Respondents Brief — American Trading Transportation Co. v. Escobar

LIBRARY ~ Supreiad Court oR

SUPREME COURT, U. & Miata Wests

IN THE

Supreme Court of the United Shalt \~ :

Octoser Term, 1974

No. 74—1191

ILIGAN INTEGRATED STEEL MILLS, INC., CON-

TINENTAL INSURANCE COMPANY, STAND-

ARD MARINE INSURANCE COMPANY, LTD.,

FIREMAN’S FUND INSURANCE COMPANY,

COMMERCIAL UNION INSURANCE COMPANY

OF NEW YORK, EMPLOYERS COMMERCIAL

UNION INSURANCE COMPANY, and AETNA

INSURANCE COMPANY,

Petitioners,

—against—

SS JOHN WEYERHAEUSER, her engines, boilers, etc.,

WEYERHAEUSER COMPANY, and NEW YORK

NAVIGATION COMPANY, INC.,

Respondents.

On PETITION FOR A WRIT OF CERTIORARI TO THE

UNITED STATEs Circuit Court oF APPEALS FOR

SEcoND CIRCUIT.

BRIEF FOR RESPONDENT WEYERHAEUSER

COMPANY IN OPPOSITION.

FREDERICK Fisu,

Counsel for Respondent

Weyerhaeuser Company,

345 Park Avenue,

New York, New York 10022.

(212) 751-6400.

Dn oe ee

veer yaaet ' a

' PAGE

OColalans DOW caunyyestire se vsdeves cicosgece 1

. ‘Question Presented .............. se eeeereeenens 2

DEE “Cita uurcpeavrctsecreeweeieerceedserrs 2

pO eT OE CE errr Ora See ee 4 :

Point I—The Decisions Below Were Clearly Cor-

GOCE ewes red cccecccsdcasecsvvrccGecrecniesic

Point 11—There Is No Conflict of Decision ...... 13 }

Point 11I—There Is No Important Question of '

aber BO v5 cc ccc eres atcestvecsatcesss 15 ¢

Cee ee cece 16 :

CASES CITED

‘

‘The CALEDONIER, 31 F. 2d 257 (2d Cir. 1929);

Cort, Gemed, Se thy oy GOO os coset as rrcansainces 14

Graver Tank & Mfg. Co., Inc. v. Linde Air Products

Co; S56 U. Bk CE i ccnvicvcess 0 cvevKice

Kish v. Taylor [1912] A. C. 604 (House of Lords). .13, 14

The MALCOLM BAXTER, Jr., 277 VU. S. 323

EP ar rae ce eeter ee atts warden ees nea e 13, 14

Monarch SS Co., Ltd. v. Karlshamns Oljefabriker

’ (A/B), [1949] A. C. 196 (House of Lords) ....13, 14

Royal Ins. Co., Ltd. v. United States, 87 F. 2d 714

Ce EG UE oro cse0s veeevetssenes eeeeas 13, 15

a 7

De ee

ii

PAGE

The TURRET CROWN, 297 Fed. 766 (2d Cir.

15G4) ; cort. denied, 264 U.S. SOl ... 2... ees 13

United States v. Wessel, Duval & Co., 115 F. Supp.

ee ee oe OM Oe hs SEE cca ich cewasss 14

The WAALHAVEN, 36 F. 2d 706 (2d Cir, 1929);

CEPR Gy Se le PE ok ee ccecacesises sic 14

The WILLDOMINO, 272 U.S. 718 (1927) ...... 13, 14

STATUTES CITED

United States Carriage of Goods by Sea Act,

ee Se een 3,4

PEE hiniaa seve dkannsaeces 3,4

OTHER SOURCES

Gilmore & Black, The Law of Admiralty, § 3-42 at

ee EEE 055 kc a wel e vem sa ka ces. cuk es 15

Prosser, Handbook of the Law of Torts, § 34 (4th

eg) a PPE UNty reine sp dake mer gb tilt Pak ien ie 15

e

. 26 ROR pO SRE GENTE OE OEY

. ‘ panei ayer WAT PE TRE WAOS SMISIOC, <i AOA SRS es

LOREAL ee LO oe

NLL KES eer |

2 yaw a

IN THE

Supreme Court of the United States

OctToser TERM, 1974

No. 74--1191

4

»

ILIGAN INTEGRATED STEEL MILts, INc., CONTINENTAL

INSURANCE COMPANY, STANDARD MARINE INSURANCE

Company, Ltp., FrreMAN’s FuNp INSURANCE Com-

PANY, COMMERCIAL UNION INSURANCE COMPANY OF

New York, Employers CoMMERCIAL UNION INSUR-

ANCE CoMPANY, and AETNA INSURANCE COMPANY,

Petitioners,

—against—

SS JoHN WEYERHAEUSER, her engines, boilers, etc.,

WEYERHAEUSER CoMPANY, and NEw YorK NAVIGATION

Company, INC.,

Respondents.

