Petition for a Writ of Certiorari — Melquist v. Illinois

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ae 7 | | ' FEE 2:3 1963

IN THE

S JON ; , SK

Supreme Court of the United ea ~ one

OCTOBER TERM 1962

os a ;

N. $58 - | -

2 i aes de. AP, ae a hee 1 Ran ge

‘ j Wi, traf f

REPUBLIC TANKERS, S.A.

. ° Respondentlppelle -Nespondent!

YACTAHEA TOS 71 aN IFEROS. FaIst Aes. *

Respondent! Ap pefiant-Patitrores

REEL PARR IRIN ee,

Petuioner-. lppell Reostumed

t & c

& ‘ e

LOAD NOs be Reo] EROS ESC A ..

/ ar! i. Lu { ni-fet

PETITION FOR WRIT OF CERTIORARi TO 8THE UNITED

STATES COURT OF APPEALS FOR THE SECOND CIRCUIT

% a

‘ RALPH BOSCH 5

“4 ‘ sel 5 j ‘s9

iy ack dekieenes

t \ te ,

Cuartes NO Eu ?

1? Mada. ‘

New York-4. X.Y

de { ‘ : a

INDEX TO PETITION

rn)

THE OPINIONS OF THE CouRTs BELOW ............ -

0 RECEIPES iy POET ICO LOLI \«

Questions PRESENTED .....27.0 178... cece cutee ces

CONSTITUTIONAL AND StTatuTorY Provisions INVOLVED

i . fe)

STATEMENT OF THR CABB on... cece cscs ceceseees

Reasons For ALLOWANCE or THE WRIT ........ Roe

I The indivisible intransferable C & F (cost —

and freight) contract made as per the Re-

vised American Foreign Trade Defini-

tions—1941 was not a maritime contract,

but one covering sale, transportation and

delivery ef seven cargoes of goods of guar-

anty specifications; and the exercise of ad-

miralty jurisdiction of a claim thereon vio-

lates Art. IIT, $2 of the Constitution,

conflicts with decisions of this Court; and

the question is of special importance to

American foreign trade and to buyers and

sellers throughout the world ........ o

II The March 16, 1957 ‘‘Charter Party’” be-

tween dibellant and Republic was not a real

maritime contract, and, with libellant and

Republic represented, as purported adver:

saries, by proctors from the same firms,

subject to the-same Dominus litis, the ex-

ercise of jurisdiction between them violates

Art. ITI, §2 of the Constitution, conflicts

with decisions of this Court, and has been

employed so as to defeat the significance

and value of the Revised. American For-

eign Trade. Definitions—1941 ........ Lee

Ill

The decree for libellant against Republic

is collusive and void and cannot *support -

the decree for Republic against petitioner ;

both decrees should be vacated ; and review

by this Court is important to the adminis-

tration of justice and to American foreign

CEE kan v bss week neheskecsunsesauseenes

IV ‘To hold petitioner liable under the De-

cember 1956 indivisible intransferable C &

F (cost and freight) purchase order, be-

cause Republic made and breached a pur-

ported March 16, 1957 ‘‘Charter Party’’

with libellant, violates the December 1956

purchase order, the Revised Definitions, :

which are part thereof, and conflicts with

decisions establishing that as independent

contractors neither libellant nor Republic

ean claim against petitioner under the De-

cember 1956 contract ....... seadbmageese

To allow the,‘‘charter party”’ in evidence,

, without any proof_of its execution, or of

authority .efelibellant from the cwner to

execute it, was highly prejudicial to pe- ~~

OE es rank Cn adekscguesduehsauies ses

The decision conflicts with decisions estab-

lishing that a safe berth clause is not an ab-

stract warranty, but always relative ‘to the

knowledge of -risk by the party with whom

— it is made, and the nature of the contract:

and with proximate cause decisions .....

The Misinterprétation of the Exemption

UND 5 vc An cccchuncupenehankaantraeves

CORIO gk cc kak weacncas eer te an ae

PAGE

26.

99:

iii

INDEX ” APPENDIX

‘ PAGE

CONSTITUTIONAL AND ateniin Provisions INvoLyED la

OPINION OF THE Covrr, OF APPRFALS, Seconp Crrcvit. 2a

JUDGMENT OF APFiRMaxcr, November 5, 1962 ...%... 12a

OrpER DENYING PETITION For REHEARING, Nov ember

28; 1962 POE A Ae SRR 8 ORS BN Se oe eee ewer eee eaee 13a

Orver By Crirp Jupce Denytne Petition, For Re-

HEARING In Banc, Nov. 28, 1962 ........ Seecass 260

Orper Denytne Petition For Reneartne In Banc,

Nov. 28, 1962 . ee aE Pe ee 15a

OnpER DENYING. Moron For Lrave to Fitz Seconp

Petition For Renrarine, December aan lfia

SuppLeMENTAL Appenvix Contarntne Extracts From

Petition To VACATE DECREES AND Dismiss THE LIBEL

AND IMPLEADER PETITION ..............2: anne a 17a

_AND Extracts or SupportinG AFFIDAVIT .......... 23a

vy»

. — or Cases CITED

Adler v. Golbraith Dacos y Co., D.C. Washi, 156 Fed.

Pe ye a rT tee es ggesecccee 13

Aetna Life Ins Co. v. Haw erry 300 U. S. Mee Kexeks ———20

Aktizselskabet Fido v. Lloyd Braziliero, 2 Cir,, 288

Fed. 62, cert. denied 260 V!. S. 737 2.0... 6g. eee eee 12

Andrews v. Essex Fire & Marine Ins. Co., 3 Mason 6,

OP. Fe We aides keane encas sae 13

Arkansas Smelting Co. v. Belden Co., 197 U. 's. 379... 24, 29

Armeur & Co, V. Fort Morgan SS Co., 270 U.S, 258 z

ONE REP RPE TCT TET eee ery ceedeegecess 8, 10, 11, 13

Bailey ¥. * Bond, 9 9 Cir., 7 77 Fed. 406 ..... Sto ates eae o 30

Bear Cat “ag Co. v. Grasselli Chemical Co., 8 Cir.,

oS Pree river Ti Tere ‘iesavseeiscauac ON

bod oe airs PAGE

Belcher v. Smith, 9 Bing. 82, 131 ung. Reprint 545 .. 20

Bern hardt v. Polygraphie Co., 350 U.S. 198 ....... ae

* Boston Ice Co, v. Potter, 123 SS ee 24, 29

’ Califernia C omm. v. United States, 355 U.S. 5384 ..8,20, 23

Carlton SS Co. v. Castle Mail Packaging Co., (1898)

A. C. 486, affg. (1897) Q. B. 485 2.2... 6m. eee 3d

Chicago Milwaukee St, P. & Pac. RR Co: * v, Acme

Fast Freight, 336 U.S. RR ESE oR ae oarehaals 24

. Cities Service Transp. Co. v. Gulf Ref. Co., 2 Cir.,

2 2 RRA Gree nr er Per ee 32

C lark v. Paul Gray, rei a ee errr 10

Cleveland y. Chamberlain, 1 Black (66 U.S.) 419 .. 21

Cleveland Rolling Mill v. Rhodes, 121 UV S. 255 ..... 11

Compania De Navegacao Lloyd Brasileiro v. C. G.

“: Blake Co., 2 Civ., 34 F. 9d G86 oad. ca csccevccacs’s 11

Cory Bros: é Co. v. United States, 2 Cir., 51 F. 2d

REG CONT Een me EEE |\ sh

Crumady v. The J. 41. Fisser, 358 U.S. 423 ........ 32

Culliford v. Gomila, 128 U.S. 135 1... 0... ee eee eee 30

Czaplicki v. SS. Haegh Silvercloud, 351 U. S. BRL was 20

Davidson v. Madison Corp., 257 N. Y. 120 wv. 0. eens 32

Dixon, Irmaos € Cia. v. Chasg Nat: Baik, 2-Cir., 144

fe 2 een are re PA BARE EN 11

East Tennessee Virginia & Georgia RR €o. v. South-

ern Telegraph Co., 125 U. S. 695 .. ere Ty 21

Eisenbach x. & bel Bros., 281 kere 32

Filley 5 U.S. 213 ...... CO OE

Forsyth v. Hammond, 166 U.S. 506 .. 2.0... cee aee ~ 7°10.

French Republic v. Fahey, D. C. Ma. 278 Fed. 949 1. 14

: e

~ Gardner v. Goodyear Dental Vulcanite Co., 131 U.S.

App. CTIT, published 21 L. Fd..41 2.2.0.0 ..... 21, 26

Gordon v. Unitéd States, WT U.S. 697 00... aste ae

Gracie v. Palmer, 8 Wheat. (21U.S.) G04.....0..... > 25

Great Northern Ry. v. O'Lonnor,2 22 U.S. (508 ...... r. 24

? ©

. PAGE

Groves v. Sentell, 153 U.S. 465 2.0... Ver iPro erry 20

Guzman v. Pichirillo, 369 U. S. Ne. ten utks cas 34 >

Hazel- Atlas Glass Co. v. Hartford- Empire Co., 329

iy MEE CATR <E A CRL SUS EASED UECET RE desikexdas 22

Hennessy v. Bond, 9 Cir., 77 Fed. 408 0 .....0..... 30

Indianapolis v. Chase N ational Bank, 314 U.S. 68 21

Israel v. Moore-McCormack Inc. SDNY, 295 Fed.

919, app. dismissed 257 U.S. 668 .............6.. 12

Judson vy. Blushing Jockey Club, 14 Mise. 350, 562, .

36 N. Y. Snpp. BBG, TTB cen te ccessvtecnsanys 21

Killian v. Ebbinghaus, 110 ULS., af" nianenet aka tes | . 20

Kossick vy. United Fruit Ca., 3 W. &. fal ....:... ae

Krauss Bros, vy. Dimon SS Co., 2010: t 'S. Lie... “42

Larsen v, Sylvester, 1. R. (A908) A.C. 295 2.0.0... 41 °

Leroy v. United States, ¥ Walls (81 U.S.) 607 .... 35

Little v. Bowers, 134 U. 8. 547 2... we cee 21

Lord v. Veazie, 8 How. (49 jm 22 | pes ere a |

Madeirense Do Brasil S/ A vy. Stulman Rmerick Lum- .

ber Co., 2 Cir., 147 F. 2d 399, cert. denied 325 US.

PR ek oh bs 4 o Cae Pie CORRE dd ee ee ets °.

Mansfield, Coldwater & Lake ‘Mic higan Ry. Co. vy.

a Oe EEOC EN cc bck VE CN OO rob ea NKaasd a ;

Matson Navigation Co. v. Daited States, 284 U.S. 352

Miller v.. Mariners Church, 7 Mb. SL oo eee.

Mille v. Grech, 159 U. 8. G30. ccc gaes -

Mitchell v. Maurer, 2938 U. S..237 ........ Seta kat

Morehead vy. Enequist, 23 Wow. 491 2. ......000...

Morgan vy. Enited States, 144Vall. (81 USS.) 5350.

Murietta v. South sane @e Co, Ltd, (1893) 62

L. J. (Q. Bes ese bak ewe Pa AKAS STAG ROA SUAS ae

“New Orleans-Beliz e Mail & Central American SS Co,

v. United States, 239 U.S. 902 «on... cess

10, 22

2°

| . ” PAGE

' Norrington’v. Wright, 115 U.S. 188 0.0.0.0... ... 4,18

Pacific Surety Co. vy. Leatham & Smith T. & W. Co

151 Fed. 440 ........... Pr ae ee Pere Le 12) 14

Panama Railroad Co, v.8SNapier Shipping Co., 166 >

Renae allied peep oar a -A. 08 3

Parker v. Ormsby, 141 U. S. 81................085 10

Parker v. Winslow, 7 El. & Bl. 942, 11@ Eng. Re-

print 1497 ...... Gad AMASAGLAS EA LARA W CSG ESD A EES 35

Perez v. Fernandez, > ‘2 U. WA a.c04 nse eucadicents 10

Plummer SW ebb, DC Me., 19 F. Case $11,233 13

Poe v. Ullman, 367 U. SM ete ee a - 20, Zi -

ee i ae ee . Ws a eeu ox vc ineckes cca 11

Pyrram SS vy. Mexican Centralsy. Co., 2 Cir., 169

2 Saree S- Grr ts een ee adecnes 41

Quincy v. Stéel, 120 U. S. 241 ......5...00..... “eed 21

Rhederi Actien Gesellschaft Oceana v. ( ‘hitha Ship-

ping Co., DC Md., 226 Fed. 339 ........... neals 13“

Richard v. Hogarth, DC NJ, 94 Fed. 684 2.0.6.2... 18

Robins Dry Dock & Repair Co. v. i. 275 U.S. 303 33

Sanders v. Fertilizer Works, 992 U.S. 190 ........ 20

Schmaling v. Thomlingon. 6 Taunt, 147, 128 Eng. Re- °

ER UE ch GAS SURO d Can ahak ea cnthekeaed cakK 2, 29

Segali v. Finlay, 245 N. A) GA rrr kwa cella ‘11

Smith v. Burnett, 173 VP. . REE oP igkyass 37

Smith v. Sperlipg, 354 U.S. 91 2.05.0... gee 2

South Spring Gold Co. v. pista Medean Gold-Mine >

ing Co., 145 U.S. eR ERG eda er RARE 21

Steamship see n Co. v. Howard Hoilder &

Partners, Inc., 2 Cir., 203 F ed. S48 0... Be CR >

Suzuki € Co. v. Companhia Mercantile International,

pe Re HE RE SG Re, Aer ahr i etait i2

Sw ift € Co. ve “a Columbiana, 359 U.S. 684° 10

The Ada, 2 Cir, 250 Fed. yw ees voce 12,-13, 14, 15

ei: ; : aa ‘ ;

>. Ser ;

The Art ¢Soderbe TON. Atlantic Lighte rade lorp., oO

‘oi - ) & 8 Pees cdiws Pek eariate :

The Calliope, (1891) A. C.'11 .....25....2..0.... 36:

at. The Convoy Wheat, 3-W y im ig <2

The Eelipse, 135-U. 8. 599 20. Pec kene TSA

The Eddy, ee ee eta: civ ck Mees ae

Phe Hamburg 2 Cir., 204 Fed. 590 0.2... es

The Lake Galera, 2s Cor., @ FP. 34. S76... So xe

The Navigadora No, 73, DC NA, 45 F.2d 639.2...

The Pennsylvania, 2 Cir., 154 a ee x

The Richard Winslow, 7 Cir. 71 P eee

~The Robert R., 2 Cir. 255 Fed. 37 Rg ACE Gna

The Winkfield, L. R. COND es WO se viens caccagas

+ Trapp v. McClellan, 68 App. Div. 362, 74 N.Y. _ Pp.

GOP Visine cine nseheancnas eee Teene pee fey

Treinies v. Sunshine Min. C Fi o See

Union Stock Yards Co, vy. Chicago &e RR Co. V6

3 a OE a Wok ooo c bakes tee cc bies ees oseenes

United States v. Corrick, 298 U.S. 435 , ‘& eee es

Universal Oil Co. v. Root Rfg. Co., 328 U.S. 575 ..

‘U.S. Trucking C orpe ve C ity of New York, 2 Cir, 18

ee EN Se cua veh FE Selene EL CiN foenek Aa

e Warren v. Stoddart, 105 U.S. 22470... .. i nba at

©Weterman SS Corp. x. Dugan & McNamara, Tne. 364

a Ces Sk b cacti Sear oe PARe ESE EME AACS

Williams Grain Co. v. Level. d Co.. 8 Cir. 277 . a

ee sp sancen seas POY eat tres REE Eee

Wood v. Nesbitt, 19 N.Y, | Supp. 42: See tf es

Woodcraft Works Ltd: vi United State s, et. of CL,

152 F. cons th RCE Wea aha tk ole wae y.

Wood i i rCo.v. Heft, 8 Wall. (75 U. a

Yone Suz suki v. Ce utral Arqe tine a4. 2 CI ir, one I.

__ 2d 795, cert. denied 278 U. S. 652 ........0 04... Sos ee

- , 0 »

United States 'v. Johnson, 399 ULS. 302 2, 26

Vill

Text Books Crrep

° PAGE

18 Halsburry’s Laws-of England, 2d Ed., ‘Inier 2 |

pleader’’, p. G11 ..7.... 5: Nahar ees ere ARE ae 20

22 Halsburry’s Laws of, england, ad ied.,** Inter-

pleader’’, p. 467 ..........00.. Ren A ray nr ie 20

Robertson & Kirkham’s Jurisdiction of the United

States Supreme Court’........ ey rere 104

I Sedgwick on Damages, §th Ed., § 205, p. 290-0... 37

~ CONSTITUTIONAL AND STATUTORY Provisions Crrep

United States Constitution, Art, ITT, See. 2... 24,9, 10, 19,

Plog eat ares "20, 22

‘3 ; Amendment , 3: Pee 4,9

28 U. S.C. 1954(1) ...:... Sse Bere ?

DE igs a Gab 2 eee ee, err TE

S| Peer fre eierneaann . 2

WO eo case oe oe esas 2

Revised American,Foreign Trade Definitions- 1941

2.4, 9, 10, 15, 16, 17, 18, 19, 23, 24, 25, 33

2 Williston on Sales (Revised Edition) § 280] et seq. 4

. ?

ee y, 4

()

a ro

2 IN THE ©

Supreme Court of the United States

OCTOBER TERM 1962

+ -----—-——

Paracon Om Co., INxc.,

Libellant-Appellee-Respondent,

agaist

Repusiic Tankers, S. A... + .

Respondent-. 1 ppellee- Responde nt,

YaciMIeNTOs* PETROLIFEROS FiscaLe S, :

Cc wider ie Appellant. Petitioner, \ =

a — s

” REPUBLIC TANKERS;S. A.

_ Petitioner-A ppellee- Respondent,

r F ‘ “Hee

p against

YACIMIENTOS PETROLIFEROS- FISCALEs,

2 > ~ ; ;

Respondent Impleaded-Appellant:, -

Petitioner.

PETITION FOR WRIT OF CERTIORARI TO THE UNITED

STATES COURT OF APPEALS FOR THE SECOND CIRCUIT

Petitioner, Yacimientos Petrojiferos Fiscales, an agence ‘

of the Argentine Government, held liable in admiralty unde

an indivisible intransferable C & F (cost and freight) pur-

chase Srder to indemnify one of the parties for liahility for

-damage to a vessel under a sife berth clanse of a pur-

ported charter party: made by the latter with an affiliated

: <3

corporation, prays that a writ of certiorari issue to review

the judgment and order of the United States Couf® of

Appeals for the Second Circuit in the above entitled matter.

The Opinions of the Courts Below

. é

The*opinion of the United States Distriet Court, South-

ernistrict of New York, Hou. Richard I. dev et, D. J., on

the merits (Vol. I, A12-A30 of Appendix below) is nat re-

ported; and the opinion of Judge Frederick P. Bryan on

the first impleader motion (Vol. T, A31-A52) is net reported.

The opinion of the United States Court of Appeals for the

Second Cireuit (Lumbard, Ch. J., Friendly and Kaufman,

CJs) R. Vol. IV, A53-A68 printed in the Appendix hereto,

infra p. 2a, is reported in 310 F. 2d 169 Adv. Ops. Ss

Jurisdiction

The principal decision of the Court ef Appeals sought4o

be reviewed was rendered November 5, 1962; a timely peti-

tion for rehearing was filed November 20, 1962 and denied

November 28, 1962, and a pefition for leave to file a peti-

tion for rehearing was denied December 11, 1962.

