187 F.2d 114 (2nd Cir. 1951), 60, Compania De Remorque y Salvamento, S.A., v. Esperance, Inc.

Docket Nº:60, 21765.
Citation:187 F.2d 114
Case Date:February 13, 1951
Court:United States Courts of Appeals, Court of Appeals for the Second Circuit

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187 F.2d 114 (2nd Cir. 1951)



ESPERANCE, Inc. et al.

Nos. 60, 21765.

United States Court of Appeals, Second Circuit.

February 13, 1951

Argued Dec. 4, 1950.

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Lotterman & Tepper, New York City, Jacob Rassner, New York City, Louis A. Tepper, New York City, of counsel, for plaintiff-appellant.

Foley & Statt, New York City, Milton James, New York City, of counsel, for defendant-appellee, Esperance, Inc.

Engelman & Hart, New York City, Myron Engelman, Jack Hart, New York City, of counsel, for defendant-appellee, Seaboard Surety Co.

Before L. HAND, Chief Judge, and SWAN and CHASE, Circuit Judges.

CHASE, Circuit Judge.

The inability of a tower to perform a towage contract completely and the settlement

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by its surety on a performance bond, without its acquiescence, of consequent claims have led to this controversy.

On November 7, 1947, Esperance, Inc., a New York corporation hired Compania De Remorque y Salvamento, S.A., a corporation organized under the laws of Panama, to tow certain vessels from Charleston, S.C., to Buenos Aires, Argentina, for $60, 000. The Seaboard Surety Company, a New York corporation, executed a performance bond as surety. Compania failed to perform fully the towage contract and each party blamed the other. Esperance brought a libel in admiralty against Compania and Seaboard in the Southern District of New York on May 27, 1948. Both answered and Compania filed a 'counterclaim' for $40, 000 against Esperance for the alleged breach by Esperance of the towing contract. Seaboard settled with Esperance for $30, 000 before the suit was tried and secured a release from it. Thereupon the suit was discontinued as to Seaboard but Compania refused to discontinue its 'counterclaim' unless it was released by Seaboard from any liability for indemnity. Apparently Compania was unwilling to agree to any settlement Seaboard made with Esperance if that settlement left it liable over to Seaboard, i.e., it did not concede that it owed Esperance anything. Seaboard was unwilling to release Compania because the latter had made an assignment to Seaboard as collateral security to indemnify it from loss on the bond. The release was not given and the 'counterclaim' was not discontinued.

Compania's assignment covered all of its assets and property and 'all claims which it has presently or may have against any and all persons, firms, and/or corporations' and it gave Seaboard the right 'to prosecute all such claims, receive any monies in connection therewith, either by settlement, judgment or otherwise, to apply said monies to indemnify it against losses' on the bond, Seaboard agreeing to account for any excess. It also provided that Seaboard should 'have the exclusive right for itself, and for the principal on said bond to decide whether to settle any claim against either.' When Compania refused to discontinue its 'counterclaim' against Esperance, the latter moved to dismiss it on the ground that Compania, having made this assignment to Seaboard, was not the real party in interest. This motion was granted on February 28, 1949; the 'counterclaim' was dismissed; and no appeal was taken.

After that Seaboard sued Compania in the state court in New York to...

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