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COCA COLA CO. v. SS NORHOLT

November 6, 1971

The COCA COLA CO., TENCO DIVISION, Plaintiff,
v.
SS NORHOLT, her engines, etc., et al., Defendants


Newman, Judge (United States Customs Court Designated to sit as United States District Judge).


The opinion of the court was delivered by: NEWMAN

NEWMAN, Judge (United States Customs Court Designated to sit as United States District Judge).

This action, involving maritime causes for breach of contract and cargo damage, was tried to the court.

 Plaintiff -- owner of a shipment of tea carried aboard the S.S. Norholt *fn1" on a voyage from Avonmouth, England to Port of Newark, New Jersey -- sought recovery for damages to a number of chests of tea stained by contamination resulting from the leakage of cresylic acid from a trim tank in the No. 1 hold of the ship. The action was commenced against the vessel owner, A/S Ivarans Rederi ("hereinafter Owner") and the time charterer, Bristol City Line of Steamships Ltd. ("hereinafter Charterer").

 A settlement agreement was reached with the plaintiff whereby plaintiff agreed to accept $25,000. for its damages, the Owner and Charterer each advancing $12,500. That settlement agreement was formalized in an order dated June 25, 1969, which reserved for the trial court the remaining issue as to which defendant was primarily liable for the settlement fund and for the cost of defending the action. The Owner and the Charterer are before the court, each claiming that the other must bear the onus of the entire loss, and each seeking indemnity from the other for the $12,500 advanced, plus reasonable counsel fees incurred.

 Certain facts are not in dispute. On December 18, 1963 at Avonmouth, England, 754 chests of tea belonging to plaintiff were loaded by the Charterer onto the Norholt for transportation to Port Newark. The entire lot of tea was stowed in No. 1 hold tween deck, along with other general cargo. A bulk cargo approximating 129 tons of cresylic acid, also loaded at Avonmouth, was stowed in the trim tank beneath No. 1 hold. *fn2"

 Cresylic acid is a coal tar product which has a strong pungent odor of creosote or disinfectant. It appeared that cresylic acid had been carried in the same tank on three prior voyages, *fn3" uneventfully and without any seepage of acid or damage to the other cargo carried in the No. 1 tween deck. But it is well within the realm of possibility that the chemical properties of the cresylic acid increased the porosity of the vegetable fibre in the tank lid's "Lighthouse" gasket, thus inevitably shortening the life of that gasket.

 During the transatlantic voyage in issue, the Norholt encountered heavy weather with wind forces gusting up to Force 11 on the Beaufort Scale. The vessel met heavy pounding and rolling, thereby compounding the prescription for the ensuing spoilage. When the ship arrived at Port Newark in January 1964, it was definitively ascertained that cresylic acid had leaked through the tank and damaged a portion of the tea.

 There was a heavy steel gasketed lid over the cargo tank in question, secured by 42 swing bolts. Built into this lid plate was a manhole cover, also bolted and gasketed. However, although the manhole gasket was made of asbestos, the tank lid gasket was a "Lighthouse" composed of wax on vegetable fibre and inorganic filler. I am convinced from the testimony that the Lighthouse gasket was not an appropriate packing for use when coming in contact with cresylic acid -- particularly so, when challenging the gods of weather during a stormy transatlantic voyage in January. Indeed, the veteran Chief Officer Roiseth testified: "This was an unusual crossing. One of the worst I have ever had * * * It was impossible [at times] to open up the hatches [for inspection] because we were shipping green seas * * * over the forecastle head and Number One and Number Two hatch".

 Owner claims that it was the Charterer's responsibility under the charter party to furnish any special equipment as required if any unusual cargo would be carried. On the other hand, Charterer insists cresylic acid was not an unusual cargo; and that it was the vessel's officers, not the shippers, who were obligated to provide and maintain a seaworthy tank for the cresylic acid and that they failed to do so.

 The charter party specifically provided that Owner warranted that the vessel's deep tanks were suitable for dry or liquid cargo. A vessel owner gives an implied warranty of seaworthiness of the chartered vessel at the commencement of every voyage. Horn v. Cia de Navegacion Fruco, S.A., 404 F.2d 422 (5th Cir. 1968), cert. den., 394 U.S. 943, 89 S. Ct. 1272, 22 L. Ed. 2d 477 (1969); The Caledonia, 157 U.S. 124, 15 S. Ct. 537, 39 L. Ed. 644 (1895). The owners must provide a vessel with equipment and tanks to safely store and transport the various cargoes, or the warranty has been breached. The Agwimoon, 24 F.2d 864 (D.C. Md. 1928); Columbus Company v. Shore, 276 F.2d 93 (5th Cir. 1960).

 Prima facie, a leaking tank constitutes unseaworthiness. Artemis Maritime Co. Inc. v. Southwestern Sugar & Molasses Co., Inc., 189 F.2d 488 (4th Cir. 1951); Jefferson Chemical Co. v. Grena, 413 F.2d 864 (5th Cir. 1969). See also, American Linseed Co. v. United States, 40 F.2d 657 (E.D.N.Y. 1930); City of Dunkirk, 10 F.2d 609 (S.D.N.Y. 1925). Unquestionably, the vessel owners in the instant case agreed to carry the cargo, knowing it was a corrosive liquid, and knowing that a secure tank was necessary to transport that cargo safely. The obligation of the Owner was breached under the facts here, when the tank leaked from the lid. Consequently, in providing a defective tank for the carriage of the acid there was a breach of the Owner's duty to provide a seaworthy ship, and that breach contributed to the resulting damage to the tea cargo.

 Moreover, the record shows a failure by the Owner to adequately inspect and test for integrity of the tank. Thus, Chief Officer Roiseth admitted that although the manhole cover gasket "was examined every time the cresylic acid was loaded and discharged", significantly, "the gasket on the tank top was never inspected after the ship started carrying cresylic acid".

 And Chief Officer Roiseth -- admittedly not familiar with gaskets -- mislead the shipper's representative: *fn4" "I did say I believe it [the gasket] was made of asbestos and tallow. It was really made of hemp and tallow"; additionally, Roiseth inaccurately stated to the Charterer's representative: "I told him I assumed it was asbestos".

 Captain Stockman, a marine consultant testifying as an expert witness for the Owner, conceded: "I don't think I would carry cresylic acid with a hemp gasket on the cover"; furthermore, even if he [Stockman] transported cresylic acid with an asbestos gasket, ...


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