W.R. Grace & Co. v. Luckenbach S.S. Co., Inc.
| Decision Date | 12 March 1918 |
| Parties | W. R. GRACE & CO. v. LUCKENBACH S.S. CO., Inc., et al. |
| Court | U.S. Court of Appeals — Fourth Circuit |
Kirlin Woolsey & Hickox, of New York City, and Edward R. Baird, Jr. of Norfolk, Va. (John M. Woolsey, of New York City, of counsel), for libelant.
Carter & Carter, of New York City, and Harry E. McCoy, of Norfolk Va., for respondents.
This is a libel in personam, with foreign attachment, against the respondents, to recover damages for the alleged breach of a contract of charter party, entered into between the libelant and the respondent, the Luckenbach Steamship Company Incorporated, for freight room for the transportation of 75,000 tons (10 per cent. more or less), at the option of the libelant, of nitrate and/or ores, between the 1st of December, 1916, and the 31st of July, 1917, the same to be loaded at one or two ports and/or their adjacent caletas, between Valparaiso and Pisagua, Chile, both included, to one port between Savannah and Boston in the United States, at the rate of $15.59 gold per ton of 2,240 pounds delivered. The usual form of nitrate charter party used by the libelant, in arranging for the transportation of nitrate, was annexed to and made a part of the agreement.
The libel averred that the Luckenbach Company was the owner of certain steamships, contemplated to be used in the performance of said charter, and that certain of its steamships had been regularly leased by the respondent, the Luckenbach Company, Incorporated, to the Luckenbach Steamship Company, Incorporated, under a term charter covering from May 15 to December 1, 1920, and certain other ships for the period from October 1, 1915, to October 1, 1926, for a monthly rental payable on the 1st day of each month, and for other payments provided for in said lease. The libel further averred that the Luckenbach Steamship Company, the lessee of said steamships, and the Luckenbach Company, Incorporated, the owner of said steamships, were in fact maintained and managed as one corporation, under the domination and control of Edgar F. Luckenbach, who was the president and principal stockholder in both corporations, for the purpose of financing and operating the steamships mentioned, and many other steamships and vessels, owned by said companies, or by the said Edgar F. Luckenbach.
The Luckenbach Steamship Company, Incorporated, the lessee, was capitalized at only $10,000, and the Luckenbach Company, Incorporated, the lessor, at $800,000, and both were chartered under the laws of the state of Delaware. The Luckenbach Company, Incorporated, denies knowledge of the acts and doings of the Luckenbach Steamship Company and responsibility therefor to the libelant.
Under this contract of affreightment, only one ship, the J. L. Luckenbach, was furnished, and one cargo of 5,998 tons of nitrate delivered. The libelant seeks to recover for the failure to transport the remaining 69,002 tons of nitrate or ores, 10 per cent. more or less, as provided in the contract. On the 21st of April, 1917, the libelant demanded of the respondent steamship company that it continue the shipments contemplated under the charter, and on the 23d of April, 1917, the Luckenbach Steamship Company, Incorporated, acting by and through its president, Edgar F. Luckenbach, declined to complete the contract, for the reason, as stated, that a state of war existed between this government (referring to the government of the United States) and the government of Germany, and claimed that they were released under article 13 of the nitrate charter party from so doing, which reads as follows:
'The * * * enemies, pirates, * * * arrest and restraint of princes, rulers, and people, political disturbance or impediment, * * * always mutually excepted.'
Libelant further avers that the respondents failed to carry out the contract, either with the ships contemplated, or any other ships; that their failure was wholly unjustified, and constituted a willful and wrongful breach of the contract between them, and a violation of libelant's rights thereunder; that said respondents, in total disregard of libelant's rights, wrongfully chartered their ships in the same trade, for the carriage of nitrate from South America to the United States, under the same form of charter party, but at greatly increased prices; and that libelant was damaged to the extent of $1,500,000, which was duly demanded of the respondent, and payment thereof refused.
The defense set up in the answer is that of exemption under the 'restraint of princes' clause referred to above, to the sufficiency of which the libelant excepts.
The conclusion reached by the court is that the exception is well taken. The defense interposed under the...
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