American Smelt. & Refin. Co. v. Naviera Andes Peruana, SA

• Decision Date: 13 August 1962
• Docket Number: Civ. A. No. 38932.
• Citation: 208 F. Supp. 164
• Court: U.S. District Court — Northern District of California
• Parties: AMERICAN SMELTING & REFINING COMPANY, Plaintiff, v. NAVIERA ANDES PERUANA, S.A., et al., Defendants.

208 F. Supp. 164

AMERICAN SMELTING & REFINING COMPANY, Plaintiff, v. NAVIERA ANDES PERUANA, S.A., et al., Defendants.

Civ. A. No. 38932.

United States District Court N. D. California, S. D.

August 13, 1962.

COPYRIGHT MATERIAL OMITTED

J. Bond Smith, Jr., New York City, Allan R. Moltzen, San Francisco, Cal., and Bigham, Englar, Jones & Houston, New York City, for plaintiff.

McCutchen, Doyle, Brown and Enersen, Russell A. Mackey and Bryant K. Zimmerman, San Francisco, Cal., for San Rafael Compania Naviera, S. A., Orion Shipping and Trading Co., Inc., Ocean Liberties, Inc., and Maritime Overseas Corp.

Maynard Garrison, Jr., of Wallace, Garrison, Norton & Ray, San Francisco, Cal., for Compania Financiera Peruana, S. A.

James L. Adams of Lillick, Geary, Wheat, Adams & Charles, and Alan H. Nichols of Nichols & Rogers, San Francisco, Cal., for Schirmer Stevedoring Co. Ltd.

WOLLENBERG, District Judge.

This is an action in Interpleader for a determination of the respective rights of the parties and certain monies claimed to be due from plaintiff as freights on cargoes carried for plaintiff on the OCEAN ALICE. Plaintiff-stakeholder has deposited cash in the sum of $46,652.01 with the Court and established an interpleader bond in the sum of $46,697.59. The total sum of the freight monies due is $92,016.19.

Federal jurisdiction is invoked under the Interpleader Act (28 U.S.C. §§ 1335, 1397, 2361) in view of the diversity of citizenship by the defendants and the existence of an amount in issue exceeding $500.00.

This action was commenced on July 13, 1959 in the United States District Court for the Southern District of New York. By orders dated December 2, 1959 (182 F.Supp. 897) and February 11, 1960, the case was transferred to this court.

In the latter part of 1958, plaintiff and Naviera Andes Peruana, S. A., hereinafter referred to as Navandes, entered into oral negotiations for a contract to ship plaintiff's ore from certain ports in South America to ports on the west coast of the United States, principally, Tacoma, Washington and Selby, California where plaintiff has smelting plants. After these negotiations, a written draft of the proposed contract was drawn. Certain changes were made through cables and letters and Navandes then advised plaintiff on March 18, 1959 of their confirmation of the agreement.

The pertinent parts of the contract provided that:

1) Freight was to be deemed earned at the port of loading but was not payable until notice was given to plaintiff at its New York office of the ship's mooring at the port of discharge.

2) Ninety-five percent of the amount due was to be payable to Navandes' agents in New York or any other person mutually agreed upon by the parties.

3) Five percent was to be payable when the outturn weight certificates were completed.

4) Navandes, the carrier, was responsible for loading and discharge of all cargoes.

5) A FORCE MAJEUR clause, the pertinent part of which reads as follows, provided:

"* * * strikes, lock-outs, stoppages or restraints of labor for whatever cause, whether partial or general; * * * or any other reason or any other disabling cause, without regard to the foregoing enumeration, arising without the actual fault and privity of the carrier or of the shipper or of the agents or servants of either, which may prevent the delivery for shipment and/or the loading on board the carrying vessel of the cargo always mutually excepted. This clause shall be restricted in application to events occurring prior to the delivery of the cargoes to the carrier herein and shall not apply to the carriage of the cargoes from the loading port or ports to discharging port or ports * * *"

To assume its obligations of carriage Navandes utilized vessels which it did not own but had chartered from various parties. These vessels were the SS OCEAN ALICE (owned by defendant Ocean Liberties Inc.); the SS ARETI S. (owned by Sociedad de Navegacion, Albion, S. A.); and the SS ANDROS LEGEND (owned by defendant San Rafael Companies Naviera).

The following voyages were made by these vessels:

a) OCEAN ALICE arriving Tacoma, Washington March 17, 1959, freight paid by plaintiff in total amount of $137,702.76.

b) ARETI S. arriving Tacoma, Washington, May 15, 1959, freight paid by plaintiff in total amount of $98,116.48.

c) ANDROS LEGEND arriving Longview, Washington May 13, 1959, freight paid by plaintiff in total amount of $23,268.03.

d) OCEAN ALICE arriving San Francisco June 5, 1959 and arriving Selby, California June 11, 1959, freights unpaid.

