Petition — Flota Mercante Grancolombiana, S. A. v. Vana Trading Co.

Supreme Court, U. S% t

tm FILED

1977

IN THE MICHAEL RODAK, JR., CLERK

Supreme Court of the United States e

OCTOBER TERM 1977

Docker No. ..... " 7 . 26 8

~~

—

- Frota MercantTe GRANCOLOMBIANA, S.A.,

Petitioner,

against

Vana TravineG Co., Inc.,

Respondent.

PETITION FOR A WRIT OF CERTIORARI TO THE

CIRCUIT COURT OF APPEALS FOR THE UNITED

STATES, FOR THE SECOND CIRCUIT

Renato C. GIALLoRENzI

Attorney for Petitioner

67 Broad Street

New York, New York 10004

|

|

TABLE OF CONTENTS

PAGE

Citations to Opinions Below ................+.005- 1

7 Pe erry PS See ey OT 2

Questions Presented ....... Letikdevemiewaaek ane 2

Statutory Provisions Involved .................55. 2

IE OE Te GOOD oo og cance c kcnsccascesenssenes 3

Reasons for Granting the Petitioner a Writ of

PO Neer eT Tr eee eT eT ree 4

Re: The first question presented: Did the Sec-

ond Circuit err in not applying the doctrine

of proportionate fault?................... 4

Re: The second question presented: Did the

Second Circuit err in not dismissing Re-

spondent’s complaint after Petitioner had

established the defense of insufficiency of

SEND oe cbesccdveddetecdscebh bite des 8

Did the Second Circuit err by not applying the

doctrine of Niel Maersk? ............4.45. 9

I i ces decease ws 11

Appendix A, Findings and Opinion by Milton Pollack,

TERE FoR addced dada sewssesesecenescocavess la

Appendix B, Judgment of District Court ......... 10a

Appendix C, Opinion of Court of Appeals ......... 12a

Appendix D, Order of Reversal of Court of Appeals 23a

ii TABLE OF CONTENTS

TaBLe oF Cases

PAGE

Cooper Stevedoring Co. v. Kopke, Inc., 417 U.S. 106

TED ahatciniecadaindsdeheutadeicdjk: 5, 6

J. Howard Smith, Inc. v. S.S. Maranon, 501 F.2d 1275

(2d Cir. 1974), cert. denied 420 U.S. 975 (1975) 9

Lekas and Drivas, Inc. v. Goulandris, 306 F. 2d 425

(2nd Cir. 1962) ...... chievulvesedsaneeaacete 10, 11

Niel Maersk, 91 F. 2nd 932 (2 Cir. 1987), cert. denied

ee We CES Cdivcc cxaveawadeedaens 2, 4, 8, 9, 10

Schnell v. The Vallescura, 293 U.S. 296 ( 1984)..... 2, 4, 7,

SUI bis arlan @iinebaiah iat Sos Pe a 6, 7

SIN <iisedun donno cided ctudeatemaere ta.) 4,5, 6

TABLE oF STaTUTES

Carriage of Goods by Sea Act, Title 46 U.S.C. Sec-

tion 1304 (2) (m) and (n) .................... 2,7,8

BD We ME ED i irsis woreda kcdapascadcuasedd code tuk 8

Supreme Court Rule 19 (1)(b) .................-. 8

In THE

”, Supreme Court of the United States

OCTOBER TERM 1977

Docket No. .....

a

i

Firota Mercante GRANCOLOMBIANA, S.A.,

Petitioner,

against

Vana Trapine Co., Inc.,

Respondent.

a

a

PETITION FOR A WRIT OF CERTIORARI TO THE

CIRCUIT COURT OF APPEALS FOR THE UNITED

STATES, FOR THE SECOND CIRCUIT

Flota Mereante Grancolombiana, S.A. (hereinafter

“Flota”), prays that a writ of certiorari issue to review

that part of the final judgment of the United States Court

of Appeals for the Second Circuit, entered on May 20, 1977

which failed to apply the doctrine of proportionate fault,

and incorrectly granted Respondent judgment against

Petitioner.

Citations to Opinions Below

The opinion of the United States District Court for the

Southern District of New York was reported at 415 F.

Supp. 884 (1976) and is printed in the Appendix hereto,

infra, page 1a).

The opinion of the Court of Appeals for the Second Cir-

cuit has not been officially reported as yet, and is printed

in the Appendix hereto, infra, page 12a.

Jurisdiction

The decision of the United States Court of Appeals for

the Second Circuit is dated May 20, 1977.

The jurisdiction of this Court is invoked under 28 U.S.C.

Section 1254 (1).

Questions Presented

1. Did the Court of Appeals for the Second Circuit err

by not applying the doctrine of proportionate fault as be-

oo Petitioner and Respondent as the District Court had

one.

2. (a) Did the Court of Appeals err in not dismissing

Respondent’s complaint once Petitioner had established

the statutory defense of insufficiency of packing.

(b) Did the Court of Appeals err by not applyi

holding of the Niel Maersk, 91 F. 2d 932 (2 ge ay

cert. denied 302 U.S. 753 (1937), rather than Schnell v.

Vallescura, 293 U.S. 296 (1924), since it was found by the

District Court that the yams were in a susceptible condi-

tion at the time of shipment and no causal connection be-

tween any act of the carrier and the dam to

was established. ee

Statutory Provisions Involved

This case involved 46 U.S.C. 1304 (2) (m) and (n) C

S.C. ar-

riage of Goods by Sea Act (COGSA) which provide as

follows: “Neither the carrier nor the ship shall be respon-

sible for loss or damage arising or resulting from—

(m) Wastage in bulk or weight or any other loss or

damage arising from inherent defect, quality, or vice

of the goods;

(n) Insufficiency of packing”.

Statement of the Case

‘

Respondent, Vana Trading Co., Ine. (hereinafter

“Vana”) delivered to Petitioner, Flota, for carriage from

Cartagena to New York aboard the 8.S. Metre Sxkovu, a

cargo of yams individually wrapped in newsprint type

paper and packed in cardboard boxes with only two hand

holes in each box and a slit for ventilation. The cargo of

yams arrived in New York in a damaged “cooked”

condition.

The District Court found that at the time of shipment

the yams were in a condition susceptible to damage. It

further found that Petitioner had established the defense

of insufficiency of packing. However, because the District

Court found that other factors contributed to the damage,

it thereby divided the total damages evenly between Peti-

tioner and Respondent applying the doctrine of propor-

tionate fault.

The Court of Appeals for the Second Circuit reversed

the judgment of the District Court holding that the Dis-

trict Court’s apportionment of damages was inappropriate

in a maritime cargo damage situation. Despite the Dis-

trict Court’s finding after trial that the yams were improp-

erly packed the Court of Appeals awarded the Respondent

its full damages stating that the Petitioner had failed to

satisfy its burden of proving what percentage of damage

was attributable to each party.

+

Reasons for Granting the Petitioner a Writ

of C ti .

Re: The first question presented: Did the Second Circuit

err in not applying the doctrine of proportionate fault?

