APP.] LA COMPANIA MARTIARtu v. CorporaTION OF THE ROYAL EXCHANGE ASSURANCE. [APP. 66 66 99 66 float derelict awash are usually wooden ships laden with timber, where materials and cargo both float; but then there is no room for cargo shifting so as to produce a list. Cargo that shifts is heavy cargo such as ore or wheat, where room is left in the hold, but such boats do not float awash with only 2ft. out of 32ft. depth above the water. I am sure that no one ever heard of such a boat of the dimensions suggested. The experts would not say that such contact was impossible, but it appears to me so highly improbable as to require the strongest proof to persuade me that it happened. The other thing that happened is that the chief engineer and donkeyman in the engine room say that they heard, about 11.20 p.m., a noise variously described as dull,' dry," and sharp which they thought was in the port bunker, and the noise of a fall of coal or a plate. No one else heard it. The next thing is to set out the rival theories and see how the alleged facts as to the rise of water fit in. The scuttling theory was that, by opening the sea inlet in the engine room and the valve in the valve box forward of the boiler room leading to No. 2 tank, water was allowed to run into No. 2 tank. When that filled there was a manhole on its top at its after end which, left loose, would let the water run on to the top of the tank in the boiler room, whence it would first fill the bilges on each side, and then rise over the top of the tank till it reached the floor of the boiler room and engine room. The engineer admitted he had been to the valve box about 11 p.m., as alleged by the firemen, but said it was to turn the pumps on to the bilges. The collision theory was that the water came through into the engine room in the way of the port bilge, and gradually rose in the engine room and boiler room till it first showed over the boiler-room floor and continued rising till it put out the fires and lights. The first objection to the collision theory was this. The experts said the surplus buoyancy of the ship was 2000 tons. I should have thought, considering the displacement scale, which, to judge by some of their answers, some of the experts had not looked at, it was 1800 tons (4ft. 10 in. freeboard × 31 tons to the inch). But taking it at 2000 tons, the ship sank in five hours, which would mean a loss of buoyancy of 400 tons an hour. As the inrush of water would be greater at first owing to the greater head of water outside, the quantity would be some 420 to 480 tons in the first hour, or 7 to 8 tons a minute. But the port bilge of the engine room only holds 7 tons of water, so that the incoming water should have filled the bilge in a minute, and the bilge on the port side aft of the engine room is open to view. Now the chief engineer gives a detailed account of his movements which I do not quote in full, but which repays the most careful study. On hearing the noise about 11.20 (1) he went up on deck to get into the port bunker to ascertain the cause of the noise, going down to the 'tween deck floor. (2) He went back to the engine room and examined under the engine and boilers, though he did not go into the boiler room. This must have been done by taking up a plate in the engine room floor, and, I suppose, going down under the boiler room. He found no water. (3) Then, after the boilerman had oiled the engines, and after 11.30, he reported some water in the bilges. (4) He then examined the bilge pumps to see they were working properly. Their capacity is about 15 tons an hour or ton a minute. (5) He then went on deck to sound the tanks. This would be routine, but though a blow in the port bunker would not put water into the tanks he did not sound the bilges: why, he did not state, though a blow in the bunker or the side of the ship would put water in the bilges. He found no water in the tanks. This, if true, negatived any idea of scuttling by No. 2 tank, which would be full before water came from it to the engine room. Was it true? (6) He went back to the engine room and found more water than before, so he put the donkey pump on, which had a capacity of 85 tons an hour, say 1 tons a minute. Up to this time only ton a minute was being taken up by the pumps. (7) He went down under the engine room by removing a plate, and found a lot of water, so much that he could not go far in. This water would be on the top of the tank. (8) Up to this time the circulating pump had been passing water from the sea through the condenser to the sea, with a capacity of 300 tons an hour. So he put on the false injection," which made this pump draw from the bilges and discharge into the sea. If all these pumps were then working on the bilges they were putting out 400 tons an hour, or 6 tons a minute, and yet the water was found to be rising substantially, so that much more than 6 tons must have been coming in. (9) He then says he went to call the third engineer, and puts the time at 11.40. He says that he did not get any report about water in the bilges till more or less ten minutes after he came back to the engine room from the bunker, and that when the water covered the tanks he did not recognise there was a serious leakage. Then follow a remarkable series of answers, at the end of which it was obvious that the judge did not, at that time, believe him, for up to the time when the false injection was put on, water must have been coming in at 7 or 8 tons a minute, in view of the fact that when all the pumps were said to be on, with a capacity of 6 tons a minute, the water was still rising substantially, probably more than 8 tons a minute, or, in