# Appendix — Press v. United States > Briefs, arguments, decisions, and more. URL: https://www.frixlaw.com/law-library/documents/brief%3Amicro_IA40386411_0236%3A02 ## Record - **Collection:** Supreme Court brief - **Document type:** Appendix - **Published:** January 1, 1965 - **Citation:** 379 U.S. 965 ## Text SUPREME COURT OF THE UNITED STATES OCTOBER TERM, 1965 No. 63 PHILIP R. CONSOLO, PETITIONER, vs. FEDERAL MARITIME COMMISSION, ET AL. ON WRIT OF CERTIORARI TO THE UNITED STATES COURT OF APPEALS FOR THE DISTRICT OF COLUMBIA CIRCUIT INDEX VOLUME II Proceedings in the United States Court of Appeals for the District of Columbia Circuit (Case Nos. 16,366 and 16,369) 243 243 Supplemental joint appendix consisting of portions of proceedings before the Federal Maritime Board (Docket Nos. 827, 835 and 841) 243 243 Letter from Herman Goldman to Federal Mari- time Board, dated February 6, 1959 _....._..__... 248 244 Letter from Robert N. Kharasch to James L. Pimper, dated February 10, 1959 - oes 249 246 Letter from Robert N. Kharasch to Jane .. Pimper, dated April 2, 1959 _..... 251 247 Letter from Herman Goldman to James L. Pimper, dated April 7, 1959 _ seit 252 249 Supplemental complaint (exeerpts) “(Docket No. 827 Sub. No. 1) - ; 255 252 Brief of Flota Mevcaute. Grenceloubions, ‘S.A. IID > ccjectsscnnesinncteueigeatoq~veinabeinanubiasinmnabessenoiteiies 256 253 Recorp Press, Printers, NEw York, N. Y., Aucust 27, 1965 li INDEX Supplemental joint appendix consisting of portions of proceedings before the Federal Maritime Board (Docket Nos. 827, 835 and 841)—Continued Recommended decision of C. W. Robinson, Exam- iner, on reparation, dated October 5, 1960 ____. Exceptions of respondent Flota Mercante Gran- colombiana, 8.A., and brief in support (ex- cerpts) Report of the Board Order of the Board (Docket No. 827) _... Order in the United States Court of Appeals, dated August 11, 1961; vacated in part on August 31, 1961. (Case Nos. 15,330, 16,366 and 16,369) Transcript of proceedings (excerpts)—Novem- ber 5, 6, 7, 11, 13, and 21, and December 2, 1958 Testimony of Jose J. Borrero— (recalled )— direct Jack Friedlander— (recalled )— direct cross redirect Philip R. Consolo— direct cross Louis F. Meyer— direct cross Maxwell Boyarsky— direct Jose J. Borrero— (recalled )— direct Original Print 259 255 267 262 270 265 284 281 285 282 288 283 288 283 289 285 290 285 291 287 291 287 299 295 318 317 319 319 319 319 324 324 INDEX lii Original Print Supplemental joint appendix consisting of portions of proceedings before the Federal Maritime Board (Docket Nos. 827, 835 and 841)—Continued Transcript of proceedings (excerpts)—May 9, 10, 11, 12, and 26, 1960 __ 332 326 Testimony of Max Boyarsky— (recalled )— direct 335 329 Louis F. Meyer— direct 336 330 Shillo Adir— direct : 337 331 Louis F. Meyer— (resumed )— direct oneal 337 332 cross 338 333 Shillo Adir— (resumed )— direct 340 335 Philip R. Consolo— direct ie 342 338 cross ; 3 343 338 William Fanelle— direct _ a. 347 344 cross = 356 353 SED aa 359 357 Alberto Sanchez— a a 359 358 Harald Solvang— direct : 363 361 cross - me 375 374 direct : 382 383 recross 383 384 Jose J. Borrero— direct ; 384 386 Alfred A. Campion— ME eae Ano a 389 391 Cross ___._ Seam ee 398 401 —— = i Original Print Gepplemuntel joint oisiat consisting of portions of proceedings before the Federal Maritime Board (Docket Nos. 827, 835 and 841)—Continued Transcript of proceedings (excerpts)—May 9, 10, 11, 12, and 26, 1960—Continued iv INDEX Samuel G. Staff— direct 402 406 cross 408 419 Jack Friedlander— direct 410 415 cross 417 493 Louis Grossman— direct 421 495 Cross -... 424 499 Alvaro Diaz S.— direct 426 430 cross 434 439 Exhibits: 436 441 No. 15—Agreement between Flota Mercante Grancolombiana, 8.A., and Leonard Morey and Samuel G. Staff, dated July 20, 1955 (excerpts) (Docket No. 827) —-..--. 436 441 No. 16—Agreement between Flota Mercante Grancolombiana, S.A., and Panama Ecuador Shipping Corporation, dated May 22, 1957 (excerpts) 436 442 No. 20—Letter from Flota Mercante Gran- colombiana, S.A., to Panama Ecuador Ship- ping Corp., dated June 19, 1958 437 443 No. 41—Consolo banana purchase and sale ex- perience (excerpts) (Docket No. 827) _ __ 439 445 No. 42—Computation of damages for each Grancolombiana sailing (excerpts) (Docket No. 827) 442 448 No. 54—Banana freighting agreement— freighter vessels—between Grace Line Inc. and Banana Distributors Inc., dated May 2, 1958 (excerpts) os 444 450 INDEX Supplemental joint appendix consisting of portions of proceedings before the Federal Maritime Board (Docket Nos. 827, 835 and 841)—Continued Exhibits—Continued No. 83—Letter from Flota Mercante Gran- colombiana, S.A., to Andes Fruit & Produce Corp., dated July 8, 1957 No. 88—Letter from Flota Mercante Gran- colombiana, S.A., to Wm. Turino Company, Inc., dated July 8, 1957 — No. 107—Schedule of freights collected on ba- nana imports into United States North At- lantic Ports in vessels of Flota Mercante Grancolombiana, 8.A., after “Cdad. de Bar- ranquilla” Voy. 5 North No. 111—Consolo banana purchase and sales experience No. 112—Computation of damages for each Grancolombiana sailing No. 113—Final summary of damages for Gran- colombiana sailings No. 115—Baltimore Service -.. No. 116—Schedule of cubic capacity allot- ments ; Proceedings in the United States Court of Appeals for the District of Columbia Circuit (Case Nos. RD ate ND si cient ecsnittimctetteecoomtcreineeenes ia Second supplemental joint appendix consisting of portions of proceedings