United States v. Palmer & Parker Co.
Decision Date | 28 October 1932 |
Docket Number | No. 2681.,2681. |
Parties | UNITED STATES v. PALMER & PARKER CO. et al. |
Court | U.S. Court of Appeals — First Circuit |
O. P. M. Brown, of Washington, D. C. (Frederick H. Tarr, U. S. Atty., and A. Chesley York, Asst. U. S. Atty., both of Boston, Mass., and Chauncey G. Parker, of Washington, D. C., on the brief), for the United States.
John W. Lowrance, of Boston, Mass., and Nathan W. Thompson, of Portland, Me. (Richard S. Chapman, of Portland, Me., on the brief), for appellee Palmer & Parker Co.
Harold Williams, Jr., of Boston, Mass. (George A. Furness, of Boston, Mass., on the brief), for appellee Bowery & East River Nat. Bank.
Before BINGHAM, ANDERSON (retired), and WILSON, Circuit Judges.
In the court below three admiralty suits were consolidated and a final decree entered on June 26, 1931, requiring the United States to pay to the Palmer & Parker Company $241,606.01, with interest, and to pay to the Bowery & East River National Bank $43,202.95, with interest.
On March 23, 1921, the United States filed its libel in rem (No. 1969 Civil) against the freights, subfreights, charter hire and/or subcharter hire of the Mt. Shasta, a merchant steamship belonging to the United States acting through the shipping board. This vessel had been chartered to the Mt. Shasta Steamship Company on May 19, 1920, for thirteen months at a gross hire of $506,940, payable in monthly installments in advance. The charter party provided, inter alia, that:
On July 14, 1920, Victor S. Fox & Co., Inc., agents of the Mt. Shasta Company, and Palmer & Parker Company (hereinafter referred to as appellee), executed a charter party for the transportation of a cargo of mahogany logs from the west coast of Africa to Boston. Two days later, Fox, agent, borrowed from the Bowery & East River National Bank (hereinafter referred to as intervener) $75,000, and assigned to the intervener, as security, the charter party to the appellee and the freights accruing thereunder. A further like transaction took place on September 16, 1920, for a loan of $40,000. The intervener made no examination of any public records or other inquiry to ascertain the real ownership of the Mt. Shasta, but claims to have relied upon representations of Fox, agent, that it and/or the Mt. Shasta Steamship Company owned the vessel. Before these loans were made, the Mt. Shasta was registered by the bureau of navigation, department of commerce, as owned by the United States; the vessel's certificate of registry was on file in the custom house at New York City, in Lloyd's Register of Shipping issued July 1, 1920, in the Record of American and Foreign Shipping issued January 1, 1920, and in the American Bureau of Shipping. There is no contention that the intervener's loans were made to furnish the Mt. Shasta or were so used.
The vessel arrived on the west coast of Africa on August 8, 1920, was loaded with mahogany logs, and sailed for Boston on September 19th; she should have arrived thirty-five days later, on October 24th, but actually arrived on February 19, 1921. Discharge of her cargo was completed on March 7, 1921, and the vessel repossessed by the shipping board on June 7, 1921.
Meantime, Fox & Co. and the Mt. Shasta Steamship Company were in receivership. None of the freight for the voyage was ever paid except $52,500, half the estimated freight for the voyage; this was paid to the intervener. The balance of freight money and earned demurrage was kept by the appellee when the cargo was discharged. When the appellant's libel was filed, there was due the government under the demise charter $289,680. The libel sought to require the appellee to pay the freight money into court. The appellee resisted this claim, contending that it had claims for advances made to furnish the vessel, and a large claim for cargo damage on account of delay in the voyage. The court below sustained these objections and ordered the libel dismissed, as not falling within the admiralty jurisdiction. The Mount Shasta (D. C.) 291 F. 92. On appeal to the Supreme Court this decision was reversed, United States v. Freights, etc., of The Mount Shasta, 274 U. S. 466, 47 S. Ct. 666, 71 L. Ed. 1156.
Thereupon, it was stipulated that the net balance of freight money and demurrage due the Mt. Shasta under the charter party was $30,555.55, which, with interest, appellee held itself bound to pay to the appellant "or to whomsoever the court might hold to be entitled thereto." In its final decree the court held the intervener entitled to this money, as above set forth.
Eight days after the filing of appellant's libel, the appellee filed a libel against the appellant (No. 1973 Civil) for $150,000 for damages caused by the unseaworthiness of the Mt. Shasta, preventing prosecution of the voyage with due diligence and dispatch. After full hearing, the court, on January 6, 1926, held the Mt. Shasta unseaworthy when the voyage was begun; that because of this unseaworthiness and failure of Fox & Co. and the Mt. Shasta Company to furnish funds requisite to coal her, etc., she was delayed beyond the time when she should have arrived, October 24, 1920, until February 19, 1921, The shipping board had furnished a marine engineer, as well as funds, for the completion of the voyage. There resulted an interlocutory decree, referring the case to an assessor, appointed on April 28, 1928.
The assessor filed two reports, which on November 14, 1930, were confirmed, and all of the appellant's exceptions overruled. On May 18, 1928, these libels, No. 1969 and No. 1973, were consolidated.
On April 25, 1927, the intervener had filed its intervening petition against the appellant and against the appellee in No. 1973, alleging loans, made in good faith upon the security of the assignment of the Mt. Shasta Steamship Company's charter party with the appellee, and without notice or knowledge of any claim by appellant against the freight money or any part thereof. It also alleges that the original charter party from appellant to the Mt. Shasta Steamship Company "was not of public record anywhere and was not brought to the knowledge of your intervenor nor could nor did your intervenor have notice thereof"; that a balance of $62,500 was still due on its loans, and seeks payment thereof from the balance of freight money due from the appellee or recovered as damages from appellant by the appellee.
On October 3, 1930, the appellant, appearing specially, excepted to the jurisdiction of the court below to entertain the intervening petition in No. 1973, on the ground that the intervener's alleged cause of action had occurred more than two years before the intervening petition was filed; and also on the ground that appellant's maritime lien against the freight money was superior to the claim asserted by the intervener; and that, if the intervener had exercised due diligence before making the loans on the security of the assignment of freight, it would have learned that the Mt. Shasta Company had neither power nor authority to create a lien against the freight of the Mt. Shasta superior to that of appellant.
On October 14, 1930, the intervener filed its written assent to the stipulation of May 14, 1928, in No. 1969. This stipulation between the appellant and the appellee, so far as now material, is as follows:
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