P & E SHIPPING CORP. v. Banco Para el Comercio Ext. de Cuba

• Decision Date: 05 September 1962
• Docket Number: No. 5846.,5846.
• Parties: P & E SHIPPING CORPORATION, Respondent and Claimant, Appellant, v. BANCO PARA EL COMERCIO EXTERIOR DE CUBA, Libelant, Appellee.
• Court: U.S. Court of Appeals — First Circuit

307 F.2d 415 (1962)

P & E SHIPPING CORPORATION, Respondent and Claimant, Appellant, v. BANCO PARA EL COMERCIO EXTERIOR DE CUBA, Libelant, Appellee.

No. 5846.

United States Court of Appeals First Circuit.

Heard February 5, 1962.

Decided September 5, 1962.

John G. Poles, New York City, with whom Poles, Tublin & Patestides, New York City, was on brief, for appellant.

Antonio M. Bird, San Juan, P. R., with whom Hartzell, Fernandez & Novas, San Juan, P. R., was on brief, for appellee.

Before WOODBURY, Chief Judge, and ALDRICH and GANEY,^* Circuit Judges.

GANEY, Circuit Judge.

This is an appeal from a decree in admiralty entered in the United States District Court for the District of Puerto Rico, awarding appellee $545,619.41 damages for loss resulting from appellant's failure to deliver a certain cargo of beans and potatoes at a port designated on four bills of lading issued by appellant.

On or about September 30, 1960, L. N. White & Company, Inc., an American importer and exporter of food products, delivered 40,000 bags of beans to the S.S. Ruth Ann, at Port Huron, Michigan, to be shipped to a foreign port. The freight charges of $57,628.01 were prepaid on board and the company received two bills of lading dated September 22, 1960, at New York from agents of appellant.

On October 18, 1960, F. W. Pirie Company, Ltd., a Canadian wholesale produce dealer, delivered 56,861 bags of potatoes to the Ruth Ann while she was docked at Saint John, New Brunswick, Canada, also to be shipped to a foreign port. The freight charges of $51,174.00 were prepaid and the Company received two bills of lading from appellant's agent.

In each case the consignee of the shipment was the appellee, Banco Para El Comercio Exterior de Cuba, Departmento de Importation; Section de Alimentos, which prepaid the shipping costs, and the port of destination was Havana, Cuba. The bills of lading made applicable the provisions of the Carriage of Goods by Sea Act, 46 U.S.C.A. §§ 1300-1315, to the contract of shipment. The appellant, a corporation, organized and existing under the laws of the Republic of Liberia, is the owner of the Ruth Ann which sails under the Liberian flag.¹

At 12:00 Noon on October 19, 1960, while the Ruth Ann was still at Saint John, the United States government proclaimed a general embargo effective 12:01 a. m., October 20, 1960, on the export to Cuba of merchandise except food and medicine. Almost at midnight on the same day, the Ruth Ann sailed from Saint John en route to New York. When the vessel arrived in New York on October 22, both the managing director and the shipping broker of appellant came aboard the Ruth Ann and conferred with the master of the vessel. On the same day the vessel left New York. While the vessel was en route to Bermuda, appellant's agent, Interamerican Marine Operators, Inc., sent a cablegram, dated October 24, to L. N. White & Company, Inc., 24 Stone Street, New York, advising it that if a bond in the amount of $750,000 was not posted in New York within 48 hours of notice of the cablegram as security for the safe return of the vessel and her crew and to cover additional possible expense upon completion of the discharge of the cargo at Havana, Cuba, the vessel would discharge the cargo at a United States port. On October 25, the Ruth Ann sailed from Bermuda en route to San Juan, Puerto Rico. Appellee refused to post bond in the amount requested, and by letter dated October 28, addressed to appellant and its agent, insisted that the cargo be unloaded at Havana. After the vessel arrived at San Juan on October 30, appellant discharged part of the cargo of potatoes but took no steps to unload the remainder. While the vessel was still in port, appellee, on November 10, 1960, brought a libel in rem against the vessel and also a libel in personam against appellant in the United States District Court for the District of Puerto Rico.

After hearing evidence, the District Court concluded that appellant was obligated to deliver the cargo of beans and potatoes at Havana, and awarded appellee the cost of the shipment, freight and other expenses incurred by it through appellant's failure to deliver the beans and potatoes. The final decree was signed on May 16, 1961.

Although the question was not raised here by the appellant, our problem at the outset is to ascertain whether the appellee should have been permitted to sue in a court of the United States. It is true that the admiralty courts of this country may afford redress for a breach of contract of shipping goods by sea, even though the vessel is a foreign one, and the goods were to be delivered to a foreign port. The Maggie Hammond, 9 Wall. 435, 76 U.S. 35, 19 L.Ed. 772 (1869); The Jerusalem, ...