before the Federal Mari- time Board (Docket Nos. 827, 835 and 841) _. Complainant’s reply to petition of respondent Grancolombiana for extension of time to an- swer complaint (excerpts) (Docket No. 827) Letter from George F. Galland to G. O. Basham, dated April 10, 1958 __. Petition to intervene (Docket No. 827) Ruling on motion for production of documents for inspection and copying (Docket Nos. 827 and 835) Vv Original Print 445 451 446 452 447 453 448 454 456 450 451 457 452 458 455 461 456 462 457 462 463 463 465 465 467 467 468 468 vi INDEX Second supplemental joint appendix consisting of portions of proceedings before the Federal Mari- time Board (Docket Nos. 827, 835 and 841)— Continued Ruling on requests for bills of particulars and for discovery and inspection of documents (Docket Nos. 827 and 841) Ruling on motions to take depositions and notice of further prehearing conference (Docket Nos. 827 and 841) Brief for petitioner Flota Mercante Grancolom- biana, S.A., aud proposed findings of fact and conclusions (excerpts) (Docket No. 835) _. Brief of Panama Ecuador Shipping Corporation (excerpts) (Docket Nos. 827, 835 and 841) __ Brief of complainant Philip R. Consolo (ex- cerpts) (Docket Nos. 827, 835 and 841) Complainant’s proposed findings and conclu- sions . Brief of Public Counsel (excerpts) (Docket Nos. I a Reply of Public Counsel to exceptions and to motion to reopen the record for receipt of additional evidence (excerpts) (Docket Nos. _ 8s ” § : 4) er ere re Letter from William J. Lippman to Examiner C. W. Robinson, dated November 9, 1959 Letter from R. C. Giallorenzi to Examiner C. W. Robinson, dated November 13, 1959 Letter from Robert E. Mitchell to Renato C. Giallorenzi, dated November 18, 1959 Petition for review in the United States Court of Appeals (excerpt) (Case No. 16,366) Petition for review of an order of the Federal Maritime Board in the United States Court of Appeals (excerpt) (Case No. 16,369) Brief for respondents in the United States Court of Appeals (excerpts) (Case Nos. 16,366 and pio shee Se ee Original Print 469 469 471 47] 472 472 473 473 475 475 479 480 480 480 483 484 484 484 486 488 488 490 508 491 508 491 514 492 Original Print Second supplemental joint appendix consisting of portions of proceedings before the Federal Mari- time Board (Docket Nos. 827, 835 and 841)— Continued Petition to reopen (excerpts) (Docket Nos. 827 and 827 (Sub. No. 1)) 525 493 Commission’s notice of reopening of proceeding (Docket No. 827 (Sub. No. 1)) -—------------ 530 498 Respondent’s reply brief upon remand and re- consideration (excerpt) (Docket No. 827 (Sub. No. 1)) 540 499 Commission’s report and order dated September 16, 1963 (Docket No. 827 (Sub. No. 1)) ~~ 562 500 Order directing payment of reparations (Docket No. 827 (Sub. No. 1)) ——-.---..... 575 514 Errata sheet to Commission’s report (Docket No. ee BO ited ech nienininimnns 576 515 Further supplemental certifications of record by Federal Maritime Commission in the United States Court of Appeals (Case Nos. 18,230 RED iceiecustaa ena iieese: 577 515 Official Minutes (excerpts) (Docket Nos. 827, 827 (Sub. No. 1), 835 and 841) — ; 578 516 May 1, 1958 (Regular Meeting) ..-............. 578 516 June 22, 1959 (Regular Meeting) 580 519 June 22, 1959 (Special Meeting) — 581 520 January 25, 1961 (Special Meeting) _......_- 582 520 February 9, 1961 (Regular Meeting) 583 521 March 24, 1961 (Special Meeting) _..._.____ - 584 522 March 27, 1961 (Regular Meeting) 585 523 March 28, 1961 (Special Meeting) —......... 586 524 July 3, 1962 (Special Meeting) ee 587 524 October 29, 1962 (Regular Meeting) _...._ _. 588 526 September 16, 1963 (Regular Meeting) ___- S.A.—Statement as to when each of our vessels entered the banana trade between Ecuador and United States North Atlantic Ports (Docket No. 827) __. GB Ea A rane Vili INDEX Second supplemental joint appendix consisting of portions of proceedings before the Federal Mari- time Board (Docket Nos. 827, 835 and 841)— Continued Exhibits—Continued No. 15—Agreement between Flota Mercante Grancolombiana,- 8.A., and Leonard Morey and Samuel G. Staff, dated July 20, 1955 (excerpts) (Docket No. 827) —--------. No. 33—Banana Freighting agreement— Freighter Vessels—between Grace Line, Ine. and Philip R. Consolo, dated Septem- tw Oh ie (eee =... No. 34—Letters from Chilean Line to Philip R. Consolo, dated July 28, 1958; September 3, 1958 (excerpts) and September 24, 1958 (excerpts) No. 36—Memorandum of agreement between Grace Line Inc. and Philip R. Consolo, dated July 15, 1953 (excerpt) —~.-... No. 37—Memorandum of agreement between Grace Line Ine. and Philip R. Consolo, dated July 15, 1953 .. oe Letter from Grace Line ‘Ine. to Mr. Philip R. Consolo, dated March 24, 1955 . Letter from Grace Line Ine. to Mr. Philip R. Consolo, dated July 20, 1955 No. 41—Consolo banana purchase and sale experience (excerpts) (Docket No. 827) -... No. 42—Computation of damages for each Grancolombiana sailing (excerpts) (Docket No. 827) No. 110—Baltimore Stevedoring Grancolom- biana arrivals, 9/18/59-4/15/60 (Docket No. 827) Transcript of proceedings (excerpts) —-.. Prehearing conference, May 7, 1958 (Docket Nos. 827 and 835) _.... Further prehearing conference, September 22, 1958 (Docket Nos. 827 and 841) _....