On PETITION FOR A WRIT OF CERTIORARI TO THE

Unitep STATES CrrcuIT Court OF APPEALS FOR

SECOND CIRCUIT.

BRIEF FOR RESPONDENT WEYERHAEUSER

COMPANY IN OPPOSITION.

dy.

a4

OPINIONS BELOW.

The opinion of the District Court (App. A of Peti-

tion) is reported at 372 F. Supp. 859. The opinion of the

United States Court of Appeals for the Second Circuit

(App. C of Petition) is reported at 507 F. 2d 68. :

&

SEL IPS LIL TTS FIM BI ee ee ea ee ee ELS GE as, |

2

QUESTION PRESENTED.

Whether a shipowner, who is liable to cargo interests

for failure to exercise due diligence to make its vessel sea-

worthy before and at the beginning of a voyage, is entitled

to the benefit of the $500 per package limitation provided

by the United States Carriage of Goods by Sea Act, U. S.

Code, Title 46, Section 1304(5).

STATEMENT.

This action was brought by Iligan Steel Mills, Inc. et al.

(cargo interests) against Weyerhaeuser Company, owner

of the SS JOHN WEYERHAEUSER, and against New

York Navigation Company, Inc., charterer of said vessel,

to recover $3,000,000 for wetting, rusting, contamination,

breakage and shortage of packages and pieces of steel

manufacturing and electrical supplies and equipment

shipped by Iligan from Baltimore, Maryland in December

1966 and consigned to Iligan at Iligan City, Republic of

Philippines. The Iligan cargo was stowed in Nos. 2 and 4

holds of the vessel and on deck. Other cargo for other

parties, fertilizer in bulk, destined for Korea, was stowed

in holds Nos. 1, 3 and 5. The fertilizer cargo was loaded

and stowed at Tampa, Florida subsequent to the loading of

the Iligan cargo at Baltimore. All cargo was in apparent

good order and condition when loaded and upon arrival at

Iligan City a portion of Iligan’s cargo was damaged. The

damage resulted from leakage en-route through a hole

which had developed in a sanitary line overboard discharge

valve located in No. 3 hold. Cargo contended that the ship-

owner and the charterer failed to exercise due diligence to

furnish a seaworthy ship, that they did not properly and

carefully carry, keep and care for the cargo, that they

SSE

3

accepted the shipment at a time when they had knowledge

that the vessel was grossly unseaworthy and that they knew

that the vessel, while undergoing engine repairs at Panama

Canal Zone en-route was taking an unusual quantity of

water into a cargo hold. Cargo further contended that the

conduct of shipowner and charterer was such that they

were not entitled to avail themselves of the $500 per pack-

age limitation of liability provision of the United States

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

U. S. C. § 1304(5). The shipowner contended that due

diligence had been exercised to make the ship seaworthy;

alternatively that the shipowner was entitled to the benefit

of the $500 per package limitation of COGSA, 46 U. S. C.

§ 1304(5).

The District Court found: (1) Weyerhaeuser (ship-

owner) had failed to exercise due diligence to provide a

seaworthy vessel and accordingly was liable to plaintiffs,

(2) there was no wilf-1 misconduct or wanton misconduct

on the part of Weyerhaeuser, (3) the terms of the United

States Carriage of Goods by Sea Act, 46 U. S. C. § 1300

et. seq. (COGSA) were applicable and Weyerhaeuser’s

liability limited to $500 per package of cargo, (4) New

York Navigation (charterer) was liable to Iligan (cargo)

for breach of warranty of seaworthiness, (5) New York

Navigation’s liability was also limited to $500 per package,

and (6) that New York Navigation was entitled to indem-

nity from Weyerhaeuser, including its attorneys fee and

expenses incurred in defending the action against it by

cargo.

