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PENNSYLVANIA R. R. CO. v. UNITED STATES

July 29, 1954

PENNSYLVANIA R. R. CO.
v.
UNITED STATES et al. A. & M. TRADING CORP. et al. v. UNITED STATES. RINN v. UNITED STATES. GEARY v. UNITED STATES et al. and related cases



The opinion of the court was delivered by: FORMAN

In all there are forty-nine complaints pending in this court against the United States arising out of the explosion at the Port of South Amboy, New Jersey, on May 19, 1950. It is agreed in stipulations between the United States and all of the plaintiffs that the complaints in the above-entitled four actions are representative of all of the others and together they contain all of the allegations imputing liability to the United States for the negligent acts of its agents and employees. The United States has made motions under Rule 12(b)(6) of the Fed.Rules Civ.Proc., 28 U.S.C.A., in the four cases to dismiss as to it the complaints filed therein on the ground that they fail to state a claim upon which relief may be granted. All of the parties have further agreed that the decision of the court shall be treated as its 'decision with respect to the bases of legal liability of the United States' in all of the cases reserving their rights in connection with the form of order to be filed and appellate review.

The following are pertinent allegations from the complaint filed by the Pennsylvania Railroad Company against the United States and the other defendants in this case.

 Prior to May 14, 1950, defendant, The Kilgore Manufacturing Company of Westerville and Newark, Ohio, manufactured, under contract with the Government of Pakistan, a large quantity of anti-tank mines and anti-personnel mines, and detonators and fuses for the said mines. Some of these articles contained high explosives, classified by the Interstate Commerce Commission and the United States Coast Guard as Class A explosives.

 Prior to May 1st, 1950, the Government of Pakistan engaged the services of the defendant, National Carloading Corporation, to expedite the shipment of these articles from the factories of Kilgore in Ohio to Karachi, Pakistan, pursuant to which National Carloading engaged space on the SS Flying Clipper, owned by defendant Isbrandtsen Company, Inc., and expected to sail May 18, 1950, to carry from the Port of New York to the Port of Karachi, 8,000 cases of anti-tank mines and a thousand cases of anti-personnel mines.

 For 30 years prior to May 19, 1950, the Pennsylvania Railroad Company operated on the Raritan River at South Amboy, in the area commonly known as the Port of New York certain piers, one of which was known as the Powder Pier and was the only pier in the entire Port of New York from which commercial shipments of explosives were permitted to be unloaded from freight cars and transported by water to their domestic or foreign destinations.

 On May 8, 1950, Rear Admiral Ed H. Smith, Commanding Officer of the Third United States Coast Guard District, in charge of the supervision of the movement and shipment of explosives in said district, issued the following directive:

 
'Due to the hazardous conditions which are deemed to exist in connection with explosives loading in Gravesend Bay and at South Amboy, N. J., the Commander, Third Coast Guard District has found it necessary to put into effect certain limitations with regard to Class A explosives.
 
'In accordance, therefore, with a directive from the Commander, Third Coast Guard District, effective this date, no permit will be granted by the Captain of the Port, New York, for any vessel to load or discharge Class A explosives in an amount in excess of 125,000 pounds in Anchorage 49-C, Gravesend Bay, and no permits will be granted for the loading or discharging of any amount of Class A explosives at South Amboy, N. J.
 
'The Class A explosives referred to above are those defined as such in the booklet Explosives Or Other Dangerous Articles On Board Vessels promulgated by the Commandant, U. S. Coast Guard, pursuant to 46 U.S.C. § 170.
 
'Class A explosives in amounts not exceeding 500 pounds may be handled, loaded, discharged, or transported without a permit from the Captain of the Port, subject to Federal, State, and local laws and regulations.'

 The above directive was published and each of the defendants received notice of it immediately after it was issued.

 The Reading Company maintained and operated facilities at Artificial Island, below Wilmington, in the Delaware River, for the loading of explosives and other dangerous articles, which was known to all of the defendants.

 On May 5 and 9, 1950, respectively, Kilgore, at the special instance of National Carloading, requested defendant, The Baltimore and Ohio Railroad Company, to place five cars at Vanatta, Ohio for loading of explosives and on May 10 and 12, ten freight cars were selected, approved and certified at Vanatta for the transportation of said explosives.