A concept of apportioning damages in cargo cases in

theory not a new one has been as a practical matter an im-

possible concept to implement. As the cases of Schnell

and Niel Maersk, supra, illustrate, two or more parties are

frequently responsible to some degree for damage to cargo,

but the party who bears the shifting burden of proof, be it

plaintiff or defendant, as a practical matter inevitably also

bears the entire responsibility for the loss. The difficulties

in trying to prove with any precision what factors caused

a perishable. commodity to spoil are readily apparent. In

effect the party assigned the burden of separating damages

is being assigned a judgment against it. The Schnell,

supra and Niel Maersk, swpra, cases are again instructive

since in neither case was the party assigned the burden of

proof, in one instance the shipper and in the other the car-

rier, able to satisfy the virtually impossible burden of

separating damages.

The District Court, thongh it failed to dismiss Respond-

ent’s complaint, recognized the difficulty of separating

damages in a situation involving several potentially liable

parties and multiple causal factors contributing to the

damage. The District Court borrowed heavily from this

Court’s decision in United States v. Reliable Transfer Co.,

421 U.S. 397 (1975) in deciding that both Respondent and

Petitioner contributed to the damage, but because it was

not possible to measure precisely the comparative degree

of their fault the damages should be allocated equally.

Though the Reliable, supra, holding involved a collision

and stranding situation the logic of the decision is readily

adaptable to the cargo damage area. It is Petitioner’s

firm belief that the Reliable holding should be extended to

5

cargo damage actions so that when two or more parties

contribute to the damage of a cargo the liability would be

allocated among the parties proportionately according to

the comparative degree of their fault.

This suggested holding is precisely the one advanced by

the District Court herein, and is a legal theory that finds

deep-rooted support not only in Reliable, supra, but in this

Court’s decision in Cooper Stevedoring Co. v. Kopke Inc.,

417 U.S. 106 (1974), as well. Though Cooper, supra, in-

volved a maritime persona! injury it delineated this

Court’s thinking on division of damages and proportionate

fault in admiralty cases in explicit terms. In upholding

the division of damages between the vessel and the steve-

dore determined by the trial court and affirmed by the

Fifth Circuit, this Court held,

«“* * ® that the apparent prohibition against con-

tribution in noncollision maritime cases announced in

Halcyon and Atlantic was inapplicable where the joint

tortfeasor against whom contribution is sought is not

immune from tort liability by statute.’’ :

The Court also spoke in Cooper in more general lan-

guage, language that both foreshadowed and fully supports

the trial court’s apportioning of damages in the cargo dam-

age situation now being considered. At page 110, Mr. Jus-

tice Marshall wrote:

«“® * © Even though the common law of torts rejected

a right of contribution among joint tortfeasors the

principle of division of damages in admiralty has, over

the years, been liberally extended by this Court in di-

rections deemed just and proper. In one line of cases,

for example, the Court expanded the doctrine to en-

compass not only damage to the vessels involved in a

collision, but personal injuries and property damage

caused innocent third parties as well. * * ° Indeed, it

is fair to say that application of the rule of division of

6

damages between joint tortfeasors in admiralty cases

has been as broad as its underlying rationales. The

interests of safety dictate that where two parties ‘are

both in fault, they should bear the damage equally, to

make them more careful.’ The Alabama, supra, at

697. And a ‘more equal distribution of justice’ can

best be achieved by ameliorating the common-law rule

against contribution which permits a plaintiff to force

one of two wrongdoers to bear the entire loss, though

the other may have been equally or more to blame.”

By using such strong sweeping language this Court was

clearly anticipating and laying the groundwork for its

holding in Reliable, supra, and the District Court’s applica-

tion of the proportionate fault doctrine to a cargo situa-

tion herein.

Having applied the proportionate fault doctrine to non-

collision maritime cases in Cooper, supra, this Court then

took the next logical step in Reliable, by extending the doc-

trine to collision and stranding situations.

It is significant to note that Reliable, like Cooper, was a

reaction to a seemingly unbending precedent of Maritime

Law, to wit, damages in a collision case being borne equally

by the parties at fault regardless of the degree of their

fault. In a unanimous decision this Court in Reliable re-

placed this harsh doctrine, the governing law since The

Schooner Catherine v. Dickinson, 58 U.S. 170 (1854), with

the more modern, practical and most importantly, more

equitable proportionate fault doctrine. It is time that the

area of maritime cargo damage itself governed by ancient

harsh doctrines, also be re-examined and infused with mod-

ern legal thinking by this Court.

The Second Circuit while recognizing that this case rep-

resented an invitation to apply to cargo damage cases the

doctrine of proportionate fault as set forth in Cooper and

Reliable, declined to do so. (See Appendix, Page 13a,

ee ee

7

paragraph 1). The Second Circuit instead chose to rely

upon Schnell, supra. Petitioner suggests that the reliance

on the Schnell rule by the Second Circuit in 1977 was mis-

placed and patently unfair to litigants in cargo damage

cases, just as The Schooner Catherine, supra, was unfair

to litigants in collision cases.

Petitioner notes initially that the Schnell decision in 1934

predates by two years the passage of the Carriage of

Goods by Sea Act (COGSA). Since the passage of the

COGSA this Court has not considered the issue of propor-

tionate fault in cargo cases.

Surely an issue of such importance to the shipping in-

dustry warrants definitive clarification by the Supreme

Court in light of COGSA and the continuous development

and modernization of maritime law since Schnell was

decided.

The patent unfairness of Schnell, is seen in this quote at

page 306,

“Where the state of the proof is such as to show that

the damage is due either to an excepted peril or to the

carrier’s negligent care of the cargo, it is for him to

bring himself within the exception or to show that he

has not been negligent.

“Similarly, the carrier must bear the entire loss

where it appears that the injury to cargo is due either

to sea peril or negligent stowage, or both, and he fails

to show what damage is attributable to sea peril.”

According to Schnell, the carrier must bear the entire

loss any time it cannot prove what portion of the damages

it was responsible for. To accurately separate damages,

as has been previously discussed, is in most cases impos-

sible. In the instant case the possible causes of damage

were many and varied; the length of time the yams re-

mained in the ground long after maturity, subjecting the

8

yams to attacks by rodents, insects and other vermin, in-

herent vice, improper wrapping and packing, improper

storage while awaiting shipment, and others. Even the

most sophisticated battery of expert witnesses could not

give conclusive testimony when confronted with such a

myriad of possible causal factors. To apply such a doc-

trine as Schnell, whereby the party forced to sustain the

burden of proof has virtually no chance of success is totally

inequitable. That the burden of separating the causes of

damage is equally as difficult for the shipper is evidenced

by the shipper’s failure to do so in Niel Maersk, supra.

The situation exemplified by the instant case is a fre-

quent one in the vast number of cargo damage cases that

are litigated each year in the Federal Courts. The issue

involved is one of paramount importance to the maritime

industry, shippers and marine underwriters. A definitive

ruling by this Court is called for pursuant to Supreme

Court Rule 19 (1)(b), and in light of the passage of

COGSA and the more than forty (40) years of moderniza-

tion and change in the maritime industry since the Court’s

holding in Schnell, supra.