The Court of Appeals was substantially in agreement

with the opinion of the District Court and concurred in the

statement of the facts by the District Court which it incor-

porated by reference. The findings of the District Court

that “plaintiff has not proved that Weyerhaeuser knew or

4

must have known of the unseaworthy condition of the ship”

prior to the Transpacific voyage and that “There was here

no wilful and wanton misconduct” were dispositive of the

case against Weyerhaeuser. The Court of Appeals also

adopted the disposition of the District Court of plaintiffs’

arguments against the time charterer, New York Navi-

gation Co., Inc. The judgment of the District Court was

affirmed.

ARGUMENT.

There is before the Court no issue as to Weyerhaeuser’s

(shipowner) liability for lack of due diligence to provide a

seaworthy vessel or as to Shipowner’s liability to indemnify

New York Navigation (charterer) for Charterer’s limited

liability to Cargo. Petitioners (cargo interests) do not

dispute that a Shipowner, liable by reason of lack of due

diligence, is nevertheless entitled to limitation of liability

to $500 per package under § 1304(5) of the United States

Carriage of Goods by Sea Act, 46 U. S. C. § 1300 et seq.

Their contentions are that the bill of lading (contract of

carriage) is void and the statute inapplicable. All their

contentions, including their contentions as to misrepre-

sentation, fraud and the unconstitutionality of this statute

are based on the premise that Shipowner was guilty of

deliberate, intentional, wilful and wanton misconduct (the

addition of “gross negligence” in the alternative constitutes

no additional grounds, for all relevant decisions, in refer-

ring to gross negligence, have equated it with wilful and

intentional wrongdoing). Both of the Courts below have

found as facts that Weyerhaeuser neither knew or must

have known of the unseaworthy condition of :':¢ ship and

that there was no wilful and wanton misconduct, cf. Graver

Tank & Mfg. Co., Inc. v. Linde Air Products Co., 336

ee a. |

5

U. S. 271 (1949). The thrust of Petitioners’ submission is

that these co.current findings of fact were clearly

erroneous.

POINT I.

THE DECISIONS BELOW WERE CLEARLY CORRECT.

The JOHN WEYERHAEUSER was a vessel em-

ployed in the carriage of merchandise for hire by water

and was owned and operated by Weyerhaeuser on the

voyage involved. New York Navigation Company, Inc.

was engaged in business as an ocean carrier of merchan-

dise by water for hire and chartered the JOHN WEYER-

HAEUSER. The JOHN WEYERHAEUSER, a Liberty

type steamship, built in 1944, was modified in 1961. In

the modification program of 1961 part of the cargo holds

were altered, certain bulkheads were removed and hatch

coverings were refitted; the crew quarters were stripped

down, scrapped and rebuilt. The cost of this modification

was a little more than half a million dollars.

The JOHN WEYERHAEUSER was subject to

annual inspections by the United States Coast Guard and

by the American Bureau of Shipping (hereinafter referred

to as A. B. S.) as well as to periodic special surveys and

to special surveys in the event of a casualty or when ma-

terial repairs were made. In March, 1966 the vessel under-

went a “Special Condition Survey for use by the ship-

owner’s brokers in connection with their dealings with

cargo underwriters” in which the main deck, all cargo

holds, shell plating above water, the areas particularly

subjected to corrosion, and tank top plating in all cargo

hatches, were closely examined and found in good condi-

tion; plating of numbers 1 and 3 holds gauged, bilge sys-

tem tested. operational test made of engine, boilers and

é

=

RD a a a |

6

machinery and steering gear which were fond satis-

factory, etc. The surveyor reported:

The condition of this vessel hull, holds, spaces,

machinery, pumping apparatus, boilers and equip-

ment indicates satisfactory maintenance and the

condition of this vessel is well above the average

cargo vessel of this age group.

The ship was maintained in first class operating condition.