__. Original Print 591 592 593 597 602 606 607 608 610 612 613 613 621 528 530 531 536 556 INDEX ix Original Print gecond supplemental joint appendix consisting of portions of proceedings before the Federal Mari- time Board (Docket Nos. 827, 885 and 841)— Continued Transcript of proceedings (excerpts )—Continued Hearing, November 5, 1958 (Docket Nos. 827, 835 and 841) 622 557 Hearing, November 6, 7, 11, 12, 20, 21 and 24, December 1, 2 and 4, 1958 623 558 Testimony of Philip R. Consolo— direct Se 623 558 cross = 628 564 redirect 629 566 cross 633 570 Jack Friedlander— pS aa ee 638 574 Jose J. Borrero— direct a 649 586 Jack Friedlander— eed a An NO 654 591 a ES 658 595 Frank Visconti— direct 660 596 Jose J. Borrero— Cross - 663 599 Transcript of proceedings (excerpts) May 9, 1960 ss 671 607 Testimony of Max Boyarsky— redirect ats 671 607 Shillo Adir— examination by Mr. Kharasch 672 609 Louis F. Meyer— direct 673 610 Shillo Adir— (resumed )— direct 680 617 AP RNR SARE SEDI a 680 617 Transcript of proceedings (excerpts) October 24, 1962 691 618 Oral argument (Docket No. 827 (Sub. No. 1)) 691 618 Motion of intervenor Philip R. Consolo 1) to dis- miss the petition for review for lack of juris- diction, or 2) alternatively, to require petitioner to file bond (Case No. 16,369) Memorandum in support Reply of respondents to intervenor’s motion to dis- miss or require a bond (Case No. 16,369) Intervenor’s reply to answers to motion to dismiss or require bond (excerpts) (Case No. 16,369) Brief for petitioner Philip R. Consolo (excerpts) (Case No. 16,366) Reply brief of Philip R. Consolo, petitioner in Case No. 16,366; and brief as intervenor in Case No. 16,369 (excerpt) —... Opinion, Washington, J., Case Nos. 15,330; 16,366 and 16,369 decided April 26, 1962 Judgment, Case Nos. 15,330; 16,366 and 16,369, dated April 26, 1962 ___. Petition of Flota Mercante Grancolombiana, Ss. A. for review of an order of the Federal Maritime Commission (excerpts) Case No. 18230 Petition of Philip R. Consolo for review of a por- tion of an order of the Federal Maritime Com- mission (excerpt) (Case No. 18235) — Supplement to petition of Flota Mereante Gran- eolombiana, 8.A. for review Case No. 18,230 _. Prehearing stipulation (excerpts) (Case Nos. ES TIE sibiciiisininsaicnecesnatebicalilicinncebiilea Addendum to prehearing stipulation (Case Nos. 18,230 and 18,235) ~ Prehearing order, December 16, 1963, “Case ‘Nos. 18,230 and 18,235 . 7 Order granting motion to supplement petition for review, Case No. 18,230 . * Opinion, Washington, J. Case. ‘Nos. ‘18, 230 ‘and 18,235, decided December 17, 1964 .. mane Judgment, Case Nos. 18,230 and 18 235, ‘dated De- ee = Order allowing certiorari . Original Print 694 = 620 695 621 719 = 637 728 734 847 737 = 649 739 650 758 «668 759 669 767 676 768 = 677 770 ~—s 679 775 ~—- 683 777 ~—s 684 778 ~—- 685 779 ~=—s-686 794 699 795 700 243 [fol. 242] [File endorsement omitted] (fol. 243] In THE United States Court or ApPEsis For tHe District or Cotumsia Circuit No. 16,366 Puiuip R. Consoro, Petitioner, Sad v Feperat Maritime Boarp and THe Unitep States or America, Respondents, Frora Mercante Grancotomsiana, §.A., Intervenor. No. 16,369 Frora Mercante Grancotomsiana, S.A., Petitioner, v. FeperaL Maritime Boarp and Tse Unitep States or America, Respondents, Puiuip R. Consoio, Intervenor. Petition for Review of an Order of the Federal Maritime Board Supplemental Joint Appendix—Filed December 7, 1961 244 [fol. 248] Berore THE F'eperaL Maritime Boarp Herman GoLpMAN Attorney & Counselor At Law Equitable Building 120 Broadway Tel. REctor 2-5535 Cable Address: “Goldenlaw” New York 5, N.Y. February 6, 1959 Federal Maritime Board Washington 25, D.C. Re: Docket No. 827—Philip R. Consolo v. Flota Mercante Grancolombiana, S.A. Docket No. 835—Flota Mercante Grancolombiana, S.A. —Carriage of Bananas from Ecuador to the United States, Docket No. 841—Banana Distributors, Inc. v. Flota Mer- cante Grancolombiana, S.A. Gentlemen: Pursuant to $201.230 of the Rules of Practice and Pro- cedure request, on behalf of Panama Ecuador Shipping Corporation, is hereby made for an enlargement of fifteen (15) days time within which to file exceptions and a brief in support thereof to the decision recommended by Ex- aminer C. W. Robinson, which said decision was served on February 4, 1959. The enlargement of time which is requested is urgently required adequately to deal with such recommended deci- sion for the reason that the premises upon which the deci- sion proceeds are, I believe, contrary to or without founda- tion in the record. In order to establish that such is the 245 case, and to comply with the requirements contained in (201.228 of the Rules, and specifically the requirements therein contained that alleged errors be stated with partic- ularity and with references to the pages of the transcript and exhibit numbers, it is necessary that the transcript of the proceedings, which numbers approximately 1900 pages, and more than 100 exhibits be carefully considered. (fol. 249] I believe that the substantial interest of Panama Ecuador Shipping Corporation in these proceedings cannot adequately be conserved or protected if in the preparation of exceptions and brief in support thereof the time to fiie such exceptions and brief is limited to the fifteen (15) day period provided by §201.228. Apart from the foregoing consideration the enlargement of time is sought for the further reason that Flias Rosen- zweig, Who is the attorney in my office who hrs had charge of and is most familiar with this matter, will, apart from other previously scheduled business enjsagements, be en- gaged within the balance of the fifteen (15) day period re- maining under §201.228 in (a) a trial of an action of an expected