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BLACK SEA STATE S.S. LINE v. ASSOCIATION OF INTL.

January 12, 1951

BLACK SEA STATE STEAMSHIP LINE
v.
ASSOCIATION OF INTERNATIONAL TRADE DIST. 1, Inc., et al.



The opinion of the court was delivered by: MCGOHEY

The respondents Moskowitz Flour Corporation and Joseph Moskowitz originally moved for leave to amend their answer to an amended libe. The proposed amendment challenged admiralty jurisdiction. Upon the argument the parties stipulated to have the motion considered as one to dismiss the four causes of action against those respondents for want of jurisdiction. This has been done, and the motion is granted.

On or about June 25, 1947, libelant and respondent The Association of International Trade District No. 1 (hereafter called the Association) entered into a charter party for the services of libelant's ship M/V Vtoraya Pyatiletka. The vessel, then in New York, was to load cargo for the Association at Houston, Texas, on or about July 5, 1947. By agreement between libelant and the Association, the charter was not to become effective until libelant received a guarantee of payment of any demurrage charges which might be incurred. On June 27, 1947, libelant's agents, Amtorg Trading Corp., received a letter of guarantee signed by respondent Joseph Moskowitz as president of respondent Moskowitz Flour Corporation. On July 9, no cargo having been loaded and none being on hand for loading, the Association, without prior notice and without libelant's agreement, cancelled the charter. An interlocutory decree has been entered against the Association with a reference to a Special Commissioner to take proof of damages. The claims against Moskowitz Flour Corporation and Joseph Moskowitz are based on the letter guaranteeing demurrage charges. It follows:

 'June 27, 1947

 'Amtorg Trading Corp.

 210 Madison Avenue

 New York N.Y.

 'Att: Mr. Needleman

 'Dear Sirs:

 'We, the undersigned, guarantee the sum of $ 10,000.00 on a contract between the Association of International Trade, District One, Inc. and Amtorg Trading Corporation.

 'This guarantee covers a demurrage charge in the event the Amtorg steamer fails to clear the Houston, Texas, port of loading within the free time allotted by Amtorg Trading Corporation to the shipper.

 'A penalty is payable only if the shipper fails to provide the necessary material for loading. Total charges for demurrage should not exceed the sum of $ 1500.00 for each day.

 'This guarantee becomes null and void immediately after posting of a bond by the office of International Trade to Amtorg Trading Corporation.

 'Very truly yours, MOSKOWITZ FLOUR CORPORATION '(signed) Joseph Moskowitz President'.

 Since it is the nature of the contract in suit which controls on the question of admiralty jurisdiction, *fn1" it seems clear to me that this contract is not within that jurisdiction. Libelant urges that by this letter the Moskowitz Flour Corporation and Joseph Moskowitz 'assumed' the obligation of 'performing' that part of the maritime contract relating to demurrage. But this is clearly not so. The letter by its terms did not 'assume' to take over payment of demurrage as it became due, thus eliminating the Association and substituting the Moskowitz Corporation as a party to the charter in respect to payment of demurrage. It merely agreed to make good any breach of the charter in this respect by the Association. The last paragraph of the letter states that the 'guarantee' was to continue only until a bond was posted. It does not appear whether this was done; presumably it was not. But it is not material. The letter was no different than a surety ...


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