Mitsubishi Shoji Kaisha v. Societe Purfina Maritime, 10179.

• Decision Date: 05 April 1943
• Docket Number: No. 10179.,10179.
• Citation: 133 F.2d 552
• Parties: MITSUBISHI SHOJI KAISHA, Limited, et al. v. SOCIETE PURFINA MARITIME. THE LAURENT MEEUS.
• Court: U.S. Court of Appeals — Ninth Circuit

133 F.2d 552 (1942)

MITSUBISHI SHOJI KAISHA, Limited, et al. v. SOCIETE PURFINA MARITIME.

THE LAURENT MEEUS.

No. 10179.

Circuit Court of Appeals, Ninth Circuit.

December 10, 1942.

Writ of Certiorari Denied April 5, 1943.

Hunt, Hill & Betts, of New York City, and Arch E. Ekdale, of San Pedro, Cal. (John W. Crandall and Geo. Whitefield Betts, Jr., both of New York City, and Arch E. Ekdale, of San Pedro, Cal., of counsel), for appellant Mitsubishi Shoji Kaisha, Ltd.

Martin J. Weil, of Los Angeles, Cal., for appellant General Petroleum Corporation of Calif.

Bigham, Englar, Jones & Houston and T. Catesby Jones, all of New York City, McCutchen, Olney, Mannon & Greene and Farnham P. Griffiths, all of San Francisco, Cal., and Harold A. Black, of Los

Angeles, Cal., for appellee Societe Purfina.

Before DENMAN, MATHEWS, and STEPHENS, Circuit Judges.

Writ of Certiorari Denied April 5, 1943. See 63 S.Ct. 858, 87 L.Ed. ___.

DENMAN, Circuit Judge.

This is an appeal from a decree based upon a libel filed November 18, 1940, and amended March 25, 1941, by Societe Purfina Maritime, a Belgian corporation, hereafter called Purfina, against Mitsubishi Shoji Kaisha, Ltd., a Japanese corporation, hereafter called Mitsubishi, and against the diesel oil cargo owned by General Petroleum Corporation of California, hereafter called General Petroleum, and loaded for Mitsubishi's account on October 2, 1940, on the Belgian tanker Laurent Meeus at San Pedro, California, for unpaid freight claimed to be earned under a charter dated September 21, 1940, executed by Purfina and Mitsubishi for the carriage by the tanker of the oil to Japan. The charter made the cargo as well as Mitsubishi liable for the freight, for which the charter provision is, "2. The freight to be paid in cash in New York less 1% discount on telegraphic advice of signing Bills of Lading and is to be considered earned and not returnable ship and/or cargo lost or not lost."

The cargo was seized under process in rem. General Petroleum appeared as claimant and contested the freight liability of the cargo. Instead of paying the value of the cargo, $64,000, into court, General Petroleum secured its release and possession by filing a stipulation for its value. Royal Indemnity Company, a corporation, hereafter called Royal, was the stipulator. Hartford Accident and Indemnity Company, hereafter called Hartford, was stipulated for costs.

The district court held that the cargo being loaded and the freight moneys due, they were deemed earned and payable by Mitsubishi, though the voyage was frustrated by a series of governmental restraints beginning on October 2, 1940, in a postponement of her departure by the Belgian Ambassador, after her cargo was loaded, and culminating in a seizure of the vessel by the Belgian Government. The district court's decree awarded $92,279.59 freight moneys against Mitsubishi: $64,000 (toward the freight obligation) against Royal and General Petroleum and added interest to the award against the latter from the day the cargo was released to it and the stipulation given. It awarded costs against Hartford.

Mitsubishi, General Petroleum, Royal and Hartford have appealed, all contending there was no breach of the charter by Mitsubishi's nonpayment of the freight money. If the freight is held due from Mitsubishi, General Petroleum admits the lien on the oil cargo and its liability in personam for the $64,000, but contends that it is not liable for interest on the value of the cargo from the date it secured its possession on release from the freight lien, although it had the value of the oil since that time and prevented Purfina from having it by contesting the freight liability.

A. On June 6, 1940, the vessel's Captain Lippens had been served by the Belgian Consul in Galveston, Texas, with the following document, to which the captain appended his signature and of which he entered its substance in the ship's log:

"Belgian Consul

"Galveston, Texas.

"The Consul of Belgium at Galveston informs the captain of the Motor Tanker Laurent Meeus that his ship is requisitioned by the Director General of Marine, acting in the name of the Minister of Communications and of the Minister of National Defense.

