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GAUD: REFERENCE IS MADE TO THE LETTER OF JUNE 26. WHICH WERE NOT OF RECORD WHEN THE CLAIM WAS BEFORE YOUR AGENCY OR WHEN THE CLAIM WAS DISALLOWED BY OUR CLAIMS DIVISION. THESE DOCUMENTS SHOWED THAT CERTAIN REPAIRS WERE ACTUALLY MADE AND CONTAINED OTHER INFORMATION INDICATING THAT DUE DILIGENCE WAS EXERCISED TO MAKE THE VESSEL SEAWORTHY AND THAT THE DAMAGE TO THE BOILERS WAS DUE TO CREW NEGLIGENCE. WAS SUBMITTED DIRECTLY TO OUR OFFICE AND PRESUMABLY YOUR OFFICE OF GENERAL COUNSEL'S MEMORANDUM OF LAW WAS WRITTEN WITHOUT CONSIDERATION THEREOF AND ON A RECORD NOT AS COMPLETE AS THAT HERE. STATES THAT THE CLAIM WAS SUBMITTED HERE ON AN INFORMAL BASIS. WAS UNDERSTOOD TO HAVE BEEN INTENDED TO BE A REFERENCE HERE FOR DIRECT SETTLEMENT BY THE GENERAL ACCOUNTING OFFICE OF A CLAIM HE CONSIDERED TO INVOLVE DOUBTFUL QUESTIONS OF LAW OR FACT.

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B-163281, JUL. 24, 1968

TO MR. GAUD:

REFERENCE IS MADE TO THE LETTER OF JUNE 26, 1968, SIGNED FOR YOUR GENERAL COUNSEL, AND ACCOMPANYING MEMORANDUM OF LAW, REQUESTING RECONSIDERATION OF OUR DECISION OF APRIL 19, 1968, B-163281, TO THE AND MARC SHIPPING CORPORATION. IN THE DECISION WE ADVISED AND MARC THAT OUR CLAIMS DIVISION WOULD RE-EXAMINE ITS SETTLEMENT DISALLOWING THE CLAIM IN THE AMOUNT OF $22,142.59 FOR GENERAL AVERAGE CONTRIBUTIONS FROM CARGO OWNED BY THE UNITED STATES ON BOARD THE SS. MARINDI JUBAMI AND THAT IT WOULD RECEIVE NOTICE OF SETTLEMENT MAKING AN APPROPRIATE ALLOWANCE IN DUE COURSE. AUTHORIZED RE-EXAMINATION OF THE SETTLEMENT AND AN APPROPRIATE ALLOWANCE ON THE BASIS OF COPIES OF DOCUMENTS FURNISHED BY AND MARC, WHICH WERE NOT OF RECORD WHEN THE CLAIM WAS BEFORE YOUR AGENCY OR WHEN THE CLAIM WAS DISALLOWED BY OUR CLAIMS DIVISION. THESE DOCUMENTS SHOWED THAT CERTAIN REPAIRS WERE ACTUALLY MADE AND CONTAINED OTHER INFORMATION INDICATING THAT DUE DILIGENCE WAS EXERCISED TO MAKE THE VESSEL SEAWORTHY AND THAT THE DAMAGE TO THE BOILERS WAS DUE TO CREW NEGLIGENCE. THIS EVIDENCE, SO FAR AS OUR RECORDS SHOW, WAS SUBMITTED DIRECTLY TO OUR OFFICE AND PRESUMABLY YOUR OFFICE OF GENERAL COUNSEL'S MEMORANDUM OF LAW WAS WRITTEN WITHOUT CONSIDERATION THEREOF AND ON A RECORD NOT AS COMPLETE AS THAT HERE.

WHILE THE LETTER OF JUNE 26, 1968, STATES THAT THE CLAIM WAS SUBMITTED HERE ON AN INFORMAL BASIS, MR. EYTAN'S LETTER OF JANUARY 8, 1968, FORWARDING THE CLAIM, WAS UNDERSTOOD TO HAVE BEEN INTENDED TO BE A REFERENCE HERE FOR DIRECT SETTLEMENT BY THE GENERAL ACCOUNTING OFFICE OF A CLAIM HE CONSIDERED TO INVOLVE DOUBTFUL QUESTIONS OF LAW OR FACT, AND PARTICULARLY IS THIS SO SINCE UNDER 39 COMP. GEN. 721 (1960) GENERAL AVERAGE CLAIMS ARISING INCIDENT TO SHIPMENTS UNDER GOVERNMENT OR COMMERCIAL BILLS OF LADING AND NOT INVOLVING DOUBTFUL QUESTIONS OF LAW OR FACT MAY BE SETTLED ADMINISTRATIVELY WITHOUT REFERRAL TO THE GENERAL ACCOUNTING OFFICE. THE CLAIM THUS CAME UNDER THE JURISDICTION OF THE GENERAL ACCOUNTING OFFICE AND OUR CLAIMS DIVISION INITIALLY DISALLOWED THE CLAIM BY SETTLEMENT CERTIFICATE DATED FEBRUARY 8, 1968. AND MARC THEN REQUESTED REVIEW OF THE SETTLEMENT BY THE COMPTROLLER GENERAL AND BASED UPON THE ADDITIONAL EVIDENCE FURNISHED WITH THE REQUEST FOR REVIEW, WE DIRECTED REOPENING OF THE DISALLOWANCE AND THE MAKING OF AN APPROPRIATE ALLOWANCE.

