United States v. Gissel, 73-2829.

• Decision Date: 26 April 1974
• Docket Number: No. 73-2829.,73-2829.
• Citation: 493 F.2d 27
• Parties: UNITED STATES of America, Plaintiff-Appellee, v. Leola Studdert GISSEL, Executrix of the Estate of Julius Schutze Gissel, et al., Defendants-Appellants. UNITED STATES of America, Plaintiff-Appellee, v. C. J. THIBODEAUX AND COMPANY and the Travelers Indemnity Company, Defendants-Appellants.
• Court: U.S. Court of Appeals — Fifth Circuit

493 F.2d 27 (1974)

UNITED STATES of America, Plaintiff-Appellee, v. Leola Studdert GISSEL, Executrix of the Estate of Julius Schutze Gissel, et al., Defendants-Appellants.

UNITED STATES of America, Plaintiff-Appellee, v. C. J. THIBODEAUX AND COMPANY and the Travelers Indemnity Company, Defendants-Appellants.

No. 73-2829.

United States Court of Appeals, Fifth Circuit.

April 26, 1974.

Robert M. Julian, Houston, Tex., for C. J. Thibodeaux & Co., et al.

Alan S. Dale, Houston, Tex., for Leola S. Gissel.

Jack Shepherd, Asst. U. S. Atty., Anthony J. P. Farris, U. S. Atty., Houston, Tex., Morton Hollander, Chief, Appellate Sec., Civ. Div., Lawrence F. Ledebur, Chief, Admiralty & Shipping Section, Robert E. Kopp, Dept. of Justice, Washington, D. C., Charles B. Wolfe, Asst. U. S. Atty., Houston, Tex., for plaintiff-appellee.

Before ALDRICH, Senior Circuit Judge,^* and BELL and GEE, Circuit Judges.

ALDRICH, Senior Circuit Judge:

These are two consolidated actions arising out of the bankruptcy and the consequent failure of the owners of an American vessel, the S. S. SEA PIONEER, to pay customs duties imposed by virtue of 19 U.S.C. § 257¹ on entry following repairs made in a foreign country. Defendants Gissel and Thibodeaux,² are so-called berthing agents whose business it is to make arrangements for entry, docking, attendance of customs agents, etc. and clearance, on behalf of vessels entering United States ports where they offer their services. In connection therewith each defendant annually files a blanket bond specified to apply to all vessels entered and cleared by them in the course of the year. The government is the obligee. In May 1964, the S. S. SEA PIONEER docked at Port Arthur, Texas, using Gissel's services. Having been repaired while abroad, she incurred a duty obligation finally liquidated in 1967 at $14,217. In October 1965, the vessel docked at Galveston, Texas, using Thibodeaux's services, and having again been repaired abroad, incurred a duty obligation finally liquidated in 1968 at $57,674. The owners having become bankrupt without having paid, and the vessel having been sold abroad without satisfying these claims, the government sued defendants on their bonds. The district court found for the government for the penal sum ($10,000) of each bond, and defendants appeal. In a nutshell, it is defendants' position that their bond covers only obligations for routine services rendered while the vessel was in port, and which they specifically requisitioned by executing Customs Form 3171, while the government claims that it covers the whole spectrum of the vessel's liability.

At least at first blush the government appears correct. The bonds, executed on Customs Form 7569, provided,

"(1) If the above-bounden principal shall pay to the collector of customs of said port(s) promptly on demand such penalties as may be incurred by the vessels, vehicles, or aircraft, together with the sums chargeable under law and regulations for such services as may be performed for said vessels, vehicles, or aircraft by customs officers or employees, and shall promptly pay any duties, charges, exactions, penalties, or other sums found legally due the United States from any master or other proper officer or owner of said vessels, vehicles, or aircraft on account of said vessels, vehicles, or aircraft." (Emphasis suppl.)

Defendants contend, (a) that the bond does not in terms cover the duty imposed on account of foreign repairs; (b) that even if the form of the bond does in terms purport to cover such duties, in the context of its execution they were not covered when a berthing agent, rather than the vessel, was the party executing it; and (c) that in any event, although executing the bonds as principals, as between themselves and the vessel the agents were only sureties, and affording an extension to the vessel effected their discharge. Consideration of these defenses requires examination of the total circumstances.

Pursuant to statutory authority, 19 U.S.C. §§ 1623, 1624, the Treasury Department adopted regulations under which an entering vessel itself, or by its...