On March 13, 1959, plaintiff's Tacoma plant was shut down because of a strike which prevented the discharge of vessels at Tacoma. As the duration of the strike could not be predicted, plaintiff made arrangements for alternate discharge of the Tacoma cargoes. Coincidently with this, plaintiff cabled Navandes on March 26, 1959 suggesting the Force Majeur clause of the contract of afreightment include events not only at the port of loading but at the port of discharge as well. On March 30, 1959, Navandes cabled plaintiff saying, "Re contract of afreightment, we agree changes your cable 26".

As the contract required plaintiff to pay Navandes' agents in New York or any other person mutually agreed upon, Navandes desired to make other arrangements for the collection of freight monies due on each voyage on each ship for plaintiff. On the first three voyages, plaintiff paid the freights due to Financiera Peruana through the Chase Manhattan Bank of New York.

On April 6 and April 24, 1959, Navandes made attempted assignments to Financiera Peruana of the freights due on all four voyages. The assignments were executed by the president and general manager of Navandes and as to the OCEAN ALICE voyage 2, in part read as follows:

"Second: Naviera Andes Peruana S. A. hereby irrevocably assigns to Financiera Peruana S. A. and up to the sum of $82,000 the freight charges owed by American Smelting Refining & Co., New York for the transportation of mineral ores which it is to ship on the SS Ocean Alice V/2 from various Peruvian ports with destination Selby (San Francisco) California."

On April 17, Navandes wrote plaintiff substantially the same communication as it had on the three previous voyages which reads as follows:

"As for previous sailings, we are making the usual arrangements with our bankers for freight collections and we therefore irrevocably authorize you to pay to the Chase Manhattan Bank for (Financiera Peruana) the freight on (OCEAN ALICE Voyage 2)".

On April 21, plaintiff agreed to pay the freight for the benefit of Financiera Peruana. At no time did Navandes or Financiera Peruana inform plaintiff expressly of the alleged assignment.

On her second voyage, the OCEAN ALICE arrived in San Francisco Bay on June 5, 1959. By that time Navandes had gone into bankruptcy and therefore failed to provide for stevedoring services as the contract required it to do. The ship was then ordered to Selby, California and arrived there at 0530 PDT on June 11, 1959. Plaintiff hired and paid Schirmer Stevedoring Company $25,167.22 to unload the ship. Plaintiff's New York office was notified of the mooring during the morning of June 11, 1959. At that time, plaintiff had been served with process by certain defendants. By June 20, these claims exceeded $400,000.00.¹

The gross freights of the second voyage of the OCEAN ALICE were $84,929.43; $7,086.76 represents the 5% outturn weights which remained to be paid on the first three voyages. The sum of these amounts represents the amount in controversy.

On these facts the contentions of the parties are as follows:

Plaintiff contends:

1) It has a right of set off against Navandes in the amount of $49,325.07; $25,167.22 being the amount paid to Schirmer for unloading the OCEAN ALICE on June 11 at Selby, California; the balance being extra costs incurred by the three vessels because of the strike at the Tacoma plant.

2) That Navandes agreed to pay all additional costs resulting from the strike at the Tacoma plant. The sum of $42,619.12 being the difference between the $92,016.19 total freights and $49,375.07, the claimed set off, is the total owed by plaintiff to any of the parties.

3) That it is entitled to a lien on the freights of the second voyage of the OCEAN ALICE against Navandes for the extra costs incurred due to the strike and the amount paid Schirmer for discharge of that vessel.

4) It is entitled to attorney's fees incurred in asserting claims against defendant.

5) It is entitled to costs of publication.

Financiera Peruana contends:

1) That on April 6, 1959, Navandes assigned to it all freights of the first three voyages, and on April 24, 1959, Navandes assigned to it all freights of the second voyage of the OCEAN ALICE; and that it is entitled to any money owing for these freights.

2) That it has a lien on the freights of the second voyage of OCEAN ALICE, for certain money paid for the benefit of that ship between April 21 and June 3, 1959.

The owners of the OCEAN ALICE contend:

1) The OCEAN ALICE was chartered to Navandes on December 17, 1958 and a lien was granted to the owners on all sub-freights for any amounts due under the charter and this lien is entitled to first priority.

2) General damages resulted from Navandes' failure to finish the charter due to its bankruptcy.

The owners of the ANDROS LEGEND contend:

1) Damages were sustained because of Navandes' failure to finish the charter due to its bankruptcy.

2) Priority for attachments made against the OCEAN ALICE on June 8, 1959.

Schirmer contends:

1) It is the first attaching creditor by right of its attachments of June 5, 8, 11 and 18, 1959.

2) It has priority based on valid maritime liens for services performed.

3) It has priority by rights of a judgment in the United States District Court.

The issues to be decided are:

1) Did plaintiff have the right to set off its claim deductions against (a) Navandes (b) as against...