 On May 11, 1950, defendant James Healing Company, agent of defendant National Carloading, for the purpose of receiving the shipment and transporting it by lighter or barge for loading on the SS Flying Clipper, applied to the Commandant of the Navy Depot at Earle, New Jersey, for permission to allow the said shipment to go to the SS Flying Clipper through the facilities of the United States Navy at Earle, New Jersey, but on May 13th the request was denied.

 On May 13, 1950, Kilgore, at the special instance of National Carloading, presented to The Baltimore and Ohio Railroad Company shipping orders and bills of lading made out by the defendant Kilgore, as directed by defendant National Carloading, for seven cars consigned to James Healing Company, c/o United States Navy, Earle, New Jersey for loading on the SS Flying Clipper and said seven cars were started over the lines of the defendant The Baltimore and Ohio Railroad Company on said May 13, 1950, at 10 p. m.

 On May 14, 1950, Kilgore turned over three more cars loaded with mines and explosives to the defendant The Baltimore and Ohio Railroad Company consigned, on instructions of defendant National Carloading, to the same consignee and over the same route as the seven cars. They started toward their destination on May 15, 1950.

 Both National Carloading and Kilgore knew when the bills of lading were in process of preparation for delivery to defendant The Baltimore and Ohio Railroad Company that no permission or authority had been issued by the United States Navy to receive ten carloads of ammunitions at Earle, New Jersey, for loading on the SS Flying Clipper and it is charged that the said bills of lading, were prepared and the carloads of explosives started in interstate commerce with the purpose and intent on the part of National Carloading to divert them in transit to some other destination for trans-shipment in the SS Flying Clipper in the event the United States Navy should not permit the cars to pass through its facilities at Earle, New Jersey.

 On May 15, 1950, defendant National Carloading sent a letter to Rear Admiral Ed. H. Smith in which said defendant represented that the manufacturer of said explosive mines 'was ordered to route the cars here (to New York) and to defer their movement until yesterday (May 14), the latest possible date to connect with this vessel', which was represented as leaving New York on May 18. Said letter further stated that:

 
'Through a misunderstanding some of the cars were shipped earlier and may be in New York by tomorrow (May 16).
 
'As the Leonardo (Earle) facilities are definitely unavailable for commercial shipments, we respectfully request that in view of the shortness of time and the natural desire of our government to assist a friendly government, you permit this one shipment to be treated as an 'emergency' shipment and allow it to move through the facilities heretofore considered satisfactory.
 
'This would contemplate the cars moving to the Munitions pier of the Pennsylvania Railroad at South Amboy, New Jersey, and then lighted to such anchorage as you designate.'

 It is charged that statements in the said letter referring to the order to Kilgore to route cars to New York and to defer their movement until May 14th and the reference to the misunderstanding whereby some of the cars were shipped earlier and might be in New York by May 16th, were false to the knowledge of National Carloading. In addition, National Carloading gave a copy of the said letter to Isbrandtsen Company, Inc. and communicated with officers of the United States Coast Guard making the same false representations and urging a speedy decision by the United States Coast Guard on the request contained in its letter upon the representation that the cars loaded with explosives were in the New York area and constituted a menace to the inhabitants thereof, when none of the cars were in fact in the New York area to the knowledge of defendant National Carloading.

 On May 16, 1950, defendant Isbrandtsen Company, Inc. called the Commandant of the Third Coast Guard District and in the absence of Rear Admiral Ed. H. Smith, on account of illness, requested immediate action on the letter, but the Acting Commandant declined to overrule the directive of Rear Admiral Smith, issued May 8, 1950. Thereafter Captain H. W. Stinchcomb, Captain of the Port of New York, United States Coast Guard, by telephone, communicated the contents of the letter of May 15, 1950 of National Carloading to Captain Edward C. Cleave and Captain Roy L. Raney at Coast Guard Headquarters in Washington and advised them that several cars containing high explosives were in the New York area where they constituted a hazard making it advisable that the situation be deemed an emergency, and that an exception be granted to Rear Admiral Ed. H. Smith's directive and that permits be issued to transfer said explosives at South Amboy from the railroad freight cars to the lighters of defendant James Healing Co. for loading on the SS Flying Clipper on May 18, 1950. At the end of the telephone conversation without any inquiry or investigation Captain Stinchcomb was authorized to issue the permits.

