Owens v. Breitung

• Decision Date: 08 December 1920
• Docket Number: 6.
• Parties: OWENS v. BREITUNG.
• Court: U.S. Court of Appeals — Second Circuit

270 F. 190

OWENS v. BREITUNG.

No. 6.

United States Court of Appeals, Second Circuit.

December 8, 1920

Harrington Bigham & Englar, of New York City (D. R. Englar and Oscar R Houston, both of New York City, of counsel), for appellant.

Katz &amp Sommerich, of New York City (Marvell C. Katz and O. C Sommerich, both of New York City, and Edwin M. Borchard, of New Haven, Conn., of counsel), for appellee.

Before WARD, ROGERS, and HOUGH, Circuit Judges.

PER CURIAM.

The libelant's case is quite without equity. Concededly the general rule in this country is that, if goods are not delivered, no freight is earned, and the shipper may recover the same, if prepaid. National Steam Navigation Co. v. International Paper Co., 241 F. 861, 154 C.C.A. 563.

In the present case it was known to all concerned before the voyage began that, though the steamer was to be seized as enemy property, there would be no condemnation of the cargo, which was to be bought or forwarded to destination by the seizing government. Before the voyage to Rotterdam was completed, the steamer was seized by a French cruiser and brought into the port of Brest. There the libelant voluntarily accepted the cargo and sold it to the French government for the full price he would have received, had it been delivered by the steamer at Rotterdam and from there forwarded to Bremen, which price included the prepaid freight. The sum and substance of the matter is that the libelant agreed to substitute the port of Brest for the port of Rotterdam, and by so doing made it impossible for the respondent to deliver at Rotterdam, as the bill of lading entitled him to do by transshipment, if the steamer for any cause were prevented from proceeding in the ordinary course of her voyage.

The only debatable question is whether the respondent was entitled to retain anything more than freight pro rata itineris; but upon all the facts in the case we think he was rightly awarded full freight. Carver on Carriage of Freight by Sea, Sec. 307. Judge Hand's opinion will be found below.

The decree is affirmed.

Opinion of Learned Hand, District Judge.

This is a libel in personam for the recovery of freight paid in advance, under the following circumstances:

On December 9, 1914, the libelant entered into a contract with E. V. Novelly & Co., New York, acting on behalf of the respondent, by which Novelly & Co. agreed to tender the steamer Dacia, then the Martha and under the German flag, but to be changed to American registry, for the shipment of 11,000 bales of cotton from Galveston, Tex., to Bremen Germany. The steamer was to be tendered at Galveston in the month of December, 1914, and was guaranteed to sail on or before January 15, 1915. It was provided that the vessel need not be insured with the United States government as to war risk, except for the excess of $750,000 for which the United States had already quoted war risk on the cargo. The freight to be paid was 3 cents a pound.

The Dacia started loading about January 7, 1915, and by the 10th or 11th had lifted 4,000 of the 11,000 bales. Meanwhile, however, difficulties had arisen in connection with the cargo's war risk insurance, because the British government had indicated a purpose not to permit her transfer, as a German ship, to neutral registry pending the war. On the 10th or 11th the loading was stopped, and on the 16th one Parker, assistant director of the War Risk Bureau, wired to Lamar, the libelant's agent, that the British government had decided not to allow the Dacia to go either to Rotterdam or Bremen, and would doubtless seize the ship, though it would protect the owner of the cotton against loss. Upon this news, representatives of both parties had an interview in New York on the 17th, at which it was agreed that the port of delivery should be changed from Bremen to Rotterdam and the freight from $3 to $2.90 per 100 pounds, the respondent declining to release the libelant from the contract and insisting upon making the voyage. He threatened to libel so much of the cotton as had already been laden for the whole freight, unless these terms were accepted. The loading then proceeded, and a bill of lading in the usual form was delivered to the libelant on January 22d; the cargo having been meanwhile insured on January 21st.

On that day the British ambassador wired the respondent's agents that the British government was prepared to arrange for the transfer of cotton at Rotterdam, loading and unloading at their expense, so as to guarantee the owners of the cargo, if consisting solely of cotton, against loss, but that the question of the transfer of flag must be tried out before a prize court. He asked what kind of guarantee the respondent would give if the Dacia was released as requested. The ship refused to sail before the payment of freight, which was made on the 1st day of February. On February 2d the Secretary of State wrote to the libelant, saying that he was laying his (the libelant's) preference regarding the disposition of the cargo before the British ambassador, but what that preference was does not appear. On the same day the libelant's agent wrote to his lawyer, saying that it did not make much difference to what English port the Dacia proceeded, as the cargo was quite content to let England select the port, if that government so desired.

The Dacia was seized by a French cruiser on February 27th off the coast of France and was taken to Brest as prize. Her crew were put ashore and sent back to America, and she was later condemned by a French court and sold.

On March 3d, after news of the capture had been confirmed, the libelant's agent wrote to the War Risk Insurance Bureau that they were prepared to let France have the cargo at the Bremen price without prize court proceedings, because they especially wished to avoid the delay, 'and we prefer that the cargo be not forwarded at the expense of the War Risk Bureau at Rotterdam, because we would have to provide transportation and pay freight from Rotterdam to Bremen. Of course, we know you have the right so to forward the cargo, if you elect to do so. If it went forward, we would also have to pay damages for late sailing from United States.'

Apparently in answer to this, the Secretary of State wired the libelant that he was inquiring of the British government regarding the disposition of the cargo. On March 5th the respondent telegraphed the Secretary of State, asking him to request the French government to release the Dacia on bond, the prize proceedings to continue, but, if France meant to detain the cargo he could see no objection to its being undelivered at France's expense and allowing the Dacia to return direct home.

On the same day the libelant wrote again to the War Risk Insurance, saying: 'We at your request some time ago advised State Department that we preferred and would accept from England Bremen sale contract price, and not request forwarding the cargo, and having made all our arrangements accordingly we would be seriously embarrassed if the cargo were not forwarded to destination.'

On the 8th the Secretary of State wired the respondent that the French government was not disposed to examine closely the possibility of enemy ownership of cargo, and that probably the shipper would be given a chance of sending the cargo to destination or receiving payment in France, and asked whether, in view of the above, the respondent wished his request transmitted to the French government that the Dacia be released in bond and be allowed to return to the United States. On the 9th the respondent said that he did wish his request transmitted, but no answer arrived till April 7th, saying that it was a matter for the prize court. Later, on April 22d, came a categorical refusal.

On March 8th, the War Risk Bureau wired the libelant's agent and wrote the libelant that the French government would follow the understanding of the British government and either purchase or forward the cargo. The Secretary of State on March 10th advised the French government that the cargo was willing to accept the offer of purchase at the full Bremen price, to which the French government assented before the 13th. The sale was later completed, the bills of lading, invoices and the insurance policy being all turned over by the Guaranty Trust Company, which had advanced money on the same.

The suit was brought on the theory that the voyage was not completed, the freight was never earned, and that it might therefore be recovered in accordance with the well-established rule under the American and continental authorities.

The libel does not very definitely declare the theory of law upon which it rests, but to be within the admiralty jurisdiction of this court I suppose it will hardly be contended that it can depend upon anything else than the breach of the contract of December 9, 1914, and of the bill of lading. The respondent promised to carry the cotton to Rotterdam and failed to do so, but this was not a breach, because the fifth...