BE THAT AS IT MAY, THE MEMORANDUM OF YOUR OFFICE OF GENERAL COUNSEL EXPRESSES THE VIEWS (1) THAT THE DAMAGE TO THE PORT BOILER RESULTED FROM FAILURE OF THE SHIPOWNER TO USE DUE DILIGENCE TO MAKE THE VESSEL SEAWORTHY; (2) THAT THE SHIPOWNER IS NOT ENTITLED TO CONTRIBUTION FROM CARGO IN GENERAL AVERAGE BECAUSE NO GENERAL AVERAGE ACT TOOK PLACE; (3) THAT THE CARRIER IS NOT ENTITLED TO A GENERAL AVERAGE CONTRIBUTION BECAUSE NO SACRIFICE OR ACCIDENT TOOK PLACE; (4) THAT APPLICATION BY THE CARRIER OF THE NEW JASON CLAUSE IN CIRCUMSTANCES IN WHICH NO GENERAL AVERAGE ACT TOOK PLACE CANNOT BE LAWFULLY ACCOMPLISHED; AND (5) THAT IF THE SHIPOWNER FAILS TO MEET THE BURDEN OF SHOWING DUE DILIGENCE TO MAKE THE VESSEL SEAWORTHY, THE SHIPOWNER AND VESSEL MAY BE RESPONSIBLE TO CARGO IN DAMAGES FOR THE UNEXCUSED PERIODS OF DELAY RESULTING FROM BREAKDOWNS IN SHIP'S BOILERS AND MACHINERY; CONSEQUENTLY THE CLAIM FOR GENERAL AVERAGE CONTRIBUTION SHOULD BE DENIED.

THIS GENERAL AVERAGE CLAIM OF $22,142.59 AROSE OUT OF A SHIPMENT OF UREA. THE CARGO WAS OWNED BY THE OFFICE OF BARTER AND STOCKPILING, FOREIGN AGRICULTURE SERVICE, UNITED STATES DEPARTMENT OF AGRICULTURE, AND WAS SHIPPED ABOARD THE SS. MARINDI JUBAMI AT CARTAGENA, SPAIN, CONSIGNED TO THE UNITED STATES OVERSEAS MISSION (SAIGON), VIETNAM.

THE VESSEL, AFTER EXTENSIVE BOILER REPAIRS, BROKE GROUND AT CARTAGENA ON AUGUST 9, 1966, AT ABOUT 11 A.M. FOR PALMA DE MALLORCA WHERE IT WAS TO RECEIVE BUNKERS. AT ABOUT 10:30 P.M. TUBES IN THE PORT BOILERS WERE OBSERVED TO BE LEAKING. THE TUBES WERE PLUGGED, BUT LEAKING BEGAN AGAIN ON THE 11TH, SO THE PORT BOILER WAS SECURED AND THE VESSEL PROCEEDED TO PALMA DE MALLORCA ON THE STARBOARD BOILER. AFTER BUNKERING AND EXAMINATION, IT WAS DECIDED THAT DUE TO LACK OF REPAIR FACILITIES AT PALMA DE MALLORCA, THE VESSEL SHOULD RETURN TO CARTAGENA FOR REPAIRS. ARRIVED THERE ON AUGUST 15 AND DEPARTED AGAIN, AFTER REPAIRS, ON AUGUST 25.

HAVING ARRIVED AT DJIBOUTI, FRENCH SOMALILAND, VIA SUEZ AND THE RED SEA, THE VESSEL BUNKERED AND DEPARTED FOR SAIGON ON OCTOBER 4 AT 10:45 P.M. AT ABOUT 11 P.M. THE CHIEF ENGINEER REPORTED THAT THE PORT BOILER WAS WITHOUT WATER AND THAT HE SUSPECTED DAMAGE. THE SHIP, THEREFORE, RETURNED TO ANCHORAGE AT DJIBOUTI WHERE IT REMAINED UNTIL EXAMINATIONS TOOK PLACE ON THE 14TH WHICH RECOMMENDED THAT IT PROCEED TO ADEN ON HER STARBOARD BOILER FOR REPAIRS. THE VESSEL ARRIVED IN ADEN ON OCTOBER 16, REMAINED UNTIL REPAIRS WERE COMPLETED ON NOVEMBER 12 AND DEPARTED THE FOLLOWING DAY. ARRIVED IN SAIGON WITHOUT FURTHER INCIDENT ON DECEMBER 17 AND DISCHARGED CARGO.

THE CLAIM FOR A GENERAL AVERAGE CONTRIBUTION FROM CARGO ARISING FROM TWO DEVIATIONS INTO PORTS OF REFUGE (CARTAGENA AND ADEN) FOR BOILER REPAIRS WAS DISALLOWED BY THE SETTLEMENT CERTIFICATE DATED FEBRUARY 8, 1968. THE CLAIM WAS DISALLOWED BECAUSE "NOTWITHSTANDING THE ALLEGATION OF CREW NEGLIGENCE, THE FACT THAT EXTENSIVE WORK ON THE BOILERS WAS REQUIRED PRIOR TO THE DATE THE VESSEL LEFT CARTAGENA IN ORDER TO MAKE HER SEAWORTHY RAISES CONSIDERABLE DOUBT AS TO THE TRUE CAUSE OF THE NECESSITY FOR SUBSEQUENT REPAIRS TO THE SAME BOILERS, AND AS TO WHETHER DUE DILIGENCE WAS EXERCISED TO MAKE THE VESSEL SEAWORTHY WITHIN THE MEANING OF THE CARRIAGE OF GOODS BY SEA ACT ...'

THE VOYAGE OF THE SS. MARINDI JUBAMI WAS MADE UNDER A CHARTER PARTY DATED JUNE 8, 1966, BETWEEN THE AND MARC SHIPPING CORPORATION, OWNERS OF THE VESSEL, AND TITAN INDUSTRIAL CORPORATION, WHO SOLD THE UREA TO THE UNITED STATES, AS CHARTERER.

CLAUSE 30 OF THE CHARTER PARTY PROVIDES FOR "GENERAL AVERAGE TO BE SETTLED IN NEW YORK CITY, ACCORDING TO THE NEW YORK/ANTWERP RULES, 1950.'

