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Petition of J. E. Brenneman Co.

August 15, 1963


Author: Forman

Before KALODNER and FORMAN, Circuit Judges, and ROSENBERG, District Judge.

FORMAN, Circuit Judge.

This is an appeal, under 28 U.S.C. ยง 1292(a) (3), by J. E. Brenneman Company (Brenneman) from an interlocutory judgment of the United States District Court for the Eastern District of Pennsylvania*fn1 denying its petition for exoneration from or limitation of liability*fn2 for damages as a result of a fire on July 20, 1956 involving its barge "Hercules", the pier to which it was moored and other property.

The petition was challenged by the following claimants:

(1) Eastern Gas & Fuel Associates*fn3 and Philadelphia Coke Company (for convenience hereafter collectively referred to as Coke Company), the owners and operators of a coke manufacturing plant, pier and equipment, located on the Delaware River in Philadelphia, Pennsylvania, alleging that they sustained damages to their property to the extent of $171,619.92 by reason of the negligence of Brenneman and the unseaworthiness of the "Hercules" whereby the fire started aboard it and was communicated to the pier causing damage to it, their plant, equipment, machinery, business and operations.

(2) Patterson Oil Company and Patterson Terminals, Inc., which maintained two petroleum product pipe lines on the pier, alleging damage to them in the sum of $1,070 on the same basis as charged by the Coke Company.

(3) S. W. Kooperman, Inc., owner of sand blasting and painting equipment deposited on the Coke Company's pier for use in work on the aforementioned pipe lines, alleging damage to it in the sum of $3,986.05, also on the same basis as charged by the Coke Company.

It is undisputed that for several weeks prior to July 20, 1956, Brenneman's employees were engaged in repairing the pier of the Coke Company, 520 feet long and 44 feet wide,*fn4 pursuant to a contract between them. As an incident to the repair operation Brenneman utilized its barge the "Hercules", approximately 54 feet long, 23 1/2 feet wide and 5 feet in depth, with a free board of approximately 2 feet. Pile driving equipment was mounted on its bow. Aft of it was a house 25 feet long, 16 1/2 feet wide and 13 1/2 feet high at the peak of the roof, which contained equipment used in the conduct of its business. Its walls were made of "German" siding, and had fire resistant, insulating material on the inside. The barge was without motive power and was towed from place to place where it was to function.

Before concluding work at 4:30 P.M. on July 19, 1956, employees of Brenneman tied the "Hercules" with its bow toward the river at a point approximately two-thirds from the river end of the pier. A float stage about 5 feet wide and 40 feet long separated the side of the "Hercules" from the side of the pier.

Brenneman employed a watchman on the "Hercules" to work a split shift which ran from 4:30 P.M. to 6:00 P.M.; from 7 P.M. to 10:30 P.M. and then from the following 4:30 A.M. to 7:30 A.M. His job was to guard the "Hercules" and prevent theft and fire.

At about 1:15 A.M., on July 20, 1956, an employee of the Coke Company, stationed in the cab of a traveling crane about 35 feet in the air and one quarter mile away, observed flames issuing from the top of the house on the "Hercules". Coke Company's employees endeavored to extinguish the fire with the company's hose. Meanwhile an alarm was given and the Philadelphia Fire Department responded with apparatus and fought the fire until it was ended. The "Hercules", the pier and the property on it were seriously damaged by the fire.

Among others, the District Court made the following findings of fact:

"19. The fire originated on the 'Hercules' and was transmitted to the pier from the vessel. It was transmitted to the pier by some force set in motion by the escaping air from the air tank.

"20. At all times material hereto, the 'Hercules', and its gear and appurtenances, were in the exclusive control of petitioner. Accordingly, it is inferred that the fire started by reason of petitioner's negligence.

"21. Reasonable care, under all the circumstances, required petitioner to maintain an all night watch on the 'Hercules', to prevent fires, to properly maintain mooring lines; to prevent the barge from breaking away from its moorings and other similar purposes.

"22. There is a custom in the port of Philadelphia of maintaining watchmen on board vessels such as the 'Hercules' during the entire night."

"24. The fire of July 20, 1956, caused damage to the property of claimants, Philadelphia Coke Company, Patterson Oil Company, Patterson Terminals, Inc. and S. W. Kooperman, Inc."

