B-122580, OCT. 7, 1955

B-122580, OCT. 7, 1955

TO FRANCIS C. CARR AND CO., INC.:

FURTHER REFERENCE IS MADE TO YOUR LETTERS OF NOVEMBER 16, 1954, AND APRIL 15, 1955, RELATIVE TO YOUR CLAIM IN CONNECTION WITH THE ADJUSTMENT OF GENERAL AVERAGE DAMAGE SUSTAINED BY THE S.S. SIMON BENSON DUE TO STRANDING IN THE ELBE RIVER WHILE OPERATING UNDER TIME CHARTER NO. DA-45-045-TC-47 BETWEEN THE SEVEN SEAS STEAMSHIP CORPORATION AND THE UNITED STATES OF AMERICA.

BY CERTIFICATE OF SETTLEMENT DATED JUNE 18, 1954, VARIOUS CLAIMED ITEMS OF CONTRIBUTION IN GENERAL AVERAGE TOTALING $377.22 WERE ALLOWED AND THE REMAINING ITEMS TOTALING $1284.23 WERE DISALLOWED. YOUR PRESENT PROTEST IS AGAINST THE FAILURE TO ALLOW, AS A GENERAL AVERAGE EXPENDITURE ARISING OUT OF THE ABOVE STRANDING, THE EXPENSE INCURRED UPON RETURN TO THE UNITED STATES IN WITHDRAWING THE VESSEL'S TAILSHAFT. SUCH DISALLOWANCE WAS BASED UPON EVIDENCE THAT IT WAS NECESSARY FOR THE VESSEL TO BE DRY DOCKED FOR REPAIR OF PARTICULAR AVERAGE DAMAGE, THE TAILSHAFT WAS DUE FOR WITHDRAWAL TO MAINTAIN CLASS AND THE EXPENSE THEREOF WAS INCURRED FOR THE OWNER'S CONVENIENCE, AND NO DAMAGE WAS DISCOVERED BY WITHDRAWAL AND EXAMINATION WHICH WAS ATTRIBUTABLE TO THE STRANDING.

YOUR LETTER OF NOVEMBER 16, 1954, INDICATES YOUR DISAGREEMENT WITH OUR SETTLEMENT IN THIS REGARD IS BASED UPON THE EXISTENCE OF AN ALLEGEDLY RECOGNIZED ADJUSTING PRACTICE THAT WHEN A SHAFT IS DRAWN FOR EXAMINATION AS THE RESULT OF A PERIL, AND IS ALSO DUE FOR DRAWING, ONE HALF OF THE COST OF DRAWING IS CHARGED TO THE PERIL; AND SINCE THE PERIL IN THIS CASE WAS THE STRANDING AND THE DAMAGE AS THE RESULT OF THE STRANDING WAS GENERAL AVERAGE IN NATURE, YOU SUGGEST OUR DISALLOWANCE OF THE FULL COST BE REVISED TO CHARGE ONE-HALF OF THE COST TO GENERAL AVERAGE IN ACCORDANCE WITH SUCH PRACTICE.

ARTICLE 19 OF THE CHARTER PARTY PROVIDES IN PERTINENT PART AS FOLLOWS:

"GENERAL AVERAGE SHALL BE ADJUSTED, STATED, AND SETTLED, ACCORDING TO RULES 1 TO 15, INCLUSIVE, 17 TO 22, INCLUSIVE, AND RULE F OF YORK ANTWERP RULES 1924, AT SUCH PORT OR PLACE IN THE UNITED STATES AS MAY BE SELECTED BY THE OWNER OF THE VESSEL, AND AS TO SUCH MATTERS NOT PROVIDED FOR BY THESE RULES, ACCORDING TO THE LAWS AND USAGES AT THE PORT OF NEW YORK.'

RULE 7 OF THE YORK-ANTWERP RULES 1924 PROVIDES THAT:

"DAMAGE CAUSED TO MACHINERY AND BOILERS OF A SHIP, WHICH IS ASHORE AND IN A POSITION OF PERIL, IN ENDEAVORING TO REFLOAT, SHALL BE ALLOWED IN GENERAL AVERAGE * * *.'

UNDER THE PROVISIONS OF THIS RULE, ALLOWANCE IN GENERAL AVERAGE IS LIMITED TO ACTUAL DAMAGES ARISING OUT OF THE PERIL, AND IT FOLLOWS THAT IN THE ABSENCE OF A SHOWING OF DAMAGE THERE IS NO GENERAL AVERAGE TO BE ADJUSTED UNDER THE TERMS OF ARTICLE 19 OF THE CHARTER PARTY. WITHDRAWAL OF THE TAILSHAFT IN THE INSTANT CASE WOULD HAVE BEEN REQUIRED FOR THE OWNER'S CONVENIENCE EVEN IN THE ABSENCE OF A GENERAL AVERAGE INCIDENT, AND EXAMINATION THEREOF FAILED TO INDICATE DAMAGE ATTRIBUTABLE TO SUCH INCIDENT. UNDER THE CIRCUMSTANCES, IT CANNOT BE SAID THAT THE OWNER OF THE VESSEL SUFFERED "DAMAGE" WITHIN THE MEANING OF RULE 7 OF THE YORK- ANTWERP RULES 1924, AND THE LIABILITY OF THE UNITED STATES FOR GENERAL AVERAGE CONTRIBUTION THEREFORE MAY NOT BE EXTENDED BY ADJUSTING PRACTICE, CUSTOM OR USAGE TO INCLUDE SUCH EXPENSES. WHILE A DIFFERENT PROCEDURE AND RULE MAY CONCEIVABLY HAVE BEEN ADOPTED BY CUSTOM AND USAGE IN CONNECTION WITH THE ADJUSTMENT OF PARTICULAR AVERAGE DAMAGE, SUCH PRACTICE MAY NOT BE EXTENDED, IN CONTRAVENTION OF THE EXPRESS TERMS OF THE CHARTER AGREEMENT, TO INCLUDE THE ADJUSTMENT OF GENERAL AVERAGE. AS STATED IN THE L AMERIQUE, 35 F. 835, 836-837:

