William McCrindle & Son, Ltd. v. Durant, 77-3030

Citation611 F.2d 89
Decision Date31 January 1980
Docket NumberNo. 77-3030,77-3030
PartiesWILLIAM McCRINDLE & SON, LTD., Plaintiff-Appellee, v. Leslie B. DURANT and American Marine Towing Corporation, Defendants-Appellants.
CourtUnited States Courts of Appeals. United States Court of Appeals (5th Circuit)

Neal D. Hobson, John T. Nesser, III, New Orleans, La., for defendants-appellants.

Bernard Berins, Martin L. C. Feldman, Robert A. Kutcher, New Orleans, La., for plaintiff-appellee.

Appeal from the United States District Court for the Eastern District of Louisiana.

Before JONES, BROWN, and RUBIN, Circuit Judges.

ALVIN B. RUBIN, Circuit Judge:

In this diversity case each of the corporate parties, one American, the other Scottish, contends the other violated the agreements made by them in three related contracts. We conclude that the trial judge correctly placed fault on the American corporation, but that he should have reckoned the damages in dollars, not pounds sterling, because the contract under which damages were due was to be performed in the United States and its obligations were stated in dollars, although they were also translated into the sterling equivalent at the time the agreement was made.

I.

William McCrindle and Son, Ltd., a Scottish corporation, and American Marine, an American corporation, entered into three agreements. One provided for a joint venture to form and operate a shipbuilding company; the second for a joint venture to form and operate a drilling company; the third provided for American Marine to train McCrindle personnel who would eventually work in the joint venture shipbuilding company. They were to be sent to the American Marine shipyard in the United States where they would both work for American Marine and, at the same time, receive training. American Marine was to pay McCrindle for their services in the form of wages, costs of living allowances, medical insurance, travel expenses, accommodations, food allowances and transportation in the United States. McCrindle was in turn to pay its employees.

Under the terms of the shipbuilding agreement, McCrindle was to arrange a major part of the financing for the joint venture. McCrindle's bank requested information concerning American Marine and its president and controlling stockholder, Leslie Durant. Despite repeated requests, American Marine furnished no information. As a result, McCrindle orally cancelled the two joint venture agreements in February, and later confirmed its action by letter. American Marine contends that McCrindle breached the contracts by terminating them without proper cause.

Beginning in December, several of McCrindle's men worked and received training at American Marine's shipyard under the third of the agreements. American Marine subsequently paid some of the amounts due under this agreement, but did not complete payment. On May 10 McCrindle notified American Marine that it would consider the training agreement breached if the sums owed were not paid in 10 days. They were not, and McCrindle brought this action to recover sums owed under the training agreement. American Marine counterclaimed for damages caused by the breach of the joint venture agreements.

Louisiana Civil Code article 1903 provides, "The obligation of contracts extends not only to what is expressly stipulated, but also to everything that, by law, equity or custom, is considered as incidental to the particular contract, or necessary to carry it into effect." See also La.Civil Code art. 1931. Though the joint venture agreements did not specifically require American Marine to supply the data requested, the trial judge correctly concluded that McCrindle's obligation to secure a loan created the correlative and implied obligation on American Marine to provide any data that the lender reasonably requested.

Joint venture agreements usually impose joint responsibility for the operation of a business on both parties. This is what was intended by both American Marine and McCrindle. There was an adequate basis in the circumstances of the formation of the contract and in the express requirement that McCrindle obtain...

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