United Nations Children's Fund v. S/S NORDSTERN

• Decision Date: 01 April 1966
• Citation: 251 F. Supp. 833
• Parties: UNITED NATIONS CHILDREN'S FUND, Libellant, v. S/S NORDSTERN, her boilers, engines, etc., Sabre Shipping Corporation, Sabre Line and C. Mackprang, Jr., Respondents.
• Court: U.S. District Court — Southern District of New York

251 F. Supp. 833

UNITED NATIONS CHILDREN'S FUND, Libellant, v. S/S NORDSTERN, her boilers, engines, etc., Sabre Shipping Corporation, Sabre Line and C. Mackprang, Jr., Respondents.

United States District Court S. D. New York.

November 23, 1965.

Supplemental Opinion April 1, 1966.

Zock, Petrie, Sheneman & Reid, New York City, for libellant; Francis J. O'Brien, Howard M. McCormack, New York City, Advocates.

Kirlin, Campbell & Keating, New York City, for claimant-respondent, C. Mackprang, Jr.; Walter P. Hickey, New York City, Advocate.

Dougherty, Ryan, Mahoney & Pellegrino, New York City, for respondents Sabre Shipping Corporation and Sabre Line; Robert J. Giuffra, New York City, Advocate.

LEVET, District Judge.

This is a libel in admiralty growing out of an alleged deviation by the S/S Nordstern, owned by C. Mackprang, Jr. (Mackprang) and under time charter to Sabre Shipping Corporation (Sabre). Libellant, United Nations Children's Fund (UNICEF), a shipper of goods on the S/S Nordstern, has libelled the ship in rem, and respondents Mackprang and Sabre in personam. Mackprang cross-claims against Sabre, the charterer, should Mackprang be held liable to libellant.

Respondent Sabre is currently undergoing an arrangement pursuant to Chapter XI of the Bankruptcy Act (11 U.S.C. § 701 et seq.). On December 18, 1964, Hon. Edward J. Ryan, Referee in Bankruptcy, signed an order in that proceeding which provided, inter alia:

"ORDERED, that any and all persons hereby are stayed, restrained, and enjoined from proceeding in any Court wherein the above named debtor Sabre Shipping Corporation is a defendant until final decree in the above entitled proceedings or until further order of this Court * * *."

This order was pursuant to 11 U.S.C. § 714.

Libellant now moves for summary judgment against all respondents. Respondent Mackprang moves for summary judgment on its cross-claim against Sabre, in the event it is held liable.

No application for a modification of the restraining order has been made to Referee Ryan, though this is the procedure implicitly approved in In re Laufer, 230 F.2d 866 (2d Cir. 1956). This court, therefore, feels constrained to respect the Referee's order, and to decline to entertain the motions for summary judgment against Sabre. The only motions properly before the court, therefore, are motions for summary judgment by UNICEF against the S/S Nordstern in rem, and against Mackprang, the owner, in personam.

The undisputed facts are as follows:

1. At all times herein relevant the S/S Nordstern was owned by Mackprang.

2. At all times herein relevant the S/S Nordstern was under time charter to Sabre. This time charter was for a period of from eight to twelve months.

3. The time charter provided that the vessel was to be employed in carrying lawful merchandise "between safe port and/or ports in Worldwide trading within certain broad territorial limits not relevant here as the Charterers or their Agents shall direct," on the following conditions, among others:

"8. * * * The Captain (although appointed by the Owners), shall be under the orders and directions of the Charterers as regards employment and agency, and Charterers are to load, stow and trim the cargo at their expense under the supervision of the Captain, who is to sign Bills of Lading for cargo as presented, in conformity with Mate's or Tally Clerk's receipts."

"9. That if the Charterers shall have reason to be dissatisfied with the conduct of the Captain, Officers, or Engineers, the Owners shall on receiving particulars of the complaint, investigate the same, and, if necessary, make a change in the appointments."

"11. That the Charterers shall furnish the Captain from time to time with all requisite instructions and sailing directions, in writing * * *."¹

4. On or about June 30, 1961 there were delivered at Baltimore, Maryland to the S/S Nordstern certain shipments of DDT belonging to UNICEF, libellant herein.

5. In return for these goods a printed bill of lading under the heading and insignia of "Sabre Line" was issued to UNICEF. The bill of lading provided that the port of discharge from the S/S Nordstern of the DDT was to be Karachi (Pakistan). The bill of lading closed with the following recital:

"In witness whereof, the carrier by its agent has signed 3 (three) bills of lading, all of the same tenor and date, one of which being accomplished, the others to stand void.

SABRE LINE Division of Sabre Shipping Corporation By TERMINAL SHIPPING CO.—AGENTS By W. BOLDOWSKY"

It is to be noted that the Captain did not sign the bill of lading.

