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SILVER v. THE SLOOP SILVER CLOUD

August 23, 1966

Norman SILVER, Plaintiff,
v.
The SLOOP SILVER CLOUD, her engines, tackle, apparel, etc., and A. LeComte Company, Inc., and all other persons lawfully intervening for their interest in said sloop, Defendants



The opinion of the court was delivered by: TENNEY

TENNEY, District Judge.

 Plaintiff herein moves pursuant to Rule D of the Supplemental Rules for Certain Admiralty and Maritime Claims for an order awarding him immediate possession of the Sloop "SILVER CLOUD" and directing the Marshal to turn over the said vessel to him. The facts, which are substantially agreed upon, are as follows:

 On May 24, 1965, defendant A. LeComte Company, Inc. entered into a contract with plaintiff whereby said defendant agreed to build a sloop for plaintiff for $27,750.00. The vessel was to be constructed in Holland according to specifications set forth in the written agreement. On October 4, 1965, a further agreement was entered into by the same parties which provided for the installation of certain extra equipment in said vessel at an additional cost of $3,309.00. The sloop was to be delivered to plaintiff in May 1966.

 Clause 3 of the printed contract of May 24, 1965, provided that:

 
Title to the vessel hereby ordered shall not pass to purchaser until the entire purchase price and any extra or additional charges have been paid in full or security acceptable to builder given therefor, and builder has delivered its bill of sale or as hereinafter provided.

 The vessel had been launched in Holland and had been transported to New York where, on May 26, 1966, defendant offered the vessel to plaintiff. Plaintiff had already paid $27,750.00 as of that date. Plaintiff examined the sloop and found it to be defective in that, among other things, a gas engine had been installed rather than a diesel engine, and the builder had failed to install a seventh bunk as per the agreement of October 4, 1965. Other extras which had not been ordered had been installed on the vessel. These extras had a value of nearly $1,000.00 according to defendant's allegation. Plaintiff does not dispute this.

 According to plaintiff's affidavit, he offered to accept the sloop if he would receive a reduction in price of $4,600.00. Defendant's president states that an agreement was reached whereby plaintiff was to receive the vessel upon making an additional payment of $2,664.98. Although plaintiff states no agreement was then reached, he then contradicts this statement by alleging that on June 11, 1966, after taking the sloop on a trial run accompanied by defendant's employee, he tendered a check to the employee in the amount demanded by defendant. Plaintiff's denial of an agreement is also contradicted by a bill appended to defendant's answer dated May 26, 1966 which shows a balance due of the amount demanded by defendant. Said bill has been initialed by plaintiff. The tendered check was not accepted because the employee had been advised to accept only cash or a certified check. Defendant alleges that plaintiff promised to return with payment in cash, which he failed to do.

 On June 23, 1966, plaintiff demanded possession of the sloop plus the payment of $4,600.00 for defendant's breach of contract. This demand was refused and defendant's president, on the same day, wrote to plaintiff demanding payment of the balance due and storage fees for the "SILVER CLOUD" at the rate of $10.00 per day from May 26, 1966. Plaintiff claims that this letter shows defendant recognized that plaintiff had title. This contention will be more fully examined later herein.

 In any event, attorneys for both sides reached an agreement on June 28, 1966 whereby defendant was to "repurchase" the sloop and pay for extras that defendant had allowed plaintiff to install. Payment was to have been made in the early part of July 1966, but defendant alleges that it was unable to make payment upon the due date.

 On July 8, 1966, plaintiff instituted an action in this Court requesting a warrant of arrest of the said vessel, an award to him of possession and damages for breach of contract in the sum of $50,000.00. The sloop was arrested on that day with notice of seizure given the defendant. Upon failure of defendant to make claim to "SILVER CLOUD" within 10 days, plaintiff commenced this possessory or petitory action.

 Much of this opinion hinges upon an interpretation of the recent amendments to the Federal Rules of Civil Procedure effective July 1, 1966. Although the amendments have the effect of merging the Admiralty Rules into the Civil Rules, the merger has not been complete and not all distinctions have been eradicated. Indeed, Rule 9(h) of the Federal Rules of Civil Procedure provides: "If the claim is cognizable only in admiralty it is an admiralty or maritime claim for those purposes whether so identified or not." The Advisory Committee Note to that Rule then states that, "Some claims for relief can only be suits in admiralty, either because the admiralty jurisdiction is exclusive or because no nonmaritime ground of federal jurisdiction exists."

 Plaintiff's motion is brought under Rule D of the Supplemental Rules for Certain Admiralty and Maritime Claims. It is my conclusion that Rule D, dealing with Possessory, Petitory and Partition Actions, is subject to Rule 9(h) and thus requires the existence of admiralty jurisdiction. Rule D deals with the right to possession of vessels or other maritime property only. Surely it would be incongruous to conclude that the Rule provides any relief other than that which is maritime. The mere fact that Rule D appears in the supplemental admiralty rules should be sufficient in itself to show that it should be limited to maritime claims. Therefore, plaintiff's argument that even if there is no admiralty claim jurisdiction can be based on diversity is without merit. Plaintiff's complaint alleges that both parties are New York citizens while his affidavit alleges that he is a citizen of Newton, Massachusetts. The contract annexed to the answer sets forth plaintiff's residence as Newton, Massachusetts. Because of my views hereinbefore expressed, however, I find it unnecessary to make any determination as to whether plaintiff has properly alleged diversity jurisdiction. It is necessary, however, to determine whether this Court does in fact have admiralty jurisdiction.

 The Supreme Court has stated that, "The boundaries of admiralty jurisdiction over contracts - as opposed to torts or crimes - being conceptual rather than spatial, have always been difficult to draw." Kossick v. United Fruit Co., 365 U.S. 731, 735, 81 S. Ct. 886, 890, 6 L. Ed. 2d 56, rehearing denied, 366 U.S. 941, 81 S. Ct. 1657, 6 L. Ed. 2d 852 (1961). It is stated that a maritime contract is one "which concerns transportation by sea, relates to navigation or maritime employment, or involves navigation and commerce on navigable waters." General Engine & Mach. Works, Inc. v. Slay, 222 F. Supp. 745, 747 (S.D.Ala.1963). Where the contract relates to the use of the vessel or to commerce on navigable waters, it is subject to admiralty jurisdiction whether it is to be performed on land or water. 1 Benedict, Admiralty ยง 64, at 130 (6th ed. 1940). In Thames Towboat Co. v. The "Francis McDonald", 254 U.S. 242, 41 S. Ct. 65, 65 L. Ed. 245, (1920), the Court stated that an agreement providing for complete construction of a ship is not within admiralty jurisdiction. Id. at 243, 41 S. Ct. 65. No distinction was drawn between contracts for construction done before the hull is in the water and construction done thereafter. Id. at 245, 41 S. Ct. 65. The crucial question to be answered is not the point in time in which the contract was made, but the purpose of the contract. If it is for construction of a ship, admiralty has no jurisdiction.

 Plaintiff alleges that the boat is an instrument of navigation because it has been on navigable waters. For this proposition he cites Tucker v. Alexandroff, 183 U.S. 424, 22 S. Ct. 195, 46 L. Ed. 264 (1901), and Kilb v. Menke, 121 F.2d ...


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