235 F. 2d 457 - Shannon v. United States

The trial judge found that the cables supplied by the United States were 'kinky' when supplied to Smith, the stevedoring employer. As the oral testimony supports this finding, it is not 'clearly erroneous.' However, the testimony perhaps justifies an inference of fact that, despite the kinks, the cable was 'in good working order,' i.e., that stevedores regard the presence of kinks as a normal condition of a cable and consider it a part of the stevedore's ordinary function to remove such kinks.¹

But we do not rest our decision on that ground, since we think Smith liable over to the owner even if, because of the kinks, the cable was not in 'good working order.' For Smith had expressly agreed with the owner to 'rig and unrig the ship's gear' which Smith used. That agreement, we think, included, as a promise implied in fact, the following: If Smith knew of a defect in any such gear, Smith would either remove the defect or notify the owner. This express undertaking constituted an agreement to indemnify the owner for any loss resulting from a breach by Smith. The express agreement distinguishes this case from American Mutual Liability Ins. Co. v. Matthews, 2 Cir., 182 F.2d 322, 324-325. See Ryan Stevedoring Co. v. Pan-Atlantic S.S. Corp., 350 U.S. 124, 76 S.Ct. 232.

The government is therefore entitled to recover from Smith the amount it paid him, together with its reasonable attorneys' fees and reimbursements in preparing to defend against Shannon's claim.

Reversed.