San Rafael Compania Naviera, SA v. American Smelt. & R. Co.

• Decision Date: 31 January 1964
• Docket Number: No. 18367.,18367.
• Citation: 327 F.2d 581
• Parties: SAN RAFAEL COMPANIA NAVIERA, S.A., and Orion Shipping & Trading Co., Inc., Appellants, v. AMERICAN SMELTING & REFINING COMPANY, Appellee. AMERICAN SMELTING & REFINING COMPANY, Appellant, v. SAN RAFAEL COMPANIA NAVIERA, S.A., and Orion Shipping & Trading Co., Inc., Appellees.
• Court: U.S. Court of Appeals — Ninth Circuit

327 F.2d 581 (1964)

SAN RAFAEL COMPANIA NAVIERA, S.A., and Orion Shipping & Trading Co., Inc., Appellants, v. AMERICAN SMELTING & REFINING COMPANY, Appellee.

AMERICAN SMELTING & REFINING COMPANY, Appellant, v. SAN RAFAEL COMPANIA NAVIERA, S.A., and Orion Shipping & Trading Co., Inc., Appellees.

No. 18367.

United States Court of Appeals Ninth Circuit.

January 31, 1964.

Wallace, Garrison, Norton & Ray, and Maynard Garrison, Jr., San Francisco, Cal., for appellant Financiera Peruana, S.A.

McCutchen, Doyle, Brown, Trautman & Enersen, Russell A. Mackey, and Bryant K. Zimmerman, San Francisco, Cal., for appellant-appellees San Rafael Compania Naviera, S.A. and Orion Shipping & Trading Co., Inc.

Bigham, Englar, Jones & Houston, New York City, and Lerer & Moltzen, San Francisco, Cal., J. Bond Smith, Jr., New York City, and Allan R. Moltzen, San Francisco, Cal., for appellees-appellants American Smelting and Refining Co. et al.

Lillick, Geary, Wheat, Adams & Charles, and James L. Adams, San Francisco, Cal., and Nichols & Rogers, and Alan H. Nichols, San Francisco, Cal., for appellee Schirmer Stevedoring Co.

Before MERRILL and DUNIWAY, Circuit Judges, and TAYLOR, District Judge.

DUNIWAY, Circuit Judge.

This is the second case that has come before us arising out of the financial difficulties of a Peruvian firm entitled Naviera Andes Peruana (Navandes). (See Schirmer Stevedoring Co. v. Seaboard Stevedoring Corp., 9 Cir., 1962, 306 F.2d 188) The appeals in this matter are from a judgment rendered in an interpleader action brought by American Smelting & Refining Company (Asarco). As the interpleading party, it deposited in court moneys owing by it as freights for shipping cargo on the vessel OCEAN ALICE, which had been chartered to Navandes. Navandes had contracted to carry cargoes of ore for Asarco from South America to Asarco's plants at Selby on San Francisco Bay and at Tacoma, Washington. In its judgment the court determined that Asarco had deposited in cash the sum of $46,652.01, and that the total sum of the freight moneys due is $92,016.19, the difference being represented by a bond. The decision of the trial court is reported as American Smelt. & Refin. Co. v. Naviera Andes Peruana, S.A., at 208 F.Supp. 164.

It is undisputed that Navandes was bankrupt by June 8, 1959, and various of its creditors laid claim to the freights owing to it by Asarco. One of these creditors, Schirmer Stevedoring Company, Ltd. (Schirmer), had brought an action in the Northern District of California and levied an attachment on June 5, 1959. The district court authorized Asarco to deduct from the total freights the sum of $25,167.22 that it had paid to Schirmer for stevedoring services performed on the voyage of the OCEAN ALICE in connection with which the freights here in question were earned. The court found that on June 5, when the vessel arrived in San Francisco Bay, Navandes was bankrupt and therefore failed to provide, as it was required to do, for stevedoring services for unloading the vessel. Asarco then hired Schirmer, which unloaded the ship at a cost of $25,167.22, which Asarco paid. No contention is now made by any party that the court's allowance of this amount for the benefit of Asarco was erroneous. The district court held that Schirmer had priority against the net funds, subject only to the maritime lien of the owners of the OCEAN ALICE, Ocean Liberties, Inc., (Ocean). It therefore awarded to Ocean $15,005.61, moneys due for port charges and the charter fee due on June 20, 1959 on the OCEAN ALICE. Next it awarded Schirmer $41,561.72 for stevedoring services performed on other voyages under charter to Navandes. The award was made to Schirmer as first attaching creditor. Finally, the court awarded to San Rafael Compania Naviera, S.A. (San Rafael) and Orion Shipping & Trading Company, Inc. (Orion), owners of two other ships chartered in the same service, as second attaching creditors, the remaining $10,281.64. One other party, Financiera Peruana S.A. (Financiera), laid claim to these freights. It claimed to be the assignee of all of the freights, but the court awarded it nothing.

