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Gemini Navigation Inc. v. Philipp Brothers Division of Minerals & Chemicals Philipp Corp.

decided: July 1, 1974.

GEMINI NAVIGATION, INC., PLAINTIFF-APPELLEE,
v.
PHILIPP BROTHERS DIVISION OF MINERALS & CHEMICALS PHILIPP CORPORATION AND ROYAL INSURANCE COMPANY, LIMITED, DEFENDANTS-APPELLANTS



Appeal from a judgment of the United States District Court for the Southern District of New York, Metzner, J., entered after a trial by the court without a jury, holding defendants-appellants liable to plaintiff-appellee for contribution in general average. Reversed.

Waterman, Friendly and Mulligan, Circuit Judges.

Author: Waterman

WATERMAN, Circuit Judge:

Defendants-appellants Philipp Brothers and Royal Insurance Company Limited appeal from a judgment of the United States District Court for the Southern District of New York entered after a trial by the court without a jury, holding defendants liable to plaintiff-appellee Gemini Navigation Inc. for contribution in general average. Invoking the "clearly erroneous" standard of Rule 52 of the Federal Rules of Civil Procedure, appellants implore us to hold that the findings of fact upon which the judgment below was predicated are unsupported by the evidence which was before the district court. As a rule, we are unwilling to disturb the factual determinations reached by an able and experienced trial judge. However, after a careful review of the findings here, we conclude, without hesitation, that the district court's findings are clearly erroneous. Accordingly, we reverse the decision below and order that judgment be entered in favor of defendants-appellants.

Plaintiff-appellee Gemini Navigation Inc. ("Gemini") was the owner of the vessel S.S. Ionic Bay ("Ionic"). Philipp Brothers ("Philipp") is the owner of a particular cargo which was conveyed by the Ionic from Costanza, Roumania to Charleston, South Carolina. Royal Insurance Company Limited ("Royal") is the cargo owner's insurer and was a defendant in the district court by virtue of its guarantee to pay any contribution due from the cargo owner.

This case concerns the effort of a vessel owner to obtain from a cargo owner contribution in general average for which the cargo owner is alleged to be legally liable.*fn1 What emerges from a close inspection of the events which comprise the final odyssey of the Ionic, however, is an audacious attempt to foist onto the cargo owner expenses which legitimately should be borne by the vessel owner alone.

Our tale begins in the Far East on June 28, 1966, well before the Ionic had loaded the cargo owned by Philipp. On that date the Ionic departed from Singapore and set out for its destination of Ancona, Italy. This departure was accomplished barely two days before the June 30th expiration date of the Ionic's International Load Line Certificate.*fn2 This impending expiration was postponed, however, by an extension of the expiration date. An extension is automatically granted to a vessel whose Certificate would otherwise expire if that vessel is at sea, but the Certificate does expire upon the vessel's arrival at the first port reached after the original time for expiration has passed. In this case the Ionic's first port of call after June 30 was Aden, at which port the Ionic applied for and was granted a formal extension of the International Load Line Certificate until August 31, 1966. After proceeding to Ancona, Italy and unloading her cargo there in early August 1966, the Ionic requested a further extension of the Certificate from the American Bureau of Shipping ("ABS"). Acting upon this application, the Bureau sent one of its expert surveyors to inspect the ship while it was still at Ancona. The surveyor, Mr. Passalacqua, discovering that extensive repairs were necessary before a further extension of the Certificate could be authorized, denied the request. The master of the Ionic then advised Mr. Passalacqua that it was his intention to sail to Piraeus where the necessary repair work could be performed. Yet, despite what the surveyor had been told, the Ionic did not sail for Piraeus but rather, at the instructions of its owners, sailed directly to Costanza, Roumania. The vessel reached Costanza on August 16 and immediately began to load the cargo owned by Philipp.

From August 16 until August 27, the stevedore, working twenty four hours a day, continued to load the cargo, which consisted of ponderous steel ingots of irregular shape. Closely supervising the loading, the master of the Ionic, Captain Varias, was sufficiently disturbed by the carelessness of the stevedore's workers in stowing the ingots that he twice, on August 24 and again on August 26,*fn3 wrote to the stevedore complaining that the improper stowage was compromising the ability of the vessel to proceed safely at sea. Also, the master noted in the ship's log for the 26th and 27th of August:

Friday 26th "Loading in No. 5 hold continues. Letter sent to Stevedores stating that the safety of the vessel was in danger owing to bad stowage of cargo.

24:00 Loading continues.

Sat. 27th

10:15 All loading completed. . . .

As can be seen, the loading was completed within one day after the master sent the second of his two protests to the stevedore. Furthermore, there was no log entry which would indicate that subsequent to the master's letters of complaint the dangerous condition of the stowage was rectified by the stevedore. Despite the passage of so little time between the second complaint and the cessation of loading, and despite the absence of a log entry noting that the stevedore had employed satisfactory corrective measures, Captain Varias now claims in his deposition in this litigation that the stevedore had satisfactorily remedied all defects in the stowage of the steel ingots by the time the ship sailed.

The Ionic left Costanza at 4:50 P.M. on the 27th of August, roughly four days before its International Load Line Certificate (for which it had already been denied an extension at Ancona due to the ship's deteriorating condition) was due to expire once again. There was only one way in which the Ionic could complete her voyage to Charleston without having to incur the significant costs of the repairs which the surveyor at Ancona had informed Captain Varias would be necessary before an extension of the Certificate could be granted; if the Ionic could clear Augusta, Sicily, its next intended port of call, by midnight of August 31, 1966, the vessel's Certificate would be automatically extended until she reached Charleston, her ultimate destination. Should the ship be unable to leave Augusta by that time, the ...


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