"NO DOUBT, WHERE THE LANGUAGE OF A CONTRACT STIPULATES FOR PERFORMANCE ACCORDING TO A SPECIFIC CUSTOM, THAT CUSTOM, IF VALID, WILL CONTROL, THOUGH THE GENERAL LAW BE DIFFERENT; FOR THE EXPRESS CONTRACT MAKES THE LAW IN SUCH A CASE. * * *. BUT * * * AN ADJUSTMENT "IN ACCORDANCE WITH THE ESTABLISHED USAGE AND LAWS OF THIS STATE," CANNOT MEAN THE ADOPTION OF ANY MERE PRACTICE OF AVERAGE ADJUSTERS THAT IS CONTRARY TO LAW * * *.'

ACCORDINGLY, THE DISALLOWANCE OF THAT PORTION OF YOUR CLAIM ON JUNE 18, 1954, IS SUSTAINED.

IT IS NOTED HOWEVER THAT THE SUM OF $377.22, WHICH WAS ALLOWED BY THE ABOVE SETTLEMENT, WAS WITHHELD FROM PAYMENT TO EFFECT PARTIAL LIQUIDATION OF A PURPORTED INDEBTEDNESS OF SEVEN SEAS STEAMSHIP CORPORATION IN THE SUM OF $1,020.00, WHICH REPRESENTS THE DIFFERENCE BETWEEN CHARTER HIRE PAID FOR TWO DAYS AT THE FULL RATE OF $1510.00 PER DAY AND THE OFF-HIRE RATE OF $1000.00 PER DAY, WHILE THE VESSEL WAS DETAINED FOR PARTICULAR AVERAGE REPAIRS TO THE HIGH PRESSURE ENGINE AT BREMERHAVEN, GERMANY, FROM JANUARY 27-30, 1950.

ARTICLE 12 OF THE CHARTER PARTY, UNDER WHICH SUCH INDEBTEDNESS WAS ESTABLISHED, PROVIDES IN PERTINENT PART AS FOLLOWS:

"/A) IN THE EVENT OF LOSS OF TIME IN EXCESS OF 48 HOURS FROM DEFICIENCY OF MEN OR STORES, FIRE, BREAKDOWN, OR DAMAGES TO HULL, MACHINERY OR EQUIPMENT, GROUNDING, DETENTION BY AVERAGE ACCIDENTS TO SHIP OR CARGO OR BY ANY OTHER CAUSE PREVENTING THE FULL WORKING OF THE VESSEL IN PORT OR AT SEA THE RATE OF HIRE FOR THE TIME IN EXCESS OF 48 HOURS THEREBY LOST SHALL BE REDUCED TO $1,000.00 PER DIEM EXCEPT * * * THAT THERE SHALL BE NO REDUCTION IN HIRE FOR ANY TIME LOST DUE TO NECESSITY OF MAKING REPAIRS TO THE VESSEL AT A FOREIGN PORT FOR THE SOLE PURPOSE OF MAKING THE VESSEL SEAWORTHY, * * *.'

OUR APPLICATION OF THE OFF-HIRE RATE DESCRIBED ABOVE IS PROTESTED ON THE GROUND THAT THE NATURE OF THE REPAIRS AND THE PLACE AT WHICH SUCH REPAIRS WERE EFFECTED ARE SUFFICIENT TO INVOKE THE EXCEPTION TO APPLICATION OF OFF -HIRE RATES QUOTED FROM ARTICLE 12, ABOVE.

UPON RECONSIDERATION, WE ARE IN AGREEMENT THAT THE REPAIRS AT BREMERHAVEN WERE NECESSARY TO MAKE THE VESSEL SEAWORTHY, WERE AFFECTED SOLELY FOR THAT PURPOSE, AND SINCE SUCH REPAIRS WERE ACCOMPLISHED AT A FOREIGN PORT, THE OWNERS ARE ENTITLED TO BE COMPENSATED FOR THE ENTIRE PERIOD OF DETENTION AT THE FULL HIRE RATE PROVIDED BY ARTICLE 12.

ACCORDINGLY, THE INDEBTEDNESS WHICH WAS ESTABLISHED AGAINST THE SEVEN SEAS STEAMSHIP CORPORATION FOR OVERPAYMENT OF SUCH HIRE WILL BE REMOVED, AND A CHECK IN THE AMOUNT OF $377.22, REPRESENTING THE ALLOWED AMOUNT OF THE CLAIM AGAINST THE UNITED STATES FOR CONTRIBUTION IN GENERAL AVERAGE ARISING OUT OF THE STRANDING IN THE ELBE RIVER ON IN GENERAL AVERAGE ARISING OUT OF THE STANDING IN THE ELBE RIVER ON JANUARY 24, 1950, WILL BE ISSUED TO YOU IN DUE COURSE, IF OTHERWISE PROPER.