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APPENDIX A.

In the Unived States Court of Appeais

for the Fifth Circuit.

October Term, 1966.

No. 22167.

D. C. Docket Nos. Adm. 2958, 2976, 2984 and 2988.

Heinrich C. Horn, Claimant of the M/S HEINZ HORN,

Appellant-Appellee,

versus

Cia de Navegacion Fruco, 8. A. and J. R. Atkins,

d/b/a Alabama Fruit and Produce Company,

Appellees-Appellants.

(And Reverse Title.)

Appeals From the United States District Court

for the Southern District of Alabama.

Before Rives, Gewin and Godbold, Circuit Judges.

Judgment on Rehearing.

It Is Ordered that the original opinion and judgment of

this Court are withdrawn, and in other respects, the Peti-

tions for Rehearing are Denied;

=,

Upon further consideration, it is now here ordered and

adjudged by this Court that the judgment of the District

Court as to the charter hire awarded Horn for the two

periods of inactivity prior to voyage No. 2 is reversed;

and that in all other respects, the judgment is affirmed;

It is further ordered and adjudged that the appellant-

appellee, Heinrich C. Horn, Claimant of the M/S Heinz

Horn, be condemned to pay the costs of this cause in this

Court for which execution may be issued out of the said

District Court.

November 5, 1968.

Court Costs:

Docketing cause, ete. .... $25.00

Issued as Mandate: Nov. 13, 1968.

A true copy

Test: Edward W. Wadsworth,

Clerk, U. S. Court of Appeals, Fifth Circuit,

By Jackie Esposito,

Deputy, Nov. 13, 1968.

New Orleans, Louisiana.

RAT la re Ae, Be Le OS —

—s =

In the

United States Court of Appeals

For the Fifth Circuit.

No, 22167,

Heinrich C, Horn, Claimant of the

M/S HEINZ HORN,

Appellant-Appellee,

versus

Cia de Navegacion Fruco, S. A., and J. R. Atkins,

d/b/a Alabama Fruit and Produce Company,

Appellees-Appellants,

(And Reverse Title.)

Appeais From the United States District Court

For tie Southern District of Alabama.

(November 5, 1968.)

Before Rives, Gewin and Godbold, Circuit Judges.

Rives, Circuit Judge: Upon petitions for rehearing filed

by the respective parties, the original opinion and decision

of this Court are withdrawn and changed so as to read

as hereinafter set furth. In other respects the petitions

for rehearing are denied.

=— © oo

Substitute Opinion and Decision.

All parties have appealed from the decree rendered in

four consolidated admiralty cases.!. These disputes arose

from the time charters of two sister ships for the trans-

port of bananas, and the subsequent delivery of some parts

of the banana shipments in excessively ripened condition.

Cia de Navegacion Fruco, S. A. (Fruco) chartered from

Heinrich C, Horn (Horn) two refrigerated vessels for the

carriage of bananas between Ecuador and the Gulf Coast

of the United States. The M/S HEINZ HORN was char-

tered April 30, 1962, under a time charter patterned after

the New York Produce Exchange Charter Party.? A simi-

lar time charter was executed by the same parties, on

May 15, 1962, affecting the M/S MARIE HORN, J. R.

Atkins, president of Fruco, and its principal shareholder

is guarantor for Fraco on both charters.

Two libels for cargo damage arose from two of the

voyages under the HEINZ HORN charter, voyage No. 1

and voyage No. 4. That vessel was delivered under char-

ter to Fruco on June 3, 1962, at Mayaguez, Puerto Rico.

She proceeded to Puerto Bolivar, Ecuador, to commence

her initial voyage under the charter. En route to Puerto

Bolivar, pursuant to Fruco’s request, the vessel took on

Daniel Christian, Fruco’s representative, who was inex-

perienced in the banana trade and who was placed on

board the HEINZ HORN to observe and to learn.

The vessel arrived in Puerto Bolivar June 10, 1962.

Loading of bananas commenced June 11 and was com-

pleted early on June 13, under the supervision of Chief

Mate Schultz. Apparently no cargo other than bananas

1 Cia de Navegacion Fruco S. A. v. M/S HEINZ WORN, et

al, S. D. Ala, 1964, 233 F. Supp. 637.

2 See Gilmore & Black, Admiralty, Appendix C, 802 (1957),

(hereinafter cited as Gilmore & Black).

a. oe

was loaded. The master of the vessel, Captain Rudolph

Horn, signed two clean bills of lading for the cargo on

June 12, 1962. Atkins, doing business as Alabama Fruit

and Produce Company (Alabama Fruit), had previously

furnished ietters of credit covering this cargo and the

sale was completed, f.0. b. Ecuador, on June 12, 1962.

The HEINZ HORN sailed from Puerto Bolivar early

on the morning of June 13, directed toward Mobile, Ala-

bama, with its cargo consigned to Alabama Fruit. Cap-

tain Horn left the ship at the Panama Canal due to illness;

Chief Mate Schultz became acting master. He and the

second mate were thereafter the only officers aboard; a

normal complenient of officers was a captain and three

mates.

The vessel docked in Mobile on the night of June 21.

When unloading commenced the next morning, many of

the bananas were found to be ripe or ripening to such an

extent that they were of no use to the importer. The

greater damage was in the number two hold where the

bananas had been packed in boxes. Damage was less

severe in the number one hold. where the bananas had

been stowed by the stem, as well as in boxes.

Under the terms of the charter party, the HEINZ HORN

was to sail on the orders of Fruco, the charterer. Fruco

did not issue a sail order to depart from Mobile until

June 29. During the period between unloading of the

cargo from voyage No, 1 and that re-sail date, the vessel

went on dry dock for inspection for slightly more than

one day; the dry-dock time admittedly was at the expense

of Horn, as owner. Upen arrival in Puerto Bolivar for the

second voyage, the HEINZ HORN stood by for two days

awaiting bananas fer loading. The vessel’s delay in leav-

ing Mobile occasioned the absence of any bananas ‘ready

for loading in Ecuador. Fruco has treated those two

days, as well as the period after arrival in Mobile, as

ar? aoe

being a period of off-charter, and it has declined to pay

the charter hire for those times, amounting to a total of

$5,594.39. Additionally, Fruco and Atkins, its guarantor,

have withheld payment of charter hire in the amount of

25,946.76, as a result of Atkins’ claim for bad cargo.

The events surrounding the second, third and fifth

voyages of the HEINZ HORN under Fruco’s charter pro-

duced no issue for this litigation.® Voyage No. 4 produced

another delivery of excessively ripened bananas to Atkins,

d/b/a Alabama Fruit. The HEINZ HORN was loaded

with bananas at Guayaquil, Ecuador, on September 2 and

3, 1962. This shipment of bananas was loaded by the

stem; none were in boxes. Both hoids were utilized. The

master of the vessel at that time, Captain Heinz Freytag,

rejected a large number of bananas brought to the ship,

on the ground that they were too far along in the ripen-

ing process to be shipped. Captain Freytag signed a

clean bill of lading for 8,170 stems, consigned to Alabama

Fruit, and the ship sailed the morning of September 3.

En route to Mobile, some two days out from Guayaquil,

the master jettisoned 335 stems of bananas, after inspect-

ing the holds and finding these stems to be so far along

in the ripening process as to ‘‘infect’? the remainder of

the cargo.

The HEINZ HORN docked in Mobile on September 11.

Unloading commenced the following morning. Many

stems of bananas were found to be too ripe to sell. The

remaining bananas were sold at a reduced rate due to

their ripened condition.

The HEINZ HORN made one further voyage under the

charter with Fruco. On September 21, 1962, Alabama

Fruit, through Atkins, notified Horn’s agent that it felt

& However, sce n. 11, infra, for the high percentage of ripe and

turning bananas on those voyages.

a a

‘‘it best for you to take the ships back and cancel the

charter at the end of the present voyage.’’ In that letter,

Atkins referred to a telephone conversation to that effect

between himself and Horn’s agent, purportedly held that

same day. Subsequently, Fruco sent a confirmation tele-

gram to the Horn agents.*

The MARIE HORN was redelivered to the owner on

September 27; she had been chartered for a minimum

period of four months, or until November 12, 1962. Thus

her redelivery was some 46 days prior to the expiration

of the minimum time. The HEINZ HORN charter was

for a minimum three-month period, which expired Sep-

tember 3. Redelivery of that vessel to the owner was

effected October 3. HEINZ HORN went on hire for an-

other charter October 4. MARIE HORN had been booked

September 3 for delivery to another charter October 1.

Libel was filed by Fruco, as charterer, against HEINZ

HORN and Horn with regard to the first voyage. Atkins,

d/b/a Alabama Fruit, subsequently joined in that libel.

Atkins filed a similar libel against the same respondents

with regard to voyage No. 4, to which Fruco was added

by amendment as a party libelant. Horn filed two sepa-

rate libels as owner of the HEINZ HORN and of the

MARIE HORN, respectively, seeking charter hire alleg-

* The telegram, charged to “Ala. Fruit & Produce Co.,” reads

as follows:

“IN ACCORDANCE WITH OUR PHONE CONVERS.\-

TION SEPTEMBER 21ST AND LETTER SAME DATE

HAVE DEFINITELY DECIDED VESSELS MARIE-

HORN) AND HEINZHORN NOT SUITABLE FOR

TRADE INTENDED AS PER CHARTER PARTIES

DATED MAY 15TH AND APRIL 30, 1962 RESPEC-

TIVELY STOP MARIEHORN UNLOADED YESTER-

DAY EXCESSIVE RIPES WHICH SAME UNSATIS-

FACTORY EXPERIENCE PREVIOUS CARGOES BOTII

VESSELS THEREFORE ACCEPT THIS OUR INTEN-

TION NOT TO USE THESE VESSELS FURTHER.”

CIA DE NAVEGACION FRUCO Ss.”

; ~*

edly due on each vessel. In connection with the first libel,

filed as a result of voyage No. 1, the HEINZ HORN, after

being put under seizure, was released under bond of

$40,000.

The district court, after consolidation, awarded At-

kins $31,261.64 for cargo damage resulting from voyage

No. 1, and $18,495.73 for cargo damage with regard to

voyage No. 4, or a total of $49,757.37. Horn was awarded

a total amount of $30,864.71. This included $25,946.76

for charter hire withheld as sccurity for cargo damage

on voyage No. 1, $3,651.29 for charter hire for time HEINZ

HORN was tied up in Mobile after voyage No. 1, and

$1,266.66 for charter time due for the two days HEINZ

HORN lay awaiting cargo in Puerto Bolivar prior to voy-

age No. 2. Interest of 6% per annum was granted on

each award, to date from relevant dates. All parties

have appealed. We affirm in part and reverse in part.

I,

The delicate nature of bananas necessitates special care

in transportation. Bananas customarily are cut in a hard

green state and are shipped under such refrigeration as

will delay the ripening process. The ripening tempera-

ture for bananas is generally a pulp temperature of 60 to

62 degrees Fahrenheit. Banana shippers regard a trans-

port temperature of 53 to 55 degrees Fahrenheit as ap-

propriate. Temperatures below 52 degrees Fahrenheit

have a deleterious chilling effect on the fruit. The gen-

eral effort is to transport the bananas at a low tempera-

ture retarding the ripening process, but safely above the

level at which the fruit is chilled.

The ripening process of the banana produces several

effects on the fruit, including a color change from grass

green to yellow and, ultimately, to brown. Ripening

bananas exude, inter alia, ethylene gas and heat, both

—:

of which tend to accelerate the ripening of other bananas

in proximity, See Lucayan Transports v. McCormick

Shipping Corp., 5th Cir. 1951, 188 F, 2d 202, 204.

For all of these reasons, a ship properly equipped to

transport: bananas will provide stowage holds cooled

by a refrigeration system which maintains a properly

low temperature and which exhausts the heat and gases

that encourage ripening,

Usually, prior to taking on a load of bananas, the car-

rier ship will cool its holds to an appropriate tempera-

ture. The cooling system may sometimes be operated

during loading, even with the hatches open. Once load-

ing is completed and the hatches are closed, the ship is

expected to ‘pull down” the hold temperature and that

of the bananas to the necessary level within approxi-

mately eight hours, The maintenance of the proper tem-

perature thereafter depends on a close control of the

temperature of air delivered into the hold, and of that

exhausted. Delivery air normally should be at a level

of 52 to 53 degrees. The temperature of the exhaust air

apparently is controlled, in part, by the frequency with

which the air in the hold is changed. A de-gassing proc-

ess is used to ensure exhaust of the ripening gasses,

Maritime law infers a general warranty of. seaworthi-

ness from a charter-party agreement even where such

warranty is not expressly made. The Caledonia, 1895, 157

U.S. 124; Work v. Leathers, 1878, 97 U. S. 379; Jordan,

Inc. v. Mayronne Drilling Mud Chemical € Engineering

Service, Sth Cir, 1954, 214 F. 2d 410. The term ‘‘seaworthi-

ness’? is read to mean, inter alia, fitness for the use antici-

pated, See The Southwark, 1903, 191 U. S. 1.

A similar warranty of seaworthiness at One time was

read into contracts of carriage or bills of lading. The

Carriage of Goods by Sea Act of 1936 (COGSA), 46

— A-10 —

U.S. C., § 1800, et seq. abolished that general warranty

with regard to the carrier-shipper relationship governed

by bills of lading. Instead, the carrier is statutorily ob-

ligated to use due diligence to make the vessel seaworthy.

46 U. S. C.,, § 1303 (1). Such obligation is either met or

not met when the vessel ‘‘breaks ground’’ on the voyage.

The Steel Navigator, 2nd Cir. 1928, 23 F. 2d 590; Erie &

St. Lawrence Corp. v. Barnes-Ames Co., W. D. N. Y. 1931,

52 F. 2d 217.5 No such statute regulates the terms of pri-

vate charter parties, and risks of damage may be adjusted

in any manner specified by the charter. See The Monarch

of Nassau, 5th Cir, 1946, 155 F. 2d 48; Gilmore & Black,

at 181.

As was the situation here, the owner and the charterer

sometimes choose to incorporate COGSA into the charter

party.® Such a practice serves to cut the general sea-

worthiness warranty ‘‘down to COGSA dimensions,’’ that

is, to the level of due diligence. Gilmore & Plack, 182 n.

41, 183. See Cooper v. Pinedo, 5th Cir. 1954, 212 F. 2d

137; Ore S. S. Corp. v. D/SA/S Hassel, 2nd Cir, 19438, 137

F. 2d 326.

5 In part, at least COGSA is closely similar to the Harter Act

of 1893, 46 U. S. C., §§ 190-196, so that cases interpreting the lat-

ter often have applicability to COGSA, Gilmore & Black, at 127.

See, e.g. The Bill, D. C. Md. 1942, 47 F. Supp. 969, aff'd 145

F. 2d 470. But see text following text at n. 12, infra.

6 “44. New Jason Clause, New Both-to-Blame Collision Clause,

Chamber of Shipping War Risk Clause 1 & 2, U. S, A. Clause

Paramount, as attached, to be fully incorporated in this Charter

Party.

“U.S. Clause Paramount

“This Bill of Lading shall have effect, subject to the provisions

of the Carriage of Goods by Sea Act of United States approved

April 16, 1936, which shall be deemed to be incorporated herein,

and nothing herein contained shall be deemed a surrender by the

carrier of any of its rights or immunities or an increase of any

of its responsibilities or liabilities under the said Act. Tf any term

of this Bill of Lading be repugnant to said Act to any extent,

such terms shall be void to that extent, but no further.”

— A-11 —

The charter party in each case made specific reference

to certain characteristics, specifications and capacities

of the ships. The statements may reasonably be treated

as warranties, the breach of which would entitle Fruco,

as charterer, to avoid the agreement entirely or to sue

for damages arising from the breach. Davison v. Von

Lingen, 1885, 113 U. S. 40; Romano v, West India Fruit &

S. S. Co., Sth Cir. 1945, 151 F. 2d 727, 731; Simonetti v.

Foster, D. Mass. 1880, 2 Fed. 415. We have found no au-

thority which would indicate any limitation on obligations

under such express representation through the advent of

COGSA by incorporation. Cf. Luckenbach v. McCahan

Sugar Co., 1918, 248 U. §. 139, 149, 150. That question

need not be decided here because, as presently developed,

in this case the charterer stood in the same position as

the cargo owner.

COGSA, in effect, limits the potential liability of the

ship or its owner in the instant case. The recovery of

Fruco, the charterer, from Horn or his ship is limited

to the level of recovery which Fruco is found to owe

the owner of the cargo, in this case Atkins, consignee

and successor to the shipper. See The Toledo, 2nd Cir.

1941, 122 F. 2d 255, aff’g, The Toledo. FE. D. N. Y. 1939, 30

F. Supp. 93, 98. Certainly Fruco should be allowed no

recovery for loss it has not suffered, and its own poten-

tial loss is measured by that recovery which it may owe

to Atkins.* Fruco’s responsibility to Atkins is, in turn,

* We thus avoid the broad question whether bills of lading gen-

erally are to be considered as contracts between shipper and time

charterer, Benner Line v. Pendleton, 2nd Cir. 1914, 217 Fed. 497,

499; Burn Line v. United States & A. S. S. Co., 2nd Cir. 1908,

162 Fed. 298, 300; Jebsen v. A Cargo of Hemp, D. Mass. 1915.

228 Fed. 143, 148; British & Foreign Marine Ins. Co. v. Kilgour

S. S. Co, S. D. N. Y. 1910, 184 Fed. 174, 178; or between

shipper and owner, Field Line (Cardiff), Lrd. v. South Atlantic

S. S. Line, 5th Cir, 1912, 201 Fed. 301, 304. citing Schooner Free-

man v. Buckingham, 1855, 59 U, S. (18 How.) 182, 189. See

Poor, Charter Parties, §10 (4th ed.). The cases cited were not

Poe ee Rectan ee Aero hada eo

— A-12—

established by the terms of the bills of lading. COGSA

governs the relationship here created by that document,

46 U. S. C. A., § 1300, and the terms of COGSA may not

be modified by agreement of the parties. 46 U.S. C. A,,

§ 1305.

ik.

VOYAGE NO. 1.

With regard to the first voyage of the HEINZ HORN

the district court found:

‘‘The ripened state of the bananas was due to the

high pulp temperatures at which they had been trans-

ported. The primary cause of the high pulp tempera-

tures was the improper stowage of the boxes of

bananas.