CLAUSE 37 OF THE CHARTER PARTY PROVIDES THAT THE "WAR RISK CLAUSE, BOTH TO BLAME COLLISION, (AND THE) NEW JASON CLAUSE, ARE DEEMED TO BEA PART OF AND FULLY INCORPORATED IN THIS CHARTER PARTY.'

CLAUSE 40, TITLED,"CLAUSE PARAMOUNT," READS IN PART "IT IS MUTUALLY AGREED THAT THIS CONTRACT IS SUBJECT TO THE PROVISIONS OF THE CARRIAGE OF- GOODS-BY-SEA ACT OF THE UNITED STATES, APPROVED APRIL 16, 1936, WHICH SHALL BE DETERMINED TO BE INCORPORATED HEREIN.'

THE LIMITING EFFECT OF THE CLAUSE PARAMOUNT AND OF THE REMAINING CLAUSES OF THE CHARTER PARTY ON THE OBLIGATION TO CONTRIBUTE TO GENERAL AVERAGE SACRIFICES OR EXPENDITURES IS DEMONSTRATED BY THE CASE OF THE LEWIS H. GOWARD, 34 F.2D 791 (1924), WHERE THE COURT SAID (PAGE 793):

"* * * GENERAL AVERAGE IS ENTIRELY INDEPENDENT OF THE CONTRACT OF CARRIAGE, AND ARISES AS PURE EQUITY OUT OF A SACRIFICE MADE OR EXPENDITURE INCURRED FOR THE COMMON BENEFIT. EXCEPTIONS IN A CHARTER PARTY OR BILL OF LADING DO NOT APPLY TO IT, UNLESS THEY ARE EXPRESSLY STATED TO DO SO.

"* * * A SHIPOWNER, WHOSE NEGLIGENCE HAS CONTRIBUTED TO A DISTRESS WHICH CAUSED THE SACRIFICE OR EXPENDITURE FOR THE COMMON BENEFIT, CAN RECOVER NO CONTRIBUTION IN GENERAL AVERAGE FOR THE CARGO (THE IRRAWADDY, 171 U.S. 187 * * * (1898) (, UNLESS THE RIGHT TO RECOVERY IS EXPRESSLY RESERVED IN THE CHARTER PARTY OR BILL OF LADING (THE JASON, 225 U.S. 32 * * * (1912) ).' SEE, ALSO, NICARAGUAN LONG LEAF PINE LUMBER CO. V MOODY, 211 F.2D 715, 718 (1954); 18 COMP. GEN. 164, 172 (1938).

WE BELIEVE THAT THE DEVIATIONS TO CARTAGENA AND TO ADEN, THE PORTS OF REFUGE, FOR BOILER REPAIRS CONSTITUTE GENERAL AVERAGE ACTS. COLINVAUX, CARVER'S CARRIAGE OF GOODS BY SEA, 10TH EDITION (1957), PAGE 618. THUS, THE LIABILITY OF THE CARGO FOR ITS CONTRIBUTION TO THE GENERAL AVERAGE EXPENDITURES ARISES FROM CLAUSE 37 OF THE CHARTER PARTY WHICH INCORPORATES BY REFERENCE THE NEW JASON CLAUSE.

THE NEW JASON CLAUSE, WHICH IS REPRODUCED ON PAGE 590 OF CARVERS, 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.'

THE CARRIAGE OF GOODS BY SEA ACT (COGSA) APPLIES HERE BY CLAUSE 40 OF THE CHARTER PARTY. CAUSES UNDER THAT ACT, FOR WHICH A VESSEL OWNER IS NOT LIABLE FOR CARGO DAMAGE, ARE SET FORTH IN SECTION 4 OF THAT ACT, 46 U.S.C. 1304 (2), AS FOLLOWS:

"NEITHER THE CARRIER NOR THE SHIP SHALL BE RESPONSIBLE FOR LOSS OR DAMAGE ARISING OR RESULTING FROM --

"/A) ACT, NEGLECT, OR DEFAULT OF THE MASTER, MARINER, PILOT, OR THE SERVANTS OF THE CARRIER IN THE NAVIGATION OR IN THE MANAGEMENT OF THE SHIP; "

BEFORE THE PASSAGE OF COGSA, CONTRACTS OF AFFREIGHTMENT OFTEN CONTAINED A JASON (NEGLIGENCE) CLAUSE SIMILAR TO THE ONE HELD VALID IN THE JASON, 225 U.S. 32 (1912). UNDER THAT CLAUSE, IT WAS A CONDITION PRECEDENT TO CARGO LIABILITY FOR CONTRIBUTION TO THE GENERAL AVERAGE THAT THE VESSEL OWNER PROVE THAT HE HAD EXERCISED DUE DILIGENCE TO MAKE THE VESSEL IN ALL RESPECTS SEAWORTHY. 80 C.J.S. SHIPPING, SECTION 232. HOWEVER, WHEN THE CONTRACT OF AFFREIGHTMENT CONTAINS THE NEW OR AMENDED JASON CLAUSE AND IS SUBJECT EX PROPRIO VIGORE OR BY CONTRACT TO COGSA, PROOF OF THE CONDITION PRECEDENT DOES NOT SEEM TO BE REQUIRED EXCEPT WHEN THE CAUSE OF THE ACCIDENT, DANGER OR DISASTER, IS UNSEAWORTHINESS. ISBRANDTSEN CO. V FEDERAL INSURANCE CO., 113 F.SUPP. 357 (1952), AFFIRMED 205 F.2D 679, CERTIORARI DENIED 346 U.S. 866; AMERICAN TOBACCO CO. V GOULANDRIS, 173 F.SUPP. 140, 168 AND 171-173. SEE, ALSO, VOLUME 1, BENEDICT ON ADMIRALTY, 6TH ED., 1940, SECTION 95, PAGE 292 WHICH READS: "* * * THE EXCEPTION CLAUSE OF THE ACT OF 1936 - ARTICLE 4 -- IS POSITIVE: IT ALWAYS OPERATES TO EXONERATE THE CARRIER UNLESS DUE DILIGENCE (TO MAKE THE SHIP SEAWORTHY) HAS NOT BEEN USED IN SOME RESPECT PROXIMATELY CAUSING OR CONTRIBUTING TO THE LOSS"; FIRESTONE SYNTHETIC FIBERS CO. V M/S BLACK HERON, 324 F.2D 835, 837 (1963) HOLDING THAT "* * * ONCE THE CARRIER HAS BROUGHT FORTH EVIDENCE ESTABLISHING THE DEFENSE OF ERROR IN MANAGEMENT, THE BURDEN IS ON THE SHIPPER TO SHOW THAT THE SHIP WAS UNSEAWORTHY AND THAT THE DAMAGE WAS CAUSED BY SUCH UNSEAWORTHINESS"; CIA. ATLANTICA PACIFICA, S.A. V HUMBLE OIL AND REFINING CO., 274 F.SUPP. 884 (1967) AND MCDOWELL AND GIBBS, OCEAN TRANSPORTATION, 1954, PAGE 336. CF. MISSISSIPPI SHIPPING CO. V ZANDER AND COMPANY, 270 F.2D 345, 348 (1959); AMERICAN MAIL LINE V TOKYO MARINE AND FIRE INSURANCE CO., 270 F.2D 499, 502 (1959); SCHADE V NATIONAL SURETY CORP., 288 F.2D 106 (1961).