Re: The second question presented: Did the Second Cir-

cuit err in not dismissing Respondent’s complaint after Peti-

— had established the defense of insufficiency of pack-

ing

(a) Both the District Court and the Court of Appeals

erred in not dismissing Respondent’s complaint once Peti-

tioner had proved to the satisfaction of the trial court the

defense of insufficiency of packing.

The defense of insufficiency of packing is a statutory

one, 46 U.S.C. 1304 (2) (n), and Petitioner contends it is

a defense intended by Congress as a total defense to the

carrier in cargo damage situations. The finding by the

District Court that the yams were insufficiently wrapped

and packed alone dictated a dismissal. The failure to dis-

9

miss Respondent’s complaint given a finding by the trial

court that the yams were insufficiently packed represents a

misapplication and misinterpretation of both a Federal

Statute and Federal Maritime Law by the District and

Circuit Courts.

Did the Second Circuit err by not applying the doctrine of

Niel Maersk?

(b) One of the most objectionable points of the decisions

of the District and Circuit Courts was the finding that Re-

spondent had satisfied its burden of proving the good order

and condition of the cargo, even though it was established

that the yams were both improperly packed and in a sus-

ceptible condition at the time of their shipment. This in-

congruous finding was made and upheld even though the

District Court realized that Respondent had the burden of

showing that its perishable cargo was free of latent defects,

J. Howard Smith, Inc. v. S.S. Maranon, 501 F. 2d 1275 (2d

Cir. 1974), cert. denied, 420 U.S. 975 (1975). The Respond-

ent clearly did not carry this burden in that the yams were

found to be both improperly packed and in a susceptible

condition for reasons apart from the packing at the time

of shipment.

Both the District and Circuit Courts then compounded

this erroneous finding by inappropriately applying Schnell,

supra, to a situation that should have been governed by the

Niel Maersk, swpra. Schnell is inapplicable to the instant

case, because it involved a case where the good order and

condition of the cargo at the time of shipment was never

disputed. The Niel Maersk, conversely, involved pre-

shipment cargo damage aggravated by the fault of the

vessel, and resulted in the shipper’s complaint being dis-

missed. The instant case, therefore, should be governed

by Niel Maersk rather than Schnell, for it too involves

cargo that was not in good order at the time of ship-

ment. Additionally, the Respondent was actively neg-

10

ligent in improperly wrapping and packing its cargo, a

factor not present in Niel Maersk, supra. This additional

factor makes the present situation an even stronger case

for dismissal of the Respondent-Shipper’s complaint than

Niel Maersk itself.

The crucial difference in the application of either Schnell

or Niel Maersk is, of course, which party must carry the

burder. of proof as to separating damages caused by the

cargo’s condition and acts of the shipper, and those due to

the fault of the vessel. Though Petitioner adamantly de-

nies any fault on its part, nevertheless, it was reversible

error by the Courts below to apply Schnell, supra, and

assign Petitioner the burden of separating damages, a

burden correctly belonging to Respondent under the gov-

erning case law, to wit, Niel Maersk, because of the sus-

ceptible condition and the improper packaging of the cargo

at the time of shipment.

The District and Cireuit Courts after erroneously as-

signing Petitioner the burden of separating the damages,

compounded their error further by holding Petitioner

liable for negligent stowage. There was never established

any evidence of such negligence or causal connection be-

tween the damage to the yams and any act of Petitioner.

The District Court itself conceded, when discussing the

various possible causal factors of the damage, that, “any

of the circumstances alone probably would not have re-

sulted in the damage.” This is a clear admission by the

Trial Court that no proximate cause between the stowage

of the yams and the damage was shown. There was there-

fore, no proof of negligence on the part of Petitioner, nor

any evidence connecting any act of the Petitioner with the

damage to the yams. Petitioner contends that to find it

negligent without proof of proximate cause is reversible

error. As the Second Circuit per Judge Friendly stated in

Lekas and Drivas, Inc. v. Goulamdris (306 F. 2d 425) (2

ll

Cir. [1962]) in considering a cargo damage action where

several factors contributed to the damage,

“Whether stowage of some of the cheese in the poop

was improper for the Gibraltar voyage is thus imma-

terial; if the accident would have happened without

defendant’s negligent act, then such is not the cause of

it.’’ (p. 430)

The Lekas, case,-supra, represents the clear-cut law that

a finding of liability against a carrier requires both proof

of a causal connection between the cargo damage and a

negligent act by the carrier, yet in the instant case a find-

ing of liability against Petitioner was made without proof

of either.

As has been demonstrated under this heading the Dis-

trict and Cireuit Courts misapplied and misinterpreted a

Federal Statute and Federal Maritime Law in failing to

dismiss Respondent’s complaint, a failure that should be

rectified by this Court.

CONCLUSION

For the foregoing reasons this Petition for a writ of

certiorari should be granted.

Respectfully submitted,

Renato C. GIALLORENZI

Attorney for Petitioner

67 Broad Street

New York, New York 10004

Renato C. GIALLORENZI

Ricuarp A. SENFTLEBEN

Joun H. DovGHERTY

Of Counsel

la

Appendix A, Findings and Opinion by

Milton Pollack, U.S.D.J.

UNITED STATES DISTRICT COURT

SourHern District or New Yor«

75 Civ. 1278 (MP)

#44733

Vana Trapine Co., Inc.,

Plaintiff,

v.

S.S. ‘‘Merre Sxovu’’, her engines, boilers, etc., and

Frota Mercante GRaNCOLOMBIANA, S§.A.,

Defendants and

Third Party Plaintiffs,

v.

Ove Sxovu and INTERNATIONAL TERMINAL

Operatine Co., Inc., '

Third Party Defendants.

FInpINGs AND OPINION

Mitton Pox.ack, District Judge.

Purrgineton & McConne.i

Attorneys for Plaintiff

40 Wall Street

New York, N.Y. 10005

By: John H. McConnell, Esq. and

Stephen A. Agus, Esq.

2a

Appendix A, Findings and Opinion by

Milton Pollack, U.S.D.J.

GIALLORENZI & STILEes

Attorneys for Defendant and Third Party Plaintiff

67 Broad Street

New York, N.Y. 10004

By: Renato C. Giallorenzi, Esq.

Haicut, Garpner, Poor & Havens

Attorneys for Third Party Defendant (Ove Skou)

One State Street Plaza

New York, N.Y. 10004

By: M. E. De Orchis, Esq.,

Chester D. Hooper, Esq. and

Vincent M. De Orchis, Esq.

Hii, Rivxins, Carey, Lozsserc & O’Brien

Attorneys for Third Party Defendant

(International Terminal Operating Co., Inc.)

96 Fulton Street

New York, N.Y. 10038

By: Martin B. Mulroy, Esq. and

Bruce J. Hector, Esq.