The jurisdiction of this Court is found in 28 U.S. C. See.

1254(1) and 2101(ce).-

;

Questions Presented

1. Whether an indivisible intransferable C & F (cost

and. freight) purchase order, made as* per the Revised

American Foreign. Trade Definitions—1941, or any part

thereof, is a maritime contract within the admiralty juris-

dictjon of tlie United States; and whether the Federa!

Courts may exercise admiralty jurisdiction of anaffirmative

claim i in contract by libel or impleader petition for damaes

or for indemnity for damages for alleged: breach by the —

purehaser of a safe berth clause contained in such indivisi- —

ble intransferable C & F contract.

——

y +

3 ‘ +N

. Whether a purported charter party and a proceeding

; bend thereon are unreal so as not to support a judgment

in admiralty whengmade between two corporations of com-

mon oWnership utter one of them had made an indivisible

intransfer ible C & F (eost and freight) contract with a

purchaser, -and the purported charterer, ‘in a suit upoi

the charter, is represented by a proctor employed’ in the

office of iibellant’s proctors.. Whether its admission in evi-

denee without proof of its execution is error prejudicial

to the purchaser. . @

3. Whether the discovery and disclosure of collusion

renders the collusion lawful or requires dismissal.

4. Whethera corporation, after receiving from a foreign

gevernment agency a purchase order for transportation of

seven eargoes, and agreeing that it and the purchase order

for the carg@ees make one indivisible intransferable CA& F

(cost and freight) purchase order, may thereafter for its

own conveniences and profit contract®with another corpora-

tion to transport one carge, and embody therein a safe

e m t

derth clauseexeept as un independent contractor and at

its own asatithed risk: and whether, if held liahlesupon its

independent contract, it may neve ‘rtheless and for that rea

son have indemnity from the purchaser whose contre aet Was

indivisible and intransferable.

- 9.” Whether a safe berth clause is relative to the known

risks of tidal harbor and temporarily occupied berth, and

may not be relied on when a vessel proceeds from Inter-

seccion to the berth without first ascertaining while the

“vessel is at Inter seecion Whether the be dept Is availabh.

6. W ilies a provision that the ; sitet sRall not be

obliged to deliver or buyer obliged to receive the product

when and while and to the extent prevented by “recited

causes precludes or affects the right to rely on a safe Berth

clause as an assurance against such recited causes.

? “@

4 | ~

Constitutional and Statutory Provisions Involved

The provisions involved of the United States Constitu-

tion (Art. TIT, see. 2; Amendment Art. VII); and statutes!

(Judicial Code, 28 U.S. C. sees. 1333 and 1359) are printed

, in the Appendix, infra. The Revised American Foreign

Trade’ Definitigns—1941 are®printed in 2 Wiriuiston on

‘Sates, ‘(Revised Fdition) § 280j et seq. A copy issued by

National Foreign Trade Council is submitted herewith. It

was offered in evidence and the C and F definition and

comments received as a YPF exhibit.

Statement of the Case

During the’ time when the Suez Canal was closed,

shutting off shipments of-oil from the Near East, and pre-

cipitating a crisis in oil purchases and tanker shipping for

its delivery, vour petitioner, an agency of the Argentine

Government, in Degember 1956 contracted in New York for

the purchase of el of oil and the necessary tank

vessels for the full transportation thereof, to be delivered

at Buenos Aires ‘LaPlata at the rate of one eargo per

month, January through July, 1957.

Petitioner’s contract consisted of two ‘complementary ”’

purchase crders, viz., Purchase Order No. NY 1970 ad-

dressed to Paragon Oil Company, Ine. (Del.), not a party

to this suit, and Purchase Order No. NY 1971 addressed to

‘*Republic Tankers’’, (See Vol. IY, for Purchase Order

No. 1970, and Vol. IT for Purchase Order No. 1971).

Both provided: ‘‘please enter an order for our account,

subject to the terms and conditions incorporated herein, for

the foHlowing material’’. No. 1970 then specified:

“Reven (7) T-two size cargoes (15/17,000 long tons

each cargo) of Commercial Fuel Oil Bunker ‘C’ in

accordance with the specifications enclosed in this

Purchase Order’’ .

Tt then set forth ‘‘Guaranty Specifications’? respecting

Gravity APT. Flash Point PMCC, Sulphur, Four Point,

B SW, Viscosity SSF, BTU and Carbon Conradson.

‘-. &e

.% os

Purchase Order No. 1971 specified :

“Tanker ships necessary for the full transportation

of 7 (seven) ——. (15,000. 17,000 long tons, 10%

nate or less in*Seller’s option, each) of fuel oil

Bunker ‘C’, awarded to Paragon Oil Co., Ine., as

per purchase order NY-1970 at a rate of 1 (one)

eargo each month to be delivered at Buenos Aires

LaPlata, January thtough July 1957.""

“it also provided that:

“Tt is understood that the loading port ean be any

. port insthe world, but the freight rate will be $29.10

U.S. Curreney per long ton. :

-aragon Oil Company, Inc. will desigumte the

port-of loading for each vessel as indieated in Pur-

chase Order NY-1970.) Time allowed tor discharging

60 (sixty) hours— demurrage rate per hour at dis-

charging port $360.00 per hour."’,

Each of the two purchase orders contained ‘Special

Conditions’* that it is ‘tan integral part in all et mY and

results’? with the other, that **Furthermore and recipro-

eally’’ the other is ‘tan integral part in all effeets and re-

sults?’ with it; and that “the tetal purchase’? of the seven

cargoes and the necessary transport

indivisible intransferable C-& F°¢@@st and freight) pur-

chase order as per the — “@f the ‘Revised American

Foreign Trade Definition 19417 ;"° anc that the beneticiaries

“fully agree with these vouditons’

tion ‘*makes only one

The libel herein is by a third corporation, a stranger to

the indivisible intransferable purchase order, but in con-

tract for damage to a tanker sustained April 17, 1957, which

libellant alleged it chartered to Republic Tankers, S.A. for

one voyage, arid which grounded at Buenos Aires. The

libe! claimed against both Republic Tankers, S. A. alleging

a safe berth clause contained in the alleged charter party

of March 16, 1957, and against vouy petitioner a similar

provision in the December 1956 contract of your petitioner.

Republic Tankers, S. A. was not served with process,

and did not appear until after your pe titioner had appeared

and answered. It a filed an answer and later two im-

pleader petitions hy a proctor in the employ of libellant’s

proctors. Notwithstanding proof by affidavits of this fact,

the District Court allowed Republic Tankers, S. A. to tm

plead your petitioner, and to be represented throughout by

Mr. Gilchrist, a proctor employed in the office of libel-

lant’s proctors.

Allegations of admiralty and maritime jurisdiction in

vars, Ninth and Figgeenth of the libel (Vol. I, A34, A36)

and in pars Kighth of the Impleader Petition (Id. A74)

were denied in pars. Sixth and Twelfth of your petitioner’ s

answer ‘to the libel (Id. A39) and in par. 8 of its answer

to the impleader petition (Id. ASO). See also affidavit

opposing motion to implead (Id. A77-A78).

The March 16, 1957 ‘*charter party’? was offered and

admitted in evidence, over petitioner's objection, at the

start of trial, without a word of testimony, the Court ruling

that ‘‘The effect against YVEF will liave to be determined”’

(Vol. I, A 92 ).

In contrast to the freight rate of $29, 10 specified in peti-

tioner’s contract, this purported contract between libellant

and Republic specified the Former USMC T-C rate +65%.

As the formers USMC T-C rate was $6.80, the addition of

63°° would make the ‘‘charter’’ freight rate $11.22, a ditfer-

ence of $17.88 per long ton from the $29.10 rate specified

in petitioner's contract. And in contrast to the demurrage

rate of $360 per hour prescribed in, Purchase Ord 1°71,

the rate in the purported charter is $120 + 65° (or $198),

a difference of $162.00 per hour,

Ships entering at Buenos Aires make three stops, first

at Recalada, where « pilot is taken on board, then at Inter-

seccion or the Roads, where pilots are changed, and tinally

at a berth.

On April 16, 1957. when the-ship’S agent Milanowski

representing Republic was told that berth C would be used _

for discharging the cargo, the berth was oceupied by an

Esso barge. The masier was informed of this by the spe-

cial pilot who boarded the vessel at Interseccion on the,

morning of the 17th. Abnormal tide had been in evidence

for several days and, instead of waiting at Interseccion

until the barge first vacated the berth, the pilot and

master decided to take the vessel on in. On this same

morning, government officials, includitig a representative

of your petitioner, reported to the agerit Milanowski, pur-

suant to his request, and were ‘tready to go on board the

tug ‘Triunfador’ ** in Grder ‘to go on the tug boat to the

roads’? (Vol. I, A 131, 132, 129-130); but the vessel was

seen already approwching the port (Id. A131). .

‘It was 1:30 in the afterneon before the barge departed

(Id. A141) ande the vessel was then aground, due to the

fall in the tide. Under direction of Camerata and the

master, ‘Sseveral mancuyres*’ were made (ld. A156) in-

cluding ‘*a little maneuvering with the engine to assist her

to come sear’? (Id. A158), although knowing that ‘tif we

made maneuvers the steamer would suffer’? (Id. A154),

and on the mernig of the 19th gt was diseovered that the

vessel had been damaged (Id. A101).

The District Court made“two separate but complemen-

tary decrees, one of which (Id. AG-AS) dismissed the libel as

to your petitioner as a respondent (Id. AG) but **Ordered,

adjudged and decreed that respondent Republic Tankers,

‘SS. A,, is liable to libellant for breach of the safe berth clause

contained in the Charter Party’? (Id. AZ); and the other

(Id- A9-AN1) ‘Ordered, adjudged and decreed that re

spondent Yacimientos: Petroliferos Fisceales is liable to re-

spondent Republic Tankers, S. A. for breach of the safe

berth clause contained in the Affreightment Contract‘

(fd. A100),

On appeal by your petitioner from beth decrees and

from the two District Court orders respecting (and one

of which granted) the application of Republic Tankers,

S. A. to implead vour petitioner to;indemnify it. for breach

of the December 1956 agreement, and on motion by your

petitioner in the Court of Appeals to vacate both decrees.

argued simultaneously with said appeal. the Court wf Ap.

peals (Lumbard, Ch. J., Friendly and Kaufman, C.Js.), in

an opinion by Judge @biendly, held that ‘‘The judgment is

affirmed and the motion to vacate dismissed.’* The pre-

‘amble: to the opinion, describing the appeal as ‘‘ Appeal

from a judgment of the District Court ... holding appellant

liable for damages to a tanker by reason . of breach of a safe

berth clause’’, misstates the appeal which*was from both

decrees, including the onesholding Republic Tankers, S. A.

liable to libellant, and from the two orders on the impleader .

motions, as well as from the separate decree holding your

petitioner Kable to indemnify Republic Tankers, S. A. The

Court of Appeals also denied a time}y petition for rehear-

, ing and denied a further petition for\eave to file a petition

for rehearing and tor a stay of*the mandate pending appli-

cation for certiorari to this Court. It dismissed the motion

to vacate the decrees.

In making the iirst decree the District Court exercised:

admiralty jurisdiction to render a Judgment between two

corporations of common ownership and whose suit was

not in any real sense adversary, and dd not involve an **ac-

tual controversy’’ or adverse presentation of rights to be

adjudicated between them, which is essential to the ex-.

ercise of the judicial process (California Comm. v. Urited

States, 355 U.S. 534, 536 and cases cited infra).

In making the second decree, the Court exercised ad-

mifalty jurisdiction to render a Judgment upon an affirma-

tive claim for breach of an indivisible intransferable C & F

(cost and freight) purehase order which is not a maritime

* > eentract within the substantive jurisdiction of admiralty

(Armour & Co. v. Fort Morgan SS Co., 270 U.S. 253, 257

and cases cited mfra). /

: o as

Reasons for Allowance of the Writ °

The Court of Appeals for the Second Circuit has sus-

tained the exercise of the judicial power and ‘admiralty

> jurisdiction to hold liable one corporation to iis when

owned by the same owners and represented as purported

adversaries by proctors from the same office, and for alleged

ae . 9

s . : .

breach of a purported ‘‘charter party’’, introduced without —

. proof of its execution, allegedly made between them, which —

~at most would bet shift from one.to the other some of the

duties and profits respecting one voyage hich the pur-

ported charterer had already undertaken by the terms of |

a. seven cargo ‘indivisible poker C & F (cost and

freight) purchase order as per’ the efinition of the ‘Re- :

vised American Foreign Trade Definition—1941’ ’’; and to

hold your petitioner liable in admiralty to indemnify such

chirterer on a claim that petitioner beeached the C & F pur-~*

chase order.

The ruling conflicts with decisions limiting the admiralty

jurisdiction to contracts which are purely maritime, and

as not extending to C & F contracts, and limiting*the ex-

ercise of the judicial power to cases which are actually ad-

versary, and precluding its exercise when two purported

adversaries are not adversaries in fact but represented by

proctors employed by the same Dominus Litis.

This is violative also‘of Art. IIT, {2 of the United

States Constifition and 28 U. S. C. § 1333, and tends to de-

stroy the significance and value of the Revised American

Foreign Trade Definitions—1941.

It-also deprives vour petitioner of the right to a jury

trial provided for in the Seventh Amendment.

The decision confiicts also with decisions denying the

right of an independent contractor to use a contract made

with a third party to vary its rights and obligations under

a prior indivisible and intransferable contract, or to change

to a maritime contract a contract which is not maritime, or

to have indemnity for a liability occasioned by its own

wrong or breach of contract. .

In view of these conflicts, the importance in American

foreign trade of the Revised American Foreign Trade Defi-

nitions—1941, and consequent importance of the questions

to ‘‘buyers and sellers throughout the world’’, a review of

the decision by this Court is plainly warranted.

This Court has held that: ‘‘An appellate federal court

must satisfy itself not only of its own jurisdiction, but

y e . .

2 10

also of that of the lower courts in a cause under review”

(Mitchell v. Maurer, 293 U.S. 237, 244. See also Mansfield,

Coldwater & Lake Michigan Ry. Co. v. Swan, 111 U.S. 379,

382-386; Parker v. Ormsby, 141 U.S. 81, 83; Perez v. Fer-

nandez, 202 U. S. 80, 100; United States v. Corrick, 298

U. S. 485, 440; Clark v. Paul Gray, Inc., 306 U. S. 583, 588;

Armour & Co. v. Fort Niagara SS Co., 270 U.S. 258, 259;

Matson Navigation Co. v. United States, 284 U.S. 352, 359).

‘‘Questions of importance in judicial administration

were obviously involved by the disposition below’? (Uni-

versal Oil Co. v. Root Rfg. Co., 328 U.S. 575, 580); **im-

portant questions _relating to the scope of admiralty

jurisdiction and its exercise are in issue’? (Swift & Co. ¥.

Compania Columbiana, 339 U.S. 684) ; ‘‘questions affecting

the relations of the United States with foreign nations, and

whose decision is of public importanee’’ (Robertson & Kirk-

ham’s Jurisdiction of the United Stat#s Supreme Court,

§ 349; Forsyth v. Hammond, 166 U. S. 506, 514),

The indivisible intransferable C & F (cost and freight)

contract made as-per the Revised American Foreign Trade

Definitions-—1941 was not a maritime contract, but one

covering sale, transportation and delivery of seven cargoes

. of goods of guaranty specifications; and the. exercise of

admiralty jurisdiction of a claim thereon violates Art. Ill,

§ 2 of the Constitution, conflict§ with decisions of this

Court; and the question is of special importance to Amer-

— trade and to bu yers and sellers Congest the

worid.

-~ Both by their interlocking terms and specifications and .

by their. ‘Special Conditions?’ so providing, Purchase Or-

der No. 1970 and Purchase Order No. 1971 constitute one

indivisible intransferable contract for future C & F (cost

and freight) sale, transportation and delivery of goods to

conform to stated ‘‘Guaranty Specificutions’’ and ‘‘to be

te tI

delivered’’ in stated quantities at stated future ihtervals

for total fixed costs per unit, including fixed freight and

; demurrage at the discharge port, regardless of ‘‘any pert

in the Ww orld”? from which they might be shipped.

‘Under these provisions, without more, the contract of

‘your petitioner was a © & F contract of purehase and sale

specifying ‘‘the time and place of delivery’? (Segall vy. Fin-

lay, 245 N. Y. 61, 65; italies by the Court); all risks as re-

spects availability of ships equaliyewith those as to avail-

ability of the goads for delivery in the stated quantities at

the stated intetvals were the sellers’ risks, undertaken for

specified and unalterable toial sams representing total cost

(Compania De Naveaacao Lloyd Brasileiro v. C.-G. Blake

Co., 2 Cir., 34 F. 2d 616; Dixon, Irmaos & Cia. v. Chasé Nat,

Bank, 2 Cir., 144 F. 2d 759, 763; Madeirense Do Brasil S/A — ,

vy. Stulman-Emrick Lumber Co., 2 Cir. 147 F. 2d 899, 405,--

cert. denied 825 U.S, 861; 17 Minune Grain Co, v. Leval & :

Co., 8 Cir. 277 F, 2d 213, 215).

‘Embodying, as they did, ‘*Guaranty Specifications’

respects the oilf as well as provisidns for the deliveries in

stated quantities at stated times, the contract was one whieh

could be wholly repudiated, or repudiated as respects any

cargo tendered for de live ry at the designated port, if the

goods failed to meet the guaranty specifications, or if not

delivered-in the quantities and att the times speeified, with

tlie buyer entitled in any sneh ease to recover previously

paid price ineluding prepaid freight (Pope v. is, Wo US

363, 372: Norrington v. Wright, 15 US. 188, 203; Filley v.

Pope, 115° U. S. 2138, 219-220; Cleveland Rolling Milly,

Rhodes, 121 U.S. 255, 261, 264). **The mere delivery of

the goods by the vendor to the carrier does not necessarily

bind the vendee to accept them. On their arrival he has the

right to inspect them to ascertain whether they conform to

the contract, and the right to inspect impliés the right to re-

ject them if they are not of the eas Gy oe hy the con-

tract’? (Pope y. Allis, supra, 115 U. S. 363, at 872, holding at

p. 373 that a suit by the buyer to recover the price previously

paid was well brought). Moreov er, ©The subsidiary provi-

* as

sions as to shipping in different months, and as to paying.

for each shipment upon its delivery, do not split up the

contract into as many,contracts'as there shall be shipments

or deliveries of so many distinct ee: (Norrington

v. Wright, supra, 115 U.S. 188, 203- 204)...

Mqually, the Socialist 3 high freight rate and ex- °

traordinarily high demurrage rate, being fixed along with

’ the price, the contract differs from one whereby the buyer

would be entitled to claim overcharge of unspecified freight

or of price in the guisé of unspecified amounts of freight’

(Cf. Krauss Bros v. Dimon S. S, Co., 290.U. S. 117, 122;

Israel v. Mobore-McC ormack, Inc., SDNY, 295 Fed. 919,

app. dismissed 257 U. §. 668). If a demurrage clause ‘‘is

an obligation to es irrespective altogether of what the

' seller’s position may be, if in fact the vessel is kept upon

demurrage’’, then ‘‘it really provides for an addition to

the price of the rice depending upon whether the ship is

or is not delayed in its discharge’? (Suzuki & Co, v. Com-

pania Mercantile Internacional, 9 Ty1: LL R. 171).