THE AVERAGE ADJUSTERS STATE THAT THE TWO INSTANCES OF BOILER DAMAGE, WHICH GAVE RISE TO THE DEVIATIONS TO THE PORTS OF REFUGE, WERE CAUSED BY CREW NEGLIGENCE. SPECIFICALLY, THE ADJUSTERS, ON PAGE 3 OF THE STATEMENT, STATE THAT "IN THE OPINION OF THE ADJUSTERS' CONSULTING ENGINEER, THE BOILER DAMAGES OF AUGUST 9, 1966, AND OCTOBER 4, 1966, WERE RESULTANT, IN EACH CASE, UPON CREW NEGLIGENCE IN THEIR FAILURE TO MAINTAIN A PROPER WATER LEVEL IN THE BOILERS.' THIS ALLEGATION OF NEGLIGENCE, 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) AND A CAUSE FOR WHICH "THE CARRIER IS NOT RESPONSIBLE BY STATUTE, CONTRACT OR OTHERWISE" WITHIN THE MEANING OF THE NEW JASON CLAUSE.

THE FIRST CONTENTION OF THE MEMORANDUM OF YOUR GENERAL COUNSEL IS THAT THE SHIPOWNER HAS FAILED TO MEET THE BURDEN OF SHOWING THAT DUE DILIGENCE WAS USE TO MAKE THE VESSEL SEAWORTHY AND CONSEQUENTLY MAY NOT RECOVER IN GENERAL AVERAGE EVEN IF ALL OTHER REQUIREMENTS FOR A GENERAL AVERAGE CONTRIBUTION ARE ASSUMED TO BE PRESENT.

IT IS OUR VIEW THAT SINCE THE CHARTER PARTY CONTAINS AN AMENDED JASON CLAUSE THE VESSEL OWNER IS NOT REQUIRED AS A CONDITION PRECEDENT TO THE CARGO'S LIABILITY UNDER THAT CLAUSE TO FIRST PROVE THAT HE EXERCISED DUE DILIGENCE TO MAKE THE VESSEL SEAWORTHY. SEE ISBRANDTSEN CO. V FEDERAL INS. CO., SUPRA. UNDER THE OLD JASON CLAUSE THE VESSEL OWNER HAD TO FIRST PROVE DUE DILIGENCE TO MAKE THE VESSEL SEAWORTHY BECAUSE INDEPENDENT OF ANY STATUTE THE CLAUSE ITSELF SO PROVIDED. THE NEW JASON CLAUSE DOES NOT CONTAIN THE SAME PROVISO; INSTEAD IT MAKES THE CARGO LIABLE IF THE CAUSE OF THE ACCIDENT IS ONE FOR WHICH THE CARRIER IS NOT RESPONSIBLE BY "STATUTE, CONTRACT OR OTHERWISE.' IF A CONTRACT OF AFFREIGHTMENT CONTAINING THE NEW JASON CLAUSE IS GOVERNED BY THE HARTER ACT IN AND OF ITSELF OR BY CONTRACT, IT SEEMS CLEAR THAT THE VESSEL OWNER MUST PROVE DUE DILIGENCE TO MAKE THE SHIP SEAWORTHY BECAUSE UNDER THE HARTER ACT SIMILAR PROOF IS REQUIRED. 46 U.S.C. 192; SCHADE V NATIONAL SURETY CORP., 288 F.2D 106 (1961). BUT IF THE CONTRACT IS GOVERNED BY THE CARRIAGE OF GOODS BY SEA ACT, AS IT IS HERE, PROOF OF DUE DILIGENCE IS NOT REQUIRED.

THE LEGISLATIVE HISTORY OF THE CARRIAGE OF GOODS BY SEA ACT INDICATES THAT CONTRARY TO WHAT WAS TRUE UNDER THE HARTER ACT THE SHIP OWNER UNDER COGSA CAN BE RELIEVED FROM LIABILITY FOR CERTAIN CAUSES (E.G., CREW NEGLIGENCE) WITHOUT FIRST SHOWING THAT HE EXERCISED DUE DILIGENCE TO MAKE THE VESSEL SEAWORTHY. HEARINGS BEFORE THE COMMITTEE ON MERCHANT MARINE AND FISHERIES, HOUSE OF REPRESENTATIVES, 74TH CONG., ON S. 1152, JANUARY 28, 1936, PAGE 62. THIS IS ALSO DEMONSTRATED IN COGSA LOSS AND DAMAGE CASES. SEE FIRESTONE SYNTHETIC FIBERS CO. V M/S BLACK HERON, SUPRA; AMERICAN TOBACCO CO. V GOULANDRIS, SUPRA, 168.

