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REDERI A/B. PULP v. REPUBLIC CHEM. CORP.

March 17, 1958

REDERI A/B. PULP, Rederi A/B. Jamaica, D/S A/S Eikland and Salamis, A/S, joint venturers doing business under the trade name and style of Salenskaugen Line, and of A/S Igadi, Libelants,
v.
REPUBLIC CHEMICAL CORPORATION, Respondent and Impleading Petitioner, Mathieson Chemical Corporation, Impleaded Respondent



The opinion of the court was delivered by: MCGOHEY

The libelants sue to recover dead freight claimed to be due because of Republic's alleged breach of two contracts to furnish cargoes of superphosphate for the vessels Knut Bakke and Igadi on voyages from the United States to Korea.

Republic challenges the libelants' standing to maintain the suit; admits negotiating for use of the vessels but denies that contracts resulted; asserts that if they did, the failure to load pursuant thereto was caused by the vessels' departure before expiration of their respective lay days which it is contended were, pursuant to the terms of the alleged contracts, extended because of rain.

 Republic by impleading petition also seeks, if held liable, to be indemnified by Mathieson. The ground of this claim is that, if Republic breached contracts respecting the vessels, this was caused by Mathieson's breach of the loading time arrangements made under a contract between it and Republic for the purchase by the latter of superphosphate which Mathieson was to deliver at its dock in Baltimore on ships to be provided by Republic.

 Mathieson admits its contract with Republic. It admits also that the above named vessels which Republic proposed for loading at specified times were not loaded. This, it asserts, did not constitute a breach by Mathieson because the vessels were sent to Baltimore for loading at times not previously agreed to by Mathieson as required by its contract with Republic, and, in any event, the vessels left Baltimore, without notice to Mathieson, before expiration of their respective lay days as extended because of rain.

 Findings.

 1. The libelants Rederi A/B. Pulp and Rederi A/B. Jamaica, Swedish corporations managed by Sven Salen, and libelants D/S A/S Eikland and Salamis A/S, Norwegian corporations managed by Brin Skaugen, were the time-chartered owners of the Knut Bakke. They operated this vessel in their liner service from the United States to the Far East under the trade name Salen-Skaugen Line. The general agent in the United States for the management and operation of this service was Interocean Steamship Corporation.

 2. The libelant A/S Igadi, a Norwegian corporation, was the owner of the Igadi, which it operated in its liner service from the United States to the Far East. Its general agent in the United States for the management and operation of such service was Stockard & Company, Inc.

 3. Republic Chemical Corporation was engaged in the purchase and sale of chemical products.

 4. Olin Mathieson Chemical Corporation was engaged in the manufacture and sale of chemical products.

 5. Republic and Mathieson are, respectively, corporations of New York and Maryland.

 6. Early in January, 1950, Republic was the successful bidder, in competition with Mathieson, for a contract to sell the United States 20,000 tons of superphosphate. The contract provided: 'Delivery: February/March 1950. Shipment on other than American Flag ships not permitted unless approved (in writing) by this office. Delivery Pusan, Korea subject to diversion other South Korean port.'

 7. When Republic entered into this contract it did not have superphosphate on hand and had no arrangement for its carriage to Korea.

 8. On January 17, 1950, Republic entered into a contract to purchase the 20,000 tons of superphosphate from Mathieson at the price the latter had offered to the Government.

 9. Negotiations which preceded this contract were conducted for Mathieson by its Director of Foreign Trade, one Vreeland. Republic's representative was one Greenfield. Vreeland informed Greenfield of the fact that Mathieson had only one dock at Baltimore; that it was used to discharge ships bringing raw material to the plant as well as to load shipments of finished products on outgoing vessels; that but one ship could be berthed there at a time; that the dock worked on a very close schedule and accordingly it would be necessary 'to correlate the shipping arrangements with our dock's availability.' The contract which resulted from their negotiations provided: 'Delivery: January/February/March. Shipping details to be arranged between Mathieson and Republic on a mutually satisfactory basis. Republic agrees to provide vessels, satisfactory for bulk stowage and acceptable to Mathieson, and Mathieson agrees to load an average minimum of 1,000 metric tons * * * per weather working day, Sundays and holidays excepted; and Mathieson agrees to pay demurrage at the rate of $ 1,000 daily if this loading schedule is not met. First vessel is tentatively scheduled for loading between February 1st and 15th.'

 10. When the foregoing contract was entered into Mathieson was under contract with other purchasers, including the United States Government, to deliver superphosphate at the Baltimore dock on board vessels provided by the purchasers. This was known to Republic.

 11. It is conceded, and in any event the evidence proves, that during February and March Mathieson delivered 20,000 tons of superphosphate in four lots which were loaded respectively on the vessels Fernland, Fernside, Titania and Peter Maersk, provided by Republic; and that the Fernland, the vessel provided to take the first lot, was loaded with 5,000 tons prior to February 15.

 12. On January 24 Republic had not yet engaged ships to receive the superphosphate, and on that date Republic's traffic manager, Jessup, so informed Vreeland who had called concerning shipping arrangements.

 13. On February 1, Vreeland wrote to Darvin, president of Republic, that although their contract tentatively scheduled the loading of a vessel between February 1st and 15th, Mathieson had as yet received no advice that a vessel would be provided by Republic during that period; that Mathieson was nevertheless holding space for a Republic vessel for the period from February 13 through February 16; that unless 'we hear from you immediately that a vessel will be provided for such loading it will be necessary for us to schedule in other boats for those dates and we may not be able to furnish you with berthing space later in the month.' Vreeland asked for 'a firm date for shipment' by return mail. Republic received Vreeland's letter on Thursday, February 2.

 14. During January Republic had been unable to engage the required tonnage at a price which Darvin was willing to pay. As a result of negotiations over the telephone on February 2 and 3, the respective agents for the Knut Bakke and Igadi orally agreed to take 4,000 long tons on each vessel on specified lay days at Darvin's price of $ 6,25 per long ton and other terms. Transactions of this kind are customarily carried on as this was and such oral agreements are known in the trade as 'fixtures.'

 15. Republic at the same time engaged tonnage on the Fernland and the Peter Maersk.

 16. The negotiations respecting the Knut Bakkee and the Igadi were conducted through William J. Martin of Walter De Lappe Company, New York brokers. Darvin personally 'conducted most of the negotiations' on behalf of Republic.

 17. On February 3, Martin, in accordance with custom, delivered to Republic for Darvin's attention the following 'confirmation' letter.

 'We are pleaded to confirm fixing the following vessels for your account on the following terms and conditions:

 Loading port -- Baltimore, Maryland (Mathieson Chemical Corp. dock) Discharging Port ...


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