For these reasons, without more, tlivrefore, the contract

consisting of Purchase Order No. 1970 and Purehase Order

No. 1971 was not a maritime contract within the ailmiralty

jurisdiction.

This Court and distinguished judges sitting in other

Federal Courts have held that a court of admiralty has no

jurisdiction of the subject matter of an affirmative claim,

whether by libel, cross-libel or impleader petition, hased —

upon breach of a noymaritime contract; that contracts to

be enforceable in admiralty must be wholly maritime, and

that contracts involving purchase and sale as well as trans-

portation. are not maritime contracts enforceable in %

miralty (armour Co, v. Fort Morgan S.S.Co., 270 U.S

953, 259; Kossick v. U niter "Fruit Co., 365 U.S. 731, 735,

citing Pacific Suretu Co. v. Leatham & Smith T. & W. Co..,

151 Fed. 440; The Eclipse, 135 U. S. 599, 608; The Lake

‘Galerag2 Cir., 60 F. 2d 876, 880; The Ada, 2 Cir., 250 Fed.

194; Aktieselskabet Fido v. Lloyd nae 98K

Fed. 62, 72-74, Cert. denied 260 U. 737; Yone Suzwi v. Cen-

tral Argentine Ry., 2 Cir., 27 F. 2d 795, 807, cert. denied 278

U. S. 652; The Alert (Soderberg v. Atlantic Lighterage

Corp.), 2 Cir., 19 F. 2d 286, 288; The Pennsylvania, 2.Cir.,

154 Fed. 9, 12; The Richard Winslow, 71 Fed. 426; The

Navigadora No. 73, D. C. N. J., 45 F. 2d §39; French Re-

public v. Fahey, D. C. Md., 278 Fed. 947-949; Adier v. Gol-

braith Bacon €& Co., D.C. Wash. 156 Fed. 259; Andrews v.

Essex Fire d & Marine Ins. Co., 3 ‘Gana 6, 1 #ed. Case agin

pp. 8895, 889 (Story, J.); Plummer v. Webb, D.C. Me. 1

Fed. +11,2 3, pp. 891, 894; Richayd v. Hogarth, D.CLN, i.

94 Fed. 684; Rhederi Action Gesellschaft Oceana vy. Clutha

Shipping Co., D. CO Md, 226 Ped. 839, 340-344; Hi oemoratt

Works Ltd. v. United States, Ct. of Ch 152 F. Supp. 82, 83).

This applies to claims by impleader petition, respecting

which this C ourt, in Armour & Co.v, Fort Morqan S.S.Co.,

supra, stated in footnote 1, p. 2 259 of 270.U. S. that’ |

‘The application of Admiralty Rale 56 is limited by

similar considerations of jurisdictione* — *

The coutrolling principle was stated | in The Adayssupra,

that: .

‘Tt is well established that a contract enforceable in

admiralty must be wholly maritime,”

Applying this ae in Armo&r & Co.v. Fort Morgan

S.S.Co,, supra, 270 U.S, 2538, at 25! O-This Nourt, citing with

other cases The Ada, supra, said:

“The bili of lading and charter paghy are both

maritime .contracts and, henee, enfyfePable ino a

court of admiralty. Morehead vo Ruegist, 23 How,

_ 491; The Biddy. Wall. 491, 494.— The original con

tract to purchase, assemble, and sell the cattle. te

charter vessels and therein transport the eattle te

. Jacksonville, ahd the agreement of compramise, are

not maritime contracts. | The Richard Winslow. 71

Fed. 426; The Ada, 250 Fed. 194."

There is no bill of lading pleadeidl or shown here: And

your petitioner was not a party to the purported charter

party.

ee >

In Kossick v. United Fruit Co., 365 U. S.,731,'735, this

Court, citing Pacific Surety Co. v: Leatham Smith T. & Wa

Co., 151 Fed. 440, recently stated that ‘‘an agreement to pay

damages for another, breach of a maritjme charter is not”’

a maritime contract within the admiralty jurisdiction. And

in the case thereited the Court stated, at 151 Fed. 447, tlrat

‘‘without a contract purely maritime in its nature, the

‘obligation is not enforceable: in the admiralty.’’

In French Republic v. Fahey, D. C. Md., 278 ted. 947,

949, the Court held that: - 7

Ab: 5s are ‘iginal nonmaritime contract of purchase

and sale does not become maritime merely because

the buyer may be entithed to recoyer from ‘the seller

e asum which it had to pay because the default of the

sellers in their nonmaritime undertaking causcd it,

in its*turn, to break a maritime engagement.”’ ”

In Yone Suzuki vy. Central “Argentine Ry., 2 Cir, 27 F.

2d 795, 807, cert. denied 278 U. S. 652, the Second Circuit

Court of Appeals, by 2 different panel, rejecting a claim

over. against a consignor based on the - ‘original contract

which’ prov ided for sale and. delivery of coalg bec ause it was .

not a maritime contract, said” s

‘*But the arree “ements to sinbniiiies an interval of ton

days betw eer each steamer and to ‘deliver the eoal’on

land were nonmaritime, and cannot be %enforced in '

adiniralty, either directhx or by remedy over under

the fiftyesixth rule. The Alert (Soderberg v. Atlantic

Lighterage ae SS woe ae KF, (2d) ISG: The

Ada CC. C. A.) 250 F. ‘94. a ;

In the Nar igadora No. 73, supra, 45 F. 2d 639, the libel

claimed damage to a tank Scaee from grounding at an un-.

safe berth caused by a buyer’s failure to furnish a free

_ and safe berth asagr ced, where:

“The original contract herein was one for the shle

of molasses .... and, among the pre visions of said

contract... was one to the ge a al effect that the

Dunbar Molasses Gompany would make deliveries of

“*

g 1S ¢ »

molasses in ten approximately equal monthly instal-

menis at the wharf of the NAP Fersey Aleohol &

Chemical Company; that the molasses woyld be de-

livered in barges, for which barges the New Jersey

Aleohol & Chemical Company agreed.to have ready

upgn their arrival free and safe wharfage, at buyer’s

~~ aecRunt.’’ : :

’ ‘ .

The Court dismissed the libel for lack of admiralty jur-

isdiction upon the ground that the contract was not a mari-

tinre*contract, citing: The Ada, 250 Fed. 194, supra, .

Under thé foregoing authorities it is submitted that,

ever without consideration being given to the “SPecial

Conditions’? conjained in Purchase Order No, 1970 and

“alike in gPurchase Order No. 1971, the contract of your

” petitioner upon which it has been held liable herein was

not a maritime contract, and the Court's exercise of ad-

miralty jurisdiction to hold your petitioner liable as for

breach there@f is in conflict with the decisions above cited,

and violates Art. IIT, See. 2, el. 3 of the United States Con-

‘stitution and 28 U.S. C. $1333 prescribing the admiralty

and maritime *jurisdiction. : a,

But this is rendered the more emphatie and of special

Importance by reason of the ‘Special Conditions’? of both

~Parts ofthe purchase order contract and the incorporation

therein of the Revised-American Foreign Trade Definitions ;

—1941.° < te

~- Your petitioner’s contract consists of the two comple-

mentary parts, ‘Complementary’? Purchase -Order No,

1970 and **Complementary ? Purchase Order No, WT, both:

containing ‘Special Conditions’? reciting that they are

‘*placed in accordance with the offer made’ (i.e. one oftet )

. *

* One‘ reading the Court of Appeals’ opinion would nat even

- .know that the cotitraet contained the ‘*Speciak Conditions’’. Com-

‘pare the Court's statement that “The only other clause . = . that

needs to be mentioned ’’ is the one respecting possible lightering at

"*Recalada.

is 16

by an agent on behalf-of the two named corporations; that

each Purchase Order reciprocally is ‘fan integral-part in all

! effeets‘and results’? with the other; and that (as worded in

No. 1971): 3

“This special conditions means that the. total pur- ,

chase of 7 (seven) cargoés from Paragon Oil Co.,

Inc. purchase order NY-1970, CCCB# (to be indi-

cated) and the necessary transportation from Re-

public Tankers purchase order NY-1971, CCCB= to

be indieated, makes only one indivisible intrarisfer-

able C & F (cost and freight) purchage order as per

the definition of@the ‘Revised American Foreign

Trade’ definition 1941 adopted July 30, 1951 by a

Joint Committee representing the Chamber‘of Com-

meree of the United States of America, National

Council of American Imports Tne., and National

Foreign Trade Council, Ine. in all respects which may

econvern Y. P. F. regarding responsibilities, labili-

ties and rights, without any other strings, exceptions

or additions. “e

“The beueficitries of the purchase order NY-1971

and purchase order NY-1970 fuily agree with these

conditions. ”’

‘

¥ 4

The Statement by the Court of Appeals that ** Republic’s

liahility to Paragon and‘YPF'’s to Republic was that as-

sumed by a charterer”’ (infra, p. Ta) is in contradiction

of the specific provision at the very end of the Purchase

- Order No. 1971 that:

~**The word Charterers do xof mean that Yacimientos

Petroliferos. Fiseales had chartered any ships, in

° view of the fact that Purchase Orders N¥z1970 and

“NY-1971 are only one order with condition C & F, as

shewn in the corresponding Purehase Orders. Any

reference to Charter Party and Charterers are to the

only effect to facilitate the wording of these Purchase

Orders C & F’’.-(Italies ours).

) ? ~ .

This Court appears never to have reviewed the Revised

American Foreign Trade Definitions—-1941, or any contract

by which the parties agreed that their contract is One as per

such Revised Definitions, to determine whether the sar

is a contract of purchase and sale and not a maritime con-

tract for breach of which a court of admiralty can exercise

substantive jurisdiction; and the wide use of such Revised

Definitions by contractors, coupled with the above noted

conflict_of-the decision herein with prior decisions, make it

of special importance that the question be re¥iewed hy this

Court herein.

As set forth in the Foreword to the Revised American

Foreign Trade Definitions—-1941) (See pamphlet copy

submitted), many changes in practice had occurred since

the issuance in 1919 of a prior set of American Foreign

Trade Definitions; **The 1919 Definitions did much to elar-

ifv and simplifyaforcign trade practice, and received recog-

nition and use by buyers and sellers througheaut the wortd?;

but “At the Twenty-Seventh National Foreign Trade

Convention, 1940, farther revisicn and clarification of these

Definitions was urged as necessary ‘to assist the, foreign

trader in the handling of his transactions.’’ Stating that

the Revised definitions “tare recommended for general use

by both exporters and importers’, the, Foreword further

states:

‘These revised definitjons have no status at law

unless there is specitie legislation providing for them,

or unless they are coufirmed by court decisions.

Henee, it is suggested that sellers and buyers agree

to their acceptance as part of the coiitract of sale.

These revised definitions will then become legally

binding upon ail parties,

“.).. Widespread acceptance will lead to a greater

standardization of foreign trade procedure, and to

the avoidance of much misunderstanding.”” .

a . e

Under General Notes of Caution it is stated that ‘‘it is im-

portant that sellers and buyers agree that their contracts

are subject to the Revised American Foreign Trade Defini-

tions—1941 and that the various points listed are aecepted

by both parties.”’

{

These recommendations, followed by your petitioner and

the two corporations in making Purchase Orders Nos. 1970

and 1971, have been followed by your petitioner in making

many other lay purchase orders in the United States con-

taining similar speciiie agreement that they are made as per

a definition in the Revised American Foreign Trade Defini-

tions—1941. And vour petitioner believes that, to a greater

extent even thap the preceeding 1919 Definitions during the

21 years preceding the revision, the 1941 Revised Defini-

tions during the 21 years since their adoption have ‘‘re-

ceived wide recognition and use by buyers and sellers

throughout the world’’, and particularly in the ever in-

creasing foreign trade of the United States.

This Court has held that ‘*‘The nature of the tribunal

where suits are tried is an important part of the parcel of

rights behind a cause of action’? (Bernhardt v. Polygqraphic

Co., 350 U. S. 198, 208). And, of course, the very guaranty

by the Seventh Amendment of a right of trial by jury in

suits at common law is based on recognition of that prin-

ciple.

It is, therefore, of special importance to Americar for-

eign trade and to ‘‘buyers and seilers throughout the

world’’ that this Court determine the nature of such a con-

tract as maritime or non-maritime and the jurisdictional

question with particular reference to the fact that by their

contract the parties expressly agreed that it was an in-

divisible intransferable C & F (eost and freight) contract

as per the definition in the Revised American Foreign Trade

Definitions—1941. } »

‘

“*%

The March 16, 1957 “Charter Party’> between libellant

and Republic wzs not a real maritime contract, and, with

libellant and Republic represented, as purported adver-

saries, by proctors from the same firm, subject to the same

Dominus litis, the exercise of jurisdiction between them

violates Art. I'l, § 2 of the Constitution, conflicts with de-

cisions of this Court, and has been employed so as to defeat

the significance and value of the Revised American Foreign

Trade Definitions—1941. )

The exercise of admiralty jurisdiction herein to make

a deeree that the respondent Republie Tankers, S. A. is

‘liable’? to libellant is violative of Art. ITI, See. 2 of the

United States Constitution and 28 U.S. @. 61333, and eon-

flicts with decisions of this Court in two respects. First,

contrary to their pleadings, the ‘suit’? betWeen them, was

“not actually adversary, involved no actual controversy ,pbe-

tween them, and the judement souekt and obtained was not,

as their pleadings represented, one for enforcement -by libel-

lant against such respondent, but one intended only for

ise by the two against vour petitioner; and second, the

March 16, 1957 purported charter party between them was

not a real maritime contract but a device for having two

corporations of the same ownership attempt to divide he-

tween themselves the ‘indivisible’? and “intransferable’’

contract of vour petitioner ond to substitute for the non-

maritinge ‘*C & F (eost and freight) purchase order’? Wind-

ing Republic Tankers, S. A. and your petitioner a pmr-

ported maritime. contfact hetween Republic Tankers, S. A.

and libellant. :

The. existence of an ‘‘actual controversy?’ hetween

parties pleading as adversaries is essential to the exercise

of the jndicial power and if there is no ‘‘actual controversy ”’

between two such farties ‘there is a fatal constitutional,

as well as statutory defect becanse of the manner in which

: | 20 | ae

the judicial power is defined by Art. IIT, <2, cl. 1, Of the

Constitution. See Aetna Life Ins. Co. v. Haworth, 300

U.S. 227° (California Comm. v. United States, 355 U.S.534,

036) ; ‘*the usual safeguards of adversary proceedings must

be observed’? (L’niversal Oil Co. v. Root Rfa. Co., 328 U.S.

579, 980). Where in form a money judgment is sought, but

is to be paid only from a fund to be provided therefor, there

is no ‘‘ease”’ or ‘‘controversy”’ within the Constitutional -

provision ; ‘*The award of execution is a part, and an essen-

tial part of every judgmeni passed by a court exercising

judicial power. It is no judgment, in the legal sense of the

term, without it’? (Gordon v. United States, 117 U. S. 697,

698).* Eten as respects declaratory or injunctive relief, if

there has been agreement by a prosecutor not to prosecute

if the determination be that such. prosecution will lie, this

will defeat the exercise of jurisdiction (Poe v. Ullman, 367

U.S. 495, 507). When the action is in form adversary, it

must in fact be ‘‘the ‘honest and‘actual antagonistic asser-

tion of rights’ to be adjudicatéd—a safeguard essential to

the integrity of the judicial process’? (United States v.

Johnson, 319 U.S. 302, 305). Even statutory assignment

of a cause of action will be construed as ineffective when

the same insurance carrier (Traveler’s Insurance Co.) in-

sured both parties and ‘‘an action by Travelers would, in

effect, be an action against itself’? (Czaplicki v. SS. Moeqh

Silrercloud, 351 U. S. 521). Jurisdiction will not be ex,

ereised where nominally adverse parties are controlled by

«b . é

*In the notable exception of interpleader cases (not to be eon-

fused with impleading petitions) it is essential, beth here and in

England, that the complainant show that he ‘thas no interest in

the subject maffter of the suit’? (Aillan v. Ebhinghaus, WOU. S.

5G8, 571: Groves v. Sentell, 153 U.S. 465, 485; Sanders v. Fertilizer

Works, 292 U.S. 190, 200; Treinics vo Sunshine Min, Co., 8308 U.S.

66, 72: 18 Halsburry’s Laws of England, 2d Ed., ‘‘Interpleader”’,

p. 611; 22 Halsburry’s Laws of England, 3d Ed., ‘‘ Interpleader”’

p. 467; Murietta v. South American de. Company, Ltd., (1893)

62 L. J. (Q. B.) 396; Belcher v. Smith, 9 Bing. 82, 131 Eng. Re-

print 545). In the Murietta case the Court said that ‘*Colluding

may be said to be an equivalent for playing the same game.”’

— 21

the same dominus litis (South Spring Gold Co. v. Amador

Medean Gold Mining Co., ¥45 U.S. 300, 301 ; East Tennessee

Virginia & Georgia RR Co.v. Southern Telegraph Co., 125

U. S. 695; Litile v. Bowers, 134 U. 8. 547, 558: Mills v.

Green, 159 U.S. 651, 653; Wood Paper Co. v. Heft, 8 Wall.

(75 U.S.) 333; Cleveland v. Chamberlain. 1 Black (66 U.S.)

419, 426; Lord v. Veazie 8 How. (49. U. S.) 251, 255; Gard.

ner v. Goodyear Dental Wuleanite Co., 131 U.S. App. CTIL,

but published in 21 L. Ed. 141). The fact “that ceunsel for

nominally opposing parties-are paid by the same interests

will require dismissal (Gardner v. Goodyear Dental Vul-

canite Co., supra, “dL. Bd. 144: Wood v. Nesbitt, 19 N.Y,

Sayfp. 423; Judson v. Flushing Jockey Club, 14 Mise. 250 and

962, 36 N.Y. Supp. 126 and 128).

In their brief in the Court of Appeals, libellant’s proc

tors acknowledged that the prime issne ‘simpl: coald not

form any basis for a roal ie op between Appellees Para-

gon and Republic.’ The bribf for Republic in the Court

of Appeals stated that “Tt pitted Paragon avainst YPF,

with Republie occupying only a nominal role. Paragon

had two strings to its how.’

This shows that the ease as between libellant and Re

public is of the character which this Court held could-not

support a judgment in Gordon vy. United States. supra, WNT

U.S. 697, 698, and Poe v. CUindn, S67 US. 495, 507. For it

shows, together with the facet that the two COrpPOrations are

owned by the same Schwartz brothers, that there is not

and was not either intention to enforce Ly execution a judy

meat for libellant against Republic Tankers, S. Al in the

abserce of judement for the latter acninst vour petitioner,

hor any motive or reason for doing so. Rather, the objec.

tive of the two was to have judgment rendered for libellant

against Republic sgmply asa ‘string to the bow? of libellant,

and to be satisfied only by the proceeds of any judgment Re-

public might be enabled to obtain against vour petitioner,

Plainly, therefore.’ they ‘tare, cofloqnially speaking,

partners in Htigation’’ (lidanapalis vo Chose National

Bank, 314 US. 65, 74). See also Guinega. Steel. POULS.

241, 249.

_ This, however, is directly contrary to their pleadings

which pitted Paragon and Rey Wlic against each other as

a 22

adversaries represented by differently named proctors and

with the libel verified by B.D. Schwartz (Vol. 1, A837) and

every pleading of Republic verified by Mr. Gilchrist as

Proctor (Vol. 1, A50, AGO, A775), although the same B. D.

