The opinion of the court was delivered by: FORMAN
On February 15, 1941, the San Juan Shipping Company executed a charter partner with MacAndrews & Forbes Company, in which it agreed that its steamship Ponce was to be hired to transport a quantity of licorice root from Izmir, Turkey to Camden, New Jersey, on a basis of an agreed amount per ton. The charter party provided that nothing therein should 'exempt the Shipowner from liability to pay for damage to Cargo occasioned by bad stowage,' and 'by improper or insufficient dunnage.'
On August 13, 1941, the parties executed an addendum to the original charter party in which they agreed, among other things:
'1. That the quantity provided for in the original charter is hereby increased to a full cargo with the charterers option of shipping any other legal merchandise, excluding arms and munitions, explosives, dangerous and hazardous cargoes. In the event any perishable merchandise is shipped, the risk of deterioration to be for account of shippers and consignees. The charterers are entitled to the full capacity of the vessel under and on deck, the vessel being described as about 173,400 cubic feet bale space available for cargo under deck, with a total dead weight capacity of about 3300 tons (including bunkers, stores, water, etc.). In the event cargo is shipped on deck, it is at the risk of the charterers. The owner reserves the right to take aboard en route its own employees for transportation to destination.
'2. That the loading port is hereby changed from Izmir to Iskenderun, Turkey.
'3. That the hire for the vessel is a lump sum of $ 148,500, cargo to be loaded, trimmed, stowed and discharged free of expense to the steamer, charterers, however, being entitled to the use of all dunnage on board.'
In the same month the Pompeian Olive Oil Corporation, a United States importer and packer of olive oil, through its buying agent, Nathan Hurwitz of Washington, D.C., purchased for delivery in the United States 30,000 gallons of olive oil from A. R. Barki & Co., of Izmir, Turkey.
An irrevocable letter of credit was obtained by the Pompeian Olive Oil Corporation from the First National Bank of Baltimore in favor of A. R. Barki & Co., payable against an on board bill of lading covering the shipment of olive oil. C. J. Giraud & Co., a Turkish bank, handled the finances of the transaction for libelant.
Ordinarily, Pompeian Olive Oil Corporation imported its olive oil in bulk in drums and packed it in containers in this country. In 1941 drums were not available to the shipper and the olive oil was placed in tin containers, each of 5 gallons capacity, in a factory at Turan near Izmir. They were then removed to the warehouse of Barki at Izmir, where they were placed in wooden cases, two tins to the case, amounting in the aggregate to 3,000 cases. These were constructed of light wood, nailed together and bound with metal straps. They were about 22 1/2' long, 11' wide and 15' high. The sides were solid and sawdust was packed between the tins and the inside of the cases. The outside of each case was marked 'Pure Olive Oil.' The name of the shipper, A. R. Barki & Co., was also marked thereon, and each was given a serial number. It was impossible to see the tins without opening the cases. Several months elapsed between the time the tins were cased and the time they were lightered, and stowed aboard the Ponce, following their transportation by rail to Iskenderon, a distance of about 1,000 miles.
The agent for San Juan Shipping Co. at Iskenderon was Joseph Catoni and MacAndrews & Forbes Company maintained an office there in charge of a Mr. Watts.
At this time shipments and the means of transportation of olive oil were becoming increasingly difficult. Accordingly, arrangements were made by A. R. Barki & Co., through the firm of Van der Zee at Izmir with Catoni and Watts at Iskenderon that the Ponce should take on the olive oil as an 'on deck' cargo. MacAndrews & Forbes Company had the right under the charter party to effect such carriage.
The Ponce is described as a three-island ship with a forecastle, bridge, and poop deck, with two cargo hatches on the main deck forward, and two on the main deck aft. The cases were placed with the largest side against the wood-sheathed, metal deck, three tiers deep, and between the port and starboard bulwarks around but not above the hatches. They were chocked off around the winches and freeing ports, and in addition the ship's carpenter shored them at various places along the deck so that the cases would remain stationary. Approximately 1800 cases were placed on the main deck forward and the remaining 1200 aft. No dunnage was provided under the cargo on the forward deck, but some was placed under that carried on the after deck. Tarpaulins were unavailable on the ship and were used neither forward nor aft.
On August 26, 1941, the Master of the ship signed the bill of lading acknowledging receipt in 'apparent good order and condition' with the following notations: 'Not responsible for leakage,' and 'Shipped on deck at Shippers' risk, as agreed.'
On the same day the Ponce sailed from Iskenderon for Camden, New Jersey, via Suez, Aden, Capetown and Trinidad. It was the monsoon season in the Indian Ocean. Heavy seas and winds of force 8 on the Beaufort Scale were encountered, and decks were awash on numerous occasions. She arrived in Camden, New Jersey, November 9, 1941. During the voyage the cases remained intact as stowed on deck, but upon discharge they began to leak, and upon examination the tins were found to be pitted with rust.
As a result of the condition of the tins on discharge a quantity of olive oil was lost at Camden and Pompeian Olive Oil Corporation incurred expenses in transferring to drums such quantity of oil as could be salvaged. To recover for its damage it filed its libel in this proceeding in rem against the S. S. Ponce. The San Juan Shipping Company ...