James Richardson & Sons v. Conners Marine Co.

• Decision Date: 01 March 1944
• Docket Number: No. 239.,239.
• Citation: 141 F.2d 226
• Parties: JAMES RICHARDSON & SONS, Limited, v. CONNERS MARINE CO., Inc.
• Court: U.S. Court of Appeals — Second Circuit

141 F.2d 226 (1944)

JAMES RICHARDSON & SONS, Limited, v. CONNERS MARINE CO., Inc.

No. 239.

Circuit Court of Appeals, Second Circuit.

March 1, 1944.

Frank C. Mason, of New York City (Mahar & Mason, of New York City, on the brief), for respondent-appellant.

George B. Warburton, of New York City (Hill, Rivkins & Middleton, of New York City, on the brief), for libellant-appellee.

Before SWAN, CLARK, and FRANK, Circuit Judges.

CLARK, Circuit Judge.

This is a libel to recover damages to a number of cargoes of grain. On May 8, 1941, the parties contracted for the transportation by respondent from Buffalo to New York City of about 110,000 bushels of libellant's wheat, constituting the capacity of one fleet of barges. The following week, on May 17, 1941, a second agreement was reached for additional carriage by three fleets of barges, each loading about 128,000 bushels. Both of these contracts were made subject to the terms of the New York Produce Exchange Canal Grain Charter Party No. 1, which provided, among other things, for three days' free unloading time upon arrival in New York and for demurrage at the rate of four cents per ton per day after the expiration of the free time. It also granted the barge-owner the option of unloading immediately into a New York public elevator, provided that free lighterage outward was guaranteed; and in this event the charterer was to pay storage after the three-day period at the rate of one-twentieth of one cent per bushel per day. These rates were substantially different; thus for the smaller 600-ton barges, they amounted to $24 per day for demurrage, as against $9.75 for elevator storage.

Twenty-one barges in all were loaded at Buffalo between May 21, 1941, and July 17, 1941, and all reached New York Harbor within approximately fifteen days from the loading date. Upon arrival there, it was found that the Erie grain elevator had been destroyed by fire and that the Columbia Street elevator was filled to capacity. So the barges were moored at the canal terminal adjacent to the latter structure. Libellant had intended to load the grain immediately on outgoing vessels for shipment to England; but because of war conditions prevalent at that time further transportation was not immediately available, and due to the necessary secrecy surrounding convoy operations it was not able to ascertain definitely when the further movement of the grain would take place. Libellant's agent hence negotiated with respondent for an arrangement whereby the grain could be left on the barges at rates lower than the demurrage rates provided by the original contracts. Two agreements were finally reached by letters from respondent dated July 23, 1941, and August 5, 1941, which stipulated "to reduce the demurrage" to $20 per day for the larger barges and $15 per day for the smaller ones, provided that a minimum of twelve days' hire was to be paid in any event. The barges thus remained not unloaded at the Columbia Street terminal until various dates between October 14, 1941, and March 14, 1942, when transocean vessels were finally made available.

Upon the final transfer of the grain from the barges, it was found that extensive damage had resulted from contact with moisture or water and that some shortages also existed. The present libel was filed to recover the value of the grain lost in this manner. Respondent does not contest its liability for the shortages, as well it could not in view of the terms of the original contracts to the effect that official weight certificates covering the grain loaded on the barges were to be conclusive of the amount to be delivered on outturn and that respondent was to be liable for any difference, less an allowance of one-eighth of one per cent of intaken weight, at the market price of a like kind and grade of grain on the date of delivery. Nor is liability denied for damage to the cargoes of three barges due to holes in the tarpaulin covers or improper placement of hatch covers and for damage to the grain loaded on a fourth as the result of a collision with a dock at Buffalo. Respondent does allege, however, that there is no basis for admiralty jurisdiction and that there should be no liability except that specifically admitted as above.

The court below, over vigorous objections by respondent, first overruled exceptions to the libel, allowing, however, the question of jurisdiction to be renewed later. Then, after full trial, it concluded that there was admiralty jurisdiction. It adjudged the additional contracts of July 23 and August 5 to be maritime contracts for reduced demurrage, rather than contracts of storage, since "the primary purpose of the libellant was the further transportation of the cargoes at an uncertain date in the future, and the demurrage was only incidental to that and to the original carriage." Then, on the merits, it rejected any claim for damage from weevils, but found the other damage to the grain in the seventeen barges under controversy to have been caused by seepage through the grain linings, tarpaulins, deck seams, and other leaks — all due to respondent's negligence and the unseaworthiness of the barges. It then entered an interlocutory judgment referring the matter to a commissioner for determination of the amount of libellant's loss. Respondent appeals from this judgment.

Initially, the action of the court in overruling exceptions to the form of the libel is not reversible error. Respondent asserts that there should have been a separate statement of a separate cause of action as to each barge, because the Produce Exchange form stated that each boatload, or parcel if less than a boatload, was to be deemed a separate charter. Since it is now recognized that repetitive verbosity does not make for clarity, refinements of separate statement are not now in favor, Original Ballet Russe, Ltd., v. Ballet Theatre, Inc., 2 Cir., 133 F.2d 187; Federal Rules of Civil Procedure, rule 10(b), 28 U.S.C.A. following section 723c; and though a formal requirement of separation is still retained in the admiralty rules, yet it should be construed in a practical way. We cannot see any possible gain to respondent by forcing from 17 to 21 repetitions of the basic allegations; as to details of the damage, they are supplied by the answers to interrogatories, and the proceedings before the commissioner are hardly likely to move with such celerity as to deprive respondent of its proof through surprise.¹ Nor is the exception as to jurisdiction to be sustained merely on the form of the libel which refers to the agreements for the reduction in demurrage rates as agreements for the charter of the barges. The pleader was obviously attempting to state in sequence the events as they transpired, and not to pin legal labels on them, as, of course, was not his function. Moreover, the objection was renewed at trial by express permission of the court, at which time libellant's motion for amendment to conform to the proof was granted. The issue is, therefore, to be considered on the facts as they were found by the court.

We see no reason to disturb the finding that libellant's primary purpose was the further transportation of the grain. True, such further transportation was to be by others than respondent. This point, however, is not an ultimate, rather an evidential, fact, bearing upon the controlling point, as to the intent of the parties and thus as to whether the later arrangement was properly incidental to the original agreement of navigation or was a new contract of warehousing. Thus, in the leading case of The Pulaski, D.C.E.D.Mich., 33 F. 383, 384, Judge, later Mr. Justice, Brown carefully distinguished between the practice "quite common upon the lakes" of winter storage of wheat upon vessels, the shipper finding "a convenient and cheap storage," and the vessel "a profitable employment during the idle season," and storage as "a mere incident to the transportation, as, for instance, if the wheat were taken on board with the understanding that the vessel should sail as soon as a tug or consort should be procured, or as soon as the ice should leave the harbor." The other cases relied on by respondent deal with this matter of winter storage and make this same distinction. The Richard Winslow, 7 Cir., 71 F. 426; The Milwaukee, D.C.W. D.N.Y., 15 F.2d 886; Pillsbury Flour Mills Co. v. Interlake S. S. Co., 2 Cir., 40 F.2d 439, certiorari denied 282 U.S. 845, 51 S.Ct. 24, 75 L.Ed. 750. Since Insurance Co. v. Dunham, 78 U.S. 1, 11 Wall. 1, 26, 20 L.Ed. 90, it has been settled that the criterion of admiralty jurisdiction as to contracts is whether the contract is maritime, "having...