In the conversion of 1961, lower holds numbers 2 and

3 were transformed into a common hold with a cubic capac-

ity in excess of any other hold in the vessel. With the

usual drag (draft of the vessel greater aft than forward)

drainage was into two bilge wells or “rose boxes’’ located

at the after end of the common hold, one on each side of

the vessel. These bilge wells were boxes 7 feet in width

across the ship, 18 inches deep and 18 inches long. The

top of the bilge well was flush with the cargo bearing

surface or ceiling at the bottom of the hold. Each bilge

well had a capacity of 65 to 75 gallons and could be

pumped in a reasonable short time. Two sanitary drainage

or soil lines entered No. 3 hold from overhead close to

the after bulkhead with the lines close to the skin of the

ship on either side of the vessel. Each line led to a sanitary

or storm valve several feet below the overhead. After

passing through the valve the line turned at a right angle

and passed through the skin of the ship to form an over-

board discharge. The soil line discharge valves were located

about two feet beneath the ’tween deck and about 20 feet

above the bottom of number 3 lower hold so that the

overboard outlet was not submerged until the mean draft

of the vessel reached about 25 feet 6 inches. The storm

valve contained a clapper within its body. This clapper

was not intended to be water-tight and to prevent access

" ica |

7

of water from outside into the soil line itself. It was —

designed to prevent the force of the seas outside causing :

a back up in the soil line into the toilets overhead. Irrespec-

tive of the clapper, no water could enter cargo spaces as

long as the pipes and shells of the valves were intact.

Prior to the voyage in question the JOHN WEYER-

HAEUSER made a voyage from Norfolk, Virginia to

Madras, India where her cargo of ammonium sulphate was

discharged during the period 11 August to 7 September

1966. On 7 September the vessel sailed for West Coast

ports of the United States in ballast via Singapore for

bunkers. At no time during the voyage to India and return

to Portland, Oregon did the bilges overflow. At no time

was there any entry of water into number 2-3 cargo hold.

This common hold was carefully examined upon completion

of discharge and there was no evidence of the entry of any

water. On return of the vessel to Portland there was no

indication of any leakage whatsoever into number 2-3 hold.

There was no water damage to the cargo of ammonium

sulphate carried to and delivered at Madras. The captain

believed that a pumping problem which occurred at Madras

was due to a back-up from the bilge suction line. On

August 16, September 1, 2, 9, 16 and 20, 1966 there were

continuing attention and repairs to bilge pumps, valve

chests, valve springs, suction valves and cargo hold bilge

strainers. There were no significant bilge soundings or

pumping en route from Singapore to Portland. On arri-

val at Portland in addition to generator and voyage repairs

the ship also underwent a Biennial United States Coast

Guard inspection and an A. B. S. 2nd Special Periodic

Survey No. 2 and Load Line Survey. Marine Superintend-

ent Baumgartner attended with the surveyors, although

not constantly at their side. He entered number 2-3 hold

and made an examination as to whether the vessel had sus-

tained any damage from cargo operations that had not been

&

~

EAE BE TS ST IRL IPI AIFS he Ty Te eee See

8

reported. He testified that if a sanitary line had been leak-

ing there would be a foul odor and if there had been any

leak through a body valve or a gasket there would be signs

of salt rust and corrosion running down the side of the ship.

He saw no evidence of any such leakage. As shown by all

the surveys, there was no evidence of any leakage into No. 3.

cargo space. There had been and was no report from any

vessel personnel that there was any problem in that area.

The discharge valves were in fact opened, examined and

found in good order in both 1962 and 1965. The sanitary

discharge valves were not opened in 1966, but were included

in the general visual inspections. It was found after the

casualty that the discharge valve that failed had become

wasted on the inside, but that except for the particular area

where wastage occurred, the metal in the valve was sound

and externally presented a good appearance. Both Opera-

tions Manager Mandle and Marine Superintendent Baum-

gartner were positive that at no time prior to the arrival of

the vessel at Moji enroute to Iligan City had they received

any oral or written reports about any leakage or back up of

water into No. 3 bilges.