ten minutes, some 80 tons enough to fill both bilges and put a considerable quantity of water over the top of the tanks. Yet it was more than ten minutes after the blow before the water was noticed to be rising in the bilges, and nothing was found on the top of the tanks. And if there was very little water in the engine room at first, until the false injection pump was put on, and then the pumps worked at a capacity of 6 tons a minute to take water out, it was difficult to see how water ever rose so far and fast as to put out the fires and stop the pumps. APP.] LA COMPANIA MARTIARTU v. CORPORATION OF THE ROYAL EXCHANGE ASSURANCE. This obvious and great difficulty evidently impressed the learned judge very much. The plaintiffs' experts tried to explain it in two ways. First, they said there must have been a good deal of injury forward of the cross bunker bulkhead so that the water coming in did not at first get into the engine-room bilges. To admit this water they suggested that the ship had been struck well forward and the bilge keel ripped off for some distance in the way of No. 2 bilge. This water, through rivet holes, would come into No. 2 hold bilges, and, rising, would not come aft till it had risen 2ft. above the tank top so as to get into the cross-bunker and through the open door into the boiler room. But the more water supposed to come into the hold this way, the more the ship would go down by the head and the water run to the forward, not the after, end of the hold. Further, I think all the expert witnesses agreed that the effect of the bow wave of the steamer would be to throw off a floating mass which had missed hitting the bow. It was suggested that suction might bring it in amidships, after being thrown off forward. The learned judge takes the view that it is extremely unlikely that such a mass would hit the ship at all, certainly not amidships." However, he "is not prepared to say, improbable as it is, that it is not a physical or scientific possibility that the mass would strike the ship where it did," that is, I suppose, where it is suggested to have struck. This possibility seems to be destroyed by the evidence of Sir Fortescue Flannery. "If the object was big enough .. if the submerged object was, for example, a waterlogged ship, it would be a big enough mass not to be affected, in my opinion, materially, by the suction." I do not think, after this, that the suction theory can be relied on to bring a mass which has missed the bow of the ship into collision amidships, or glancing along the side of the ship from fore to aft and ripping the bilge keel. Secondly, it was said that this glancing blow only sheared the rivets, leaving part tight in the rivet holes, and only very gradually did rivet by rivet fall in, admitting water through the rivet holes. This seems ... 66 extremely improbable, and, in addition, it is difficult to believe that a long glancing blow tearing out a number of rivets was not felt or heard by anyone on board the ship, as such a continuous blow. Weighing the probabilities of the stories, and bearing in mind the extreme improbabilities of parts of the collision theory, I have come to the conclusion, after a careful consideration of all the evidence, that water was intentionally admitted into the ship. I am specially impressed by the extreme improbability, I think impossibility, of a blow on the bilge keel amidships from a floating mass in the position described and by the difficulty of reconciling the slow rise of the water after the alleged hearing of a noise with the rapid entrance of water which must have followed a blow amidships from which the ship sank in the time proved. I also find these extreme difficulties in the way of the collision theory, coupled with [APP. a strong motive for scuttling, and incidents as to course and premature abandonment frequently found in scuttling cases. The combined effect drives me to the conclusion I have stated. I Next, was the water admitted with the well be when nothing is known except that the I do not think it is possible to put the case EVE, J.-At 9.30 p.m. on the 26th April 1921 the steamship Arnus left Vivero, on the north-west coast of Spain, bound for Rotterdam APP.] LA COMPANIA MARTIARTU v. CORPORATION OF THE ROYAL EXCHANGE ASSURANCE. [APP. with a cargo of 4640 tons of iron ore. She was owned by the plaintiff company, a Spanish corporation, and had been purchased in May 1920 for 160,000l. In April 1921 her value had fallen to 13,500l. or thereabouts, and she was insured for a total sum of 174,000l. under policies expiring on the seventeenth of the following month. The plaintiff company was accurately described by the managing director and secretary, Juan de Longaray, as a family company. He, his two brothers and his ten step-children, with a Mr. de la Rica and his brother and sister, held the bulk of the 4820 shares of 500 pesetas each, issued by the company. The difference between the company's capital and the amount required to meet (1) the cost of the ship and (2) the expenses of the purchase and of the formation of the company had been provided by a bank on the guarantee of the three de la Rica shareholders, and in April 1921, when the company's only assets were the ship and a few odds and ends, valued at 3751.,all the capital had been expended and there were outstanding liabilities in respect of loans amounting to 936,986 pesetas apart altogether from debts due to ordinary creditors. There can be no doubt that the company was at that time insolvent, and that there was no prospect of paying the creditors, let alone of making any return to the shareholders if the vessel survived the then