Schwartz was an officer of Republic, and Mr. Gilehrist' was

an employee of libellant’s proctors. By its Answer, Re-

yublie ‘‘pravs that the libel hérein be dismissed as against.

if pray g

it with costs’? (Vol. 1, A49). In reality, howevgr, it de-

sired judgment to be rendered for libellant against it, and

now affirmatively seeks to have the judgment for libellant

against it sustained.

Th Hazel-Atlas Glass Co. v. Hartford-Empire Co., 322

U.S. 288, 247, this Court said: ‘Truth needs no disguise.”’

If, indeed, Republic was to act as a mere ‘string to the

bow’ 6f* Paragon, both its own pleadings and Paragon’s

pleadings should have so alleged. They then would have

been pitted as co-libellants againsi your petitioner, and no

judgment would have been sought by libellant against Re-

public. (Cf. diseussion of the artificial alignment of parties

in Mitchell v. Maurer, 293 U.S. 237, 242). The suit neces-

rily would have been one solely against your petitioner

and based on the indivisible intransferable C & F (cost and

freight) purchase order of vour petitioner. Every item of

evidence offered (e. g. the alleged Mareh 16, 1957 ‘charter

party’’, Libellant’s Ex. 1) would have been clearly subject

to objection by your petitioner, and would haye_ re-

quired proof thereof, as distinet from being admitted into

the record because Mr. Gilchrist made no objection or by —

Republie’s pleadings ‘tadmitted’’ or himself alleg@l its

execution. .

Under the foregoing authorities, theyefore, even if the

question of *‘collusion’’ or the lack of any ‘‘actual contro-

versy’’ between libellant and Republic involved this and

nothing more, the rendering of a decree herein in favor of

libellant against Republic would involve ‘‘a fatal constitu-

tional, as well as statutory defect beeause of the manner in

which the judicial power is defined by Art. III, § 2, el. 1, of

23 ©

the Constitution’? (California Comm. v. United States,

supra, 355 Us S. 534, 536), which definition inelides

“Cases of admiralty and maritime Jurisdiction.’’ Preju-

dice to your petitioner would result from the fact that the

sanctity of that deerce for libellant against>Republic is

essential to the making of the second decree in favor of

Republic against petitipner.

But by treating the question as abstract, and ignoring

the ‘‘Special Conditions’? of your. petitioner’s December

1956 purehase order, while reciting that ‘‘At the time the

tanker was under a voyage charter to Republic, which ix

urn had entered into a contract of .affreightment with

YPF”’, the Court of Appeals has misapprehended the juris-

dictional question presented by reason of the extraordinary

steps which actually were taken by closely affiliated corpora-

tions (of the same ownership, and what the Court of Ap-

peals called ‘‘the congeries of Schwartz-owned corpora-

tiens’’) after two of them made their ‘‘indivisible intrans-

ferable C & F (cost and freight) purchase eecten”'« contract

with your petitioner.

For after two of the corporations had first ‘fully

agreed’’ with your petitioner in writing by the December

1956 purchase orders that ‘‘the total purcliase’’ of the

seven cargoes of oil and the necessary transportation

‘*makes only one indivisible intransferable C & I (cost and

freight) purchase order as per the definition of the Revised

American Foreign Trade Definitions—1941"". one of them

and a third affiliate (of the same ownership) made, or claim

they made, between themselves, as of March 16, 195,,°a

purported maritime contract, viz., a purported, charver

party for simple affreightment and discharge at Buenos

Aires of one cargo of ‘‘Bunker ‘C’ Fuel Oil’’—without

reference whatever to the seven cargo purchase,&the enar

anty specifications, the special conditions, the Revised Defi-

nitions, or the other terms and conditions of the December

1956 indivisible intransferable C & F (cost and freight) pur-

chase order, and at a freight rate approximately 38.9%

and a demurrage rate approximately 55% of the ratgs paid

by petitioner under the December 1956 purchase order. (CY.

Great Northern Ry. v. O’Connor, 232 U. S. 508, 514-515;

Chicago Milwaukee St. P. € Pac. RR Co. v. ‘Acme Fast

Freight, 336 U.\S. 465, 484-485; Schmaling v. Thomlinson,

6 Taunt. 147, 128 FE. Reprint 989, (and Cull v. Backhouse

there summarized) cited in Boston Ice Company v. Potter,

123 Mass. 28, 30, which is cited in Arkansas Smelting Co. v.

Belden Co., 127 U-S. 379, 387).

If this ean be done as here, with a purported ‘‘charter

party’” between two corporations of the san ownership,

and by admiralty proceedings in which the charterer as a

purported adversary respondent is represented by a proc-

tor from the firm representing the libellant, then a means

will have ‘been established of contractgrs destroying the

significance’ and value to buyers in American foreign trade

of the use of the Revised American- Foreign Trade Defini-

tions—1941, and this without any actual cost, loss, li, ° ility

or risk being occasioned to the contractor in doing so “fhe

same owner of two corporations can have one corporation

first ‘‘fully agrge’’ to an indivisible intransferable C & F

(cost and freight) purchase order-as per the Revised Ameri-

can Foreign Trade Definitions—1941, and then* effect fin

immediate destruction of the valué of that ‘agreement to

the buyer by having the second corporation make a “char.

ter party’? with the first one without any reference what-

ever to the Revised American Foreign Trade Definitions—

1941. Then, whatever the circumstances of any damage

that may occur, the one corporation tan ‘sue’? the other

in admiralty and, by proctors from the same firm, the two

ean ‘effectively cooperate to have the ‘‘charterer’’ held

‘‘liable’’ to the libellant for breath of the charter, but in-

sist that a claim for ‘indemnity’? from the. buy er be deter-

mined in admiralty.

As between the two Corporations of the same ownership

it Would make no difference what freight, demurrage or

other division was made between them of the sums which the

buyer was obliged to pay; whether they made it a small or

a large, fraction or the equivalent of the sums payable by the

buyer would involve in reality s#mply transferring ‘it from

“one pocket to another. They could, in fact, as they did

here, withhold any information of the ‘‘charter’’, and bring

it forth only in case an advantage would be served against

Yomeone else, Indeed, if the method of introdueing it in

evidence here used be approved, with no on® being obliged

to prove its execution, it could be created for their conven-

ience after the need arose. (The form itself even reads

‘“made asaf March 16,1957'*.) And as respects the ‘‘suit’’

and ‘trial’? itself, there would never be any real’ issue or,

doubt between them, since proctors from the same office

would be intent from the begining on having a judgment

entered for the libellant: * ey

Instead of the Revised’ American Foreign Trade Defini-

,tions—1941 heeoming by agreement “legally binding per

all parties*’, they wonld hind the seHeronty at wilh, and only

until he shone to-make with a dummy a pretended “charter.

party’? without reference to the ReVised Definitions, Tn-

stead of their-leading ‘to the avoidance of much misunder-

standing’’*they would become the cause of creat misunder-

standing. Instead of seryinig ‘*to assist the foreign trader

in the handling of his transactions’’, the Definitions would

increase his difficulties. Buvérs ‘“throughont the world’,

accustomed taaise the Revised Definitions with confidence.

would have that confidence shatteyed. (Cf. Foreword to

Revised Definitions).

As respects the contract as well as the snit, even/anart

from Constitutional and ‘jurisdictional provisions, ‘Tt isy

then, only an evasion of the rights of the’? buver ‘‘and

presents a facility to evasion, whieh ought not to be en-

couraged’* (Gracie v. Palmer, 8 Wheat. (21 U. S.) 604,

638). ;

Moreover, ‘Collusion to satisfy the jurisdictiohal

quirements of the District Court may, of conrse, lwa\es

2 shown; and it will always defeat (auammnatdin of > (Nmith

v. Sperling, 354 U. S. 91, 97). x

ct ot

. . lil

The decree for libellant against Republic is collusive

and void and cannot support the decree for Republic

against petitioner; both decrees should be vacated; and

review by this Court is important to the administration of

justice and to American foréign trade.

The ( ‘ourt of Appeals has recognized that Republic was

“going through what was only a form’, but states that:

-** AS against this, the Court was not deceived as_to the

course Republic was taking, Republic’ s abstentionist posi-

tion having been plain from the beginning, and it is hard —

to see that YPF suifered any prejudice thereby. YPF

knew about the nature of the representation. of Republic

from the outset of the litigation ...’" (Infra, P., 10a)

_ Faetually, this is clearly qrroneous; but it also-conflicts

with decisions of this Court, as to the duty of a Court upon

being informed of the collusive nature of any proceeding.

Assuming that ‘the’ Court was not deceived”’, it was ‘the

Court’s duty to dismiss the proceedingg-between libellant

and Republic as soon as it became knoWr'that they were

represented by attorneys from the same_ office, under

domination of the same dominus litis, In Gardner x. Good-

year Dental Vulcanite Co., supra, 21 L. Ed. 141, this Court,

after pointing out that:

“The company, however, paid the counsel employed

. by the defense as well as‘for themselves in the dis-

trict court, and subsequently in this eourt?’;

said that:

‘*These are the only faets which we think it neees-

sary to notice.”’

In United States v. Johnson, supra, 319 U.S. 302, 305, this

Court said of the fact that there was no independent selec-

tion of counsel:

‘Such a suit is woherive because it is not in any

* real sense adversary. It does not assume the ‘honest

“a?

“ of the judicial process”’,

* litigation’

{

e and actual antagonistic assertion of rights’ to bie

adjudicated—a safeguard essential to the integrity

As respects Judge Friendly’s statement that gythe Court

was not deceived’’, your petitioner and petitioner's cougsel ’

of course, cannot know what the Court may have realized

- from the beginning; but if, indeed, ‘the Court was not

deceived’’, then the Court must have. realized that process

and pleadings-eftoth libellant and Republic’ had been care-

filly designed to make apparent in’ ‘*form’’ an adversary

controversy where none in fact existed, maritime charae-

ter and admiralty jurisdiction of subject matter which in

fact was lacking, and a purported purpose to obtain and

enforce by execution a decree in favot of libellant against

Republic, or in favor of Republic against Abelfant, where

in fac. no such purpose'existed.. "Unless the Gardner ease

is to be overruled, ** These are the only facts . necessary

to notice.’ @.

The ryle in collusion cases is not that discovery of the

collusion renders it legal; but that discovery of the collu-

, Slon-erequires dismissal.

The Court's recital that **YPE knew about the naftuye

of the represehtation of Republic from the outset of the

and pleadings establish the contrary, s

The libel (Vol. I, A: yy" verified by B. DL. Se hwartz as

treasurer of libellant (Id. A37), was filed Mi av 16, 1908 by

Till Betts & Nash (now ne Betts Yamacka Freehiil &

Lougeope ) as proctors for libellant. <1 claimed adversely

aga.nst Republic as well ds against your petitioner; alkew-

ing a March 16, 1957 charter of the vessel by libellant to

Republic, that it contained a safe berth clause, and

‘Eighth: Respondents Republic Tankers, S. As and

Yacimientos: Petroliferos Fiseales, S. AL failed to furnish |

a safe berth . . . but on the contrary furnished it with an

unsafe berth resulting in the damage aforesaid.’* It did

simply is not the fact; and the docket entries

not disclose the fact me libellant and Republic were of |

common owntrship, with the same dominus litis, but on the

contrary alleged **the Admiralty and maritime jirisdiction

of the United States and of this Honorable Court’? (Id.

A34), a matter put in issue by your petitioner’s Answer

(Id. A39), and nécessarily Gependent on a real maritime

contract ‘and a real adversary proceeding.

The libel —_—-yed citation and decree against both YPF

and Repub! (1d. A386). However, the Docket shows that a

citation v. s issued only to YPF, and YPF alone was served

* May 29, 1958 (Id. Al); that YREF appeared June 23, 1958,

and filed Answer and Exceptions July 21, 1958 (ld. Al).

Thereafter—in other words, following the submission by

YPF to jurisdiction on the pleadings filed—on September

16, 1958 Repubiic, although n®ver cited, appeated by David

I. Gilchrist, Esq., as proctor (Id? A2) and filed an ‘Answer

verified by him as proctor—althongh the motion papers

filed in the Court of Appeals disclose that B. D. Schwartz

Was an officer of Repubme (lufra, p. 25a). Mr. Giichrist

my verified Republie’s other pleadings, alleging each time

s ‘*the reason’’ for this that Republic ‘tis a “foreign corpo-

aie (Id. A50, AGO, AT5), when he knew that, whiie it

was a Panama corporation (organized at the Panama con.

slate in New York), its real principal office and all of

its officers resided in New York City. It was not until the

first motion to implead had been noticed that petitioner's

counsel first discovered and called ‘*the Court’s attention”

to the fact that Mr. Gilchrist was an employee of Hill, Betts

& Nash, (Id. 61). It was not. until after the conclusion of

* the trial and while the appeal was pending in the Court of

Appeals that petitioner’s counsel learned that libellant and

Republic were of common ownership (Infra, p. 24a)

Kven now, libellant and Republic have peither admitted

nor denied these facts.

These pleadings and tacties are from one of the oldest

admiralty firms in the country, and naturally. if approved,

will he followed by less experienced proctors as models.

ta - r)

To hold petitioner liable under the December 1956 in-

divisible intransferable C & F (cost and freight) purchase

order, because Republic made and breached a purported

March 16, 1957 .““Charter Party” with libellant, violates

the December 1956, purchase order, the Revised Defini-

tions, which are part thereof, and conflicts with decisions

establishing that as independent contractors neither libel-

lant nor Republic can claim against petitioner under the

December 1966 contract. © Be er.

This’ Court and other courts have uniformly held that.

as stated in clrhansaxy Nine lfing Co. v. Belden Co... 227 UL S

379, 387:

But everyone has a right to seleet and deterinine

With whom he will contract, and cannat have another

person thrust upon him without his cogsent. In tie

familiar phrase of Lord Denman, *You have the right

tocthe benefit, you anticipated from the character,

eredic and substance of the party with whom you

contraet’ ”’ ‘s

“ ; :

The Court Gited and meg from Boston Tee Co, v. Potter,

125 Mass, 28, 50,-statin

“Tn all these cases, as he may contract with whom-

he pleasesathe sufficieney of his reasons for so doing

cannot be inquired into,’ 5

The Massachusetts Court cited and summarized as follows

Schmaling v. Thondinson, 6 Taunt, 147, 128 Eng. Reprint

989: :

. ‘

‘A firm was eniploved by: the defendants to trans

port goods to a foreign market, and transferred the

‘eytire employment to the plaintiti, who performed it

Without privity of the defendants, and it was held

that he could not recover compensation for his serv-

ices from the defendants, *’

It was sought by counsél in the English court to thnweinh

CUll v. Backhouse where the other was employed by the

contractor ‘‘to do only a part of the business which the de-

fendant ‘had cemmissioned the prime agent to pertorm.’’

The Court refused to make any such distinetion. | 4

The differences between the terms of petitioner’s De-

‘cember 1956 contract and the purported March 16, 1957

‘charter party’? between libellant and Republic are so

great that the latter cannot be related even remotely to the

former except as an independent contryet of libellant and

Republic between themselves alone. It is restricted to the

one voyage and one cargo—in contrast to tlie seven cargoes

4——previded in the Deceniber 1956 contract. It purports to be

maritiine instead of C & Fk. It contains no reference to the

December 1956 contract nor to any of the **Guaranty Speci-

fic ations’” set forth in the indivjsible December 1956 con-

-tract.” In contfast te’the large freight and demurrage rates

specified in the December 1956 contract, it prescribes much

smaller rates payabie by Republic t6 libellant. The Decem-

ber 1956 contract incorporated par, 25. Liberty Clauses"

froma charter form, giving the phaster broad discretion re-

specting entering port. In gontrast ‘Those provisions

were industriously left out of the charter party °° a libel-

lant and Republic (C8. Cudliford vo Gomilas 128 U.S. 135,

308). Also’eliminated from the ‘charter party’? is Ghai

27 covering ** Assignment.’’

Ifence, “The ‘ve is nothing in the contract which shews

that it was made in any particular for the benefit of? your

petitioner (Cf. Hennessy v. Bond, 9 Cir., 77 Fed. 403, 409);

and *‘the agreement was not of the character’’ petitioner

stipulated for (Baile y y. Bond, 9 Cir., 77 Fed. 406, ee

In Union Stock Yards Co. ve Chicago &e RR.

196 U.S. 217, 226, the railfoad was required by steed

with the terminal company to inspect cars, and the terminal

‘owed the same duty to its employees. This Court held,

accordingly, that the terminal company upon being held

: | 31 tk

7 — >

liable could not have restitution fronrthe railroad company,

saying:

“Tt may be conceded that the railroad company,

having a contract with the terminal company

. a discharge of this duty required an inspection. of

the cars by the railroad company upon delivery to

the terminal company. But that the terminal com-

pany owed a similar duty to its employees and

neglected to’ perform the same to the injury of an

employee, has been established.”’

‘But here the only undertaking toward libellant was that

of Republic; and it did not even purport by its provisions

to undertake instead that petitioner would take care 6f the

vessel, nor did it afford anyemeans for petitioner to do so.

No communication was had from the ‘vessel to petitioner,

nor from petitioner to the vessel (vol. 1, A104); and your

petitioner was never given any notice of readiness until

the vessel already was aground. It was not notified of the

vessel's arrival at Interseecion. The mastér was function-

ing under and in accordance with the chaster party; and did

notoever have available petitioner’s purchase order con-

tracé, testifying that he did not see it until in Court (vol. 1,

A167). He looked solely to Republie’s agent, ie., the

ship’s agent, and to the ‘‘charter party’? between libellant

and Republic as defining his own and such agent’s au-

thority. He took the instructions or advice of the agent

. Milanowski and of the special pilot Camerata placed on

board at Intersection by Milanowski’s instruction. Mila-

nowski in turn-was exercising all the authority afforded

him by the charter party, rather than the more limited

authority afforded him by the purchase order contract.

Until after the vessel had grounded, both Milanowski and

the master were functioning under the independent con-

tract between Republic and libellant. %

* As said in Cory Bros. d& Co. v. United States, 2 Cir., 51

F. 2d 1010, 1013-1014: :

/*The risks of the independent contractor's busi-

ness are his own.,”’

In The Hamburg, 2 Cir., 204 Fed. 590, 591-592, the Court

held that the DeMayo Company **was_an independent con-

tractor’’ and, having been held liable, could have no indem-

nity or claim over: ‘It cannot claim indemnity from the

Hamburg Line tor its own negligence in doing the work

it undertook.’’_ ee

Having a contract with your petitioner for the extraordi-

narily large freight and demurrage rates, it would have

been a gross betrayal of petitionergtor Republic to hire

another at a fraction of that amount, if Republic were

acting in any sense as your petitioner’s agent, It is, in

fact, only as one by which Republic was contracting inde-

pendently as the principal that the *‘charter party’’ be-

tween Republic and libellant can be justified. And if Re-

publicwhose independently to have another act in Pepublic’s

place, to Republie’s great profit, Republic thereby assumed

fuily the obligation to perform -any undertakings it made °

to that other. Republie’s undertakings to Your petitioner

were its own, and Republic’s undertakings to libellant by

its later independent contract were its own (Cf. Davidson

v. Madison Corp., 257 N. Y. 120, 125; Eisenbaeh v. Gimbel

Bros., 281 N. Y. 474).

