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CERRO SALES CORP. v. ATLANTIC MARINE ENTERPRISES

November 10, 1975

CERRO SALES CORPORATION, a corporation, Plaintiff,
v.
ATLANTIC MARINE ENTERPRISES, INC. and Maritime Associates, Inc., Defendants


Metzner, District Judge.


The opinion of the court was delivered by: METZNER

METZNER, District Judge:

This is an action for cargo loss, transshipment expenses and related damages, and for indemnity for costs of salvage, stemming from a ship fire at sea. Trial was held, without a jury, solely as to liability of the defendants.

 On May 15, 1968, plaintiff Cerro Sales Corporation (Cerro) entered into a voyage charter party with defendant Atlantic Marine Enterprises, Inc. (Atlantic), owner of the S.S. North America, to convey a cargo of copper concentrates from San Fernando, in the Philippines, to Callao, Peru. Atlantic is a Liberian corporation and the North America is a Liberian flag vessel. The North America was managed and operated by Atlantic's agent, defendant Maritime Associates, Inc. (Maritime).

 The charter party provided that the Carriage of Goods by Sea Act (COGSA) applied to the charter (U.S.A. Clause Paramount), incorporated the York-Antwerp Rules of 1950, and included the "New Jason Clause."

 On or about June 1, 1968, the North America sailed from San Fernando for Callao. After a stopover for fuel in Honolulu, Hawaii, on or about June 20, the ship proceeded toward its destination. At 4:25 A.M. on June 23, some 600 miles from the Hawaiian Islands, a fire broke out in the boiler room of the North America. The fire started due to the carelessness of a fireman who improperly failed to secure a valve while changing a burner on the starboard boiler. As a result, heated oil spurted onto hot surfaces of the boilers igniting the oil and causing the fire. Fire fighting efforts, which will be discussed below, proved unsuccessful, and approximately one hour after the outbreak of the fire, the captain and crew abandoned ship in rough seas. The captain himself fell into the sea. Two seamen were lost.

 About 5:00 P.M. on June 23, the S.S. St. Paul, at the direction of the U.S. Coast Guard, rescued the crew members from the lifeboats. The North America was still burning at the time. On June 24, the St. Paul tried to take the North America in tow but was unable to do so due to heavy seas. The St. Paul then returned with the crew to Honolulu, leaving the North America afloat but without power.

 On June 28, 1968, the tug Malie set out to rescue the North America, and brought the ruined ship into port on July 5, 1968.

 In the salvage actions that followed in Hawaii, the two salving vessels and their crews were awarded in excess of $230,000 in salvage against Cerro, based on a cargo value of $1,850,000. As the North America was found to be worth only $14,000, this was the limitation of owner's contribution.

 Eventually the cargo of copper concentrates, in large part undamaged, was transshipped at plaintiff's expense, and arrived at Callao on October 26, 1968. Unloading was completed on October 31. The complaint in this action was filed on July 23, 1969.

 At the trial plaintiff attempted to establish that due to the knowledge, neglect and design of Maritime and Atlantic, the fire broke out, and the improperly trained crew and improperly equipped ship made effective fire-fighting impossible, thus making the shipowner and its agent liable to the plaintiff for damages and indemnity.

 Defendants claim that the damages for cargo loss and transshipment are time-barred, 46 U.S.C. § 1303(6), that since there was no allegation of payment of salvage, and, in fact, salvage has not been paid by Cerro, the indemnity action has not accrued, and that the facts, as proved, are insufficient to support a finding of liability on the part of defendants under the "Fire Act," 46 U.S.C. § 182, and the fire exception of COGSA, 46 U.S.C. § 1304(2)(b). Defendants further argue that defendant Maritime is an improper party defendant and that, in the event of liability, such liability should be limited to ship plus freight pursuant to 46 U.S.C. §§ 181-88.

 Statute of Limitations

 Under Section 1303(6) of Title 46, claims for cargo loss or damage under COGSA are barred if not brought "within one year after delivery of the goods or the date when the goods should have been delivered . . . ." It is clear from the evidence, and not disputed by the proof, that the vessel, had all gone well, should have arrived at Callao on July 11, 1968. The cargo should have been unloaded by July 16. Accordingly, if the "should have been delivered" standard applies to these facts, the claims for damages to cargo are time-barred.

 However, plaintiff advances two arguments against this conclusion. The first is that the goods were actually delivered at Callao on October 31, and that this date starts the statute running. The delivery eventually made at Callao was made under a separate and distinct bill of lading and separate from the contract of carriage sued upon here. In such cases the delivery date is of no importance and the limitations period runs from the date the goods ...


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