# Petition for a Writ of Certiorari — Melquist v. Illinois > Briefs, arguments, decisions, and more. URL: https://www.frixlaw.com/law-library/documents/brief%3Amicro_IA40385601_0857%3A2 ## Record - **Collection:** Supreme Court brief - **Document type:** Petition for a Writ of Certiorari - **Published:** January 1, 1963 - **Citation:** 372 U.S. 967 ## Text *- 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 a: 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 10 Ill ii 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- V 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 VI 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: vu 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: 33 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 iv 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 ? © v . 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 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 ~ ; ; Respondent Impleaded-Appellant:, - Petitioner. y 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 : 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. f - 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. ? “@ . aS 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. a ‘-. &e .% os <> 9] 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."’, 6 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 ma x 6 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- + r 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. 8 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 wv 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 Pi 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 12 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- 13 > 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 > oe 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 ; oS 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 od “* en ~~ . , » 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.° 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. : tJ 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 Pi at : | 20 | ae the judicial power is defined by Art. IIT, 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% e- v 24 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 a 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. 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.,”’ é > 32 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, 2 => 33 423-425, 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.’’ ee 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 \ 34 / 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, ° 35 Vi 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 s 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’ 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 ta 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 . 5a 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 > ae high tides, there was sufficient water for the tanker to pro-~ om 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. ba 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 Za 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. * FY 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 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, 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 4 [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 — “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. o 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] 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). o 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’ ~ ad re ry oe] s od > 5 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. =, % to . 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. ; 4. 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 - ia . ‘ 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 is 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 New York 20, New Yérk ©“ aN 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. p? a 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. t 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). 4 e 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 (4 ~ 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° 5 (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) 6 (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). 7 - (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: S Seller must {1) fp and pay for all transportation to (2) (6 . 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 © that he 11 accepting important responsibilities, 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; © (2) — clean dock or ship's receipt; (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; (c) provide and pay for ocean’ and other 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. 10 ’ . > - 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 named point of destination; © (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’ be eendered, be responsible for, any loss or damage, or beth, until the goods have been delivered into the custody of the ‘ocean Carrier; (5) where on-board ocean bil6fJading is re- quired, be responsible for any loss or dam- age, or Both, until the goods have been de- livered on board the vessel; (6) Pye e, at the buyer's request and expense, “€ertifitates of origin, consular invoices, of - any other documents issued in the.country . & 11 hy | . [Text truncated at 120,000 characters. The full text is on the page linked above.] --- Source: Frix Law Library, https://www.frixlaw.com/law-library/documents/brief%3Amicro_IA40385601_0857%3A2. Public record. Not legal advice.