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UNITED STATES v. NEW YORK DOCK CO.

August 2, 1951

UNITED STATES v NEW YORK DOCK CO., Inc., et al.


The opinion of the court was delivered by: LEIBELL

The defendants move for summary judgment under Rule 56 of the Federal Rules of Civil Procedure, 28 U.S.C.A. to dismiss all three causes of action alleged in a complaint of plaintiff on the grounds (1) that the United States of America is not the proper party plaintiff and (2) that all three claims are barred by the New York State statute of limitations.

The pertinent underlying facts are as follows: In late August or early September 1944 the United States Commercial Company, a wholly owned subsidiary of the Reconstruction Finance Corporation, which in turn is wholly owned by the United States of America, acquired a shipment of raw untanned hides by purchasing the bills of lading therefor while the shipments was enroute to New York aboard the S.S. Fernglen, a vessel operated by the Norwegian Lines, Inc. This shipment was sold by the United States Commercial Company to certain private corporations, and as part of the contract of sale United States Commercial Company agreed to take out insurance which would cover any damage to the hides until they were received in the private purchaser's actual custody. The United States Commercial Company did not in fact procure the insurance but instead assumed the risks for its own account.

 Upon delivery to the purchasers, some of the hides were found to be seriously damaged by contact with water and other foreign substances. Part of the shipment was undelivered, because it was short. As a result, the United Stated Commercial Company was required to pay and did in fact pay to the purchasers the amount of the damage and loss. The total amount thus paid was $ 6,643.45.

 Previous suits were brought on these claims by the United States Commercial Company in the names of private parties, the various purchasers, who were represented in those actions by the United States Attorney for this District. Schmoll Fils, Inc., v. The Fernglen, her engines, etc., D.C., 85 F.Supp. 578. Both actions were dismissed on jurisdictional grounds, and the motion of the United States Commercial Company to intervene as the real party in interest was denied, because this Court had no jurisdiction when the actions were instituted and jurisdiction could not be conferred by intervention. The complaint in the present action was later filed. October 26, 1950.

 Defendant, New York Dock Company, Inc. was the lessee of Pier 38, Brooklyn, New York, at which the ship carrying the cargo docked. Defendant Atlantic Piers Company, Inc. was a sub-tenant, or otherwise operated Pier 38.

 In its complaint and as part of its first cause of action plaintiff alleges:

 '5. Plaintiff sues on behalf of United States Commercial Company and its successor in interest, the Reconstruction Finance Corporation, as well as upon its own behalf.

 '8. On or about September 5, 1944, the shipments hereinabove described were badly damaged as a result of the failure of defendants to receive and store and care for said shipments properly, and as a result of their failure to furnish the said shipments with necessary and proper protection from loss and damage and due to other wilful, wanton and negligent acts of defendants, which will be proved at the trial, all in violation of the obligations and duties of defendants as dock lessee or operator, terminal operator and warehousemen.

 '9. As a result of defendants' negligence plaintiff was required to pay and did in fact pay to the purchasers of the said cargo by way of deductions from full contract purchase price the amounts listed below pursuant to the terms and conditions of the sales contracts described in Article 6 hereinabove as follows representing claims for damage and shortage: (thereafter are set forth the individual contracts and the amounts paid on each, totalling $ 6,643.45).

 '10. As a result of defendants' negligence plaintiff has been damaged to the extent of $ 6,643.45, no part of which has been paid although duly demanded.'

 For a second cause of action plaintiff realleges all the allegations of the first cause of action and further alleges that Oivind Lorentzen, as Acting Director and Curator of the Norwegian Shipping and Trade Mission, acting through its agent, Barber Lines, Inc. arranged a contract for benefit of plaintiff with the defendants, under the terms of which the defendants agreed to care for, store, preserve and protect the aforementioned shipments; that defendants failed to carry out the terms of this contract, as a result of which the cargo was damaged.

 For a third cause of action plaintiff realleges the allegations of the first cause of action and further alleges that the S.S. Fernglen was operated by Oivind Lorentzen, Acting Director and Curator of the Norwegian Shipping and Trade Mission, with Barber Lines as its agent; that they had arranged for pier space at Pier 38; that Lorentzen did not deliver the goods in good order but in a seriously damaged and short condition, and that Lorentzen and the Barber Lines had contracted with defendants whereby the latter had agreed to act as terminal operators, warehousemen and bailees of the cargo. It is also alleged that under the terms of a waiver of claims agreement between plaintiff and the Royal Norwegian Government, which allegedly covers the loss involved herein, plaintiff acquired whatever rights the Norwegian Shipping and Trade Mission, Barber Lines and the Royal Norwegian Government had against the defendants on the facts pleaded, and plaintiff is now claiming those rights in this suit.

 In their affidavits on this motion the attorneys for defendant, New York Dock Company, Inc., state that 'any rights of action in respect of such claims (if there be any) is in the United States Commercial Company and that that company would be barred under statutes of limitations because of failure to have brought suit either within three years or within six years from September 5, 1944.' Sections 49(6) and 48(1) of the N.Y. Civil Practice Act.

 The real party in interest in this litigation in the first and second causes of action is the United States. The United States Commercial Company is a wholly owned corporate subsidiary of the Reconstruction Finance Corporation, which is a wholly owned corporate agency of the United States, both of them operating with government funds. Defense Supplies Corp. v. United States Lines Co., 2 Cir., 148 F.2d 311; Inland Waterways Corp. v. Young, 309 U.S. 517, at page 524, 60 S. Ct. 646, 84 L. Ed. 901. The United States may properly sue on the two claims in the first and second causes of action, as the real party in interest under Rule 17(a) Fed. Rules of Civ. Proc. But for the purpose of deciding whether ...


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