"The requisitioned ship may not be time chartered. Any contemplated voyage must be submitted to the previous approval of the Director General of Marine, through the intermediary of the Consul of the Port where the ship is. A copy of the present order of requisition shall be delivered to the captain who will sign the original for execution.

"Made in triplicate at Galveston, on June 6, 1940.

"For the owners of The Consul of Bel the ship, The gium Captain Signed Baudoux Signed Lippens Seal of Consulate."

Mitsubishi claims that this requisitioning by the Belgian Government constituted a taking over of the vessel for the government's account which makes all the subsequent charters of the tanker free from any effect of a charter clause exempting the owner from the "restraints of princes, rulers and people."

The word "requisitioned" is not one of art. As was said by Lord Justice Pickford of the British Court of Appeals in The Broadmayne, 1916 P. 64, 114 L.T.R. 891, "There is no particular magic in the word requisition itself; it does not connote the same state of things in every particular case." Its various meanings are determinable in a specific instance by other facts. It may mean that the vessel's title is taken, as in a condemnation proceeding,¹ or her exclusive or partial use for the requisitioning government,² or merely that her ownership and earnings remain in her owner, but only for such voyages as are permitted or directed by the government with a view to the national interest.³

The agreement between Mitsubishi and Purfina provided that the charter for the Japanese voyage was "subject to the approval of the Belgian Government, London." Mitsubishi claims that it knew nothing of the June requisitioning, and it becomes pertinent to determine whether the requisitioning was for anything more than a governmental control over the voyages of the vessel by the owner on its own account.

Mitsubishi's brief concedes that the Belgian Government is not "entitled to the freights in the sense that it earned them as carrier." The only alternative is that Purfina earned the freights for its own account. The brief concedes that its claim that Purfina is estopped to assert the frustration is concerned with what was to happen to the freights after Purfina has earned them. The same paragraph as that containing the language last quoted, continues, "What we say is that the Government has the July freight on a prior voyage and will get the freight money in suit if Purfina collects it and, as a sovereign power, can use this money if necessity so requires."

With such admissions, it is apparent that we should sustain the finding of the district court that the requisitioning of the vessel on June 6, 1940, was for no more than the Belgian Government's direction of the use of the vessel for Purfina's account.⁴ This would impose no more restraint on Purfina than contained in its agreement with Mitsubishi that the charter was subject to approval by the Belgian Government.

Much evidence was taken upon the conduct of the Belgian officials with respect to the use of the vessel between June 6, 1940, and November 16, 1940, when the vessel was taken by that government. It is not inconsistent with, but supports, the finding of the trial court, in which we agree. The concessions of the brief above quoted make it unnecessary to give it detailed consideration. We hold the requisition of June 6, 1940, in no way affects Mitsubishi's liability for the freight.

B. The Belgian Government took possession of the tanker on November 16, 1940, under the following circumstances: The Belgian Consul boarded the vessel and delivered a notice stating in part, "* * * on July 10, 1940, the owners of said vessel having been given a permit to operate the said vessel for their own account, and on July 13, 1940, and September 23, 1940, round trips having been approved to permit the owners to operate the vessel on round trips to Japan, and subsequent to the said permits the need of the vessel for the purposes of State having become apparent, the said permits are hereby cancelled as of the 5th day of November, 1940." The Belgian Consul also served a notice that the Belgian Government was in possession of the vessel and required Captain Lippens to sign a declaration that he was holding the ship for the Belgian Government. A corresponding entry was made by the Belgian Consul on the vessel's Lettre de Mer.

Mitsubishi claims that the Belgian Government had some sort of an interest in the unpaid moneys, making the frustration of the voyage by the Belgian requisition in some way an act of Purfina which estops Purfina from suing for the nonpayment of the freight. This claimed Belgian interest consists of the right to compel Purfina to turn over to that government its net profits of the voyage, to be held by that government as trustee, to Purfina's account, just as it so holds the tanker's net earnings on a prior voyage. Mitsubishi's contention proceeds with the assertion that this trust account of Purfina is subject to a possible future expropriation by the Belgian Government.

It seems clear that since Purfina managed the vessel and earned the freight for its own account and not as agent for the Belgian Government, the trusteeship of the net earnings after Purfina had discharged its obligations to Mitsubishi is not a matter of the latter's concern. The net funds were Purfina's property before delivery to the government with its resultant trust interest.

With regard to the possibility that Purfina's trust property at some future time might be appropriated by the Belgian Government, the contention that that government took possession of the vessel before it could sail on its voyage for the purpose of giving a...