IN FIRESTONE, THE COURT PLAINLY EXPLAINS THAT THE DEFENSE AFFORDED BY SECTION 4 (2) (A) OF THE CARRIAGE OF GOODS BY SEA ACT, (THE DEFENSE AGAINST LIABILITY FOR DAMAGE DUE TO ERRORS IN NAVIGATION OR MANAGEMENT OF THE VESSEL) IS NOT CONDITIONED ON A SHOWING OF SEAWORTHINESS OR ON A SHOWING OF DUE DILIGENCE TO MAKE THE VESSEL SEAWORTHY. IN SO HOLDING THE COURT SAID:

"UNDER THE CARRIAGE OF GOODS BY SEA ACT, 46 U.S.C. SEC. 1304 (2) (A) (1958) THE DEFENSE OF ERROR IN MANAGEMENT IS NOT CONDITIONED, AS IT IS UNDER THE HARTER ACT, 46 U.S.C. SEC. 192 (1958), ON A SHOWING OF SEAWORTHINESS OR DUE DILIGENCE TO MAKE THE VESSEL SEAWORTHY. ISBRANDTSEN CO. V FEDERAL INS. CO., 113 F.SUPP. 357 (S.D.N.Y. 1952),AFF-D PER CURIAM, 205 F.2D 679 (2D CIR.), CERT. DENIED, 346 U.S. 866, 74 S.CT. 106, 98 L.ED. 377 (1953). THEREFORE ONCE THE CARRIER HAS BROUGHT FORTH EVIDENCE ESTABLISHING THE DEFENSE OF ERROR IN MANAGEMENT THE BURDEN IS ON THE SHIPPER TO SHOW THAT THE SHIP WAS UNSEAWORTHY AND THAT THE DAMAGE WAS CAUSED BY SUCH UNSEAWORTHINESS. SEE ISBRANDTSEN CO. V FEDERAL INS. CO., SUPRA.'

MOREOVER ON THIS POINT IT SEEMS TO US THAT THE MEMORANDUM OF YOUR GENERAL COUNSEL HAS TAKEN VARIOUS FACTS FROM THE GENERAL AVERAGE STATEMENT AND DRAWS CERTAIN CONCLUSIONS AND INFERENCES WHICH ALTHOUGH DENOMINATED AS BEING "MOST PLAUSIBLE EXPLANATIONS" NEVERTHELESS SEEM TO BE SPECULATIVE AND MATTERS OF CONJECTURE.

THE MEMORANDUM STATES THAT THE STATEMENT PREPARED BY THE AVERAGE ADJUSTER -- ALTHOUGH AN EX-PARTE DOCUMENT PREPARED BY AN AGENT OF THE CARRIER AND OBVIOUSLY SLANTED IN FAVOR OF THE CARRIER -- DEMONSTRATES THAT NONE OF THE DELAYS WHICH THE VESSEL ENCOUNTERED ARE ATTRIBUTABLE SOLELY TO NEGLIGENCE OF THE CREW BUT WERE THE RESULT OF THE UNSEAWORTHINESS OF THE VESSEL. THIS CONNECTION IT HAS BEEN HELD THAT GENERAL AVERAGE ADJUSTING IS A HIGHLY SPECIALIZED FIELD. MOST OFTEN,DIFFERENCES ARE RESOLVED BY SPECIALLY TRAINED ADJUSTERS IN NON LEGAL FORUMS. CONSEQUENTLY, JUDICIAL INTERPRETATION OF GENERAL AVERAGE ADJUSTMENTS IS RARE AND A COURT IN ONE CASE FOUND THAT THE OPINIONS OF GENERAL AVERAGE ADJUSTERS ARE SIGNIFICANT. WATERMAN S.S. CORP. V UNITED STATES, 258 F.SUPP. 425, 429 (1966). SEE, ALSO, CIA. ATLANTICA PACIFICA, S.A. V HUMBLE OIL AND REFINING CO., SUPRA, PAGE 899 WHERE THE COURT HELD THAT ASSUMING THE EXISTENCE OF A GENERAL AVERAGE ACT AND A DETERMINATION THAT ONE OR MORE GIVEN ITEMS OF CLAIMED DAMAGE ARE ALLOCABLE IN GENERAL AVERAGE, A GENERAL AVERAGE STATEMENT BECOMES PRIMA FACIE EVIDENCE THAT ANY ITEM SO CLAIMED IS PROPERLY INCLUDED AS AN ELEMENT OF GENERAL AVERAGE CONTRIBUTION IN THE AMOUNT AND PROPORTION ATTRIBUTED TO THE ITEM IN THE GENERAL AVERAGE STATEMENT.