‘‘In the No. 2 hold the cartons of bananas were

tightly stowed. No slots, bin boards or dunnage had

been used to facilitate the flow of air between the

cartons. The cartons were stowed an average of

eight tiers high in both compartments of the No. 2

hold. No space was left between the cartons.

‘*A factor which contributed to the ripening of the

bananas was the excessive length of time taken in

pulling down the temperature of the delivery and

return air, and the failure of the vessel to maintain

the proper hold temperature.

‘‘The bananas were packed in hoxes or card-

board cartons designed for and used in the trans-

porting of bananas. These cartons were well venti-

dependent on a matter of statutory liability, and its effect on the

relationships of the parties.

Since Horn has repeatedly asserted an absence of privity with

Atkins, we are unable here to use the rationale of Cooper v.

Pinedo, 5th Cir. 1954, 212 F. 2d 143, where we noted that counsel

for both parties had understood that the issue of liability was to be

determined from the original charter agreement.

— A-13 —-

lated and their construction in no way caused or

contributed to the damage done to the bananas.’’ 233

F. Supp. 637, 640 (emphasis supplied).

We agree with these determinations of the district

court and find they are not clearly erronecus. See Fed.

R. Civ. 52 (a).8 Indeed, in the findings quoted above,

the only matter over which there could be disagreement

is with regard to the time taken to lower the hold tem-

peratures, and the maintenance thereafter of the proper

temperatures. Since a higher percentage of the bananas

in hold No. 1 survived under the same refrigeration sys-

tem, the method of stowage may have affected the ship’s

capacity to care for its cargo. We note, however, that

Arthur Grant, a naval architect and marine surveyer,

called by libelants® as an expert witness, testified at

length as to his readings of the ship’s temperature logs.

He concluded that, with regard to hold No. 2, the delivery

air temperature steadied down to 53 degrees Fahrenheit

in approximately 36 hours, whereas an 8-hour period

was the proper time. He stated further that the return

air never steadied at or below 55 degrees Fahrenheit,

while the appropriate level would have been between 53

and 54 degrees. Whether these effects resulted from the

capacity of the system itself, or from the manner in which

it was operated, he did not say. The district court con-

cluded that the latter element, method of operation, was

at fault. 233 F. Supp. at 642.

Our disagreement with the result reached in the dis-

trict court as to voyage No. 1 stems from the path fol-

lowed to its conclusion that liability for the ‘‘primary

8 See also McAllister v. United States, 1954, 348 U. S. 19; C. J.

Dick Towing Co. v. The Leo, 5th Cir. 1953, 202 F. 2d 850, 854;

River Terminals Corp. v. Southwestern Sugar & Molasses Co., Sth

Cir. 1960, 274 F. 2d 36, 37.

® For convenience, we refer to Fruco and Atkins as libelants

and to Horn as respondent.

Si eine ten what tI 6A wi a Yer ornate me 66 nel ent +

— A-14—

cause’’ and contributing ‘‘factor’’ rests with Horn, as

the ‘‘carrier.’’

From Atkins’ view, the charterer and the owner are

indistinguishable. It is not for Atkins to separate their

responsibilities under the charter party, a document iz

which he did not participate except as a guarantor.

However, Fruco may have recovery over against the

vessel or its owner es a result of the charter-party terms.

Thus we actually are concerned with Atkins’ recovery

through Fruco but ultimately against Horn.’®

The district court concluded that the HEINZ HORN

was seaworthy. We do not agree. While we would sus-

tain its conclusion to the extent of the mechanical fit-

ness of the vessel,’ based on the testimony of the expert

10 This court has observed that, “regardless of whether libelants,

as subcharterers, may claim privity of contract with the owners

sufficient to maintain an action fn personam, they are still en-

titled to maintain the present in ren’ suit against the vessel for

damages to the cargo.” Cocper v. Pinedo, 5th Cir. 1954, 212 F.

2d 137, 142; Perez v. Cia Tropical Exportadora, 5 Cir. 1950, 182

F. 2d 874, 875.

The procedure we follow does no iniustice to the shipowner.

“The general owner must be taken to know that the purpose

for which the vessel is hived, when not employed to car.y

cargo belonging to the hirer, is to carry cargo of third per-

sons; and that bills of lading, or charter parties, must, in the

invariable regular course of that business, be made, for the

performance of which the law confers a lien on the vessel.”

The Schooner Freeman, i850, 59 U. S. (18 How.) 182, 190;

Perez v. Cia Tropical Exportadora, 5th Cir. 1950, 182 F. 2d 874,

875.

22 The testimony indicated that subsequent voyages of the

HEINZ HORN under this charter party produce! the following

percentages of ripe and turning bananas:

No.2 17.51%

No.3 26.99%

No. 4 56.00%

No. 5 28.79%

The normal and expected percentage is from 3% to 5%. The

testimony was that 10% is regarded as cxcessive. While the ac-

—-————

Aa

thnk dada Pn helt Bs Oe The.

— A-15 —

witnesses summoned by all parties, we conclude that the

ship was unseaworthy with respect to its crew.

‘‘Seaworthiness is a relative term depending for

its application upon the type of vessel and the char-

acter of the voyage. The generai rule is that the

ship must be staunch and strong and well equipped

for the intended voyage. And she must also be pro-

vided with a crew, adequate in number and compe-

tent for the voyage with reference to its length and

other particulars, and have a competent and skilled

master of sound judgment and discretion.”’

The Framlington Court, 5th Cir. 1934, 69 F. 2d 300, 304.

From the record, the following is more than apparent:

(1) The Captain, Rudolph Horne was ill, did not

supervise loading, and left the vessel before the end

of the voyage.

(2) At no time during the voyage did the vessel

have the normal complement of officers.

(3) The officers had no experience with boxed ba-

nanas.

(4) For officers, once the Captain left the ship at

the Canal Zone, the vessel had only two mates, one

of whom had limited sea experience.

tual results could be regarded as indicative cither of a condition

of unseaworthiness or of failure to use due diligence to make the

vessel seaworthy, as well as of failure properly to operate the

refrigeration mechanism. the district court inferred the last ex-

planation as the source of trouble, rather than the csndition of the

equipment.

The fact that Fruco’s witness Grant testified that the HEINZ

HORN’S refrigeration plant was overhauled after the fourth voy-

age, and that on the ffth voyage the delivery air stayed at 52

degrees “almost perfectly,” does aot necessarily lead to the con-

clusion that prior to that overhaul the owners had failed to use

due diligence in providing a properly-equipped vessel. In fact, that

overhaul apparently did not have a great effect on the compara-

tively high perceniage of damaged bananas,

— A-16 —

(5) The Acting Master had had prior experience

as the Captain of a refrigerated vessel.

Faced with such evidence, we conclude that the HEINZ

HORN was not seaworthy with regard to its personnel.

The owner bore the burden of proving the exercise of due

diligence to make the vessel seaworthy. J.C. Penney Co.

v. American Express Co., S. D. N. Y. 1952, 102 F. Supp.

742, aff'd, 2nd Cir, 1953, 201 F. 2d 846. Such proof dves

not appear in the record. We conclude, Continental In-

surance Co, v. United States, 2nd Cir, 1952, 195 F. 2d 527,

528 that the owner failed to exercise due diligence to make

the vessel seaworthy at the start of the voyage by not in-

suring that adequate and competent personnel would re-

main on board through the voyage. Interaational Nav,

Co. v. Farvy & Bailey Mfg. Co., 1901, 181 U. S. 218; The

Framlington Court, supra.

Under the Harter Act, supra, n. 5, the owner whose

diligence in providing a seaworthy vessel is found de-

ficient is liable for damage to cargo without causal re-

lation between the defect and the disaster. The Fram-

lington Court, supra, 69 F, 2d at 307. COGSA, however,

calls for such causal relation as a prerequisite to a find-

ing of liability. Although § 1303 (1) (a), supra, n. 12,

makes the exercise of due diligence obligatory, § 1304

(1) n. 21, twfra, has been construed as requiring that

the loss be causally related to the want of due diligence

before liability can be imposed on the carrier. See The

Vale Royal, D. C. Md. 1943, 51 F. Supp. 412, 424; Gilmore

& Black, at 130. This view is reinforced by reference to

a comparison of COGSA with its predecessor:

12 § 1303: “(1) The cacrier shall be bound, before and at the

beginning of the voyage, to exercise due diligence to—

“(a) Make the ship seaworthy ;

“(b) Properly man, equip, and supply the ship... .

— A-17 —

*‘The principal difference between the Harter Act

and the Hague Rules or Carriage of Goods by Sea

Act is that the negligence or exception clause of the

Harter Act—Section 3—is conditional; it never op-

erates to exonerate the carrier unless due diligence

has been used te make the ship seaworthy tn all re-

spects, regardless of causal connection; whereas the

exception clause of the Act of 1936—Article 4 [§

1304]—is positive; it always operates to exonerate

the carrier unless due diligence has not been used

in some respect proximately causing or contributing

to the loss.’’

1 Benedict, Admiralty, § 96, at pp. 291-92 (Knauth ed.)

The manner in which the cooling system was operated

stemmed from the unseaworthy character of the vessel.

Whether the link of the causal chain is manifested by the

numerical inadequacy of the crew, or in the want of

proper training and instruction is not material, since the

owner has failed to carry its burden of proving an ab-

sence of causation between the unseaworthiness and loss.

See Cooper v. Pinedo, 5th Cir. 1954, 212 F. 2d 137, 143;

Eppens, Smith Co, v. Silver Line, 5th Cir. 1942, 128 F. 2d

882, 883. We need not consider at this point any po-

tential exculpation offered by the Refrigeration Clause

quoted n, 15, infra, since that clause by its own terms is

not operative where, as on this voyage, there was a want

of due diligence to make the vessel seaworthy. :

The other and primary cause of damage on the first

voyage, as found by the district court, was the improper

stowage of the bananas. 46 U. S. C., § 1303 provides in

part:

**(2) The carrier shall properly and carefully load,

handle, stow, carry, keep, care for, and discharge the

goods carried.”’

ITE PI TE REARS SD Fe

— A-18 —

Neither the carrier nor the ship is responsible for loss

resulting from a ‘‘cause «rising without the actual fault

or privity of the carrier and without the fault or neglect

of the agents or servants of the carrier.”’ § 1304 (2) (q)."

Horn, the owner, rather than denying the causal effect

of the improper stowage of the bananas, has argued that

Fruco, the charterer, was responsible for the stowage.

We note that COGSA places stowage responsibility on the

‘‘earrier.’”?> We do not decide that, when COGSA is in-

corporated into a charter party, the term ‘‘carrier’’ in

$1303 (2) refers to the owner and not to the charterer,

although such a use of the Act may well be proper. In-

stead, we regard COGSA, through its statutory control

over the bills of lading herein, as momentarily placing

stowage responsibility on Fruco, the ‘“‘carrier’’ from the

standpoint of the cargo, its shipper and its consignee.

We then turn to the charter party to ascertain the party

responsible for towage of the cargo under that document,

as between the owner and the charterer.

The charter party placed all loading spaces and loading

equipment at the disposal of the charterer. That person

in turn was obligated to furnish the Captain with ‘all

requisite instructions and sailing directions.’’ Horn, the

owner, accepted responsibility for ‘‘the navigation of the

vessel, insurance, crew and all other matters, same as when

trading for their own account.’? Clause 8 of the charter

party places the Captain under the orders and directions

18 1304 (2) (q): “Neither the carrier nor the ship shall be re-

sponsible for loss or damage arising or resulting from—

“(q) Any other cause arising without the actual fault and

privity of the carrier and without the fault or neglect of the

agents or servants of the carrier, but the burden of proof

shall be on the person claiming the benefit of this exception

to show that neither the actual fault or privity of the car-

rier nor the fault or neglect of the agents or servants of the

carrier contributed to the loss or damage.”

— A-19 —

of the charterer ‘‘as regards employment and agency,’’

but states that the charterer was to ‘‘load, stow, and trim

the cargo at their expense, under the supervision of the

Captain.’ We concluded that final decisions as to stow-

age were made subject to the discretion of the Captain,

and were his responsibility.

The Captain occupies a dual role with regard to such

decisions, He acts for the shipowner where his stowage

decisions are made with regard to the seaworthiness and

safety of the vessel; he acts for the cargo owner where

his decisions do not affect the seaworthiness or safety of

the vessel, but affect the safety of the cargo only. Oxford

Paper Co. v. The Nidarholm, 1931, 282 U. S. 681; Mobile,

Miami & Gulf S. S. Co. v. Lake Giltedge S. S. Co., 5th Cir.

1934, 68 F. 2d 370; The Thomas P. Beale, 3rd Cir. 1926,

11 F, 2d 49, 53; The Santona, S. D. N. Y. 1907, 152 Fed.

516, 518,14

While the arrangement of the banana cartons affected

the safety of their contents, it more pertinently affected

the capacity of the ship to transport the delicate cargo

14 In The Nidarholm, the Supreme Court declined to adopt or

reject an asserted distinction which would bar the shipowner's

liability where cargo alone was imperiled, 282 U. S. at 684-85.

See n. 1, infra. In Canadian Transport Co., Ltd. v. Count Line,

Ltd., House of Lords 1940, A. C. 934 at 944, Lord Wright re-

garded the phrase “under the supervision of the Master” as an un-

necessary expression of the pre-existing right of a vessel's master

to limit the charterer’s control of the stowage. “The master is re-

sponsible for the seaworthiness of the ship and also for insuring

that the cargo will not be so loaded as to be subject to damage,

by absence of dunnage and separation, by being placed near to

other goods or to parts of the ship which are liable to cause dam-

age, or in other ways. . . . [To] the extent that the master exer-

cises supervision and limits the charterer's control of the stowage,

the charterer’s liability will be limited in a corresponding degree.”

We interpret that latter expression of the limitation on the liability

of the charterer and the consequent imposition of liability on the

vessel or its owner to be a process effected where there has been

a difference of view between the master and the charterer. That

situation was not present in the instant case.

— |

in the manner specified by the charter party.’ The ca-

pacity of the ship to perform the role assigned by the

charter party is an aspect of the seaworthiness of the

vessel, See The Nidarholm, supra, 282 U. S. at 685; The

Southwark, supra, 191 U. S. at 8-12. Since the arrange-

ment of the cartons in the hold critically affected the ship’s

carriage of the cargo in the specified and proper manner,

decisions by and for the master with regard to the stowage

of these cartons must be said to have been made on behalf

of the ship’s owner.'®

We conclude that the Captain and his mate, in stowing

these bananas too closely together, were acting for and

in behalf of the ship’s owner, although not to his best

interest.

As a result of responsibility for the causes contributing

to the loss of bananas on voyage No. 1, Horn is liable

for all of the cargo damage arising from that voyage.

15 The Regulus, S. D. N. Y. 1883, 18 Fed. 380. Although the

district court herein did not rule explicitly that the faulty stowage

resulted in improper ventilation, and thus the capacity of the

ship to cool the bananas, we have no doubt that such determina-

tion is implicit in, and, indeed, necessary to its findings.

16 Compare Bull v. New York & Porto Rico S. S. Co., 2nd Cir.

1909, 167 Fed. 792; Isbrandtsen Co. v. The George S. Boutwell,

S. D. N.Y. 1957, 1958 A. M. C. 351; Canadian Transport Co.,

Ltd. v. Count Line, Ltd., House of Lords, 1940, A, C. 934;

where the master of the vessel was found to have acted solely in

behalf of the charterer in stowing the cargo. In those cases the

method of stowage had no effect on the ability of the vessel to

provide the required mode of transportation; nothing was re-

quired but stowage space itself. In American Tobacco Co. vy. The

Katingo Hadjipatera, S. D. N. Y. 1948, 81 F. Supp. 438, modified,

2nd Cir. 1951, 194 F. 2d 449, where faulty stowage was found

to have hindered ventilation of the cargo, the court held the char-

terer liable; the master, however, had no supervisory duties as to

stowage, anc, in any event, had protested, for the ship, to the

stowage method used. ates

In this regard, we believe Bergan v. International Freighting

Corp., 2nd Cir, 1958, 254 FL 2d 231, relied on by the district

court, to be inapposite. That case considered questions of the

employee-employer relationship for Jones Act purposes,

i

Damages.

The district court awarded damages to Atkins in the

amount of $31,261.64 as a result of voyage No. 1, It con-

sidered conflicting testimony as to the actual quantities

of ripened bananas, the extent of ripeness, and the market

value of the various categories. We affirm the determina-

tion of the amount owed Atkins as a result of voyage

No. 1.

IIT.

VOYAGE NO, 4.

On the fourth voyage under the HEINZ HORN’S

charter, the bananas were loaded by the stem. The master

for that voyage, Captain Heinz Freytag, stated on deposi-

tion that vertically-placed bin boards were used to sepa-

rate the cargo to prevent it from shifting during the

voyage. The district court concluded with respect to both

of the voyages under consideration that ‘‘the officers failed

to cause the bananas to be stowed properly.’’ 233 F. Supp.

at 642. While such apparently was the case on the first

Voyage, we find only slight evidence in the record to in-

dicate that the manner of stowage employed on voyage

No. 4 contributed to the ripening of that cargo of bananas.

Most of the testimony adverse to the stowage technique

employed referred to voyage No. 1.

Captain Freytag remarked in his deposition that the

cargo on voyage No. 4 did not fill the holds. He stated

that the resultant empty hold areas caused turbulence

in the air circulation, making difficult the exhaust of foul

air and gases. We pass any question of responsibility for

the implied shortage of cargo and for the placement of the

stems, for there is no testimony or evidence relating the

‘**turbulence”’’ to the damaged cargo.

The district court erred in finding an absence of due

diligence in the stowage of the bananas on voyage No. 4

— A-22 —

Without that factor at issue, the dispute is as to whether

the ripening of the cargo resulted from the operation of

the cooling system or from the alleged ripened state of

some of the cargo when it was loaded. Without evidence

to indicate any decline in the condition of the refrigeration

mechanism in the period between voyages No. 1 and No. 4,

we again approve the district court’s determination that

the HEINZ HORN was mechanically seaworthy for the

purpose of transporting bananas. No question of the ade-

quacy of ship’s personnel arises from this voyage.

