1925 A. M. C.

to it its claims against the assignee and that these greatly exceed the amount of the charter freight it, the respondent, promised to pay the libellant. In a full and satisfactory opinion, 275 Fed. 989, the learned Court below held that the admiralty had not jurisdiction to consider this defense, based as it was upon a set off, recoupment or counter claim, not depending upon or arising out of a maritime undertaking which was the subject matter of the libel. It cited in support of this view Willard vs. Door, Fed. Cas. No. 17680; O'Brien vs. 1614 Bags of Guano, 48 Fed. 726, 729, 730; Emery Co. vs. Tweedie Trading Co., 143 Fed. 144, Benedict's Admiralty, 4th Edition, Section 392, Hughes' Admiralty, 2nd Edition, Section 200, Bowker vs. U. S., 186 U. S. 135; Howard vs. 9899 Bags of Malt, 255 Fed. 917, 918; United Transp. Co. vs. N. Y. & B. Tr. Line, 2CCA, 185 Fed. 386. The same conclusion had been previously reached by Judge Learned Hand upon an earlier libel, filed by the libellant against the respondent in the Southern District of New York. We have been favored with a copy of his opinion, The Lydia, although it does not, we believe, appear in the Federal Reporter. In Susquehanna Steamship Co. Inc., vs. A. O. Anderson & Co. Inc., 275 Fed. 355, the same Judge sitting on another side of the Court, subsequently declined to entertain a bill in equity to enjoin the prosecution of the suit in admiralty because of the existence of cross claims which could not be pleaded in the admiralty suit.

We are satisfied that Judges Waddill and Hand were right and indeed we do not understand that the respondent now seriously questions the accuracy of the conclusion at which they arrived, provided the libellant has, as respondent says it has not, such an interest in the monies to be paid under the charter party as entitled it to sue for them. The charter party recites that it was made "between A. O. Anderson & Co., Inc., as agents for the good American S. S. Lydia' and the respondent. The libellant signed it as "A. O. Anderson & Co., Inc., V. Reimann, Vice-President and General Manager, agents.' If nothing more appeared it might well be held that the libellant was not personally bound by the charter and therefore, presumably was not entitled in its own right to recover under it. Universal Steam Navigation Co. Ltd. vs. James McKelvie & Co., [1923] A. C. 492. In the admiralty, however, the party entitled to relief should always be made libellant. Fretz vs. Bull, 12 How. 466.

From the facts already set forth, the libellant was, during the time

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covered by this charter party, expressly given the right by the owner to handle the vessel and trade her according to its own judgment. Under this authority, it was clearly intended that the libellant should charter the ship, if it could. It is true that this was to be done for the benefit of whom it may concern, but according to the contention of the owner, the person chiefly concerned was the libellant. Express authority was given to the libellant to collect the charter hire. It is true there was to be a subsequent accounting between it and the owner into which accounting the money so received by it was to be brought, but those facts did not in any way lessen the right or indeed impair its duty to make the collection in the first instance. It is not without significance that the charter party provides for the payment of the hire to "A. O. Anderson & Co., Inc." " at New York" without, in that connection, describing them as agents or otherwise limiting their absolute right to demand the money and to give due acquittance for it.

Under these circumstances, the Court below was right in holding that libellant was entitled to maintain its suit. If the libellant is able to pay any judgment or decree which may be recovered against it by the respondent as assignee of the Lydia Steamship Co. in the suit brought against it by the respondent in a State Court of New York and still there depending, no harm can possibly result from the necessary affirmance by us of the decree below. If, as was suggested in the argument before us, the libellant is now insolvent, the respondent will have time before our mandate goes down, to consider whether there is anything it can do to protect itself against the possibility that, after paying the large decree in this case, it may be unable to realize upon any judgment it may recover in New York and thereby will fail to turn to its advantage, the claims against the libellant assigned to it. However that may be, it remains obvious that the decree below was right and must be affirmed.

1925 A. M. C.

WILLFARO-WILLSOLO.

PACIFIC GUANO AND FERTILIZER COMPANY, Libellant,

vs.

STEAMER WILLFARO, WILLIAMS STEAMSHIP CO., Claimant,

AND ANOTHER CASE.

United States District Court, Northern District of California, May 23, 1925. CARGO DAMAGE-14. Fish Meal-1245. Improper Stowage-125. Ventilation

-BILLS OF LADING-193. Inherent Vice-1965. Fire.

Stowage of fishmeal in solid blocks in a lower hold without wooden ventilators between sacks is bad stowage, and consequent heating and combustion can not be charged to inherent vice, but is the fault of the shipowner.

AGENTS-112. General Agent-Privity for Bad Stowage-BILLS OF LADING-1965. Fire-1212. Due Diligence.

The fire statute (R. S. 4282) does not protect a shipowner where fire or heating of cargo was caused by negligent stowage which was approved by a general agent of the owner.

DERBY & SINGLE (CARROL SINGLE, of Counsel), for Libellant, Pacific Guano and Fertilizer Company.