After completing repairs, inspections ad surveys at

Portland the vessel loaded a full cargo of wet, green lumber

and sailed from Coos Bay on 31 October for Boston and

Portsmouth, Rhode Island. On several days during this

voyage there were log entries of 20 or 24 inches in one or

the other of the No. 3 bilges. On this inter-coastal voy age

the soil line discharges were either on the water line or

6 inches above. On an inter-coastal voyage, such as this,

with transit from cool climate to tropics and return to cold

climate it was normal for there to be substantial sweating

and drainage from the wet lumber. Numbers 2 and 3

were a common hold with bilge wells at the after end of

number 3 and the common hold was far greater in size than

numbers 1, 4 and 5 so that more accumulation was to be

ee

9

anticipated in the number 3 bilges. There was substantial ©

accumulation in the other holds as well, with soundings

up to 13 inches in number 1, 17 inches in number 4 and |

18 inches in number 5. The inter-coastal soundings are —

properly attributable to sweat and drainage. After com-

pleting discharge of the lumber cargo the vessel proceeded

to Baltimore where on 12 December 1966 she was delivered

by the shipowner to New York Navigation Company under

time charter for a voyage from the East coast of ‘the

United States to the Far East. At the time of delivery an

on-hire survey was conducted and further survey was made

by representatives of the National Cargo Bureau. An in-

spection of the holds was made by Captain Rikkers acting

for charterer. All cargo compartments and adjacent decks

areas were examined and were found in general good order

and condition. The hull, deck machinery, hatch covers, etc.

appeared to be in good repair and to have been well main-

tained. Prior to loading, the charterer erected a non-water-

tight wooden bulkhead between numbers 2 and 3 holds.

Loading at Baltimore commenced on 12 December and was |

completed on 16 December ; 2,000 tons of mill machinery,

factory equipment and supplies were loaded in numbers 2

and 4 lower holds and ’tween decks with 224 tons of this

amount being loaded on-deck and across numbers 2 and 4

hatches (there was no issue involving the on-deck cargo).

The cargo was shipped under New York Navigation Com-

pany form Bill of Lading.

At Baltimore bilge soundings were routine until 15

December 1966 when 18 inches were found in number 3

port bilge (the soil lines were more than 12 feet above

water level). On the day before these soundings at Balti-

more there was very heavy snow and rain requiring sus-

pension of work and the carpenters were unable to close

number 3 hatch. There were also 12 to 15 inch readings in

number 1 and 18 inches in number 5 bilges. The bilge

SOREL SSID FRPP EA IR PML ORIEN PREG OLIN OER OED FT SII RS TET TN, PATER VR DD SIE POR SEES A Rar la

10

readings at Baltimore were due to working the vessel with

open hatches during snow and rain. The vessel sailed on

16 December for Tampa, Florida where she arrived on 22

December. At Tampa the vessel on 22 and 23 December,

after a further survey of the holds, loaded in numbers 1, 3

and 5 lower holds and ’tween decks 6,996 tons of tr:ple

super phosphate in bulk for Korea. Pre-loading survey at

Tampa was conducted by the National Cargo Bureau.

After thorough inspection no moisture or traces of water

could be found. There was no indication of any leaking.

There was no smell of sewage. On 23 December 1966 the

vessel sailed from Tampa for Korea via the Panama Canal.

The vessel arrived at Cristobal, Canal Zone on 29 December

for bunkers and repairs to the main engine necessitated by

misalignment of a high pressure piston rod components and

a fractured crosshead. Engine repairs commenced on 30

December under the supervision of the American Bureau

of Shipping. Repairs were completed on 13 January 1967

and a certificate of seaworthiness was thereupon issued by

the American Bureau of Shipping.

From Baltimore to Tampa bilge soundings were normal.

At Tampa 25 tons fresh water were taken on board. The

vessel sailed on the evening of 23 December for the Canal

Zone with a mean draft of 26 feet 4 inches. Commencing

on 24 December there were soundings in excess of 18 inches

in number 3 port bilge. There were 2 inches on arrival

Cristobal, C. Z. on the morning of the 29th and 38 inches

in the afternoon while bunkering and taking on fresh water.

At this time the master tasted the bilge water and found it

fresh. Thereafter during the 14 day stay at the Canal

Zone soundings were normal except on 6 and 7 January

when fresh water was again taken on board. Trash was re-

moved from number 3 port cargo hold bilge valve on 26

December and the bilge pump rods were repacked the next

day. Further repairs were made on 28 January and 4

DORR CA tsar eee maremmnesiit ac 0 RI EPIL TLL EOE LEIS BCODS IICOTE

11

February 1967 when a broken disk guide was replaced, disk

machined and ground in and rubber lining installed. Except

as noted the number 3 port bilge soundings were normal

during the time the vessel was at the Canal. At no time

during the voyage were the soundings in the number 3

starboard bilge in excess of the depth of the bilge. The

master reasoned that the soundings in number 3 port bilge

were due to a back up of fresh water through the bilge

system during and after the taking on of fresh water. He

presumed it was coming from some place in the engine

room, that he had the problem under control through main-

tenance work performed and pumping, and that he could

continue the voyage safely from the Panama Canal.

