THE GEORGE J. GOULANDRIS

• Decision Date: 27 January 1941
• Docket Number: No. 1520-1522.,1520-1522.
• Parties: THE GEORGE J. GOULANDRIS. GOULANDRIS BROS. v. BRITISH IRON & STEEL CORPORATION, Limited, et al. BRITISH IRON & STEEL CORPORATION, Limited, v. GOULANDRIS BROS.
• Court: U.S. District Court — District of Maine

36 F. Supp. 827

THE GEORGE J. GOULANDRIS.

GOULANDRIS BROS. v. BRITISH IRON & STEEL CORPORATION, Limited, et al.

BRITISH IRON & STEEL CORPORATION, Limited, v. GOULANDRIS BROS.

Nos. 1520-1522.

District Court, D. Maine, S. D.

January 27, 1941.

Verrill, Hale, Dana & Walker, of Portland, Me. (Robert Hale, of Portland, Me., of counsel), for plaintiff.

Woodman, Skelton, Thompson & Chapman, of Portland, Me. (N. W. Thompson and R. S. Chapman, both of Portland, Me., and Herbert M. Statt, of New York City, of counsel), for defendant.

PETERS, District Judge.

These three libels, one in rem by the above-entitled British Corporation against the Greek steamship "George J. Goulandris", one in personam by the British Corporation against the owners of the steamship, and a cross-libel by the owners of the steamship against the cargo and the British Corporation as owner of the cargo, were heard together and involve one question, viz:—the right of the vessel to refuse to continue a chartered voyage from New York, by way of Portland and Providence, to the United Kingdom with a load of scrap iron, after the breaking out of the war between England and Germany.

The facts are largely undisputed. The "Goulandris", a steamship owned by Goulandris Brothers, Greek citizens, and wholly manned by Greeks, was chartered on July 31, 1939, by the British Iron & Steel Corporation, Ltd., of London, England, to carry 6,500 tons of scrap iron from one or two safe ports between New York and Portland, both inclusive, "to one safe port in the United Kingdom, discharging range to be declared 8 days after sailing and port of discharge to be declared when vessel is 72 hours off Lands End * * * or as near thereto as she may safely get".

The vessel arrived in Portland, her first loading port, on Saturday, September 2, 1939. On the next day, Sunday, September 3, England and France declared war on Germany. The Monday following was a holiday. On Tuesday, September 5, the local agent of the charterers, Mr. Gignoux, interviewed the master of the vessel to find out his attitude about the voyage, in view of the news of war. The master testified on this point as follows:

"Q. Will you state what conversations you had with Mr. Gignoux on September 5th regarding loading. A. Mr. Gignoux asked me if the war made any difference to me.

"Q. What response, if any, did you make to Mr. Gignoux? A. I answered that it isn't easy for me to stop those gentlemen from loading, but I will refuse to to sign bill of lading for U. K. So they did not start that day.

"Q. Did you say at that time why you would not sign the bill of lading? A. Because I was afraid.

"Q. Did you tell Mr. Gignoux? A. Yes, I told him I was afraid.

"Q. Afraid of what? A. From the war. I was afraid to lose lives, vessel and cargo too.

"Q. Were you then, Captain, familiar with the terms of the charter party? A. Yes."

Mr. Gignoux was present at the trial and the above testimony as to the conversation with him was not refuted.

The reference by the captain to stopping "those gentlemen from loading" evidently referred to the charterers or their employees whose duty it was to load the vessel.

This conversation between the captain and the agent of the charterers who was also, — until the controversy got a bit warmer, — the local agent of the owners of the vessel, was the beginning of the dispute between the owners of the vessel and the charterers, owners of the cargo, which culminated in these libels.

Nothing else occurred on the 5th. On the 6th at 1 P. M. the charterers began loading the vessel and by the 11th had put aboard 2,244 tons, being all the scrap that was to be taken on at Portland, — the vessel having been directed thence to proceed to Providence to take on the balance of the cargo and proceed to Europe.

After this loading was completed on the 11th the captain was asked by Mr. Gignoux to sign bills of lading, but he refused, giving the reasons as before, that he was "afraid about the war, about the lives, vessel and cargo"; saying also that he regarded it as unsafe to attempt to reach the United Kingdom with a cargo which he thought was contraband, and having in mind information he had received from the newspapers and radio that numerous neutral vessels bound for Great Britain had been sunk by German submarines.

