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AMERICAN-HAWAIIAN S.S. CO. v. BOWRING & CO.

April 19, 1957

AMERICAN-HAWAIIAN STEAMSHIP COMPANY (DEL.), Plaintiff,
v.
BOWRING & COMPANY, General Steamship Corporation, Ltd., Ocean Freighting& Brokerage Corporation and Howell Barnard Smith and George V. Cutler, copartners doing business as Smith & Johnson, Defendants



The opinion of the court was delivered by: BRYAN

This is an action of interpleader brought under the Federal Interpleader Act, 28 U.S.C. §§ 1335, 1397 and 2361

Plaintiff, American-Hawaiian Steamship Company, was the owner of two vessels, the 'Panaman' and the 'Alaskan,' which it sold to the Matson Navigation Company, not a party here. The defendants are ship brokers concerned in the transaction who are grouped into two pairs, one being Bowring & Company and Smith & Johnson as co-brokers, and the other being General Steamship Corporation, Ltd. and Ocean Freighting & Brokerage Corporation as co-brokers.

The complaint alleges that each pair of defendant co-brokers, adversely to the other, claims to be entitled to the sum of $ 40,000 representing the full brokerage commissions payable by plaintiff on account of the sale of these two vessels to Matson. Plaintiff has deposited this sum in the Registry of the Court and has secured a temporary restraining order enjoining the defendants from commencing any action against the plaintiff in so far as it may relate to or affect their claims to the $ 40,000 so deposited until further order of the Court.

 Each pair of defendant co-brokers filed an answer which places in issue the plaintiff's right to interpleader. The answer of the General Steamship-Ocean Freighting pair also sets up a counterclaim in which it alleges, among other things, an independent agreement on the part of the plaintiff to pay it commissions of $ 40,000 on this sale, regardless of what plaintiff's liability for such commissions may be to the Bowring-Smith & Johnson pair. Plaintiff's reply to the counterclaim is, in substance, a general denial.

 Plaintiff now moves for an injunction permanently granting the relief temporarily afforded by the restraining order. Both pairs of defendants assert that the temporary restraining order should be lifted rather than made permanent, and the Bowring-Smith & Johnson pair asks that the complaint be dismissed for failure to state a claim cognizable in interpleader.

 The facts, as they appear from the affidavits submitted by the various parties on this motion, may be summarized as follows:

 In January 1955 Matson asked defendant Bowring to canvass the field for two AP-3 type Victory vessels which it was desirous of purchasing. Bowring got in touch with defendant Smith & Johnson, which had acted on previous occasions for plaintiff American-Hawaiian, the owner of the two AP-3 Victories 'Panaman' and 'Alaskan', to discuss the availability of these vessels for sale. Bowring and Smith & Johnson agreed to work together on the deal with commissions to be split between them.

 Shortly thereafter defendant Ocean Freighting, having learned that the 'Alaskan' and 'Panaman' were for sale, agreed with General Steamship to work on the deal together on a split commission basis, and the two vessels were then proposed by these co-brokers to Matson.

 Some months of proposals, counterproposals, bargaining and negotiation ensued in which the two pairs of cobrokers, acting quite independently of one another, participated in varying degrees. Indeed, plaintiff asserts that the defendant brokers were not the only brokers working to effect the sale.

 During the late spring and summer of 1955 proposals by American-Hawaiian to sell the vessels to Italian interests fell through. American-Hawaiian then advised Ocean Freighting that it would consider an offer for sale under American registry.

 By this time Matson was aware of the availability of the vessels and American-Hawaiian was aware that Matson was in the market for vessels of this type. By mid-November of 1955 it seemed clear that the views of the prospective buyer and seller as to price were not irreconcilable.

 The Ocean Freighting-General Steamship pair alleges that at this point Ocean Freighting was advised by American-Hawaiian that it was almost ready to talk to Matson and asked whether Ocean Freighting would accept a lump payment of $ 20,000 per vessel if and when the sale to Matson was consummated. The Ocean Freighting pair further alleges that this proposal was made because American-Hawaiian believed that the sale would be facilitated by direct negotiations between the principals, which was an unusual arrangement, that the proposal was approved by the pair, and that American-Hawaiian was so advised.

 This proposal forms the basis of the Ocean Freighting-General Steamship claim that plaintiff incurred an independent liability to pay this pair $ 40,000, whether or not it was the procuring cause of the sale, 'when, as and if the sale of the vessels was completed.'

 The Bowring-Smith & Johnson pair also learned that the principals desired to talk directly. It maintains that Matson agreed to talk directly with American-Hawaiian only upon the proviso that the ground was not cut from under Bowring and Smith & Johnson who were handling the business. It asserts that American-Hawaiian agreed to this and understood that it was ...


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