B-157519, FEB. 15, 1966

B-157519: Feb 15, 1966

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THE CONTRIBUTION IS ALLEGEDLY DUE FROM THE UNITED STATES AS THE GOVERNMENT CARGO'S SHARE OF THE EXPENSES INCURRED BY THE OWNERS OF THE S.S. WAS PRESENTED TO THE DEPARTMENT OF AGRICULTURE WHICH REFERRED IT HERE FOR SETTLEMENT. THE RECORDS IN THIS CASE SHOW THAT THE CARGO OF GRAIN FROM WHICH CONTRIBUTION IS CLAIMED WAS LIFTED ABOARD THE S.S. THE CHIEF ENGINEER REPORTED TO THE MASTER THAT THE STARBOARD AND PORT BOILERS WERE MALFUNCTIONING. THE STATEMENT ALSO INDICATES THAT THE CARGO'S SHARE OF THE REPAIR EXPENSES IS $20. OUR CLAIMS DIVISION DISALLOWED YOUR CLAIM BECAUSE THE RECORD DID NOT CONTAIN ANY EVIDENCE THAT THE VESSEL WAS SEAWORTHY. SUCH A SHOWING WAS CONSIDERED TO BE A CONDITION PRECEDENT TO ENTITLEMENT TO A GENERAL AVERAGE CONTRIBUTION.

B-157519, FEB. 15, 1966

TO FRANK B. HALL AND CO., INC.:

WE REFER TO YOUR LETTER OF AUGUST 10, 1965, AND LATER STATEMENTS IN SUPPORT OF A REQUEST FOR REVIEW OF OUR SETTLEMENT CERTIFICATE DATED JULY 30, 1965 (OUR CLAIM FILE NO. Z-2-294-001). THE SETTLEMENT DISALLOWED YOUR CLAIM FOR A GENERAL AVERAGE CONTRIBUTION OF $20,462.62. THE CONTRIBUTION IS ALLEGEDLY DUE FROM THE UNITED STATES AS THE GOVERNMENT CARGO'S SHARE OF THE EXPENSES INCURRED BY THE OWNERS OF THE S.S. BANGOR IN TWICE REPAIRING THE VESSEL'S STARBOARD AND PORT BOILERS DURING A VOYAGE FROM BEAUMONT, TEXAS, TO KARACHI, PAKISTAN, IN MAY AND JUNE 1964.

YOUR CLAIM, SUPPORTED WITH A COPY OF THE SETTLEMENT OF GENERAL AND PARTICULAR AVERAGE, WAS PRESENTED TO THE DEPARTMENT OF AGRICULTURE WHICH REFERRED IT HERE FOR SETTLEMENT.

THE GENERAL AVERAGE STATEMENT, YOUR ATTORNEY'S BRIEF, AND THE RECORDS IN THIS CASE SHOW THAT THE CARGO OF GRAIN FROM WHICH CONTRIBUTION IS CLAIMED WAS LIFTED ABOARD THE S.S. BANGOR AT BEAUMONT, TEXAS, FOR DELIVERY TO KARACHI, PAKISTAN. THE VESSEL BROKE GROUND ON MAY 3, AND ON MAY 5, WHILE PROCEEDING WITH THE VOYAGE, EXPERIENCED TROUBLE WITH THE STARBOARD BOILER. SHE PUT INTO FORT EVERGLADES, FLORIDA, AND AFTER NECESSARY REPAIRS, BROKE GROUND THERE ON MAY 10. ON MAY 15, WHILE CONTINUING ON THE VOYAGE, THE CHIEF ENGINEER REPORTED TO THE MASTER THAT THE STARBOARD AND PORT BOILERS WERE MALFUNCTIONING; ON MAY 24 THE VESSEL PUT INTO PALERMO, SICILY, FOR REPAIRS. THE VESSEL BROKE GROUND THERE ON JUNE 1,1964, AND CONTINUED TO KARACHI, WITH RELATIVELY LITTLE DAMAGE TO THE CARGO BEING NOTED.

THE GENERAL AVERAGE STATEMENT INDICATES THAT THE ADJUSTERS AND THE UNDERWRITERS' SURVEYORS AT NEW YORK AGREED THAT THE GENERAL AVERAGE INCIDENT "CAN REASONABLY BE ATTRIBUTED TO CREW NEGLIGENCE IN THE BOILERS BEING BOTTOM BLOWN UNDER FULL STEAMING CONDITIONS.' THE STATEMENT ALSO INDICATES THAT THE CARGO'S SHARE OF THE REPAIR EXPENSES IS $20,462.62. OUR CLAIMS DIVISION DISALLOWED YOUR CLAIM BECAUSE THE RECORD DID NOT CONTAIN ANY EVIDENCE THAT THE VESSEL WAS SEAWORTHY, OR THAT THE OWNERS HAD EXERCISED DUE DILIGENCE TO MAKE HER SO, AT THE TIME THE VESSEL BROKE GROUND AT BEAUMONT. SUCH A SHOWING WAS CONSIDERED TO BE A CONDITION PRECEDENT TO ENTITLEMENT TO A GENERAL AVERAGE CONTRIBUTION.