Neither the M:ster nor the Chief Engineer nor any other

vessel personnel made any report of any problem concern-

ing leakage or pumping to the Company’s supervisory staff,

either during the previous foreign voyage, the previous

inter-coastal voyage or the voyage in question until the

vessel arrived at Moji.

On 13 January anchor was aweigh and vessel ccm-

menced transit of Panama Canal. During the 40-day trans-

Pacific passage to Moji, Japan where the vessel intended to

take bunkers, the weather was not unusually severe. Cargo

holds were inspected by the Chief Officer to the extent

permitted by the nature of the cargo stowage on 31 Decem-

ber 1966, 20 January and 3 and 13 February and found in

good condition. The vessel arrived at Moji quarantine

anchorage on 22 February. At the time of anchoring the

vessel appeared to the master to be out of trim and down

by the head. The chief mate again checked the cargo holds,

entering number 3 hold. He found that the phosphate had

settled along the forward bulkhead and the sides and that

the surface of the phosphate on the periphery of the stow

was wet. On further inspection sea water was found enter-

Teton serally

!

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pi ean is

Bex rel iA A

12

ing through a hole in the overboard discharge value of the

sanitary line which entered the port after corner of number

3 lower hold from overhead. This hole, which was about

1%” x %” in size, was located on the underside of the

horizontal portion of the valve (inboard of the clapper in

the valve). Number 2 lower hold was flooded to a depth of

13 feet so that much of the stow of cargo was submerged.

It was also apparent that a Jarge quantity of phosphate had

been carried along with the water which had entered

number 2 lower hold.

Shoreside assistance was obtained at Moji. A cement

box was installed around the leaking valve. Under water

inspections were made by divers. No cracked plate was

found and no dents or damage were found in way of

number 3 hold. No leakage through any of the shell plat-

ing or any source other than the sanitary line discharge

valve was found after discharge at Iligan or after the

return of the vessel to the United States. The vessel sailed

from Moji on 26 February and arrived at Mokpo, Korea

on 28 February. Discharge of phosphate into barges com-

menced shortly after arrival at Mokpo. On 18 March the

vessel sailed for Moji where she called briefly for bunkers

on 19 March, sailing again for Iligan on 20 March and

arriving and docking at Iligan City on the evening of 26

March.

At Iligan the vessel was attended throughout the course

uf discharge by numerous representatives of all parties

concerned. Except for the discharge valve on the port soil

line in number 3 lower hold, the hull, deck machinery, hatch

covers etc., were found to be in good repair and to have been

well maintained. The port valve was brought on deck and

examined by surveyors. The port clapper valve when in-

spected appeared sound externally, save the wasted area

around the end of the seat where the holed wasted area

had been built up by welding at Mokpo. The water and

RON TRAE LRT SOMITE TNE OEP ILLS FEN Bo =

RAAT EEG Ped ORE aeieneeiinetinneme, |

13

fertilizer in number 3 lower hold had formed a slurry which

had penetrated the temporary bulkhead between numbers 2

and 3 cargo compartments. Some of the cargo in number

2 lower hold was in good order and condition; some cargo

was cleaned and repaired at Iligan; some cargo was aban-

doned as worthless and other cargo was returned to the

United States for reconditioning and repair.

The foregoing statement of facts, fully supported by the

record, establishes that prior to departure from Tampa en

route from Baltimore to Iligan City, there was no indica-

tion of leakaye from or apparent defect in the sanitary

valve that failed, that the vessel had been well maintained

and was in apparent good condition, that there had been no

report from the vessel of any leakage from the sea into any

cargo space and that numerous, frequent and recent inspec-

tions had disclosed nothing to the contrary. The findings

of both Courts below that there was no wilful or wanton

misconduct were clearly correct.

POINT Il.

THERE IS NO CONFLICT OF DECISION.

Petitioners urge that the decision of the Court of Ap-

peals in this case is in conflict with the principles of The

WILLDOMINO, 272 U.S. 718 (1927), The MALCOLM

BAXTER, JR., 277 U. S. 323 (1928), and Monarch SS

Co., Ltd. v. Karlshamns Oljefabriker (A/B), [1949] A. C.

