Steamship Knutsford Co. v. Barber & Co.

LEARNED HAND, District Judge ‘-(after stating the facts as above). [1-3] We quite agree with the learned District Court that within the language of article 16 it is not necessary that the damage should be “structural” in the sense that the frame of the ship must be injured, so as to prevent her “working.”. In this case the buckling of the fore and aft bulkhead was not such damage, and the charterer’s right, under article 16, must rest upon the fact that the holds had to be cleaned before the ship was in seaworthy condition and that tire charred bulkhead had to be removed. We further agree that the ship was not again in efficient state to resume her services until the morning of the 23d. Therefore, if article 16 had read that the charterer should Hot pay while the ship was in such a damaged condition as prevented her “working,” we should have no difficulty in agreeing that during the whole of that period the hire ceased. However, in reaching such a result under the actual terms of this charter party, we should have to disregard the words, “in the event of loss of time,” which were certainly intended to provide indemnity, if only partial indemnity, to the charterer. It follows that, if the cargo had been removed, not because of any damage to itself, but only to give access to the necessary repairs, then, as indeed Mr. Hickox admitted, all the time until July-23d would have been on the owner’s account, but that, if the cargo had to be removed in any event for examination and restowage, the time taken for that purpose was not lost by reason of damage.to the ship. The evidence is far from clear, but it sufficiently appears that the sugar was taken out because it had to be. The hold had been flooded, and the charterer must examine and restow it before the ship could proceed. The same apparently was true of the cases of machinery, and possibly of the carbon, too, although the record is silent as to the last. But as regards the steel billets and the spelter it must be assumed that they-were not injured. These being the circumstances, we think that the time necessary to examine and restow the sugar was not “loss of time” within the meaning of article 16, but that the charterer was using the ship at that time for a purpose which, though it necessarily delayed her, was still his own, and was not due to any “damage” to the ship. It seems to us that article 16 does not justify a deduction during that period, or until the charterer began to lose the use of the ship after he again wished to load her. Had the spelter'and billets been stowed at the bottom of the hold, [869] in such wise that it had to be discharged before the bilges, limbers, etc., could be cleared, or the charred remains of the wooden bulkhead removed, then the ship would have gone off hire in our judgment from the time the discharge of the cargo had reached the spelter and billets. The rest of the time would have been lost only because it then became necessary to remove that portion, of the cargo to gain access to the damaged parts. It would have been upon the owner’s account. So far as we can gather from the somewhat fragmentary proof, the last day lost because of the removal of the sugar was the 21st, on which the repairs began. The only question that can arise, therefore, is of the 22d, for on the morning of the 23d a certificate was given to the ship, showing that she was again “in an efficient state to resume her service.” The only evidence of what was done by the charterer on the 22d is contained in the testimony of the master, who says that cases of machinery were taken out for examination on the 21st and 22d. If this is to be understood as meaning that the 22d as well as the 21st were necessary for tlie purpose; of examining the cases of machinery — some of which were later taken off the ship — the ship would not have been off hire at all. It is impossible upon such a meager record to tell whether this was the reason, or whether the unloading of the cases had proceeded in a leisurely way because in any case the ship must be laid up for repairs on the -22d. The burden of proof to bring article 16 into operation is upon the charterer, and on this record it, strictly speaking, fails to sustain that burden. However, since the decree is to be modified, a reference may be taken, if the parties cannot agree, to ascertain at what time on the 21st the charterer had completed so much of the discharge of cargo as was necessary for its examination before proceeding to reload, had the ship then been in an efficient stale to resume her service. As we have already indicated, all the time after 9 o’clock on the morning of the 23d we charge to the charterer’s account. As held in Smailes & Son v. Evans & Reid [1917] 2 K. B. 54, the clause does not provide full indemnity to the charterers, but only until such time as the vessel is in efficient condition for “working.” We are in full accord with the judgment of Mr. Justice Bailhache in that case. Finally, there is the question whether the ship’s holds were clear of water by 7 p. m. on July 17th, or whether the failure of the stevedore to work on the 18th was because they were not so cleared. The master says the holds were cleared, with the exception of some water in the bilges. The stevedore, Spillane, says that he did not believe the men would have gone into the holds on Sunday, the 18th. Yet at most there were only 6 inches of water on his own statement, and such a condition scarcely supports his belief. We think that the respondent has not borne the issue on this point. In Hogarth v. Miller, [1891] A. C. 48, it was held that, while 'the ship was being used for discharge, she was on hire though she was not in fact efficient to resume her service, because her machinery was broken down. There the ship had broken down at Las Palmas, and was towed from there to Harburg, her first port of discharge, [870] where the charterer discharged her in part. The charterer was excused from paying hire, during the period of the towage, and held during the period of discharge. The period of towage was not, indeed, lost time; certainly all of it was not; but the towage charge had been included as an expense in general average and was treated as a separate venture. We understand the case as m'eaning that the damage “prevented the working of the vessel,” though-possibly that is not wholly clear from the judgments delivered. In Lake Steam Shipping Co. v. Bacon (D. C.) 129 Fed. 819, affirmed in this court without opinion in 145 Fed. 1022, 74 C. C. A. 476, the facts were substantially the same as in Hogarth v. Miller, except that the ship made port under her own steam in a crippled condition. The distinction regarding the towage charge above noted in Hogarth v. Miller seems not to have been observed, and it must be owned that the result is somewhat inconsistent in allowing a deduction for loss of time due to crippled power in steaming, while refusing to allow it for the period of discharge. Moreover, the allowance appears to us to be in face of the decision of the District Court here, which this court unanimously accepts, that the allowance is to be made only in case the breakdown prevents working of the vessel. However that may be, the allowance was refused during the period of discharge, and we see no distinction between that and the period of discharging the cargo for examination in the case at bar. The Canadia, 241 Fed. 233, 154 C. C. A. 153 (C. C. A. 3d Cir.), squarely supports our ruling. In that case the vessel was held to be off hire during the period of a fire, but on hire while being discharged, though in an unseaworthy condition, being available for the purposes required by the charterer. We see no substantial difference between that form of expression and the one which we somewhat prefer; i. e., that the charterer has lost no time because of the damage. The ruling reported in the note to The Santona (C. C.) 152 Fed. 520, made by Judge Choate while acting as arbitrator, does not seem to us to bear out the libelant’s contention that a damage such as the Knutsford suffered did not bring her within the breakdown clause. We understand the damage in that case to have been altogether to the cargo, except for some slight repairs, which could safely have been postponed. We do not regard the damage done to the Knutsford as of that class, for, in spite of the master’s statement to the contrary, the surveyor clearly did not think her seaworthy without some repairs. [4, 5] As to the first point, we agree with the learned District Court that article 16 by its language precludes tacking together periods of less than 24 hours. We also agree as to the second point, that the vessel’s reduced speed, due to the inefficiency of machinery, is not covered by the language “preventing the working of the vessel.” These points are too obvious to require extended discussion. The decree will therefore be modified, by allowing the owner full-hire, unless. the charterer shall choose to -take a reference as above indicated. Costs of this appeal to the appellant.