Once it has been established that the bananas were

loaded in good condition and unloaded in damaged con-

dition, the carrier can avoid liability only by proving that

the damage resulted from a cause for which it is statu-

torily not responsible, or that it exercised due diligence to

prevent the harm. Schnell v. The Vallescura, 1934, 293

U. S. 296, 303; Compagnie De Navigation v. Mondial

United Corp., 5th Cir, 1963, 316 F. 2d 163, 169; Schroeder

Bros. Inc. v. The Saturnia, 2nd Cir. 1955, 226 F. 2d 147,

149. The cargo was delivered to Mobile in part at least in

an excessively ripened condition. Captain Freytag signed

the bill of lading for this particular cargo, dated Septem-

ber 2, 1962. No exceptions were noted on the bill of lading.

Thus is raised the rebuttable presumption that the fruit

was delivered on board shiv in good condition. Fidelis

Fisheries, Ltd. v. Thorden, S. D. N. Y. 1956, 142 F. Supp.

798,

COGSA, at 46 U. S. C., § 1804 (2) (m), states:

“Neither the carrier nor the ship shall be respon-

sible for loss or damage arising or resulting from—

. wastage in bulk or weight or any other loss or

damage arising from inherent defect, quality, or vice

of the goods . . .”

The fact that bananas require special care during ship-

ment, due to such characteristics of that cargo as en-

— A-23 —

courage ripening, Lucayan Transports v. McCormick Ship-

ping Corp., supra, is not the circumstance envisioned by

that exculpatory clause. Certainly all parties to the

charter party understood the nature of such cargo in

general and the special ship characteristics necessary for

its transport. Rather, to gain assistance from that statu-

tory exculpation, the carrier must have shown scme de-

fect, quality or vice adhering to the particular bananas

brought aboard. See Compagnie De Navigation v. Mondial

Uniled Corp., supra, 316 F, 2d at 168-69.

The district court stated that ‘‘there was no proof of

inherent defect, quality or vice of the bananas.’’ 233 F.

Supp. at 642. Captain Freytag and First Mate Schultz,

in depositions, testified that they rejected as too ripe for

shipment large quantities of the bananas brought to be

loaded. Schultz stated further that Mr. Juan Rioswas~

present as Atkins’ representative at loading time and

that Rios rejected many stems. Captain Freytag indi-

cated that much of the rejection was based on color, and

that the light available during night loading was not suf-

ficient for the color test. Schultz indicated that the banana

experts working on the loading operation, presumably

including Rios, also had been cutting open selected ba-

nanas to examine for ripeness.

Captain Freytag took three stems of the rejected

bananas and hung them on the deck during the voyage.

He stated that a day out of port these stems were “ripe.”

He and Schultz inspected the holds and jettisoned bananas

that were ripening too fast, 335 stems over a two-day

period. Captain Freytag felt that these jettisoned bananas

had been brought aboard at night, when they could not

be insvected closely and hastened the ripening process of

the other bananas.'*

17 The bill of lading was dated September 2. Both Captain

Freytag and Schultz testified that some loading was done in the

pre-dawn hours of September 3.

ak ied Mina aL TSE US COERLE RRE < mewt

— A-24—

With such testimony the only evidence available to

prove the existence of an exculpatory condition of the

cargo, we conclude that the district court was not clearly

erroneous in finding no proof of inherent defect, quality,

or vice in the bananas. The inferential and credibility

determinations necessarily made by the district court will

not be disturbed.

Since we disagree with the finding that stowage con-

tributed to the cargo damage, and uphold the finding that

the bananas themselves possessed no inherent conditions

affecting their transport, our affirmance of the district

court’s determination that the vessel was seaworthy leads

us to conclude that the manner of operation of the re-

frigeration system was the cause of the ripening of the

cargo. This conclusion is not made merely for want of a

better cause, for there is evidence in the record to support

the district court’s determination that the crew failed to

use due diligence with regard to the pull-down time as

well as with regard to the maintenance of proper tem-

peratures.

Whereas eight hours was stated to be the allowable

time within which the hold temperatures should reach

the proper level once the hatches were closed, the evi-

dence shows that the return air in hold No. 1 settled to

the 55-degree level after forty hours'® and that that in

hold No. 2 reached the 55-degree level after forty-eight

hours. The air being delivered into both holds generally

steadied at an appropriate 52 degrees within the 8-hour

period.

Clause 34 of the charter party required that a Refrigera-

tion Clause be included in all bills of lading issued during

the period of the charter. The Refrigeration Clause was

18 This exceeds by four hours the trial court’s finding. 233 F.

Supp. at 641.

bg sie ee

aie Sin UE NG aE ae RT eee eee A RRL Se ae

cars A-25 —

also incorporated into the charter party itself..° That

clause purports to bar liability of the shipowner or his

ship for the negligent operation of the refrigeration

equipment. If the clause is given effect, Horn and his

ship cannot be held liable for damages resulting from the

operation of the cooling system.?°

We have observed, supra, that Fruco, the charterer,

and one of the parties libellant here ‘‘should be allowed

19 “34 Owners’ usual refrigeration clause is incorporated in this

Charter Party and is to be incorporated in all Bills of Lading and

Mate’s Receipts covering refrigerated cargo shipped by this vessel

during the period covered by this Charter Party.

“Refrige. ution Clause

“It is also agreed that if the Shipowners shall have exercised

due diligence to make the vessel in all respects seaworthy and

properly manned, equipped and supplied, said vessel, her Owners,

Agents, or Officers shall in no case be responsible for any loss or

damage to any cargo shipped in refrigerated chambers, whether

such loss or damage arise from defect or insufficiency either before

or after the shipment, in the Hull of the said vessel, or her Re-

frigeration Machinery, chambers space or apparatus, or any part

thereof, or in any material used in the process of Refrigeration,

and whether such loss or damage, however arising be caused by

the negligence, fault, error in judgment of the Pilot, Master,

Officers, Engineers, Mariners, Refrigeration Engineers of [sic] any

other servants of the shipowners or persons for whom they are

responsible or by tnseaworthiness. It is expressly agreed that any

negligence, fault, or error in the operation of the said Refrigera-

tion apparatus shall be deemed to be and is hereby expressly

agreed to be a fault of error in the management of the vessel

within the meaning of this Bill of Lading, and shall not be con-

sidered or held to be a fault of failure in the custody, care or

stowage of merchandise shipped in Refrigeration space.”

20 However, Clause 12 stated:

“That the Captain shall use diligence in caring for the

proper ventilation and refrigeration of the cargo, also run

temperature in accordance with Charterers’ written instruc-

tions.”

Nevertheless, the Refrigeration Clause was added _ specifically to

the standard charter party form of which Clause 12 was a part.

If there is a conflict between these porticns, the Refrigeration

Clause must here govern. Cf. Cooper v. Pinedo, supra, 212 F. 2d

at 141-42.

SPUR AB EVN, ned ied

— A-26 —

no recovery for loss it has not suffered, and its own poten-

tial loss is measured by that recovery which it may owe

Atkins,’’ the consignee of the cargo. (See text at n. 7,

supra.) We also noted supra, text at n. 10, the ‘“‘we are

actually concerned with Atkins’ [the consignee’s] re-

covery through Fruco [the charterer] but ultimately

against Horn [the owner].’’ Thus, for there to be any

recovery against Horn or his ship as a result of voyage

No. 4, the effect of the Refrigeration Claus? on the charter

party relationship, as well as the effect on the bill of

lading obligations must be assessed.

Considering first that clause and its potential inter-

action with the COGSA-governed bill of lading relation-

ship, we turn to section 1304, which states that neither

the carrier nor the ship is responsible for loss arising

from neglect in the navigation or management of the

ship.21_ The Refrigeration Clause expressly defined any

fault in the operation of the refrigeration apparatus as

a fault in the management of the ship.

21 § 1304: “(1) Neither the carrier nor the ship shall be liable

for {uss or damage arising or resulting from unseaworthiness un-

less caused by want of due diligence on the part of the carrier

to make the ship seaworthy, and to secure that the ship is prop-

erly manned, equipped, and supplied, and to make the holds, re-

frigerating and cool chambers, and all other parts of the ship

in which goods are carried fit and safe for their reception, carriage,

and preservation in accordance with the provisions of paragraph

(1) of section 1303 of this title. Whenever loss or damage has re-

sulted from unseaworthiness, the burden of proving the exercise

of due diligence shall be on the carrier or other persons claiming

exemption under this section.

“(2) Neither the carrier nor the ship shall be responsible for

loss or dariage arising or resulting from—

“(a) . ct, neglect, or default of the master, mariner, pilot, or

the servants of the carrier in the navigation or in the management

of the ship... .”

See § 1303 (2).

As observed supra, incorporation of COGSA into the charter

party serves to limit liabilities under the charter to COGSA dimen-

sions.

— A-27 —

Section 1303 (2), it should be recalled, specifies that

‘‘the carrier shall properly and carefully load, hendle,

stow, carry, keep, care for, and ¢‘scharge the goods

earried.’’

‘‘The cases which have defined the scope of the ex-

emption from liability for negligence in the naviga-

tion 2nd management of the ship have mostly been

concerned with deciding whether a given fault is to

be classified as of this sort or is to be regarded as

one having to do with the custody, care, etc., of the

cargo, for which the carrier is lable.”’

Gilmore & Black, at p. 134.

‘‘The distinction between a loss due to improper stow-

age or unscaworthiness on the one hand and a loss

resulting from faults or errors in the navigation or

the management of the vessel on the other hand re-

quires in many instances a close and discriminating

attention to the specific facts of the case.’’

1 Benedict, Admiralty, § 95, at pp. 288-89.

The same line is drawn both in the Harter Act and in

COGSA, so that ‘‘the Harter Act cases are important .. .

for the direct help they give in pinning down the distinc-

tion, in COGSA, between a Section 3 (2) [$1303 (2)]

liability and a Section 4 (2) (a) [§ 1804 (2) (a)] immun-

ity.”? Gilmore & Black at p. 184. The problem at this

point is whether this court can accept the advance deter-

mination of the parties, via a clause necessarily a part of

the bill of lading, that a particular act be placed on the

immunity or the liability side of the statutory line.

In the general context of contractual definition of terms,

this court once said:

‘‘Tt is often almost, if not quite, true that in contracts

words mean what their users choose them to mean,

neither more nor less, for it is true of most words that

— A-28 —

their shades of meaning are many, and that they take

their color and conteut from the context and subject

matter in connection with which they are used.”’

Cocke v. Vacuum Oil Co., 5th Cir. 1933, 63 F. 2d 406, 407.

Such a reflection is not particularly helpful here, where

the matter actually is not one of definition, but of cate-

gorization.

COGSA prohibits contractual limitation of the carrier’s

liability for negligence or liability imposed by the Act. 46

U.S. C. A. $1303 (8). See 4 Williston, Contracts, § 1134B

at p. 3237 (Williston & Thompson ed.). It follows that, if

the manner in which the refrigeration equipment was

operated on voyage No. 4 constituted acts and resulted in

damages for which the carrier is statutorily liable to the

cargo owner, the Refrigeration Clause cannot bar that

liability.

Messrs. Gilmore and Black have set forth numerous cases

demonstrating various performances falling on the liabil-

ity or on the immunity side of the line. See Gilmore %

Black, at p. 137 n. 54. Of the cases cited therein, those

which have considered acts dealing with either ventilation

or refrigeration of cargo have found such acts to be re-

lated to the duty of care owed the cargo, with liability for

negligence related thereto imposed on the carrier. See,

e. g., Barr v. International Mercantile Marine Co., 2nd

Cir. 1928, 29 F. 2d 26 (use of improper refrigerant); The

Rita Sister, FE. D. Pa. 1946, 69 F. Supp. 480 (improper

ventilation of hold); The Samland, 8S. D. N. Y. 1925, 7 F.

2d 155 (failure to observe condition of thermometers in

refrigerating compartments). See also General Foods

Cerp. v. United States, S. D. N. Y. 1952, 104 F. Supp. 629

(failure to ventilate vessel). Justice Holmes stated the fol-

lowing test: ‘*. . . the question which section is to govern

must be determined by the primary nature and object of

the acts which cause the loss.’’ The Germanic, 1905, 196

— A-29 —

U. S. 589, 598. see also Leon Bernstein Co. v. Wilhelmsen,

5th Cir. 1956, 232 F. 2d 771, 772. Since the operation of

the refrigeration system herein so directly affected the

condition of the cargo, we conclude that the damages re-

lated thereto fall within the liability created by $1303 (2).

The Refrigeration Clause therefore cannot be allowed to

bar liability for cargo damage so far as the bill of lading

relationship betxveen the cargo owner and the charterer

is concerned. We do not hold, however that such a Refrig-

eration Clause can never have sway in the presence of

COGSA, for there may be circumstances where the oper-

ation of a refrigeration system has more to do with the

management or navigation of a vessel than with the care

of the cargo.

The charter party incorporated COGSA. The parties

must be presumed to have intended to incorporate all

the effects of that statute. We therefore apply the reason-

ing set forth above and hold that the refrigeration clause

does not bar the owner’s liability under .he charter party

to ‘‘use due diligence in caring for the proper ventilation

and refrigeration of the cargo’’ (charter party clause

number 12), nor the liability assumed by the incorporation

of COGSA.

We therefore affirm the judement of the district court

insofar as it awarded damages to Atkins as a result of

loss of cargo on voyage No. 4.

IV.

CHARTER HIRE FOR PERIOD BETWEEN

VOYAGES NO. 1 AND NO. 2.

In Mobile.

Fruco declined to pav $5,594.39 potentially due Horn for

charter hire. Of that amount, $4,327.73 represented the

A cert e

Le RLU Ete DAO, SPE PY LLOEGR REE NG NOE LEN NE

bi ad a a a atecia PREETI OEE PSM II FN Sy SE AO eo tae

ORS Ry

— A-30 —

approximately seven-day period in Mobile, after unloading

from the first voyage, when the ship lay without orders.

Approximately one day of that period admittedly was at

Horn’s expense, for dry-dock inspection, to the amount

of $676.44. There is no doubt that the charter party pro-

vided that the ship sail on orders of the charterer.

The district court found that ‘‘the assertions of Atkins

that he rescinded the charter party at the end of voyage

No. 1 are unsupported by the evidence.’’ 233 F. Supp. 642.

Atkins testified that after he saw the cargo discharged

on arrival from the first: voyage, he spoke ‘‘a numer of

times’? with Mr. Ulrich Mahn, a representative of the char-

tering agent. He stated that he told Mahn on June 22, the

day of unloading, that the vessel was not suitable and was

not properly crewed, and that it was his intention to place

the HEINZ HORN off-hire. At another point in his testi-

mony, Atkins stated that he told Mahn that the vessel

would remain off-hire until it sailed, and that Maha

agreed. Mahn appar:ntly reassured Atkins with promise

of improved services. Atkins said that he agreed to ‘‘a

trial basis, on a trip-by-trip basis.’’ A letter from Atkins

to Captain Freytag on June 25 referred to the second voy-

age to Puerto Bolivar as a ‘‘trial to see if the vessel can

carry fruit satisfactorily.’’ Copies of that letter went to

Mahn and Mr. Jan Grisboli, the chartering broker’s rep-

resentative. In response by letter of June 27, Captain

Freytag stated that he was unable to agree with Atkins’

letter of the 25th and that he, Freytag, had no authority

or intent to change any term of the charter party. Mahn

testified that he made no agreement with Atkins to the

effect that the HEINZ HORN would operate on a trip-by-

trip basis, rather than in accord with the charter.

Atkins has further argued that the charter parties were

rescinded as a result of frustration of purpose. While the

outturn of ripened bananas on subsequent voyages (see n.

— A-31 —

11, supra) apparently was higher than normal, such had

not occurred at the point at which Atkins says the charter

party was frustrated.

The record supports the conelusion that the charter

party was not rescinded at the conclusion of voyage

No. 1. Cf. Aaby v. States Marine Corp., 2nd Cir. 1950, 181

F, 2d 383.

Clause 152 provides that the charterer is not liable

for payment of hire for time lost from ‘‘deficiency of

men.’? We have seen already that the owner failed to

exercise due diligence with respect to personnel aboard

for the first voyage. The testimony shows that the time

lost in Mobile, excepting the period of dry dock, resulted

from the delay in disposing of the damaged bananas.

The bananas were damaged, in part at least, as a result

of inadequacy of personnel, The time lost in Mobile

resulted from ‘‘deficiency of men.”’

In Puerto Bolivar.

Fruco and Atkins have explained that the HEINZ

HORN was expected to turn around and return to Puerto

Bolivar for the second voyage immediately after dis-

charging its cargo in Mobile on June 22. The charterer

then claims that the condition of the cargo, and its dis-

pesition, resulted in the delay in sailing until the 29th,

and thus its failure to pick up the cargo scheduled for

the second voyage. When the vessel did arrive in Puerto

Bolivar, it had to wait two days before a substitute cargo

was collected. The charterer withheld $1,266.66 in charter

hire for those two days.

Since the time lost here again resulted from the time

lost in disposing of bananas damaged on the first voyage,

22 “15. That in the event of the loss of time from deficiency of

men or stores .. ., the payment of hire shall cease for the time

thereby lost... .”

tt ’ SUMAN UE RR PGRN LEP ACB LB ETE HOM

wy A SRR EA EM POE ROE BT

— A-32 —

we conclude that the time lost was a result of the ‘‘de-

ficiency of men,’? which resulted in the damage to the

cargo.

We conclude that the district court was ervuneous in

awarding the sum of $4,917.95 in charter hire for these

two periods.

V.

REDELIVERY OF THE VESSELS TO THE OWNER.

HEINZ HORN.

Fruco redelivered the HEINZ HORN to her owner

October 3, 1962, a month past the minimum three-month

period. She went on hire to another charterer on Oc-

tober 4.

Fruco claimed that it gave netice of delivery by letter

of September 21, confirmed by telegram of September 27.

Horn argues that whichever date was the effective date

of notice, it was entitled to charter hire for thirty days

from that date, as a result of a thirty-day notice require-

ment in the charter. The district court felt it unnecessary

to pinpoint the date of notice, finding that Horn had

been able to mitigate any potential damages for lack

of use for the vessel by the immediate recharter.

