MASSACHUSETTS TRUSTEES, ETC. v. United States

• Decision Date: 02 May 1962
• Docket Number: No. 55-26.,55-26.
• Citation: 210 F. Supp. 822
• Parties: MASSACHUSETTS TRUSTEES OF EASTERN GAS AND FUEL ASSOCIATES, Libelants, v. UNITED STATES of America, Respondent.
• Court: U.S. District Court — District of Massachusetts

210 F. Supp. 822

MASSACHUSETTS TRUSTEES OF EASTERN GAS AND FUEL ASSOCIATES, Libelants, v. UNITED STATES of America, Respondent.

No. 55-26.

United States District Court D. Massachusetts.

May 2, 1962.

James S. Eastham, Boston, Mass., Kominers & Fort, Washington, D. C., for libelant; William M. Brady, Boston, Mass., J. Franklin Fort, Israel Convisser, Washington, D. C., of counsel.

W. Arthur Garrity, Jr., U. S. Atty., Boston, Mass., for respondent; Levenworth Colby, Lawrence F. Ledebur, Attys., Admiralty & Shipping Section, Dept. of Justice, of counsel.

WYZANSKI, District Judge.

1. On January 15, 1962 this Court issued an opinion, 202 F.Supp. 297, that the final judgment when entered herein should include the dismissal of libelant's first and second causes of action and the dismissal of respondent's first cause of action. This opinion is now amended in the following respects:

(a) In Section E, finding 14, pages 16 and 17 at page 308 the second sentence of the finding is amended to read, "The Government had vessels which it alleges had a fair charter hire of over 2 million dollars."

(b) Section F, Adjudications, paragraph 2, page 17 at page 308 is deleted. At the time the opinion was written Eastern had not had adequate opportunity to present evidence with respect to its second cause of action.

2. March 23, 1962 the parties by stipulation settled libelant's third cause of action and respondent's third and fourth causes of action. March 26, 1962 the Court entered a decree based on that stipulation.

3. There now remains for consideration only libelant's second cause of action. This cause of action, already summarized in the main opinion, has two aspects. The broader contention is that with respect to the year 1947 the Commission should have charged for all vessels chartered by Eastern during that year a rate calculated upon the accumulative net voyages profits for the year of all such vessels. The narrower contention is that the Commission had no right to require two separate accountings of the voyage profits of, respectively, the S. S. ISAAC SHARPLESS and the S. S. WASHINGTON IRVING. Each claim turns on the question whether the Government had an unfettered right to terminate the bareboat charters.

4. As the opinion of January 15, 1962 notes, on October 1, 1946 Eastern and the Commission entered into bareboat charters, Contract No. MC c-41881, for the use of certain Government owned vessels. Many of the terms of that Contract are set out in the opinion and need not be repeated. But it is now appropriate to quote Part II, Clauses 14 and 27, of the Contract.

"CLAUSE 14. Termination. Either the Owner or the Charterer may terminate the period of use of any of the vessels by giving written notice to the other party at least fifteen (15) days prior to the termination of any voyage hereunder, in which event the vessel shall be redelivered at the port of redelivery provided for in Clause G of Part I hereof upon termination of the voyage during which such notice is given."

"CLAUSE 27. Cancellation or Modification by Mutual Consent: Waivers. This agreement may be terminated, modified, or amended at any time by mutual consent."

5. While Eastern was using the chartered vessels, the Commission on August 15, 1947 sent to Eastern and other charterers, a telegram stating:

"The use of any and all vessels chartered to your company pursuant to the provisions of Shipsalesdemise 303 is hereby terminated as follows:

"With respect to vessels whose voyages terminate on or after August 31, 1947 this telegram shall be deemed to be the owner's fifteen days notice of cancellation pursuant to Clause 14 of Part II of the Charter.

"With respect to vessels whose voyages have terminated or will terminate prior to August 31, 1947 this telegram will also be deemed to be the owner's fifteen days notice of cancellation pursuant to said Clause 14 and/or Clause C(2) of Part I. You will be given opportunity to continue the use of vessels under charter pursuant to new terms and conditions to be announced within the next few days.

"If within seven days from date hereof you advise as to those vessels which are engaged solely in domestic trade, the Commission will except such vessels from this notice."

6. The Commission on August 20, 1947 sent to Eastern and other charterers a telegram stating:

"Pursuant to the Commission notice of August 15, 1947, as to the termination of the use of all vessels chartered to your company subject to the provisions of Shipsalesdemise 303, the U.S. Maritime Commission today authorized an addendum to its bareboat charter agreement for warbuilt vessels, "Shipsalesdemise 303", effective as of September 1, 1947, providing substantially as follows:

"1. Rates of basic and additional charter hire for foreign trade remain unchanged stop

"2. Period of about six months, but no voyages to be commenced after February 29, 1948, subject to termination as to any vessels on fifteen days' notice by either party to be given after a period of sixty days from the date when the vessel becomes subject to the provisions of the addendum stop

"3. The payment of additional charter hire pursuant to Clause 13 shall be computed separately for those voyages commenced prior to September 1, 1947, and those which commence under the addendum to the charter agreement herein authorized, with the understanding that the Maritime Commission may permit charterers to establish reserves for repair expenses and expenses usually covered by P & I insurance stop

"Please advise not later than August 27, 1947, if you accept the addendum as specified herein. Upon written notice being given of such acceptance, you are authorized to continue the use of any vessels now chartered to you pursuant to Shipsalesdemise 303 under the present terms and conditions as to any approved voyages commencing prior to September 1, 1947, but the voyages of any new vessel allocations after August 20, 1947, shall be under the terms and conditions of the addendum. If such written notice of acceptance of the addendum is not received by the Commission on or before August 27, 1947 all vessels, pursuant to the provisions of Shipsalesdemise 303, shall be redelivered in accordance with the terms of such charter upon completion of approved voyages commenced prior to September 1, 1947."

7. August 25, 1947, Eastern sent a telegram to the Commission stating:

"Retel yours of August 15 and August 20 we accept addendum specified your wire of August 20 and have all vessels now chartered to us pursuant to Ship Sales Demise Charter Form 303 committed load coal during September with one exception which vessel loads early October."

8. In October, 1947, the Commission and Eastern executed Addendum No. 7 to the charter which embodied the terms of the foregoing telegrams. The relevant terms of that Addendum follow:

"WHEREAS, on August 15, 1947, the Owner served notice of termination pursuant to Clause 14, Part II, with respect to vessels hereunder operating in foreign trades, and simultaneously advised that the Charterer would be given an opportunity to continue the

...