current insurances. A profit and loss account for the first seven months of the company's trading and a balance sheet made up as on the 31st Dec. 1920 was presented to a general meeting of the company, held on the 31st March 1921. When the vessel left Vivero she was commanded by Thomas Enciardo, who had under him as first and second mates, Jose Ybarra, and Filipe Ybarra, his nephews, and stepsons of Longaray, and as chief engineer Victorinea Gomeza, a cousin of one Jaurequi, who held eighty shares in the company's capital, The captain had joined the ship in Dec. 1920, and the chief engineer on the 18th or 19th April 1921. Each mate held seventy-two, and the chief engineer eighty shares in the company; the captain held no shares. On the night of the 27th and 28th April in fine weather, a smooth sea, and with little or no wind blowing, the ship sank in deep water at a spot within easy reach of a large fishing fleet, but several miles nearer to the coast than she would have been had she been pursuing the normal course from Vivero to Rotterdam. There was no loss of life-some five hours elapsed from the time when the crew took to the boats until the ship foundered-no attempt was made to attract attention or to secure assistance by wireless or other signals all the ship's logs and papers except the master's chart were said to have been lost in an abortive attempt to launch the first boat; and no one who was on board has given evidence of any casualty to which the sinking of the ship can be attributed beyond the influx of sea water. On being landed from the fishing-boats by which they had been respectively rescued soon after the sinking of the ship, the officers in charge of the two boats in which the crew got awaythat is to say, the second mate and the captain —telegraphed to the owners that the ship had been wrecked owing to a leak. By way of defence to this action brought to enforce payment of the defendants' subscription to the policies, it is pleaded that the ship was not lost by perils insured against, but was wilfully cast away by those on board of her with the knowledge and consent of the plaintiffs. The learned judge in the court below rejected the defence and gave judgment against the defendants for the full amount claimed. It is impossible to read his judgment without appreciating two things; the one that he arrived at the conclusion he did with some considerable hesitancy, and the other that in his ultimate decision he was materially influenced by the weight he attached to the evidence of the second mate. He refers to this evidence where he says: “ In my judgment, this case in substance depends upon whether I believe the second mate or whether I do not. If I do not believe the second mate it is quite clear that the vessel was scuttled "; and later again, where he adds: "The main reason why I decide in favour of the owners is that I accept the evidence of the second mate." Had the learned judge seen and heard this witness as, in momentary forgetfulness, when delivering judgment, he believed he had done, it would have been difficult for this court to reconsider the truthfulness or otherwise of his testimony, but as the learned judge did not in fact hear his evidence, and as we have exactly the same materials for testing his veracity as were available in the court below, it is clearly open to us to review his evidence and to form our own opinion as to its reliability. The importance of this is not restricted to the question of the second mate's credibility. In accepting the truth of his story, the learned judge treated it as in some way establishing the credibility of the chief engineer. With all respect, I cannot follow this reasoning: if the second mate is speaking the truth when he says that the floating wreckage which he alleges he saw at a distance of some 7 or 8 metres from the ship did not touch the ship, how does this avail to support the chief engineer's story of a blow on the port side consistent only with an unmistakeable collision ? So far from being of a confirmatory nature, the two statements are, I venture to suggest, mutually destructive of one another. But it may no doubt be said, and said with some considerable force, that if the evidence of the second mate be true it proves the presence in the vicinity of something capable of inflicting a mortal injury to the vessel, and when it is not disputed that what subsequently happened is consistent with the infliction of such an injury, it is argued that it is more logical and more reasonable to link up cause and effect than to cast around for other possible contingencies capable of bringing about the same result. Why, it is urged, should theoretical suggestions of felonious acts on the part of the crew be preferred to the obvious APP.] LA COmpania Martiartu v. CorpORATION OF THE Royal Exchange AssurANCE. [APP. risk present in the shape of this floating mass of wreckage? From this point of view a careful examination of the second mate's deposition appears to me useful. As I have already observed, he is a nephew of the master, a stepson of the manager and secretary, and a shareholder in the company to the extent of some 14007. It is impossible to say that he is independent of the plaintiffs and that he has not, for a young man in his position, a considerable pecuniary interest in the result of the litigation. It is important to bear this in mind, as also that this is only one of several similar actions against the other underwriters in considering some of his answers under cross-examination. His material evidence is that about 11.15 or 11.20 on the night in question, when standing at the port end of the bridge, he sighted