The only testimony regarding the asserted mitigation

of damages was from Mahn, the charter broker. Ilis

statements, self-serving though they may be, are not con-

troverted by any evidence from Fruco. We might con-

clude from his testimony that under the subsequent char-

ter the HEINZ HORN operated at an expense differential

of $210.96 per day. Adding Horn’s daily profit of $6.92,

we could find that Horn is entitled to $217.88 per day

for each day of the thirty-day period net allowed. Con-

sidering the testimony from another angle, we note that

— A-33 —

the total hire earned on the subsequent charter was at

a higher total rate than the nemthly $19,000.00 paid

by Fruco. The district court had opportunity to study

the testimony in light of the witnesses’ demeanor. With

this in mind, we are unable to hold erroneous the finding

of the court that the owner mitigated any alleged dam-

ages. Thus we do not consider the question of whether

Horn actually was entitled to its thirty-day notice, or

the question of the actual date on which notice of re-

delivery was made.

MARIE HORN.

The same letter and telegram applied to the MARIE

HORN, which was chartered for a four-month minimum

period, expiring November 12, 1962. Again, the only

testimony as to damages here is from Horn’s witness

Mahn. The same sort of analysis was made for both

vessels and we conclude, as with the HEINZ HORN, that

the MARIE HORN mitigated any damages it otherwise

might have suffered.

VI.

INTEREST ON THE JUDGMENTS.

The district court computed interest as follows:

‘¢Atkins is further entitled to interest at the

rate of 6% per aunum from June 22, 1962, on the

cargo damage on Voyage No. 1, and from Sep-

tember 12, i962, on the cargo damage on Voyage

No. 4.

‘‘Horn is entitied to interest at the rate of 6%

per annum from June 22, 1962, on the charter hire

withheld as security for cargo damage on Voyage

No. 1; from June 29, 1962, for the charter hire

withheld for the time the HEINZ HORN was tied

up in Mobile; and from July 8, 1962, for the

es, PB Saat 6

MLSE RESON IOS OT PESTIEIES EMP IP BEIT ELIE ROME - AHIR HAS PRE TS

PREP

— A-34 —

charter hire withheld for stand-by time in Bolli-

var.’”’ 233 F. Supp. at 643,

ilorn argues on appeal that this method of computation,

in effect, allows Atkins the benefit of the interest on the

sum withheld as security as well as on the sum awarded,

This plainly is not correct. We find no error in the

assessment of interest.

VII.

The judgment is reversed as to the charter hire awarded

Horn for the two periods of inactivity prior to Voyage

No. 2. The judgment is affirmed in all other respects.

Costs of appeal are taxed against Ilorn.

— A-3d —

APPENDIX B.

In the

United States Court of .sppeals

for the Fifth Circuit.

No, 22167.

Heinrich C. Horn, Claimant of the M/S HEINZ HORN,

Appellant-Appellee,

versus

Cia De Navegacion Fruco, S. A. and J. R. Atkins, d/b/a

Alabama Fruit and Produce Company,

Appellees-Appellants,

(and Reverse Title)

Appeals From the United States District Court for the

Southern District of Alabama.

(June 28, 1968.)

Before Rives, Gewin and Godbold, Circuit Judges,

Rives, Cireuit Judge: All parties have appealed from

the decree rendered in four consolidated admiralty cases.’

1 Cia de Navegacion Fruco, S$. A. v. M/S HEINZ HORN, et

al., S. D. Ala. 1964, 233 F. Supp. 637.

————

Cate Ok

nn et ae ah ee al ee ens ei

rrr

Cy 7)

— A-36 —

These disputes arose from the time charters of two sister

ships for the transport of bananas, and the subsequent

delivery of some parts of the banana shipments in ex-

cessively ripened condition.

Cia de Navegacion Fruco, S. A. (Fruco) chartered from

Heinrich C. Horn (Horn) two refrigerated vessels for

the carriage of bananas between Ecuador and the Gulf

Coast of the United States. The M/S HEINZ HORN

was chartered April 30, 1962, under a time charter pat-

terned after the New York Produce Exchange Charter

Party.? A similar time charter was executed by the same

parties, on May 15, 1962, affecting the M/S MARIE

HORN. J. R. Atkins, president of Fruco, and its prin-

cipal shareholder, is guarantor for Fruco on both charters.

Two libels for cargo damage arose from two of the

voyages under the HEINZ HORN charter, Voyage No. 1

and Voyage No. 4. That vessel was delivered under

charter to Fruco on June 3, 1962, at Mayaguez, Puerto

Rico. She proceeded to Puerto Bolivar, Ecuador, to com-

mence her initial voyage under the charter. En route

to Puerto Bolivar, pursuant to Fruco’s request, the vessel

took on Daniel Christian, Fruco’s representative, who

was inexperienced in the banana trade and who was

placed on board the HEINZ HORN to observe and to

learn.

The vessel arrived in Puerto Bolivar June 10, 1962.

Loading of bananas commenced June 11 and was com-

pleted early on June 13, under the supervision of Chief

Mate Schultz. Apparently no cargo other than bananas

was loaded. The master of the vessel, Captain Rudolph

Horn, signed two clean bills of lading for the cargo on

June 12, 1962. Atkins, doing business as Alabama Fruit

2 See Gilmore & Black, Admiralty, Appendix C, 802 (1957),

(hereinafter cited as Gilmore & Black).

— A-37 —

and Produce Company (Alabama Fruit), had previously

furnished letters of credit covering this cargo and the sale

was completed, f. o. b. Ecuador, on June 12, 1962.

The HEINZ HORN sailed from Puerto Bolivar early on

the morning of June 13, directed toward Mobile, Alabama,

with its cargo consigned to Alabama Fruit. Captain Horn

left the ship at the Panama Canal due to illness; Chief

Mate Schultz became acting master. He and the second

mate were thereafter the only officers aboard; a normal

complement of officers was a captain and three mates.

The vessel docked in Mobile on the night of June 21.

When unloading commenced the next morning, many

of the bananas were found to be ripe or ripening to such

an extent that they were of no use to the importer. The

greater damage was in the number two hold where the

bananas had been packed in boxes. Damage was less

severe in the number one hold, where the bananas had

been stowed oy the stem as well as in boxes.

Under the terms of the charter party, the HEINZ

HOR: was to sail on the orders of Fruco, the charterer.

Fruco did not issue a sail order to depait from Mobile

until June 29. During the period between unloading of

the cargo from voyage No. 1 and that re-sail date, the

vessel went on dry dock for inspectien for slightly more

than one day; the dry-dock time admittedly was at the

expense of Horn, as owner. Upon arrival in Puerto Boli-

var for the second voyage, the HEINZ HORN stood by for

two days awaiting bananas for loading. The vessel’s de-

lay in leaving Mobile occasioned the absence of any ba-

nanas ready for loading in Ecuador. Fruco has treated

those two days, as well as the period after arrival in

Mobile, as being a period of off-charter, and it has de-

clined to pay the charter hire for those times, amounting

to a total of $5,594.39. Additionally, Fruco and Atkins,

eee oy alt 4

CPT Oe: 9 il adele’ os eae OTS

re rs

—

its guarantor, have withheld payment of charter hive in

the amount of $25,946.76, as a resuit of Atkins’ claim for

bad cargo.

The events surrounding the second, third and fifth voy-

ages of the HEINZ HORN under Fruco’s charter produced

no issue for this litigation. Voyage No. 4 produced an-

other delivery of excessively ripened bananas to Atkins,

d/b/a Alabama Fruit. The HEINZ HORN was loaded

with bananas at Guayaquil, Ecuador, on September 2 and

3, 1962. This shipment of bananas was loaded by the stem;

none were in boxes. Both holds were utilized. The mas-

ter of the vessel at that time, Captain Heinz Freytag, re-

jected a large number of bananas brought to the ship, on

the ground that they were too far along in the ripening

process to be shipped. Captain Freytag signed a clean

bill of lading for 8,170 stems, consigned to Alabama Fruit,

and the ship sailed the morning of September 3. En route

to Mobile, some two days out from Guayaquil, the master

jettisoned 335 stems of bananas, after inspecting the holds

and finding these stems to be so far along in the ripening

process as to ‘‘infect’’ the remainder of the cargo.

The HEINZ HORN docked in Mobile on September 11.

Unloading commenced the following morning. Many stems

of bananas were found to be too ripe to sell. The remain-

ing bananas were sold at a reduced rate due to their

ripened condition.

The HEINZ HORN made one further voyage under the

charter with Fruco. On Septembe. 21, 1962, Alabama

Fruit, through Atkins, notified Horn’s agent that it felt

‘it best for you to take the ships back and cancel ‘the

charter at the end of the present voyage.’’ In that letter,

Atkins referred to a telephone conversation to that effect

3 However, see n. 11, infra, for the high percentage of ripe and

turniny bananas on those voyages.

— A-39 —

between himself and Horn’s agent, purportedly held that

same day. Subsequently, Fruco sent a confirmation tele-

gram to the Horn agents.*

The MARIE HORN was redelivered to the owner on

September 27; she had been chartered for a minimum pe-

riod of four months, or until November 12, 1962. Thus

her redelivery was some 46 days prior to the expiration

of the minimum time. The HEINZ HORN charter was

for a minimum three-month period, which expired Sep-

tember 3. Redelivery of that vessel to the owner was

effected October 3. HEINZ HORN wen: on hire for an-

other charter October 4. MARIE HORN had been booked

September 3 for delivery to another charterer October 1.

Libel was filed by Fruco, as charterer, against HXINZ

HORN and Horn with regard to the first voyage. Atkins,

d/b/a Alabama Fruit, subsequently joined in that libel.

Atkins filed ‘a similar libel against the same respondents

with regard to voyage No. 4, to which Fruco was added

by amendment as a party libelant. Horn filed two sepa-

rate libels, as owner of the HEINZ HORN and of the

MARIE HORN, respectively, seeking charter hire al-

legedly due on each vessel. In connection with the first

libel, filed as a result of voyage No. 1, the HEINZ HORN,

4 The telegram, charged to “Ala. Fruit & Produce Co.,” reads

as follows:

“IN ACCORDANCE WITH OUR PHONE CONVERSA-

TION SEPTEMBER 21ST AND LETTER SAME DATE

HAVE DEFINITELY DECIDED VESSELS MARIE-

HORN AND HEINZHORN NOT SUITABLE FOR

TRADE INTENDED AS PER CHARTER PARTIES

DATED MAY 15TH AND APRIL 30, 1962 RESPEC-

TIVELY STOP MARIEHORN UNLOADED YESTER-

DAY EXCESSIVE RIPES WHICH SAME UNSATIS-

FACTORY EXPERIENCE PREVIOUS CARGOES BOTH

VESSELS THEREFORE ACCEPT THIS OUR INTEN-

TION NOT TO USE THESE VESSELS FURTHER.

CIA DE NAVEGACION FRUCO SA”

ia aa ada’ 8 i i a a

BOR a Nice gis “

— A-49 —

after being put under seizure, was released unde: bond of

$40,000.00.

The district court, after consolidation, awarded Atkins

$31,261.64 for cargo damage resulting from vovage No. 1,

and $18,495.73 for cargo damage with regard to voyage

No. 4, or a total of $49,757.37. Horn was awarded a total

amount of $30,864.71. This included $25,946.76 for charter

hire withheld as security for cargo damage on voyage No.

1, $3,651.29 for charter hire for time HEINZ HORN was

tied up in Mobile after voyage No. 1, and $1,266.66 for

charter time due for the two days HEINZ HORN lay

awaiting cargo in Puerto Bolivar prior to voyage No. 2.

Interest of 6% per annum was granted on each award, to

date from relevant dates. All parties have appealed. We

affirm in part and reverse in part.

I.

The delicate nature of bananas necessitates special care

in transportation. Bananas customarily are cut in a hard

green state and are shipped under such refrigeration as

will delay the ripening process. The ripening tempera-

ture for bananas is generally a pulp temperature of 60 to

62 degrees Fahrenheit. Banana shippers regard a trans-

port temperature of 53 to 55 degrees Fahrenheit as ap-

propriate. Temperatures below 52 degrees Fahrenheit have

a deleterious chilling effect on the fruit. The general

effort is to transport the bananas at a low temperature,

retarding the ripening process, but safely above the level

at which the fruit is chilled.

The ripening process of the banana produces several

effects on the fruit, including a color change from grass

green to yellow and, ultimately, to brown. Ripening ba-

nanas exude, inter alia, ethylene gas and heat, both of

which tend to accelerate the ripening of other bananas in

— A-41 —

proximity. See Lucayan Transports v. McCormick Ship-

ping Corp., 5th Cir. 1951, 188 F. 2d 202, 204.

For all of these reasons, a ship properly equipped to

transport bananas will provide stowage holds cooled by

a refrigeration system which maintains a properly low

temperature and which exhausts the heat and gases that

encourage ripening.

Usually, prior to taking on a load of bananas, the car-

rier ship will cool its holds to an appropriate temperature.

The cooling system may sometimes be operated during

loading, even with the hatches open. Once loading is

completed and the hatches are closed, the ship is expected

to ‘‘pull down’? the hold temperature and that of the ba-

nanas to the necessary level within approximately eight

hours. The maintenance of the proper temperature there-

after depends on a close control of the temperature of air

delivered into the hold, and of that exhausted. Delivery

air normally should be at a level of 52 to 53 degrees. The

temperature of the exhaust air apparently is controlled,

in part, by the frequency with which the air in the hold

is changed. A de-gassing process is used to ensure ex-

haust of the ripening gasses.

Maritime law. infers a general warranty of seaworthi-

ness from a charter-party agreement even where such war-

ranty is not expressly made. The Caledonia, 1895, 157

U. S. 124; Work v. Leathers, 1878, 97 U. S. 379; Jordan,

Inc. v. Mayronne Drilling Mud, Chemical & Engineering

Service, 5th Cir. 1954, 214 F. 2d 410. The term ‘‘sea-

worthiness’’ is read to mean, inter alia, fitness for the use

anticipated. See The Southwark, 1903, 191 U. S. 1.

A similar warranty of seaworthiness at one time was

read into contracts of carriage or bills of lading. The Car-

riage of Goods by Sea Act of 1936 (COGSA), 46 U.S. C.,

§ 1300, et seq., abolished that general warranty with re-

gard to the carrier-shipper relationship governed by bills

EPL 4

— So

of lading. Instead, the carrier is statutorily obligated to

use due diligence to make the vessel seaworthy. 46 U.S. C.,

§ 1303 (1). Such obligation is either met or not met when

vessel ‘‘breaks ground’”’ on the voyage. Tne Steel Navi-

gator, 2nd Cir. 1928, 23 F. 2d 590; Erie & St. Lawrence

Corp. v. Barnes-Ames Co., W. D. N. Y. 1931, 52 F. 2d

217.5 No such statute regulates the terms of private char-

ter parties, and risks of damage mey be adjusted in any

manner specified by the charter. See The Monarch of

Nassau, 5th Cir. 1946, 155 F. 2d 48; Gilmore & Black, at

181.

As was the situation here, the owner and the charterer

sometimes choose to incorporate COGSA into the charter

party. Such a practice serves to cut the general sea-

worthiness warranty ‘‘down to COGSA dimensions,’’ that

is, to the level of due diligence. Gilmore & Black, 182 n.

41, 183. See Cooper v. Pinedo, 5th Cir. 1954, 212 F. 2d

137; Ore S. S. Corp. v. D/SA/S Hassel, 2nd Cir. 1943, 137

F. 2d 326.

The charter party in each case made specific reference

to certain characteristics, specifications and capacities of

5 In part, at least. COGSA is closely similar to the Harter Act

of 1893, 46 U. S. C., §§ 190-196, so that cases interpreting the

latter may also be cited with respect to COGSA. Gilmore &

Black, at 127.

6 “44. New Jason Clause, New Both-to-Blame Collision Clause,

Chamber of Shipping War Risk Clause 1 & 2, U. S. A. Clause

Paramount, at attached, to be fully incorporated in this Charter

Party. °

“U. S. Clause Paramount

“This Bill of Lading shall have effect, subject to the provisions

of the Carriage of Goods by Sea Act of United States approved

April 16, 1936, which shall be deemed to be incorporated herein, and

nothing herein contained shall be deemed a surrender by the carrier

of any of its rights or immunities or an increase of any of its

responsibilities or liabilities under the said Act. If any term of

this Bill of Lading be repugnant to said Act to any extent, such

terms shall be void to that extent, but no further.”

—-4s—

the ships. The statements may reasonably be treated as

warranties, the breach of which would entitle Fruco, as

charterer, to avoid the agreement entirely or to sue for

damages arising from the breach. Davison v. Von Lingen,

1885, 113 U. S. 40; Romano v. West India Fruit & S. S.

Cot, 5th Cir., 1945, 151 F. 2d 727, 731; Simonetti v. Foster,

D. Mass. 1880, 2 Fed. 415. We have found no authority

which would indicate any limitation on obligations under

such express representation through the advent of COGSA

by incorporation. Cf. Luckenbach v. McCahan Sugar

Co., 1918, 248 U. S. 139, 149, 150. That question need not

be decided here because, as presently developed, in this

case the charterer stood in the same position as the cargo

owner.

COGSA, in effect, limits the potential liability of the

ship or its owner in the instant case. The recovery of

Fruco, the charterer, from Horn or his ship is limited to

the level of recovery which Fruco is found to owe the

owner of the cargo, in this case Atkins, consignee and suc-

cessor to the shipper. See The Toledo, 2nd Cir. 1941, 122

Fed. 255, aff’g, The Toledo, BK. D. N. Y. 1939, 30 F. Supp.

93, 98. Certainly. Fruco should be allowed no recovery

for loss it has not suffered, and its own potential loss is

measured by that recovery which it may owe to Atkins.’

7 We thus avoid the broad question whether bills of lading gen-

erally are to be considered as contracts between shipper and time

charterer. Benner Line v. Pendleton, 2nd Cir. 1914, 217 Fed. 497,

499; Burn Line v. United States & A. S. S. Co., 2nd Cir. 1908,

162 Fed. 298, 300; Jebsen v. A Cargo of Hemp, D. Mass. 1915,

228 Fed. 143, 148; British & Foreign Marine Ins. Co. v. Kilgour

S. S. Co., S. D. N. Y. 1910, 184 Fed. 174, 178; or between shipper

and owner, Field Line (Cardiff), Ltd. v. South Atlantic S. S. Line,

5th Cir. 1912, 201 Fed. 301, 304, citing Schooner Freeman v.