"26. Petitioner was negligent in failing to maintain an all night watchman on the barge under general principles of negligence and for failure to conform with the practice in the port, with which negligence petitioner was in privity."

The District Court made the following conclusions of law, among others:

"1. The fire on the coal pier of the Philadelphia Coke Company on July 20, 1956, started by reason of the negligence of petitioner and/or its employees.

"2. The exercise of reasonable care required that petitioner maintain a watchman aboard the 'Hercules' during the entire night. Its failure to do so constituted negligence and rendered the vessel unseaworthy and said negligence and unseaworthiness was a proximate cause of the spread of the fire to the pier.

"3. Petitioner had actual knowledge that no watchman was on duty from 10:30 P.M. to 4:30 A.M. and, therefore, was in privity to the aforesaid act of negligence and unseaworthy condition."

"5. Petitioner is not entitled to exoneration from liability against any of the claimants by reason of its negligence in causing or permitting the fire to take place.

"6. Petitioner is not entitled to exoneration from liability against any of the claimants by reason of its negligence and the unseaworthiness of the 'Hercules' in that there was no watchman aboard the vessel.

"7. Petitioner is not entitled to limitation of liability against any of the claimants because of its privity in the negligent act and the unseaworthy condition existing by reason of the failure to have a watchman aboard the 'Hercules'."

The District Court supplemented its findings and conclusions with a memorandum opinion.

As to the origin of the fire the District Court concluded that the theories of the experts*fn5 were to be given little or no weight "for the simple reason that there was ample reliable, impartial, eye-witness testimony to support the conclusions * * *" that the fire originated on the "Hercules" and not on the pier. It concluded that the petitioner had fallen far short of sustaining its burden of proof and was not entitled to exoneration.

On the issue of limitation the District Court analyzed the evidence dealing with the petitioner's failure to have an all night watchman aboard the "Hercules" and summarized its determination as follows:

"From the foregoing, there seems to be sufficient evidence to establish a custom of the Port of Philadelphia to the effect that barges are manned by night watchmen, one of the reasons being to guard against fire. Accordingly, the failure of the petitioner here to have a watchman all night may be regarded as negligence. Indeed, many cases seem to hold as a matter of law without proof of custom that failure to man a barge with a night watchman is negligence. See United States v. Carol Towing Co., 159 F.2d 169 (2d Cir.); Burns Bros. v. Erie R. Co., [D.C.] 79 F.Supp. 948. But it is not necessary to go so far here because of the testimony just considered. Clearly there was privity and Limitation will be denied."

Accordingly an interlocutory decree in favor of the claimants was entered, denying the petition of Brenneman for exoneration from, or limitation of, liability and directing that the matter proceed to a determination of the question of damages.

Brenneman takes this appeal from the interlocutory decree asserting that the findings and conclusions are in error.

Preliminarily, during the trial Brenneman raised the question that if the claimants had been paid by their own insurers for their losses occasioned by the fire they could not be heard to contest the petition for exoneration and limitation. It urged that they would not be the real parties in interest, and in admiralty an action may only be brought or contested by the real parties in interest. The claimants contended that payments received from their insurers were for loan receipts. The factual evidence underlying these contentions was not available in the record and it was felt that such a threshold issue should be treated first. Accordingly, an order was made granting leave to supplement the record herein, by producing before the District Court evidence as to the propriety of the claimants as real parties in interest and to lodge the transcript thereof with this court.*fn6

The supplemental proofs were submitted to the District Court from which it made further findings of fact and conclusions of law. The District Court found that the claimant S. W. Kooperman, Inc. was not insured for its loss sustained in the fire and has not been compensated therefor; that the claimants Patterson Oil Company and Patterson Terminals, Inc. were insured by the Fire Association of Philadelphia and following the fire they received the amount of $1,070 as a loan from said insurance company, giving it in return a loan receipt executed by the Patterson Oil Company in the typical form attached hereto as an appendix. It further found that the claimants Philadelphia Coke Company and Eastern Gas & Fuel Associates carried insurance in three different categories - blanket fire insurance which covered the pier, inland marine insurance on the equipment on the pier, and business interruption insurance; that following the fire the said claimants received as loans from their insurers, in each category, the amounts ...

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