3a

Appendiz A, Fimdings and Opinion by

Milton Pollack, U.S.D.J.

This admiralty cargo suit was brought by Vana Trading

Co. (hereinafter ‘‘Vana’’) against the S/S Mette Skou

and its time-charterer, Flota Mercante Grancolombiana

S.A. (hereinafter “Flota”) for alleged damage and loss

to a shipment of 5,000 cartons of Colombian yams. Flota

impleaded the owner of the vessel, Ove Skou, and the

stevedoring company at New York, International Termi-

nal Operating Co., Inc. (hereinafter ‘‘I.T.0O.’’) as third

party defendants.

The S/S Mette Skou was time chartered by Flota from

her owner, Ove Skou, on a Time Charter form approved

by the New York Produce Exchange, with some changes,

which was dated April 26, 1974.

The yams in question were shipped late in the season

from Colombia, South America. They had matured in

November or December 1973, months before shipment, but

were not shipped at that time. Instead, they were allowed

to remain in the ground from November or December

1973 until they were harvested in March 1974. After

harvesting, they remained in the storage sheds before they

were finally packed into the cardboard cartons used for

shipping.

On June 15, 1974, the yams were individually wrapped

in unprinted newspaper and packed into the cardboard

boxes which contained only two hand holes and a slit

for ventilation. The yams were trucked to Cartagena,

Colombia. After storage in a government wareliouse,

they were brought to the pier on June 18, or 19, 1974,

subsequent to the vessel’s arrival.

When the Mette Skou arrived at Cartegena, the Char-

terer informed the vessel’s officers that the Charterer

had booked 5,000 cartons of yams. At that time, only

the deep tanks on the vessel were empty and available for

cargo. The shipper examined the deep tanks and the

ventilation system which serviced the deep tanks, and

4a

Appendia A, Findings and Opinion by

Milton Pollack, U.S.D.J.

did not object to the storage of the yams in the deep tanks.

At the time that the yams left Cartegene, Colombia,

defendant Flota delivered to the shipper’s forwarding

agent a bill of lading numbered 1, dated at Cartegena,

Colombia, June 1974 and signed by Flota’s authorized

Cartegena Agents, which recited receipt in apparent good

order and condition of the 5,000 cartons of yams con-

signed to the order of Vana at the Port of New York. The

Bill of Lading was executed by Flota’s authorized Carte-

gena agents on behalf of Flota; and for and on behalf of

the Master of the S/S Mette Skou. The Instituto Colom-

biano Agropecurio of the Republic of Colombia’s Ministry

of Agriculture issued a certificate stating that the yams

were found to the best of the inspector’s knowledge to be

substantially free from injurious diseases and pests, and

were believed to conform to the current phytosanitary

regulations of the United States.

The proof showed that the shipment together with two

other shipments of yams were loaded aboard the S/S

Mette Skou, under deck and stowed in the port and

starboard No. 3 hatch deep tanks at the direction of the

Master. )

The cartons of yams were stowed 10-13 tiers high with

2x4’s between every third tier. The cartons were set

out about eight to nine inches from the wings of the

tanks with air channels both fore and aft and athwart ship

each about six to ten inches wide. Ventilation was

provided by two six inch service pipes which extend at

the sides to the main deck. The electrically-operated ven-

tilation system for the deep tanks was run continuously

through the entire voyage until the yams were discharged

at New York.

When the vessel arrived in New York on July 1, 1974

at 0700 hours request was made by the vessel’s officers to

the Charterer, Flota, and to I.T.O., the defendant steve-

5a

Appendiz A, Findings and Opinion by

Milton Pollack, U.S.D.J.

dore, to being discharge of the yams immediately after

arrival. New York was experiencing a heat wave at the

time. However, Flota and I.T.O. failed to being discharge

of the cargo until July 2, 1974. After discharge the car-

tons were placed in I.T.O.’s warehouse, which was not

adequately ventilated.

The yams were delivered by I.T.O. on behalf of Flota

in a damaged and cooked condition. At the time of de-

livery the yams exhibited excessive heat, moisture, sprout-

ing and tissue breakdown. The plaintiff claimed that it

attempted to sell the yams to various wholesale dealers

but was unsuccessful because the yams were damaged and

decayed. The plaintiff also claimed that it dumped the

yams but the evidence was inconclusive, concerning the

extent of the dumping involved.

Pursuant to the terms of the charter party, the Char-

terer had the entire responsibility and authority for the

load, stow and trim of the cargo under the supervision

of the Captain. The charter party did not warrant or

express that the No. 3 deep tanks were suited for the

carriage of yams, and as between the owner of the vessel

and the Charterer, the decision to load yams in the

No. 3 deep tanks was ultimately made by the Charterer.

The participation of the officers of the vessel in the load-

ing was as the agents for the Charterer Flota, and not

for the owner. Nichimen Co. v. M.V. Farland, 462 F.2d

319 (2d Cir. 1972); International Produce, Inc. v. S.S.

Frances Salman, 1975 A.M.C. 1521 at 1544-5 (S.D.N.Y.

1975).

Te evidence satisfactorily establishes that the ship was

not unseaworthy; that ventilation was not warranted in

the charter party but in fact existed and that the ventila-

tion was appropriate in the deep tanks for the shipment of

merchantable cargo delivered on board in good condition,

properly packed and wrapped. Consequently, the third

6a

Appendia A, Findings and Opinion by

Milton Pollack, U.S.D.J.

party claim of Flota against Ove Skou cannot be sustained

and is to be dismissed with costs to be assessed against

Flota. Ove Skou is entitled to recover legal expenses the

amount of which has been agreed upon by the parties to be

$9,036.24.

Plaintiff must, in order to make out a prima facie case

against Flota, the Charterer, prove by a preponderance of

the credible evidence that the yams were delivered to the

vessel in good order and condition. North American Steel

Products Corp. v. Andros Mentor, 1969 A.M.C. 1482

(S.D.N.Y. 1967). The burden is on the plaintiff to show

that the perishables were free of latent pathological disease

or injury. J. Howard Smith, Inc. v. S.S. Maranon, 501 F.

2d 1275 (2d Cir. 1975), cert. denied, 420 U.S. 975 (1975).

That burden was carried by the plaintiff, since the pre-

ponderance of the credible evidence, including the testi-

mony of experts and others who inspected the yams in New

York, as well as the proof concerning the condition and

handling of the yams in Colombia, demonstrated that the

damage suffered by the cargo was caused by the conditions

to which it was subjected in transit, and not by any in-

herent defects.

There is a suggestion from the defendants that the yams

may nonetheless have suffered from some inherent vice and

it is unclear that they did not. However, no finding can be

made that there was inherent vice. The most that can be

said is that the yams were in susceptible conditions for the

results which followed their preparation for shipment,

stowage, transportation, delayed discharge, warehousing

and delivery. What happened in the packing and handling

of the yams after their collection for transportation gives

a firmer inference of the basis of the damage occasioned.

