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CAPARELLI v. THE PROCEEDS OF FREIGHT

March 25, 1974

Frank CAPARELLI et al., Plaintiffs, and Robert L. Jones et al., and James J. Hayes et al., Plaintiffs-Intervenors,
v.
The PROCEEDS OF FREIGHT, Pan American Tankers Corporation and Whitehall Navigation Corporation, Pursuant to Charter Parties with the Government of South Vietnam for Transport of Cargo Aboard the S.S. CORTLAND, S.S. BOWLING GREEN and S.S. WHITEHALL, Defendants. NATIONAL BANK OF NORTH AMERICA, Defendant and Third-Party Plaintiff, v. UNITED STATES of America, Third-Party Defendant


Bonsal, District Judge.


The opinion of the court was delivered by: BONSAL

BONSAL, District Judge.

This is an action in admiralty for recovery of mariners' wages. Plaintiffs and plaintiffs-intervenors sue in rem against "proceeds of freight" and in personam against defendant National Bank of North America ("National"). The "proceeds of freight" are alleged to be within this district in the possession or under the control of National.

 Plaintiffs are unlicensed seamen who in 1967 and 1968 allegedly were employed aboard the S.S. BOWLING GREEN, the S.S. CORTLAND, and the S.S. WHITEHALL. Plaintiffs-intervenors, the Trustees of the Masters, Mates & Pilots Pension & Welfare Plan ("Masters Trustees") and the Trustees of the Marine Engineers Beneficial Association Health & Welfare Plan ("MEBA Trustees"), are the assignees of the wage claims of the licensed deck officers and licensed marine engineers, respectively, who in 1967 and 1968 allegedly were employed aboard the same three vessels. Defendant National is the holder of a first preferred ship mortgage on the S.S. BOWLING GREEN, S.S. CORTLAND and S.S. WHITEHALL. The Pan American Tankers Corporation ("Pan American") was the owner and operator of the S.S. BOWLING GREEN and S.S. CORTLAND, and the Whitehall Navigation Corporation ("Whitehall") was the owner and operator of the S.S. WHITEHALL. Defendant National filed a "third party complaint" against the United States seeking a judgment declaring that the United States has no claim against certain funds in the possession of National and enjoining the United States from levying on or asserting any claim to recover from these funds that portion of the plaintiffs' gross wages representing federal taxes.

 Plaintiffs and plaintiffs-intervenors move pursuant to Rule C(3) of the Supplemental Rules for Certain Admiralty and Maritime Claims for an order requiring National to pay into court certain "proceeds of freight" resulting from an arbitration award and demurrage claims, and for summary judgment in their favor pursuant to Fed.R.Civ.P. 56. In addition, plaintiffs and plaintiffs-intervenors move for an order granting them leave to amend their complaint to state a cause of action against National for penalty wages under 46 U.S.C. § 596.

 Facts

 In 1968, the vessels S.S. BOWLING GREEN, S.S. CORTLAND, and S.S. WHITEHALL were transporting cement from Taiwan to Saigon under a contract with the Republic of Vietnam. By letter of May 14, 1968, the Republic of Vietnam repudiated the contract. Following the repudiation, the vessels remained at Saigon withholding further discharge of cargoes, and on August 5, 1968 the crews were repatriated by the U.S. Government. The vessels remained under the protective custody of the U.S. Embassy, *fn1" and the cargoes were removed by the Receivers. Pan American and Whitehall subsequently commenced an arbitration proceeding against the Republic of Vietnam and were awarded $406,343.40. Prior to the arbitration award, $82,811.45 was paid on behalf of the Republic of Vietnam to Pan American and Whitehall on account of demurrage claims, *fn2" making a total of $489,154.85 received by Pan American and Whitehall. The arbitration award of $406,343.40 was made up as follows: "Lay-up expense" for the S.S. BOWLING GREEN, May 26, 1968 to July 3, 1968, plus interest $116,298.90 "Lay-up expense" for the S.S. WHITEHALL, June 4, 1968 to July 3, 1968, plus interest 89,460.69 "Lay-up expense" for the S.S. CORTLAND, June 4, 1968 to July 3, 1968, plus interest 89,460.69 "Owners' Agent's Travel Expenses," plus interest 6,309.57 "Demurrage (net)," plus interest 102,125.35 "Freight (net)," plus interest 1,723.70 "Mats, Dunnage and Separations," plus interest 964.50 $406,343.40

 It appears that after the deduction of various expenses and attorneys' fees, National received from Pan American and Whitehall a total of $418,911.85, *fn3" as mortgagee of the three vessels.

 Plaintiffs seamen allege gross wages in the amount of $285,189.03, plus interest. They have assigned $103,915.63 of this amount to the Internal Revenue Service, as agent for the United States, to cover withholding and social security taxes.

 Plaintiffs-intervenors, Masters Trustees and MEBA Trustees, allege gross wages in the amounts of $145,124.74 and $175,686.93, respectively, plus interest. The claims of the plaintiffs and plaintiffs-intervenors total $606,000.70, plus interest.

 Plaintiffs and Plaintiffs-Intervenors' Motions pursuant to Supplemental Rule C(3)

 Plaintiffs and plaintiffs-intervenors, asserting maritime liens for wages on the $418,911.85 received by National, seek an order requiring that this amount, plus interest, be deposited in court to be applied to their claims.

 Rule C(3) of the Supplemental Rules for Certain Admirality Claims pertains to an in rem action brought to enforce "any maritime lien" and provides in relevant part:

 
"If the property that is the subject of the action consists in whole or in part of freight . . . or other intangible property, the clerk shall issue a summons directing any person having control of the funds to show cause why they should not be paid into court to abide the judgment."

 The threshold issue, therefore, is whether a mariner has a maritime lien arising from nonpayment of wages on all or any part of the $418,911.85 received by National, as ...


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