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Valdesa Compania Naviera, S.A. v. Petroleiros

decided: July 13, 1965.

VALDESA COMPANIA NAVIERA, S.A. AS OWNER OF THE MOTOR TANKER CAPE ARAXOS, (LIBELLANT),
v.
FROTA NACIONAL DE PETROLEIROS AND PETROLEO BRASILEIRO, S.A., (RESPONDENTS) APPELLANTS



McLaughlin, Staley and Smith, Circuit Judges.

Author: Staley

STALEY, Circuit Judge.

The M/T Cape Araxos ran aground in June and September, 1960, in the harbor of Rio de Janeiro. The ship, which was owned by Valdesa Compania Naviera, S.A. ("owner"), was engaged in shipping certain petroleum products under charter party to Frota Nacional de Petroleiros ("charterer"), the agent of Petroleo Brasileiro, S.A. The owner has brought this suit against the charterer in the District Court for the District of New Jersey for damages allegedly caused by the groundings.

The libel alleged that respondent charterer was liable for breach of a warranty in the charter party which required it to discharge at any safe place or port provided that the vessel can proceed thereto "or so near thereto as she may safely get always afloat." The district court, rejecting an argument that the groundings had been caused by the unseaworthy condition of the ship, found the charterer liable in the amount of $45,799.27 with interest and costs. On this appeal it is contended that the court's determination that the charterer was responsible for the groundings is not supported by the evidence, that the court abused its discretion in refusing to admit certain items of evidence, and that the damages awarded were excessive. We find the appellant's arguments unpersuasive except as to damages; we, however, find the award of damages excessive and are compelled to reverse the judgment below as to damages and remand for a new trial limited to that issue.

The charterer first contends that the determination of the trial court that it was responsible for the groundings is not supported by the evidence. The standard to be applied on appeal regarding a determination of this sort is that set forth in McAllister v. United States, 348 U.S. 19, 75 S. Ct. 6, 8, 99 L. Ed. 20 (1954). We may, therefore, disagree with the district court's determinations of fact only if they are "clearly erroneous," that is, "when '"although there is evidence to support it, the reviewing court on the entire evidence is left with a definite and firm conviction that a mistake has been committed."'" Id. at p. 20, 75 S. Ct. at p. 8.

In the district court neither side disputed that the accidents had occurred. The owner claimed that the groundings were caused by the inadequate handling of the vessel by the pilot. The charterer denied improper handling and contended that the ship ran aground when certain ropes which ran from the ship to its accompanying tugs parted. The charterer sought to prove that the ropes were mended and shredded and that the ship was consequently unseaworthy.

The captain's testimony tended to show that the accident had happened when the pilot had tried to berth the ship when the tides were unfavorable for such a maneuver. According to the captain, some ropes by which the ship was connected to tugs assisting its berthing maneuver broke as a result of the grounding. The pilot's testimony was essentially that the grounding was caused by the breaking of the ropes which were in very poor condition. The ship's bell book, in which a constant account was kept of the changes in direction and the extent of engine power in use, tended to support the captain's testimony. This, then, is simply a case in which the court, having studied the testimony of two contradictory witnesses, has determined to believe one and disbelieve the other. As the testimony of the captain which the district court chose to believe is not so unworthy of belief as to leave us "with a definite and firm conviction that a mistake has been committed," we cannot disagree with the findings of the district court.

In making its findings of fact, the district court remarked that it was impressed with the demeanor of the captain on the witness stand and indicated that his presence gave weight to his testimony. It was implied in the appellant's brief that there was something unfair about this since the testimony of the pilot, which was presented in evidence in the form of a deposition, necessarily could not have had the same effect. There is clearly no merit in this point. It is obvious that the failure of one party to bring its chief witness into court does not require the court to deprive itself of the benefits of confrontation with the Chief witness for the other side.

It is next contended that the district court abused its discretion in refusing to admit certain evidence of foreign statutes, which, it is alleged, would have been determinative of the case. The matter was first brought to the attention of the court at the pretrial conference held on October 1, 1963. At that time, proctors for the charterer indicated that they wished to amend the answer to include a defense which they contended would be sufficient under Brazilian law and would be binding on the court under ordinary conflict of laws rules. The court required the proctors to furnish a memorandum to the court and their opponents setting out the particular provisions of Brazilian law that they deemed to be applicable, together with a discussion of the reasons for their applicability. This was to be done by October 15, 1963. No objection was made then or later that the time allowed for preparation of the memorandum was insufficient. On the information that the lawyer who was originally to handle the matter was ill, several postponements of the date for submission of this memorandum were obtained over increasing objection from the proctors for the owners. The trial was not in fact held until March 1964. At each of the hearings on motions to extend the trial date, counsel was asked why the required memorandum had not been prepared. In each case, the court was assured that it would be presented in a few days. It was furnished on February 10, 1964. The memorandum contained the text of Article 138 of the Regulations for Captains of the Port of Rio de Janeiro, which is as follows:

"Article 138 -- The Master of a National or foreign vessel, within 24 hours after the vessel has entered (the harbor), will go to the Port Authority to inform of his entry, recording his statements in the proper book.

"Paragraph 1. -- If in the course of the voyage immediately prior to his call any of the hypotheses listed below occur, the Master will deliver to the Port Authority an extract duly authenticated, of the statement that he has recorded in the Log Book:

"a. any damage to the vessel or to the cargo;

On the opening day of the trial, counsel was asked what he hoped to prove with respect to Article 138. He answered that Brazilian law provides that the sole determiner of the facts of maritime accidents is the Maritime Tribunal and that those facts are the only ones which may be used in a Brazilian court when suit for damages is brought. The following colloquy then took place between the court and the charterer's proctor:

"The Court: Just a moment. Aside from any effect that that might have I do not find in any regulation that you have cited anything of that nature.

"Mr. Fox [of proctors for Charterer]: If your Honor please, I believe this is correct. Your statement is quite probably correct. We have here with us from Brazil a Brazilian lawyer who is prepared to testify as an expert on Brazilian law. I believe that the only section of the Act that was cited in the trial memorandum filed with you was Section 138. I believe that was the section involved.

"The Court: Well, all I see that would bear upon this point --

"Mr. Fox: I have since discovered that Article 18 of the provisional constitutional provisions of September 18, 1946 hold as follows: 'The decision of the Maritime Tribunal as to the technical subject concerning the ...


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