The yams had been packed in cartons that may be de-

scribed as non-breathing and had been wrapped in news-

print, an unsuitable wrapping for such a commodity, which

—-,

7a

Appendiz A, Findings and Opinion by

Milton Pollack, U.S.D.J.

produced a cooking effect. They were then stowed in the

deep tanks some 13 tiers high and subjected to a measure

of heat which caused the yams to continue the cooking

process and decay. Any of these circumstances alone prob-

ably would not have resulted in the damage. Their com-

bination, together with the conduct of I.T.O. as hereafter

indicated, brought on the destruction of the yams to the

major extent that has been established. Thus, the damage

was due to a combination at least of the circumstances cre-

ated or contributed to by the shipper and the charterer and

was enhanced by the manner of performance of I.T.O. of

its obligations.

In removing the cartons and storing them until delivery,

I.T.0. negligently destroyed further quantities of the com-

modity by its harsh handling in the removal causing the

collapse of cartons and damage to contents and by the

subsequent unventilated storage of the commodity until

delivery to the consignee. I.T.O. thereby contributed to

and aggravated the fault assessable against Flota in a

measurable amount but here again, one that can only be

estimated.

When there is concurrent fault in the fashion described,

the loss occasioned thereby does not entitle a shipper to

whom some of the fault is attributable to claim a recovery

for the full value as a premium for the fault. The rule is

clear that when two or more parties have contributed by

their fault to cause property damage in a maritime cargo

situation, liability for such damage is to be allocated among

the parties proportionately to the comparative degree of

their fault and that liability for such damage is to be al-

located equally only when the parties are equally at fault

or when it is not possible fairly to measure the compara-

tive degree of their fault. See United States v. Reliable

Transfer Co., 421 U.S. 397, 411 (1975); Selcamerica, Inc.

v. 8.8. Barberbrook, 390 F. Supp. 462 (S.D.N.Y. 1975).

8a

Appendix A, Fimdings amd Opinion by

Milton Pollack, U.S.D.J.

The Court is called upon to fix the damages under the

well-settled rule that where there are wrongdoers and there

is uncertainty, the risk of the uncertainty which wrong has

created will be resolved from the circumstances in the best

way possible by the trier of fact. See Perma Research ¢

Development Co. v. Singer Co., No. 75-7362 (2d Cir. July

1, 1976). Such a resolution has been applied in the ad-

miralty context. See, e.g., Petition of M/V Elawme Jones,

480 F.2d 11, 23-24 (5th Cir. 1973), modified on other

grounds, 513 F.2d 911, cert. denied, 423 U.S. 840 (1975).

In connection with that doctrine, the liability of I.T.O.

to Flota represents a claim over by Flota to the extent that

I.T.O. contributed to the damage. It does not increase the

amount of the plaintiff’s claim but is an element in deter-

mining the comparative fault of Flota and I.T.O.

At the suggestion of the Court, the parties sought to de-

termine and fix the respective liability. They have stipu-

lated and agreed among themselves, without prejudice to

their rights of appeal from all adverse rulings of the Court

as to any party (including the allocations of fault implicit

in the amounts referred to hereafter) that the total com-

pensable loss involved to the consignee was $78,358.50.

They have also agreed that the degree of fault allocable to

each party cannot be determined to a mathematical cer-

tainty from the evidence, and in accordance with the rule

of damages stated by the Court, the plaintiff and defendant

have consented to divide the damages equally subject to

the aforementioned appeal by which Flota will claim that

it does not owe the award. This results in a recovery by

the plaintiff in accordance with the stipulation of the par-

ties of $39,179.25 which shall be inclusive of interest but

subject to costs against the defendant Flota. Finally, the

defendant Flota and third-party defendant I.T.O. have

agreed that the latter’s liability should be assessed at

$1,000 which shall be inclusive of interest but subject to

costs in favor of Flota.

9a

Appendia A, Findings and Opinion by

Milton Pollack, U.S.D.J.

To summarize, judgment of dismissal is to be entered

on behalf of Ove Skou as against Flota and it shall re-

cover its expenses and counsel fees which are agreed to

amount to the sum of $9,036.24 inclusive of interest and

costs.

The plaintiff, Vana Trading, shall recover against Flota

the sum of $39,179.25 with costs to be taxed and Flota

in turn.shall recover against I.T.O. the sum of $1,000

with costs to be taxed.

The parties entitled to such recoveries shall have exe-

cution therefor.

The foregoing together with the decision of May 19,

1976 shall constitute the findings of fact and conclusions

of law required by Fed. R. Civ. P. 52 (a).

So OrpEReED.

July 9, 1976.

Mitton Poiiack

USS. District Judge

10a

Appendix B, Judgment of District Court.

UNITED STATES DISTRICT COURT

SovuTrHERN District or New York

75 Civil 1278 (MP)

$76,673

hs

A

Vana Trapine Co., Inc.

Plaintiff

—against—

S.S. ‘‘Merre Sxov’’, her engines, boilers, ete., and

Fiota Mercante Grancotomsiana §.A.

Defendants and

* Third Party Plaintiffs,

—against—

Ove Sxovu and InTEeRNATIONAL TERMINAL

OperatTine Co., Inc.

Third Party Defendants

+,

=

7/22/76—9:15 A.M.—No apperance in opposition. Bill

of Costs as taxed in the sum of $451.71, in

favor of plaintiff Vana as against defendant

Flota, and added to the judgment.

Clerk

The issues in the above entitled action having been

brought on regularly for trial, before the Honorable

Milton Pollack, United States District Judge, on May 17,

18, 19 and 20, 1976, and at the conclusion of the evidence

lla

Appendix B, Judgment.

the Court having reserved decision, and the Court there-

after on July 9, 1976, having handed down its opinion,

constituting its findings of fact and conclusions of law,

it is,

OrpERED, ApsupGED and Decreep: That the Third party

complaint as to third pasty defendant Ove Skou be and

it is hereby dismissed, and that Ove Skou shall recover

its expenses and counsel fees against defendant/third

party plaintiff Flota Mercante Grancolombiana, S.A., in

the amount of $9,036.24, inclusive of interest and costs, and

it is further,

OrperRED, Apsupcep and Decreep: That plaintiff Vana

Trading Co., Inc., have judgment against defendant Flota

Mercante Grancolombiana, 8.A., in the amount of $39,179.25,

with costs to be taxed, and it is further,

ORDERED, ApsupGED and Drecreep: That defendant/third

party piaintiff Flota Mercante Grancolombiana, S.A., have

judgment against third party defendant International

Terminal Operating Co., Inc., in the amount of $1,000,

with costs to be taxed.

Dated: New Yorx, N.Y.

July 13, 1976

Raymonp F.. BurcHarptr

12a

Appendix C, Opinion of Court of Appeals.

UNITED STATES COURT OF APPEALS

For tHe Seconp Circuit

Nos. 547, 679, 986, 987—September Term, 1976.

(Argued March 11, 1977 Decided May 20, 1977.)