There are three appeals. Financiera appeals, claiming that it takes precedence over subsequent attaching creditors and over the owners' claim for charter hire that became due subsequent to the payment date of earned freights. Asarco appeals claiming that it is entitled to deduct certain expenses arising out of a strike at its Tacoma, Washington plant, and that the court erred in denying it certain counsel fees and costs. San Rafael and Orion appeal, claiming that their rights are prior to Schirmer's rights. All parties join in opposing the appeal of Financiera.

We consider first the appeal of Financiera. It says that it is a financial institution of Lima, Peru, engaged in buying at a discount freights to be earned on voyages up the west coast of North and South America, and that it agreed with Navandes to purchase the freights earned by vessels under charter to Navandes, which freights would become due and payable upon the arrival of these vessels at their ports of destination. It says that the consideration given by it was its payment of necessary stevedoring, fuel, port, charter, and other costs necessary and incidental to the voyages. It says that on April 6, 1959 a general document of intent as to four vessels, including the OCEAN ALICE, was executed, and that on April 24, 1959, shortly before the OCEAN ALICE sailed on her second voyage, the voyage giving rise to the freights deposited by Asarco, a specific assignment of the freights of that voyage was executed to Financiera by Navandes. One week before that date Navandes had advised Asarco that it irrevocably authorized Asarco to pay the freights of the voyage to Chase Manhattan Bank for Financiera. The OCEAN ALICE arrived in San Francisco on June 5, 1959 and tied up at Asarco's Selby plant on June 11, on which date, says Financiera, the freights became payable. Financiera also claims that it paid, during the progress of the voyage, various expenses totalling $59,382.

The trial court found that the assignment of April 24 was executed by the president and general manager of Navandes, that on April 17 Navandes did authorize payment of the freights to Chase Manhattan Bank for Financiera, that on April 21 Asarco agreed to pay the freights for the benefit of Financiera, but that neither Navandes nor Financiera ever informed Asarco of the assignment.

The court also found that Financiera had failed in its burden of showing a valid assignment, stating: "The record is unclear as to exactly what the dealings were between Financiera and Navandes in general and in particular it appears no adequate consideration was given for the assignment of April 24, 1959 by Financiera." (208 F.Supp. at 169-170) The court was also of the view that the assignment falls within the Uniform Fraudulent Conveyance Act, because it rendered Navandes insolvent and was made without fair consideration. See Cal.Civ.Code, §§ 3439 et seq., 3439.04 and New York Debtor and Creditor Law, McKinney's Consol. Laws, c. 12, §§ 270 and 273. The court, however, did not rest its judgment on this ground, nor do we. In essence, the court's judgment as to the claim of Financiera is a little like the old Scots verdict of "not proved."

The record, as presented by Financiera, is most unsatisfactory. There was no proof of the delivery of the assignment, and no proof that the officers of Navandes who signed the assignment had any authority to do so. Neither the April 6 document nor that of April 24 contains any promise by Financiera to do anything. Also, although Financiera claims that it advanced in excess of $59,000 for this voyage, the record does not compel any such conclusion. Most of the items to which it refers were actually charged to other accounts, and some were not, on their face, for the benefit of the OCEAN ALICE. Also, many of the payments were made before the date of the assignment. The record also indicates that Financiera has been more than amply repaid, by the collection of freights of other voyages, for the total payments made by it to or for the benefit of Navandes. We note, too, that the pre-trial order recites that "Financiera contends that it made no loans or advances to Navandes and claims no indebtedness or right to repayment from Navandes on account of any amounts paid to Navandes or to others." It thus asserts rights solely as an assignee. We are not surprised that the court was unwilling to sustain its claims in the absence of compelling proof of their validity. We think that these and other facts support the court's finding.

Financiera also asserts a maritime lien under 46 U.S.C. § 971, but here again, for the reasons that we have already stated, we think that its proof is inadequate. We conclude that the judgment, insofar as it denies relief to Financiera, is correct.

We next consider the appeal of Asarco. Its first contention is that it is entitled to deduct from the freights certain expenses which it says that it paid, and that Navandes agreed to assume, in connection with three voyages between Peru and Asarco's Tacoma plant. One of these was a previous voyage by the OCEAN ALICE, which arrived at Tacoma on March 17, 1959; another was by the ARETI S., which arrived at Tacoma on May 15, 1959, and the third was a voyage by the ANDROS LEGEND, which arrived at Tacoma on May 13, 1959. At the time that each of these vessels arrived, Asarco's Tacoma plant was shut down by a strike, and had been since March 13. This prevented discharging the vessels at that plant and Asarco made arrangements for discharge at other locations. It claims that Navandes, through its agents, and by exchanges of cables, letters and telex messages, agreed to these alternate arrangements and to pay the additional costs to Asarco that arose from its acceptance of the cargoes at ports or places other than its Tacoma smelter dock.

The...