It is, petitioner submits, clearly erroneous and erroneous

as matter of law for the Court of Appeais to hold that the

captain ‘thad a right®°to re on the ‘express assurance’

of the Affreightment Contract ;’’ since his own testimony

shows that he did not kndw of its existence.

The case of Cities Service Transp. Co. v. Gulf Ref. Co.,

2 Cir., 79 fF. 2d 521, cited by the Court of Appeals, and simi-

Jar cases cited by the District Court, are of an opposite

nature to the present one. They involve cases where after

a charter contract containing a safe berth clause, a sub-

charterer or consignee, by subcharter or bill of lading, then

undertakes to perform that obligation instead of the char-

terer performing it. The Court of Appeals also misapplies

Crumadyv. The J. HW. Fisser, 358 U.S. 423, 428. and Wuater-

man S, S. Corp. v. Dugan & McNamara, Inc., 364 U. S. 421,

423-425, where a stevedoring company, contracting to un-

load a vessel, is obliged to do so in workmanlike manner,

and will be liable over to a shipowner for ‘‘bringing ‘into

play the unseaworthy condition of the vessel’,’? (358 U.S.

426, 429). If the ‘‘bringing into play’’ has application

here, it would establish liability of Republic to indemnify _

petitioner if there were any basis, for liability of petitioney,,

to libellant.. For it was Republie’s own independent con-

tract with libellant which would be analogous to the steve-

doring contract in those cases, with Republic obliged, upon

visite ae the Ma®eh 16, 1957 ‘‘charter party’? with libel-

lant, to carry out itself the obligations it thereby undertook.

To hold otherwise is again,*in this respect also, to

destroy the usefulness and value of the Revised American

Foreign Trade Definitions—-1941, by enabling a contractor

such as Republic to first make anon-maritime ‘indivisible

intransferable C & F (Cost and Freight) purchase order"’

contract with a buyer, and.then immediately deprive the

buyer of the advantages thereof by making an actual or

purported maritime contract with an affiliate or third party.

‘This question also is of great importance to ‘*buyers and

sellers throughout the world.’’

To allow the “charter party” in evidence, without any

’ proof of its execution, or of authority of libellant from the

owner to execute it, was highly prejudicial to petitioner.

At start of the trial, without a word of proof, the pur-

ported ‘‘charter party’ of March 16, 1957 was offered an‘

admitted, over vour petitioner’s objection, and with the

Court stating: ‘The effect agaist YPF will have to be

determined” (Vol. k, A92). There is nothing in The Wink-

field, L. R. (1902), P. 42, cited by the Court of Appeals to

justify this. Robins Dry Dock & Repair Co. v. Flint, 275.

U. S. 303, cited apparently with disapproval the Winkfield

case as respects a charterer’s right to claim damage to a

vessel.

But the Court of Appeals herein has failed to note that

a principal contention of your petitioner was that it should

not have been admitted at all.

Charter rights h€¥%e to be proved, and ‘* This burden is

heavy,’’ tor courts are reluctant to find a demise when the

dealings between the parties are consistent with any lesser

relationship (Guzman v. Pichirillo, 368 ". S. GOS: ital.

ours). Here, aere was no proof who was owner, nor that

libell: int had any rights from such owner, nor even that the

March 16, 1957 **Charter’’ was executed.

Its admission illustrates the dual and inconsistent roles

Republic and Mr. Gilchrist, as its proctor, were permitied

to play. It is only by treating Republic asa real adversary

of libellant that any basis for its admission can be sug-

gested, i.e., the lack of objection by Mr. Gilchrist, and his

having alleged its existence in his pleadings. This is not an

‘‘abstentionist position’’; and it deprived petitioner of the

opportunity of cross-examination of any witness who might

be produced to prove the fact, time and circumstances of

its execution; and that it was never intende: to establish a

real contract relationship between the two, but ay a device

for changing, without your petitioner's consent or knowl-

edge, the rights of your petitioner under the ‘*indivisible

intransferable C & F (vost and freight) purchase order*’

contract. .

It is important to ‘‘buyers and sellers throughout the

world’ to determine whether this pattern can be followed

when a buyer is sued on his C & F contract,

The decision conflicts with decisions establishing that

a safe berth clause is not an abstract warranty, but always

relative to the knowledge of risk by the party with whom

it is made, and the nature of the contract; and with proxi-

mate cause decisions.

The Court of Appeals treats ‘*Paragon’s case against

Republic and Republie’s against YPF"’ as identical and

rested on the simple proposition that **A place to which

the Greenpoint could proceedsand from which she could

depart ‘always safeiy afloat? was warranted: it was not

provided; therefore the warranty was breached and the

Warrantor wets lable for the resulting damage.’

Actually, libellant's own evidence established that the

Vessel could proceed thereto and depart therefrom always

ailoat, althongh not at every hour of every’ day. The

harbor is a notoriously tidal one (Findings 19 and 20, Vol.

I, AWTS), aud Judge Levet found that:

“19. "Phe condition of the wind and the tide exist-

Ing at the time of the vessel's arrival determine

Whether lighterage is required at-lutersection.”’

Undertakings as to safe harbors or berth must be inter-

preted with reference to this faet (Park: rv. Winslow, 7

El & Bl S42, 119 Reprint 1497; Carlion SS Co. v. Castle

Mail Packaging Co., (A808) A.C. 486, affg. (1897) 2 Q. B.

$85). This Court held in) Morgan:- vy. United States. 14

Wall (ST UL S.) 589, Leroy ve United States, 14 Wall (81

U.S.) 607, and New Orleans-Belize Mail & Central Ameri-_

can SS Co. v. United States, 239 U. © 202, 206, that the

risk of stranding when high wind and low stage of water

are encountered, or of coliision with a sunken anchor in

the harbor, is ‘*an ordinary risk which every vessel must

run that enters a harbor’’, ;

36° e

E>: In Panama Railroad Co. vy. Napier Shipping Co., 166

“UL S. 280, 288, distinguishing eases where ‘the respondent

has been hekl liable, upon the theory that it was his duty

to furnish a safe berth’’, this Court held:

“This test is manifestly inapplicable where the

agent of the vessel is already acquainted with the

danger, and assumes the responsibility of providing

her with a safe birth.’’

Here, when Republic and Tibellant excented the March |

16, 1957 ‘tcharter party’’, Republic and its ship's agent

Milanowski, were fully acquainted with the harbor. Repub-

lie had, indeed, already delivered two of the seven cargoes.

And the basis of any liability of Republic to libellant neces-

sarily is that by the March 16, 1957 charter party Republic

assumed the responsibility of providing her with a safe

berth.

Both Milanowski and Camerata knew also that the

berth which was to be used was presently occupied by an

Esso barge; and that the berth weuld not be available until,

the barge left.

It was erroneous as matter of law and clearly erroneous

factually for the Court of Appeals to hold that Milanowski

‘‘was entitled to rely’? on a ‘‘clear implication that the

berth would be available the next day.** He was neither

entitled to nor “did he impute such an assurance to your

petitioner.

Milanowski knew that your petitioner could not give

assurance that the barge would leave: indeed. what he

a ° . +

wanted was ‘‘contirmation from Esso that the berth would

be free’’ (Vol. I, A 145). Of similar facets in The Calliope,

(iso1) A.C. 11, 17, Lord Halsbury said:

‘*In the first place it discloses an absolute in.

tenfion not to rely upon any ‘order’ supposed to

have been given to them, and in the second place it

also shows that they knew that the operation was

one which was attended with danger"

7 37

This Court cited both The Calliope and Panama R. R. Co.

Napier. Shipping Co., supra, in Smith v. Burnett, 173

U.S. 480, 435, and at p. 433 said:

‘*At the.same time the master is bound to use ordi-

nary care, and cannot carelessly run into danger.”’

This is all in accord with the rule stated in I Sedgwick

on Damages, 9th Ed. § 205, p. 390, that:

injury, that is, the loss of the value of the contract

itself. but for a consequential loss, the plaintiff

eannot recover for such loss if he might reasonably

have avoided it.” ——————

6 ae

ee es Ten BrarCat Wi Mining Cow: Grasselli (3, ome al Co., 8 Cir.,

~ the sublease, occasioning a breach of the lease, by a flood-

ing of the mine, and the Court held that it was necessary -

for the plaintiff to do everything necessary to protect the

leasehold, and, citing Warren v. Stoddart, 105 U. S. 224,

held the diunage, if any,,was clearly consequential, and that:

‘*But the damages which the plaintiff is in fact seek-

ing to recover are not the direct result of defend-

ant’s violation of the sfiiblease, but are more prop-

erly referable to plaintiff's taper of his own lease

with the owner of the mine’? (247 Fed. 28s).

Here, the very ground of libellant’s recovery against

Republic is Re public’ < own violation of its own March 16,

1957 contract with libellant (if it be sustained as a con-

tract); and it was by the direct action of Milanowski and

Camerata and the master that this oceurred.

It was repeatedly testified by Milanowski and Camerata

that the place where it customarily was determined whether

to lighter the vessel was Interseecion or The Roads (Vol.

I, A127, 129, 131, 156, 157, 158, 151). Your petitioner,

however, was never notitied that the vessel arrived at Inter-

seecion or The Roads; and a representative of your peti-

tioner reported at Boca on the morning of the 17th pur-

“Where damages are claimed, not for the direct

247 Fed. 286, a lessee sued a sublessee who had breached °

suant to instructions of Milanowski that they would go out

_ to the roads to arrange free pratique-for lightering there °

(Vol. I, A132).

It would have been a simple matter for either Camerata

. or the master to communicate with Milanowski to ascer-

tain if the berth was free, or for him to communicate with

them to report that it was still occupied (The Convoy

Wheat, 3 Wall. = S.) 225, 230; U.S. Trucking Corp. vy.

City of New York, 2 Cir,, 18 F. 2d 775).

In Milanowski’s message of the 15th to the captain, only’

part of which is quoted by Judge Friendly (infra, p. 5a),

_he had instructed the captain: * Keep closely advised’? (Vol.

1, A128).

The Court of Appeals reasons that it was necessary for

petitioner to show that Milanowski knew that ‘tor no ar-

count would Berth C be available on’the Greenpoint’s

arrival there’’ or that the captain allowed the pilots to navi-

gate the Greenpoint ‘‘to a berth he knew would be filled’’

(p. 7a-8a infra). y 7

This, however, would substitute certainty of disaster

for risk of danger, and destroy utterly the rule of reason-

able care. Milanowski, Camerata and the master all knew

the Esso barge was there and that the berth would not be

clear until it had departed. Like the starting of the fire-

boat without first checking to be sure the lines were cast off

in Trapp v. McClellan, 68 App. Div. 362, 74 N. Y. Supp. 130,

here the proximate cause, the causa causans of the ground-

ing, was the Greenpoint’s proceeding from Interseccion

without first checking to be sure the berth was available.

Both Milanowskigand the master, and indeed all the

Schwartz’ interests, were eager for quick entrance, dis-

charge and departure, for the tankérs were at a great

premium due to the Suez Canal crisis; and their eagerness

for haste caused them to disregard the simplest precautions

—a feature which both the District Court and the Circuit

Court of Appeals overlooked.

“Only the clearest requirement to’do something which

is dangerous can relieve the contractor from fhe exercise

of ordinary prudence’’(The Robert R., 2 Cir., 255 Fed. 37,

40). **The law will not permit him to throw a loss, result-

ing from a damage to himself, upon another, arising frém

causes for which the latter may be responsible, which the

party sustaining the damage, might by common ,prudence

have prevented’? (Miller v. Mariners’ Church, 7 Me. 51,

56, cited in Warren v. Stoddart, 105.U. S. 224, 229).

Since Milanowski had arranged the previous afternoon

for all officials to meet him early on the morning of the 17th

_to go out to Interseecion, it was gross negligence of -him

not to inform Camerata or’the master of this fact and ‘his

intention to lighter at Interseccion, either on the afternoon

of the 16th when this was arranged or at the latest very

early on the 17th. And it was grossly negligent of Camerata

and the master to leave Interseecion without checking

whether the Esso barge had departed. df any of them, in-

tended to have your petitioner decide the point, it was in-

cumbent upon them to notify your petitioner when the vessel

. arrived at Interseccion.

Republic net only owed on its own account eny obliga-

tion it undertook to libellant by the purported March 16,

1957 ‘‘eharter party’’; it owed your petitioner the obliga-—

tions undertaken under the oindivisible intransferable

C & F (eost and freight) purchase order’? of Decembere

1956. If Republic is liable to libellant, the’ very grounds

of such liability preelude any recovery over by Republic

against your petitioner.

With an agent and master intent on hurtied entrance,

discharge aid departure (the Suez Canal closure made

tankers much in demand, and Milanowski arranged for de-

parture papers vor the TSthoat the same tiie he arranged

for officials to reporigte go to Intersecciou? Vol. 1, AIS),

similar questions could arise as respects any C & F pur-

chate order made ‘tas per the definition of the ‘Revised

American Foreign Trade Detinitions--1941" **; and proper

= *

3 ie

determination of the questions are of importance to Ameri-

can foreign trade and to ‘buyers and sellers throughout

the world’? (See Foreword of the Revised Detinitions).

VIl° |

The Misinterpretation of the Exemption Clause.

The Court of Appeals does not hold as did the District

Court that the provisions of the exemption clause ‘‘acts of,

God, fires, strikes or other Jahbor disturbances, . . . or any

cause whatsoever beyond the control of Seller or Buyer,

whether or not similar ‘to causes herein specified’’ are in-

sufficient to comprehend the type of labor disturbance then

existing, fhaking it very difficult to get tugs, or the acts of

the master of thé Esso barge, which could not be controlled

by petitioner, Instead, because the provision is that“ The

Seller shall ot he obliged to eliver or Buyer obliged to

receive said produet when and while and to the extent that

Buyer is prevented from receiving or disposing of it or

Seller from manufacturing or making deliveriés in its eus-

tomary manner’ by the recited canses, the Court holds

that ‘‘ Whatever effect this might or might not have on

YPF'’s obligation to receive the cargo, it has none on any

issue before us.’’

This, it is submitted, beth divides the indivisible con-

. tract and also unduly emasculates the provision itself.

The Court appears to realize that the clause relates to

purehase and sale—which should itself then establish that

the contract is noi a maritime contract.

But, in addition, vour petitioner was entitled to ‘re

ceive’’ the eargo either at Interseecion or at the berth.

Either receding tide or the continued oce pane yv of the berth

by the Esso must affeet, even to controlling, whether to

‘receive’’ at least part of.the cargo by lighters at Inter

seecion, by preventing its full receipt at the berth, of |

making it dangerous to have the vessel come iy willeut

lightering.- The risks were’vithin the language of the elause

(Larsen v. Sulvester, LOR. W908) ALC. 2952 Pyrrain SS v2

Meatcan C@utral By. Co. 2 Cir, 169 Red. 283 Steamship

Rutherglen Co. v. Howard Wowlderd Partncés, Inc., 2 Cir.

2038 Fed. S48, ! Sov). He he “oy detention at Tntersee c don, due to

any such causes, would not.ent ail defnurrage liability, The

presence in the contract of this provision atfe@ed the duties

of the respective parties, and certainly entitled your peti

tioner to notice of arrival of the vessel at Intersoccion: age’

the aets of Camerata and the master in disregarding the

known risks, and of Milanowski in {Sling te etify them or

his intention to lobter at Interseecion, cannot deprive your

petitioner of the proteetion which that clause « contemplated, i

The review and determination of this question also is of

importance to Americad fore in trad and to *buvers ana

sellers throughout the world’’. ‘

@ se

Conclusion

For Vie above reasons a writ of certiorari should be °

granted as prayed for,

Respectfully submitted,

RaLeuw Bosen,

Cosmpsse ] hut e fal ee.

a 1) Beast 40th Stress

| . New York 16, N.Y,

®%

‘ . ~ 7 .;

Cuarues A. Buus, °

42 Broadway, e

/ New York 4, 7

OF Counsel

@ .

APPENDIX

Constitutional and Shtutory Provisions Involved

CONSTITUTION OF THE UNITED STATEs:

° Art. IIT See. 2: -

‘*The judicial Power shall extend to all Cases, in

Law. and Equity, arising under this Constitution, the

Laws of the United States, and Treaties made, or

which shall be made, under their Authority; . . .—-to

all Cases of admiralty and maritime Jurisdiction;

.. .--to Controversies . . . between a State, or the

Citizens thereof, and foreign States, Citizens or

Subjects. :

~.. . Inallthe .. . Cases before mentioned, the

Supreme Court shall have appellate Jurisdiction,

both as to Law and Fact, with such Exceptions, and

under such Regulations as the Congress shall make.”’

* . *

Amendment Ay. VIL:

“Tn suits at common law, where the value in

controversy shall exceed twenty dollars, the right

of trial by jury shall be preseftved, and no fact tried

by a jury shall be otherwise re-examined in any court

of the United States than according to the rules

of the common law.’’

ee OES SE Ge

1355. ApmMirnaLty, MARITIME AND Prize Cases.

The District courts shall have original jurisdiction,

exclusive of the courts of the States, of:

(1) Any eivil case of admiralty or maritime juris-

diction, saving to suiters in all Gises all other rem-

edies to which they are otherwise entitled."’

- o . 2

an59. A distriet court shall not have jurisdte

tion of a civil action in which any party, by assign

ment or otherwise has been tmproperly or collusively

inade or joined to invoke the jurisdiction of such

court.” .

» /

(Vol. IV, A53-A62J

UNITED STATES COURT OF APPEALS

For THE Seconp Cirevir |

. No. 17—-October<4t7m, 1962

(Argued October 2 = 1962 Decided November 5. 12)

Docket No. 27401 9%

Paracon Ou. Co. Isc.,

Libellant-Ap pe lee .

g Rercpsuic Tankers, S. A.,

Responde nt-A py lew,

Yacimientos Pirkouirenos Fiscaes, erroneousiy-sued as

YaciMientos Pernocireros Kiscarres, S. A.,

Respondent-Appeitlanit,

-~ -

Rervusiic Tankerus, S. A.,

Petitioner-Appelle

F eo

YactmMieNtos Perrouirrnos Fiscanes,

3 Cs Responde nl -Lin ple ade A-A pope liane.

Before:

Lumrarp, Chief Judge,

Frienpiy and Kaurman, ( ‘ireuit Judges.

Appeal from a judgment of the District Court for the

Southern District of New York in admiralty, Riehard H.

Levet, Jr, holding appellant liable for damage to a tanker

by reason of breach of a safe berth clause. :

Affirmed.

(stares AL Enuois (Ralph Beseh), NA York, New

York, for Z Ippe lant. sas

> Bra Eraas CHL Betts, Yamaoka, Freehill & Lone-

cope), New York, New York, for Appellee ,

Paragon Oi Co. Tne, ,

Davin Gincunimr, New York, New York, for Appellee

Repihle Tanke rs, Ss, ae bed

Frenpiy, Corcat Judae:

Paragen Oi Co. Ine. aeNew York corporation, alleg- *

Ine itself to he ownerand operator of the tanker Green-

port, filed a libel in the Distriet Court for the Southern

District of New York against Republic Tankers, S. A,,

Panamanian corporation, and Yacimientos Petroliferos

Fiscales (hereatter YPE). an ageney of the Argentine

Government, for damages sustained by the Greenpoint on

April t7. W957. when she grounded near-a dock in Buenos

Aires linvbor. At the time the tanker was under a voyage

charter to Republic, whiehyin turn had entered into a

contract of aftretehtment yith YPF. Republie, acting by

a proctor Who was an associate in the firm representing

Paragon, iniplended YPR. After a trial Judge Levet sus-

tained Paragon's claim against Republic and Republic's

against YPR: Paragon's direct. claim against YPEF was

dismissed. YPER alone appeals; we affirm.