ON PAGE THREE OF THE STATEMENT OF GENERAL AND PARTICULAR AVERAGE ON THE SS. MARINDI JUBAMI IS THE FOLLOWING STATEMENT:

"IN THE OPINION OF THE ADJUSTERS' CONSULTING ENGINEER, THE BOILER DAMAGES OF AUGUST 9, 1966, AND OCTOBER 4, 1966, WERE RESULTANT, IN EACH CASE, UPON CREW NEGLIGENCE IN THEIR FAILING TO MAINTAIN A PROPER WATER LEVEL IN THE BOILERS.' WE ARE ENCLOSING COPIES OF A LETTER DATED JANUARY 10, 1968, FROM GREAT EASTERN ASSOCIATES, INC., ADDRESSED TO OUR CLAIMS DIVISION, AND A LETTER OF FEBRUARY 15, 1968, ADDRESSED TO THE LEMURIA SHIPPING CORPORATION BOTH OF WHICH STATE THAT CREW NEGLIGENCE WAS THE CAUSE OF THE DELAY AND OF THE CONSEQUENT GENERAL AVERAGE CONTRIBUTIONS. ALSO, ENCLOSED IS A COPY OF A TRANSLATION OF A LETTER OF AUGUST 22, 1966, AND A REPORT FROM THE EMPRESA NACIONAL "BAZAN" , THE COMPANY PERFORMING THE REPAIRS AT CARTAGENA, WHICH SHOW THAT THE DAMAGE WAS CAUSED BY THE BOILER BEING LEFT WITHOUT WATER (CREW NEGLIGENCE). THERE IS NOTHING IN THE RECORD TO INDICATE THAT THE BOILER REPAIRS WERE NOT COMPETENTLY PERFORMED AND INSPECTED.

WE BELIEVE THAT THE EVIDENCE, TAKEN AS A WHOLE, TENDS TO ESTABLISH THAT THE DAMAGE TO THE BOILER IN EACH CASE WAS THE RESULT OF CREW NEGLIGENCE IN THEIR FAILURE TO MAINTAIN PROPER WATER LEVELS IN THE PORT BOILER. THIS BEING SO, THE BURDEN OF PROVING THAT UNSEAWORTHINESS CONTRIBUTED TO THE CAUSE OF THE DAMAGE FALLS ON THE CARGO. CIA. ATLANTICA PACIFICA, S.A. V HUMBLE OIL AND REFINING CO., SUPRA, PAGE 904; FIRESTONE SYNTHETIC FIBERS CO. V M/S BLACK HERON, SUPRA, PAGE 837.

IN THE ABSENCE OF CARGO POSSESSING PROOF OF SUCH UNSEAWORTHINESS (AS CONTRASTED WITH THE INFERENCE OF UNSEAWORTHINESS ARISING FROM THE FACT THAT EXTENSIVE WORK ON THE BOILERS WAS REQUIRED PRIOR TO THE TIME THE VESSEL LEFT CARTAGENA), WE ARE OF THE OPINION THAT THE ADDITIONAL EVIDENCE SENT IN BY THE CLAIMANT IN RESPONSE TO THE DISALLOWANCE OF THE CLAIM, SPECIFICALLY, LLOYD'S REGISTER OF SHIPPING CERTIFICATE S/C NO. 2636, DATED AUGUST 25, 1956, AND THE ACCOUNT OF THE REPAIR WORK DONE ON THE BOILERS SUBMITTED BY THE CARTAGENA WORKS OF THE EMPRESA NACIONAL DE CONSTRUCCIONES NAVALES MILITARES S.A., WORK 12-7158, REASONABLY SHOW THAT THE DAMAGE WAS NOT CAUSED BY WANT OF DUE CARE TO MAKE THE VESSEL SEAWORTHY.

THE NEXT POINT RAISED IN THE MEMORANDUM OF YOUR GENERAL COUNSEL'S OFFICE IS THAT THERE WAS NO GENERAL AVERAGE ACT, THAT IS, THAT THE EXPENSES OF GOING INTO A PORT OF REFUGE FOR REPAIRS TO THE BOILERS WERE NOT INCURRED FOR THE COMMON SAFETY AND FOR THE PURPOSE OF PRESERVING THE SHIP AND CARGO FROM PERIL. THIS CONCLUSION APPARENTLY IS ARRIVED AT BECAUSE OF THE INTERPRETATION GIVEN IN THE MEMORANDUM TO RULE VII OF THE YORK-ANTWERP RULES OF 1950, INCORPORATED INTO THE CHARTER PARTY BY CLAUSE 30, AND BECAUSE OF THE OPINION EXPRESSED IN THE MEMORANDUM THAT NO PERIL EXISTED.

WE BELIEVE THE CONSTRUCTION OF RULE VII IS UNWARRANTED. RULE VII READS:

"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 WHEN SHOWN TO HAVE ARISEN FROM AN ACTUAL INTENTION TO FLOAT THE SHIP FOR THE COMMON SAFETY AT THE RISK OF SUCH DAMAGE; BUT WHERE A SHIP IS AFLOAT NO LOSS OR DAMAGE CAUSED BY WORKING THE MACHINERY AND BOILERS, INCLUDING LOSS OR DAMAGE DUE TO COMPOUNDING OF ENGINES OR SUCH MEASURES SHALL IN ANY CIRCUMSTANCES BE MADE GOOD AS GENERAL AVERAGE.' THIS RULE DOES NOT SAY THAT WHERE A SHIP IS AFLOAT DAMAGES TO BOILERS CANNOT BE THE PROXIMATE CAUSE OF A GENERAL AVERAGE ACT. ALL THE RULE STATES IS THAT THE ACTUAL DAMAGE CAUSED BY WORKING THE BOILER AND MACHINERY, PRESUMABLY TO REDUCE THE PERIL AND WHETHER SUCH DAMAGE IS TO THE BOILER OR MACHINERY OR OTHER PARTS OF THE VESSEL, CANNOT BE RECOVERED AS A GENERAL AVERAGE CONTRIBUTION, AND THE MEMORANDUM OF YOUR GENERAL COUNSEL ACKNOWLEDGES THAT THE CARRIER DOES NOT SEEK A CONTRIBUTION FOR COSTS OF REPAIR TO MACHINERY AND BOILERS. SEE LOWNDES AND RUDOLF'S GENERAL AVERAGE AND THE YORK-ANTWERP RULES (8TH ED. 1955) P. 421 AND THE AMERICAN JOURNAL OF COMPARATIVE LAW, VOLUME 9 (1960) PP. 104-112.

