Opinion ID: 1482002
Heading Depth: 1
Heading Rank: 2

Heading: Protection and Insurance.

Text: 1. The Contractor shall at all times provide protection adequate in the judgment of the General Manager of the United States Lines, or other duly authorized representative of the United States Lines, to protect fully the vessel, the work and all of the property of the United States Lines at Contractor's plant or on the vessel, provided, however, that the exercise of judgment by the General Manager of the United States Lines or other duly authorized representative of the United States Lines provided for in this paragraph, and protection furnished by the Contractor in accordance therewith, shall not release the Contractor from any liability or responsibility it may be under, irrespective of the provisions of this paragraph and howsoever arising. 2. Without limiting by the provisions hereof any liability of the contractor, howsoever arising, it is understood that from the delivery of the vessel to the Contractor until its re-delivery to the United States Lines, after the completion of the work or while the work hereunder is being performed, the Contractor shall be responsible for and protect and save harmless the United States of America, the United States Shipping Board, the United States Shipping Board Emergency Fleet Corporation, the United States Lines and the vessel, against all losses (provided, however, that the United States Lines will continue the present hull, machinery and equipment insurance upon the vessel during the period the vessel is at the Contractor's yard, but the Contractor shall, at its own expense, protect the United States Lines through a Builder's Risk Insurance, for the amount of this contract, and for such of the United States Lines' material removed from the vessel, or as may be placed in storage at the Contractor's plant), accidents, injuries and/or damages of any nature to the vessel (except demurrage which is provided for hereinunder and provision relating to liquidated damages) and/or the vessel's equipment and/or its cargo and/or its movable stores and/or to the crew or property thereof, through any act or default or neglect of the Contractor, and/or of any of the Contractor's agents or employees, or in any other case where losses, accidents, injuries or damages shall have been due to causes within the control of the Contractor, or where such losses, accidents, injuries or damages could have been prevented by the Contractor by the exercise of a degree of care exhibited in high grade repair yard practice, including (but not limited by such specific mention, the generality of this requirement), the following precautions: The Contractor shall take precaution to protect the ship from fire in every possible way, including the prompt removal of rubbish, care in the use of inflammable materials and torches, care of electric wiring, strict prohibition against smoking, and in all other ways to prevent fires and add to the safety of the ship. The United States Lines reserves the right to permanently refuse admittance to the ship, or expel therefrom any of the Contractor's employees who violate the rules laid down from time to time to carry out the intent of these clauses. The Contractor shall maintain an efficient system of inspection over the activities of welders, acetylene burners, painters and similar workmen employed by him under this contract, so as to minimize the danger of fires occurring through carelessness or otherwise. He shall have at all times while such work is in progress, a line of fire hose, under pressure, available in each section involved and at least one man on duty at all such times solely for the purpose of operating this hose in emergency. In addition, the Contractor will provide chemical fire extinguishers in ample quantities (and sand boxes or other approved oil fire extinguishers and at all locations where directed) to supplement the hose protection. Wherever steel plates are being burned through under this specification, adequate provision must be made to prevent sparks coming in contact with inflammable material; and the Contractor will be required to adopt such other reasonable measures in this connection as may be directed by the United States Lines. Wherever a rivet forge is being used over a wood deck, it shall be set in a tight, shallow, metal-lined pan, at least four feet by five feet to protect wood deck from cinders, coals and hot rivets. If, in spite of this precaution, burned spots occur on the deck in the vicinity of the rivet forges, contractor shall patch or replace the deck in a suitable manner approved by United States Lines' representative, to remove such burns. 3. For the purpose of this contract, the vessel shall be considered as having been delivered to the Contractor when access thereto has been afforded the Contractor, whether the vessel be at the Contractor's plant, at anchor in a stream or harbor, tied up at a wharf, dock, pier, loading or discharging berth, in dry dock or elsewhere and in whatever condition; and for the purposes of this contract, the vessel shall be considered as being in the possession of the Contractor until the work hereunder shall have been completed to the satisfaction of the United States Lines, irrespective of where or in what condition the vessel may be. Completion of this contract shall include the removal from the vessel of all the Contractor's tools, equipment, etc., and all rubbish. 4. The Contractor shall at its own expense protect and save harmless the United States of America, the United States Shipping Board Emergency Fleet Corporation, the United States Lines, and the vessel, from all claims and liabilities ordinarily covered by proper casualty or liability insurance, and Workmen's Compensation Insurance. It is expressly understood that the workmen engaged upon the work hereunder shall at all times be employees of the Contractor and/or sub-contractors, and not of the United States of America, or of the United States Shipping Board, or of the United States Shipping Board Emergency Fleet Corporation, or of the United States Lines. 5. The Contractor shall be responsible for the safety and proper keeping of materials, equipment and supplies furnished by the United States Lines for the purpose of being installed in the vessel or used in the work. In the event of loss or damage to such materials or supplies after being furnished by the United States Lines and before being installed or used, the Contractor shall replace the articles or repair the damages at his own expense. Paragraphs 6, 7, 8, 9, and 10 are omitted as immaterial. 11. The United States Lines reserves the right to maintain at its own expense, officers, watchmen and crew on board the vessel who shall be solely responsible to it and under its sole direction. Article 17 of the contract is as follows: 1. All understandings and agreements of every kind heretofore had or alleged to have been had between the parties hereto, or any of their agents or representatives, whether written or verbal, are embodied in this contract, which is now the one and only contract between the parties hereto relative to this subject matter. The builder's risk insurance required to the amount of the contract was secured by the shipyard, and is not in controversy. The vessel left New York January 6, arrived at the shipyard January 7, and the fire occurred March 10, all in the year 1926. A considerable part of the crew remained aboard while the work was in progress. Under the contract, the repairs were to be completed not later than March 11, and the demurrage for delay was fixed at $4,000 for each day. The contract was 99¼ per cent. complete at the time of the fire. The fire broke out in a stateroom where were a plumber, who was working on a pipe, using a lighted plumber's furnace, and two joiners, all employees of the shipyard. A carpenter's sawhorse and miscellaneous tools were in the stateroom. The loss occasioned by the fire was in excess of $2,000,000. The United States filed its libel charging negligence on the part of the shipyard, and asking recovery for the entire damages. Answer was filed by the shipyard. Numerous interrogatories were filed by the United States and answered by the shipyard. Evidence was taken and the judge below entered an interlocutory decree, holding the shipyard liable, from which decree this appeal was taken. The United States also filed its cross-appeal, complaining that the court below had in its decree failed to hold the shipyard liable under the demurrage clause in the contract. No ascertainment of the actual amount of the damage has been had. There are three questions involved: (1) Was the shipyard, through negligence, liable for the damage occasioned by the fire? (2) If liable, did the government's agreement with respect to insurance operate to relieve the shipyard of liability for the loss to the extent of the amount of the insurance that the United States agreed to carry, or $2,000,000? (3) Is the shipyard liable for demurrage?