Buckingham, 1855, 59 U. S. (18 How.) 182, 189. See Poor,

Charter Parties, § 10 (4th ed.). The cases cited were not depend-

ent on a matter of statutory liability, and its effect on the rela-

tionships of the parties.

Since Horn has repeatedly asserted an absence of privity with

Atkins, we are unable here to use the rationale of Cooper v.

eal |

PREG ELLIE PLL OME,

REPEL

pan LA AY ON gE HAE le BE GE

Perr ass

— A-44 —

Fruco’s responsibility to Atkins is, in turn, established by

the terms of the biils of lading. COGSA governs the re-

lationship created by that document, and the terms of

COGSA may not be modified by agreement of the parties.

46 U.S. C. A., § 1305.

Il.

VOYAGE NO. 1.

With regard to the first voyage of the HEINZ HORN

the district court found:

‘‘The ripened state of the bananas was due to the

high pulp temperatures at which they had been trans-

ported. The primary cause of the high pulp tempera-

tures was the improper stowage of the boxes of

bananas.

‘‘In the No. 2 hold the cartons of bananas were

tightly stowed. No slots, bin boards or dunnage had

been used to facilitate the flow of air between the

cartons. The cartons were stowed an average of eight

tiers high in both compartments of the No. Z hold.

No space was left between the cartons.

‘*A factor which contributed to the ripening of the

bananas was the excessive length of time taken in

pulling down the temperature of the delivery and

return air, and the failure of the vessel to maintain

the proper hold temperature.

‘‘The bananas were packed in boxes or cardboard

cartons designed for and used in the transporting of

bananas. These cartons were well ventilated and their

construction in no way caused or contributed to the

damage done to the bananas.’’ 233 F. Supp. 637, 640

(emphasis supplied).

Pinedo, 5th Cir. 1954, 212 F. 2d 143, where we noted that counsel

for both parties had understood that the issue of liability was to

be determined from the original charter agreement.

— A-45 —

We agree with these determinations of the district court

and find they are not clearly erroneous. See Fed. R. Civ.

P. 52 (a).8 Indeed, in the findings quoted above, the only

matter over which there could be disagreement is with

regard to the time taken to lower the hold temperatures,

and the maintenance thereafter of the proper temperatures.

Since a higher percentage of the bananas in hold No. 1

survived under the same refrigeration system, the method

of stowage may have affected the ship’s capacity to care

for its cargo. We note, however, that Arthur Grant, a

naval architect and marine surveyor, called by libelants®

as an expert witness, testified at length as to his readings

of the ship’s temperature logs. He concluded that, with

regard to hold No. 2, the delivery aii temperature steadivd

down to 53 degrees Fahrenheit in approximately 36 hours,

whereas an 8-hour period was the proper time. He stated

further that the return air never steadied at or below 55

degrees Fahrenheit, while the appropriate level would

have been between 53 and 54 degrees. Whether these

effects resulted from the capacity of the system itself, or

from the manner in which it was operated, he did not say.

The district court concluded that the latter element,

method of operation was at fault. 233 F. Supp. at 642.

Our disagreement with the result reached in the district

curt as to voyage No. 1 stems from the path followed to

its conclusion that liability for the ‘‘primary cause’’ and

contributing ‘‘factor’’ rests with Horn, as the ‘‘carrier.’’

From Atkins’ view, the charterer and the owner are

indistinguishable. It is not for Atkins to separate their

responsibilities under the charter party, a document in

8 See also McAllister v. United States, 1954, 348 U. S. 19; C. J.

Dick Towing Co. v. The Leo, 5th Cir. 1953, 202 F. 2d 850, 854;

River Terminals Corp. v. Southwestern Sugar & Molasses Co.,

5th Cir. 1960, 274 F. 2d 36, 37.

9 For convenience, we refer to Fruco and Atkins as libelants

and to Horn as réspondent.

CRAVE SOE Se +

REE CD

— A-46 —

which he did not participate except as a <uarantor. How-

ever, Fruco may have recovery over against the vessel or

its owner as a result of the charter-party terms. Thus we

actually are concerned with Atkins’ recovery through

Fruco but ultimately against Horn.!°

The district court concluded that the HEINZ HORN

was seaworthy. We do not «gree. While we wouid sus-

tain its conclusion to the extent of the mechanical fitness

o. the vessel,'! based on the testimony of the expert wit-

10 “his court has observed that, “regardless of whether libel-

ants, as subcharterers, may claim privity of contract with the own-

ers sufficient to maintain an action in personam, they are still en-

titled to maintain the present in rem suit against the vessel for

damages to the cargo.” Cooper v. Pinedo, 5th Cir. 1954, 212

F, 2d 137, 142; Perez v. Cia Tropical Exportadora, 5th Cir. 1950,

182 F. 2d 874, 875.

The procedure we follow does no injustice to the shipowner.

“The general owner must be taken to know that the purpose

for which the vessel is hired, when not employed to carry

cargo belonging to the hirer, is to carry cargo of third per-

sons; and that bills of lading, or charter parties, must, in the

invariable regular course of that business, be made, for the

performance of which the law confers a lien on the vessel.”

The Schooner Freeman, 1856, 59 U. S. (18 How.) 182, 190; Perez

v. Cia Tropical Exportadora, 5th Cir. 1950, 182 F. 2d 874, 875.

11 The testimony indicated that subsequent voyages of the

HEINZ HORN under this charter party produced the following

percentages of ripe and turning bananas:

No. 2 17.51%

No. 3 26.99%

No. 4 56.00%

No. 5 28.79%

The tuormal and expected percentage is from 3% to 5%. The

testimony was that 10% per cent is regarded as excessive. While

the actual results could be regarded as indicative either of a con-

dition of unseaworthiness or of failure to use due diligence to

make the vessel seaworthy, as well as of failure properly to oper-

ate the refrigeration mechanism, the district court inferred the last

explanation as the source of troubie, rather than the condition of

the equipment.

The fact that Fruco’s witness Grant testified that the HEINZ

HORN’s refrigeration plant was overhauled after the fourth voy-

— A-47 —

nesses summoned by all parties, we conclude that the ship

was unseaworthy with respect to its crew.

‘‘Seaworthiness is a relative term depending for

its application upon the type of vessel and the char-

acter of the voyage. The general rule is that the ship

must be staunch and strong and well equipped for

the intended voyage. And she must also be provided

with a crew adequate in number and competent for the

voyage with reference to its length and other par-

ticulars, »n@ have a competent and skilled master of

sound judgment and discretion.’’

The Framlington Court, 5th Cir. 1934, 69 F. 2d 300, 304.

From the record, the following is more than apparent:

(1) The Captain, Rudolph Horne, was ill, did not

supervise loading, and left the vessel before the end

of the voyage.

(2) At no time during the voyage did the vessel

have the normal complement of officers.

(3) The officers had no experience with boxed

bananas.

(4) For officers, once the Captain left the ship at

the Canal Zone, the vessel had only two mates, one

of whom had limited sea experience.

(5) The Acting Master had had prior experience

as the Captain of a refrigerated vessel.

Faced with such evidence, we must conclude that the

HEINZ HORN was not seaworthy with respect to its

personnel, The owner failed to exercise due diligence to

age, and that on the fifth voyage the delivery air stayed at 52

degrees “almost perfectly,” does not necessarily lead to the con-

clusion that prior to that overhaul the owners had failed to use

due diligence in providing a properly-equipped vessel. In fact,

that overhaul apparently did not have a great effect on the com-

paratively high percentage of damaged bananas.

ISICON:

eee 2 ees

— eT en

A

make the vessel seaworthy at the start of the vovage, by

not insuring that adequate and competent personnel would

remain on board through the voyage. International Nav.

Co. v. Farr & Bailey Mfg. Co., 1901, 181 U. S. 218; The

Framlington Court, supra.’?

Much has been said to this court regarding the responsi-

bility for the stowage of the cargo. The effects of the

improper stowage have no bearing on Horn’s liability, in

view of our determination of unseaworthiness. May v.

Hamburg Amerikanische Packetfahrt Akttengesellschaft,

1933, 290 U. S. 333; The Framlington Court, supra. The

same is true of any potential exculpation offered by the

Refrigeration Clause, quoted infra, n. 15.

**Tt is now settled that, when the owner relies upon

an exception in a charter to escape liability for an

accident resulting from errors of navigation, and is

guilty of negligence in not making his vessel sea-

worthy, it is not necessary to show causal relation

between the defect and the disaster.’’

The Fromlington Court, supra, 69 F. 2d at 307. Horn,

therefore, is liable for all of the cargo damage arising

from voyage No. 1.

Damages.

The district court awarded damages to Atkins in the

amount of $31,261.64 as a result of voyage No. 1. It con-

sidered conflicting testimony as to the actual quantities of

ripened bananas, the extent of ripeness, and the market

value of the various categories. We affirm the determina-

tion of the amount owed Atkins as a result of voyage

No. 1.

12 § 1303: “(1) The carrier shail be bound, before and at the

beginning of the voyage, to exercise due diligence to—

“(a) Make the ship seaworthy ;

“(b) Properly man, equip, and supply the ship... .”

— A-49 —

III.

VOYAGE NO. 4.

On the fourth voyage under the HEINZ HORN’S

charter, the bananas were loaded by the stem. The master

for that voyage, Captain Heinz Freytag, stated on deposi-

ition that vertically-placed bin boards were used to sepa-

rate the cargo to prevent it from shifting during the

voyage. The district court concluded with respect to both

of the voyages under consideration that ‘‘the officers failed

to cause the bananas to be stowed properly.’’ 233 F. Supp.

at 642. While such appareutly was the case on the first

voyage, we find only slight evidence in the record to in-

dicate that the manner of stowage employed on voyage

No. 4 contributed to the ripening of that cargo of bananas.

Most of the testimony adverse to the stowage technique

employed referred to voyage No. 1.

Captain Freytag remarked in his deposition that the

cargo on voyage No. 4 did not fill the holds. He stated

that the resultant empty hold areas caused turbulence in

the air circulation, making difficult the exhaust of foul

air and gasses. We pass any question of responsibility

for the implied shortage of cargo and for the placement

of the stems, for there is no testimony or evidence relating

the ‘‘turbulence’’ to the damaged cargo.

The district court erred in finding an absence of due

diligence in the stowage of the bananas on voyage No. 4.

Without that factor at issue, the dispute is as to

whether the ripening of the cargo resulted from the op-

eration of the cooling system or from the alleged ripened

state of some of the cargo when it was loaded. Without

evidence to indicate any decline in the condition of the

refrigeration mechanism in the period between voyages

No. 1 and No. 4, we again approve the district court’s

Leip dion SRE dae i

— A-d0 —

determination that the HEINZ HORN was mechanically

seaworthy for the purpose of transporting bananas. No

question of the adequacy of ship’s personnel arises from

this voyage.

Once it has been established that the bananas were

loaded in good condition and unloaded in damaged condi-

tion, the carrier can avoid liability only by proving that

the damage resulted from a cause for which it is statu-

torily not responsible, or that it exercised due diligence

to prevent the harm. Schnell v. The Vallescura, 1934, 293

U. S. 296, 303; Compagnie De Navigation v. Mondial

United Corp., 5th Cir. 1963, 316 F. 2d 163, 169; Schroeder

Bros., Inc. v. The Saturnia, 2nd Cir. 1955, 226 F. 2d 147,

149. The cargo was delivered to Mobile in part at least

in an excessively ripened condition. Captain Freytag

signed the bill of lading for this particular cargo, dated

September 2, 1962. No exceptions were noted on the bill

of lading. Thus is raised the rebuttable presumption that

the fruit was delivered on board ship in good condition.

Fidelis Fisheries, Ltd. v. Thorden, 8. D. N. Y. 1956, 142

F. Supp. 798.

COGSA, at 46 U. S. C., § 1304 (2) (m), states:

‘‘Neither the carrier nor the ship shall be responsi-

ble for loss or damage arising or resulting from—.. .

wastage in bulk or weight or any other loss or dam-

age arising from inherent defect, quality, or vice of

the goods... .

The fact that bananas require special care during ship-

ment, due to such characteristics of that cargo as en-

courage ripening, Lucayan Transports v. McCormick

Shipping Corp., supra, is not the circumstance envisoned

by that exculpatory clause. Certainly all parties to the

charter party understood the nature of such cargo in gen-

eral and the special! ship characteristics necessary for its

— A-d1 —

transport. Rather, to gain assistance from that statutory

exculpation, the carrier must have shown some defect,

quality or vice adhering to the particular bananas brought

aboard. See Compagnie D. Navigation v. Mondial United

Corp., supra, 316 F. 2d at 168-69.

The district court stated that ‘‘there was no proof of

inherent defect, quality or vice of the bananas.’’ 233 F.

Supp. at 642. Captain Freytag and First Mate Schultz,

in depositions, testified that they rejected as too ripe for

shipment large quantities of the bananas brought to be

loaded. Schultz stated further that Mr. Juan Rios was

present as Atkins’ representative at loading time and

that Rios rejected many stems. Captain Freytag indi-

cated that much of the rejection was based on color, and

that the light available during night loading was not

sufficient for the color test. Schultz indicated that the

banana experts working on the loading operation, pre-

sumably including Rios, also had been cutting open

selected bananas to examine for ripeness.

Captain Freytag took three stems of the rejected ba-

nanas and hung them on the deck during the voyage. He

stated that a day out of port these stems were ‘‘ripe’’.

He and Schultz inspected the holds and jettisoned ba-

nanas that were ripening too fast, 335 stens over a two-

day period. Captain Freytag felt that these jettisoned

bananas had been brought aboard at night, when they

could not be inspected closely, and hastened the ripening

process of the other bananas.!* This suspicion was con-

troverted by Mr. Turner, the shipper.

With such testimony the only evidence available to

prove the existence of an exculpatory condition of the

13 The bill of lading was dated September 2. Both Captain

Freytag and Schultz testified that some loading was done in the

pre-dawn hours of September 3.

RR Ie me

RES eT ee

eV AER Sees. |

A BF ag te ASO thos abe wan

— A-02 —

cargo, we conclude that the district court was not clearly

erroneous in finding no proof of inherent defect, quality,

or vice in the bananas. The inferential and credibility

determinations necessarily made by the district court will

not be disturbed.

Since we disagree with the finding that stowage con-

tributed to the cargo damage, and uphold the finding that

the bananas themselves possessed no inherent conditions

affecting their transport, our affirmance of the district

court’s determination that the vessel was seaworthy leads

us to conclude that the manner of operation of the re-

frigeration system was the cause of the ripening of the

cargo. This conclusion is not made merely for want of a

better cause, for there is evidence in the record to support

the district court’s determination that the crew failed to

use due diligence with regard to the pull-down time as

well as with regard to the maintenance of proper tem-

peratures.

Whereas eight hours was stated to be the allowable

time within which the hold temperatures should reach the

proper level once the hatches were closed, the evidence

shows that the return air in hold No. 1 settled to the 55-

degree level after forty hours!* and that that in hold No.

2 reached the 55-degree level after forty-eight hours. The

air being delivered into both holds generally steadied at

an appropriate 52 degrees within the 8-hour period.

Clause 34 of the charter party required that the Re-

frigeration Clause be included in all bills of 'ading issued

during the period of charter.!* It was also incorporated

14 This exceeds by four hours the trial court’s finding. 233 F.

Supp. at 641.

15 “34. Owners’ usual refrigeration clause is incorporated in

this Charter Party and is to be incorporated in all Bills of Lading

— A-d3 —

into the charter party itself. That clause bars liability of

the shipowner or his ship for the negligent operation of

the refrigeration equipment. Horn therefore cannot be

liable for damages resulting from the operation of the

cooling system.?®

Atkins is further barred from recovery from the car-

rier or the ship under COGSA. Section 1304 states that

neither the carrier nor the ship is responsible for loss

arising from neglect in the navigation or management of

and Mate’s Receipts covering refrigerated cargo shipped by this

vessel during the period covered by this Charter Party.

“Refrigeration Clause

“Tt is also agreed that if the Shipowners shal] have exercised

due diligence to make the vessel in all respects seaworthy and

properly manned, equipped and supplied, said vessel, her Owners,

Agents, or Officers shall in no case be responsible for any loss

or damage to any cargo shipped in refrigerated chambers, whether

such less or damage arise from defect or insufficiency either before

or after the shipment, in the Hull of the said vessel, or her Re-

frigeration Machinery, chambers space or apparatus, or any part

thereof, or in any material used in the process of refrigeration,

and whether such loss or damage, however, arising be caused by

the negligence, fault, error in judgment of the Pilot, Master,

Officers, Engineers, Mariners, Refrigeration Engineers of [sic]

any other servants of the shipowners or persons for whom they

are responsible or by unseaworthiness. It is expressly agreed that

any negligence, fault, or error in the operation of the said Re-

frigeration apparatus shall be deemed to be and is hereby expressly

agreed to be a fault of error in the management of the vessel

within the meaning of this Bill of Lading, and shall not be con-

sidered or held to be a fault of failure in the custody, care or

stowage of merchandise shipped in Refrigeration space.”

16 However, Clause 12 stated:

“That the Captain shall use diligence in caring for the proper

ventilation and refrigeration of the cargo, also run tempera-

ture in accordance with Charterers’ written instructions.”

Nevertheless, the Refrigeration Clause was added specifically to

the standard charter party form of which Clause 12 was a part.

If there is a conflict between these portions, the Refrigeration

Clause must here govern. Cf. Cooper v. Pinedo, supra, 212 F. 2d

at 141-42. |

3

:

:

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OPO Se NTT e

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— A-d4 —

the ship.17 The Refrigeration Clause required to be in-

corporated into the bill of lading for the cargo, expressly

defined any fault in the operation of the refrigeration

apparatus as a fault in the management of the ship.

We must reverse the judgment of the district court

insofar as it awarded damages to Atkins as a result of

loss of cargo on voyage No. 4.

IV.

CHARTER HIRE FOR PERIOD BETWEEN

VOYAGES NO. 1 AND NO. 2.

In Mobile.