at a distance of some 7 or 8 metres a black mass in the water some 85 metres long and 8 metres wide, standing about 2ft. out of the water and looking like a hull or a large raft. The mass was abaft the bridge and seemed to him to pass clear of the vessel. He felt no shock, heard no noise, and kept his course. There is no corroboration of this story. The mass was not seen by the sailor on deck, by the man at the wheel, or by anyone keeping the same watch-so far as is known, its presence has never been reported by any ship navigating or any boat fishing in the locality, and there is expert evidence that the description does not assist in identifying its character. The witness drew no one's attention to the object, made no report of the incident to his brother, the first officer, who relieved him at midnight, and asserts that, although he reported it to the captain when the third boat, the port one, was being launched, he never mentioned it to anyone else. I think it is very difficult to give complete credence to this story. It is scarcely possible to believe that the cause of the catastrophe to the ship was not discussed by the crew when escaping and after their rescue by the fishing boat, and, if so, can one believe if this young officer (he is only twenty-three) had really seen this extraordinary object in the immediate vicinity only a very short time before he was aroused to find preparations for abandoning the ship in full swing, he would not at once have made known, at least to his brother, whom he admits he saw as soon as he reached the boat deck, what he had so lately seen? But it does not rest there. In crossexamination he was asked some pertinent questions as to this action and other matters, and the answers which I am about to read appear to me to throw grave doubt on his truthfulness. He is asked: When did you first hear that there were suspicions about the manner in which the ship was lost? (A.) I did not hear that there were suspicions. (Q.) Have you never heard that there are grave suspicions about the manner in which this ship was lost? (A.) No. (Q.) Never? (A.) No. (Q.) Have you never heard that some of the crew have accused the master of throwing away his ship? (A.) No. (Q.) What do you think this case is all about? (A.) About the insurance. (Q.) Do you under 66 (Q.) stand why your owners have brought this action? (A.) I can suppose the cause. What do you suppose the cause is? (A.) I suppose because the underwriters will not pay.. (Q.) And why do you think they won't pay ? (A.) I do not think they will not pay, but are trying to get out of paying. (Q.) Have your heard that the underwriters are trying to get out of paying because they think that the ship was deliberately sunk? (A.) No." And further on he is questioned on some other matters as follows: " (Q.) Was there a fireman or second fireman in your boat? (A.) I think there was more than one. (Q.) Was there a man called Bestos? (A.) Yes. (Q.) You recollect him? (A.) No. (Q.) Was there any talk in the boat between these men about the loss of the ship? (A.) I do not think so. (Q.) What did you talk about in the boat? (A.) About getting ashore and about the wind. (Q.) Was the sinking of the ship and its cause never mentioned ? (A.) I did not hear anything. (Q.) Witness are you being quite frank in answering this question? (A.) Yes. (Q.) Are you quite sure that you are answering correctly? (A.) I do my best. (Q.) You are quite sure you are not hiding anything? (A.) I do not hide anything. (Q.) Do you know that some of the crew approached the captain at St. Nazaire ? (A.) Many of us approached him for money. (Q.) Did you hear at St. Nazaire and at Bilbao some of the crew made charges against the master? (A.) I do not think so. (Q.) Are you certain that you have never heard of that incident? (A.) I do not remember, but I do not think so. (Q.) Is it a matter about which you can possibly be uncertain? (A.) I believe that I have not heard anything, and that I have no doubt about it? (Q.) This is a serious matter, witness, can you not be more certain than that? (A.) Had it been at the time, yes, but as it was a year ago, I do not remember. (Q.) Some of the crew had said they had made charges against the captain, but you never heard of them? (A.) I do not think I have heard anything. (Q.) I want to give you another opportunity of answering me with regard to the attitude of the underwriters. You have told me you had no idea of the attitude taken up by the underwriters with regard to the loss of the ship? (A.) No. (Q.) You really have no knowledge? (A.) No. (Q.) When was it first suggested to you by anyone that the ship was sunk deliberately? (A.) I do not think I have heard that. (Q.) Are you sure? (A.) I think I am sure of not having heard that." I do not think that is the evidence of a truthful witness, and in forming a judgment on the whole of his evidence the dearth of material for his cross-examination must not be overlooked. On the only crucial matter upon which he could be effectively cross-examined he appears to me to have given very unsatisfactory answers, and having regard to the date of his examination, Feb. 1922, to the fact that as early as June 1921 the possibility of litigation with the underwriters was being provided for by the plaintiff company, that this action had [APP. APP.] LA COMPANIA MARTIARTU v. CORPORATION OF THE ROYAL EXCHANGE ASSURANCE. been commenced in Oct. 1921, and that he personally and his eight brothers and one sister were all very materially interested in the success of the claim to recover the insurance moneys, I do not believe he was ignorant of the circumstances in which the claim was