two days duration, (b) a hearing in an arbitration proceeding which it is anticipated will consume one day, and (c) at least two examinations before trial in actions now pending in the United States District Court for the Southern District of New York which examinations will consume the better part of two days. It is, therefore, respectfully submitted that the enlarge- ment of time herein requested be granted and that the time of Panama Ecuador Shipping Corporation to file excep- tions, and brief in support thereof, to the recommended decision be extended to and including March 6, 1959. Respectfully submitted, Herman Goldman Attorney for Panama Ecuador Shipping Corporation 246 BrEForE THE FEepERAL Maritime Boarp February 10, 1959 Mr. James L. Pimper Sec sry Federal Maritime Board Washington 25, D. C. Re: Dockets 827, 835, 841 Dear Mr. Pimper: This refers to Mr. Goldman’s letter of February 6, 1959, on behalf of intervener, Panama Ecuador Shipping Cor- poration, requesting an enlargement, until March 6, 1959, of the time within which to file exceptions in these pro- ceedings. We oppose the request, for the following reasons: [fol. 250] (1) The letter asserts that additional time is required so that the record may be “carefully considered.” But Panama Ecuador submitted a 50-page brief to the Examiner which cites the record in great detail. It thus would appear that most of the work already has been done. (2) Panama Ecuador re-intervened in these proceedings at a late stage during the hearing (after once successfully demanding that it be let out of the case). Its petition for intervention was granted at the hearing only after the Examiner received assurances. that the late—intervention would create no delays (Tr. 1048-53). The delay now sought is in direct conflict with representations made in the peti- tion for intervention. As a late intervener, Panama Ecua- dor’s interest in delay must be subordinated to the interests of complainant, Philip R. Consolo, who is still being denied the right to ship via Grancolombiana in defiance of two prior decisions of the Board. (3) The létter states that Mr. Rosenzweig has commit-.-2 ments which will occupy a portion of his time during the balance of the 15-day period remaining before exceptions are due. We would like to accommodate counsel, if it were possible to do so without jeopardizing the interests of our a _ 247 client. However, since the conflicting engagements will con- sume only a fraction of the 15-day period, we must oppose any extension of time. Inasmuch as the record already has peen fully briefed, no convincing reason is shown why ex- ceptions may not be prepared in the period allowed. Very truly yours, Robert N. Kharasch William J. Lippman Attorneys for Complainant Philip R. Consolo ee, All counsel [fol. 251] BerorE THE FEepERAL MariTiME BoarD April 2, 1959 James L. Pimper, Esq. Secretary Federal Maritime Board Washington 25, D. C. / Re: Docket Nos. 827, 835, 841 Dear Mr. Pimper: _.Phis-refers to the notice setting these proceedings for- oral argument before the Board on June 10, 1959. In the circumstances of this case, the delay of more than two months would be highly prejudicial to the interests of our client. We therefore request that the date be advanced so that the argument may be held at the Board’s earliest convenience, for the following reasons: (1) Consolo’s complaint has been pending since Novem- ber 15, 1957. The complaint alleges unlawful exclusion from shipping facilities. Any unreasonable delays in the final decision, therefore, serve to perpetuate the exclusion - 248 —found by the Board in Consolo v. Grace Line, 4 F.MB. 273, and Banana Distributors v. Grace Line, 5 F.M.B, —_ and by the Examiner in his recommended decision in this case to have been unlawful. (2) Since his complaint was filed, complainant has dili- gently prosecuted it before the Board. Respondent Gran. colombiana also has expressed an interest in obtaining a speedy determination of the issues, perhaps with a view to minimizing reparations. Intervener Panama Ecuador, how. ever, is now and for several years has been monopolizing the refrigerated facilities. Its participation in the case has been characterized by repeated attempts at delays. A fur. ther long delay for oral argument thus amounts to a wind- fall to Panama Ecuador, and grants it an extension of its monopoly. Because most of the issues in this case have previously been considered by the Board, a relatively brief and simple oral argument is required. If any early argument is at all possible, we urge that in [fol. 252] the interest of justice, to avoid real prejudice to a diligent litigant, the case should be set for quick hearing. Very truly yours, Robert N. Kharasch Attorney for Philip R. Consolo ee. All counsel bee. Philip R. Consolo 249 BerorE THE F'eperaL Maritime BoarpD HERMAN GOLDMAN Attorney & Counselor at Law Equitable Building 120 Broadway New York 5, N.Y. April 7, 1959 James L. Pimper, Esq. Secretary Federal Maritime Board Washington 25, D.C. Re: Dockets 827, 835, 841 Dear Mr. Pimper: I refer to the letter of April 2, 1959 addressed to you by Mr. Kharasch regarding the notice fixing the date for oral argument to the Board and requesting that the date of such argument be advanced. I would suppose that the date fixed by the Board for such argument was the earliest date which suited the convenience of the Board with due regard for the other business which the Board has before it. Implicit in Mr. Kharasch’s re- quest is the suggestion that other matters be deferred and that his client be preferred—such preference to be af- forded because Consolo’s complaint was “diligently prose- cuted” before the Board and Panama Ecuador’s “partici- pation in the case has been characterized by repeated at- tempts at delays”. I would not trouble to address this letter to the Board were it not for the fact that it has become impossible further (fol. 253] to suffer uncomplainingly the unjust insinuations which Consolo’s counsel now spread on the record for a fourth time—such insinuations have already been con- tained in their brief to the Examiner, their main brief to the Board, and in their reply to Panama Ecuador’s excep- tions. The time has come to set the record straight. 