Red Cross Line v. Atlantic Fruit Co.

• Decision Date: 31 May 1922
• Citation: 233 N.Y. 373,135 N.E. 821
• Parties: RED CROSS LINE v. ATLANTIC FRUIT CO.
• Court: New York Court of Appeals Court of Appeals

233 N.Y. 373

135 N.E. 821

RED CROSS LINE

v.ATLANTIC FRUIT CO.

Court of Appeals of New York.

May 31, 1922.

In the matter of the petition of the Red Cross Line for an order directing the Atlantic Fruit Company to proceed to arbitration. An order of arbitration was made and affirmed on appeal to the Appellate Division of the Supreme Court (199 App. Div. 961,191 N. Y. Supp. 949), and the Atlantic Fruit Company appeals from such order of affirmance.

Order reversed, and proceedings dismissed.

See, also, -- App. Div. --, 192 N. Y. Supp. 947, and 232 N. Y. 629, 134 N. E. 600.

November 28, 1919, the petitioner, Red Cross Line, respondent, and the appellant, Atlantic Fruit Company, entered into a written agreement of charter party wherein appellant was described as ‘chartered owners' of the steamship Runa, and referred to as ‘owners,’ and the respondent ‘Red Cross Line’ was designated as ‘charterers.’

By the terms of the charter party the owners let and the charterers hired the steamship Runa from the time of delivery at Philadelphia, Pa., with sufficient bunkers to take the steamer to New York, for one round trip between New York and any safe port or ports in Canada or other British possessions not north of the St. Lawrence river.

The owners covenanted to provide and pay for all provisions, wages, and consular shipping and discharging fees of captain, officers, firemen, and crew, pay for the insurance of the vessel, also for all engine room and deck stores, and maintain the vessel in a thoroughly efficient state. The charter party provided that in the event of loss of time from deficiency of men or stores, breakdown of machinery or damages preventing the working of the steamer for more than 24 hours at sea the payment of hire should cease until service was resumed, and should the vessel, in consequence, put into any port other than that to which it was bound, the port charges, etc., should be borne by the ‘owners'; further, that if any loss of time occurred from crew or stores not being on board in time, repairs not being complete after cargo and coal on board and hour of sailing had been fixed by ‘charterers' and notice given to captain, the time was lost to the ‘owner's' account.

The ‘charterers' covenanted to pay and provide for all the coal, port charges, pilotage agencies, and commissions, and for the use of the vessel $25,000 for calendar month, and at the same rates for any part of a month until delivery of the vessel to owner (unless lost), payment to be made in cash half monthly in advance from the date of delivery of steamer, also for all the coal in steamer's bunkers on delivery, the owners to pay for all coal left in bunkers on redelivery of ship at port where redelivered. In default of payment of hire the ‘owners' had the right to withdraw the steamer from the service of ‘charterers' without prejudice to any other claims under the charter.

Further provisions of the charter party were:

‘The captain shall prosecute his voyage with the utmost dispatch.’

‘That should any dispute arise between ‘owners' and ‘charterers' the matter in dispute shall be referred to three persons in New York, one to be appointed by each of the parties hereto and the third by the two so chosen; their decision, or that of any two of them shall be final and for the purpose of enforcing any award this agreement may be made a rule of court.’

A dispute and controversy arose between the parties. On April 8, 1920, the ‘charterers' demanded that the ‘owners' join with the ‘charterers' in an arbitration of said dispute as provided by the charter party. The ‘owners' refused to accede to the demand, and thereupon the present proceeding was instituted under chapter 275, Laws of 1920, for an order directing the ‘owners' to appoint its arbitrator and proceed to arbitration as provided for in the charter party contract.

The petition persented to the court set out in full the charter party contract, and in substance as to dispute and controversy between the parties, the following:

(a) That the steamer cleared from the port of New York for the port of St. Johns, normally an eight-day run from New York, on December 6, 1919, and was ready to proceed in the evening of that day, and the master was ordered so to do by the ‘charterers,’ but refused to proceed until the following day, December 7, 1919, a needless delay of 12 hours, and the master did not, as required by the charter party, ‘prosecute said voyage with the utmost dispatch.’

(b) That when within approximately 100 miles of St. Johns, Newfoundland, the port of destination, the master turned the steamer about and proceeded to the Azores, distant from St. Johns about 1300 miles, where the Runa was kept by the master for 21 days until January 5, 1920, and finally arrived at St. Johns on January 14, 1920, and that 39 days were consumed on the voyage from New York to Newfoundland, instead of 8 days, the normal running time.

(c) That the steamer consumed an excess quantity of coal exceeding 298 tons over the amount reasonably required.

(d) That petitioners in ignorance of the true state of facts until after the return of the steamer, and in view of the right of the fruit company under the charter contract to withdraw the steamer from the service of petitioner unless the hire of the same was paid in advance, paid to the ‘owners' under protest charter hire, cost of fuel, and other disbursements aggregating $35,256.96, which the fruit company after demand has refused to repay, and which items and overpayment constitute a dispute and controversy between the parties.

The answer to the petition filed by respondent denied:

(a) That the master did not prosecute the voyage with the utmost dispatch, viz. in leaving New York on the evening of December 6th, and affirmatively alleged that the pilot appointed by the pilotage authorities in the port of New York pursuant to law refused to take the steamship Runa out to sea on the evening of December 6, 1919, on the ground that it was not safe to do so.

(b) Denied that the steamer as alleged was turned about and proceeded to the Azores, kept there by the master for a period of 21 days, finally arriving at St. Johns, January 14, 1920, and that an excess quantity of coal was taken aboard the steamer.

(c) Denied knowledge or information sufficient to form a belief that the ‘charterers' were ignorant of the true state of facts alleged until after the redelivery of the steamer, and that in order to protect its rights paid to the owner the charter hire, cost of fuel, and other disbursements.

(d) Denied that any amount is due the respondent.

(e) Admits that a dispute and controversy has arisen and exists between the parties and its refusal to arbitrate the same.

As an affirmative defense and answer it was alleged:

That the dispute or controversy between the parties set forth in the petition and answer being one arising out of a charter party is a maritime dispute, and is a cause of ‘admiralty and maritime...