Hinkins Steamship Agency v. Freighters, Inc.

• Decision Date: 30 November 1972
• Docket Number: No. C-71 2405 ACW.,C-71 2405 ACW.
• Citation: 1973 AMC 348,351 F. Supp. 373
• Parties: HINKINS STEAMSHIP AGENCY, Plaintiff, v. FREIGHTERS, INC., Defendant.
• Court: U.S. District Court — Northern District of California

351 F. Supp. 373

1973 AMC 348

HINKINS STEAMSHIP AGENCY, Plaintiff, v. FREIGHTERS, INC., Defendant.

No. C-71 2405 ACW.

United States District Court, N. D. California.

November 30, 1972.

Hamilton & King, by William H. King, San Francisco, Cal., for plaintiff.

Lawrence E. Alioto, San Francisco, Cal., for defendant.

MEMORANDUM OPINION DENYING DEFENDANT'S MOTION TO DISMISS AND GRANTING PLAINTIFF'S MOTION FOR SUMMARY JUDGMENT

WOLLENBERG, District Judge.

Defendant has filed a motion to dismiss alleging that the contract sued upon is not within the admiralty and maritime jurisdiction of the federal courts. (28 U.S.C. § 1333) The basis for this interpretation of the contract is that plaintiff, by the language of the complaint, describes itself as an agent for the performance of maritime services rather than a performer of such services itself. Defendant relies on Cory Brothers & Co. v. United States, 51 F.2d 1010 (2d Cir. 1931), which in turn discusses The Thames, 10 F. 848 (D.C.Cir. 1881), and Minturn v. Maynard, 58 U.S. (17 How.) 476, 15 L.Ed. 235 (1855). See also P.D. Marchessini & Co. v. Pacific Marine Corp., 227 F.Supp. 17 (S.D.N.Y.1964). From these cases, defendant draws a distinction between contracts for preliminary services leading to maritime contracts and maritime contracts themselves. The Thames involved a shipping broker; Minturn and Marchessini involved general, continuing agency agreements. Cory Brothers itself involved a contract employing the libelant as cargo agent at several ports. The Court indicated that it was unclear from the contract whether libelant should perform stevedoring services itself or should engage others to do so, and commented that "If the contract merely employed libelant to procure maritime services instead of obligating it to perform them itself, it may well be that a suit to recover compensation and disbursements would be not of maritime cognizance." (51 F.2d at 1012) But the Court did not decide that issue, finding that jurisdiction existed independently under the Tucker Act.

Two questions are raised by defendant's reliance on Cory. The first is whether the distinction recognized in Cory has continuing validity.¹ The second is whether, assuming the validity of Cory the services performed by libelant here are themselves preliminary or maritime. Plaintiff correctly points out that the settled law in the United States is that jurisdiction of admiralty in matters of contract depends upon the subject matter of the contract. If the subject matter of the contract is the repair or refitting of a ship, the contract unquestionably falls within the Court's maritime jurisdiction. North Pacific Steamship Co. v. Hall Brothers Marine Railway & Shipbuilding Co., 249 U.S. 119, 125, 39 S.Ct. 221, 63 L.Ed. 510 (1919); O'Leary v. Puget Sound Bridge & Dry Dock Co., 349 F.2d 571, 574 (9th Cir. 1965); 1 Benedict on Admiralty § 62 (1940), and cases cited in § 62, n. 32 (Supp.1971). Plaintiff further contends that under Archawski v. Hanioti, 350 U. S. 532, 535, 76 S.Ct. 617, 620, 100 L.Ed. 676 (1956), if the claim asserted in the case at bar "arises out of a maritime contract, the admiralty court has jurisdiction over it."

The difficulty with applying this analysis to the present case is that it begs the question of whether a contract between a local husbanding agent and a shipowner or general agent under which the husbanding agent procures and supervises a variety of services² is itself a maritime contract. If so, then the failure to pay the full value of services rendered under the contract is a claim in admiralty.