THE VOYAGE IN QUESTION WAS MADE UNDER A GRAIN CHARTER PARTY (CONTRACT NO. 12-29-003-15), DATED APRIL 7, 1964, BETWEEN THE DEPARTMENT OF AGRICULTURE AND THE BERMUDA SHIPPING CORPORATION, THE OWNERS OF THE VESSEL. THE MASTER OF THE VESSEL AFFIRMED A BERTH TERM GRAIN BILL OF LADING, WHICH CONTAINED A CLAUSE INDICATING THAT IT WAS SUBJECT TO ALL THE TERMS AND CONDITIONS AND ALL EXCEPTIONS OF THE CHARTER PARTY. SEE, IN THIS CONNECTION, CARVER, CARRIAGE OF GOODS BY SEA, 10TH ED. (1957), PAGES 208, 284.

CLAUSE 1 OF THE CHARTER PARTY PROVIDES IN PART THAT THE S.S. BANGOR IS "TIGHT, STAUNCH AND STRONG, AND IN EVERY WAY FITTED FOR THE VOYAGE.' THIS IS A WARRANTY OF SEAWORTHINESS. CARVER, CARRIAGE OF GOODS BY SEA, SUPRA, PAGE 246; AABY V. STATES MARINE CORP., 181 F.2D 383 (1950).

CLAUSE 7 OF THE CHARTER PARTY SUBJECTS THE CHARTER PARTY TO ALL THE TERMS AND PROVISIONS OF, AND ALL EXEMPTIONS FROM LIABILITY CONTAINED IN, THE CARRIAGE OF GOODS BY SEA ACT, 46 U.S.C. 1300 ET SEQ. (COGSA). SEE, IN THIS CONNECTION, UNITED STATES V. WESSEL AND DUVAL AND CO., 123 F.SUPP. 318, 326 (1954).

THE FIRST PARAGRAPH OF CLAUSE 8 OF THE CHARTER PARTY IS A FORM OF THE AMENDED JASON CLAUSE (CF. KNAUTH, OCEAN BILLS OF LADING, 4TH ED. (1953), PAGE 102), AND READS:

"8. IN THE EVENT OF ACCIDENT, DANGER, DAMAGE OR DISASTER BEFORE OR AFTER THE COMMENCEMENT OF THE VOYAGE RESULTING FROM ANY CAUSE WHATSOEVER, WHETHER DUE TO NEGLIGENCE OR NOT, FOR WHICH, OR FOR THE CONSEQUENCE OF WHICH, THE CARRIER IS NOT RESPONSIBLE BY STATUTE, CONTRACT OR OTHERWISE, THE GOODS, SHIPPERS, CONSIGNEES OR OWNERS OF THE GOODS SHALL CONTRIBUTE WITH THE CARRIER IN GENERAL AVERAGE TO THE PAYMENT OF ANY SACRIFICES, LOSSES OR EXPENSES OF A GENERAL AVERAGE NATURE THAT MAY BE MADE OR INCURRED AND SHALL PAY SALVAGE AND SPECIAL CHARGES INCURRED IN RESPECT TO THE GOODS.'

CLAUSE 9, THE GENERAL AVERAGE CLAUSE, PROVIDES IN PART THAT THE "GENERAL AVERAGE SHALL BE PAYABLE ACCORDING TO YORK-ANTWERP RULES, 1950, AND SHALL BE SETTLED IN NEW YORK, NEW YORK.'

WE AGREE THAT THE TWO INSTANCES OF BOILER REPAIR ARE, IN APPROPRIATE CIRCUMSTANCES,"EXPENSES OF A GENERAL AVERAGE NATURE.' CARVER, SUPRA, PAGE 618. THUS, THE LIABILITY OF THE CARGO FOR ITS CONTRIBUTION TO THE GENERAL AVERAGE EXPENSES ARISES FROM CLAUSE 8 OF THE CHARTER PARTY, THE AMENDED JASON CLAUSE.

IN AMERICAN TOBACCO COMPANY V. GOULANDRIS, 173 F.SUPP. 140, 181 (1959), THE COURT STATED THAT THE "NEW JASON CLAUSE PROVIDES IN SUBSTANCE THAT THE VESSEL OWNER IS ENTITLED TO GENERAL AVERAGE CONTRIBUTION IN ANY CASE IN WHICH HE IS NOT LIABLE FOR CARGO DAMAGE UNDER COGSA (SEC. 5, 46 U.S.C.A. SEC. 1305) AND EVEN WHERE UNSEAWORTHINESS DID NOT CONTRIBUTE TO LOSS.'