 Before any confirmation of the telephone message had been received at Coast Guard Headquarters in New York by Captain Stinchcomb, the United States Coast Guard in Washington informed defendant Isbrandtsen Company, Inc., defendant National Carloading and defendant James Healing Company that permission would be issued for the trans-shipment at South Amboy. Furthermore, Captain Stinchcomb on May 16, 1950, advised the Pennsylvania Railroad Company and others that the Coast Guard would issue permits for the loading on lighters at South Amboy of 1800 cases of dynamite in two carloads manufactured by Hercules Powder Company for shipment to Pakistan, via SS Flying Clipper

 On said May 16, 1950, defendants National Carloading and Isbrandtsen Company, Inc., by their agents, requested the Pennsylvania Railroad Company, the plaintiff, to accept delivery from Reading Company at Belmont, Philadelphia County, Pennsylvania, of said ten cars that had been shipped from the Kilgore plants in Ohio and move the same to its pier at South Amboy and also two carloads of dynamite shipped by Hercules Powder Company, where they were to be unloaded by James Healing Company and transported by lighter to and loaded on the SS Flying Clipper. Plaintiff advised said defendants that it would not accept said proferred shipments because of the directive of the United States Coast Guard of May 8, 1950, whereupon the National Carloading and Isbrandtsen Company, Inc. informed plaintiff that they had been advised by the United States Coast Guard that it would issue permits for said shipments to pass through South Amboy. Plaintiff communicated with Captain Stinchcomb, the Captain of the Port of New York, who advised plaintiff that he would approve acceptance by plaintiff of said twelve cars for delivery to South Amboy and transfer by water to the SS Flying Clipper and that immediately thereafter the Coast Guard directive of May 8, 1950 would again become effective.

 On May 17, 1950, defendant National Carloading wrote a letter to the plaintiff confirming that it had reconsigned the said ten carloads of ammunitions and explosives to South Amboy from Belmont, Pennsylvania.

 On May 18, 1950, on the application of James Healing Co., Captain Stinchcomb issued permits for the explosives to be handled at South Amboy by lighter and loaded on the SS Flying Clipper on May 19, 20, 1950, within given hours.

 On May 16, 1950, Hercules Powder Company, at Lake Junction, New Jersey, issued bills of lading which were accepted by the Central Railroad Company of New Jersey covering the shipment to South Amboy of two cars of high explosives consigned to itself, care of James Healing Company for export on the SS Flying Clipper. Plaintiff received delivery of said two cars at Phillipsburg, New Jersey and delivered them to the consignee James Healing Company at its Powder Pier at South Amboy on May 19, 1950, with the explosive placard as required by law thereon.

 Seven of the ten cars shipped by Kilgore were interchanged to plaintiff at Belmont, Philadelphia County, Pennsylvania, from the Reading Company on the morning of May 18th and the remaining three cars were shipped from Rutherford, Pennsylvania on May 18th, via Reading Company and Central Railroad of New Jersey to Oak Island, New Jersey, where they were interchanged to plaintiff and delivered to and accepted by defendant James Healing Company on their arrival at South Amboy on May 19, 1950.

 At approximately noon of May 19, 1950, two of the Healing lighters had been fully loaded with 1800 cases of dynamite and 1000 cases of anti-personnel mines and were moved to the end of the pier and made fast there, while the remainder of said cars were unloaded into two other lighters.

 At 7:28 p. m., on May 19, 1950, while the loading of the said lighters was in progress a violent explosion occurred and the entire shipment, the lighters, plaintiff's pier and the cars thereon, were totally destroyed and its property, building and facilities in the area were severely damaged.

 The complaint then sets forth six causes of action against the following defendants respectively: (1) The Kilgore Manufacturing Company, (2) The Baltimore and Ohio Railroad Company, (3) National Carloading Corporation, (4) The Kilgore Manufacturing Company, The Baltimore and Ohio Railroad Company and National Carloading ...


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