In re Canadian Gulf Line, 360.

• Decision Date: 29 July 1938
• Docket Number: No. 360.,360.
• Citation: 98 F.2d 711
• Parties: In re CANADIAN GULF LINE, Limited. CANADIAN GULF LINE, Limited, v. CONTINENTAL GRAIN CO.
• Court: U.S. Court of Appeals — Second Circuit

98 F.2d 711 (1938)

In re CANADIAN GULF LINE, Limited.

CANADIAN GULF LINE, Limited, v. CONTINENTAL GRAIN CO.

No. 360.

Circuit Court of Appeals, Second Circuit.

July 29, 1938.

Haight, Griffin, Deming & Gardner, of New York City (Wharton Poor and Herbert M. Statt, both of New York City, of counsel), for appellant.

Bigham, Englar, Jones & Houston, of New York City (F. Herbert Prem, of New York City, of counsel), for appellee.

Before L. HAND, AUGUSTUS N. HAND, and CHASE, Circuit Judges.

AUGUSTUS N. HAND, Circuit Judge.

The question on this appeal is whether or not petitioner Canadian Gulf Line, Ltd., sub-charterer of the motorship "Soloy", is entitled to an order directing the respondent Continental Grain Co., chartered owner of the vessel, to arbitrate certain disputes between the parties in accordance with the provisions of the charterparty. The Canadian Gulf Line, Ltd., will hereafter be called "charterer" and The Continental Grain Co. "owner".

Under the original charterparty dated January 21, 1937, the charterer hired the motor "Dagrun" from the owner for six months but later paid $2,000 to have the motor "Soloy" substituted, believing that she would be available for the charterer's business earlier than the other vessel. The terms of the original charterparty under an "Addendum" thereto were to apply to the "Soloy". The bonus of $2,000 is alleged to have been paid upon the owner's representation that she would be available earlier than the "Dagrun" to take on newsprint paper at Powell River, British Columbia, whence the charterer by contract with the shipper was to transport the paper to Texas where it was to be delivered to newspaper publishers for use in their presses. The agreements between the parties to the charter nowhere contained any provision that the "Soloy" was to be engaged in any particular trade or contained any reference to the payment of $2,000 as a consideration for obtaining an earlier vessel than the "Dagrun".

The "Addendum" to the charter dated March 19, 1937, provided for substitution of the "Soloy" and concluded thus:

"Rate of hire and all other terms and conditions and exceptions of the said charter party remaining in full force and effect without alteration."

Clause 17 of the original charter reads as follows:

"That should any dispute arise between the Owners and the Charterers, the matter in dispute shall be referred to three persons at New York, one to be appointed by each of the parties hereto, and the third by the two so chosen; their decision or that of any two of them, shall be final, and for enforcing any award this agreement may be a rule of the Court."

Disputes having thereafter arisen between the parties, they entered into a written agreement in consideration of each refraining from demanding immediate arbitration pursuant to Clause 17, supra. The agreement referred to the charter dated January 21, 1937, and Clause 4 of that agreement provided: "that if the claims heretofore asserted by Canadian-Gulf Lines, Ltd., against Continental Grain Company under the above dated Charter Party and Addendum are not settled and compromised between the two said parties, on or before December 1, 1937, then and in such event either of the said parties may immediately demand arbitration of the same matters without further notice to the other, and that the matters in dispute between the said parties shall thereafter proceed to arbitration as promptly as circumstances permit."

The charterer demanded arbitration of its claims against the owner in respect to the following matters:

(1) Damages arising from a sale by the owner to the charterer of bad Diesel oil.

(2) Loss of ten days' hire.

(3) Damages in the amount of $9,060 for excess cost of rail transportation over water carriage of the newsprint paper from Powell River in British Columbia to Texas because of delay caused by unseaworthiness of the "Soloy's" engines or by bad oil or both.

(4) Refund of the $2,000 paid for substitution of the "Soloy" for the "Dagrun" because of the alleged representation.

Dispute (1) arises under a clause of the charterparty which provides: "3. That the Charterers shall accept and pay for all coal in the Steamer's Bunkers, and the Owners shall, on expiration of this Charter Party, pay for all Coal left in the Bunkers * * *".

The "Soloy" was to be delivered to the charterer at Rotterdam, which port according to the "Addendum" she was expected to reach about March 21-25, 1937. When she arrived there her bunkers contained only about 15 tons of fuel oil. The charterer was notified of this by the owner and agreed to purchase Diesel oil from the latter in order to supply the ship. The charterer paid $5,000 for the oil after it was loaded. The "Soloy" was then delivered at Rotterdam and left for Vancouver on April 20. The charterer claims that because the Diesel oil which had been purchased was bad the vessel was forced to put in at Falmouth where she discharged the oil, redelivered it to the owner and took on 220 tons of new fuel at a cost of $2,200. The charterer demands the difference between the $5,000 paid for the bad oil and the $2,200 paid for the new fuel, or $2,800.

Dispute (2) is over the claim of the charterer for loss of ten days' hire because of the bad oil furnished by the latter and the unseaworthy condition of the "Soloy's" engines.

Dispute (3) is over the claim that because of bad oil and the alleged unseaworthy condition of her engines the "Soloy" failed to leave Falmouth early enough to get to Powell River in British Columbia in time and the charterer was therefore obliged to ship 6,040 tons of paper by rail at $9,060 more than it would have cost to carry it by the "Soloy".

Dispute (4) is over the charterer's alleged right to obtain restitution of the $2,000 paid by it to have the "...