None of the cases cited to the Court present this precise question. Archawski, upon which plaintiff relies so heavily, held that "admiralty has jurisdiction, even where the libel reads like indebitatus assumpsit at common law, provided that the unjust enrichment arose as a result of the breach of a maritime contract." (350 U.S. at 536, 76 S.Ct. at 621) North Pacific Steamship Co. held that a contract to repair a ship in dry dock was essentially a maritime contract.

In Interocean Steamship Corporation v. Amelco Engineers Co., 341 F.Supp. 995 (N.D.Cal.1971), this Court per Peckham, J., held that an oral contract giving plaintiffs the right to act as agents for a vessel in connection with its loading and discharging arose out of a maritime contract — plaintiffs' contract with the United States government to provide exclusive sea transportation services to the United States Trust Territory of the Pacific Islands. Consequently, the oral contract, like the contract before the court in Amerind Shipping Corp. v. Jordan International Co., 314 F.Supp. 1324 (E.D.La.1970) was cognizable under the Court's maritime jurisdiction. In so holding, the Court distinguished P. D. Marchessini & Co., Inc. v. Pacific Marine Corp., 227 F.Supp. 17 (S.D.N.Y.1964) on the grounds that "whether the claim itself, in the abstract, is or is not, strictly speaking, a `maritime claim' is not dispositive" (341 F.Supp. at 998) because the claim arose out of a contract which was clearly maritime.

Marchessini begins with the premise that "the test to be applied in deciding whether or not a contract is maritime is its nature and subject matter." (227 F. Supp. at 18) The Court then proceeds to examine the functions the libelant was to perform under a general agency agreement. One of these functions was to "make suitable arrangements for the husbanding of vessels and solicitation of cargoes." By "husbanding" the Court meant taking "care of the shoreside business of the ship and taking no part in the actual management or navigation of the vessel." (227 F.Supp. at 19, quoting Erlandson v. Commissioner, 277 F.2d 70, 71 9th Cir. 1960). The Court held that these "shoreside functions", and others such as collecting freights and other receipts, and submitting accounts, were of a preliminary character and therefore nonmaritime.

Marchessini can be distinguished from the present case on the grounds that the services performed there were primarily "shoreside" although one function was to arrange for husbanding. There was a continuing relationship between the agent and the principal. In the present case, on the other hand, the services provided by Hinkins (see footnote 2, supra) were necessary for a specific voyage of the ship. They were not part of a continuing relationship between Hinkins and Freighters, Inc. Moreover, Hinkins' personnel did not merely arrange for the services of others, but supervised these services directly and were repeatedly in attendance on board the vessel. (Affidavit of Charles J. Caulfield, Executive Vice President of Hinkins Steamship Agency, Inc., filed Nov. 29, 1972). Hence, Hinkins was more directly involved in the repairing and servicing of the vessel than was the general agent in Marchessini or Cory Brothers.

These distinctions are sufficient to take this contract out of the "preliminary" or "shoreside" category, and put it within the maritime jurisdiction. This conclusion is compelled by the federal interest underlying maritime jurisdiction which "can best be implemented by thus dealing with the major concerns of the shipping industry — with all of them, and not just with a few of them selected on antiquarian criteria." Gilmore & Black, The Law of Admiralty § 1-10 (1957) It is difficult to imagine a relationship of more direct concern to the shipping industry than the relationship between a supervising, local husbanding agent and a general agent. Consequently, to the extent that Cory Brothers has continuing validity, it is distinguishable from the present case. The motion to dismiss is therefore denied.

Plaintiff's motion for summary judgment contends that there are no disputed factual issues. Defendant's pretrial statement, filed October 26, 1972, sets out the following as undisputed facts:

In December of 1970 and January of 1971, Plaintiff performed certain services upon the SS PINE TREE STATE in Baltimore, Maryland. Advance payment for such services in the amount of $20,000 was paid to Hinkins by Bulk Food Carriers, Inc. of San Francisco. The total claimed value of the services performed by Hinkins is $28,227.61.

On January 25, 1971, plaintiff Hinkins billed Bulk Food Carriers for the difference of $8,227.61. That amount has not been paid.

In addition, defen...