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ANTILLES SHIPPING CO. v. TEXACO

September 23, 1970

ANTILLES SHIPPING CO., Ltd., as Owner of SS PACHEMIST, Plaintiff,
v.
TEXACO, INC., Defendant


Cooper, District Judge.


The opinion of the court was delivered by: COOPER

COOPER, District Judge.

This is an admiralty action brought by plaintiff Antilles Shipping Co. Ltd. (Antilles) against defendant Texaco, Inc. (Texaco) to recover damages sustained as a result of the alleged breakdowns of the thrust bearings and rotor journals of plaintiff's tanker T/V Pachemist, first in December, 1963 and then again in January, 1964, on the ground that they were caused by the unsuitability of the vessel's lubricating oil, Regal Oil 500 E.P., manufactured and recommended by Texaco for use in the lubrication system of the Pachemist.

 Plaintiff claims breach of warranty and negligence as the bases of defendant's liability: breach of warranty because the oil was allegedly not fit for the use to which it was put and for which Texaco had recommended it, thus sustaining damages by reason of unsuitability; negligence because Texaco marketed and recommended use of the oil as a lubricant for the Pachemist after it should have known of the oil's alleged unsuitability therefor.

 At the outset of trial it was agreed that the issue of liability should be tried and determined first and the issue of damages await the Court's disposition thereon. The issue of liability was tried before this Court on April 1, 2, 3, 1970, at the conclusion of which decision was reserved. This opinion constitutes our findings of fact and conclusions of law on the issues presented, pursuant to Rule 52, F.R. Civ. P.

 At the outset, defendant "admits the sale of the product to plaintiff, and also admits that it warranted the product to be suitable for use on the T/V Pachemist." Defendant's Post Trial Brief, May 11, 1970, p. 1. The parties acknowledge that the only issues remaining in dispute are the factual questions of unsuitability of the product and causation. Id. ; Plaintiff's Reply Brief, May 18, 1970, p. 1. Plaintiff has the burden of establishing each of these elements by a preponderance of credible proof. Thus, plaintiff must show that the oil in question was not fit for the purpose of lubricating the engine and shaft bearings of the ship and that damages were suffered as a result of its unsuitability. In this regard, plaintiff must show that it used the product properly. See, e.g., Peragine v. Esposito, 17 Misc. 2d 621, 184 N.Y.S. 2d 25, aff'd 8 A.D. 2d 710, 185 N.Y.S. 2d 750 (1st Dept. 1959).

 With respect to plaintiff's burden of proving causality, it may not recover for breach of warranty if the essential cause of the occurrences here in question were other than the alleged unsuitability of the oil. See, e.g., Natale v. Pepsi-Cola Co., 7 A.D. 2d 282, 284, 182 N.Y.S. 2d 404 (1st Dept. 1959). Moreover, "[where] the facts proven show that there are several possible causes of an injury, for one or more of which the defendant was not responsible, and it is just as reasonable and probable that the injury was the result of one cause as the other, plaintiff cannot have a recovery, since he has failed to prove that the negligence [or breach of warranty] caused the injury." Ingersoll v. Liberty Bank of Buffalo, 278 N.Y. 1, 7, 14 N.E. 2d 828, 829-830 (1938); Schwartz v. Macrose Lumber & Trim Co., Inc., 29 A.D. 2d 781, 287 N.Y.S. 2d 706 (2d Dept. 1968), aff'd, 24 N.Y. 2d 856, 301 N.Y.S. 2d 91, 248 N.E. 2d 920 (1969).

 We now turn to analyze the two incidents of damage to the Pachemist which are the subject of this complaint and plaintiff's contentions as to the factors which made defendant's oil unsuitable and induced damages.

 Facts

 The Pachemist was purchased by Antilles from Texaco in early 1963. Tr. *fn1" 10, 11. The ship was overhauled and converted into a chemical carrier by Antilles in Germany. Tr. 11, 12, 15. In the course of overhaul it was necessary to enter the turbine power plant. As a result, the oil from the lubricating system was pumped out into drums and tanks on shore. Tr. 20. The oil in the vessel was the same Texaco Regal Oil 500 E.P. in issue, an oil containing a chlorine additive. A representative of Westinghouse, manufacturer of the turbine, was present during overhaul. He reported on June 16, 1963, as follows:

 
"Gears and housing very dirty. Removed all pieces of shims. This condition was witnessed by Mr. Holman. Recommended removing all piping for cleaning and cleaning out housing. Mr. Holman said to remove only pipe necessary to do job."
 
Plaintiff's exhibit 3 in evidence.

