. The receiving end of each of these lines was composed of flexible hose which was connected to the ship's lines. Each of these hoses led directly from the deck towards a dock of similar elevation and connected with a pipeline. Each pipeline on the dock proceeded inshore for a few feet and then made a right-angle turn to proceed parallel to the shore line. Immediately after this turn each line contained a swing-type check-valve, whose purpose was to retard any backflow from the shore lines to the vessel. Inshore of each check-valve a small take-off or sampling line ran off the main line to permit sampling of the product in the main lines. Each main line then ran several feet further parallel to the shore line, and ended. This piece of straight pipe from a point after the sampling line to the closed end was referred to at trial as a "header." Discharge of the product entering each of the headers was achieved by nine branch lines from each of the three headers running vertically downward from the elevated dock and connecting to a single set of nine lines which once again proceeded inshore at right angles to the shore line and terminated in field storage tanks. In the headers at the top of each of the nine branch lines there was a plug valve, the function of which is to control the flow into the branches. By opening only one of these valves on a header, cargo could be directed to the appropriate shore line and tank. It should be noted that although the three header systems were basically independent, they could be cross-connected, since each header was joined to each shore line by vertical branch pipes. Thus, for example, if on both the number 1 header and the number 2 header the branch lines to the first shore line and tank were open, the two headers would be cross-connected through that shore line. The district court found that the contamination in suit could have occurred on shore only by cross-connection of two otherwise independent headers as a result of the improper opening of a plug valve by libellant's employees.

During the discharge in question the Kaposia's tanks containing gasoline were serviced by the ship's starboard pump, and the cargo was discharged into the number 3 header on shore. The tanks containing heating oil were serviced by the port pump, and the heating oil was discharged into the number 1 header. The gasoline and heating oil were distributed to their respective shore lines and tanks by the opening of the appropriate plug valve on each header. In the course of discharge, Esso's employees took samples from the respective sampling lines every five minutes. The contamination of the heating oil was first discovered by making one of these tests while both products were flowing. At 6:50 P.M. on July 25, 1951, after both products had been flowing for some hours, the test taken at the number 1 header (heating oil) disclosed that the heating oil was contaminated with gasoline, and very shortly thereafter operations were closed down on shore and on the ship. It is not disputed that subsequent tests established that before and after the contamination the cargo still in the Kaposia's tanks was not contaminated. With this summary we can proceed to the examination of respondent's contentions.

At trial there was no direct testimony to the effect that improper valves were actually open either on the Kaposia or on shore. The district court reached its decision by finding first the locations at which and the conditions under which contamination was discovered. Then, by resolving a conflict in expert engineering testimony, it determined that from these preliminary facts it could be deduced as a necessary inference that the contamination must have occurred on board the Kaposia.

We shall consider first respondent's attack upon the validity of this inference, insofar as the inference was based on the undisputed finding of a contaminated sample at the sampling line on the number 1 header. Respondent advances several arguments. The first is that the district court was clearly erroneous in finding that the physical location of the sampling line was at a point between the ship and the header before the line entered the header. If there were error in this determination it would necessarily infect the derivative inference; but the assertion is without support in the record or in the opinion below. That the court clearly understood the physical location of the line is made amply clear by its opinion:

"Upon reaching the No. 1 header the gasoline, it is alleged, would proceed back down the No. 1 line * * * and pass through the sample house and by the check valve and on to the ship's flange." 148 F.Supp. at page 902.

Indeed, at trial the court noted the possibility of this confusion, and expressly clarified its use of the word "header." The argument is without merit.

Respondent next insists that the district court erred in its finding that from the discovery of contamination at the sampling line on the number 1 header contamination on board ship could properly be inferred. But respondent mistakes the finality which attaches to the finding that the inference was justified. It is elementary that if the trial court in deciding a contested issue of fact is confronted with a substantial issue of the credibility and the weight to be attached to conflicting oral testimony, its findings are not to be reversed unless they are clearly erroneous. Federal Rules of Civil Procedure 52(a); see, e.g., Iravani Mottaghi v. Barkey Importing Co., 2 Cir., 1957, 244 F.2d 238, 248, certiorari denied 1957, 354 U.S. 939, 77 S. Ct. 1402, 1 L. Ed. 2d 1538; Lee Dong Sep v. Dulles, 2 Cir., 1955, 220 F.2d 264; Orvis v. Higgins, 2 Cir., 1950, 180 F.2d 537, certiorari denied, 1950, 340 U.S. 810, 71 S. Ct. 37, 95 L. Ed. 595; Broadcast Music, Inc. v. Havana Madrid Restaurant Corp., 2 Cir., 1949, 175 F.2d 77. This is not the kind of case in which the contested finding is based

"* * * not on facts to which a witness testified orally, but only on secondary or derivative inferences from the facts which the trial judge directly inferred from such testimony." American Tobacco Co. v. The Katingo Hadjipatera, 2 Cir., 1951, 194 F.2d 449, 451, certiorari denied, 1952, 343 U.S. 978, 72 S. Ct. 1076, 96 L. Ed. 1370.

and we may therefore not disregard such a finding merely because other rational inferences are available from the undisputed facts. See E. F. Drew & Co. v. Reinhard, 2 Cir., 1948, 170 F.2d 679, 684. However positive the laws of physics may otherwise appear, in this case the physical behavior of particular fluids in particular pipes was a contested issue of fact as to which competent and conflicting expert oral testimony was heard and evaluated by the district court. We are not aware of any principle which requires such testimony to be treated differently in this court from any oral testimony on an issue of fact, and such a finding upon expert testimony will not be reversed unless this court "is left with the definite and firm conviction ...

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