Fisher Flouring Mills Co. v. United States

• Decision Date: 31 January 1927
• Docket Number: No. 4712.,4712.
• Citation: 17 F.2d 232
• Parties: FISHER FLOURING MILLS CO. et al. v. UNITED STATES.
• Court: U.S. Court of Appeals — Ninth Circuit

17 F.2d 232 (1927)

FISHER FLOURING MILLS CO. et al. v. UNITED STATES.

No. 4712.

Circuit Court of Appeals, Ninth Circuit.

January 31, 1927.

H. H. A. Hastings and L. B. Stedman, both of Seattle, Wash. (J. B. Howe and D. G. Graham, both of Seattle, Wash., of counsel), for plaintiffs in error.

Thomas P. Revelle, U. S. Atty., and Chas E. Allen, both of Seattle, Wash., for the United States.

Before RUDKIN, Circuit Judge, and SAWTELLE and JAMES, District Judges.

RUDKIN, Circuit Judge.

August 9, 1920, the United States Emergency Fleet Corporation, acting through its managing agents at Seattle, chartered the steamship Yosemite to the Fisher Flouring Mills Company and the White-Dulany Company, to carry grain from Puget Sound to European ports. The charter party provided that the rate should be $20 per long ton, that loading should not commence before October 15, 1920, and that if the vessel was not tendered ready for loading on or before 12 o'clock noon of November 15, 1920, the charterers should have the option of canceling the charter party. October 29, 1920, the steamship Westward Ho was substituted for the Yosemite under a right reserved in the charter party. Neither the Yosemite nor the Westward Ho was tendered or delivered for loading at the time agreed upon, and the charterers contend that they then agreed with the managing agents of the Fleet Corporation that the Eastern Mariner should be substituted in the place of the other vessels, and that the substituted vessel should be berthed for loading at the dock of the Harbor Island Dock & Warehouse Company at 8 o'clock on the morning of November 22, 1920. They further contend that the original charter party was canceled on the latter date for failure to tender or deliver the vessel for loading as agreed.

After the arrangement was made to have the Eastern Mariner at the dock ready for loading on November 22, 1920, the Flouring Mills Company notified the manager of the dock that the vessel would be at the dock on the morning of November 22, and that he should then proceed to deliver cargo. On November 26, 1920, four days after the date agreed upon, the Eastern Mariner was berthed alongside the dock in question, and the manager of the dock began loading cargo under the instructions which he had received prior to November 22. As soon as the charterers were advised of that fact, they threatened to remove the cargo from the vessel unless they were given a rate of $18 per long ton, which was the prevailing rate on that date. The managing agents of the Fleet Corporation contended that the placing of cargo on the vessel constituted an acceptance of the original charter party, but after some further negotiations it was finally agreed that the charterers would load the vessel with cargo, that a bill of lading would be issued carrying an $18 per ton rate, and that the question whether the $20 or the $18 rate should be paid, would be submitted to arbitration. On the same day the managing agents addressed a letter to the charterers, saying:

"As we have telephoned you to-day, we, however, suggest so that no injustice be done, that you continue to supply cargo for this steamer, and that we will submit the entire matter of whether the terms of the original charter as to rate are in effect and you are bound by same, to arbitration. We can appoint a board of arbitrators, you to select one member, we to select one, and the two to select a third, and both parties will be bound by the decision of this board. In the event the arbitration board should decide against us, we agree to the new $18 Shipping Board rate as put into effect to-day, with Shipping Board terms of discharge."

The offer to arbitrate was accepted under date of December 1, 1920, each party selecting an arbitrator and the two thus selected selecting a third. December 23, 1920, a majority of the arbitrators decided that the $20 per ton rate should prevail; one arbitrator dissenting therefrom. Later a controversy arose over the arbitration, and, under date of January 14, 1921, the managing agents of the Fleet Corporation notified the charterers that, in view of the fact that the charterers had brought proceedings to cancel the findings of the arbitration board, they would demand the payment of the $20 rate at the port of discharge before delivering the cargo. Thereupon the charterers commenced an action in the state court against the managing agents and the Fleet Corporation, to restrain them from collecting the $20 per ton rate, or any other rate in excess of $18 per ton, before delivering the cargo. Upon the commencement of that action a bond in the sum of $25,000 was executed by the plaintiffs therein and the American Surety Company, conditioned to indemnify and save harmless the managing agents and the Fleet Corporation from any and all loss or damage suffered by them, or either of them, should it be adjudged in that or any other action that the restraining order was wrongfully sued out. Whether because of the injunction or not, the cargo was delivered to the consignees upon the payment of the $18 rate.

The action in which the bond was given was thereafter dismissed on motion of the plaintiffs therein, the injunction bond was assigned to the United States by the managing agents and the Fleet Corporation, and the present action was then instituted on the bond to recover the difference between the $20 rate and the $18 rate, amounting to the sum of upwards of $15,000. Among other defenses interposed, the answer set up two offsets in favor of the charterers and against the Fleet Corporation for damages sustained by the former because of...