The evidence warranted the judge in finding the faets

to be as follow-: | ;

On Mareli 16. 1057, Paragen by Circle Shipping Co.,,

Ine. as Agent, chartered the Greenpoint to Republic for a

e .

‘ —=- a

voyage from Puerto La Cruz, Venezuela, to Buenos Aires.

The charter party contained a safe berth clause. Pre-

vious to this, in December, 1956, YPF had entered into

an agreement with Paragon Oil Company, Ine. (Del.) for

the purchase of seven cargoes of fuel oil (Purchase Order

NY-1970) and a complementary Affreightment Contract

with Republic for the transportation of these cargoes to

Buenos Aires or LaPlata in the Argentine (Purchase Order

NY-1971). The Affreightment Contract, like se many

commercial agreements, ‘‘earries its endorsements like

bunting flapping in all directions,’* Devlin, Samples of

Lawmaking (1962), 35. One of these appendages was a

photostatie copy of some clauses from the same form of

charter party, Warshipoilvoy (Rev.), used by Paragon

and Republic in their Voyage Charter, among them the

following:

OG. Sare BERTH, SHIFTING. The Vessel shail

‘dead and? discharge, at any safe place or wharf, or

alongside vessels or lighters reachable on her ar-

rival, which shall be designated and procured by

the Charterer, provided that the Vessel can pre-

ceed thereto, lie at, and depart therefrom always

safely afloat,;any lighterage being at the expense,

risk and peril of the Charterer * * *”

Thus, so far as here relevant, the Voyage Charter and the

Affreightment Contract had identical safe herth clauses.

Although a typewritten addition to the photostat explained

that “The word charterers do [sie] not mean that Yaci-

mientos Petroliferos Fiseales had chartered any ships, in

view of the fact that Purchase Orders NY-1970 and NY-

1971 are only one order with condition C & F, as shown

in the corresponding Purchase Orders’’, it is plain that

YPF assumed any obligations which the printed form

specifically imposed on a ‘*Charterer’’. The only other

clause in the Affreightment Contract that needs to be

mentioned at this juncture is oné reading:

‘‘For your information the tankers which ex-

ceed 31 feet draft in fresh water, fully loaded, might

require lighterage in Reealada, which expense, if

any of course will be for seller’s account because of

the conditions ( & F of combined Purchase Order

NY-1970 and NY-1971. Other lighterage, if any, at

discharge port to be for account of Y. P. F.”’

The Greenpoint had an agent, Milanowski, at Buenos.

Aires; he was appointed, as he said, ‘‘By the owners, the

Republic Tankeys; S. A., and by Circe Surpprxa’’,_- The

Greenpoint kept Milanowski advised of its progress down

the South American coast; he passed this information on,

to YPF, ultimately informing it that the tanker would ar- *,

rive on April 16, 1957, at Reealada and with high tide would

proceed to Interseecion.*. On April 15, YPF told Millanow-

ski that the Greenpoint was to take berth B, C or D in the

South Dock at Buenos Aires; on April 16, it confirmed Berth

C. Having been instructed by YPF ‘*To take a chance of

the exceptionally high. tides, prevailing during the last days

and enter ship withou? lightering, if, possible,’*? Milan-

owski radioed the Greenpoint on April 16:

‘*Advise when Recealada ‘pilot on board and indi-

cate ETA Interseecion where would lighter if neces-

sary stop however if recent high tides prevail try

enter south dock Baires without lightering * * *”’

Consistently with this, although on. April 16 YPF had as-

signed a vessel to lighter the Greenpoint at Interseccion, it

later cancelled the order. The Rio de la Piata pilot, Gran-

elli, who boarded the Greenpoint at Recalada on April 16,

found her'draft to be 30.8” both fore and aft; his deposi-

tion does not make elea: whether this was a salt or fresh

water reckoning. Upon the vessel’s arriving at Intersec-

cion early in the morning of April 17, Granelli was relieved

by portpilots; they advised that, because of the continued

high tides, there was sufficient water for the tanker to pro-~

1 Recalada is located in the Rio de la Plata almost due south of

Montevideo and about 137 miles southeast of Buenos Aires. Inter-

seecion is about 100 miles northwest of Reealada, at the entrance of

the channel to Buenos Aires harbor.

eeed directly to the berth without lightering. Their advice

proved correct; the Greenpoint arrived off South Dock (

at 11:30 A.M. on April 17 without incident—only to find

the berth occupied by the barge Esso Rosario.

On April 16 Milanowski had learned from: YP F of the

barge’s being at Dock (; however, YPF-advised that it

would finish discharging at 5 P.M., and later that day eon-

firmed that it had. Camerata, one of the port pilots who

boarded the Greenpoint at Interseccion at 6:30 A.M. on

April 17, advised her captain that Dock C( was oceupied

by the barge but said he expected the barge would leave

before the Greenpoint arrived. Milanowski had procured

a tug to go out to Interseecion for lightering and attendant

customs formalities if the tide required this. When he re-

ceived a message from Camerata that the Greenpoint was

coming directly to her berth, he went there. Finding the

Esso Rosario at the dock, he phoned the YPF office, and.

was told that ‘‘they were waiting for Esso to take the barge

immediately out.’? \By this time the Greenpoint was ap

proaching the berth and could no longer be ordered to turn

around and anchor in\deep water. She anchored alongside

the barge, some 35 meters from the dock. Her fresh water

arrival draft was 30’8” forward, 3100” aft, mean 30/10”.

The YPF workers on the dock did not have a hose long

enough to discharge her. Around 1:30 P.M. the Esso Ro-

sario departed under its own power. Attempts were made

to move the Greenpoint to the dock, but she was agrouty

At the afternoon high tide, around 6:00 or 7:00 P.M. on

April 17, there were further efforts to move her, again with

out sueeess. Tater that night she was broncht within

25 meters of the dock; discharge began on the morning of

the 18th. By that evening she had been lightened enonzh

to be Lrought against the dock. Next dav, April 1. the

chief mate reported she was leaking; surveyors were calle!

and found her bottom plating damaged.

Paragon's case against Republic and Republic's against

YPF rested on a simple series of propositions: A place to

which the Greenpoint could proceed and from which she

could depart ‘‘always safely afloat’? was warranted; it was

not provided; therefore the warranty was breached-and the

warrantor was liable for the resulting damage. “~ Although

such simplicity is often delusive, courts should not spurn

it when, as here, it is sufficient and appropriate.

YPF makes much of the fact that the Greenpoint’s agent

and captain both knew befd¢re her arrival at Bu “os Aires

that the Esso Rosario was ai Berth C, and relies on the

statement in Panama R.R. vy. Napier Shipping Co., 166 U.S.

280, 288 (1897), that the obligation to supply a safe berth

‘is manifestly inapplicable where the agent of the vessel is

already acquainted with the danger, and assumes the re-

sponsibility of providing her with a safe berth.’? .This re

liance is misplaced, for three reasons. The first is that the

Panama Railroad was only a wharfinger, who, in the ab

sence of an express contract creating a higher standard,

‘‘does not guarantee the safety of vessels coming to his

wharves,’’ although he is ‘‘bound to exercise reasonable

diligence in ascertaining the condition of the berths thereat,

and if there is any dangerous obstruction to remove it, or

to give due notice of its existence to vessels about to use

the berths.’’ Smith v. Burnett, 1738 U.S. 480, 4283 (1899).

In contras?, Republic’seliability to Paragon and YPE’s to

Republic was that assumed b) a: charterer, bound by. the

express terms of his contract ‘*to furnish, not only a place

which he believes to be safe, but a place where the chartered

vessel can discharge ‘always afloat’.’? Constantine & Pick-

: ering SS. Co. v. West India SS. Co., 199 FL 964, 967

iS. DN.Y. 1912) (Hough, D. J.) . The second is that, on

the judge’s reasonable finding, YPF did not even meet the

standard laid down for a whartinger in Smith vo Burnett.

The third is that, as the judge was warranted in finding, the

Greenpoint’s agent did not here *tassume the responsibility

of providing her witha safe berth."’

We are not refuired to go so far as to hold that if Milan-

owski had known that on no account would Berth © be avail-

able on the Greenpoint’s arrival and then had failed to give

warning when warning would have availed, or if the cap-

\ eae

tain had allowed the pilots to navigate the Greenpoint to A

berth he knew would be filled, YPF would still be liable fer

the entire damage. See Park S.S. Co. vy. Cities Service Oil

Co., 188 F. 2d S804, 806 (2 Cir.), cert. denied, 342 U.S. 862

(1951). No such showing was made. When Milanowski

learned, on April 16, that the barge was at Berth C, he in-

quired of YPF and was assured first that it would finish

discharging that afternoon and later that it had. He was

entitled to rely on these assure and their clear implica-

tion that the berth would be available the next day. When,

on the 17th, he learred of the Esso Rosario’s continued

presence, it was too late to head off the Greenpoi.t. Simi-

larly, although the captain of the Greenpoint knew about

the Esso Rosario in the early morning of April 17, he also

had a right to rely on the ‘‘express assurance’’ of the Af-

freightment Contract, Cities Service Transp. Co. v. Gulf

Ref. Co., 79 F. 2d 521 (2 Cir. 1935), particularly in the light

of Camerata’s advice that the barge was expected to leave

the berth designated by YPF before the Greenpoint arrived?

YPF claims also that the damage could have been

avoided or lessened if no attempts had been made to man-

euver the Greenpoint from the place where she grounded

until the tide floated her. Cf. The Tynebridae, 6 F. Supp.

941 (KE. D. Va. 1984). It is true that one liable for violating

safe berth clause ‘*may lessen the amount of damages for

_ which he is responsible by showing negligence, or even lack

of diligence, on the part of the person wronged, in failing

to take steps to lessen certain or even probable damages,*’

Constantine & Pickering S.S. Co. v. West’ India S.S. Co.,

supra, 199 F. at 967-968. However, this is an issue on

which the defendant has the burden. MeCormick, Damages

(1935) § 338, at 180. Here the burden was not sustained,

There was no proof how much of the damage to the plating

was caused by the initial grounding and how much by the

* This would be se even though, as YPF contends, Camerata

may have been acting on the basis of advice from Milanowski, since

this advice was a reasonable interpretation of information Milanow-

ski had received from YPF.

subsequent maneuvering. There was likewise no proof that

the Greenpoint Would have floated at high tide; she did not

at the afternoon high tide of April 17 and it was only after

being maneuvered closer to the dock later that night and

then lightened that she was refloated. Finally the record

is quite inconclusive as to who ordered the maneuvers.

YPF'’s representatives were on the dock; they, the captain

of the Greenpoint, the two port pilots, and Milanowski all

seem to have been participating in the endeavor,

Two other contentions of YPF are readily answered.

The first relates to the failure to lighter, Assuming as we

do that the advice given Milanowski by YPE to ‘‘enter

ship without lightering if possible’ did not waive the cor.’

tract provision as to SV maximum draft, there issno evi-

dence that the Greenpoint failed to meet it. Anel, whether

the decision not to lighter was wise or not, there is nothing

to show it would have had any untoward consequences if

YPF had provided the safe berth it had warranted; so far

as the record shows, the purpose of lighterage at Reealada

or Interseecion. was to enaby the vessel to navigate shallow

waters in the Rio de lacPlatror in the Buenos Aires chan-

nel, not to meet conditions at the dock. The other argument

relies on a clause in the fuel oil purchase order, which was

incorporated into the Affreightment Contract, that ‘* The

Seller shall not be obliged to deliver or Buyer obliged to

receive said product when and while and to the extent that

-Buyer’is prevented from receiving er disposing of it or

Seller from Manufacturing or making deliveties in its ens

tomary manner by acts of God, fire, strikes or other hibor

disturbances * * **'; coupled with the fact that in April,

1957, tug employees. in Buenos Aires, in an effort to raise

their wages, were working only minimum hours, Whatever

effect this might or might not have on YPEF's ‘obligation to

receive the eargo, it has hone on any issue before us.

YPF has devoted a considerable part of its briefs to a

contention that Republic acted in ‘‘collusion’’ with Para

gon, and has also moved that we vacate the decree below

on that ground. The points particularly urged ir the

10a

briefs are that Républic’s proctor was an associate in the

firm which represented Paragon, and that Republic tailed

to make any defense. The motion is supported by veritied

allegations that the libellant Paragon ‘of New York,

Republic, ayd Greenpoint, Tankers, Inc., a Delaware cor-

poration heh is registered owner of, the Greenpoint,

were all owned by the Schwartz brothers, and that laragon

of Delaware and Circle Shipping Co. were in turn owned

by libellant—which facts were not known to YE until

after the trial. YPF says that if it had known or antici-

pated that Republic, a Panamanian corporation, would not

defend against’ Paragon, it might have pleaded sovercicn

immunity, since its poliey of not making this’ defense in

American courts applied only when the plaintiY was

American, as was the case with Paragon's direct claim

but not with Republie’s third-party claim. ~The myviad

vl Schwartzsowned cogporations is, indeed, bewildering,

and it would have been better if Republic had tendered the

defense of Paragon's libel to YPEF rather than geing

through what was only a‘form.. As agaist this, the Court

was not’ deceived as to the course Republic was taking,

Republic’s abstentionist position having been plain from

the beginning, and it is hard to see that YPE sutYered ans

prejudice thereby. YPEF knew about the nature of the

representation of Republic from the outset of the litigation

—indeed, one must have some credulity to believe that YE

had not realized long before that Paragon Oit Co, of New

Vork and Paragon Oil Co. of Defaware might be affiliate.!

or had not suspected a link between Paragon of Delaware

and Republic when it negotiated complementary purchase

orders with them, addressing beth **% Sieling & .Tarvis

Corp.’* irethe same building. Even if YPER is entitled to

have the separate entities of the congeries ef Schwartz.

owned corporations disregarded, it would be liable none

the less, since the ultimate responsibility to provide a safe

berth rested on it; and the true party in interest would still

be American. Indeed, we see no reason why libellant’s

direct claim against YPF should not have been sustained,

on a theory akin to the liability to the shipowner of a

lla

stevedoring company that contracts, with a charterer,

‘Crumady vo The J. MW. Fisser, 358 U.S. 423, 42s (1959),

or even with a consignee, "Vaterman SoS. Corp. vy Dudgeon

& McNamara, Tne,, 8364 U.S. 421, 423-425 (1960). Neither

are we told of any substantial defenses that an independent

proctoes could have interposed for Republic with any hope

of success. The main suggestion is that something could

have been made of the fact that Milanowski worked als.

for Cirele Suipping, another Schwartz-owned corporation

Which was agent for libellant as well as for Republie, <.

that any fault on his part would defeat the reeoverys by the

former against the latter. A sufficient answer is that. we

discern no fault to impute.

Finally, YPEF elaims that Paragon did. not prove the

allegation in the libel that H owned the Greenpoint. We

need not debate whether YPE’'s denial of knowledge o:

‘information sufficient to form a belief as to this allevation

was enough, without more, to require Paragen te <ohmi

proof of title. See Boston Ins. Co. v. City af New Vout,

0 FL 2d 156 (2 Cir, 1942). Paragon introduced th

Voyage Charter with Republie in whieh Paragon was char

acterized as ‘*Chartered Owner.’ \ This sufficed to deine

into play the ‘‘almost universal rulehat for a conversion

of, or damage to, bailed goods by a thil person, the hailee

is entitled to recover the full value of \the goods or the

full extent of the damace inflieted.”’ Rrown, Persona!

Property . ed. 1955), 890; The Winkfield, I. R. {1}

spare 42. Cf Robins Dry Dock & Rep-'r Cov. Flint, 275

U. S. 308 (eet), Tf, as YPF now a veges in its motion,

Greenpoint Tankers, Inc. also owned by the Sehwarty

brothers, was the ‘fregistered owner’ -of the Greenpoint,

the district court has sufficient resonrees to protect YPE

against any attempt at double recoverv—an atte npt we

are confident will not be made.

The judgement is affirmed and the motion to vacate is

‘missed.

l2a

[Vol IV, A-64]

UNITED STATES COURT OF APPEALS

- For tHe Seconp Circuit

. ey cae

: 2 .

At a Stated Term Of the United States Court of Ap-

peals, in and for the Second Circuit, held at the United

States Court House in the City of New York, on the Fifth

. day of November, one thousand nine hundred and sixty-

two. pal .

PRESENT: ‘

How. J. Epwarp Lumsarp,

Chief Judge,

How. Henry J. Frienp.y,

‘Hon. Irvine R. Kaurman,

Circuit Judges.

: [Same Titte] ©

Appeal from the United States~District Court for the

Southern District of New York. ‘

This cause came on to be heard on the transcript of

record from the United States District Court for the South-

ern District of New York, and was argued by counsel.

g. , . . .

Ow ConsipERATION WHEREOF, it is now ordered, adjudged, | °

and decreed that the judgment of said District Court be and

it hereby is affirmed ; vith costs to the appellees.

A. DANIEL F'usaro

Clerk

¥ | 13a

Vol: WW, Asi]

UNITED STATES cou RT OF APPEALS

For THE Seconp Circvit

“At a Stated Term of the United States Court of Appeals,

in and for the Second Circuit, held at the United States

Court House, in the City of New York, on the twenty -eighth ;

day of November, one thousand nine hundred and sixty-two.

PRESENT:

How. J. Epwarp Lumparp, *-

Chief Judge, ;

Hon, Henry J. Frienpy, :

Hoy. Irvine R. Kavrmay, Q

Cireuit Judges.

[SaME Tire]

A petition for g rehearing having aba: -filed herein he

counsel for the appellant

_ Upon consideration thereof, it is

Ordered that said petition be and hereby is,denied. :

. »

A. Danteu Fusaro

‘ Clerk

ny o

g ; sf ;

i oe .

c l4a

[Vol. LV, A-83] eet gees,

: ane [SaMe Tite | mR

Petition For Rehearing in Banc

: Ww F :

Ratru Boscu, New York, N. Y., for appellant.

No active circuit judge having requested that the case .

be reheard in-bane, the petition is denied.

J. Epwarpn Lumparp,

‘ ° Chief Judge.

“

23 Yov. 182 i. : | 4

f %,

| 15a

[va IV, A-85] a

UNITED STATES COURT OF APPEALS

‘Seconp Crecuit

—

“a

At a Stated Term of the United States Court of Appeals,

in’and for the Second Circuit, held at the United States

Court House, in the-City of New York, on the twenty-eighth

day of November, one thousand nine hundred and sixty-

two. ,

PRESENT : (

- Hox. J. E>warp Lumsarp, :

‘Chief Judge, .

Hon. Cuartes EK. Ciark, ,

Hon. Sterry R. Waterman,

Hon. Leonarp P: Moors, °

_. Hon. Henry J, Frrenviy, ~ :

Hon. J. JosepH SMIrTH,

Hon. Irvine R. Kaurman,

Hon. Pavut R. Hays,

Hoy. Tuurcoop MarsHat, -

Cireuit Judges. g

g 3 [Same Tfrie]

A petition for a rehearing in bane having been filed

herein by counsel tor the appellant /

Upon consideration thereof, it is

Ordered that said petition be and hereby is denied.