250 A—As to the “diligent prosecution” of Consolo’s com. plaint: 1) I know of no action taken by Consolo’s counsel to expedite the hearings in these dockets, and I believe that the record will demonstrate that such counsel did nothing other than to proceed with the matter in the regular, normal course which like matters pursue before the Board. If this be the “diligent prosecution” of which Mr. Kharasch speaks it should not serve to obtain for him or his client a preferred position. 2) I believe that Consolo or his counsel delayed the pro- ceedings on the common carriage issue. The record will disclose that it was at the insistence of Consolo’s counsel that the issue of reparation was tried first. Session after session before the Examiner was consumed in putting in the proof of Consolo’s alleged damages, and it was only on the motion of Banana Distributors that an end was finally put to that time consuming procedure and the hear- ings turned in the direction of the issue of common carriage, the sole issue before the Board. 3) “Diligent prosecution” would, I believe, comprehend compliance with the Board’s rules. Such rules require that copies of briefs be dispatched to other counsel in such good time as to permit of their receipt by such other counsel on the date the brief is due to be filed with the Board, Consolo’s counsel has consistently ignored this requirement. Copies of their brief to the Examiner and their principal brief to the Board were first mailed to other counsel on the filing date. Their reply to the exceptions of Panama Ecuador and Flota Grancolombiana was due on March 21. In fact it was not served on the Board until March 23 on which date copies were first mailed to other counsel. I do not write of this failure of Consolo’s counsel to comply with the Board’s rules as a suggestion that such briefs be not considered but only to point out that Mr. Kharasch’s as- sertion of “diligent prosecution” is one to which he would have difficulty in gaining adherents. [fol. 254] B—As to the “attempts at delays” by Panama Ecuador: _— 251 1) The record will demonstrate that Panama Ecuador’s witnesses were available when required and testified without prolixity. The record will also disclose that the time con- sumed in cross examining Panama Ecuador’s principal witness probably exceeded by far the time consumed in his direct examination. 2) Mr. Kharasch’s letter fails to particularize the “re- ated attempts at delays”. I assume they refer to (a) the refusal to waive briefs to the Examiner and (b) the applica- tion for a brief extension of time within which to file ex- ceptions to the Examiner’s recommended decision. Suffice it to say that in both instances the Examiner upheld Panama Ecuador’s position. Perhaps the best proof of the fact that Consolo’s counsel required the time allowed by the Exam- iner consists of the fact that they utilized every minute of the allotted time—even, as heretofore observed, at the expense of compliance with the rules. Lastly, I would point out only that Mr. Kharasch’s sug- gestion that only “a relatively brief and simple oral argu- ment is required” does not square too readily with his request for 114 hours time for oral argument. I note also that he has studiously avoided mention of the fact that the reversal by the Court of Appeals of the Board’s deci- sion in the Banana Distributors case casts a new complexion ~on the Whole-matter and makes it~one~ ot considerable complexity. Very truly yours, ce All parties 252 [fol. 255] Service (omitted in printing). BrEFrorE THE Feperat Maritime Boarp Docket No. 827 (Sub. No. 1) Puiip R. Consoto, Complainant, v. Fora Mercante GRraNcoLoMBIANA, S.A.., Respondent. SUPPLEMENTAL CompLaint—Received November 18, 1959 Complainant alleges upon information and belief : 1. The allegations of paragraphs 1 through 10 of the original complaint in Docket 827 (copy attached hereto and marked Appendix A) are repeated and incorporated herein. Wherefore, complainant requests that in addition to the relief requested in his original complaint in Docket 827, an order be issued by the Board (a) ordering Grancolombiana to pay reparation to complainant for his damages during the period November 15, 1957, through September-t, 1959, — in the amount of $250,000 and (b) awarding such other and further relief as the Board may determine to be just and reasonable. Philip R. Consolo, 4425 North Michigan Avenue, Miami Beach, Florida, By: Robert N. Kharasch, Attorney. [File endorsement omitted] a 253 (fol. 256] Berore THE FreperaL MaritiMeE BoarpD * * * ~ * * * Barer or Frora Mercante Grancotomsiana, S.A.— July 7, 1960 Table of Contents Page Introduction 1 The Issues 4 The Facts 5 Argument: Point I —Complainant’s Hands Are Uneléan .... 