Opinion ID: 391190
Heading Depth: 1
Heading Rank: 5

Heading: the valve incident and its legal consequences

Text: 40 In reviewing the district court's finding of liability, the critical question we must address is whether the QUEENY INTERESTS had knowledge and privity of any defect in the astern guardian valve. Even if it is conceded that the valve was defective and that the collision was caused by the valve's defect, this alone does not constitute a basis to deny the QUEENY INTERESTS' petition to limit their liability. To constitute a per se basis to deny their petition, they must have had knowledge and privity of the valve's defect. 41 The statute provides that the owners' liability shall be limited to the value of the interest of the vessel and her freight for any act which occurs without the privity or knowledge of the owner. 46 U.S.C. § 183(a). In this case, therefore, the magic words are privity or knowledge, for a shipowner is responsible for unseaworthiness of his vessel only if he has knowledge, or, in the use of ordinary care, should have knowledge of that condition. Spencer Kellog & Sons, Inc. v. Hicks, 285 U.S. 502, 52 S.Ct. 450, 76 L.Ed. 903 (1932); Gibboney v. Wright, 517 F.2d 1054 (5th Cir. 1975); Waterman Steamship Corp. v. Gay Cottons, 414 F.2d 724 (9th Cir. 1969); China Union Lines, Ltd. v. A. O. Andersen & Co., 364 F.2d 769 (5th Cir. 1966), cert. denied, 386 U.S. 933, 87 S.Ct. 955, 17 L.Ed.2d 805 (1967); The Cleveco, 154 F.2d 605 (6th Cir. 1946). 42 In this respect, corporate shipowners, are held liable for the acts or knowledge of managing officers or supervisory employees. Coryell v. Phipps, 317 U.S. 406, 410-412, 63 S.Ct. 291, 293-294, 87 L.Ed. 363 (1943); Avera v. Florida Towing Corporation, 322 F.2d 155 (5th Cir. 1963); Complaint of Allied Towing Corp., 409 F.Supp. 180, 188 (E.D.Va.1976), aff'd, 580 F.2d 792 (4th Cir. 1978). Usually, however, they will not be held liable for the actions of crew members in the navigation or operation of the ship at sea. In re Black Sea Steamship Company, 382 F.Supp. 907, 911 (D.C. Canal Zone 1974). To hold Keystone privy, therefore, the evidence must show that some individual at the management level of Keystone had, or should have had, knowledge of the QUEENY's damaged astern guardian valve. BP/Sohio and the CORINTHOS bear the burden of proving negligence or unseaworthiness. Keystone, on the other hand, must demonstrate a lack of knowledge or privity to show that it is entitled to have its liability limited. Farrell Lines, Inc. v. Jones, 530 F.2d 7, 10 (5th Cir. 1976). 11 43 Under these precepts of law, what were the facts in this case which would justify the trial court's finding of privity or knowledge?