A. Danie. F'usaro

Clerk

ro}

16a

vol. IV, A- A101]

UNITED STATES COURT OF APPEALS-

~Seconp Circuit

At a Stated Term of the United States Court of Ap-

peals, in and for the Second Circuit, held at the United

States Court House, in the City of New York, on the

eleventh day of December, one thousand nine hundred and

sixty-two.

PRESENT:

Hon. Henry J. FRIENDLy,

Hon. ‘Irvine R. KaurMan,

- 8

Circuit Judges.

i &

[Same Tite]

A motion having been made herein by counsel for the

appellant for leave to file a second petition for rehearing

and to recall the niandate and for-other and further pees,

Upon consideration thereof, itis ~ ‘.

Ordered that the said motion be and it hereby is denied.-

7) A. Dante, Fusaro

e ae Clerk

“*

_ [Vol. IV, A8]

UNITED STATES COURT OF APPEALS

For THE Seconp Circuit

[Same Tit.e]

Petition to Vacate Decrees and_Orders Now on Appeal

* in This Court and to Dismiss the Libel

| and the Impleader Petition.

The Petitioner, Yacimientos Petroliferos Fiscales, re-

spectfully petitions the United States Court of Appeals

for the Second Circuit for an order or decree vacating and

setting asidé the decree of the United States District Court

of December 26, 1961, in favor of the libellant against

respondent Republic Tankers, S. A., the decree fot Decem-

ber 26, 1961 in favor of respondent- -petitioner Republic

Tankers, S. A. ‘against your petitioner, and the order of

December 24,:1958 which granted the motion of Republic

Tankers, S. A. to implead your petitioner.

. oe *

(A-9J : , nS

JURISDICTION, ‘ 2

This Court has inherent jurisdiction and power to va-

cate a Distriet Court decree or order on appeal therefrom

[A-10] pending in this .C ourt whenever it is shown to the

Court or the Court detects that collusion has been or is

being pra@ised in either obtaining or seeking to obtain

or sustain for any purpose in any Court any judgment

or decree pes a Federal p ‘ourt (Gardner v. Goodyear Dental

Vulcanite 131 U. S., App. CILIL but published in 21

L. Ed. hs C. S. v. Pirie, 319°U. S. 302, 305; Lord v.

Veazie, 8 How. (49 U.S.) 251, 255; Wood Paper Co. v

Heft, 8 Wall. (75° U.S.) 333; Cleveland v. Chamberlain,

18a

“ | ae

1 Black (66 U. S.) 419, 426; Judson v. Flushing Jockey

Club, 14 Mise. 350 and 562, 36 N. : — 126 and 128;

- ood v. Nesbitt, 19 N. Y. Supp. 423. See also Ceaplicki

. S. S. Hoegh Silvercloud, 351 U. S. 521; D’Amante v

| Tethmian Lines, Inc., 159 F. Supp. 468, 1958 A, Me C. 1583).

The Court has inherent jurisdiction to vacate any judg-

ment or order obtained unfairly Universal Oil Co. vy. Root

Rfg. Ce., 328 U. S. 575, 580; Hazel-Atlas Co. v. Hartford-

Empire Co. . so2 U.S. 238; Shawkee ate. Co. x, j Hartford.

Empire Co., 322 U. S. 271). *

It is the Court's duty to do.so when anything affeeting

the public welfare may be inv volved (United States y. John-

son, supra, 519 U. S. 502). Since your petitioner is:an

important agency of the Government of Argentina, it is

important, in the present critical period of the history of

this Country and of Argentina that the Courts of ‘either

Country be not misused to occasion by collusion of private

parties an unjust decree against an agency of the other

Government.

STATEMENT OF THE Case anv Grovuxtps ror Reuree.*

At the times involved herein the libellant herein was

a New York corporation, the respondent and impleader

[A-17%] petitioner, Republic Tankers, S. A. was a Pana-

manian corporation. Both were owned by several brothers

Schwartz, who reside and have offices in New York.

“Another corporation of the same name as libellant, but

organized i in Delaware, was eavned by the New York corpo-

‘ration and consequently, in effect, by the Schwartz brothers.

Circle Shipping Co., Ine., was a New York corporation

owned by libellant New York corporation and consequently,

in effe¢t,.by the Schwartz brothers.

Gr¥enpoint Tankers, Inc. was a Delaware’ corporation

owned by the Schwartz brothers and was registered owner’

of the S: S. Greenpoint.

The foregoing facts as to ownership of these several

sorporations by the Schwartz brothers and as to registered

ownership of the S. S. Greenpoint were not known to peti-

ia 19a

fioner until after the trial of the case in District Court and

‘the entry of the decree appealed from.

In December, 1956, your petitioner, without knowledge

of ownership of both corporations by the Schwartz brothers,

made with the Delaware corporation, Paragon Oil Com-

pany, Ine. a contract, Purchase Order No. NY 1970, for

purchase of seven cargoes of oil, and with Republic Tankers,

a contract, Purehase Order NY 19%, for affreightment,

transportation and delivery of sail seven cargoes to your

petitioner at Buenos Aires. These contracts provided

- that they constituted together one ‘indivisible intrans-

ferable’* contract, and the, contragt NY°1971 expressly

provided that it does not mean that your petitioner char-

tered any ships.

The first and third cargoes were carried by ihe S.S.

Greenpoint, of which Capt. Urbani was master.

[A-12] The agent of Republic Tankers, S. A. and

Cirele Shipping Co., Ine. in Buenos Aires was Vitalis A.

» Milanowski. .

By the libel herein, libellant, claiming to be ‘‘the owner

and operator of the 8. S. ‘‘Greenpoint’’, sued your peti-

tioner and Republic Tankers, S. A. for damages allegedly

sustained by grounding of the vessel at Buenos Aires on the

third voyage. The libel, verified by B. D. Schwartz, did not -

disclose that libellant and Republic Tankers, S. A. were both

owned by the Schwartz brothers, er that the Suit.as between —

libellant and Republic Tankers, S. A. was in effect a suit by -

the Schwartz brothers against ‘themeelv es.

The libel alleged that libellant chartered the ini to

Republic Tankers, S. A. on March 16, 1957, but did not

disclose that any suth charter contract was in effect a con-

tract’ of the Schwartz brothers with themselves.

Libellant appeared by Hill, Betts & Nash as proctors.

Process was issued against your petitioner but not

against Republic Tankers, S. A. But after your petitioner

appeared and answered, Republic Tankers, 8. A. then ap- .

peared by David T. Gilchrist as proctor, and filed an answer

and petitions to implead your petitioner all verified by

Mr. Gilchrist and not by any of the Schwartz brothers.

(

20a 2

Your petitioner’s proctor-learned that Mr. Gilchrist was

associated with and an employee of Hill, Betts & Nash, the

proctors for libellant, and pleaded collusion for this reason.

But neither your petitioner nor petitioner’s counsel knew

ner did either of Appellees disclose to them or to the court

that the two corporafions were both owned by the Schwartz

brothers.

[A- -13] The answer and the three interpleader peti-

" tions verified and filed by Mr. Gilchrist nominally for Re-

public Tankers, S. A. (but actually for the Schwart2 broth-

ers who were its owners and the owners of Itbellant) prayed

that the libel be ‘‘dismissed”’ as against it, but praved also

for a decree against your petitioner for any amount that

might be ‘‘awarded’’ to libellant ‘‘against’’ Republic

Tankers, S. A.° It thus affected an adversary status as

respects libellant equally as respects vour petitioner.

Your petitioner submits that if Republic Tankers, S. A.

and Mr. Gilchrist who verified its answer and impleader

. petitions had been sincere in pleading that the libel ‘‘he

dismissed’’ as against it, they could readily have procured

such dismissal by setting forth in such pleading, (and that

honesty required their setting forth) the true facts.

; * 4% *

.[A- 16] Your petitioner submits that it is now appar-

ent that it was never the intention or purpose éf Republic

Tankers, S. A. or Mr. Gilchrist to cause the libel to be

dismissed, but it was their intention and purpose and the

intention and purpose of libellant (specifically the inten-

tion and purpose of the Schwartz brothers who owned lioth

corporations) ard was the intention: and purpose of Hill,

Betts & Nash (now Hill, Betts, Yamaoka, Freehill & Long-

cope) and of Mr. Gilchrist, both acting on behalf of the.

Schwartz brothers owning both corporations, to cause a

collusive decree to be rendered in favor nominally of libel-

lant (owned by the Schwartz” brothers) and nominally

against Republic Tankers, a (owned by the Schwartz

brothers), in a concerted and collusive effort and as a

collusive means on behalf of the Schw artz brothers to make’ ~

re ry

oe]

Qla

_it falsely appear and be adjudged that a justiciable con-

troversy between them was duly pleaded and duly tried

and that Republie Tankers, S. A. as a bona fide adversary

was compelled by libellant as an adversary and in an ad-

versary proceeding to iheur a judgment liability to libel-

lant, upon the sanc.ity of which the same Court and this

Court might rely in determining whether Republic Tankers,

S. A. had any liability to libellant as a basis [A-17] for

Republic Tankers, S. A. ‘itself claiming against your peti-

tioner for alleged damages occasioned to it theréby.

* *.2 e °

[A-24] Certainly Mr. B. D. Schwartz, who verified the

libel, knew that all the several corporations involved were

owned by himself and his brothers, and that Mr, Gilchrist

was acting in their interests in” representing Republic

Tankers, S. A, (owned by the Schwartz brothers) as were

Hill, Betts & Nasi. in representing libellant (owned by the

Schwartz brothers)... Candor and fairness to the Court

and to your petitioner required disclosure of ‘these facts

by the Schwartz brothers to their proctors, to the Court

and to petitioner: and it was collusive and deceitful of

Libellant and Republic Tankers, 8. A. and of the Schwartz

brothers, as owners of both, ‘not to make such disclosure:

Certainly, Hill, Betts & Nash and Mr. Gilchrist either

did or did not know that’ the corporations involved were

all ovned by the Schwartz brothers. If they knew this,

then candor and fairness to the Court and your petitioner

required them, as proctors, either to disclose these facts

to the Court and to petitioner, or to refuse to participate

in the collusive and deceitful conduct of thé Schwartz

brothers: and their corporations.

If, however, they did not know that the purported

adversary litigants, lihellant and Republic Tankers, S. A.

were both owned by the Schwartz brothers, then they were

imposed on and deceived as were the Court and your peti.

tioner; and,candor [A-25] and fairness to the Court and

your petitioner requires them, as proctors, to now disclose

to the court such as the true facts.

=, %

z*%

ee Sarr

Wuenerore, Petitioner prays for an order vacating and

setting aside the decree of December 26, 1961 in favor of

lib@lant against Republic Tankers, S. A. except that part

that dismisses the libel as to your petitioner, upon the -

ground that libellant and Republic Tankers, S. A, were

two corporations owned by the Schwartz brothers, and

the suit between them was not in any real s@*se adver-

sary and was not a genuine litigation of a real-controversy

between actual litigants over rights contested between them

as opposing parties; but was a simulated issue as to which

the same persons owning both corporations dominated

both sides of the record, and said decree in favor of the

one corporation against the other is void for collusion; and

for an order vacating and setting aside or reversing the

companior/ decree of December : 26, 1961, in favor of Re-

public Tankers, S. A. against your petitioner upon the

ground that it is occasioned by such collusion and cannot

be sustained without sustaining the other; and for such

other and further relief as to the Court may seem just

and proper, tégether with costs and disbursements to your

Petitioner in this Court and in the District Court.

Respectf ully submitted,

Rarer Boscn, sh

Proctor for Petitioner,

Office & P.O. Addre&,

. 10 East 40th Street,

New York 16, N.Y.

‘A27]

State or New York = : fe)

County or New York

Ra pu Bosch, being duly sworn, deposes and says: that

he is proctor for Yacinientos Petroliferos Fiscales (Ar-

‘gentine Government Oil Fields), the respondent-appellant

and respondent-impleaded-appellant herein, hereinafter re-

ferred to as YPF, and makes‘ this affidavit in support of a

motion to vacate the decree in favor of libellant-appellee,

Paragon Qil Co., Inc. against Republic Tankers, 8. A., en-

tered December 26, 1961, and to dismiss the libel as to the

said Republic Tankers, S. A., upon the ground that the

libellant and Republic Tankers, S. A., were not bona-tide

adversaries and that the proceeding was instituted and thé

decree in favor of libellant-appellee {[A-28] against Re-:

public Tankers, S. A. was obtained by their falsely pretend-

ing the existence of a controversy between them and by

collusion between the said Republic Tankers, S. A. and

libellant-appellee and solely for use against YPF; and to

vacate the decree in favor of Republic Tankers, S. A. against |

YPEF upon the grourd that apart from other errors in its

procurement the said decree in favor of said Republic

Tankers, S. A. against YPF is invalid by reason of the.

invalidity of libellant’s decree against Republic Tankers,

S. A. and must be vacated upon vacating the Said libellant’s

decree against Republic Tankers, nally A.

[A-31] In Buenos Aires deponent asked Mr. Eli Ellis

whether he had ahy written authorization to represent “Re-

~ public T ankers, $ S. A.; whom he was not representing in the

suit, and he stated that Mr. Joseph Nestor was Vice Presi-

dent of Republic Tankers, S. A.fnd had accompa. ied ws

to Buenos Aires ‘to represent Republic Tankers, S. A.

any settlement discussions. At no time did either of es

disclose to depoiient that libellant and Republic! Tankers, —

S. A. were owned by the Schwartz brothers. — ;

In their separate briefs August 31, 1962, upon the appeal .

herein (Docket No. 27401) Mr. Eli Ellis and Mr. Gilchrist

; 24a

uave claimed that they informed me and my associate and

the Court that, the two were ‘‘affiliated companies’’. Their

briefs, however, do not even now discluse the nature of the

affiliation.

Subsequent to the trial, and "tnlbeoneed by the fact that,

notwithstanding 9ur charge that collusion was involved,

said officer of Republic Tankers, 8. A. who was igCourt was

not put on the stand as a witness by either Mr. Eli. Ellis or

Mr. Girehrist. I employed an Attorney in Panama to check

and {A-32] repopt on all data on file there respecting Re-

public Tankers, S.~A.; and I-was astonished to be finally

informed, and prov ided with evidence to show, that Re-

public Tankers, S. A. was organized at the Panamanian

Consulate in New York by two brothers, Schwartz, and

that at the times involved in this actior®libellant and Re-

public Tankers, S. A. were both owned by the Schwartz

hrothers, and for this reason could have no genuine adver-

sary status as litigants, even were' they represented by

independent proctors.

x * ie .

[A-33] Deponent ther€fore investigated as to the

‘several ‘‘Paragon’’ companies and as to the ownership of

the S. .S. Greenpoint and-deponent has since then dis-

covered that there were Seven corporations, all owned

directly or beneficially by the Schwartz Brothers, namely :

three ‘* Paragon Oil Co., Ine.’’, organized and incorporated

in the States of Delaware, New York and New Jersey,

respectively, two ‘Republic Tankers’’, i.e.,. one Republic

.Tankers, S. A., organized as a Panamanian corporation

‘before the Panamanian Consulate and the other Republic

Tankers Corporation organized and incorporated under-the

laws of the $tate of New York; Greenpoint Tankers, Ine:,

incorp rated under the laws of Delaware and Circle Ship-

ce. Ine., organized and incorporated under the laws

» Of the State of New York. .

[A334] Deponent further ‘discovered the following:

* Ownership of the S. S. Greeripoiat was in the name of

Greenpoint Tankers, Ine.

ei ? a

« x. ;

actual litigants but in effect would represent the aN. f

= 9D . “5a i atah re em

ro oe

Three of the Schwartz brothers were directors of all of -

the aforesaid Seven corporations and Mr. B. D. Schwartz,

Who verified the libél of ‘the libellant corperation was,a.

director and an officer of each of said Seven corperations,

ineluding’ Republic Tankers, S. A. whose ariswer anu peti- .

- tion was verified Sy Mr. Gilchrist and that all of the said

séven corporations had offices either at 2100 Hunters Point

Avenue, Long Island City, New York, and/or at 30 East .

40th Street, New York, New York, whiere the said Schwartz _

brothers then had and still continue to have offices.

The foregoing facts deponent can substantiate by duly

certified instruments which deponent begs leave to present

at the argument of this motion in the event libellant and or »

Republic Tankers, S. A. make any denial of these facts.

e - * @

[A-36] 1]. That at the said times the said’ B. D.

| Schwartz, his brothers, and the said Hill, Betts & Nash

A .

‘knew that a deeree or suit for a decree merel ygapt favor of

libellant against Republic Tankers, S. A. would’avail them

nothing, since such would be in effect a suit for a decree by

and ‘against the brothers Schwartz, owning both libellant

and Republic Tankers, S. A. y «

12. At the time oi the said verification and filing. the

said B. D. Schwartz and hi§ brothers and their Said attor-

neys knew that the prosecution in the name of-the corporate

libellant of a claim against the said Republic Tankers, S. A.

would not involve an honest and actual assertion of ad: -«.

versary rights nor constitute a real controversy betwéen ¥

brothers suing [A-37] themselves, and that this would be %s

apparent if Republic Tankers, S. A. were also’ openly,

represented by the-said firm of Hill, Betts & Nash and that

the court might refuse to entertain a suit between libellant

and Republic Tankers, S. A; with the said firm of Hilf, Betts

& —— openly representing both as proctors of record.

13. At the time of the said verification and filing fhe

said B. D. Schwartz, his brothers and their said attorneys

26a

Hill, Betts & Nash knew that if any answer, petition or other

' pleading in the name of Republic Tankers, S. A. were veri-

fied by the said B. D. Schwartz of any of his said brothers,

it would become apparent that the proceeding as between

said libellant and said Republic Tankers, S. A. was not an

actual adversary suit.

[- 38] 16. That at the same time the said B. D.

Schwartz, his said brothers and the said Hill, Betts & Nash

were determined nevertheJess to presen: and control in all

respects a simulated issue as between libellant and Republic

Tankers, S. A. and to dominate both sides of the record as

respects such simulated issue in order to inane fia Repub-

lic Tankers, S. A. should not be effectively defettded and that

libellant should ebtain a decree against Republic Tankers,

S. A. as a basis for a claim by it over against YPF for the

‘bénefit of libellant and the Schwartz brothers and to deceive

the court and YPF in these respects. :

e e ‘ F

EA-39] 21. That, YP: and “regi did. not know

that the said Repubiié Tankera, 8. S. A.and libellant were

both owned by the Schwartz’ peathipse: nor that the said

B. D. Schwartz and Henry Schwartz were officers of both —

corporations and were residents of the City of New York

with offices atid ptace of business at No. 30 East 40th Street,

Manhattan, New York City, and 2100 Hunters l’oint Ave-

nue, Long Island City, New York.

: ry a . ‘

22. That the said answer of Republic Tankers, S. A.,

verified as aforesaid, contained the foliowing prayer:

‘Wherefore, respondent prays that the libel herein

be dismissed as against it; with costs."’

St Bie

Also three impleader petitions of Republic Tankers, S. A...

similarty and for the sanie recited reayons Verified by said

Mr. Gilchrist on September 16, 1958, December 11, 195s

and December 29, 1958, eaeh contained a prayer that the

. ‘ 27a °

on libel be dismissed against said petitioner. But in truth

Ay and in fact the said Republic Tankers, S. A. did not seck

to have the libel dismissed against it, but made its ippear-

ance and filed its answer and its impleader petitions with

the intent and purpose of obtaining a’ deerce of any

upon its part to libellant, to support a ‘claim over by i

against YIge for the benefit of libellant and the “ake Mee

Schwartz. . itn

. * * 5 e

[A-41] Deponent has for a few years had pleasant

relations with, and admiration for the firm, and regrets”

; that in their briefs they havessought to convert the matter

into one between proctors. It is, however, rather a matter

‘seriously affecting the rights of my Hien, an important

ageney. of the Argentine Government, and must be deter-

mined.as such, mthe light of the facts.

