Banco Para El Comercio Exterior De Cuba v. The Ruth Ann, 12-60.

• Decision Date: 04 April 1961
• Docket Number: No. 12-60.,12-60.
• Citation: 192 F. Supp. 607,1962 AMC 117
• Court: U.S. District Court — District of Puerto Rico
• Parties: BANCO PARA EL COMERCIO EXTERIOR DE CUBA, Libelant, v. THE Steamship RUTH ANN, her engines, tackle, apparel, equipment, etc., in rem, and P & E Shipping Corporation, and all persons lawfully intervening for their interests in said steamship, etc., in personam, Respondents.

192 F. Supp. 607

1962 AMC 117

BANCO PARA EL COMERCIO EXTERIOR DE CUBA, Libelant, v. THE Steamship RUTH ANN, her engines, tackle, apparel, equipment, etc., in rem, and P & E Shipping Corporation, and all persons lawfully intervening for their interests in said steamship, etc., in personam, Respondents.

No. 12-60.

United States District Court D. Puerto Rico, San Juan Division.

April 4, 1961.

Hartzell, Fernandez & Novas, San Juan, P. R., for libelant.

Isaias Rodriguez Moreno and Elmer Toro Luchetti, San Juan, P. R., for respondent.

RUIZ-NAZARIO, District Judge.

Libelant, Banco para el Commercio Exterior de Cuba, is a banking corporation organized and existing under and by virtue of the laws of the Republic of Cuba.

Respondent, S.S. Ruth Ann, is a Liberian vessel, flying the Liberian flag, and the other respondent P & E Shipping Corporation is a corporation organized, created and existing under and by virtue of the Laws of the Republic of Liberia, and is the owner of the S.S. Ruth Ann.

There is evidence to the effect that all the stockholders of respondent P and E Shipping Corporation are American citizens.

Respondents have unsuccessfully endeavored to pierce the corporate veil of said corporation and have the court hold that the S.S. Ruth Ann is individually owned by three American citizens.

Although mindful that the corporate respondent has no standing in law to challenge the legality of its own existence as a Liberian corporation, the court on the second day of trial gave it an opportunity to produce all evidence it might have in support of said contention, but it failed to do so.

The evidence shows that the S.S. Ruth Ann, was, at the time it entered into the contracts in question here, a general ship engaged in the common carriage of merchandise on the high seas for hire between agreed ports, but said evidence fails to show that said vessel was at said time, or has been at any other time material to this action, a regular carrier of goods with a fixed and pre-established route and itinerary between ports in the United States and Canada and Havana, Cuba.

Now, the evidence produced at the trial herein unquestionably established that respondent P and E Shipping Corporation contracted to carry and transport from Port Huron, Michigan and from St. Johns, New Brunswick to Havana, Cuba, on board the S.S. Ruth Ann, the shipments of potatoes and beans, consigned to libelant to which reference is made in the amended libel herein, as further amended at the trial.

These contracts are evidenced by Bills of Lading (Exhibits 1, 2, 3 and 4 Libel.) issued by said respondent on Sept. 22 and October 18, 1960, the consignee in all of them being libelant herein Banco para el Commercio Exterior de Cuba, Havana. All of them are clean bills of lading and each of them shows that the freight was prepaid on board. The total prepaid freight amounted to $108,803.91 and this was included in the total amount of $545,619.41, paid by the libelant for the goods and which it claims in its suit herein.

The beans consisting of 40,000 bags "Pea Beans" American White Beans (34,850 bags being U. S. No. 1 and 5150 bags U. S. No. 2) were taken on board the S.S. Ruth Ann at Port Huron, Michigan and are covered by Bills of Lading, Exhibits 1 and 2 Libelant, both dated September 22, 1960.

The potatoes consisting of 56,861 bags, 100 lbs. each Pippin brand (50,360 bags Canada No. 1, two inches minimum table potatoes and 6501 bags U. S. Number 1, 1 7/8 inches minimum table potatoes) were taken on board the S.S. Ruth Ann at St. Johns, New Brunswick, and are covered by Bills of Lading, Exhibits 3 and 4 Libel., both dated October 18, 1960.

At the time that said contracts, evidenced by the four bills of lading above mentioned (Exh. 1 to 4 Lib.) were executed, the political situation in the Republic of Cuba was quite unsettled.

Numerous citizens, including some Americans had been executed by firing squads.

Very valuable property not only of Cubans but of American businesses had been confiscated by the dictatorial communist influenced government of Fidel Castro.

Fidel Castro, his brother Raul and Ernesto (Che) Guevara had subjected everybody and everything in Cuba to their ruthless, predatory regime of terror.

Che Guevara was the Director of the Banco Nacional de Cuba, which in turn owned all the stock of libelant herein.