Docket Nos. 76-7386, 76-7393, 76-7417 and 76-7446

Vana Trapine Co., Inc.,

Plaintiff -Appellee-Cross-A ppellant,

—against—

S.S. ‘‘Metre Sxov’’, her engines, boilers, ete., and

Fiota Mercante Grancotomsiana, §.A.,

Defendant-Third-Party Plaintiff-

A ppellant-A ppellee

—against—

Ove Sxovu and Internationa, TERMINAL

Operatine Co., Inc.,

Third-Party Defendants-A ppellees-

Cross-Appellants.

Before:

J. Josepx Smite and Wicrrep Fernsere, Circuit Judges

and Cuartes H. Tenney, District Judge.*

* United States District Judge for the Southern District of

New York, sitting by designation.

13a

Appendiz C, Opinion.

Purrineton & McConnett, New York, N.Y.

(John Hay McConnell and Stephen A. Agus,

of counsel), for Plaintiff-Appellee-Cross-

Appellant, Vana Trading Co., Ine.

Renato C. Giattorenz1, New York, N.Y., for

Defendant-Third-Party Plaintiff-Appellant-

Appellee, Flota Mercante Grancolombiana,

S.A, :

Haicut, Garpner, Poor & Havens, New York,

N.Y. (Chester D. Hooper, Vincent M. De

Orchis and M. E. DeOrchis, of counsel),

for Defendant-Appellee Ove Skou.

Hix, Rivxins, Carey, Loessperc & O’Brien, New

York, N.Y. (Martin B. Mulroy and Bruce

J. Hector, of counsel), for Third-Party De-

fendant-Cross-A ppellant-Appellee, Interna-

national Terminal Operating Co. Inc.

a,

-

Tenney, D.J.:

This admiralty cargo suit involves the damage and loss

to a shipment of yams. It also represents an invitation

to apply to cargo suits the doctrine of proportionate fault

recently made applicable to collision and stranding cases

by United States v. Reliable Transfer Co., 421 U.S. 397

(1975), an invitation which we decline.’

Suit was brought by Vana Trading Co., Inc. (‘‘Vana’’),

the consignee of the yams, against the S.S. Mette Skou

2 We decined a similar invitation in Reliable Transfer Co.,

Inc. v. United States, 497 F.2d 1036 (2d Cir. 1974), rev’d, 421

U.S. 397 (1975), for reasons equally applicable to the instant

case.

l4a

appendix C, Opinion.

and her time-charterer, Flota Mercante Grancolombiana,

S.A. (‘‘Flota’’). Flota impleaded the owner of the vessel,

Ove Skou (‘‘Skou’’), and the stevedoring company at New

York, International Terminal Operating Co. Inc. (‘‘I.T.O.”)

as third-party defendants.’ After trial District Judge Mil-

ton Pollack held on the evidence that the loss was caused

by a combination of circumstances attributable to Vana,

the eonsignee, to Flota, the time-charterer, and to L.T.O.,

the stevedore. Vana Trading Co., Inc. v. S.S. Mette Skou,

415 F. Supp. 884, 887 (S.D.N.Y. 1976). He further held

that allocation of liability for damages proportionate to

each party’s comparative degree of fault was appropriate.

Accepting the parties’ agreement ‘‘that the degree of fault

cannot be determined to a mathematical certainty,’’ id. at

888, Judge Pollack confirmed the allocation of damages

contained in that agreement without prejudice to their

rights of appeal with respect to such allocation.’ Finding

the allocation between Vana and Flota improper, we re-

verse.

The facts and findings as developed on the trial are as

follows. The S.S. Mette Skou was time chartered from her

owner, Skou, on a New York time charter form dated April

26, 1974. The form contained the usual clause 8 which

made the captain and crew the borrowed servants of the

charterer, Flota, and not servants of the shipowner, Skou,

for the purpose of loading, stowing and discharging cargo

?Vana’s complaint lay in personam against Flota under the

bill of lading contract signed by Flota’s Cartegena agents; the

owner Skou appeared in personam in response to Flota’s third-

party complaint as did I1.T.O. No in rem action or jurisdiction

is involved herein.

*The total loss was stipulated as $78,358.50. The parties

stipulated that these damages should be divided equally between

Flota and Vana—$39,179.25 each—and that Flota was entitled

to a recovery against I.T.O. of $1,000. Judge Pollack confirmed

this apportionment. 415 F. Supp. at 888.

15a

Appendix C, Opinion.

on the ship. When the Mette Skou arrived at Cartagena,

Colombia in mid-June 1974, Flota advised the vessel’s offi-

cers that Flota had booked 5,000 cartons of yams. These

yams had matured in November or December 1973 but were

allowed to remain in the ground from that time until they

were harvested in March 1974, after which they remained

in stowage sheds until June 15, 1974 when the ship-

per, Exportadora Andina Ltda. (‘‘Andina’’) individually

wrapped them in unprinted newspaper and packed them

into cardboard boxes which contained only two hand holes

and a slit for ventilation. They were then trucked to

Cartagena, stored in a government warehouse and de-

fine to the pier on June 18 or 19, 1974, subsequent to

e vessel’s arrival. At that time only the deep tanks and

several ’tween decks on the vessel were empty and avail-

able for cargo. The shipper, Andina, examined the deep

tanks and the ventilation system servicing them and did

not object to the storage of the yams in the deep tanks.

The shipment involved herein, together with two other

~ shipments of yams, were loaded aboard the 8.8. Mette

Skou under deck and stowed in the port and starboard

No. 3 hatch deep tanks at the direction of-the Master, The

cartons were stowed 10-13 tiers high with 2 x 4’s between

every third tier. The cartons were set out about eight to

nine inches from the wings of the tanks with air channels

both fore and aft and athwart ship, each about six to ten

inches wide. Ventilation was provided by two six-inch

service pipes which extended at the sides to the main deck.

The electrically-operated ventilation for the deep tanks

was run continuously through the entire voyage until the

yams were discharged at New York.

At the time the yams left Cartagena, Flota delivered

to Andina’s forwarding agent a bill of lading dated June

19, 1974, executed by Flota’s Cartagena agents both on

behalf of Flota and for and on behalf of the Master of

16a

Appendiz C, Opinion.

the vessel, which acknowledged receipt in Colombia of the

5,000 cartons of yams in apparent good order and condi-

tion and stated that they were consigned to the order of

Vana at New York.‘ The Instituto Colombiano Agrope-

cuario of the Republic of Colombia’s Ministry of Agricul-

ture issued a certificate stating that the yams, to the best

of the inspector’s knowledge, were substantially free from

injurious diseases and pests, and were believed to conform

to the current phytosanitary regulations of the United

States.

Although the 3.S. Mette Skou arrived in New York on

the morning of July 1, 1974, Flota and I.T.O. failed to

begin discharge of the yams until July 2, 1974, despite a

request by the vessel’s officers that discharge begin imme-

diately after arrival. Furthermore, after discharge, the

cartons were placed in I.T.O.’s warehouse, which was not

adequately ventilated. When the yams were delivered to

Vana by I.T.O. on behalf of Flota they were in a damaged

and cooked condition, exhibiting excessive heat, moisture,

sprouting and tissue breakdown.