Fruco declined to pay $5,594.39 potentially due Horn

for charter hire. Of that amount, $4,327.73 represented

the approximately seven-day period in Mobile, after un-

loading from the first voyage, when the ship lay without

17 §1304: “(1) Neither the carrier nor the ship shall be liable

for loss or damage arising or resulting from unseaworthiness un-

less caused by want of due diligence on the part of the carrier

to make the ship seaworthy, and to secure that the ship is properly

manned, equipped, and supplied, and to make the holds, refrig-

erating and cool chambers, and ail other parts of the ship in which

goods are carried fit and safe for their reception, carriage, and

preservation in accordance with the provisions of paragraph (1)

of section 1303 of this title. Whenever loss or damage has re-

sulted from unseaworthiness, the burden of proving the exercise

of due diligence shall be on the carrier or other persons claiming

exemption under this section.

“(2) Neither the carrier nor the ship shall be responsible for

loss of 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 man-

agement of the ship... .”

See § 1303 (2).

As observed supra, incorporation of COGSA into the charter

party serves to limit liabilities under the charter to COGSA dimen-

sions.

—" oe

orders. Approximately one day of that period admittedly

was at Horn’s expense, for dry-dock inspection, to the

amount of $676.44. There is no doubt that the charter

party provided that the ship sail on orders of the

charterer.

The district court found that ‘‘the assertions of Atkins

that he rescinded the charter party at the end of voyage

No. 1 are unsupported by the evidence.’? 233 F. Supp.

642.

Atkins testified that after he saw the cargo discharged

on arrival from the first voyage, he spoke ‘‘a number of

times’? with Mr. Ulrich Mahn, a representative of the

chartering agent. He stated that he told Mahn on June

22, the day of unloading, that the vesse! was not suitable

and was not properly crewed, and that it was his intention

to place the HEINZ HORN off-hire. At another point in

his testimony, Atkins stated that he told Mahn that the

vessel would remain off-hire until it sailed, and that Mahn

agreed. Mahn apparently reassured Atkins with promise

of improved services. Atkins said that he agreed to ‘‘a

trial basis, on a trip-by-trip basis.’? A letter from Atkins

to Captain Freytag on June 25 referred to the second

voyage to Puerto Bolivar as a ‘‘trial to see if the vessel

can carry fruit satisfactorily.’’ Copies of that letter went

to Mahn and Mr. Jan Grisbolt, the chartering broker’s

representative. In response by letter of June 27, Captain

Freytag stated that he was unable to agree with Atkins’

letter of the 25th and that he, Freytag, had no authority

or intent to change any term of the charter party. Mahn

testified that he made no agreement with Atkins to the

effect that the HEINZ HORN would operate on a trip-by-

trip basis, rather than in accord with the charter.

Atkins has further argued that the charter parties

were rescinded as a result of frustration of purpose.

While the outturn of ripened bananas on subsequent voy-

PROLOG EIT eR ee ee Ne

EEE OTR ee

— A-56 —

ages (see n. 11, supra) apparently was higher than normal,

such had not occurred at the point at which Atkins says

the charter party was frustrated.

The record supports the conclusion that the charter

party was not rescinded at the conclusion of voyage No. 1.

Cf. Aaby v. States Marine Corp., 2nd Cir. 1950, 181 F.

2d 383.

Clause 15'* provides that the charterer is not liable for

payment of hire for time lost from ‘‘deficiency of men.’’

We have seen already that the owner failed to exercise

due diligence with respect to personnel aboard for the

first voyage. The testimony shows that the time lost in

Mobile, excepting the period of dry dock, resulted from

the delay in disposing of the damaged bananas. The

bananas were damaged, in part at least, as a result of

inadequacy of personnel. The time lost in Mobile re-

sulted from ‘‘deficiency of men.’’

In Puerto Bolivar.

Fruco and Atkins have explained that the HEINZ

HORN was expected to turn around and return to Puerto

Bolivar for the second voyage immediately after discharg-

ing its cargo in Mobile on June 22. The charterer then

claims that the condition of the cargo, and its disposition,

resulted in the delay in sailing until the 29th, and thus

its failure to pick up the cargo scheduled for the second

voyage. When the vessel did arrive in Puerto Bolivar, it

had to wait two days before a substitute cargo was col-

lected. The charterer withheld $1,266.66 in charter hire

for those two days.

Since the time lost here again resulted from the time

lost in disposing of bananas damaged on the first voyage,

i8 “15, That in the event of the loss of time from deficiency

of men or stores . . ., the payment of hire shall cease for the

time thereby lost. . . .”

oe

we conclude that the time lost was a result of the ‘‘de-

ficiency of men,’’ which resulted in the damage to the

cargo.

We conclude that the district court was erroneous in

awarding the sum of $4,917.95 in charter hire for these

two periods.

V.

REDELIVERY OF THE VESSELS

TO THE OWNER

HEINZ HORN.

Fruco redelivered the HEINZ HORN to her owner

October 3, 1962, a month past the minimum three-month

period. She went on hire to another charterer on Oc-

tober 4.

Fruco claimed that it gave notice of redelivery by

letter of September 21, confirmed by telegram of Sep-

tember 27. Horn argues that whichever date was the

effective date of notice, it was entitled to charter hire for

thirty days from that date, as a result of a thirty-day

notice requirement in the charter. The district court felt

it unnecessary to pinpoint the date of notice, finding that

Horn had been able to mitigate any potential damages for

lack of use for the vessel by the immediate recharter.

The only testimony regarding the asserted mitigation

of damages was from Mahn, the charter broker. His state-

ments, self-serving though they may be, are not contro-

verted by any evidence from Fruco. We might conclude

from his testimony that under the subsequent charter the

HEINZ HORN operated at an expense differential of

$210.96 per day. Adding Horn’s daily profit of $6.92, we

could find that Horn is entitled to $217.88 per day for

each day of the thirty-day period not allowed. Consider-

Wh A KA epee

— A-58 —

ing the testimony from another angle, we note that the

total hire earned on the subsequent charter was at a

higher total rate than the monthly $19,000.00 paid by

Fruco. The district court had opportunity to study the

testimony in light of the witnesses’ demeanor. With this

in mind, we are unable to hold erroneous the finding of

the court that the owner mitigated any alleged damages.

Thus we do not consider the question of whether Horn

actually was entitled to its thirty-day notice, or the ques-

tion of the actual date on which notice of redelivery was

made.

MARIE HORN.

The same letter and telephone applied to the MARIE

HORN, which was chartered for a four-month minimum

period, expiring November 12, 1962. Again, the only testi-

mony as to damages here is from Horn’s witness Mahn.

The same sort of analysis was made for both vessels and

we conclude, as with the HEINZ HORN, that the MARTE

HORN mitigated any damages it otherwise might have

suffered.

VI.

INTERESTS ON THE JUDGMENTS.

The district court computed interest as follows:

‘‘Atkins is further entitled to interest at the rate

of 6% per annum from June 22, 1962, on the cargo

damage on Voyage No. 1, and from September 12,

1962, on the cargo damage on Voyage No. 4.

‘‘Horn is entitled to interest at the rate of 6% per

annum from June 22, 1962, on the charter hire with-

held as security for cargo damage on Voyage No. 1;

from June 29, 1962, for the charter hire withheld for

the time the HEINZ HORN was tied up in Mobile;

— A-59 —

and from July 8, 1962, for the charter hire withheld

for stand-by time in Bolivar.’’ 233 F. Supp. at 643.

Iiorn argues on appeal that this method of computa-

tion, in effect, allows Atkins the benefit of the interest on

the sum withheld as security as well as on the sum

awarded. This plainly is not correct. We find no error in

the assessment of interest.

Vil.

Vhe judgment is reversed as to the damages awarded

to Atkins from voyage No. 4, and reversed as to the

charter hire awarded Horn for the two periods of in-

activity prior to voyage No. 2. The judgment is affirmed

in all other respects. Costs of appeal are taxed one half

against Horn and one half against Fruco and Atkins.

Affirmed in Part and

Reversed in Part.

facie A tad “,

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APPENDIX C.

CIA De Navegacion Fruco, S. A., a

Corporation, Libelant,

Vv.

The M/S HEINZ HORN, Her Engines, Tackle, Apparel,

and Furniture, Ete.; Heinrich C. Horn, and

Partenreederei, Respondents.

J. R. Atkins, Doing Business as Alabama Fruit and

Produce Company, Libelant,

Vv.

The M/S HEINZ HORN, Her Engines, Tackle, Apparel,

and Furniture, Ete., and Heiarich C. Horn,

Respondents.

Heinrich C. Horn, as Managing Owner of the

M/S MARIE HORN, Libelant,

Vv.

CIA De Navegacion, Fruco, S. A. and J. R. Atkins,

Individually, Respondents.

Heinrich C. Horn, Libelant,

Vv.

CIA De Navegacion Fruco, S. A., and J. R. Atkins,

Individually, Kespondents.

Nos. 2958, 2976, 2984, 2988.

United States District Court,

S. D. Alabama, S. D.,

Sept. 14, 1964.

- = a * . * *

Daniel Holcombe Thomas, District Judge.

These consolidated cases arise out of the time charter

of two sister ships, the M/S HEINZ HORN and the M/S

— A-61 —

MARIE HORN, under a New York Produce Exchange

Charter Party, by Cia De Navegacion Fruco, 8. A., herein-

after referred to as Fruco from Heinrich C. Horn, herein-

after referred to as Horn. The vessels were chartered for

the carriage of bananas between good and safe ports in

Ecuador and the Gulf Coast.

The HEINZ HORN was chartered April 30, 1962, and

actually went on charter on or about June 3, 1962. The

vessel, by terms of the: charter party, was to remain on

charter for a minimum period of three months to about

six months, the exact time to be at the charterer’s option.

There was provision for thirty-day notice prior to re-

delivery. Charter hire at the rate of $19,000.00 per month

was payable semi-monthly, in advance, in New York.

The MARIE HORN was chartered May 15, 1962, and

actually went on charter on or about July 12, 1962. The

terms of the charter party were very similar to those of

the HEINZ HORN except that the MARIE HORN charter

party was for a minimum of four months to about eight

months, and the charter hire was at the rate of $19,150.00

per month, payable semi-monthly, in advance. There also

was a provision for thirty-day notice on redelivery.

Two of these. cases, Admiralty No. 2958 and Admiralty

No. 2976, in rem and in personam, were brought by Fruco,

as charterer, and J. R. Atkins, individually and doing

business as Alabama Produce Company, hereinafter re-

ferred to as Atkins, as consignee and owner of the cargo,

for damage to the cargo of bananas on two separate voy-

ages of the HEINZ HORN, hereinafter referred to as

Voyage No. 1 and Voyage No. 4, and for the alleged

breach of the charter party of the HEINZ HORN. (At-

kins is also the president of Fruco and its principal stock-

holder.)

The other two cases, Admiralty No. 2984 and Admiralty

No. 2988, were brought by Horn, as managing owner of

— A-62 —

the two vessels, against Fruco and Atkins, as guarantor,

for charter hire allegedly due on the two vessels.

The HEINZ HORN and MARIE HORN are refrigerated

vessels, sister ships of German registry. The vessels are

equipped with a horizontal air delivery system. Refrig-

erated air is delivered into the lower No. 1 hold at the

after bulkhead, flows forward and then up into the No.

1 *tween deck; then aft to the aft bulkhead, where it is

either exhausted or redelivered into the cooling units. The

reverse is true as to the No. 2 hold: refrigerated air is

delivered into the lower No. 2 hold at the forward bulk-

head, flows aft through the hold, up into the No. 2 ’tween

deck, and then forward to the forward bulkhead, where

it is either exhausted or redelivered into the cooling units.

The refrigeration unit on either of these vessels is capable

of delivering air at a temperature below zero, Fahrenheit,

and the temperature of the delivery and return air can

be checked and regulated.

The HEINZ HORN picked up Mr. Dan Christian while

passing through the Panama “anal on Voyage No. 1 en

route to Puerto Bolivar, Ecuador. Mr. Christion was em-

ployed by Atkins but knew nothing of the banana busi-

ness. He was sent by Atkins on this voyage to observe,

in an endeavor to learn the banana trade.

The HEINZ HORN arrived in Bolivar, June 10, 1962.

Loading commenced June 11 and was completed in the

early morning hours of June 13. The vessel was loaded

with bananas which were cut June 10, 11 and 12. The

refrigeration on the vessel was not turned on until ap-

proximately 6:30 p. m. on June 12, some twenty-four hours

after loading had commenced. The bananas upon loading

were grass green, fresh and hard.

The entire No. 2 hold was fully loaded with some 9,357

cartons of bananas, at approximately 40 pounds per car-

ton. The No. 1 lower hold was loaded with bananas in

— A-63 —

stems while the No. 1 ’tween deck had bananas in stems

in the wings with cartons in the way of the hatch, for a

total in No. 1 hold of 3,539 stems and 2,009 boxes. Some

space was left in the No. 1 ’tween deck. Before loading,

the bin boards, under the direction of Chief Mate Schultz,

were removed; and no bin boards, slats or dunnage were

used on the voyage.

The loading of the vessel was accomplished under the

supervision and direction of the officers of the vessel.

Chief Mate Schultz stated that he supervised the stowage

of the cargo, thought it was proper and made no objec-

tions.

The master of the vessel signed bills of lading for the

cargo on June 12, 1962. He noted no exceptions, which at-

tested to the good condition of the cargo. Relying on

these clean bills of lading, the letter of credit which had

been previously furnished by Atkins was honored and the

sale was completed, f. o. b. Ecuador on June 12, 1962.

The vessel sailed from Bolivar in the early morning

hours of June 13. Only two mates were aboard, as had

been the case during loading. On passing through the

Panama Canal, Captain Horn, who had been sick for some

time, left the vessel. This left only two mates aboard as

the ship’s officers. Normaliy there is a captain plus three

mates. None of the officers aboard was experienced with

the handling of boxed bananas.

Bananas are very delicate by their nature and present

difficulties to their being successfully transported. They

are cut in a green state and shipped under refrigeration

to delay the ripening process. The ripening temperature

for bananas is generally 60°-62° Fahrenheit. For this

reason bananas have to be transported at a cooler temper-

ature, and generally 953°-90° Fahrenheit is considered ac-

ceptable.

LTE IEE LIPS LOOPS SOLE LLG IO POL

eALERTS EIPLEY LEE LLL LOGIE ELLIS SEE REN

ra teehee

TATE BAIR 2) ONAL A ——

— A-64—

Bananas give off carbon dioxide, ethylene gas and heat

which hastens the ripening process. This also hastens the

ripening of other bananas in proximity. So it becomes

absolutely essential that the hold temperature of the ves-

sel and pulp temperature of the bananas be maintained at

approximately 54°-55° Fahrenheit, and that the foul air

be exhausted sufficiently to remove the carbon dioxide,

ethylene gas and heat.

In order to assure a proper hold temperature for the

successful carriage of bananas it becomes imperative that

the temperatures of delivery air and return air be very

closely controlled. Delivery air should be 52°-53° Fahren-

heit, and it should reach that level within eight hours

after the hatches are closed. The difference between the

temperature of the delivery air and the return air should

be no more than 3° after pulldown.

The delivery air never steadied down to 52° Fahren-

heit in either hold on Voyage No. 1, and it took approxi-

mately thirty-four hours to pull it down to 53° Fahren-

heit. Return air also was very slow in being pulled down

to a desired level.

The HEINZ HORN docked in Mobile at approximately

8:00 p. m. on the 21st of June, 1962. Discharging opera-

tions began at 7:00 a. m. the next morning. A very high

percentage of the bananas were found to be yellow in

color and in a ripened and ripening condition. Pulp tem-

peratures were taken and some of them were as high as

62° Fahrenheit. Temperatures in the No. 2 hold were

higher than in No. 1 hold. The bananas in both holds

were damaged, but the greater damage was in the No. 2

hold which was completely filled with boxed bananas.

Most of the bananas were damaged to such an extent,

meaning ripe or ripening, that they were of no value to

an importer.

— A-65 —

The ripened state of the bananas was due to the high

pulp temperatures at which they had been transported.

The primary cause of the high pulp temperatures was the

improper stowage of the boxes of bananas.

In the No. 2 hold the cartons of bananas were tightly

stowed. No slats, bin boards or dunnage had been used

to facilitate the flow of air between the cartons. The

cartons were stowed an average of eight tiers high in

both compartments of the No. 2 hold. No space was left

between the cartons.

A factor which contributed to the ripening of the ba-

nanas was the excessive length of time taken in pulling

down the temperature of the delivery and return air, and.

the failure of the vessel to maintain the proper hold tem-

perature.

The bananas were packed in boxes or cardboard car-

tons designed for and used in the transporting of bananas.

These cartens were well ventilated and their construction

in no way caused or contributed to the damage done to

the bananas.

Of the 9,357 cartons of bananas loaded in the No. 2

hold, only 1,007 were unloaded. Those taken out of the

No. 2 hold were salvaged for $1,552.26. The other cartons

were left on board the vessel because no buyer was willing

to accept the bananas in such a ripened condition. The

fair value of a box of good green bananas in Mobile at

that time was approximately $3.20.

The charterer did not order the HEINZ HORN to sail

again until the 29th of June. By terms of the charter

party the vessel was to sail on orders of the charterer.

For the time the vessel was tied up in the port of Mobile

following discharge, Fruco deemed the vessel off charter

and deducted $4,327.73 from the charter hire. During this

»

— A-66 —

time the vessel went on dry-dock for inspection for

slightly more than one day. This dry-dock time was at

the owner’s expense, and admittedly Fruco did not owe

Horn for that time, which amounted to $676.44.

Atkins withheld and still withholds payment of charter

hire in the amount of $25,946.76 because of his claim

for bad cargo on Voyage No. 1.

The HEINZ HORN sailed from Mobile to Bolivar on

June 29. Upon arrival in Bolivar the vessel had to stand

by for two days awaiting bananas for loading. No ba-

nanas were ready to be loaded because the vessel had

been delayed in sailing from Mobile. Atkins treated these

two days as off charter for which he deducted $1,266.66

from charter hire.

The next claim for damaged bananas arose out of

Voyage No. 4 of the HEINZ HORN. On this voyage no

personnel were aboard other than the crew. The vessel

was loaded and stowed under the supervision and direc-

tion of the master and mates at Guayaquil, Ecuador. The

load consisted of 8,170 stems of bananas. Several thousand

stems of bananas were rejected by the officers of the

vessel before they got a complete load of acceptable ba-

nanas. For this load the master signed a bill of lading,

noting no exceptions, as had been done on Voyage No. 1.