being resisted or that his evidence was being given to refute the allegation of a wilful throwing away of the vessel. I do not, therefore, accept the story of the floating wreckage, and I agree with Bailhache, J. that if one does not believe this witness it is quite clear that the vessel was scuttled. What follows from that statement of the learned judge and the observation in his judgment to which I have already alluded, where he says, "accepting the evidence of the second mate the evidence of the engineer becomes possible and credible"? This means, surely, that unless the second mate spoke the truth, the engineer is not to be believed, an opinion which coincides entirely with the learned judge's attitude towards the latter when under examination. I share that opinion with this qualification, that even if I believed the evidence of the second mate I should not believe that of the engineer. Having reached these conclusions it is not necessary for me to examine in detail the theories put forward for establishing the case that the incursion of sea water was a fortuitous casualty, more particularly as they have already been exhaustively dealt with in the judgments just read, but I may perhaps point out that the first theory raised on the evidence of the chief engineer as to the locality, where he heard the noise attributed to the alleged collision with the floating wreckage, of a leak due to a damaged plate near the port bunker was effectually disposed of by the statements of the engineer himself, that when he climbed down from the upper deck into the bunker shortly after hearing the blow he found everything there as usual, and no water, a condition of things quite impossible according to Mr. Camp, if a hole had been made in the ship's side capable of admitting a column of water measuring eight tons per minute; and that the second theory of a stripping back of the bilge keel from somewhere near the foremast and the flow of water from No. 2 hold into the cross bunker, and from there through the bulk head doors into the boiler and engine rooms, is quite inconsistent with a few very plain answers given by the engineer in examination in chief. Thus he is asked: "What about the bulkhead doors had they been open or shut up to then? : -this is up to the time when he went into the boiler room on hearing from a trimmer that there was a great deal of water in the place where they worked. His answer is: Up to then they were open. (Q.) Why had they been kept open? (A.) They were opened to get the coal out. (Q.) Yes; but why had you not closed them before? (A.) So as to let any water run out and to be able to work longer in the engine room. (Q.) Then, finding you were unable to keep the water out and work longer in the engine room, you ordered them 66 : to be closed is that right? (A.) Yes. When I found it was impossible I gave orders to close them and to make the engine room watertight." I am satisfied that the proof upon which those questions were framed had been prepared to support the case of a hole in the ship's side in the neighbourhood of the port bunker through which water was coming into the boiler room, and was passing forward through the bulkhead doors. The answers are quite inconsistent with the theory that the water was coming aft from No. 2 hold and the cross-bunker into the boiler room through those doors. In face of the opinion I have formed and expressed upon the evidence of the two most material witnesses called on behalf of the plaintiffs, it is quite unnecessary for me to dilate further on the acts and inactions of the master and other responsible officers following on the communications made to them by the chief engineer. Their conduct and attitude is inexplicable if they ever contemplated making any attempt to save the ship, but is quite consistent with a preconcerted plan to throw her away. At one time I entertained some doubt whether the evidence warranted the conclusion that the owners were privy to that plot, especially having regard to the fact that two-possibly threeof those who put it into execution were pecuniarily interested in the ship's destruction, but that qualification does not affect the master, who had no shares and was undoubtedly a participant in the crime, and I think the inference to be drawn from this, from the desperate financial position of the owners, from the intimate connection of the shareholders who were on board with those who were directing the company's affairs on land, from the course laid down for the voyage and from the other circumstances mentioned by my Lord and the Lord Justice, is that the throwing away of the ship was instigated by, and carried out with the connivance of, those most interested in the results which it was hoped-vainly, so far-such an act would bring about. Finally, I concur in the view that, in a case like this, where it cannot be said that the sinking of the ship was due to any unascertainable cause since it is demonstrated that she sank owing to the incursion of sea water, and where the evidence of everyone who was aboard her is available for the trial, had the evidence left the court in doubt on the question whether such incursion of sea water was due to a fortuitous casualty or a crime, the plaintiffs would not have been entitled to judgment, not having proved the material allegation in par. 2 of the statement of claim that "the steamer was sunk and was totally lost by perils insured against by the policy." I agree that the appeal must be allowed and the action be dismissed with costs here and below. Appeal allowed. Solicitors for the appellant, Holman, Fenwick, and Willan; for the respondents, Botterell and Roche. |