American Anthracite & B. Coal Corp. v. Amerocean SS Co.

• Decision Date: 14 February 1955
• Docket Number: No. 35 of 1955,35 of 1955
• Citation: 131 F. Supp. 244
• Parties: AMERICAN ANTHRACITE AND BITUMINOUS COAL CORPORATION v. AMEROCEAN S. S. CO., Inc. and Amersea Navigation Corp.
• Court: U.S. District Court — Eastern District of Pennsylvania

131 F. Supp. 244

AMERICAN ANTHRACITE AND BITUMINOUS COAL CORPORATION v. AMEROCEAN S. S. CO., Inc. and Amersea Navigation Corp.

No. 35 of 1955, Admiralty.

United States District Court E. D. Pennsylvania.

February 14, 1955.

Conlen, LaBrum & Beechwood, Philadelphia, Pa., Hays, St. John, Abramson & Schulman, New York City, for libellant.

Krusen, Evans, & Shaw, Philadelphia, Pa., Julius Wilk, New York City, for respondents.

GANEY, District Judge.

This matter concerns itself with the motion to dismiss by the respondents with an answer thereto by the libellant. With respect thereto the court makes the following

Findings of Facts.

1. Libellant, American Anthracite and Bituminous Coal Corporation, is a corporation existing under the laws of the State of New York, whose principal office is at 11 West 44th Street, New York.

2. The respondents herein are Amerocean S. S. Co., Inc., a New York corporation whose place of business is 149 Broadway, New York, and its wholly owned subsidiary, Amersea Navigation Corp., a Liberian corporation whose place of business is the office of Amerocean S. S. Co., Inc., Broadway, New York.

3. The respondent, Amerocean S. S. Co., Inc., owns all of the capital stock of Amersea Navigation Corp. The corporate officers of Amersea Navigation Corp. are the same as those of Amerocean S. S. Co., Inc.

4. The Amersea Navigation Corp. was formed by the Amerocean S. S. Co., Inc. in order to place the S.S. Amersea, a vessel of American registry owned by Amerocean S. S. Co., Inc., under the Liberian flag by reason of the fact that it was more economical to operate the same under Liberian registry.

5. The bill of sale of the S.S. Amersea from Amerocean S. S. Co., Inc. to Amersea Navigation Corp. was dated December 3, 1954.

6. On December 24, 1954 Alfred Devereaux, a partner of Walter A. DeLappe Co., New York, brokers for chartering vessels, acted as agent for the libellant in charter negotiations with Samuel H. Wang who was president of both Amersea Navigation Corp. and Amerocean S. S. Co., Inc.

7. During the course of these negotiations Samuel H. Wang disclosed to Alfred Devereaux the ownership of the S.S. Amersea and advised him that the Amersea was owned by Amersea Navigation Corp. of Liberia.

8. As a result of these negotiations, Alfred Devereaux caused to be drawn up in his office a proposed charter party between Amersea Navigation Corp. of Liberia, owner of the American S.S. Amersea or Liberty Substitute and American Anthracite and Bituminous Coal Corporation, which draft was mailed to and received by Samuel H. Wang, Amerocean S. S. Co., Inc. at his office, 149 Broadway, New York City.

9. Before the draft of the proposed charter party was completed, Alfred Devereaux was aware of the fact that the S.S. Amersea was owned by the Amersea Navigation Corp. of Liberia, by reason of the fact that "Amersea Navigation Corp. of Liberia" was inserted into the proposed charter party by the agent of the libellant, Walter A. DeLappe Co.

10. An action, the basis for which is the same as in the one before us, was brought by the libellant against Amerocean S. S. Co., Inc. in the United States District Court for the Southern District of New York on the twenty-fourth day of January, 1955. Attached to the New York pleading is a photostatic copy of a carbon copy of the charter party offered in evidence in the instant case as R-7.

11. Amerocean S. S. Co., Inc. and Amersea Navigation Corp. of Liberia are separate and distinct corporate entities, and Amerocean S. S. Co., Inc. acts as agent for Amersea Navigation Corp. in the operation of the S.S. Amersea.

12. The libellant had full knowledge of the fact that the S.S. Amersea was owned by the Amersea Navigation Corp. of Liberia prior to the time of the filing of the libel in the instant case.

13. There is no evidence of fraud, deceit or other misuse of the corporate structure here as between Amerocean S. S. Co., Inc. and Amersea Navigation Corp. of Liberia.

14. There is no evidence that the creation of Amersea Navigation Corp. as a wholly owned subsidiary of Amerocean S. S. Co., Inc. was for other than a legitimate business purpose.

15. It is customary in the arrangement for charter parties for agents of vessel owners who are prospective parties, to refer to themselves as though they were the owner of the vessel.

16. Walter A. DeLappe Co. was not misled into believing that Amerocean S. S. Co., Inc. was the owner of the S.S. Amersea by the subsequent correspondence that ensued between it and Amerocean S. S. Co., Inc.

17. The S.S. Amersea was seized in this district by the United States Marshal under a Writ of Foreign Attachment issued by libellant. The vessel is being held here under that writ.

18. The respondent, Amerocean S. S. Co., Inc., appeared and filed a motion to dissolve the writ on the ground that the vessel was owned, not by it, but by the Amersea Navigation Corp.

19. At the close of the hearing on the motion to dissolve the Writ of Attachment an amended libel with a clause for foreign attachment was filed joining the Amersea Navigation Corp. as an additional respondent. Counsel for that corporation accepted service and filed an appearance. The additional respondent joined in the motion to dissolve the attachment.

Conclusions of Law.

1. In the absence of fraud, illegality or wrongdoing by the respondent herein, Amerocean S. S. Co., Inc., and in the light of knowledge of the libellant, American Anthracite and Bituminous Coal Corporation, that the owner of the S.S. Amersea was the Amersea Navigation Corp. of Liberia, the court will not disregard the corporate entity of the Amersea Navigation Corp. of Liberia.

2. The attachment of the vessel S.S. Amersea under the writ was improper.

Discussion.

This is a motion to vacate a writ of foreign attachment and to dismiss the libel on the ground that the respondent, Amerocean S. S. Co., Inc., named as the owner of the ship against which the writ issued was not the owner of the ship, and that the real owner was Amersea Navigation Corp. of Liberia.

The S.S. Amersea was sold to the Amersea Navigation Corp. of Liberia under bill of sale of December 3, 1954, and there is no evidence in the case to show anything of a fraudulent or illegal transfer, although the officers and directors of the Amerocean S. S. Co., Inc. were the same as those of the Amersea Navigation Corp. of Liberia. The reason for the transfer, the record discloses, was the more economical operation under the Liberian flag, and is a practice resorted to in the shipping industry by many companies and is not to be considered an uncommon practice.

The cause of action is brought on an alleged oral contract, the terms of which were supplied by Samuel H. Wang of the Amerocean S. S. Co., Inc. and Alfred Devereaux of Walter A. DeLappe Co., agent for the libellant, American Anthracite and Bituminous Coal Corporation. While the oral contract of the parties is the basis of the action, the best evidence of what that oral contract was is to be found in the proposed draft of the charter party prepared by Alfred Devereaux of Walter A. DeLappe Co., the agent for libellant. Alfred Devereaux testified that he had never heard of the Amersea Navigation Corp. of Liberia and that he mailed out the proposed draft of the charter p...