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Marine Traders Inc. v. Seasons Navigation Corp.

decided: February 24, 1970.

MARINE TRADERS, INC., PLAINTIFF-APPELLANT,
v.
SEASONS NAVIGATION CORPORATION, UNITED STATES STEEL INTERNATIONAL (NEW YORK), INC. (FORMERLY KNOWN AS UNITED STATES STEEL EXPORT COMPANY), UNITED STATES STEEL CORPORATION, AND FREIGHTS, SUB-FREIGHTS AND/OR CHARTER HIRE OF THE VESSEL GRANAPOLIS IN THE AMOUNT OF $171,431.06 HELD BY UNITED STATES STEEL INTERNATIONAL (NEW YORK), INC. (FORMERLY KNOWN AS UNITED STATES STEEL EXPORT COMPANY) AND/OR IN THE HANDS OF UNITED STATES STEEL CORPORATION, DEFENDANTS-APPELLEES



Friendly, Smith and Hays, Circuit Judges.

Author: Hays

HAYS, Circuit Judge:

This is an appeal from so much of a judgment of the United States District Court for the Southern District of New York as dismissed appellant's action against United States Steel International (New York), Inc., United States Steel Corporation and the subfreights of the vessel Granapolis.

I.

On April 11, 1963 Marine Traders, Inc. ("Marine") time chartered the vessel Granapolis to Seasons Navigation Corporation ("Seasons") for a two-month "Transatlantic round voyage via U.S. Gulf and North Continent." The time charter was the standard "Government Form Approved by the New York Produce Exchange" and provided in paragraph 18:

"That the Owners shall have a lien upon all cargoes, and all sub-freights for any amounts due under this Charter, including General Average contributions, and the Charterers to have a lien on the Ship for all moneys paid in advance and not earned, and any overpaid hire or excess deposit to be returned at once * * *."

Seasons had previously contracted with United States Steel International (New York), Inc. ("International"), a wholly owned subsidiary of United States Steel Corporation ("Steel"), to carry to Chittagong, Pakistan, certain steel products which International had sold to Pakistani buyers.

Between April 20 and May 5, 1963, the Granapolis loaded this cargo at Baltimore and Mobile. Prepaid bills of lading were issued for the cargo; however, not all designated the Granapolis as the carrying vessel. A portion of the bills of lading had been issued when it was contemplated that the steel products described therein would be carried on the vessel Smith Explorer. These shipments were shut out of the Smith Explorer and subsequently loaded on the Granapolis. The bills of lading were not changed to designate the Granapolis as the carrying vessel. Although all the bills of lading for the cargo loaded on the Granapolis provided for carriage from the port of loading to Chittagong, Pakistan, it was understood that the Granapolis would carry the cargo only to Antwerp, Belgium, where it would be transshipped for on-carriage to Chittagong on other vessels. The total freight for the through carriage to Chittagong under these bills of lading amounted to $586,602.44.

On April 22, 1963, pursuant to arrangement with Seasons, International paid to Wall Street Traders, Inc., Marine's agent, the sum of $147,000 as the first month's hire under the charter party. This sum was treated as an advance on account of freights on Granapolis cargo.

The Granapolis left Mobile on May 5, 1963 bound for Antwerp, Belgium, where she arrived on May 21, 1963. By this time, Seasons had defaulted on the payment of the second installment of the charter hire, which had become due on May 20, 1963, and was also unable to pay for unloading, transshipment or oncarriage of the cargo. Marine requested International to unload and store the cargo of the Granapolis but International refused. Marine thereupon arranged for stevedoring, unloading and storage of the cargo. On June 1, 1963, the unloading of the Granapolis was completed, and the vessel sailed for the United States. The unpaid charter hire, together with maritime expenses connected with the charter, and the costs of unloading at Antwerp, amounted to $167,895.48.

Marine instituted this action in the United States District Court for the Southern District of New York against Seasons, International, Steel and the sub-freights of the vessel Granapolis to recover the unpaid charter hire and the related expenses. After a trial before Judge Milton Pollack, judgment was entered against Seasons in favor of Marine in the amount of $167,895.48, plus interest thereon of $58,763.42. The action as to the other defendants was dismissed. Marine appeals from the dismissal.

II.

Since Seasons is no longer in existence, Marine seeks to recover its unpaid charter hire and the expenses of unloading at Antwerp out of the total freights for the carriage of the cargo to Chittagong, amounting to $586,602.44. International defends on the grounds that Marine may assert a lien against only so much of the freights for the entire carriage to Chittagong as are allocable to the Antwerp leg of the carriage and that this lien has been discharged by good faith payments by International to Seasons on account of freights on cargo carried on the Granapolis. We agree and accordingly affirm the order of dismissal.

To secure the payment of sums due under a charter of his ship, a shipowner may create, by express provision in the charter party, a lien on the subfreights earned by his vessel. In re North Atlantic and Gulf Steamship Co., 204 F. Supp. 899, 904 (S.D.N.Y.1962), affirmed sub nom. Schilling v. A/S D/S Dannebrog, 320 F.2d 628 (2d Cir. 1963). See Raymond v. Tyson, 58 U.S. (17 How.) 53, 15 L. Ed. 47 (1854); Hall Corporation of Canada v. Cargo Ex Steamer ...


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