 Mr. Holman was plaintiff's representative who supervised all of the conversion work on the Pachemist. Tr. 61. He acknowledged that this report was accurate and that only some, (emphatically not all) of the lubricating system's piping was removed. Tr. 93-94. See Tr. 158-160. The Pachemist's Chief Engineer Witte testified that cleaning of that piping was accomplished ashore by chemical bath followed by steam lancing. Tr. 112. The pipes were then plugged. Tr. 113. The various tanks of the lubricating system were cleaned with rags. Tr. 66, 113. At the time of reassembly any pipes which had come unsealed were blown out with compressed air to remove foreign matter. Tr. 118.

 Upon Texaco's finding (through its European affiliate Caltex) after analysis of samples that the oil removed from the vessel was fit for further use, and Texaco's recommendation of the continued use by Antilles of Texaco's Regal Oil 500 E.P. in the Pachemist, the oil stored ashore was returned to the ship's lubricating system after reassembly was completed, together with new amounts of such oil purchased from Texaco to replace not alone that portion of the old which had been found unfit but also an additional quantity lost because of an open valve. Plaintiff's exhibit 6 in evidence; Tr. 63-67; Tr. 20, 22, 23. No flushing oil was used to clean the system before returning the lubricating oil. Tr. 157.

 Following recommissioning the vessel was delivered to plaintiff's crew. Tr. 25. In September, 1963 she sailed to the United States, taking on cargo at various Gulf ports, passed through the Panama Canal and proceeded to San Francisco. Tr. 28, 29. Samples of the lubricating oil were taken on October 16, 1963 in San Francisco and analyzed by Texaco. Tr. 29. Texaco found that the oil was in good condition and fit for further use. Plaintiff's exhibit 12 in evidence; Tr. 29, 30. On September 17, 1963 the Pachemist set sail from San Francisco bound for Japan. High seas which strained the vessel were immediately encountered upon departure and continued throughout the voyage. Plaintiff's exhibit 14 in evidence, pp. 4, 5. On October 30, 1963 the ship sustained structural damage from the heavy weather. Id. at 2-5, 7 and 8. Similar weather was encountered during September, November, and December, 1963 as well. Id. at 2, 14.

 In early November, 1963, the ship discharged her cargo in various Japanese ports. She departed Japan November 11, 1963. On December 1, 1963 as she neared the Panama Canal trouble with the turbine thrust bearing was noted. Id. at 5. Temporary repairs were made then and again on December 7 and 8, 1963. Id. at 5-6. The vessel then proceeded through the Canal to Todd Shipyard, Galveston, Texas for permanent repairs to her turbine and also to the heavy weather structural damage. Id.

 These repairs were made between December 12 and 23, 1963 under the supervision of the American Bureau of Shipping, Salvage Association, London, United States Salvage Association and plaintiff's representative Mr. Holman. Plaintiff's exhibits 13, 14, 14A-F in evidence; Defendant's exhibit B in evidence. Westinghouse also sent a representative. Defendant's exhibit A in evidence. Plaintiff submitted a claim for insurance based on crew negligence against the underwriters. It was determined that the damage to the turbine did result from a loss of lubrication due to crew negligence. Plaintiff's exhibits 14 at 2-3 and 14 E-F; Defendant's exhibits A and B; Tr. 79, 102-103. On the basis of this finding by the surveyors present during repairs and supported by the insurance adjuster, plaintiff's claim was honored and paid by the underwriters. Tr. 51, 52.

 The Westinghouse report on damages to the Pachemist noted in part:

 
"Customer's oil system was very dirty, it is apparent that the oil was 'lost' at one time."
 
Defendant's Exhibit A, p. 4.

 The surveyors made note of the contaminated state of the lubrication system (metal and grit) after this first breakdown and recommended it be opened, thoroughly cleaned and closed in good order. Plaintiff's Exhibit 14, pp. 11, 15; Defendant's Exhibit B. A report by the surveyor for the American Bureau of Shipping dated December 21, 1963 stated that "sump and gravity tanks were opened and cleaned, lines flushed clear and system left in good clean condition." Plaintiff's exhibit 13. No flushing oil was used in cleaning, however. Tr. 157, 158. The vessel's lubricating oil was not changed at Galveston; plaintiff continued to use defendant's Regal Oil 500 E.P. Chief Engineer Witte deposed that this oil was clean before the ship left Todd Shipyard because it was purified before it was returned to the sump tank. Tr. 165.

 On December 22, 1963, the vessel left Todd Shipyard and after taking on cargo headed again for Japan. Tr. 35, 36. Prior to reaching Hawaii, on January 13, 1964, trouble again developed, this time involving the high pressure turbine bearing. Plaintiff's exhibit 17 in evidence, p. 5; Tr. 79, 80. The Pachemist proceeded to Honolulu, arriving January 20, 1964, where repairs were made from January 21 to January 28 under the supervision of the American Bureau of Shipping, Salvage Association, London, and United States Salvage Association. Plaintiff's exhibits 18 and 19 in evidence; plaintiff's exhibit 17, ...


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