SAWYER & CLUFF (DANIEL W. EVANS, of Counsel), for Libellant, WilburEllis Company.

THACHER & WRIGHT (THOMAS A. THACHER, of Counsel), for Claimant.

KERRIGAN, D. J.:

These two cases, being alike in their facts, were consolidated for trial. They are actions for damages and involve two shipments of fishmeal from Baltimore, Maryland, to Los Angeles, California, and to Portland, Oregon, respectively. The Pacific Guano and Fertilizer Company shipment was of 7009 bags of fish-scrap or fish meal. It was taken aboard the steamer Willfaro, operated by the claimant, the Williams Steamship Co., and 3116 bags of the fishmeal were stowed in the No. 4 lower hold. When the vessel arrived at Los Angeles, on October 23, 1922, it was found that the meal in the lower part of the hold had become heated. The remaining 3893 bags were stowed in four other places in the vessel in smaller quantities and they suffered no damage.

In the other case the shipment was of 1000 bags of fish meal in the steamship Willsolo, also operated by the Williams Steamship Co. This lot was stowed in No. 5 lower hold. Upon arrival in San

998.

Francisco, on the way to Portland, on October 17, 1922, it was discovered that this fish meal also had become heated, and its market value seriously impaired.

The contention of the claimant in these cases is that the damage complained of resulted from the inherent vice of the meal. The theory of the libellant, on the other hand, is that the owners of the vessels violated the contracts of carriage by negligently and improperly stowing the cargo which by reason thereof became heated, thereby devitalizing the fish meal and rendering it unmerchantable.

Fish meal or fish-scrap is fish boiled, with the oil and the moisture almost entirely extracted; then it is dried and ground up. Aside from some moisture and oil, it contains nitrogen. It is used as chicken feed and as a fertilizer. There is no difference between fish meal and fish-scrap except that fish-scrap is coarser than fish meal. Since it contains oil and moisture it is freely admitted by libellants that if fish meal is not properly stowed and ventilated, it may heat and result in a lowering of its commercial value.

The claimant argues that the meal in these cases was stowed in the customary manner, and that the heating which developed was consequently the result of inherent vice of the commodity. Claimant's witnesses in effect testified that the meal in each instance was stowed as the claimant and other shippers, so far as they knew, had stowed scrap-meal for years; and as these were the only shipments they ever heard of as heating, they could only ascribe the occurrence to the inferior quality of the meal. According to their experiences and observation there was no occasion for stowing fish meal differently from all other bagged material such as flour, oyster-shells, sugar, etc. They had never given the stowage of fish meal any special attention, and as just stated they have never before known of such a product heating.

Evidence introduced by the libellants shows that the meal was received in good order and condition; that since commercial fish meal contains some oil and moisture, if packed close together in bags, in large quantities, and not well aired, heating and consequent damage will result; that in both of these cases the meal was stowed in solid blocks in the lower holds of the two vessels, where the ventilation in all ships is the poorest. According to the testimony of one of the experts introduced by libellants, fish meal should never be stowed in quantities exceeding 100 tons, even in a warehouse, where the

1925 A. M. C.

ventilation as compared with a ship's hold is vastly superior. Another witness said: "We never have any trouble from heating. where the meal is properly stowed in a vessel or on a car and ventilation provided. The oil and water content do not seem to bother if suitable ventilation is provided." He further said: "It cannot be packed too tightly, and it cannot be packed in an entirely closed space. When I say 'cannot' I mean you are running a risk that material might tend to heat."

...

A marine surveyor, regarding the stowage of the 3116 bags on the Willfaro said: "It was a solid block of sacks . . . straight down under the hatch with no dunnage in between the sacks, and no air shafts or any other means of ventilation, such as is customary in a shipment of this nature. . . . There was no dunnage or wood of any description whatsoever in the shipment to rest the weight or allow the air or anything like that to percolate through. was no ventilation whatsoever from the sides of the ship."

.. There

A sea Captain of long experience testified in part: "The lower portion only became heated." Stowed in a great pile as this was, "the weight would have a tendency to weld it together . . . it being of an oily nature, and containing various phosphates, and being in a moist condition from the nature of being moist and soft in sacks, it would weld together of its own weight and be liable to spontaneous combustion by self-generated heat."

Captain Cecil Brown testified that to store fish meal as stowed here was to invite danger. Claimant took the deposition of a stevedore who worked in unloading the Willfaro. He deposed to the effect that it was absolutely stowed en bloc, the same as you would stow sugar or flour . . . right up to the hatch coamings 'tween decks. . . . It completely filled the square of the hatch. . . . There was no dunnage. .. There was no ventilation at all. She went right solid down." He also stated that there was nothing to protect this portion of the cargo from the heat of the shaft alley, which was appreciable.

Another of claimant's expert witnesses testified that a cargo which is apt to heat usually is stowed in well-ventilated places, and that extra precautions are taken to keep it well ventilated; in the case of rice cargo, which notoriously heats, and damp pepper, inexpensive wooden box ventilators are stowed along with the cargo; and that a cargo which from its nature requires special ventilation should