JB Effenson Company v. Three Bays Corporation, 16200.
Decision Date | 14 November 1956 |
Docket Number | No. 16200.,16200. |
Citation | 238 F.2d 611 |
Parties | J. B. EFFENSON COMPANY, Appellant, v. THREE BAYS CORPORATION, Ltd., Appellee. |
Court | U.S. Court of Appeals — Fifth Circuit |
Arthur Roth, Rassner, Miller & Roth, by Arthur Roth, Miami, Fla., for appellant.
Richard F. Ralph, Fowler, White, Gillen, Yancey & Humkey, Miami, Fla., for appellee.
Before RIVES, TUTTLE and JONES, Circuit Judges.
Diversity jurisdiction was invoked in a civil action upon a charter party executed at Miami, Florida, and dated February 5, 1952, by which the defendant, Three Bays Corporation, Ltd., a Nassau corporation, appellee here, chartered the M/V "Church Bay" to the plaintiff, J. B. Effenson Company, a Florida corporation, appellant here, for two voyages between Puerto Barrios, Guatemala, and Miami. Diversion for one trip to a Mexican port was sought by the plaintiff and permitted by the defendant. The plaintiff requested and the defendant granted an indefinite extension of the charter party. The vessel was used in the banana trade. By paragraph 19 of the charter party it was provided that:
In Section 3(6) of the Carriage of Goods by Sea Act it is provided:
"In any event the carrier and the ship shall be discharged from all liability in respect of loss or damage unless suit is brought within one year after delivery of the goods or the date when the goods should have been delivered". 46 U.S.C.A. § 1303(6).
In the first count of the plaintiff's complaint, filed in the United States District Court for the Southern District of Florida, it is alleged that on June 20, 1952, the refrigeration of the vessel broke down causing cargo damage of $5,000. In a second count it is stated that the refrigeration again broke down on July 3, 1952, with the result that cargo damage of $9,500 was sustained. The plaintiff averred that the defendant owed it an absolute and non-delegable duty to provide a seaworthy vessel for refrigerated cargo, and that the duty was breached in that the refrigeration broke down of causes known to defendant or of which defendant should have known before the vessel left port.
The defendant took the position that the claim was barred by the provisions herein quoted of the Act referred to in the charter party, 46 U.S.C.A. § 1303 (6), as more than one year had elapsed since the cause of action accrued. The plaintiff urged before the District Court as it urges here that the applicable period of limitation is five years as prescribed by the Florida statute with respect to actions upon written contracts not under seal. F.S.A. § 95.11. This provision, says the plaintiff, must govern as the Carriage of Goods by Sea Act does not apply to the charter party, and any effort to engraft on it the portion of the Act fixing the time within which suit may be brought must fail because of the Florida statutory prohibition against shortening by contract stipulation the limitation periods fixed by the state. The statute says:
F.S.A. § 95.03.
The plaintiff also urges that if the Carriage of Goods by Sea Act applies it is applicable in its entirety including the duty imposed by the Act on the carrier to exercise diligence to make the ship seaworthy and to make the refrigerating and cooling chambers fit and safe. 46 U.S.C.A. § 1303(1) (a, c). So urging, the plaintiff says that the defendant cannot invoke the provisions of the Act as to limitations because of the breach of duty to make the vessel seaworthy. The Carriage of Goods by Sea Act is not, by its terms, applicable to the charter of vessels. It applies to carriers and shippers, to contracts between them, and to the rights, duties and liabilities existing under the relationship between them. 46 U.S.C.A. § 1302. The parties to the cause before us neither assumed nor intended that their contract would be governed by the Carriage of Goods by Sea Act. They did not undertake to bring themselves under the Act. They stipulated that they should "be entitled to the like provisions and rights and immunities as are contained in" the designated sections of the Act. By this portion of the charter party the owner and the charterer incorporated by reference the statutory provisions referred to with the same effect as would have resulted if the substance of the provisions had been set forth in extenso in the agreement. By the incorporation of the parts of the Act it was agreed that the owner would be discharged from liability for loss of or damage to cargo unless suit be brought within a year. If this stipulation is valid the plaintiff cannot recover as more than a year had expired between the accrual of the causes of action and the bringing of the suit. If the Florida statutes are controlling the action was brought seasonably and the granting of the motion to dismiss was error.
The plaintiff's position is simply stated. It says that there is diversity of citizenship, the amount involved exceeds $3,000, the action is brought in a Federal court sitting in Florida, and requires the application of Florida law, the laws of the forum govern as to limitations, and by the Florida law contractual stipulations shortening limitation periods are void. If this were the usual run of the mill diversity case for the enforcement of a right derived from and existing under state law the question, at the outset, would be whether the determination of the applicable limitation period was controlled, under Erie Railroad Co. v. Tompkins, 304 U.S. 64, 58 S.Ct. 817, 82 L.Ed. 1188, 114 A.L.R. 1487, by state law. Such question has been resolved. Whether the question be of substantive or procedural rights, or in a hiatus between the two, it is the state law that governs. Guaranty Trust Co. of New York v. York, 326 U.S. 99, 65 S.Ct. 1464, 89 L.Ed. 2079, 160 A.L.R. 1231. See also Holderness v. Hamilton Fire Ins. Co. of New York, D.C.S.D.Fla.1944, 54 F.Supp. 145. So too, would we be required to determine the effect to be given to a prohibition against shortening limitation periods by contract under a declaration of public policy made by the legislature of the state in which the court is sitting? Trust Co. of Chicago v. Pennsylvania Railroad Co., 7 Cir., 1950, 183 F.2d 640, 21 A.L.R.2d 238. But do we here have the usual type of a diversity case? Do we look to the statutes of the State and its judicial decisions to supply the principles by which we are to be guided to a decision?
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