Judge Pollack concluded on the basis of the foregoing

that the third-party claim of Flota against Ove Skou, the

owner of the vessel, should be dismissed with costs assessed

against Flota. We agree. The trial judge found that the

officers of the vessel participated in the loading of the car-

tons of yams as agents for Flota, and not on behalf of the

shipowner. He further found “that the ship was not unsea-

worthy; that ventilation was not warranted in the charter

party but in fact existed and that the ventilation was ap-

propriate in the deep tanks for the shipment of merchant-

able cargo delivered on board in good condition, properly

*A clean bill of lading in the case of packaged goods merely

pe ey my wg Bey De A

ion. United States v. Lykes Bros. Steamship Co., Inc., 511

2d 218, 223 (5th Cir. 1975).

ee

oe ee we

ee

17a

Appendix C, Opinion.

packed and wrapped.” 415 F. Supp. at 887.° On the rec-

ord we find no reason to disturb these findings or his legal

conclusion. Nichimen Co. v. M.V. Farland, 462 F.2d 319

(2d Cir. 1972); International Produce, Inc. v. S.S. Frances

Salman, 1975 A.M.C. 1521, 1544-45 (S.D.N.Y. 1975).

We cannot agree, however, with the trial court’s alloca-

tion of liability between Vana and Flota. On this issue,

we read Judge Pollack’s opinion as holding that there

was no inherent vice in the yams and that they were de-

livered to the vessel in good order and condition, free of

latent pathological disease or injury. 415 F. Supp. at 887.

Although Judge Pollack stated that “[t]he most that can

be said is that the yams were in susceptible condition for

* the results which followed their shipment, stowage, trans-

portation, delayed discharge, warehousing and delivery,”

id., such a*condition does not amount to an inherent vice.

The Supreme Court has accepted a jury charge defining

the latter term as “‘any existing defects, diseases, decay

or the inherent nature of the commodity which will cause

it to deteriorate with a lapse of time.’” Missouri Pacific

R.R. v. Elmore & Stahl, 377 U.S. 134, 136, 138-39 (1964).*

By using t’> term “susceptible” in this context Judge

Pollack would seem to have meant only that the yams were

particularly able to be affected by the conditions under

which they were packed, stowed and unloaded and not that

*Jiad the trial court found the ship unseaworthy due to a

faulty or improper ventilation system, there is authority for an

equa! division of damages as between the owner and the charterer.

International Produce Inc. v. 8.8. Frances Salman, 1975 A.M.C.

1521, 1546-47 (S.D.N.Y. 1975).

*The Missouri Pacific case was decided under the Interstate

Commerce Act rather than COGSA. Nevertheless, the fungibility

of the definition of inherent vice is indicated by the Missouri Pacific

Court’s use of a quotation from Schnell v. The Vallescura to sup-

port one part of its holding. 377 U.S. at 138 n.7, quoting 293 U.S.

296, 305-06 (1934).

18a

Appendix C, Opinion.

their condition was such that they would have deteriorated

merely through “a lapse of time.” Moreover, Judge Pol-

lack found that “the damage suffered by the cargo was

caused by the conditions to which it was subjected in

transit, and not by any inherent defects,” and that “the

damage was due to a combination at least of the circum-

stances created or contributed to by the shipper and the

Charterer and was enhanced by the manner of performance

- of I.T.O. of its obligations.” 415 F. Supp. at 887. Specif-

ically, the shipper’s packing of the yams—“which produced

a cooking effect”—and the charterer’s stowage of the yams

—“which caused the yams to continue the cooking process

and decay”—combined, along with the conduct of I.T.O., to

cause the damage. /d.

The primary problem concerns the trial court’s reliance

on the Supreme Court’s recent decision in United States

v. Reliable Transfer Co., supra, which extended the doc-

trine of proportional fault to property damage in mari-

time collisions and stranding cases, and its failure to apply

the correct rule for apportioning damages as determined

by the Supreme Court over forty years ago in Schnell v.

The Vallescura, 293 U.S. 296 (1934). As was stated in

7 Although Schnell v. The Vallescura was decided before the

of COGSA in 1936, the rule of the case has been restated

and followed often in the Second Circuit since that time. J. Gerber

& Co. v. S.8. Sabine Howaldt, 437 F.2d 580, 588 i ;

Lekas & Drivas, Inc. v. Goulandris, 306 F.2d 426, 431-32 (2d Cir.

1962) ; Great Atlantic & Pacific Tea Co. v.

363, 366-67 (2d Cir, 1945); Pioneer Import Corp. v. The Lafcomo,

138 F.2d 907, 908 (2d Cir. 1943), cert. denied, 321 U.S. 766

SE me ee

19a

Appendiz C, Opinion.

David Crystal, Inc. v. Cunard S.8. Co., 223 F. Supp. 273,

287 (S.D.N.Y. 1963), aff’d, 339 F.2d 295 (2d Cir. 1964):

“There is no rule in cargo damage cases which re-

quires the damages to be either equally apportioned

among the parties negligent as in mutual fault col-

lision cases . . . or to be proportioned among the par-

ties at fault as in maritime personal injury cases. . . .”

The Court’s action in Reliable Transfer Co., while bringing

the rule in collision cases into line with that in personal

injury cases, does not alter this situation.

Under Sections 3-4 of the Carriage of Goods by Sea

Act (“COGSA”), 46 U.S.C. §§ 1303-04, a consignee or

shipper such as Vana who wishes to recover against the

carrier for damage to goods bears the initial burden of

proving both delivery of the goods to the carrier, in this

case Flota, in good condition, and outturn by the carrier

or by the stevedore, for whose conduct the carrier is re-

sponsible, in damaged condition. M.W. Zack Metal Co. v.

S.S. Birmingham City, 311 F.2d 334, 337 (2d Cir. 1962),

cert. denied, 375 U.S. 816 (1963). The trial court found

that Vana had sustained that burden, and we do not find

this to be “clearly erroneous.”’ McAllister v. United States,

348 U.S. 19, 20 (1954).*

* There was evidence in the form of the certificate by the Insti-

tuto Colombiano Avropecuario of the Republic of Colombia Minis-

try of Agricultu:. (stipulated to by both Vana and Flota) and

testimony by the chief officer of the vessel and by the shipper,

Andina’s general manager, that the cargo at time of shipment was

in good order and condition. However, the consignee’s burden

does not mean that it must always introduce direct evidence that

the cargo was in good condition when shipped. It may additionally

meet its burden by showing, as was also done here, from the condi-

tion of the cargo as delivered or otherwise, that the damage was

caused by the carrier’s negligence and not by any inherent vice in

the cargo. Elia Salzman Tobacco Co. v. 8.8. Mormacwind, 371 F.

2d 537, 539 (2d Cir. 1967).

20a

Appendiz C, Opinion.

When the consignee has proved its prima facie case,

the burden shifts to the carrier to show that the loss or

damage falls within one of the COGSA exceptions set

forth in 28 U.S.C. §1304(2).° J. Gerber € Co. v. SS.