WE BELIEVE THAT RULE A IS THE PROPER RULE TO USE IN DETERMINING WHETHER THERE HAS BEEN A GENERAL AVERAGE ACT. RULE A READS AS FOLLOWS:

"THERE IS A GENERAL AVERAGE ACT WHEN, AND ONLY WHEN, ANY EXTRAORDINARY SACRIFICE OR EXPENDITURE IS INTENTIONALLY AND REASONABLY MADE OR INCURRED FOR THE COMMON SAFETY FOR THE PURPOSE OF PRESERVING FROM PERIL THE PROPERTY INVOLVED IN A COMMON MARITIME ADVENTURE.' BUT THE MEMORANDUM OF YOUR GENERAL COUNSEL CONTENDS THAT THERE EXISTED NO PERIL.

RULE A DOES NOT SAY THAT THE PERIL MUST BE IMMEDIATE OR PRESENT. SEE LOWNDES AND RUDOLPH-S, SUPRA, PP. 384-385. JUDGE AUGUSTUS N. HAND IN NAVIGAZIONE GENERALE ITALIANA V SPENCER KELLOGG AND SONS, 92 F.2D 41, 43 (1937), CERTIORARI DENIED 302 U.S. 751, STATES THAT:

"THERE MUST BE A FAIR REASON TO REGARD A VESSEL IN PERIL IN ORDER TO REQUIRE A CONTRIBUTION IN GENERAL AVERAGE. WHILE THE COURTS IN SOME CASES HAVE USED EXPRESSIONS INDICATING THAT BOTH IN GENERAL AVERAGE AND IN SALVAGE CASES IT IS ESSENTIAL THAT THE PROPERTY AT RISK BE SUBJECT TO AN IMMEDIATELY IMPENDING DANGER, WE THINK THAT THE IMMINENCY- OF THE PERIL IS NOT THE CRITICAL TEST. IF THE DANGER BE REAL AND SUBSTANTIAL, A SACRIFICE OR EXPENDITURE MADE IN GOOD FAITH FOR THE COMMON INTEREST IS JUSTIFIED, EVEN THOUGH THE ADVENT OF ANY CATASTROPHE MAY BE DISTANT OR INDEED UNLIKELY. IN POINTING OUT THE BROAD DISCRETION WHICH MUST BE ALLOWED TO THE MASTER OF THE VESSEL, JUDGE HOUGH SAID IN WILLCOX, PECK AND HUGHES V AMERICAN SMELTING AND REFINING CO. (D.C.) 210 F.89, 91: -IF HE FINDS DANGER IN A LAND LOCKED HARBOR, IN SHALLOWS, AT ANCHOR, OR MOORED TO A WHARF, IT SHOULD BE NO ANSWER TO REGISTER A LANDSMAN'S OPINION AS TO THE NECESSARY ABSENCE OF DANGER AT SUCH A PLACE.-

"AS CURTIS, J., SAID IN LAWRENCE V MINTURN, 17 HOW. 100, 109, 15 L.ED. 58, WHERE THE NECESSITY OF A JETTISON OF CARGO WAS QUESTIONED: IT IS TRUE, THAT WHEN IT WAS ACTUALLY MADE, THE SEA WAS SMOOTH, AND THE SHIP IN NO IMMEDIATE DANGER. BUT IT SATISFACTORILY APPEARS, THAT THESE BOILERS AND CHIMNEYS COULD NOT BE THROWN OVERBOARD, WITHOUT THE GREATEST RISK, WHEN THERE WAS ANY CONSIDERABLE SEA. TO REQUIRE DELAY UNTIL A STORM, WOULD BE, IN EFFECT, TO PROHIBIT THE CRIFICE.'

IN THIS CONNECTION, THE MASTER OF A SHIP IS VESTED WITH A LARGE DISCRETION AS TO THE NECESSITY FOR A GENERAL AVERAGE ACT, AND THE COURTS ARE INCLINED TO UPHOLD THAT DISCRETION. RALLI V TROOP, 157 U.S. 386, 400- 401 (1895); LAWRENCE V MINTURN, 17 HOW. 100, 109-110 (1854); MINNEAPOLIS, ST. P.-AND-S.S.S. CO. V MANISTEE TRANSIT CO., 156 F.424 (1907). IN THE WORDSWORTH, 88 F.313 (1898), THE COURT FOUND IT TO BE A GENERAL AVERAGE INCIDENT WHERE THE CAPTAIN WAS MISTAKEN AS TO THE FACTS AND THE SHIP WAS NOT IN IMMINENT DANGER. THE COURT STATED (PAGE 315):

"IN OTHER WORDS A SITUATION OF IMMINENT DANGER TO THE WHOLE ENTERPRISE WAS BELIEVED TO EXIST AND DID APPARENTLY EXIST SUCH AS APPARENTLY REQUIRED THE SACRIFICE TO BE INCURRED; AND IT WAS UPON THAT JUDGMENT AND BELIEF THAT THE SACRIFICE WAS MADE, AND MADE, AS SUPPOSED AND UNDERSTOOD AT THE TIME, NECESSARILY IN THE INTEREST AND FOR THE SAFETY OF ALL CONCERNED.'

IT HAS BEEN HELD THAT WHERE A VESSEL HAS A COLLISION WITH SOME OBSTRUCTION CAUSING THE VESSEL TO LEAK BUT THE LEAKING WAS UNDER CONTROL AND THE BOAT ITSELF WAS BROUGHT TO SHORE AND TIED UP, THE CARGO WAS IN NO DANGER, AND COULD EASILY HAVE BEEN RESHIPPED ON TRANSIENT BOATS, NEVERTHELESS THE VESSEL HAD LOST HER MOTIVE POWER, AND WAS NOT IN ANY PORT OR HARBOR OF REFUGE BUT THE SHIP AND CARGO AS A WHOLE WERE IN PERIL AND THE EXPENSES OF TOWING TO DESTINATION WERE NECESSARY FOR THE COMMON SAFETY OF THE SHIP AND CARGO AND WERE PROPERLY OF GENERAL AVERAGE. THAT THE PORT OF REFUGE AND PORT OF DESTINATION WERE THE SAME MAKES NO MATERIAL DIFFERENCE. SWEENEY V THOMPSON, 39 F.121, 125, 126 (1889).

