Bartlett-Collins Company v. Surinam Navigation Company

• Decision Date: 24 March 1967
• Docket Number: No. 8681-8683.,8681-8683.
• Citation: 381 F.2d 546
• Parties: BARTLETT-COLLINS COMPANY, a Corporation, Appellant, v. SURINAM NAVIGATION COMPANY, a Corporation, Appellee. BARTLETT-COLLINS INTERNATIONAL, C. A., a Corporation, Appellant, v. SOUTH AFRICAN MARINE CORPORATION, Ltd., a Corporation, Appellee. BARTLETT-COLLINS INTERNATIONAL, C. A., a Corporation, Appellant, v. SURINAM NAVIGATION COMPANY, a Corporation, Appellee.
• Court: U.S. Court of Appeals — Tenth Circuit

381 F.2d 546 (1967)

BARTLETT-COLLINS COMPANY, a Corporation, Appellant, v. SURINAM NAVIGATION COMPANY, a Corporation, Appellee.

BARTLETT-COLLINS INTERNATIONAL, C. A., a Corporation, Appellant, v. SOUTH AFRICAN MARINE CORPORATION, Ltd., a Corporation, Appellee.

BARTLETT-COLLINS INTERNATIONAL, C. A., a Corporation, Appellant, v. SURINAM NAVIGATION COMPANY, a Corporation, Appellee.

Nos. 8681-8683.

United States Court of Appeals Tenth Circuit.

February 20, 1967.

Rehearing Denied March 24, 1967.

Sam T. Allen, III, Sapulpa, Okl., for appellants.

Clarence A. Warren, Tulsa, Okl., for appellees.

Before MURRAH, Chief Judge, and HILL and HICKEY, Circuit Judges.

MURRAH, Chief Judge.

The appellee ocean carriers brought these actions in admiralty to recover the freight charges on goods shipped by appellants Bartlett-Collins Co. (hereinafter BC) and Bartlett-Collins International, C.A. (hereinafter BCI). At pretrial, the court suggested referral of the cases to a Special Master, and the parties subsequently agreed. The Master heard evidence and made findings and conclusions. The court also made findings and conclusions which were based upon and specifically "approved and confirmed" the report of the Special Master. The court prefaced his findings by stating in each case that "* * * there is no dispute as to the facts in this case and * * * all evidence necessary to sustain a judgment in favor of the plaintiff is either undisputed, uncontradicted or agreed to. The Court, therefore, finds that there is no issue to be submitted to a jury * *, and that plaintiff is entitled to judgment * * *." We affirm.

The goods in question were shipped through the port of New Orleans. A freight forwarder acted on behalf of BC and BCI to make the necessary shipping arrangements with Hansen and Tidemann, Inc. (hereinafter H & T), the shore agent of the carriers. The procedure was substantially as follows. After booking space on the appropriate ship, the forwarder prepared bills of lading for the goods and submitted them to H & T. H & T signed and returned them in exchange for the forwarder's three day due bills in the amount of the freight. The bills of lading were nevertheless marked "Freight Prepaid". The bills of lading were then sent to the appellant shippers along with the forwarder's invoice for the freight costs, incidental expenses, and its forwarding fee. In the usual case¹ the shippers paid the forwarder, the forwarder honored its due bills, and everyone was happy. But not in this case. Although BC and BCI paid the invoice amounts to the forwarder, the due bills were not paid on time. Indeed, despite repeated demands by H & T, the forwarder never did pay the due bills, and eventually became unable to do so.² It is undisputed that the forwarder was solvent during the first three or four weeks after its bills became due, and that the first notice to the shippers of dishonor of the due bills and demand for payment from the shippers did not occur until some three months after the bills became due.

We are first concerned with in personam jurisdiction over BCI. BCI is licensed to do business in Oklahoma, and process was served on its registered service agent. The contention is that BC (a Delaware corporation) and BCI (a Venezuelan corporation) are separate entities and that the glass manufacturing plant at Sapulpa, Oklahoma, is operated solely by BC and not, as the court found, by BC and BCI. BCI is said to be a mere exporter not doing business in Oklahoma and not amenable to suit there. We consider this matter only in No. 8682³ since no defense of lack of personal jurisdiction was raised in No. 8683.

