Standard Oil Company Of New Jersey v. Southern Pacific Company

268 U.S. 146 (1925)

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Nature of the Case

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Facts

On August 19, 1918, the steamship Cushing, owned by D, and the Proteus, owned by P and operated by the Director General of Railroads, collided. The Proteus and her cargo were lost. P and D filed their petitions for limitation of liability. The District Court found that both vessels were at fault and referred the question of damages to a commissioner who reported that there should be awarded on account of the loss of the Proteus $750,000, with interest. The Proteus had an original cost of $557,600. In 1909, she was reboilered and otherwise improved at a cost of $90,000. She was unusually well-kept and in excellent condition for use. The District Court found that in 1917 and 1918, on account of unprecedented demand and a shortage of shipbuilding facilities, the market value of ships was higher than the cost of construction; and also found that in 1918, when the Proteus was lost, the cost of construction was approaching the peak which came some months later. P called three witnesses experienced in shipbuilding and familiar with construction costs and value of ships in 1918. Each made an estimate of the cost of reproduction of the Proteus as of the date of the loss. Their estimates were respectively $1,755,450, $1,750,000, and $1,750,000. P called a mechanical engineer and naval architect connected with its construction department, who testified that the cost of reproduction of the Proteus in 1918 would have been three times its original cost of approximately $1,670,000. Two other witnesses, who had been members of a government board of appraisers for the determination of just compensation for vessels requisitioned. expressed the opinion that the cost of reproduction of the Proteus in 1918 would have been two and a half times its original cost of approximately $1,400,000. The figures were arrived at by examination of statistics showing labor and material costs. These three witnesses testified respectively that at the time of the loss, the value of the ship was $630,000, $650,000, and $611,000. The Commissioner’s number of $750,000 was confirmed and the decree was entered. P and D appealed. D maintained that the Cushing was not at fault and sought reversal on that ground. P claimed that the commissioner's valuation of the Proteus was too low. The Circuit Court of Appeals affirmed the fault of the Cushing and held that the value of the Proteus at the time of the collision was $1,225,000. D appealed.