Opinion

Gulf Oil Trading Co. v. Creole Supply

  • 596 F.2d 515
  • 1979 A.M.C. 585
Court
Court of Appeals for the Second Circuit
Filed
Feb 26, 1979
Status
Published
On the bench
Gurfein
Cited by
27 cases
Authority
More cited than 19.1%

noting availability of quasi-contract remedies under maritime law even though express contract alleged by plaintiff “had [not] come into being”

How later courts described this case

  • noting availability of quasi-contract remedies under maritime law even though express contract alleged by plaintiff “had [not] come into being”
  • “We hold that title to the proceeds of sale as substitution for the vessel is in the hands of the mortgagee free from any maritime liens, since the priority of liens was a matter for determination by the law of the forum — the Bahamas.”
  • decree of Bahamian court discharging maritime liens given recognition, preventing claim under Maritime Lien Act, 46 U.S.C. Sec. 971
  • diversity and admiralty jurisdiction treated as separate but not mutually exclusive jurisdictional underpinnings

Written by the judges who cited it.

The opinion

*522 ON PETITION FOR REHEARING

The petition for rehearing is granted. On rehearing we adhere to our original decision.

The petition for rehearing contends that Chase received a benefit from the earlier supply of bunkers before the last voyage and that, hence, in equity, Gulf is entitled to be paid because Chase caused the vessel to leave the United States with the attendant destruction of an inchoate lien of Gulf. This misapprehends our ruling. We did not say that Chase was precluded from foreclosing the mortgage on the vessel in the Bahamas, for it had the right to do so under international maritime law. If Chase had paid cash for the bunkers needed for the last voyage, Gulf would have had no equitable claim. The fact that there were inchoate liens by suppliers in the United States did not in itself prohibit the Bahamian foreclosure, and Gulf’s inchoate maritime lien, like other maritime liens, was wiped out in the Bahamas.

Even if the freights earned on voyages before the last voyage did not pass to the mortgagee by virtue of the Bahamian foreclosure because they were paid in the United States, we see no equitable reason to impress a constructive trust upon them, since an inchoate lien against such freights could have been asserted earlier to determine whether payment directly to the mortgagee instead of to the shipowner equally caused the payment to lose its character as freight.

The petition also argues that we erred in finding Gulf guilty of laches. In our main opinion we mentioned laches, not as a strict time-bar, but as an additional reason for denying equitable relief. * See Holmberg v. Armbrecht, 327 U.S. 392, 396 , 66 S.Ct. 582 , 90 L.Ed. 743 (1946). It would be inequitable to keep the claim alive (1) because Gulf did not rely on Chase, but on the credit of the vessel, when it supplied the bunkers; (2) because when Creole fell in arrears, Gulf chose to continue to supply the vessel on more liberal credit terms; and (3) because there was prejudice to Chase in that a strict adherence by Gulf to its credit terms with the vessel might have alerted Chase to earlier action in protection of its interest as mortgagee of the vessel.

Accordingly, the parties’ dispute over the exact span of time in which Gulf allowed its credit to the vessels to mount is not sufficiently material to require resolution.

This is a copy of a public record, reproduced as it was published. It is not legal advice, and it may not be the version a court would rely on. Check the official source before you cite it.

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