WHILE WE GENERALLY AGREE THAT ONCE NEGLIGENCE OF THE CREW HAS BEEN ESTABLISHED, THERE IS NO REQUIREMENT ON THE PART OF THE VESSEL TO MAKE A FURTHER SHOWING OF SEAWORTHINESS, WE BELIEVE THAT THERE IS A PROPER BASIS FOR SUSTAINING THE SETTLEMENT DISALLOWING YOUR CLAIM.

AS AVERAGE ADJUSTERS, YOUR COMPANY, LIKE ALL CLAIMANTS, HAS THE BURDEN OF PRESENTING EVIDENCE SATISFACTORILY PROVING ITS CLAIMS AND ALL MATTERS INCIDENT THERETO AND NECESSARY TO ESTABLISH THE CLEAR LEGAL LIABILITY OF THE UNITED STATES AND THE CLAIMANT'S RIGHT TO PAYMENT UNDER THE APPROPRIATIONS INVOLVED. UNITED STATES V. NEW YORK, N.Y. AND H.R. CO., 355 U.S. 253 (1957); BENJAMIN MOTOR EXPRESS, INC. V. UNITED STATES, 251 F.2D 547 (1958). ABSENT SATISFACTORY EVIDENCE WE HAVE NO AUTHORITY TO AUTHORIZE PAYMENT OF THESE CLAIMS. SEE CHARLES V. UNITED STATES, 19 CT.CL. 316 (1884); LONGWILL V. UNITED STATES, 17 CT.CL. 288 (1881).

THE ONLY DOCUMENT SUBMITTED BY YOU TO ESTABLISH THE LIABILITY OF THE UNITED STATES AND THE VESSEL OWNERS' RIGHT TO PAYMENT IS THE GENERAL AVERAGE STATEMENT. HOWEVER, A SIMILAR STATEMENT BY AN AVERAGE ADJUSTER HAS BEEN VIEWED AS AN EX PARTE DOCUMENT (THE NESCO, 47 F.2D 643 (1931) ( AND AS MERELY THE SHIPOWNERS' VERSION OF THE ACCOUNT AS BETWEEN THE PARTIES. KOHLER AND CHASE V. UNITED AMERICAN LINES, 60 F.2D 530 (1932). SUCH A STATEMENT IS NOT CONCLUSIVE ON THE PARTIES IN THE ABSENCE OF AN AGREEMENT TO THAT EFFECT IN THE SHIPPING CONTRACT. REBORA V. BRITISH AND FOREIGN MARINE INSURANCE CO., 180 N.E. 90 (1932). NO SUCH AGREEMENT APPEARS IN THE CHARTER PARTY IN THIS CASE.

AS MENTIONED ABOVE, THE GENERAL AVERAGE STATEMENT INDICATES (PAGE 3) THAT THE ADJUSTERS AND THE UNDERWRITERS' SURVEYORS OF NEW YORK "DISCUSSED THE CAUSE OF THE DAMAGE" AND HAVE AGREED THE DAMAGES WERE DUE TO THE NEGLIGENCE OF THE VESSEL'S CREW IN THE OPERATION OF THE BOILERS. THIS FACT, IF PROVED, WOULD SEEM TO BE AN ERROR IN THE MANAGEMENT OF THE SHIP WITHIN THE MEANING OF 46 U.S.C. 1304 (2) (A/--- SEE KNAUTH, SUPRA, PAGE 202--- THE LIABILITY FOR WHICH THE SHIPOWNER WOULD BE EXONERATED. AND, ALSO, AS INDICATED IN THE AMENDED JASON CLAUSE, IT WOULD BE A CAUSE OF DAMAGE FOR WHICH THE CARRIER IS NOT RESPONSIBLE BY STATUTE. HOWEVER, THE REFERENCE TO THE AGREEMENT ON PAGE 3 OF THE GENERAL AVERAGE STATEMENT AS TO THE CAUSE OF THE DAMAGE TO THE BOILERS IS THE ONLY INFORMATION IN THE RECORD TENDING TO INDICATE CREW NEGLIGENCE. SINCE WE HAVE NO WAY OF TESTING ITS AUTHENTICITY, WE CANNOT ACCEPT IT AS EVIDENCE OF THE CREW'S NEGLIGENCE.

IT IS STATED BY THE ADJUSTERS THAT THE CAUSE OF THE DAMAGE TO THE BOILERS CAN "REASONABLY BE ATTRIBUTED" TO CREW NEGLIGENCE. THE SALVAGE ASSOCIATION, LONDON, SURVEY REPORT NO. 18234, DATED MAY 25, 1964, REFERS TO THE DAMAGE AS BEING "IN CONSEQUENCE OF ALLEGED CREW NEGLIGENCE.'