An admiralty action may be brought against a foreign corporation in any United States District Court which can obtain personal jurisdiction over that corporation. See Pardonnet v. Flying Tiger Line, Inc., D.C., 233 F.Supp. 683; see also McKee v. Brunswick Corp., 7 Cir., 354 F.2d 577; Gkiafis v. Steamship Yiosonas, 4 Cir., 342 F.2d 546. Without deciding whether BC and BCI were jointly engaged in the manufacture of glass at Sapulpa, we think the court clearly had personal jurisdiction over BCI. Being licensed to do business in Oklahoma it was thus a domesticated corporation within the meaning of 18 Okl.St.Ann. § 1.2(4). As such, it was entitled to the same rights and privileges and subject to the same duties as a domestic corporation, 18 Okl.St.Ann. § 1.199(d), including amenability to suit. But, moreover, BCI's Vice President testified that when these shipments were made, it maintained an "expediter" office at Sapulpa, staffed by two employees. Thus, even if BCI were not domesticated within the meaning of the Oklahoma Act and had no registered service agent, it was doing business within the meaning of 18 Okl.St.Ann. § 1.204a, as amended, and therefore was subject to substituted service. See Walker v. General Features Corp., 10 Cir., 319 F.2d 583; Walker v. Field Enterprises, Inc., 10 Cir., 332 F.2d 632.

On the merits the main contention is that the carriers are estopped from recovery by the conduct of their agent, H & T. It is argued that BC and BCI paid the forwarder, and that H & T is responsible for the carriers not being paid. The shippers point out that they did not know the bills of lading were issued in exchange for due bills or that such was the longstanding custom in the port of New Orleans;⁴ that as the Master found, the shippers did not authorize payment via the due bill procedure; that the bills of lading were marked "Freight Prepaid"; and that by not notifying the shippers for three months that the due bills had been dishonored, H & T prevented the shippers from taking recourse against the forwarder while it was still solvent. It is further asserted that issuing, "Prepaid" bills of lading for due bills is in violation of 49 U.S.C. § 918, and even "smacked of fraud". In support of their position the shippers cite Alcoa S. S. Co. v. Graver Tank and Mfg. Co., City Ct., 124 N.Y.S.2d 77, and Hellenic Lines Limited v. Alexander Pach, Inc., 20 Misc.2d 170, 192 N.Y.S.2d 660. The trial court held that the shippers contracted for the carriage of their goods, and that under the principle of Empire Petroleum Co. v. Sinclair Pipeline Co., 10 Cir., 282 F.2d 913, the carriers must be paid no matter how inequitable the conduct of the carriers or their agent.

The rule followed by the trial court is too well established to admit of doubt. It has been followed in the case of pipelines, railroads, motor carriers and airlines. See Empire Petroleum Co. v. Sinclair Pipeline Co., supra; Atchison, Topeka and Santa Fe Ry. Co. v. Bouziden, 10 Cir., 307 F.2d 230; T & M Transp. Co. v. S. W. Shattuck Chemical Co., 10 Cir., 158 F.2d 909; United States v. Associated Air Transport, Inc., 5 Cir., 275 F.2d 827; Cf. Alcoa S. S. Co., Inc. v. Comfort Spring Corp., D.C., 170 F.Supp. 548. Its application to foreign shipping was clearly indicated on facts nearly identical to these in Compania Anonima Venezolana De Nav. v. A. J. Perez Exp. Co., 5 Cir., 303 F.2d 692. As Judge Brown concisely stated:

"If it is a suit by the Carrier, we can assume that by virtue of its filed tariffs expressly incorporating its bill of lading contract, conduct by the Carrier — no matter how inequitable — cannot excuse it from enforcing collection of freight, nor can harm innocently suffered by the Shipper — occasioned by the wrongdoing of another (the Agent) — excuse it from paying the Carrier even though this means payment twice. That would follow from the rigorous policy which, to prohibit not only discrimination but the possibility of it, gives to carrier tariffs the force of law." Footnotes omitted. Id. 695.

The court, however, did not apply the rule in that case, for it found that although the suit was brought in the name of the carrier, the real party in interest was the carrier's agent who was seeking subrogation to the rights of the carrier. To seek subrogation and to attain it were held to be two different matters, and subrogation being an equitable...