Depenent therefore prays for the relief prayed for in

the petition.

ms | ke . / RALPH Bosca

« > Ralph Bosch

. 2, o :

A " Sworn to before me : } :

“this 24th day of September, 1962. -

¢ *Heneen T KB. NEL. SON «-

= he,

: ; Herbert EK. 2 Nelson ‘

Notary Public, State of New York

No. 24-S116150 06.

“ (Qualified in Kings C —

Certificate filed in New-York County

Commission Exprres March 30, 1964 4

Revised

‘ American

' Foreign Trade

- Definitions—

« 1941

* ® Adopted July 30, 1941 by a -

Joint Committee representing the

CHAMBER OF COMMERCE OF THE

UNITED STATES oF AMERICA

NATIONAL COUNCIL OF AMERICAN

IMPORTERS, INC.

-NATIONAL FOREIGN TRADE COUNCIL,

INC.

‘ ORD

Issuéd by the

Natidnal Foreign Trade Council, Inc.

10 Rocke feller Plaza

Revised

American

Foreign Trade Definitions—

1941

Adopted July 30, 1941, by a, Joint Committee rep-

‘resenting the Chamber of Commerce of the United

States of America, the National Council of American

Importers, Inc. and the National Foreign Trade

Council, Inc. .

FOREWORD

Sire the issuance of American Foreign Trade

Definitions in 1919, many changes in practice have

occurred. The 1949 Definitions did much to clarify

and simplify foreign trade practice, and received wide

recognition and use by buyers and sellers throughout

the world. At the Twenty-Seventh National Foreign

Trade Convention, 1940, further revision and clari-

fication of these Definitions was urged as necessary

to assist the foreign trader in the hagdling of his -

transactions.

._ The following Revised American Foreign Trade

Definitions - 1941 are recommended for general use

by both-exporters and importers. These revised defini-

tions have no status at law unless there is specific

legislation providing for them, or unless they are

confirmed by court decisions. Hence, it is suggested

that sellers and bufers agree to “their acceptance as

part of the contract of sale. Sthese revised definitions

will then become legally binding upon all parties.

In view of changes in practice and procedure since

1919, certain new responsibilities for sellers and buy-

ers are included in these revised definitions. Also, in

many instances, the old” responsibilities are more

clearly defined than in the 1919 Definitions, and the

changes should be beneficial both ro sellers and buy-

ers. Widespread acceptance will lead to a greater

standardization of foreign trade procedure, and to the

avoidance of much misunderstanding.

Adoption by exporters and importers of these re-

vised terms will impress on all parcies concerned

their respective responsibilities and rights.

General Notes of Caution

1. As foreign trade definitions have been issued by

Organizations in various parts of the world, and as

the courts of countries have interpreted these defini-

tions in different ways, it is important that sellers and

buyers agree that their contracts are subject to the

Revised American Foreign Trade Definitions -

1941 And that the various points listed are accepted

by both parties.

2. In addition to the foreigti trade terms: list®d

herein, there are terms that are at times used, such

as Free Harbor, C.1.F..& C. (Cost, Insurance, Freight,

and Commission), C.1.F.C. & I. (Cost, Insurance.

Freight, Commission, and Interest), C.I.F. Landed

(Cost, Insurance, Freight, Landed), and others.

None of these should be used unless there has first -

been a definite understanding as to rhe exact meaning

thereof. It is unwise to attempt to interpret other.

terms in the light of the terms given hegein. Hence,,

whenever possible, one of the terms defined herein

should be uséd.

3. It is unwise to use abbreviations in quotations

or in contracts which might be subject to misunder-

standing.

4 When making quotations, the featilias terms

“bundredweight” or “ton” should be avoided. A

hundredweight can be 100 pounds of the short ton,

or 112 pounds of the long ton.’ A ton can be a short

ton of 2,000 poiinds, or a metric ton of 2,204.6

pounds, or a lofig’ ton of 2,240 pounds. Hence, the

type of hundredweigh ton should be clearly stated

in quotations and igrefales confirmations. Also, all

terms referring tO“guantity, weight, volume, length,

or surface should be clearly defined and agreed upon

5. If inspection, or certificate of inspection, is re-

quired, it should be agreed, in advance, whether the

cost thereof is for account of seller or buyer.

6. Unless otherwise agreed upon, all expenses are

for the account of seller up to the point at which the

buyer must handle the subsequent movement of

goods.

7. There are a, number of elements in a contract

that do not fall within the scope of these foreign

trade definitions. Hence, no mention of these 1s

made-herein. Seller and buyer should agree to these

separately when negotiating contracts. This particu-

‘larly apphes to sp-called “customary”, practices

. ak

DEFINITIONS OF QUOTATIONS

(1) EX (Point of Origin)

“EX FACTORY”, “EX MILL”, “EX MINE”,

“EX PLANTATION”, “EX WAREHOUSE ®, etc.

(named point of origin)

Under this term, the price quoted applies aly at

the point of origin, and the seller agrees to place the

poor oy at the disposal of the buyer at the agreed place

on the date or within the period fixed.

Under ‘this quotation:

Seller must

(1) bear all costs and risks of the goods until

such time as the buyer is obliged to take

delivery thereof;

(2) render the buyer, at the buyer's request and

expense, assistance in obtaining the docu-

ments issued *in the country of. origin, or

of shipment, or of both, which the buyer

may require either for purposes of ex-

" portation, or of importation at destination.

Buyer must

(1) take delivery of the goods as soon as they

have been placed at his disposal at the

agreed place on the date or within the

period fixed;

(2) pay export taxes, or other fees or charges,

if any, levied because of exportation;

(3) bear all costs and risks of the goods from

the time when he is obligated to take de-

liveryr thereof;

(4) pay all costs and charges incurred in obtain-

) ing the documents issued in the country of

origin, or of shipment, or of both, which

may be required either for purposes of ex-

portation, or of importation at destination.

(tt) F.0.8. (Free on Board)

N@We: Seller and buyer should consider not only the

definitions but also the “Comments on All

F.O.B. Terms” given at end of this section

(page 9), sm order to understand fully thes

respective vesponsibilitses and rights under

the several classes of “F.O.B.” terms.

(II-A) “F.O.B. (named inland carrier at named

inland point of departure) ”*

Under this term, the prite quoted applies only at

inland shipping point, and the seller arranges for

loading of the goods on, or in, railway cars, trucks,

lighters, barges, aircraft, or other conveyance fur-

nished for transportation.

* See Note above and Comments on All F O B_ Terms (page 9).

Under this quotation:

Seller must.

(1) place goods on, or in, conveyance, or de-

liver to inland carrier for loading;

(2) provide clean bill of lading or otheg trans-

portation receipt, freight collect;

(3) be responsible for any loss or damage, or

both, until goods have been placed in, or

on, conveyance at loading point, and clean

bill of lading or other transportation receipt

has been furnished by the carrier;

render the, buyer, at the buyers request and

“expense, assistance in obtaining the docu-

ments issued in the country of origin, or of

shipmen:, or of both, which the buyer may

require either for purposes of exportation,

or of importation at destination.

Buyer must

(1) be responsible for all movement of the

goods from inland point of loading, and

pay all transportation costs;

pay export taxes, or other fees or charges,

“af any, levied because of exportation; ;

be responsible for any loss or damage, or

both, incurred after loading at named in-

land point of departure; ;

(4) pay all costs and charges incurred in ob-

taining the documents issued in the coun.

try Sf origin, or of shipment, or of both,

which may be required either for purposes

of exportation, or of importation at des.

tination

ee a

w rt

ve ~

(11-B) “F.O.B. (named inland carrier at named

inland point of departure) FREIGHT PRE.

PAID TO (named point of exportation) **

——Under this term, the seller quotes a price including

transportation charges ta the named point of ex-

portation and prepays freight to named point of ex.

portation, without assyming responsibility for the

goods after obtaining a clean bill of lading or other

transportation receipt at named inland point of de-

parture,

Under this quotation

Seiler must ‘

(1) assume the seller's obligations as under ITA

(page 5), except that under (2) he must

provide clean bill of lading or other trans

portation receipt, freight prepaid to named

point of exportation

Buver must

assume the same buyers obligations as

under II-A (page 5), except that he does .

nor pav freight from loading point to

named point of exportation

* sce Note page t) ard Comments on all FOR Terme ‘page 9°

(II-C) “F.O.B. (named inland carrier at named

inland point of departure) FREIGHT AL-

LOWED TO (named point)’

Under this term, the seller quotes a price includ-

ing the transportation charges to the named pointy

shipping. freight collect and deducting the cost of ~

transportation, without assuming responsibility for

the goods after obtaining a clean bill of lading or

_ other transportation receipt at named inland point of

departure. — ;

Under this quotation:

Seller must

(1) assume the same seller's obligations as

under I-A (page 5), but deducts from his

° invoice’ the ‘transportation cost to named

point.

Buyer must Ae

(1) assume the same buyer's obligations as

under II-A (page 5), including payment of

freight from inland loading point to named

point, for which seller has made deduction.

(II-D) “F.O.B. (named inland carrier at named

point of exportation) °°

Under this term, the seller quotes a price intlud-

ing the costs of transportation of the goods to named

int of exportation, bearing any loss or damage, or

h; incurred up to that point.

Under this quotation:

Seller must

(1) place goods on, or in, conveyance, or de-

liver to inland carrier for loading;

(2) provide clean bill of lading or other trans-

portation receipt, paying all transportation

costs from loading point to named point

of exportation; .

(3) be responsibie for any loss or damage, or

both, until goods have arrived in, or on,

- inland conveyance at the named point. of

exportation;

> (4) render the buyer, at the buyer's request and

expense, assistance in obtaining the docu-

ments issued in the country of origin, or

of shipment, or of both, which the buyer

may require either for purposes of exporta-

tion, or of importation at destination.

Buyer must

(1) be responsible for all movement of the

goods from inland conveyance at named

point of exportation; ,

* See Note (page 4) and Comments on all FO B. Terms (page 9)

(2) pay export taxes, or other fees or charges,

if any, levied becauses of exportation;

(3) be responsible for any toss or damage, or

both, incurred after goods have arrived in,

~ or on, inland conveyance at the named.

point of exportation; '

(4) pay -all cOsts and charges incurred. in ob-

taining the documents issued in the coun-

try of origin, or of shipment, or of both,

wich may be required either for purposes

of exportation, or of importation at des- -

tination. doe

(II-E) “F.0.B. VESSEL (named part of

shipment)”*

;

Under this term, the seller quotes a price cover-

ing all expenses up to, and including, delivery of the

goods upon the overseas vessel provided by, or for,

the buyer at the named port,of shipment.

Under this quotation:

Seller must ; ;

(1) pay all charges incurred in placing —

actually on board the vessel designated and

provided by, or for, the buyer on the dare

or within the period fixed; i

(2) provide clean ship's receipt or on-board

bill of lading;

(3) be responsible for any loss or damage, or

both, until goods have been placed on

board the vessel on the date or within the

period fixed; e

(4) render the buyer, at the buyez’s request and

expense, assistance in obtaining the docu-

ments issued in the country of origin, or

of shipment, or of both, which the buyer

may vequire either for purposes of exporta-

tion, or of importation at destination.

Buyer must

(1) give seller adequate notice of name, sailing

date, loading berth of, and delivery time to,

the vessel;

(2) bear the additional costs incurred and all

_ tisks of the goods from the time when the

Seller has placed them at his disposal if

the vessel named by him fails to arrive or

to load within the designated time;

(3) handle all subsequent movement of the

goods to destination:

(a) provide and pay for insurance;

(b) provide and pay for ocean and other

transportation;

(4) pay export taxes, or other fees or charges,

if any, levied because of exportation;

* See Note (page 4) and Comments on all F.O B Terms (page 9).

- (3) be responsible for any loss or dam

, of

both, after goods have been loaded on board .

the vessel; «

(6) pay all costs and charges incurred in ob-.

taining the documents, other than clean

ship's i:ceipt or bill of lading, issued in

the country of origin,.or of ipment, or

of both, which may be required either for

pur of exportation, or of importation

at destination.

(II-F):“F.0.B. (named inland point in country

of importation) **

Under'this term, the seller quotes a pricecincluding

the cost of the merchandise and all costs of trans-

pertation to the named inland point in the country

of importacion.

Under this quotation:

Seller must

{1) fp and pay for all transportation to

(2)

the named inland point in the country of

importation; _

pay export taxes’ or other,fees or charges,

if any, levied because of exportation;

provide and pay for marine insurance,

— and pay for war risk insurance,

unless otherwise agreed upon between the .

seller and buyer;

be responsible for afy loss or damage, ot

both, until arrival of goods on conveyances

at the named inland point in the country

of importation; :

pay the costs of certificates of origin, con-

sular invoices, or any other documents 1s-

sued in the country of origin, or of ship-

ment, or of both, which the buyer may re-

quire for the importation of goods into the

country of destination and, where necessary.

for their passage in transit through another

country;

(7) pay all costs of landing, including wharf-

age, landing charges, and taxes, if any;

(8) pay all costs of customs entry in the coun-

try of importation;

‘ (9) pay customs duties and all taxes applicable

to imports, if any, in the country of im-

portation.

Nore: The seller under this quotation must realize

costs, and visks, and should therefore be cer-

tasn to obtain adequate imsurance. On the

other hand, the importer or buyer may desire

such quotations to velreve him of the risks of

the voyag@and to assure him of his landed

costs at sland point in country of importa

. “See ! Note (page 4) and Comments oh all F 0 B. Terms (page 9) -

7 8

tion. When competition is keen, or the buyer

$5 accustomed to such quotations from ot

sellers, seller may quote such terms, being

careful to protect bimself in an appropriate

manner.

Buyer must

(1) take prompt delivery of goods from con-

veyance upon arrival at destination;

(2) bear any costs and be responsible for all

loss or damage, or both, after arrival at

destination. ;

* Comments On All F.0.B. Terms

In connection with F.O.B. terms, che following

points of caution are recommended: !

1. The method of inland transportation, such as

trucks, railroad cars, lighters, barges, or aircraft

should be specified. o (8

2. If any switching charges are involved during

the inlarid transportation, it should be agreed, in ad-

vance, whether these charges are for accounteof the

seller or the buyer.

3, The term “E.0.B. (named port)”, without des-

ignating the exact point at which the liability of the

seller terminates and the liability of the buyer begins,

should .be avoided. The tise of this term gives rise

to disputes as to the liability of the seller or the

buyer in the event of loss or ‘damage arising while

the goods are in port, and before delivery to or on.

board the ocean carrier. .Misundégstandings may be

avoided by naming the specific point-of delivery.

4. If lhghterage or trucking is requiréd in the

transfer of goods from the inland’ conveyance to

ship's side; and there” is a cost therefor,>it should be

understood, in advance, whether this cost is for ac-

count of- the seller or the buyer.

5. The seller should be certain to notify the buyer

of the minimum quantity required to obtain a car-

load, a truckload, or a barge-load freight rate.

. 6 Under FOB. terms, excepting “F.O.B. (named

inland point in country of importation)”, the

“ obligation to obtain ocean freight space, and

marine’ and war tisk insurance, rests with the buyer.

Despite this obligation on the part of the buyer, in

many trades the seller obtains the ocean freight space,

and marine and War risk-insurance, and provides for —

shipment on behalf of the buyer. Hence, seller and

buyer must have an understanding as to whether the

buyer will obtain the ocean freight space, and marine

and war risk insurance, as is his obligation, or whether

the seller agrees to do this for the buyer.

7. For the seller's protection, hesshould provide

in his contract of sale that marine insurance obtained

by the buyer include standard warehouse to ware

e house coverage

9 *

. (U1) F.A.S. (Free Along Side)

Note: Seller. and buyer should consider not only the -

definitions but also the “Comments” given

at the end of this section (page 11), i”

- order to understand fully their respective. re-

sponsibilsties and rights under"F.AS.” terms.

“F.A.S. VESSEL (named port of shipment)”

Under this term, the seller quotes a price including

delivery of the goods along side Overseas \ vessel and -

withia reach of its loading. tackle. | -

Under this quotation: - oe

Seller must

(1) place goods along side vessel or on dock

designated and provided by, or for, buyer

on the date or within the period fixed;

pay any heavy lift charges, where necessary,

up to this point;

(3) be responsible for any loss or damage, or

both, until goods have been delivered along

side the vessel or on.the dock;

(4) render the buyer, at the buyer's request and

expense, assistance in obtaining the docu-

ments issued in the country of origin, or of

shipment, or of both, w' ich the buyer may

require either for purposes of exportation, .

or of importation at destination.

Buyer must °

(1) give seller adequate notice of name, sailing

date, loading berth of, and delivery time t6,

the vessel;

(2) handle all subsequent :aovement of the

goods from along side the vessel:

(a) arrange and pay for demurrage or

storage charges, or both, in ware-

house or on wharf, where necessary;

(b) provide and pay for insurance;

transportation;

(3) pay export taxes, or other fees or charges,

if any, levied hecatise of exportation;

(4) be responsible for any loss or damage, or

both, while the goods are on a lighter or

other conveyance along side vessel within

reach of its loading tackle, or on the dock

awaiting loading,- or until actually loaded

on board the vessel, and subsequent thereto;

(5) pay all costs and charges incurred in ob-

taining the documents, other than clean

dock or ship's receipt, issued in the coun-

try of origin, or of shipment, or of both,

which may be required ejther for purposes

of expggration, ‘or of importation at des- |

‘ tination.

’

F.A.S. Comments __, 4

1. Under F.AS. terms; the*obligation, to obtain

ocean freight space, and marine and war risk insur-

ance, rests with the buyer Despite this obligation on

the part of the buyer, in many trades the seller obtains

ocean freight spacé, and ‘marine and war risk insur-

ance, and provides for shipment on behalf of the

buyer. Isfothers, the buyer notifies the seller to make

delivery along side a vessel designated by the buyer >

and the buyer provides )his own marine and war risk.

insurance. Hence, seller and buyer must have an un-

derstanding as to whether the buyer will obtain the

_ocean freight space, agd marine and war risk insur-

* ance, as is his obligation, or whether the seller agrees

»° to do this for the buyer. . ‘

2. For the seller's protection,: he should provide

in his contract of sale that marine insurance obtained”

by the buyer include standard warehouse to ware-

house coverage. . : ; r

(IV) C..&F. (Cost and Freight)

Note: Seller and buyer should consider not only the

definitions but also the “C. & F. Comments”

_ (page 12) and the "C. & F. and CIF. Com-

® ments” (pages 14-15), inorder to understand

fully thew vespective responsibilities and

rights under "C. & F.” terms.

“C. & F. (named point of destination)” :

Under this term, thie seller quotes a price includi

the cost ‘of transportation to the named point ‘of

destination. ;

Under this quotation: .

Seller must

(1) provide and pay for transportation to

(2) pay export taxes, or other fees or charges, —

* af any, levied because of exportation;

(3) obtain and dispatch promptly to buyer, or

his agent, clean bill of. lading to named

point of destination,

- (4) where received-for-shipment ocean bill of

lading may

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