45 Point II —Consolo Is Not The Real Party In In- terest 48 Point I1]—Consolo Has Neither Suffered Nor Shown Damage 51 Point IV —Consolo’s Standard of Damages, Apart From—Other Inadequacies,Is_Inap-... 4 plicable 70 Conclusion .. 77 Certificate of Service 78 Citations American Banana Co. v. United Fruit Co., 160 Fed. 184, 188 69 Areher- Daniels-Midland Co. v. Great Northern R. Co., 171 ICC 192, 195 68 Atlantic Coast Line R. Co. v. Geraty, 4 Cir., 1908, 166 Fed. 10 75 Bracket v. McNair, 14 Johns. (N.Y.) 170 (1817) ........ 73 Bridgeman v. The Steamboat Emily, 18 Iowa 510, 512 (1865) 74 254 Page Brooklyn Eastern District Term. Co. v. US., 287 U.S. 170, 175 — Brownlee v. Malco Theatres, (W.D. Ark. 1951) 99 F.Supp. 312 50, 69 Central Coal & Coke Co. v. Hartman, 8 Cir. 1901, 111 Fed. 96 . 49 Eastman Kodak Co. v. Blackmer, 2 Cir. 1921, 277 Fed. 694 iieantincisiies 47 [fol. 257] First National Pictures v. Robison, 9 Cir 1934, 72 F.2d 37 47 Goodman, A. J. & Son v. United Lacquer Mfg. Corp. (D.C. Mass. 1949) 81 F.Supp. 890 .. 69 Grund v. Pendergast, 58 Barb. 216, 223 (1870) .......... 74 Hayes Pump & Planter Co. v. Atchison, T. & S.F. Ry. Co., 171 ICC 13, 19 Hernandez v. Arnold Bernstein S.M.B.H. (S.D.N.Y.) 116 F.2d 849 (2 Cir.), cert. denied, 85 L.Ed. 1539 ....13, 76 ICC v. U.S. ex rel. Campbell, 289 U.S. 385, 390-3 (1933) 08-60, 63 Kobe, Inc. v. Dempsey Pump Co., 10 Cir. 1952, 198 F.2d 416, 426 63 McWhirter v. Monroe Cale. Mach. Co. (W.D. Mo. ——1948) 76 BF Sup p65 6 —seesereseeses cess 22 si cc Scie AI Mid-West Theatres Co. v. Cooperative Theatres, (E.D. Mich. S.D. 1941) 43 F.Supp. 216 47 Montgomery Ward & Co. v. Northern Pac, Term. Co. (D.C. Ore. 1953) 128 F.Supp. 475 46 New Mexico ex rel. McLean v. Denver & R.G.R. Co. 203 U.S. 38 38, 70, 73 Patrick Lumber Company v. Calmar Steamship Cor- poration, 2 U.S.M.C. 494 76 Peller v. International Boxing Club, 7 Cir. 1955, 227 F. 2d 593 50, 69 Pennsylvania R. Co. v. International Coal Co., 230 U.S. 184, 203-7, 212, 213-4, 243-4 ..... 51-8, 61, 68 Pittsburgh Banana Corp. v. N.Y., N.H. & H.R. Co., 195 ICC 300, 301-2 68 255 Page Twentieth Century-Fox Film Corp. v. Brookside Thea- tre Corp., 8 Cir. 1952, 194 F. 2d 846, 859 -.................-- 63 Waterman v. Stockholms, 3 F.M.B. 248, 249 -...........--. 60, 61 Statutes Interstate Commerce Act, Section 8 52 Shipping Act, Section 22 48, 52 Treatises Benedict on Admiralty, 6th Ed. Vol. II, Section 230, Page 48 ....... . 48 Dobie, Bailments and Carriers, Section 159 -.................-. 70-1 [fol. 259] BerorE THE FeperaL Maritime Boarp Complainant found injured to the extent of $259,812.26 by respondent’s refusal to allocate to him refrigerated space on respondent’s vessels for the carriage of bananas from Ecuador to North Atlantic ports of the United States, and reparation in that amount should be awarded, with 3 _—_—jnterest.— ———- ~~ — - - — -~ ~ +--+ Robert N. Kharasch and William J. Lippman for complainant. Renato C. Giallorenzi and John H. Dougherty for respondent. RecoMMENDED Decision or C. W. Rosrnson, EXxaMINER, on Reparation—October 5, 1960 In Philip R. Consolo, et al. v. Flota Mercante Gran- colombiana, 5 F.M.B. 633 (1959),' the Board found, among other things, that respondent (Flota) was a common carrier by water between the west coast of South America and North Atlantic and Gulf ports of the United States, and 1 A consolidation of Docket Nos. 827, 835, and 841. — 256 that its practice of contracting all of its refrigerated space on vessels in those trades to one shipper of bananas to the exclusion of other qualified shippers of bananas, was un. justly discriminatory and unduly and unreasonably preju- dicial and disadvantageous, in violation of sections 14 Fourth and 16 First of the Shipping Act, 1916. Nos, 997 and 841 were held open for further action on the claims for reparation, if any. On September 1, 1959, in compliance with the Board’s order, Flota executed space contracts with all qualified shippers of bananas. A supplemental complaint was filed by complainant Con- solo (No, 827 (Sub. No. 1)) on November 18, 1959, the allegations of which are generally the same as those in No. 827. The avowed purpose of the supplemental com- plaint is a “probably unnecessary precaution against the running of the statute of limitations following the date of the first complaint” (footnote 2, page 2, of complainant’s opening brief on reparation). Hearing on Consolo’s claim [fol. 260] for reparation has been held, and the parties have filed opening and reply briefs. The Board has found Consolo to be an experienced and qualified banana shipper (5 F.M.B. 635, 638). Although re- spondent delved into that phase of the matter during the reparation hearing, no serious point is made of it on brief. There is therefore no need for discussion of complainant’s ability to finance the shipments upon which his claim for reparation is based. It is undisputed that an ample quantity of good bananas was available to Consolo in Ecuador had he been able to secure space on Flota’s vessels. Flota argues that Consolo should have tendered bananas when he ap- plied for space, but with a commodity as perishable as bananas, their tender would not have been a very smart move on Consolo’s part, and certainly he was not required to perform such a “futile and idle act.” Philip R. Consolo v. Grace Line, Inc., 4 F.M.B. 293, 303 (1953). Tender was not required in Hernandez v. Bernstein, 116 F.2d 849, 852 (2d Cir. 1941). In assessing the possibility of sales of bananas which Consolo might have imported on Flota’s