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January 9, 1975

S. S. ATHINAI, her engines, boilers, etc., and Hellenic Lines, Ltd., Defendants

Bonsal, District Judge.

The opinion of the court was delivered by: BONSAL

BONSAL, District Judge.

This is an action in admiralty to recover damages arising from injury to cargo. Plaintiff, a New York corporation engaged in the distribution of produce, fresh fruits, and vegetables, was the consignee of a shipment of chestnuts under bill of lading No. 28 issued by defendant Hellenic Lines, Ltd., and dated October 24, 1972. Defendant, a Greek corporation, was at all material times the operator of the Greek flag steamer ATHINAI, engaged in the common carriage of goods by water for hire. The action was tried by the Court without a jury.

 On or about October 24, 1972, at the Port of Leghorn, the shipper R & G Seppia, by its agent "Pilade Gianias," delivered to defendant, as carrier, for shipment to New York, 974 fifty-five-pound bags of fresh chestnuts. Defendant issued a clean bill of lading indicating receipt of the chestnuts in apparent good order and condition. "Phytosanitary Certificates" covering the shipment of chestnuts were issued by the Italian Government. According to the bill of lading, the bags were broken down into six lots and contained three sizes of chestnuts: "60/65," "80/85," and "90/95," with the size "90/95" denoting the smallest chestnuts.

 The 974 bags of chestnuts were stowed in the No. 3 lower hold of the vessel ATHINAI, which constituted the reefer space. The bill of lading indicated that the temperature was "to be kept centigrades ퟿." However, according to the deposition of the chief engineer of the ATHINAI and the ATHINAI's refrigerator log book, the temperatures for the voyage were mostly 3 to 4 degrees centigrade (37.4 to 39.2 degrees fahrenheit) with dips to 2 degrees C (35.6 degrees F) and an occasional rise to 6 degrees C (42.8 degrees F). Austin McCabe, Jr., plaintiff's expert on chestnuts, testified that the most desirable air temperature for stowage of chestnuts is 32 degrees F, with a range of 32 degrees F to 40 degrees F being acceptable. McCabe stated that "for each one degree the temperature rises the respiration rises and the enzymic action rises and it shortens the life of the product each degree." (Transcript, at 186.)

 On Friday, November 17, 1972, the ATHINAI berthed at Hellenic Lines' terminal in Brooklyn. Sylvester Levatino, who was an officer of the plaintiff, testified that plaintiff expected the vessel to arrive around November 3, in time to sell the chestnuts for the Thanksgiving holiday. Levatino stated that the lateness of the vessel caused plaintiff to lose orders. However, there is no evidence that defendant had agreed to deliver the chestnuts before Thanksgiving or that the vessel was diverted during the voyage. At trial, plaintiff withdrew any claim that it was entitled to damages for late arrival of the ATHINAI.

 On November 18, 1972, the day following the arrival of the ATHINAI, the 974 bags of chestnuts were discharged, and a joint survey was made by Max Barkus, plaintiff's surveyor, and Kjell Hansen, defendant's surveyor. Barkus testified that he observed the bags coming off the vessel on pallets and being stacked on the pier. The inspection was conducted by selecting two bags from each of the six lots and pulling out 100 chestnuts at random from each bag selected. Barkus testified and indicated in his written report that many of the bags and their contents were wet, that some chestnuts were sticky and that the wet bags emitted a musty odor. According to Barkus' report, the pulp temperatures of the chestnuts ranged from 38 degrees F to 41 degrees F and the chestnuts were: "Fairly well formed and shaped. Fairly well sized to some irregular and small for graded size. Fairly good color. Medium to dark brown color." Barkus also found that 2 to 6 percent, average 3 percent, of the chestnuts were snowballs, i.e. chestnuts covered with a heavy or wet mold; that 4 to 16 percent, average 7 percent, showed moderate to heavy surface mold; that 10 to 40 percent, average 25 percent, showed light surface mold; that 2 to 6 percent, average 3 percent showed worm injury; and that 2 to 8 percent, average 4 percent, showed decay. Hansen's report stated:

"In all bags opened ex these lots we found nuts to be for the most part in apparent good order with some slight surface mold and with occasional 'snowballs' present estimated at less than 1%."

 On November 20, the chestnuts were transported by plaintiff's trucker in an unrefrigerated truck from the Hellenic Lines' pier to plaintiff's premises in the Bronx. Levatino testified that when the chestnuts arrived at plaintiff's premises they were moldy, of dull color, and internally decayed. The chestnuts were placed in refrigeration at a temperature of 42 degrees to 44 degrees F. On the night of November 20 or the morning of November 21, the chestnuts were taken by unrefrigerated truck to the New York Fruit Auction ("Fruit Auction") for reconditioning, a process by which the bad chestnuts are picked out and the remaining chestnuts are rubbed to bring back the shine. On November 21, Phil Peoper of the Port Entry Expeditors, Inc. began reconditioning the chestnuts. The process took at least two or three days and resulted in the loss of 158 bags of chestnuts. While at the Fruit Auction, where some chestnuts remained at least until November 24, the chestnuts were not refrigerated.

 The testimony of Levatino as to the events following the reconditioning is unclear. Levatino testified that after the chestnuts were reconditioned, plaintiff tried to sell them. However, he stated that since Thanksgiving was on November 23, plaintiff's customers had already bought their supplies for the holiday and plaintiff's chestnuts had to be carried past the holiday. Levatino further testified that on Friday, November 24 or Monday, November 27, some or all of the chestnuts were transported back from the Fruit Auction to plaintiff's premises where they were again placed in refrigeration.

 During the remainder of 1972 plaintiff continued to try to sell the chestnuts and succeeded in making some sales both from the Fruit Auction and from plaintiff's premises. Levatino testified that if sales were effected from the Fruit Auction, then the chestnuts would be delivered from the Fruit Auction rather than from plaintiff's premises. In attempting to sell the chestnuts, it appears that plaintiff would shuttle them back and forth between the Fruit Auction, where there was no refrigeration, and plaintiff's premises. Levatino testified that there were some returns of chestnuts, although there were more completed sales than returns.

 A second survey of the chestnuts was made on December 15, 1972 by Austin McCabe, Jr. for the plaintiff and Hansen for the defendant. According to McCabe, the warehouse records indicated that there were 217 bags in refrigeration on plaintiff's premises and 600 bags unrefrigerated at Phil Pepper's section of the Fruit Auction. McCabe found no reason to doubt these figures. As to the approximately 217 bags at plaintiff's premises, McCabe's report indicated that the temperature of the chestnuts was 60 degrees F while the temperature of the refrigerator was 45 degrees F. The report stated:

"Stock is mature. Dull pale color. All nuts show light to heavy dehydration. Upon cutting: 30% to 70% average 40% shows internal decay and mold -- early to well advanced stages. About 60% of nuts which show internal decay can be floated in water."

 As to the approximately 600 bags at the Fruit Auction, McCabe noted that the air temperature was 48 degrees F while the temperature of the chestnuts was 60 degrees to 62 degrees F. McCabe's report further stated:

"Stock is dull pale color. Most to all nuts show light to heavy dehydration. Range: 5% to 70% average 30% ...

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