The opinion of the court was delivered by: COHEN
The "Diane and Janet" is a commercial, deep sea fishing vessel plying the Atlantic Ocean off Southern New Jersey, out of Cape May, owned and operated by plaintiff Melanson Company, Inc., a New Jersey corporation. Its marine diesel engine is alleged to have been defectively designed, manufactured, serviced, and repaired through the negligence of defendants and in breach of express and implied warranties of fitness for use, thereby causing damages to plaintiff for which it seeks recovery.
Jurisdiction vests in this Court under 28 U.S.C. § 1332, as amended, by reason of diversity and requisite amount in controversy.
The trial of this case to the Court without a jury consumed five full weeks. The presentation of evidence was complex, voluminous, and, at times, reached digressions which obscured the central and crucial issues. Narrative statement will focus upon what is deemed to be the material circumstances and events surrounding this controversy.
In April of 1957, plaintiff purchased the Hercules marine engine in question from defendant Hupp Corporation (which had been manufactured by its corporate predecessor, Hercules Motors Corporation), through the accommodation of defendant Metalweld, Inc., Hupp's dealer and distributor. The actual sale was consummated through Delaware Bay Shipbuilding Company, which also installed the engine for plaintiff. Defendant Metalweld, in effect, brokered the sale through Delaware Bay Shipbuilding Company in order for plaintiff to gain a shipyard discount. The engine was accompanied by Hercules' basic warranty, which limited its liability to the replacement or repair of parts found to be defective, if any, within six months of the date of shipment or within ninety days of service, whichever was the shorter period.
Defendant Hupp claims that not only did such warranty exclude other express, implied, or statutory warranties, but that in fact no others were made at any time to plaintiff.
After installation of the engine during the months of April and May, 1957, purchased for $8,465.51 and installed for $4,179.51, it remained in the operating vessel until January, 1960. It was during this three year interim that the problem now presented arose.
On or about May 24, 1957, the vessel was given its first test run with the new Hercules engine. The engine attained a speed of 1500 rpms and, at that speed, the fresh water cooling system temperature attained 200 degrees. Incomplete combustion resulted in the emission of black smoke from its smoke stack. A service check by Charles J. Schwanbeck, defendant Metalweld's engineer, revealed the cooling system to be in proper order and function, and that the engine was running free, without any drag back to the propeller joint. He concluded that the propeller was too large, thereby absorbing the full power of the engine thrust before the engine could attain its factory rated maximum speed of 2100 rpms and, consequently, recommended that plaintiff purchase a Columbian 5 blade propeller. Captain Boudreau, principal figure of the plaintiff corporation, rejected this recommendation, preferring to use his old 3 blade propeller which had been used for a larger slow speed diesel engine, an Atlas, on a previous boat. Thereupon, Schwanbeck recommended a reduction in the size of the old Atlas propeller.
After the propeller diameter had been reduced on May 31, 1957 by someone other than defendants, selected by the plaintiff, a second test run was held on June 5th or 6th, 1957, and the engine attained a speed of 1600 rpms before the fresh water cooling system reached 200 degrees and black smoke emitted. Clarence McGirr, Hercules Field Service Engineer for 28 years, told Captain Boudreau on the second test run that the propeller, or wheel, although reduced to a 50 inch diameter with a 36 inch pitch, was still too large to enable the engine to attain rated maximum performance. Boudreau refused to make any further reduction in the size of the propeller. McGirr then advised a cut in the reduction gear ratio to 4 1/2 to 1. This was done.
On a third test run in the latter part of June, 1957, the engine was able to attain a speed of 1925 rpms, over a period of ten minutes running with the throttle wide open, before a temperature rise of 200 degrees and black smoke emission. When the engine speed was dropped back to 1800 rpms, the cooling system temperature dropped to 185 degrees and the black smoke ceased. Following this run, representatives of both defendant companies recommended to Captain Boudreau that the propeller diameter be reduced further, in order to eliminate the propeller overload so that the engine could attain its rated speed of 2100 rpms. However, Captain Boudreau refused to have any further propeller diameter reduction made. There is testimony that he stated, rather colorfully, that he wasn't going to swing a toy propeller on his boat. Metalweld insisted that for proper rated performance the reduction would have to be effected, and directed that the vessel remain at the Delaware Bay Shipbuilding Company until reduction was made. Captain Boudreau refused and had the engine governor set at 1800 rpms, at which speed the cooling system had attained 185 degree on the third test run in June, 1957. The manufacturer's recommended maximum speed for continuous operation as a work boat was 1700 rpms, which could vary depending upon the type of service and load haul. Captain Boudreau had the vessel released and placed in active commercial fishing service.
In November, 1959, approximately two and a half years after engine installation, during which time it had been serviced and repaired by Metalweld as well as others, it broke down. Inspection by plaintiff disclosed that the engine's cylinder liners were 0.0055 to 0.008 inches below the top surface of the engine block which, it contends, resulted in poor sealing with the gasket, by reason of defective design and manufacture causing engine failure with ensuing damages, including loss of profits.
The theories of liability advanced by plaintiff are substantially three: (a) sale by a manufacturer through Metalweld, its distributor, to plaintiff of an engine expressly or impliedly warranted to be merchantable and fit for use as intended, but which engine was in fact defective and not fit for the use represented and intended; (b) that such defective engine was placed in the stream of trade by the manufacturer which led to its purchase by plaintiff in reliance upon its national promotional advertising expressly and impliedly warranting fitness for use, hence imposing strict tort liability upon the manufacturer; and (c) negligence in the design, manufacture or servicing of the engine, or a combination of these factors, which rendered the engine inherently dangerous.
Specifically and succinctly, it is the factual contention of plaintiff that the overheating of the engine at certain speeds caused its alleged damages; that such overheating resulted from defectively designed and manufactured cylinder sleeves, which were below the surface of the engine block, thus preventing proper gasket sealing, thereby permitting water from the cooling system to seep into the cylinder housing, causing engine damage.
Defendant Metalweld denies any negligence or breach of implied warranty of reasonable care and fitness in its servicing of the engine. It contends that the overheating and smoke situation was reported to the manufacturer immediately after the first trial run, and that proper ...