INTERNATIONAL DRILLING COMPANY v. M/V DORIEFS

Citation291 F. Supp. 479
Decision Date15 October 1968
Docket NumberNo. 64-H-171.,64-H-171.
PartiesINTERNATIONAL DRILLING COMPANY, N. V., v. The M/V DORIEFS, in rem, Compania Naviera "Doriefs", S. A., Marlin International Corporation, Commerce Marine Line, Inc., Lacy & Company, Inc., and J. M. Cook Company, in personam.
CourtU.S. District Court — Southern District of Texas

COPYRIGHT MATERIAL OMITTED

Vinson, Elkins, Weems & Searls, Robert M. Julian, Houston, Tex., for plaintiff, International Drilling Co.

Royston, Rayzor & Cook, George W. Renaudin, Houston, Tex., for defendant "Doriefs" S. A.

Schlanger, Cook & Cohn, Joel W. Cook, Houston, Tex., for defendant J. M. Cook Co.

MEMORANDUM OPINION

SEALS, District Judge.

This is a proceeding in admiralty by International Drilling Company (IDC) against the M/V DORIEFS, in rem, her owner, Compania Naviera "Doriefs", S. A. (owner) and Marlin International Corporation (Marlin) for breach of a contract of affreightment and damages resulting from delay in the delivery of cargo. The libel also seeks to hold Lacy & Company (Lacy) and J. M. Cook Company (Cook) responsible for their alleged activities in the inducement of, or their participation in, the breach of contract.

After suit was filed in this court in October, 1964, and answers were filed jointly by Marlin, Lacy and Cook through a local attorney, Marlin filed a petition in bankruptcy in the United States District Court for the Southern District of New York. Counsel for these parties was notified that his services were no longer required and the court allowed him to withdraw from this case. Although copies of the proceedings were mailed to both Marlin and Lacy, they have failed to make further appearance before this court. Cook subsequently retained another attorney to represent him in these proceedings.

There is no indication that there has been any action taken that would preclude this court from exercising its admiralty jurisdiction over, and proceeding to judgment against either Marlin or Lacy. Accordingly, it is the opinion of this court that there is full and complete jurisdiction of the subject matter and parties herein, including jurisdiction in rem of the M/V DORIEFS.

In March, 1964, Marlin through its agent Lacy, contracted with Global Supply, Incorporated to transport a drilling rig from Houston, Texas to Marsa El Brega, Libya. The rig was to be loaded between the first and tenth of May with an expected transit time of seventeen days to destination. It appears that it was agreed, or at least Global expected that Marsa El Brega would be the first port of call.

In April, 1964, Behring-Southports Shipping, Incorporated, as agent for the Offshore Company and its subsidiaries, IDC and Offshore Venezuela, C.A., entered into negotiations with Lacy and Cook, Marlin's agents in New Orleans and Houston, to arrange for the shipment of a drilling rig from Houston to Benghazi, Libya. These negotiations culminated in an agreement dated April 14, 1964, between Marlin and Offshore Venezuela. The agreement was executed by the agents after approval by the Offshore Company and its subsidiaries. Among other things, the agreement guaranteed the arrival of the rig in Benghazi within twenty-one days after departure from Houston, subject to conditions and circumstances beyond Marlin's control, and that Benghazi would be the first port of discharge. The agreement was also made "subject and subordinate to all terms and conditions of Marlin International Corporation's regular liner form bill of lading."

On April 23, 1964, Marlin chartered the M/V DORIEFS from its owner under a time charter (Government Form—New York Produce Exchange) in London. The DORIEFS was delivered to Marlin pursuant to the charter party at Tampa, Florida on or about April 30, 1964, where she was partially loaded with bulk cargo to be delivered at Savona, Italy. There the master of the DORIEFS delegated to Marlin and its agents authorization to execute bills of lading in his name. Thereafter, the vessel sailed for Houston, arriving on May 5th.

While in Houston, both drilling rigs were loaded aboard the DORIEFS along with general cargo destined for Alicante, Spain. On May 13th, Behring-Southports prepared a bill of lading listing IDC as the shipper and consignee of the rig bound for Benghazi. The bill of lading forms were supplied by Cook and he signed the prepared forms for the master of the DORIEFS.

The same day the DORIEFS departed Houston, arriving at New York on May 19th. After loading general cargo to be delivered in Alexandria, Egypt the vessel sailed for Alicante arriving there on May 31st. The vessel then proceeded to Alexandria, arriving on June 6th; Marsa El Brega, arriving on June 9th; and Benghazi, arriving on June 14, 1964, some eleven days later than anticipated in the agreement of April 14, 1964.