6. The S/S Nordstern sailed from Baltimore with the aforesaid cargo aboard.

7. The DDT was not discharged at Karachi, but rather at Calcutta, where the voyage was terminated. This was done pursuant to order of Sabre sent by cable to Sabre's agent in Calcutta, and relayed by him to the ship. The owner of the vessel was not consulted with regard to the termination or the discharge of the cargo. The decision to terminate and discharge the cargo is admitted to have been made by Sabre solely for business purposes and not as a result of stress of weather or damage to the vessel.

It is clear from the statement of facts that there was a deviation by the vessel from the voyage agreed upon. The ship never went to Karachi and the goods were unloaded at Calcutta. However, not all deviations carry with them liability for damages. It is only "unreasonable" deviations which carry with them such damages. The Wildwood, 133 F.2d 765 (9th Cir.), cert. denied 319 U.S. 771, 63 S.Ct. 1436, 87 L.Ed. 1719 (1943); Surrendra (Overseas) Private, Ltd. v. S.S. Hellenic Hero, 213 F.Supp. 97 (S.D. N.Y.), aff'd per curiam 324 F.2d 955 (2nd Cir. 1963). The deviation herein was prima facie unreasonable. Carriage of Goods by Sea Act, 46 U.S.C. § 1300 et seq. (§ 1304(4)).² The undisputed facts of this case, with the deviation admitted to have been made solely for "business reasons," clearly show the deviation to have been unreasonable. The question becomes, then, whether the ship and the owner, or either of them, is liable for the damage thereby sustained.

Considerable research has led us to the conclusion that the ship is liable in rem for the damages sustained as a result of the deviation, even though her master did not sign the bill of lading.

It was early said:

"A charter-party is the hiring of the whole or a part of a vessel, for the transportation of merchandise or passengers; and if it does not, ex vi termini, convey a proprietary interest, it certainly does pass a claim or interest in the vessel, recognized by the maritime law, the privilege to look upon her as answerable for the goods placed on board. That she is answerable for them, and they to her, is a well-settled and universal rule of law; and the parties, when they enter into the contract, are presumed to do so with knowledge of the lien implied by law from the terms and character of the instrument they make. * * *"³

Only a few cases in which the factual situation herein has arisen have been found. All held the ship liable. The first of these is The Blandon, 287 F. 722 (S.D.N.Y.1922). There Judge Learned Hand held that the ship was liable in rem to a shipper for the delay in the arrival of goods at the port of destination occasioned by a deviation. This was held in spite of the fact that the bill of lading under which the goods were shipped was signed by the time charterer of the vessel, not by the master or owner. Judge Hand held that once the voyage has commenced, the bill of lading, though signed by the charterer only, is "the measure of the ship's duty."

Again, in The G. A. Tomlinson, 293 F. 51 (W.D.N.Y.1923), it was held that libellant, a shipper of goods, could recover in rem against the ship where the ship delivered the goods at a location in Buffalo other than that specified in the bill of lading under which the goods were carried. The bills of lading had been signed by the charterer, "The Tomlinson Company, Agents." It was held that the master having accepted the goods over the rail of the ship, the ship was bound by the terms of the bills of lading, regardless of the fact that neither master nor owner had signed them.

Finally, in The Muskegon, 10 F.2d 817 (S.D.N.Y.1924), Judge Goddard held the ship bound by bills of lading issued by a charterer, although neither master nor owner had signed them. Once the ship left with the cargo, there was a ratification of the bills of lading. See also The Poznan, 276 F. 418 (S.D.N.Y.1921) (L. Hand, J.), discussed below.

It is true that most of the cases above cited Judge Manton's discussion of the subject in The Esrom, 272 F. 266 (2nd Cir. 1921). There Judge Manton, in one of three opinions for the court, spoke at 272 F. 266, 271, 272 of "a ratification and adoption by the ship of the charterer's contract with the shipper" once the ship has "broken ground." The court held there, however, that the ship was not liable for delay in sailing. There was no single opinion for the majority, one judge basing his opinion on the reasonableness of the delay, another on the binding character of the charter contract to sail "when a full cargo was secured." Judge Ward dissented. Later, in The Capitaine Faure, 10 F.2d 950, 967 (2nd Cir. 1926), the Second Circuit pointed out that in The Esrom, supra, the goods had been removed before sailing, and that therefore Judge Manton's words were dictum. The court concluded, 10 F.2d at 967:

"In saying what we have in reference to that portion of Judge Manton's opinion relating to the ratification of the charterer's bill of lading by the ship's breaking ground with the goods on board, we do not wish to be understood as expressing any opinion either favorable or unfavorable thereto. That question simply was not in this case, and it was not in the Esrom Case."

The court then went on to hold the ship liable in rem to shippers whose bills of lading were signed by the charterer and ratified...