Some two days out of Guayaquil the master checked

the bananas and had 335 stems jettisoned because they

had begun ripening.

On Voyage No. 4, unlike Voyage No. 1, the stowage

of the stems of bananas was accomplished by separating

the cargo with bin boards, and the stems were stowed

in such a fashion that small spaces were left between

them to facilitate the flow of air. Metal gliding sheets

had been installed in front of the fans and turning vanes

had been installed subsequent to Voyage No. 1 in an

— A-67 —

attempt to increase circulation in the holds. The return

air on Voyage No. 4 was not pulled down to the proper

level for forty-eight hours in hold No. 2 and thirty-six

hours in hold No, 1.

The HEINZ HORN docked in Mobile on Voyage No. 4

on the 11th of September 1962, and discharging com-

menced on the 12th. A very high percentage of these

bananas were ripe and turning. Of the entire cargo, 519

stems were left aboard ship because they were too ripe

to sell. Some 44% of the cargo was classified as green

but could not be sold at the same price as good green

fruit. Some 709 stems were sent to the city dump because

they were too ripe to sell. The rest of the cargo was

sold but at a reduced rate, due to the ripened condition,

On September 12, 1962, good green bananas were selling

for approximately $5.00 per hundred pounds in Mobile.

A stem of bananas averages approximately 85.44 pounds.

None of the bananas on Voyage No. 4 brought as much

as $5.00 per hundred pounds. The entire cargo was sold

for only $16,408.51.

The HEINZ HORN made one more trip for Fruco and

was then placed off charter. Atkins, as Fruco’s repre-

sentative, notified Mr. Mahn, the representative of Horn,

by letter on September 21, 1962, of his intention to place

both the vessels off hire at the end of their then present

voyages. A telegram from Atkins to Mahn dated Sep-

tember 27, 1962, confirmed this intent.

The MARIE HORN was redelivered on the 27th of

September, 1962, and the HEINZ HORN was redelivered

on the 3rd of October, 1962. The minimum period of

charter under the MARIE HORN’s charter party was

four months, which meant that she should have stayed

on charter until November 12, 1962. The minimum for

the HEINZ HORN was three months, and that time

a el UBS aie Di Et

” t bee Rateing Teneres

—s

ended September 3, 1962. So, the HEINZ HORN sailed

for more than the minimum time but the MARIE HORN

was redelivered some 46 days before her minimum time

had expired.

Following redelivery the HEINZ HORN immediately

went on hire for another charterer. In fact, she went on

hire on the 4th of October, 1962. The vessel was able

to mitigate any damages she might have actually sus-

tained as a result of the failure of Atkins to give a thirty-

day notice on redelivery.

Following redelivery, the MARIE HORN went on hire

to another charterer and was able to mitigate any dam-

ages which might have resulted from the failure of At-

kins to give a thirty-day notice on redelivery and from

the early redelivery. In fact, the vessel was booked on

September 3, 1962, for delivery to this subsequent char-

terer on October 1, 1962. This booking was made ap-

proximately three weeks prior to the notice of redelivery

given by Atkins.

Conclusions of Law.

[1, 2] The charter party provided that the cargo was

to be loaded at the expense of the charterer, but under

the supervision of the Captain. It further provided that

the charter party could not be construed as a demise

of the vessel to the charterer, and that the owners were

to remain responsible for navigation of the vessel, in-

surance, crew, and other matters, the same as if trading

on their own account. The Carriage of Goods by Sea

Act, which was incorporated in the ‘‘USA Clause Para-

mount’’ attached to the charter party, and which is con-

trolling wherein it conflicts with the provisions of the

charter party, provides that the carrier shall properly and

carefully load, handle, stow, carry, keep, care for, and

discharge the goods carried. So, as spelled out in the

—

charter, the proper stowage of the bananas became the

responsibility of the carrier, Horn, and as such makes

the vessel responsible for any cargo damage resulting

from improper stowage. Mobile, Miami & Gulf S. S. Co.

v. Lake Giltedge S. S. Co., 5th Cir., 1934, 68 F. 2d 370.

Mondella v. 8. S. Elie V, D. C.:S. D. N. Y. 1963, 223 F.

Supp. 390.

[3, 4] Under a time charter, such as we have in this

case, the members of the crew and officers remain the

shipowner’s men. Bergan v. International Freighting

Corp., 2 Cir., 1958, 254 F. 2d 231. In the instant case,

the bananas were loaded and stowed under the super-

vision of the officers of the vessel; and they made no

objections to the stowage, though they were under a duty

to do so if they thought the stowage improper. The

Atlanta, D. C. S. D. Ga. 1948, 82 F. Supp. 218.

[5] The bananas, on both Voyage No. 1 and Voyage

No. 4, were in good order and condition when delivered

into the custody of the vessel. Upon arrival in Mobile

the bananas were extensively damaged, in that a high

percentage of them were ripe and turning and of no value

to an importer. Under these circumstances the vessel

has the burden of proving that due diligence was exer-

cised, or that the damage resulted from some inherent

vice, or through no fault of the vessel, as pleaded. Com-

pagnie De Navigation, ete. v. Mondial United Corp., 5th

Cir., 1968, 316 F. 2d 163; Cooper v. Pinedo, 5th Cir.,

1954, 212 F. 2d 137.

[6] There was no proof of inherent defect, quality or

vice of the bananas. The vessel failed to use due dili-

gence to insure the safe carriage of the bananas in that

the officers failed to cause the bananas to he stowed

properly. The vessel further failed to exercise due dili-

gence in promptly pulling the air temperature down and

maintaining the delivery and return air temperature at

the desired level.

eae

i, lettin

-— A-70 —

The Horn vessels were seaworthy. Undoubtedly the

vessels are not the best banana carriers to be had, but

they are and were capable of safely transporting bananas,

providing due diligence is exercised.

[7] Without finding specifically that Fruco had a right

to rescind the charter party, I find that it did not in fact

rescind, The assertions of Atkins that he rescinded the

charter party at the end of Voyage No. 1 are unsupported

by the evidence. The fact that he did not order the

vessel to sail again until the 29th of June does not sup-

port such assertion, The vessel remained on charter while

tied up at Mobile, and the owners are entitled to charter

hire for all this period except for the time the vessel

was on dry-dock. The owners are entitled to the $4,327.73

which was withheld from charter hire for this time, less

$676.44 for the time when the vessel was on dry-dock.

Likewise the owners are entitled to the $1,266.66 with-

held from charter hire for the two days standing by,

awaiting bananas in Bolivar.

Having found that there was no breach of the owner’s

undertaking of seaworthiness of carrying bananas, the

owner or vessel is entitled to that amount of charter hire

which was withheld by Atkins as security for damage

to the cargo on Voyage No. 1. The damage to the cargo,

for which the vessel was responsible, may be set off

against earned charter hire.

Having thus found that the owners of the vessels are

entitled to any charter hire remaining unpaid, that the

vessels were able to completely mitigate any damages

which might have resulted by being placed off charter

without proper notice, and that Atkins is entitled to re-

cover the damage to the cargo on Voyage No. 1 and

Voyage No. 4, it is found that the parties are entitled to

their damages as follows:

oh

ATKINS:

Cargo damage Voyage No. 1 .......... $31,261.64

Cargo damage Voyage No. 4 .......... 18,495.73

EE eke SGuns wen wr Sen tans choker eels $49,757.37

HORN:

Charter hire withheld as security for

cargo damage on Voyage No. 1 ........ $25,946.76

Charter hire for time HEINZ HORN was

tied up in Mobile after Voyage No. 1 less

repair time ($4,327.73 less $676.44) .... 3,651.29

Charter hire for two days of stand-by time

ee Pie cicatteratieewccev<. < 1,266.66

WE CondnGsdebneusnvenceieniccucens $30,864.71

Atkins is further entitled to interest at the rate of

6% per annum from June 22, 1962, on the cargo damage

on Voyage No. 1, and from September 12, 1962, on the

cargo damage on Voyage No. 4.

Horn is entitled to interest at the rate of 6% per an-

num from June 22, 1962, on the charter hire withheld

as security for cargo damage on Voyage No. 1; from

June 29, 1962, for the charter hire withheld for the time

the HEINZ HORN was tied up in Mobile; and from

July 8, 1962, for the charter hire withheld for stand-by

time in Bolivar.

A deeree in accordance herewith will issue,

i ee mee eae ted weet

— A-72 —

APPENDIX D.

CARRIAGE OF GOODS BY SKA ACT.

Act of 1936.

American.

Bills of Lading Subject to Act.

Every bill of lading cr similar document of title which

is evidence of a contract for the carriage of goods by sea

to or from pcrts of the United States, in foreign trade,

shall have effect subject to the provisions of this Act. (46

U. S. C. 1300).

Definitions.

Sec. 1. When used in this Act—

(a) The term ‘‘carrier’’ inc'udes the owner or the

charterer who enters into a contract of carriage with a

shipper.

(b) The term ‘contract of carriage’ applies only to

contracts of carriage covered by a bill of lading or any

similar document of title, insofar as such document relates

to the carriage of gouds by sea, including any bill of lading

or similar document as aforesaid issued under or pursuant

to a charter party from the moment at which such bill of

lading or similar document of title regulates the relations

between a carrier and a holder of the same.

fc) The term ‘‘goods”’ includes goods, wares, merchan-

dise, and articles of every kind whatsoever, except live

animals and cargo which by the contract « carriage is

stated as being carried on deck and is so carried.

— A-73 —

(d) The term ‘‘ship’’ means any vesse? used for the car-

riage of goods by sea.

(e) The term ‘‘carriage of goods’”’ covers the period

from the time when the goods are loaded on to the time

when they are discharged from the ship. (46 U. 8S. C.

1301),

Duties and Rights of Carrier.

Sec. 2. Subject to the provisions of section 6, under

every contract of carriage of goods by sea, the carrier in

relation to the loading. handling, stowage, carriage, cus-

tody, care, and discharge of such goods, shall be subject

to the responsibilities and liabilities and entitled to the

rights and immunities hereinafter set forth. (46 U. S.C.

1302).

Responsibilities and Liabilities of Carrier and Ship.

Sec. 3. (1) The carrier shall be bound, before and at the

beginning of the voyage, to exercise due diligence to—

(a) Make the ship seaworthy;

(b) Properly man, equip, and supply the ship;

(c) Make the holds, refrigerating and cooling cham-

bers, and ali other parts of the ship in which goods are

carried, fit and safe for their reception, carriage, and

preservation.

(2) The carrier shali properly and carefully load, han-

dle, stow, carry, keep, care for, and discharge the goods

carried,

(3) After receiving the goods into his charge the car-

rier, or the master or agent of the carrier, shall, on de-

mand of the shipper, issue to the shipper a bill of lading

showing among other things—

Re ae |

abd RG nai ne ee

— A-74—

(a) The leading marks necessary for identification of

the goods as the same are furnished in writing by the

shipper before the loading of such goods starts, provided

such marks are stamped or otherwise shown clearly upon

the goods if uncovered, or on the cases or coverings in

which such goods are contained, in such a manner as

should ordinarily remain legibie until the end of the

voyage.

(b) Either the number of packages or pieces, or the

quantity or weight as the case may be, as furnished in

writing by the shipper.

(c) The apparent order and condition of the goods:

Provided, That no carrier, master, or agent of the carrier,

shali be bound to state or show in the bill of lading any

marks, number, quantity, or weight which he has reason-

able ground for suspecting not accurately to represent the

goods actualiy received, or which he has had no reasonable

means of checking.

(4) Such a bill of lading shall be prima facie evidence

of the receipt by the carrier of the goods as therein de-

scribed in accordance with paragraphs (3) (a), (b), and

(c), of this section: Provided, That nothing in this act

shall be construed as repealing or limiting the application

of any part of the act, as amended, entitled ‘‘An act re-

lating to bill of lading in interstate and foreign com-

merce’’, approved August 29, 1916 (U.S. C., title 49, sees.

81-124), commonly known as the ‘‘Pomerene Bills of

Lading Act.’’

(5) The shipper shall be deemed to have guaranteed

to the carrier the accuracy at the time of shipment of the

marks, number, quantity, and weight, as furnished by

him; and the shipper shall indemnify the carrier against

all loss, damages, and expenses arising or resulting from

inaccuracies in such particulars. The right of the carrier

— A-75 —

to suck indemnity shall in no way limit his responsibility

and liability under the contract of carriage to any person

other than the shipper.

(6) Unless notice of loss or damage and the general na-

ture of such loss or damage be given in writing to the

carrier or his agent at the port of discharge before or at

the time of the removal of the goods into the custody of

the person entitled to delivery thereof under the contract

of carriage, such removal shall be prima facie evidence of

the delivery by the carrier of the goods as described in

the bill of lading. If the loss or damage is not apparent,

the notice must be given within three days of the delivery.

Said notice of loss or damage may be endorsed upon the

receipt for the goods given by the person taking delivery

thereof.

The notice in writing need not be given if the state of

goods has at the time of their receipt been the subject

of joint survey or inspection.

In any event the carrier and the ship shall be discharged

from ali liability in respect of loss or damage unless suit

is brought within one year after delivery of the goods

or the date when the goods should have been delivered:

Provided, That if a notice of loss or damage, cither ap-

parent or concealed, is not given as provided for in this

section, that fact shall not effect or prejudice the right of

the shipper to bring suit within one year after the de-

livery of the goods or the date when the goods should

have been delivered.

In the case of any actual or apprehended loss or damage

the carrier and the receiver shall give all reasonable

facilities to each other for inspecting and tallying the

goods.

(7) After the goods are loaded the bill of lading to be

issued by the carrier, master, or agent cf the carrier to the

— A-76 —

shipper shall, if tue shipper so demands, be a ‘‘shipped”’

bill of lading: Provided, That if the shipper shail have

previously taken up any document of title to such

goods, he shall surrender the same as against the issue

of the ‘‘shipped’’ bill of lading, but at the option of the

carrier such document of title may be noted at the port

of shipment by the carrier, master, or agent with the

name or names of the ship or ships upon which the goods

have been shipped and the date or dates of shipment, and

when so noted the same shall for the purpose of this sec-

tion be deemed to constitute a ‘‘shipped’’ bill of lading.

(8) Any clause, covenant, or agreement in a contract

of carriage relieving the carrier or the ship from liability

for loss or damage to or in connection with the goods,

arising from negligence, fault, or failure in the duties and

obligations provided in this section, or lessening such li-

ability otherwise than as provided in this act, shall be

null and void and of no effect. A benefit of insurance in

favor of the carrier, or similar clause, shall be deemed to

be a clause relieving the carrier from liability. (46 U. S. C.

1303).

Rights and Immunities.

Sec. 4. (1) Neither the carrier nor the ship shall be

liable for loss or damage arising or resulting from un-

seaworthiness uniess caused by want of due diligence on

the part of the carrier to make the ship seaworthy, and

to secure that the ship is properly manned, equipped, and

supplied, and to make the holds, refrigerating and cool

chambers, and all other parts of the ship in which goods

are carried fit and safe for their reception, carriage, and

preservation in accordance with the provisions of para-

graph (1) of section 3. Whenever loss or damage has re-

sulted from unseaworthiness, the burden of proving the

exercise of due diligence shall be on the carrier or other

persons claiming exemption under this section.

— A-77 —

(2) 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;

(b) Fire, unless caused by the actual fault or privity

of the carrier;

(c) Perils, dangers, and accidents of the sea or other

navigable waters;

(d) Act of God;

(e) Act of war;

(f) Act of public enemies;

(g) Restraint or restraint of princes, rulers, or people,

or seizure under legal process;

(h) Quarantine restrictions;

(i) Act or omission of the shipper or owner of the

goods, his agent or representative;

(j) Strikes or lockouts or stoppage or restraint of labor

from whatever cause, whether partial or general; Pro-

vided, That nothing herein contained shall be construed to

relieve a carrier from responsibility for the carrier’s own

acts;

(k) Riots and civil commotions;

(1) Saving or attempting to save life or property at

sea;

(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;

(o) Insufficiency or inadequacy of marks;

ST

EE is TSE RE URINAIRE gO Pra DG eit RY Til pO I AS va adie

inward sity cit Bios.

— A-78 —

(p) Latent defects not discoverable by due diligence;

and

(q) Any other cause arising without the actual fault

and privity of the carrier and without the fault or neglect

of the agents or servants of the carrier, but the burden

of proof shall be on the person claiming the benefit of

this exception to show that neither the actual fault or

privity of the carrier nor the fault or neglect of the agents

or servants of the carrier contributed to the loss or dam-

age.

(3) The shipper shall not be responsible for loss or

damage sustained by the carrier or the ship arising or

resulting from any cause without the act, fault, or neglect

of the shipper, his agents, or his servants.

(4) Any deviation in saving or attempting to save life

or property at sea, or any reasonable deviation shall not

be deemed to be an infringement or breach of this act or

of the contract of carriage, and the carrier shall not be.

liable for any loss or damage resulting therefrom: Pro-

vided, however, That if the deviation is for the purpose

of loading or unloading cargo or passengers it shall, prima

facie, be regarded as unreasonable.

(5) Neither the carrier nor the ship shall in any event

be or become liable for any loss or damage to or in con-

nection with the transportation of goods in an amount

exceeding $500 per package lawful money of the United

States, or in case of goods not shipped in packages, per

customary freight unit, or the equivalent of that sum in

other currency, unless the nature and value of such goods

have been declared by the shipper before shipment and

inserted in the bill of lading. This declaration, if em-

bodied in the bill of lading, shall be prima facie evidence,

but shall not be conclusive on the carrier.

By agreement between the carrier, master, or agent of

the carrier and the shipper another maximum amount

—

— A-79 —

than that mentioned in this paragraph may be fixed: Pro-

vided, That such maximum shall not be less than the figure

above named. In no event shall the carrier be liable for

more than the amount of damage actually sustained.

Neither the carrier nor the ship shall be responsible in

any event for loss or damage to or in connection with the

transportation of the goods if the nature or value thereof

has been knowingly and fraudulently misstated by the

shipper in the bill of lading.

(6) Goods of an inflammable, explosive, or dangerous

nature to the shipment whereof the carrier, master or

agent of the carrier has not consented with knowledge

of their nature and character may at any time before

discharge be landed at any place or destroyed or rendered

innocuous by the carrier without compensation, and the

shipper of such goods shall be liable for all damages and

expenses directly or indirectly arising out of or resulting

from such shipment. If any such goods shipped with

such knowledge and consent shall become a danger to the

ship or cargo, they may in like manner be landed at any

place or destroyed or rendered innocuous by the carrier

without liability on the part of the carrier except to

general average, if any. (46 U. S. C. 1304).