THE ACTUAL DAMAGE TO THE STARBOARD BOILER WAS FOUND AT PORT EVERGLADES, FLORIDA, TO BE BLISTERING AND PERFORATION IN THE SCREEN TUBES, MODERATELY HEAVY BAKED ON DEPOSITS OF SCALE AND/OR WATER TREATMENT COMPOUNDS IN THE SCREEN TUBES, MORE OR LESS SLIGHT DISTORTION IN ALL THE FORWARD AND AFTER BANKS OF SIDE WATERWALL TUBES. THE PORT BOILER WAS FOUND TO HAVE ALMOST SIMILAR DAMAGE. THE REPORT ALSO SHOWS THAT THE SURVEYOR'S RECOMMENDATIONS WITH RESPECT TO REPLACEMENT OF ALL SCREEN TUBES AND CLEANING OF THE GENERATING TUBES WAS ACCOMPLISHED, BUT AS TO THE FORWARD AND AFTER SIDEWALL BANKS, THE RECOMMENDATION AS TO THE REPLACEMENT OF THOSE TUBES WAS NOT FOLLOWED, THOSE TUBES WHICH WERE BLISTERED BEING PLUGGED AND RENEWAL DEFERRED UNTIL "VESSEL RETURNS FROM THE CURRENT VOYAGE.' IN OTHER WORDS, THERE WERE TEMPORARY REPAIRS MADE, AS LLOYD'S REGISTER OF SHIPPING REPORT NO. D-470, DATED JUNE 25, 1964, INDICATES. THE REPORT OF MAY 25, 1964, RELATIVE TO THE CAUSE OF THE DAMAGE STATES:

"IT APPEARS TO BE THE CONSENSUS OF OPINION OF THE ATTENDING SURVEYORS THAT THE CAUSE OF THE DAMAGE WAS THE TEMPORARY, OR INTERMITTENT, SHORTAGE OF BOILER WATER, TOGETHER WITH THE FAILURE OF THE LOW WATER CUT-OUTS TO OPERATE, RESULTING IN DISTURBANCE OF THE CIRCULATION FLOW, LOCAL OVERHEATING OF SCREEN AND SIDE WALL TUBES, AND PRECIPITATION OF DEPOSITS.'

NOTWITHSTANDING THE EXTENSIVE REPAIRS MADE TO BOTH BOILERS AT PORT EVERGLADES, 5 DAYS AFTER LEAVING THAT PORT, IT WAS NECESSARY FOR THE VESSEL TO CHANGE COURSE AND PUT IN AT PALERMO, SICILY (MAY 24, 1964),TO REPAIR BOTH BOILERS AGAIN BY REPLACING 32 TUBES IN EACH BOILER, AND TO MAKE FURTHER EXTENSIVE REPAIRS AS SET FORTH ON PAGES 38 AND 39 OF THE GENERAL AVERAGE REPORT. WE NOTE ALSO THAT LLOYD'S REPORT NO. D-470 STATES THAT THE "OWNERS' REPRESENTATIVES HAVE NOT YET SUBMITTED ANY CAUSE OF THIS DAMAGE.'

THE EXTENSIVE WORK REQUIRED TO BE MADE TO THESE BOILERS, FIRST AT PORT EVERGLADES, AND AGAIN AT PALERMO, SICILY, RAISES CONSIDERABLE DOUBT AS TO THE TRUE CAUSE OF THE NECESSITY FOR ALL THESE REPAIRS, AND AS TO WHETHER THE VESSEL WAS SEAWORTHY WITHIN THE MEANING OF CLAUSE 1 OF THE CHARTER PARTY WHEN UNDERTAKING THIS VOYAGE. IN THIS CONNECTION IT HAS BEEN HELD THAT CERTIFICATES OF INSPECTION AND SURVEYORS' REPORTS ARE NOT PROOF THAT THE VESSEL WAS ACTUALLY SEAWORTHY WHEN THE VOYAGE WAS UNDERTAKEN. PRESIDENT OF INDIA V. WEST COAST S.S. CO., 213 F.SUPP. 352, 359 (1962); IONION S.S.CO. OF ATHENS V. UNITED DISTILLERS, 236 F.2D 78, 83, (1956); BANK LINE V. PORTER, 25 F.2D 843, CERT.DEN. 278 U.S. 623 (1928).

IN THESE CIRCUMSTANCES, WE WOULD NOT BE JUSTIFIED IN REVISING THE SETTLEMENT OF JULY 30, 1965, AND, ACCORDINGLY, IT IS SUSTAINED.