Danielsen v. Entre Rios Rys. Co.

• Decision Date: 21 October 1927
• Docket Number: No. 1463.,1463.
• Citation: 22 F.2d 326
• Parties: DANIELSEN v. ENTRE RIOS RYS. CO., Limited, et al.
• Court: U.S. District Court — District of Maryland

22 F.2d 326 (1927)

DANIELSEN v. ENTRE RIOS RYS. CO., Limited, et al.

No. 1463.

District Court, D. Maryland.

October 21, 1927.

George Forbes, of Baltimore, Md., for libelant.

M. Maurice Meyer, of Baltimore, Md., for respondents specially.

COLEMAN, District Judge.

In this case the master of a Norwegian vessel entered into a charter party in London with the agents of South American charterers, for the carriage of coal from the port of Baltimore, or a nearby port, to South America. The charterers were to notify the master before arrival at just what port he should load. The charter contained a clause providing that "any question arising under this charter shall be referred to arbitration in London in the customary manner."

The charterers failed to notify the master before arrival as to where he should load, so that he was forced to remain at Norfolk for a day awaiting orders, which were to proceed to Baltimore to load, as he did. He now claims to have been damaged by the delay, and has filed this libel in personam, with clause of foreign attachment, against the charterers for $555.76.

The respondents except upon two grounds: First, that arbitration as provided for in the charter party is a condition precedent to assumption by this court of jurisdiction; second, that all the parties to this proceeding being foreigners, they are not entitled, as a matter of right, to be heard by this court.

Turning first to the second exception, it is clear that whether an admiralty court will take jurisdiction of suits between foreigners is a matter entirely within its discretion, and such suits will be entertained, unless some special reason is shown why the court should deny its aid. Panama R. Co. v. Napier Co., 166 U. S. 280, 285, 17 S. Ct. 572, 41 L. Ed. 1004; The Belgenland, 114 U. S. 335, 5 S. Ct. 860, 29 L. Ed. 152; The Pesaro, 255 U. S. 216, 41 S. Ct. 308, 65 L. Ed. 592; The Fredensbro (D. C.) 18 F.(2d) 983, 1927 A. M. C. 1238; Dominion Combing Mills v. Canadian Pacific Ry. (D. C.) 300 F. 992. No special reason is here shown, other than the matter of arbitration, which is considered under the first exception below.

The first exception calls for a careful consideration of the effect of the federal Arbitration Act of 1925 (43 Stat. 883 9 USCA), which has only been before the courts in two reported cases. The Silverbrook (D. C.) 18 F.(2d) 144; The Fredensbro (D. C.) 18 F.(2d) 983. The respondent seeks to invoke this act to oust the jurisdiction of the court.

Prior to the act, the law was well settled that agreements for arbitration would not be allowed to oust the jurisdiction of the federal courts. Therefore no effect was given to them, even though they might be recognized as valid. U. S. Asphalt Co. v. Trinidad Lake Petroleum Co. (D. C.) 222 F. 1006; Aktieselskabet-Korn-Og, etc., v. Rederiaktiebolaget (D. C.) 232 F. 403; The Eros (C. C. A.) 251 F. 45; The Atlanten, 252 U. S. 313, 40 S. Ct. 332, 64 L. Ed. 586.

The Arbitration Act is entitled "An act to make valid and enforceable written provisions or agreements for arbitration of disputes arising out of contracts, maritime transactions, or commerce among the states or territories, or with foreign nations." Section 2 (9 USCA § 2) provides that "a written provision in any maritime transaction or a contract evidencing a transaction involving commerce to settle by arbitration a controversy thereafter arising out of such contract or transaction, or the refusal to perform the whole or any part thereof, or an agreement in writing to submit to arbitration an existing controversy arising out of such a contract, transaction, or refusal, shall be valid, irrevocable, and enforceable, save upon such grounds as exist at law or in equity for the revocation of any contract." Section 3 (9 USCA § 3) provides that "if any suit or proceeding be brought in any of the courts of the United States upon any issue referable to arbitration under an agreement in writing for such arbitration, the court in which such suit is pending, upon being satisfied that the issue involved in such suit or proceeding is referable to arbitration under such an agreement, shall on application of one of the parties stay the trial of the action until such arbitration has been had in accordance with the terms of the agreement, providing the applicant for the stay...