Surrender of Rights and Immunities and Increase

of Responsibilities and Liabilities.

Sec. 5. A carrier shall be at liberty to surrender in

whole or in part all or any of his rights and immunities

or to increase any of his responsibilities and liabilities

under this act, provided such surrender or increase shall

be embodied in the bill of lading issued to the shipper.

The provisions of this act shall not be applicable to

charter parties; but if bills of lading are issued in the

case of a ship under a charter party, they shall comply

with the terms of this act. Nothing in this act shall be

in ee ene te ee oy

ae |

SS eRe a > o> UE Cee ee . . .

A Se A ee EE iz pry etn Ae po Gt Sites es

— A-80 —

held to prevent the insertion in a bill of lading of any

lawful provision regarding general average. (46 U. S. C.

1305).

Special Conditions.

Sec. 6. Notwithstanding the provisions of the preced-

ing sections, a carrier, master or agent of the carrier and

a shipper shall, in regard to any particular goods be at

liberty to enter into any agreement in any terms as to

the responsibility and liability of the carrier for such

goods, and as to the rights and immunities of the carrier

in respect of such goods, or his obligations as to sea-

worthiness (so far as the stipulation regarding seaworthi-

ness is not contrary to public policy), or the care or dili-

gence of his servants or agents in regard to the loading,

handling, stowage, carriage, custody, care, and discharge

of the goods carried by sea: Provided, That in this case

no bill of lading has been or shall be issued and that the

terms agreed shall be embodied in a receipt which shall

be a nonnegotiable document and shall be marked as such.

Any agreement so entered into shall have full legal ef-

fect: Provided, That this section shall not apply to ordi-

nary commercial shipments made in the ordinary course

of trade but only to other shipments where the character

or condition of the property to be carried or the circum-

stances, terms, and conditions under which the carriage

is to be performed are such as reasonably to justify a

special agreement. (46 U. S. C. 1306).

Agreement as to Liability Prior to Loading or

After Discharge.

Sec. 7. Nothing contained in this act shall prevent a

carrier or a shipper from entering into any agreement,

stipulation, condition, reservation, or exemption as to the

responsibility and liability of the carrier or the ship for

—- A-81 —

the loss or damage to or in connection with the custody

and care and handling of goods prior to the loading on

and subsequent to the discharge from the ship on which

the goods are carried by sea. (46 U. S. C. 1307).

Rights and Liabilities Under Other Enactment.

Sec. 8. The provisions of this act shall not affect the

rights and obligations of the carrier under the provisions

of the Shipping Act, 1916, or under the provisions of sec-

tions 4281 to 4289, inclusive, of the Revised Statutes of

the United States, or of any amendments thereto; or un-

der the provisions of any other enactment for the time

being in force relating to the limitation of the liability of

the owners of seagoing vessels. (46 U. S. C. 1308).

Discrimination Between Competing Shippers.

as permitting a common carrier by water to discriminate

between competing shippers similarly placed in time and

circumstances, either (a) with respect to their right to

demand and receive bills of lading subject to the pro-

visions of this act; or (b) when issuing such bills of lad-

ing, either in the surrender of any of the carrier’s rights

and immunities or in the increase of any of the carrier’s

responsibilities and liabilities pursuant to section 5, title

I, of this act; or (c) in any other way prohibited by the

Sec. 9. Nothing contained in this act shall be construed

Shipping Act, 1916, as amended. (46 U. S. C. 1309).

Weight of Bulk Cargo.

Sec. 11. Where under the customs of any trade the

weight of any bulk cargo inserted in the bill of lading is a

weight ascertained or accepted by a third party other than

the carrier or the shipper, and the fact that the weight is

so ascertained or accepted is stated in the bill of lading,

then, notwithstanding anything in this act, the bill of lad-

oe Nera cto ert sR woe er OURO SKE Le ea UP AP

— A-82 =

AO AE! ARLE AAA LBI d h Liy ly aitlo UA aah ss ch eA a otpat at: A bo >

A Rim 0

ing shall not be deemed to be prima facie evidence against

the carrier of the receipt of goods of the weight so in-

serted in the bill of lading, and the accuracy thereof at

the time of shipment shall not be deemed to have been

guaranteed by the shipper. (46 U. S. C. 1310).

Liabilities Before Loading and After Discharge; Effect on

Other Laws.

Sec. 12. Nothing in this act shall be construed as super-

seding any part of the act entitled ‘‘An act relating to

navigation of vessels, bills of lading, and to certain obliga-

tions, duties, and rights in connection with the carriage of

property’’, approved February 13, 1893, or of any other

law which would be applicable in the absence of this act,

insofar as they relate to the duties, responsibilities, and

liabilities of the ship or carrier prior to the time when the

goods are loaded on or after the time they are discharged

from the ship. (46 U. S. C. 1311).

Scope of Act; ‘‘United States’’; ‘‘Foreign Trade.’’

Sec. 13. This Act shall apply to all contracts for car-

riage of goods by sea to or from ports of the United

States in foreign trade. As used in this act the term

‘‘United States’’ includes its districts, territories, and

possessions: Provided, however, That the Philippine Leg-

islature may by law exclude its application to transporta-

tion to or from ports of the Philippine Islands. The term

‘‘foreign trade’? means the transportation of goods be-

tween the ports of the United States and ports of foreign

countries. Nothing in this act shall be held to apply to

contracts for carriage of goods by sea between any port

of the United States or its possessions, and any other port

of the United States or its possessions: Provided, how-

ever, That any bill of lading or similar document of title

which is evidence of a contract for the carriage of goods

—" an

by sea between such ports, containing an express state-

ment that it shall be subject to the provisions of this act,

shall be subjected hereto as fully as if subject hereto by

the express provisions of this act: Provided further, That

every bill of lading or similar document of title which is

evidence of a contract for the carriage of goods by sea

from ports of the United States, in foreign trade, shall

contain a statement that it shall have effect subject to the

provisions of this act. (46 U. S.C 1312).

Suspension of Provisions by President.

Sec. 14. Upon the certification of the Secretary of Com-

merce that the foreign commerce of the United States in

its competition with that of foreign nations is prejudiced

by the provisions, or any of them, of title I of this act, or

by the laws of any foreign country or countries relating

to the carriage of goods by sea, the President of the United

States may, from time to time, by proclamation suspend

any or all provisions of title I* of this act for such periods

of time or indefinitely as may be designated in the proc-

lamation. The President may at any time rescind such sus-

pension of title I hereof, and any provisions thereof which

may have been suspended shall thereby be reinstated and

again apply to contracts thereafter made for the carriage

of goods by sea. Any proclamation of suspension or rescis-

sion of any such suspension shall take effect on a date

named therein, which date shall be not less than ten days

from the issue of the proclamation.

Any contract for the carriage of goods by sea, subject

to the provisions of this act, effective during any period

when title I hereof, or any part thereof, is suspended, shall

be subject to all provisions of law now or hereafter ap-

plicable to that part of title I which may have thus been

suspended. (46 U. S. C. 1313).

*® Secs. 1301-1308.

—

Effective Date; Retroactive Effect.

Sec. 15. This act shall take effect ninety days after the

date of its approval; but nothing in this act shall apply

during a period not to exceed one year following its ap-

proval to any contract for the carriage of goods by sea,

made before the date on which this act is approved, nor to

any bill of lading or similar document of title issued,

whether before or after such date of approval in pur-

suance of any such contract as aforesaid. (46 U. S. C.

1314).

Short Title.

Sec. 16. This act may be cited as the ‘‘Carriage of Goods

by Sea Act.’’ (46 U. S. C. 1315).

— A-85 —

APPENDIX E.

THE HARTER ACT.

(U. 8. Code, Title 46, §§ 190-195.)

[Feb. 13, 1893.]

Sec. 1. It shall not be lawful for the manager, agent,

master or owner of any vessel transporting merchandise

or property frum or between ports ot the United States

and foreign ports to insert in any bill of lading or ship-

ping document any clause, covenant, or agreement

whereby it, he, or they shall be relieved from liability for

loss or damage arising from negligence, fault, or failure

in proper loading, stowage, custody, care, or proper de-

livery of any and all lawful merchandise or property com-

mitted to its or their charge. Any and all words or clauses

of such import inserted in bills of lading or shipping re-

ceipts shall be nuil and void and of no effect.

Sec. 2. It shall not be lawful for any vessel transport-

ing merchandise or property from or between ports of the

United States of America and foreign ports, her owner,

master, agent or manager to insert in any bill of lading

or shipping document any covenant or agreement whereby

the obligations of the owner or owners of said vessel to

exercise due diligence properly equip, man, provision, and

outfit said vessel, and to make said vessel seaworthy and

capable of performing her intended voyage, or whereby

the obligations of the master, officers, agents, or servants

to carefully handle and stow her cargo and to care for

and properly deliver same, shall in any wise be lessened,

weakened, or avoided.

Sec. 3. If the owner of any vessel transporting mer-

chandise or property to or from any port in the United

ER MR ATCT ROY ARR BER IN

—— -

— A-86 —

States of America shal! exercise due diligence to make the

said vessel in all respects seaworthy and properly manned,

equipped, and supplied, neither the vessel, her owner or

owners, agen!, or charterers shall become or be held re-

sponsible for damage or loss resulting from faults or er-

rors in navigation or in the management of said vessel,

nor shall the vessel, her owner or owners, charterers,

agent, or master, be held liable for losses arising from

dangers of the sea or other navigable waters, acts of God,

or public enemies, or the inherent defect, quality, or vice

of the thing carried, or from insufficiency of package, or

seizure under legal process, or for loss resulting from any

act or omission of the shipper or owner of the goods, his

agent or representative, or from saving or attempting to

save life or property at sea, or from any deviation in ren-

dering such service.

Sec. 4. It shall be the duty ef the owner or owners, mas-

ters, or agent of any vessel transporting merchandise or

property from or between ports of the United States and

foreign ports to issue to shippers of any lawful merchan-

dise a bill of lading, or shipping document, stating, among

other things, the marks necessary for identification, num-

ber of packages, or quantity, stating whether it be car-

rier’s or shipper’s weight, and apparent order or condi-

tion of such merchandise or property delivered to and

received by the owner, master, or agent of the vessel for

transportation, and such document shall be prima facie

evidence of the receipt of the merchandise therein de-

scribed.

See. 5. For a violation of any of the provisions of this

act the agent, owner, or master of the vessel guilty of

such violation, and who refuses to issue on demand the

bill of lading herein provided for, shall be liable to a fine

not exceeding two thousand dollars. The amount of the

fine and costs for such violation shall be a lien upon the

~ ho

vessel, whose agent, owner, or master is guilty of such

violation, and such vessel may be libeled therefor in any

district court of the United States, within whose juris-

diction the vessel may be found. One-half of such penalty

shall go to the party injured by such violation and the

remainder to the Government of the United States.

Sec. 6. This act shall not be held to modify or repeal

sections forty-two hundred and eighty-one, forty-two hun-

dred and eighty-two, and forty-two hundred and eighty-

three of the Revised Statutes of the United States, or

any other statute defining the liability of vessels, their

owners, or representatives.

Sec. 7. Sections one and four of this act shall not

apply to the transportation of live animals.

—s

APPENDIX fF.

June 1, 1962.

Captain M/S ‘‘HEINZ HORN’’

c/o L. K. Cofer

P. O. Box 192

Balboa, Canal Zone —

Dear Sir:

As per advices we have received from New York, we

understand that you are scheduled to depart from Maya-

guez Monday afternoon, June 4. In accordance with our

charter, we are taking delivery of the ship upon dropping

pilet at Mayaguez. We wired you today advising that

you are to proceed to Puerto Bolivar, Ecuador to load

cargo of bananas for Mobile, Alabama U. S. A.

Our agent in the Canal Zone who will handle your transit

both ways through the Canal is L. K. Cofer. He has a

radiotelephone, therefore you can contact him the day

before your arrival at Christobal and Balboa giving him

your ETA in order that he may arrange for speedy pas-

sage through the Canal.

Our connection in Puerto Bolivar who will take care

of loading the vessel is Jose Turner of Comercial Latino-

americana S.A. whose address is P. O. Box 33 Machala,

El Oro, Ecuador. For your information, Machala is ap-

proximately three to five miles from Puerto Bolivar where

you will load. Although these people are experienced in

the loading of bananas, we. desire you to see that your

ship is loaded properly.

We will load both bananas in stems covered with poly-

ethylene bags and in 40 pound cardboard cartons (or

boxes). Upon loading you will notice that the polyethylene

bags have approximately 14” ventilation holes on 3” to 4”

eenters. The cardboard cartons, are as you will notice,

— A-89 —

ventilated both top and bottom. Also has four large

ventilation holes on both sides and in addition has hand

holes at the end. We have been loading these boxes on

our own vessel, MARTHA ANNE, and our experience in

carrying the fruit in boxes has been very good, therefore,

you should have no difficulties providing you follow our

instructions.

Be sure and instruct your engineers to see that the

vessel “3 precooled before loading. We desire you to

maintain a 54-55 degree pulp temperature of the bananas

on your trip from Bolivar to Mobile. We fully appreciate

that in view of the fact the pulp temperature of the

bananas when they are loaded will be considerably higher

than this. That it will take you anywhere from 18 to 30

hours to pull down your fruit whereby it will have a

temperature of 54 to 55 degrees. We also realize that you

have ample refrigeration, in fact enough for deep freeze,

therefore, do not be in a hurry to reduce the temperature

of your fruit after loading and blow real cold air through

your system.

Under no circumstances after you finish loading should

your delivery air be below 52 degrees at anytime during

the trip. It would be better if you would let this delivery

air be between 52 and 53 degrees. Please understand this

low of 52-53 degrees also applies to the reduction period

which we estimate will be anywhere from 18 to 30 hours.

Please remember to instruct your engineers to be very

careful and not chill this fruit. Tell them that it is possible

to sell ripe fruit whereas chilled fruit is worthless.

We have scheduled you for loading in Puerto Bolivar

either the 12th or 13th ail according to your arrival time

there.

When you depart from Balboa for Puerto Bolivar, our

agent, L. K. Cofer, is suppose to wire Comercial Latino-

americana in Machala giving them your departure from

SAT OA OTE ETE ORE

pADPR WY Dts AQIS Sat gente Rs “Tena

PLE LOPLI, BONE Pt OER, Vr Se

AO NAO OMe

POM LOI

oor ?

— A-90 —

Balboa and your ETA Puerto Bolivar. Normally this trip

should take you about 65 to 68 hours. Be sure and remind

the agent to send this wire to the people at Machala.

On your departure from Puerto Bolivar the Comercial

Latinoamericana will wire us giving your sailing time,

manifest, ETA at Balboa and ETA Mobile. They will also

wire Cofer at Balboa giving him your ETA at Balboa.

Please remind Comercia! Latinoamericana to send these

wires when you depart.

When you depart from Cristobal coming to Mobile, our

agent, Cofer, is suppose to wire us in Mobile giving your

departure from Christobal and your ETA Mobile. Again

remind Cofer to send this cable. Our cable address which

he already knows is ALFRUCO.

As soon as possible after you depart from Christobal

call us on the radiophone. Our phone numbers are as.

follows—Mobile, Alabama:

Office Hemlock 8-4561

Residence—J. R. Atkins 473-7287

Residence—E. H. Haas 479-5526

Again let me remind you to instruct your engineers

that we desire them to maintain a pulp temperature of

54-55 degrees on the bananas on the trip to Mobile. Also

under no circumstances, even though his reduction period

may take a little longer, blow delivery air lower than 52-53

degrees on the fruit.

Yours very truly,

CIA De Navegacion

Fruco SA.

J. R. Atkins

JRA/me

— A-9i —

APPENDIX G.

(Letterhead of German Consulate General,

New York, N. Y. 10022.)

V 2-82/6 July 22, 1968

Lamorte, Burns & Co., Ine.

26 Broadway,

New York, N. Y. 10004

Attention: Mr. August C. Burns

Re: MV ‘“‘HEINZ HORN”? and MV ‘‘MARIE HORN’”’

Sir:

I thank you very much for your letter—ACB/ca—of

July 17, 1968.

The MV ‘‘HEINZ liORN”’ as weil as the MV ‘‘MARIE

HORN”’’ belongs to the category of regular freighters.

Both vessels are relatively small, namely 1138 gross tons,

607 net tons or 3223 cubic meters,

The respective German Code, the ‘‘Verordnung iiber

die Besetzung der Kauffahrteischiffe mit Kapitiinen und

Schiffsoffizieren (Schiffsbesetzungsordnung)’’ of June 29,

193i (last version of March 1, 1966) requires a Master

and only two Mates fui vessels of that class.

A copy of said Code and an official duplicate of this

letter are attached for your convenience. Unfortunately

there is no English edition available. Paragraph 10, See-

tion 2 calls for special attention.

Hoping tha. this letter answers your questions, I re-

main,

very truly yours,

(Seal) G. Hauptmann,

G. Hauptmann.

EIS! RELL, OLE ETI LI SOLE I EL

PET SS ETH Ye

se

§ 105

Beseizung der Schiffe in der groben Fahrt.

a) Kapitin und Seestcuerleuie: In der groben Fahrt

mub der Kapitan ein Befihigungszeugnis A 6 besitzen.

Neben dem Kapitan sind Schiffe von nicht mehr als

2000cbm Bruttoraumgchalt mit einem, Schiffe von mehr

als 2000 ecbm Bruttoraumgchalt mit zwei und Fahrgast-

schiffe jeder Art mit drei Seesieuerleuten zu_besetzen.

Unofficial Translation

§ 10°

Manning of ships in all ocean travel

(a) Captain and Mates: In the all ocean travel the

Captain must possess a qualification ticket A 6,

Besides the Captain ships of not more than 2000 cubic-

meter gross space contents are to be manned with one,

ships of more than 2000 chm gross space contents with

two, and passenger ships of every kind with three mates.

— A-93 —

APPENDIX H.

A. EXTRACTS FROM RELEVANT CHARTER PARTY.

Clause 8. That the Captain shall prosecute his voyages

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