vessels had he been permitted to ship, it should be borne in mind that the volume 257 would not have been in addition to the quantity actually handled by Flota since it would have been stowed in space which other shippers were occupying. Intervener Panama Ecuador Shipping Corporation (Panama Ecuador), which had all the space but gave it up subsequent to the Board’s decision on the merits, now charters entire vessels and imports 31,000 more stems of bananas each week than it did when shipping via Flota and via Grace Line, Inc. The bananas Consolo would have had on the Flota vessels would have been sold at the prevailing market prices at the principal North Atlantic ports. The prices were substan- tially the same at all of those ports. Wholesalers and jobbers of bananas require a continuing supply of fresh fruit because of the perishable nature of the commodity, hence the more vessel arrivals there are the better oppor- tunity the importer has to market his fruit at favorable rices. {fol 261] The sale of bananas on the wholesale level is highly competitive, and purchasers generally are not tied by contract or otherwise to a particular importer. The record is clear, and it is so found, that Consolo could have sold all the bananas he would have been able to import on Flota’s vessels had he been able to secure space. ft having been found that-Consolo-was~an~experienced and qualified shipper of bananas, that he was denied space unlawfully on Flota’s vessels, that an adequate supply of good-quality bananas was available to him in Eeuador dur- ing the times under consideration, that he was financially able to purchase the fruit, and that he could have sold the fruit at market prices had he been able to utilize Flota’s vessels, the remaining issue is the amount of reparation to which he is entitled, if any. Generally, the measure of damages for failure of a com- mon carrier to accept a shipment is the difference between the value of the commodity at the place it would have been tendered and its value at destination, less the cost of trans- portation. McLean v. Denver & Rio Grande R.R. Co., 203 US. 38, 49 (1906) ; Sonken-Gulamba Corp. v. A.T. & S.F., 124 F.(2d) 952, 958 (8th Cir. 1942). Flota contends, how- ever, that Consolo could have minimized his damages by 258 utilizing other available transportation, three possibilities being suggested: (1) Grace Line, (2) Chilean Line, ang (3) charter of vessels. (a) During the period under consideration there was no additional space available to Consolo on the Grace ships, and even when some of the Grace shippers relinquished their space in 1958 Consolo was unable to obtain any of it, (b) In September 1955, when the hearings commenced in Banana Distributors, Inc. v. Grace Line, Inc., 5 F.M.B. 278 (1957) and 5 F.M.B. 615 (1959), Chilean Line was not a satisfactory carrier of bananas because of its irregular service and transit time. The service had improved to such an extent in 1958, however, that Consolo booked the entire available refrigerated space for five consecutive voyages, During this period Consolo requested space for an addi- tional 18 or 24 months but was refused. After Chilean Line had circularized the trade in 1959 for prospective shippers, [fol 262] replies were received from Consolo and one Chilean company, the latter eventually receiving the space. Even as late as May 1960 (the time of the present repara- tion nearing) Chilean Line did not furnish a weekly ser- vice such as is furnished by Grace Line and Flota. Fur- thermore, Chilean Line generally carries no bananas during the Chilean fruit season (December-May). (c) Although Consolo was required to use reasonable efforts to minimize his damages, this does not mean that he should have chartered entire refrigerated vessels. It ill-behooves a common carrier, which has failed in its duty to perform for the public in general, to insist on such extreme counter measures by a shipper deprived of space. Consolo’s first attempt to secure space on Flota’s vessels was late in 1954. Further discussions were had in the spring of 1955, at which time Consolo inspected the space on one vessel. A fixed price for the space was set by Flota, but since Consolo was not satisfied with the physical charac- teristics of the facilities, he made a counter offer, which was rejected. In July 1955 the space was leased to the organizers of intervener Panama Ecuador. Consolo again 259 inquired about space possibly late in 1955 and also in 1956, put was told that all of it was under contract. By letter of February 26, 1957, Flota advised Consolo to submit any hid to the home office in Ecuador. This was done by letter of March 6, 1957, directed to the entire space on five vessels. By letter of June 21, 1957, Consolo was informed that the space had been given to another firm (Panama Ecuador interests). In the meantime, on April 29, 1957, the Board had found that Grace Line was a common carrier of bananas from Ecuador to the Atlantic coast of the United States, and that its refrigerated space should be pro-rated among qualified shippers of bananas (the Board’s order was dated. August 19, 1957). Banana Distributors, Inc. v. Grace Line, Inc., supra. As the result of this action by the Board, Consolo wrote to Flota on August 23, 1957, and stated that «before issuing any allotment of space on your ships, I wish to be considered for a fair and reasonable amount since I have consistently been asking for space on your ships for the past two years.” Flota informed Consolo by