All the business and properties of The Chase Manhattan Bank located in Cuba had been confiscated by the Cuban dictatorship since September 16, 1960. (So it was conceded by counsel for the respondent —Transcript, pp. 175-176).

Neither the Master nor any of the members of the crew of the S.S. Ruth Ann were American citizens, and only the Master was a resident of the United States.

All the above facts were known or should have been known by the respondents when they took on board the S.S. Ruth Ann the cargo of potatoes and beans in question and issued the four bills of lading (Exh. 1 to 4, Libel.), in favor of libelant, as consignee, and contracted to deliver said cargo in Havana, Cuba.

In addition, they knew that the S.S. Ruth Ann was mortgaged for $80,000 in favor of the The Chase Manhattan Bank, whose business and properties in Cuba had been already confiscated by the Castro dictatorship.

Under their contracts with libelant respondents were bound to unload in Havana, Cuba all the potatoes and beans which were the subject thereof, and they had contracted to bear all the expenses of such unloading.

From the letters of September 6th and 16th, 1960 (Exhibits 11 and 12 Resp.) and the cablegrams therein mentioned, respondents, prior to the execution of the contracts with libelant, evidenced by the bills of lading (Exhibits 1 to 4 libel.), had knowledge that the stevedoring and other charges for unloading the merchandise in Havana were likely to increase substantially, as they were warned of this possibility in the first of said letters (Exh. 11, Resp.) as well as in the second letter (Exh. 12, Resp.).

They had quite a clear view of what the situation in Cuba was at the time and of the risks they were likely to encounter on a voyage from Canada and the United States to deliver cargo in Havana.

Nevertheless they took the risk and entered into the contracts in which libelant had invested a substantial amount of money of which the sum of $108,803.91 represented prepaid freight received by respondents.

Each and everyone of the Bills of Lading issued by respondents in favor of libelant, as consignee, contained provisions stating that they "shall have effect subject to the provisions of the Carriage of Goods by Sea Act of the United States approved April 16, 1936, which shall be deemed to be incorporated herein." (See Term 1 of each bill of lading).

All of them also contain condition or Term No. 4, which reads as follows:

"4. In any situation whatsoever or wheresoever occurring and whether existing or anticipated before commencement of or during the voyage, which in the judgment of the Carrier or master is likely to give rise to capture, seizure, detention, damage, delay or disadvantage to or loss of the ship or any part of her cargo, or to make it unsafe, imprudent, or unlawful for any reason to begin or continue the voyage or to enter or discharge the goods at the port of discharge, or to give rise to delay or difficulty in arriving, discharging at or leaving the port of discharge or the usual place of discharge in such port, the Master or Carrier, whether or not proceeding toward or entering or attempting to enter the port of discharge or reaching or attempting to reach the usual place of discharge therein or attempting to discharge the goods there, may, without giving any prior notice, discharge the goods into depot, lazaretto, craft, or other place and the goods shall be liable for any extra expense thereby incurred, or the Master or Carrier may proceed or return, directly or indirectly, to stop at such other port or place whatsoever as he or the Carrier may consider safe or advisable under the circumstances, and discharge the goods or any part thereof there without giving any prior notice and, when landed as hereinabove provided, the goods shall be at their own risk and expense, the delivery thereof by the Carrier shall be considered complete and the Carrier shall be freed from any further responsibility in respect thereof except to mail notice of the disposition of the goods directed to the shipper or consignee named in this bill of lading at such address as may be stated herein; or the Master or Carrier may retain the cargo on board until the return trip or until such time as he or the Carrier thinks advisable; or the master or carrier may forward the goods by any means by water or by land, or by both such means, at the risk and expense of the goods. For any services rendered to the goods as hereinabove provided, the Carrier shall be entitled to a reasonable extra compensation.

"Another vessel may be substituted for the ship, without notice, whenever and wherever the Carrier deems it desirable, whether or not the substituted vessel be owned or operated by the Carrier, or arrives or departs or is scheduled to arrive or depart before or after the ship." (Emphasis supplied.)

So it was that on October 19th, 1960 almost at midnight, the S.S. Ruth Ann sailed from the Port of St. Johns, New Brunswick en route to Havana to perform the contracts it had with libelant (Exhibits 1 to 4 Libel.).

On the way between St. Johns and New York, as testified by the Master of the Ruth Ann at the trial, they heard over the radio after midnight of October 20, 1960, that the United States had placed an embargo on shipments to Cuba.

She arrived in New York on October 22, 1960 and as soon as the ship moored, Mr. Shayne one of the officers of the carrier-respondent and Mr. Gatto, shipping broker, came aboard.

On the same day, October 22, 1960, the S.S. Ruth Ann sailed from New York toward Bermuda; arriving at Bermuda on October 25, 1960.

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