Pan-American Petroleum & Transport Co. v. United States

27 F.2d 684 (1928)

PAN-AMERICAN PETROLEUM & TRANSPORT CO.
v.
UNITED STATES.

No. 306.

Circuit Court of Appeals, Second Circuit.

July 9, 1928.

Charles H. Tuttle, U. S. Atty., of New York City (Horace M. Gray, Sp. Asst. U. S. Atty., of New York City, of counsel), for the United States.

Burlingham, Veeder, Masten & Fearey, of New York City (C. B. Manley O'Kelley and Chauncey I. Clark, both of New York City, of counsel), for appellee.

Before MANTON, L. HAND, and SWAN, Circuit Judges.

L. HAND, Circuit Judge (after stating the facts as above).

We held in Clyde S. S. Co. v. N. Y., 20 F.(2d) 381, that, when the owner waits to make collision repairs until the yearly overhaul, no detention damage may be allowed. This is because, as the overhaul is necessary in any event, so much of the ship's time is bound to be lost, regardless of the collision. If so, the owner has lost no profits, for he could have earned nothing during the lay-up. What we added in that case, as to the rule when owner's repairs are made at the same time as collision repairs, presupposed that the last were immediately necessary. The Bergen, 128 F. 920 (C. C. A. 2), stands only for the doctrine that in the case of necessary collision repairs the detention damage must be limited to such time as is required for them alone, an obvious conclusion.

The District Court thought that it made no difference whether the collision repairs were in fact immediately necessary, so long as the owner believed it prudent to make them at the time. We agree, provided the owner's conclusion be well founded; that is to say, the tort-feasor may not complain if, in the situation in which the collision has placed the owner, he is reasonably apprehensive as to the seaworthiness of his ship. No one is obliged to take chances in the interest of one who has wronged him. However, it seems to us equally clear that an owner may not seize the opportunity offered him by a collision to advance his periodic overhaul, and make owner's and collision repairs together, when the ship remains fit for her service as she rides. So to hold would put in his hands the option at his pleasure to throw the loss upon the tort-feasor and profit by the wrong. This is entirely plain in cases where the damage is of a trivial kind, which nobody could honestly suppose to impair the ship's capacity.

In the case at bar the stipulation is that the collision repairs were not necessary to the ship's seaworthiness, but that the owner thought it advisable to make them at once. Strictly the measure of damages in collision is the difference in value between the ship before and after the collision, but the cost of the necessary repairs and the loss of earnings while they are being made have long been regarded as its equivalent. As to the loss of earnings, it may be that the owner makes a prima facie case when he proves his actual loss by reason of the lay-up. In respect of repairs this has been held in another connection. Mayor, etc., of N. Y. v. Second Ave. R. R., 102 N.Y. 572, 577, 7 N.E. 905, 55 Am. Rep. 839; McKegney v. Illinois Surety Co., 180 A.D. 507, 167 N. Y. S. 843. In addition, the stipulation answers the possibility that the libelant might not honestly have thought it necessary to select the season which he did; so much we may attribute to the term "advisable." Nevertheless it remains true that the lay-up was in fact unnecessary, since the ship was seaworthy as she sailed, which means that she was reasonably fit for her service.

The test in such cases is, not the judgment of the victim of the wrong, but the objective standard of a reasonable person. The Baltimore, 8 Wall. 377, 385, 388, 19 L. Ed. 463. Conceivably it may be possible that a reasonable owner might think that a seaworthy ship should be laid up for repairs before the season for her overhaul, but the presumption appears to us otherwise. The eventual burden of proof rests upon the owner, and, although his selection of the season may possibly make a prima facie case, it is answered by her actual seaworthiness, which, unexplained, condemns his judgment. He must go further, and show that it did not, and this he has not done.

So we think that the libelant has failed to prove that the detention damages were the proximate result of the collision, and it becomes unnecessary to decide whether it made a difference that owner's repairs went along at the same time. However, since the result depends upon a nice regard to the terms of the stipulation, probably drawn without the distinction precisely in mind, we will remit the cause to the District Court, with leave, if so advised, to relieve the libelant from it. Upon that question we wish, however, expressly to say that we do not indicate any opinion one way or the other.

Decree reversed.