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JAKO MKTG. CORP. v. M.V. SEA FAN

February 24, 1983

JAKO MARKETING CORP., Plaintiff,
v.
M.V. SEA FAN, her engines, boilers, etc., SEA FAN TRANSPORT, INC., M.V. WOKO MARU, her engines, boilers, etc., ZUITO KAIUN K.K., M.V. SEA BELLS, her engines, boilers, etc., SEA BELLS TRANSPORT, INC., SANKO STEAMSHIP CO., LTD. and LAVINO SHIPPING COMPANY, Defendants and Third-Party Plaintiffs, v. LAVINO SHIPPING COMPANY and ATLANTIC AND GULF STEVEDORES, INC., Third-Party Defendants



The opinion of the court was delivered by: POLLACK

MILTON POLLACK, District Judge

 This is an admiralty suit tried to the court at a Bench trial. Jurisdiction exists under 28 U.S.C. § 1333. For the reasons appearing hereafter, plaintiff is entitled to a recovery from the defendant Sanko Steamship Co., Ltd.

 Jako was an importer of tires from Korea transported to the United States in bulk through Sanko ships up to the fall of 1979. Jako sues for its losses and expenses incurred as a result of damage and deformation to the cargoes of truck tires which it imported from Korea and destined for East and Gulf Coast ports. The tires were carried in the lower holds of the M/V SEA BELLS, SEA FAN and WOKO MARU. The defendant Sanko was the time charterer of the three vessels and acted as a common carrier for hire. Sanko issued "clean," received for shipment, bills of lading at Inchon and Busan, Korea, the ports of loading. Jako was the consignee of the cargoes and was the holder in due course of the bills of lading.

 The defendants, Lavino Shipping Company and Atlantic and Gulf Stevedores, Inc. acted as stevedores at Camden and Houston, respectively.

 A substantial portion of the truck tires arrived at their respective destinations in damaged and deformed condition. This was noted in all survey reports and observed by representatives of the parties at some of the ports, and Sanko was informed that Jako had received deformed and damaged tires.

 The deformation was in the side wall or in the tread area and the damaged tires had a severe distortion of the bead (which is the inner molding or rim of the tire). A survey was jointly made by Jako, representatives of the insurance company, and representatives from the steamship company. Personnel from Smithers Scientific Services, Inc. were instructed to sort out and segregate the tires into three categories, viz., first-class quality, deformed tires, and damaged tires, which was done. Thus, the tires were grouped into the category of (1) tires which had kinked or deformed beads; (2) tires which were visually misshapen, with misaligned beads or distorted side walls; and (3) tires which had arrived in commercially acceptable condition.

 The decision was made to destroy the damaged tires because the bead thereon was kinked or distorted and rendered such tires unsafe for mounting on wheels -- a kinked bead is irreversible; it cannot be straightened. Every tire that was classified as damaged was related to a bead area problem, not a side wall problem.

 It was decided that the tires classified as deformed should be sold as "blems" (meaning below top quality) at a reduced price because from their appearance no customer would pay the regular price structure for a tire that had a severe deformation, and those tires were offered and sold that way.

 The plaintiff contended that the deformation and damages were caused either by improper methods of stowage and securing of the tires in the holds on board the three ships involved or by improper methods of discharging and handling of the tire cargo by the stevedores who were acting on behalf of Sanko, the charterer, at destination ports. However, no evidence established fault on the part of the stevedores, and they were dismissed from the suit at the close of the evidence. The claims against the three ships were also dismissed at the close of the trial as the ships were not properly served in rem.

 The proof did establish by a fair preponderance of the credible evidence that the stowage of the cargo was improper and negligent and that this was the proximate cause of the damage and distortion to the spoiled tires. The damage and deformation were caused by the way the tires were stowed on the vessels and not due to any defect in their construction or change in their specifications or in the manner in which the bundles of tires (five to a bundle) were banded together when taken aboard.

 The evidence established that an uninflated tire will not stand excessive weight put on it in stowing it; it will compress and become deformed from being subjected to excessive weight. With passage of time and weight load on a tire, a permanent deformation or damage will occur. Consequently, in loading and stowing tires on a vessel, it is requisite that the tire stacks or bundles be loaded on top of one another in an even fashion -- a structured loading. In a perfectly structured stowage pattern, a uniform deformation will occur all around the tire. Uniform deformation does not create any problem in marketing tires because its effects are only temporary. Consequently, to avoid unacceptable deformation or damage, the load on tires stowed must be placed on the center of the tread. Then, if a side wall bulges, it will bulge symmetrically on both sides; there will be a flattening effect. However, if the loading is made so that the overhead force is on the edge of the tread, a non-uniform deformation will occur -- a wobbling effect -- and given time in that position, the underneath tires will become irretrievably distorted or the beads damaged and commercially unacceptable as first quality or as safe for mounting.

 The truck tires were bundled and metal strapped in groups of five to keep them in an upright position rather than have them slant. The damaged and distorted tires were those stowed on the bottom of the loads. The bundles were stored on the tread (standing up) with the eyes (openings) of the bundles running fore and aft and each tier of bundles was nestled into the spaces between the tops of the bundles of the tires below.

 Thus, the overweight, which will be described shortly -- the weight of the tires in the top tiers -- was so heavy that it had a crushing effect on the bundles below -- on the edge of the treads below -- causing distortion and kinking of the tires below. This was a fairly known consequence, reasonably to be apprehended by anyone involved in stowing tires in the hold of a ship -- not good practice and conducive to distortion and damage. Photographs of the stow and testimony as to the stowage procedure and evidence concerning the manner in which the type of damage and deformation resulted credibly establish an improper stow.

 The loading surveyors, Korean Adjusters and Surveyors Corp., acting at the request of Sanko, surveyed the loading of the three vessels, the M/V SEA BELLS, SEA FAN, and WOKO MARU, at Inchon and reported that an inspection was made of every package and noted exceptions for 270 tires "wet by rain," consigned to Houston on the M/V WOKO MARU. No other exceptions were noted. Their survey reports stated: "During the entire course of loading operation, inspection was made of every package and found each and all ...


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