196 (House of Lords). There is no conflict.

Lack of due diligence, whether of the owner or the

master, to furnish a seaworthy vessel does not abrogate

the contract of carriage. The MALCOM BAXTER, JR.,

277 U. S. 323 (1928); Kish v. Taylor, [1912] A. C. 604

(House of Lords); Royal Jns. Co., Ltd. v. United States,

87 F. 2d 714 (2d Cir. 1937); The TURRET CROWN,

a

7

4

Fe Pa et SON SI ee ae

AVI

14

297 Fed. 766 (2d Cir. 1924); cert. den., 264 U. S. 591;

The CALEDONIER, 31 F. 2d 257 (2d Cir. 1929); cert.

den., 279 U. S. 865; The WAALHAVEN, 36 F. 2d 706

(2d Cir. 1929); Cert. den., 281 U. S. 747. In United

States v. Wessel, Duval & Co., 115 F. Supp. 678 at 684

(S. D. N. Y. 1953), the court restated the rule:

The United States is therefore left only with the

claim that failure to use due diligence to make the

ship seaworthy can amount to a deviation. Nothing

like such conduct on the part of a carrier has ever

been given the effect of deviation. The farthest

that I have found the courts going away from the

original conception of a departure from the ship’s

route is theif acceptance of a breach of contract for

special stowage of cargo as a deviation.

In The WILLDOMINO, supra, inexcusable deviation

_ was found by reason of geographical departure from an

_ ordinary, intended course necessitated by the wilful action

__ of the owners in directing sailing with a known insufficiency

_ of fuel for that voyage. There was no such wilful action

_ in the present case. In The MALCOLM BAXTER, JR.,

_ supra, where it was held that departure from the voyage

_ described in the bill of lading due to unseaworthiness re-

sulting from lack of due diligence was not voluntary and

' was excusable, the Court distinguished The WJILL-

- DOMINO on the ground that the knowledge and intent

_ on Sailing to deviate, found in The WILLDOMINO, was

- not present. Kish v. Taylor, supra, is in accord. Both

_ Kish vy. Taylor and The MALCOLM BAXTER, JR., were

- cited with approval in Monarch SS Co., Ltd. v. Karlshamns

_ Oljefabriker (A/B), supra, where Lord Porter said, [1948]

A. C. at page 212:

Undoubtedly deviation necessarily made to remedy

unseaworthiness does not amount to unjustifiable

PCIe EES ARATE ED

15

deviation or destroy the right to rely upon the terms

of the contract of carriage unless it is established —

that the owners knew of the vessel’s state on sailing.

In the present case, as the Court of Appeals indicated, the

findings that Weyerhaeuser neither knew or must have

known of the unseaworthiness and that there was no wilful

and wanton misconduct dictated the result that was reached.

The further discussion by the Court below of gross negli-

gence was not necessary to its decision. There was no

indication, however, that the Court intended any modifica-

tion of the doctrine that a party remains fully liable for the

consequences of wilful and intentional misconduct. There

was no statement that the rule established in this Court and

followed by the Courts below as to such conduct should be

modified. As in Royal Ins. Co. v. United States, 87 F. 2d

714 (2d Cir. 1937), on which the Court of Appeals relied,

where it was said at page 716 that for all practical pur-

poses “gross negligence” amounts to the same thing as

“deliberate intention”, consideration of gross negligence is

unnecessary. The Courts below, rather, were concerned

with the difficulties in defining and applying varying degrees

of negligence, citing Prosser, Torts, § 34 (4th ed. 1971).

As to extension of the principle of “quasi-deviation ’gen-

erally, see Gilmore & Black, Admiralty, § 3-42 at 182 (2d

ed. 1975).

POINT Ill.

THERE IS NO IMPORTANT QUESTION OF FEDERAL LAW.

There is in this case only a matter of factual determi-

nation and the application of established principles of law

relating to limitation of liability for lack of due diligence

to $500 per package of cargo.

PIL ALLIES ah T AT

16

CONCLUSION

For the foregoing reasons it is respectfully submitted

that this petition for a writ of certiorari should be denied.

Respectfully submitted,

FREDERICK FIsH,

Counsel for Respondent

Weyerhaeuser Company,

345 Park Avenue,

New York, New York 10022.

(212) 751-6400.

> April 7, 1975

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