IDC claims that the routing provisions of its contract of affreightment were breached in that: (1) the DORIEFS did not make Benghazi its first port of discharge; (2) the vessel did not arrive at Benghazi within twenty-one days of its departure from Houston; and (3) the vessel deviated from its voyage by proceeding from Houston to New York, then to Alicante, then past Benghazi to Alexandria before doubling back to Marsa El Brega and Benghazi. As a result, it is contended that IDC sustained damages for the expense of maintaining a crew and logistic equipment in preparation of receiving the rig and moving it inland while awaiting the delayed arrival of the DORIEFS. It is also urged that some discharging costs for the vessel's account were not defrayed by Marlin or the vessel, but were advanced by IDC to obtain its cargo.

It is the opinion of this court that IDC was the owner and true party in interest in the drilling rig in question. Although it appears that Offshore Venezuela was the original owner, the purchasing agent for the Offshore Company and its subsidiaries testified that at all times pertinent to this action IDC was the owner. The bill of lading shows IDC to be both shipper and consignee of the cargo.

The foremost controversy in this case centers around the question of what constitutes the contract of affreightment and, once that issue is resolved, who, if anyone, is liable in damages to IDC. The evidence indicates that from the time of the first negotiations until the actual delivery of the rig at Benghazi, the date of such delivery was of paramount importance to IDC. In accepting the letter agreement of April 14th, Marlin bound itself to deliver the rig within twenty-one days of departure from Houston and to insure this, designated Benghazi as the first port of discharge. It is apparent from the evidence that this was the primary reason IDC permitted Marlin to transport the cargo. The evidence further demonstrates that Marlin directly and through its agents continued to reassure IDC's agents that the specified date of delivery would be met while the rig was being loaded aboard the DORIEFS and after the vessel sailed from Houston. As the charterer of the vessel Marlin directed its course at all times by instructions to the master. Whatever the reasons that prompted Marlin to choose this particular route for the DORIEFS (although the evidence suggests that it was for Marlin's own economic interests), it is the opinion of this court that in so doing Marlin breached the agreement of April 14th and that breach resulted in damages to IDC.

Although the bill of lading was silent as to the terms of the April 14th agreement and that agreement was made subject to the bill of lading, the bill of lading standing alone cannot be considered as a complete defense to the charterer as was the case in American Tobacco Co. v. The Katingo Hadjipatera, 81 F.Supp. 438, 447-448 (S.D.N.Y.1948); modified, 194 F.2d 449 (2d Cir. 1951), cert. denied, 343 U.S. 978, 72 S.Ct. 1076, 96 L.Ed. 1370 (1952). Unlike the facts of that case, the bill of lading herein shows that it was prepared after the cargo was on board the DORIEFS and presumably out of the control of the shipper. In addition, as previously mentioned, the charterer repeatedly assured the shipper that the delivery provisions of the prior agreement would be honored.

Where, as here, the facts of a particular situation justify it, the conditions and circumstances known to the parties and contemplated by them in the making of a bill of lading will be taken into consideration in giving effect to the bill of lading. Isthmian S. S. Co. v. California Spray-Chem. Corp., 300 F.2d 41, 44 (9th Cir. 1962); W. R. Grace & Co. v. Frank Waterhouse & Co., Inc., 264 F. 422, 424 (9th Cir. 1920); Pacific Coast Co. v. Yukon Independent Transp. Co., 155 F. 29 (9th Cir. 1907). Under these circumstances it is unnecessary to hold that the prior agreement replaced the bill of lading or that the bill of lading was merely a receipt for cargo loaded in order to give full effect to the provisions of the April 14th agreement. Toyo Kisen Kaisha v. W. R. Grace & Co., 53 F.2d 740 (9th Cir. 1931). Accordingly, Marlin as the charterer of the vessel, must be held accountable to IDC for its breach of the prior agreement in that the rig was not delivered within twenty-one days transit time from Houston and Benghazi was not made the first port of discharge.

It does not follow by this reasoning that the DORIEFS and its owner are liable to IDC for Marlin's breach of the prior agreement. Only Marlin and IDC were parties to that agreement which was entered into some nine days before the DORIEFS was chartered. There is no evidence that the master or owner of the vessel at any time had knowledge of the terms of that agreement. The agreement was made subject to the bill of lading. The bill of lading signed by Cook for the master pursuant to Clause 8 of the charter party contained no reference to the agreement of April 14th, the proposed first port of discharge or a transit time of twenty-one days.

In The Blandon, Judge Learned Hand summarized the law applicable to this situation: ...

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