Navigazione Generale Italiana v. Spencer Kellogg & Sons, Inc.
92 F.2d 41, 1937 U.S. App. LEXIS 4480 (1937)
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Rule of Law:
A voluntary sacrifice or extraordinary expenditure made to save a common maritime venture from a peril that is real and substantial, but not necessarily immediate or impending, constitutes a general average act for which all parties to the venture must contribute.
Facts:
- The steamship Mincio, owned by Navigazione Generale Italiana, carried a cargo of linseed owned by Spencer Kellogg & Sons under a charter party providing for general average according to York-Antwerp Rules.
- While navigating the Parana river on October 9, 1926, under the command of a compulsory pilot, the Mincio stranded on the muddy, sandy river bottom.
- The location of the stranding was within a zone known for 'Pamperos' (hurricanes), which posed a risk of further lowering the water level and straining the ship's hull.
- The vessel was resting unevenly, creating a substantial risk that its seams could open, causing leaks that would damage the linseed cargo and potentially burst the ship's plating.
- To free the ship from this peril, the master intentionally and repeatedly ran the ship's engines at full speed over approximately thirty-six hours.
- This extraordinary use of the engines successfully freed the vessel from the strand but caused significant damage to the ship's engines, rudder, and bottom plating.
Procedural Posture:
- The owner of the steamship Mincio (libelant) filed a suit in admiralty in the U.S. District Court against Spencer Kellogg & Sons, the owner of the cargo (respondent).
- The suit sought to recover the cargo's ratable contribution to general average losses incurred when the Mincio was stranded.
- After the cargo was discharged, the shipowner asserted a general average lien, which it surrendered in exchange for the cargo owner's agreement to pay its share as determined by average adjusters.
- The District Court (trial court) heard the case and entered a final decree dismissing the libel, finding in favor of the cargo owner.
- The owner of the Mincio (appellant) appealed the District Court's decree to the U.S. Circuit Court of Appeals, Second Circuit.
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Issue:
Does a voluntary sacrifice or expenditure made to free a stranded vessel from a 'real and substantial' but not immediately impending peril constitute a general average act for which the cargo owner must contribute?
Opinions:
Majority - Augustus N. Hand, Circuit Judge
Yes. A voluntary sacrifice or expenditure made to free a stranded vessel from a real and substantial, though not immediately impending, peril constitutes a general average act. The court reasoned that the critical test for a general average act is not the 'imminency' of the peril, but whether the danger is 'real and substantial.' The court found that a stranded vessel is almost always in a position of substantial peril because it is helpless and cannot effectively deal with new emergencies like a storm or a further drop in water levels. In this case, the Mincio faced the real dangers of straining its hull on the uneven riverbed and the potential onset of a hurricane. The master's intentional and extraordinary use of the engines, despite the risk of damaging them, was a voluntary sacrifice made in good faith for the common benefit of both the ship and the cargo. Therefore, the resulting damage and expenses were properly subject to general average contribution.
Analysis:
This decision clarifies the standard for 'peril' in general average law, moving away from a strict requirement of immediate danger to a more flexible 'real and substantial' test. By doing so, the court grants ship masters greater discretion to take proactive, costly measures to save the ship and cargo from a developing threat. This precedent strengthens the position of shipowners in seeking contribution from cargo interests for sacrifices made to avert potential, but not necessarily imminent, disasters. It underscores that general average applies to prudent, preventative sacrifices, not just last-ditch efforts to escape certain catastrophe.