Sabine Howaldt, 437 F.2d 580, 588 (2d Cir. 1971); see

Schnell v. The Vallescura, supra, 293 U.S. at 303. Flota

satisfied that burden according to the tfial judge in that

he found that the yams had been packed in “non-breath-

ing” cartons in “unsuitable wrapping for such a com-

modity” thus establishing the section 1304(2)(m) excep-

tion, “insufficiency of packing.” 415 F. Supp. at 887.

Once a COGSA exception is established, the burden then

returns to the shipper or consignee to “show that there

were... concurrent causes of loss in the fault and ne-

glect of the carrier.” J. Gerber & Co. v. S.S. Sabine

Howaldt, supra, 437 F.2d at 588; Lekas & Drivas, Inc.

v. Goulandris, 306 F.2d 426, 431-32 (2d Cir. 1962); see

Schnell v. The Vallescura, supra, 293 U.S. at 305. The

court below found that Vana had sustained this further

burden by showing that the stowage of the yams some

thirteen tiers high within the deep tanks, subjecting them

“to a measure of heat,” was a concurrent cause of the

loss. 415 F. Supp. at 887. Defendant I.T.O. was also

found to be at fault for its harsh handling of the cargo

*It is not necessary for us to reconsider the question whether,

under COGSA and circumstances such as those presented by this

case, the carrier has the burden of proving inherent vice under 46

U.S.C. § 1304(2)(m) or the shipper has the burden of disproving

that exception as a part of the requirement that it must establish

the good condition of the goods upon delivery of the carrier. See,

e.g., Hecht, a Ca v. The 8.8. President Buchanan,

236 F.2d 627, 691 (2d Cir. 1956). As was discussed in the text

above, we read the trial court’s opinion as holding that it was es-

tablished that the yams suffered from no inherent vice.

improper to Flota, is not

a type of negligence by the carrier which > Guinntel eunne

under COGSA. See, ¢.g., 28 U.S.C. § 1304(a) (2).

—— — |

2la

Appendiz C, Opinion.

and for subjecting the yams to unventilated storage fol-

lowing discharge. Id. The negligence of I.T.O. is im-

puted to Flota but is recoverabe by Flota in indemnity.

All the previous burdens being satisfied, the final burden

rested with Flota to show what ascertainable amount of

the damage was attributable to the packaging, from which

it was excepted, and what was due to the improper stowage

and negligent stevedoring, which were not excepted and

for which Flota was chargeable. Failing this burden, Flota

was chargeable with the entire loss Schnell v. The Valles-

cura, supra, 293 U.S. at 306; J. Gerber & Co. v. S.S. Sabine

Howaldt, supra, 437 F.2d at 588.

Rather than determining ultimate liability according to

Flota’s success in satisfying this burden of separating the

damage, however, the trial court stated:

“The rule is clear that when two or more#farties have

contributed by their fault to cause property damage

in a maritime cargo situation, liability for such dam-

age is to be allocated among the parties proportion-

ately to the comparative degree of their fault and that

liability for such damage is to be allocated equally

only when the parties are equally at fault or when

it is not possible fairly to measure the comparative

degree of fault.” 415 F. Supp. at 888, citing United

States v. Reliable Transfer Co., supra, 421 U.S. at 411.

Except for the substitution of the words “cargo situation”

for the words “collision or stranding” this is virtually the

precise language of Reliable Transfer Co. In that case,

the Court overruled the ancient and harsh maritime colli-

sion and stranding rule of equal apportionment regardless

of actual degree of fault, a rule which did not apply in

cargo cases such as that currently on appeal. Indeed, this

area of maritime law has been governed for some forty

years by a rule which does allow for apportionment ac-

22a

Appendix C, Opinion.

cording to relative degree of fault, although an occasional

harsh result may arise, as when the carrier is unable to

sustain its final burden of proving the relative degree of

fault. In such a case the cagrier must bear all the damages

even though it has been established that those damages

were in part caused by occurrences for which it is excepted

from liability. Nevertheless, the rule of Schnell v. The

Vallescura, clearly stated and frequently applied, must

govern in this case.

The trial court was unable to make a finding as to the

allocable percentages of the degree of fault, nor is there

any support for such a finding in the record. Cf. Tri-

Valley Packing Ass’n v. States Marine Corp., 310 F.2d

891, 894 (9th Cir. 1962). The parties agreed as between

themselves, and the trial court concurred, that an exact

apportionment could not be made and that, in accordance

with the Reliable Transfer Co. rule quoted above, Vana

and Flota would divide the damages equally, with Flota

entitled to indemnification in the amount of $1,000 from

L.T.0O. 415 F. Supp. at 888. The parties having reserved

their right to appeal such allocation, we hold that, ac-

cording to the rule of Schnell v. The Vallescura, Flota

must bear the full amount of damages of $78,358.50, an

amount for which we find adequate support in the record.

We do not disturb the $1,000 indemnification award since

it is unrelated to the trial court’s application of a rule

which we find to be in error in a maritime, noncollision

cargo damage case.

Accordingly, the judgments against Flota and Vana must

be reversed, and the causes are remanded to the district

court with directions to enter judgment for plaintiff Vana

against defendant Flota for the full amount of its damages,

with costs to Vana and Skou against Flota both below

and on this appeal.

oe TS

23a

Appendix D, Order of Reversal of

Court of Appeals.

UNITED STATES COURT OF APPEALS

FOR THE

SECOND CIRCUIT

At a stated Term of the United States Court of Appeals

for the Second Circuit, held at the United States Court-

house in the City of New York, on the twentieth day of

May one thousand nine hundred and seventy-seven.

Present: Hon. J. Josepn Smiru

Hon. Witrrep FEINBERG,

Cireuit Judges

Hon. Cuares H. Tenney,

District Judge

76-7386

Vana Trapine Co., Inc.,

Plaintiff-Appellee-Cross-Appellant

V.

S.S. ‘‘Merre Sxov’’, her engines, boilers, etc., and

Fioata MercanTte GRaNCOLOMBIANA, §.A.,

Defendant-Third-Party

Plaintiff-Appellant-Appellee,

V.

Ove Sxovu and InTERNATIONAL TERMINAL

Operatine Co., Inc.,

Third-Party Defendants-Appellees-

Cross-Appelants.

,

—_

24a

Appendix D, Order of Reversal.

Appeal from the United States District Court for the

Southern District of New York.

This cause came on to be heard on the transcript of

record from the United States District Court for the

Southern District of New York, and was argued by counsel.

On ConsmeRATION WHEREOF, it is now hereby ordered,

adjudged and decreed that the judgment of said District

Court be and it hereby is reversed and the action be and

it hereby is remanded to said District Court for further

proceedings with costs to be taxed against defendant-third-

party-plaintiff-appellee-appellee Floata Mercante in ac-

cordance with the opinion of this court.

A. Dante, Fvusaro

Clerk

By: Arrour HELLER

Deputy Clerk