In re Utility Oil Corporation
| Decision Date | 05 March 1934 |
| Docket Number | No. 290.,290. |
| Parties | In re UTILITY OIL CORPORATION. |
| Court | U.S. Court of Appeals — Second Circuit |
Kirlin, Campbell, Hickox, Keating & McGrann, of New York City (Cletus Keating, Edwin S. Murphy, L. DeGrove Potter, and Henry L. O'Brien, all of New York City, of counsel), for appellant.
Burlingham, Veeder, Fearey, Clark & Hupper, of New York City (Roscoe H. Hupper and William J. Dean, both of New York City, of counsel), for appellee Petroleum Navigation Corporation.
Before MANTON, AUGUSTUS N. HAND, and CHASE, Circuit Judges.
The petition filed alleged that on August 6, 1928, the Petroleum Navigation Company chartered the steamship Papoose to the appellant for as many consecutive voyages as the vessel could make between Trinidad, British West Indies, and United States ports, north of Cape Hatteras, between January, 1929, and December, 1933. Under clause 23, the chatterer might cancel, at its option, three voyages in any one year. On December 5, 1932, it gave notice to the owner canceling three consecutive voyages for the year 1933, the first of which was to take effect on the expiration of the notice of cancellation forty-five days later. This cancellation notice expired January 19, 1933. The petition states that three Trinidad voyages of the ship would have consumed fifty-four days and therefore the vessel was bound to report at Trinidad to load her next cargo March 14, 1933. She did not report on that day; she was then sailing between New York and the Gulf of Mexico, not for the account of the charterer. The petition alleges that the failure to have the vessel at the loading port March 14, 1933, was a breach of the charter. It is also suggested that, even though the cancellation period might not be regarded as beginning until the vessel completed an entire voyage for Gulf ports, not under the charter, beginning January 18, 1933, and ending at Providence, R. I., January 27, 1933, the cancellation period expired March 22, 1933. In that event, it is claimed, there was a breach of the charter by the owner because the vessel did not report for loading on or before March 22, 1933. On March 28, 1933, the appellant advised the appellee that it would not deliver any further cargoes to the vessel. Thereafter a demand was made by the appellee for damages for breach of the charter, which the appellant refused to pay.
The charter contained an arbitration clause reading:
The appellee filed a libel in admiralty against the appellant and refuses to arbitrate the dispute. Thereupon this petition was filed. In support of the petition, the appellant invokes section 4 of the United States Arbitration Act (U. S. C. section 4, title 9 9 USCA § 4) which provides: "A party aggrieved by the alleged failure, neglect, or refusal of another to arbitrate under a written agreement for arbitration may petition any court of the United States which, save for such agreement, would have jurisdiction under the judicial code at law, in equity, or in admiralty of the subject matter of a suit arising out of the controversy between the parties, for an order directing that such arbitration proceed in the manner provided for in such agreement. * * *" It further provides: "The court shall hear the parties, and upon being satisfied that the making of the agreement for arbitration or the failure to comply therewith is not in issue, the court shall make an order directing the parties to proceed to arbitration in accordance with the terms of the agreement. * * *"
The petition sufficiently sets forth the refusal to arbitrate and the grievance of the appellant thereby under the terms of the agreement so to do.
It is to be noted that the agreement to arbitrate was for a dispute arising during the performance of the charter party. The parties had entered into the performance of this contract. According to the appellant's petition, the denial of which raises the issue, there was a termination of performance by the appellant, on breach of the appellee; thus the question presented is whether, on the shipowner's breach of the charter during performance, the charterer is entitled to have the respective rights of the parties determined by an arbitration under the arbitration clause.
The court below, resting its decision on The Atlanten, 252 U. S. 313, 40 S. Ct....
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