IN CONCLUSION ON THIS POINT, CARVERS, SUPRA, AT PAGE 618, SUMS IT UP AS FOLLOWS:

"WHERE A DEVIATION IS VOLUNTARILY MADE TO AVOID THE DANGER OF GOING ON IN A SHIP WHICH IS SO DAMAGED THAT A CONTINUANCE OF THE VOYAGE IS UNSAFE BOTH FOR SHIP AND CARGO, THE DEVIATION IS A GENERAL AVERAGE ACT. IT INVOLVES EXTRAORDINARY ADDITIONAL EXPENSES TO THE SHIPOWNER, WHICH ARE VOLUNTARILY INCURRED UNDER THE PRESSURE OF A COMMON RISK, FOR THE COMMON SAFETY. IS NOT A SUFFICIENT OBJECTION TO SAY THAT IT IS THESHIPOWNER'S DUTY TO TAKE THESE PRECAUTIONS AND INCUR THESE EXPENSES UNDER HIS CONTRACT OF CARRIAGE. FOR, AS WE HAVE SEEN, THAT ARGUMENT WOULD PROVE TOO MUCH. IS THE SHIPOWNER'S DUTY ALSO TO MAKE OTHER VOLUNTARY SACRIFICES, TO WHICH, STILL, HE IS ENTITLED TO CLAIM CONTRIBUTION. THE POLICY OF THE LAW IS TO ENCOURAGE THE MAKING OF NECESSARY SACRIFICES WITH PROMPTITUDE; AND WITH AS LITTLE HESITATION WHERE THEY AFFECT THE SHIPOWNER'S PROPERTY, OR INTERESTS, AS WHERE THE PROPERTY OF THE SHIPPERS IS DEALT WITH.'

UPON RECONSIDERATION OF OUR DECISION, WE REAFFIRM OUR CONCLUSIONS THAT THE DAMAGE TO THE PORT BOILER RESULTED FROM CREW NEGLIGENCE, THAT THE SHIPOWNER IS NOT REQUIRED AS A CONDITION PRECEDENT TO CARGO LIABILITY FOR A GENERAL AVERAGE CONTRIBUTION TO FIRST PROVE THAT HE EXERCISED DUE DILIGENCE TO MAKE THE VESSEL SEAWORTHY, AND THAT THE DEVIATIONS INTO PORTS OF REFUGE FOR BOILER REPAIRS CONSTITUTE GENERAL AVERAGE ACTS. IN THESE CIRCUMSTANCES, IT APPEARS UNNECESSARY TO REPLY TO THE THIRD, FOURTH, AND FIFTH CONTENTIONS OF YOUR GENERAL COUNSEL'S MEMORANDUM.

IN THE MEMORANDUM OF YOUR GENERAL COUNSEL, THE VIEW IS EXPRESSED THAT THE INSURANCE ADJUSTER HAS INCLUDED ITEMS WITHIN THE GENERAL AVERAGE CALCULATION WHICH SHOULD HAVE BEEN EXCLUDED. WE HAVE ADVISED OUR CLAIMS DIVISION TO GIVE CONSIDERATION TO SUCH VIEWS WHEN IT RE EXAMINES THE SETTLEMENT DISALLOWING THE CLAIM. ALSO, THAT MEMORANDUM CALLS ATTENTION TO THE FACT THAT THE AVERAGE ADJUSTER ACKNOWLEDGED SHORT LANDING OF 84.250 METRIC TONS OF UREA WORTH $9,462.12, WHICH THE MEMORANDUM INDICATES "IT APPEARS THE CARRIER HAS NOT PAID THE UNITED STATES" AND RAISES SOME QUESTION WHETHER RECOVERY OF SUCH AMOUNT MAY BE BARRED BY FAILURE OF THE GOVERNMENT TO BRING SUIT THEREON WITHIN ONE YEAR OF THE DATE WHEN THE GOODS SHOULD HAVE BEEN DELIVERED UNDER 46 U.S.C. 1303 (6). THE DUTY TO MAKE RECOVERY FOR LOSS OF GOVERNMENT CARGO AND PROTECT THE GOVERNMENT'S RIGHTS FROM BECOMING EXTINGUISHED CLEARLY RESTS WITH THE ADMINISTRATIVE AGENCY OR AGENCIES INVOLVED AND IF THE AMOUNT OF THE LOSS WAS NOT PREVIOUSLY RECOVERED, IT SHOULD HAVE BEEN REPORTED HERE WITHIN SIX MONTHS FROM THE DATE DEMAND WAS FIRST MADE ON THE DEBTOR. 5 GAO 5040.21 AND 5040.25. HOWEVER, THE AVERAGE ADJUSTER'S CLAIM IS NO DOUBT MADE PRIMARILY ON BEHALF OF THE VESSEL OWNER WHICH ALSO WOULD BE RESPONSIBLE FOR THE DAMAGE CLAIM. BOTH AROSE OUT OF THE SAME CONTRACT AND CIRCUMSTANCES, AND UNDER THE DOCTRINE OF RECOUPMENT ENUNCIATED IN BULL V UNITED STATES, 295 U.S. 247 (1935) AND GRACE LINE, INC. V UNITED STATES, 144 F.SUPP. 548 (1956) SUCH RECOUPMENT IS NOT BARRED AND OUR CLAIMS DIVISION WILL WITHHOLD AND COLLECT SUCH AMOUNT FROM THE AMOUNT OTHERWISE FOUND DUE ON THE GENERAL AVERAGE CLAIM.

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