Meanwhile the captain had been in communication with his owners' agents in London, and the owners themselves in Greece. His orders were conflicting. On the 6th the London agents cabled him to load, but on the 10th the owners in Greece cabled him not to load. On the 16th the London agents cabled him not to load further, and on the 30th the owners cabled instructions to discharge the cargo. The captain testified that he had lost faith in the agents in London.

Certain notices in writing were given to make a record of the position of the parties. On September 11, Mr. Gignoux, as agent for the charterers notified the captain of the Goulandris that the British Iron & Steel Corporation, Ltd., would hold him responsible for all delays caused by his refusal to sign bills of lading and his refusal to clear and sail to the second loading point and thence to the destination, as provided in the charter party. On the 30th the captain wrote the New York agents of the British Iron & Steel Corporation, Ltd., as follows: "Confirming the various conversations between your agent, in New York, and Fred E. Gignoux, local agent, I have received instructions from my owners to discharge the cargo of scrap metal now aboard my ship at the port of Portland, and I am prepared to move my ship to a safe dock in Portland where you may discharge the cargo, but unless I receive your instructions to proceed to a proper berth at Portland for the purpose of discharging the cargo by noon on Tuesday, October 3, 1939, I will proceed to have this cargo discharged and stored, the cost and expense thereof to be borne by you as charterers and as owners of the cargo."

The charterers, adhering to their position that the ship should load and sail, took no action on the letter of the captain and on the 12th the Goulandris started discharging the cargo that she had taken on and the discharging was completed on the 17th. The libels followed.

The owners of the vessel have advanced and argued several reasons for non-performance of their undertakings in the charter party. Among others they allege that they are excused by the general maritime law, by the "Restraint of Princes" clause and the war risk clauses in the charter. These clauses are as follows:

"2. It is also mutually agreed that the carrier shall not be liable for loss or damage occasioned by causes beyond his control, by the perils of the seas or other waters * * * by enemies, pirates, or robbers, by arrest and restraint of Princes, Rulers or People * * * Charterers also not to be responsible for restraints of Princes, Rulers or People."

"War Risks Clauses.

"1. No Bills of Lading to be signed for any blockaded port and if the port of discharge be declared blockaded after Bills of Lading have been signed, or if the port to which the ship has been ordered to discharge either on signing Bills of Lading or thereafter be one to which the ship is or shall be prohibited from going by the Government of the nation under whose flag the ship sails or by any other Government, the owner shall discharge the cargo at any other port covered by this Charter-party as ordered by the Charterers (provided such other port is not a blockaded or prohibited port as above mentioned) and shall be entitled to freight as if the ship had discharged at the port or ports of discharge to which she was originally ordered.

"2. The ship shall have liberty to comply with any orders or directions as to departure, arrival, routes, ports of call, stoppages, destination, delivery or otherwise howsoever given by the Government of the Nation under whose flag the act with authority of such Government or of any department thereof, or by any committee or person having, under the terms of the War Risks Insurance on the ship, the right to give such orders or directions and if by reason of and in compliance with any such orders or directions anything is done or not done, the same shall not be deemed a deviation, and delivery in accordance with such orders or directions shall be a fulfillment of the contract voyage and the freight shall be payable accordingly."

The industry of counsel has brought to my attention numerous decisions of the higher courts in this and other countries involving the rights and responsibilities of ship masters and owners under contracts of carriage when war has broken out after the contract was made, — as in this case. While the facts in the different cases vary considerably, I gather from the authorities that there is one principle which, when applicable, may be depended upon as a guide to the decision of a dispute such as this. It is that when the "Restraint of Princes" clause or similar language is found in the contract a reasonable apprehension of capture or destruction of the ship or cargo will justify non-performance of the agreement to carry.

The leading case of The Styria v. Morgan, 186 U.S. 1-18, 22 S.Ct. 731, 46 L.Ed. 1027, decided that a well-gounded fear of restraint is equivalent to actual force.

Quoting with approval from the opinion in Nobel's Explosives Co. v. Jenkins, L.R. 1896, 2 Q.B. 326, the court said: "`The main ground of defence was the exception in the bill of lading of "restraint of princes, rulers or people". A large body of evidence was laid before me to show that if the vessel sailed with the goods on board she would, in all probability, be stopped and searched. It was certain in that case that the goods would have been confiscated, and quite uncertain what course the captors would take with the ship and the rest of the cargo. I am satisfied that if the master had continued the voyage with the goods on board he would have been acting recklessly. It was...