letter of (fol. 263] October 7, 1957, that all refrigerated space on its vessels had been committed for the following two years, but that it would be pleased, at the end of that time, to consider Consolo’s application for an allotment. It is apparent that Consolo was interested primarily in the entire space on the Flota vessels until after the Banana Distributors decision, even though the Board had passed favorably on his earlier claim against Grace Line for the same general relief (Philip R. Consolo v. Grace Line, 4 F.M.B. 292 (1953)), and that in his negotiations with Flota he did not take into consideration the interests of other banana shippers until his demand of August 23, 1957. Flota’s status as a common carrier of bananas did not squarely arise until Consolo’s demand of August 23, 1957 (and that of Banana Distributors in the same month, infra), hence any reparation to which Consolo is entitled must have its genesis as of that date. Consolo predicates his damages on the use of 14 of the space that could have been made available to him. Flota, on the other hand, contends that only 18.46 percent of the space would have been made available to Consolo. It there- 260 fore becomes necessary to determine (1) how many shippers either did ship or could have shipped bananas via Flota from August 23, 1957, to September 1, 1959, when all quali- fied shippers were given space, and (2) the portion of the total space each would or could have utilized during that period. In addition to Consolo, another shipper (“Noboa”, for short), admitted by Consolo to be experienced in the banana business, also submitted a bid for space in February 1957, Furthermore, the contract with Panama Ecuador was re. newed for three years on July 19, 1957. On August 6, 1957, the attorney for intervener Banana Distributors wrote to Flota and requested 50,000 cubic feet of refrigerated space on each Flota vessel (approximately the full capacity) for an unnamed client. Banana Distributors itself wrote to Flota on August 26, 1957, and requested “immediate allo. cation to this firm of a proportionate amount of your re- frigerated space.” Both requests were rejected. Between June and November 1957, applications for space were filed by seven other persons or firms, but Flota made no investi- gation as to their financial qualifications. Under the cir- [fol. 264] cumstances, these seven applicants should not be here considered. Thus, on August 23, 1957, Consolo, Pan- ama Ecuador, Banana Distributors, and Noboa were the only actual or potential shippers of bananas on Flota’s vessels. Panama Ecuador’s witness testified, however, that his company would not have accepted less than all of the space, a position confirmed when the company did not seek an allocation of space when Flota complied with the Board’s order on September 1, 1959. This means, then, that only three persons or firms might have shipped between August 23, 1957, and September 1, 1959 (Consolo, Banana Dis- tributors, Noboa). When Flota opened the space to quali- fied shippers it was found that only five were acceptable. As it finally shaped up, Consolo received 18.46 percent of the total space; this figure, referred to earlier herein, is the maximum proportion of space against which Flota be- lieves any computation of reparation to Consolo should be made. 261 As his original complaint was filed on November 15, 1957, Consolo maintains as a matter of principle that from that time until September 1, 1959, he was entitled to half of the space, the other half to be credited to Banana Distributors. He is content, however, that a 14 division is “appropriate” (Consolo’s opening brief, pages 21-22). There is no evi- dence of sound probative value as to how the space would have been divided among Consolo, Banana Distributors, and Noboa had all three shipped during the period, hence itis concluded that an equitable proration would have been ¥, to each of the three. Although the conclusion here reached naturally is subject to some objection by the very nature of the situation, a certain amount of latitude must be allowed, and any doubt should be resolved in Consolo’s favor. The law is satisfied with a practical solution. Of general help in that respect are Power Comm’n v. Hope Gas Co., 321 U.S. 591 (1944); Power Comm’n v. Pipeline Co., 315 U.S. 575 (1942); Pennsylvania R. Co. v. Puritan Coal Mining Co., 237 U.S. 121 (1915); Morrisdale Coal Co. v. Pennsylvania R. Co., 230 U.S. 304 (1913). In computing his damages, Consolo uses the loading, outturn, and liquidation sheets’ for each shipment of ba- nanas made by him on Grace Line vessels during the rep- [fol. 265] aration period, and applies them against the space that would have been used on Flota’s vessels at Flota’s freight rates during the same period (Flota sup- plied its freight charges, stevedoring costs, and numbers of stems carried). This method of ascertaining damages is logical and fair under the particular situation here present. It is concluded and found that Consolo’s damages are as shown in the following table. Period Voyages Stems Net profit 1/3 net profit 8/23/57-9/1/59 105 1,133,927 $779,436.78 $259,812.26 1After deducting freight, stevedoring, overhead, and miscellaneous expenses. In addition to the sum of $259,812.26, Consolo is entitled to interest at six percent from the date of arrival of each vessel from which he was shut out. * Report of commission merchant rendered to importer, showing proceeds of sale, certain expenses, commission fee, and net proceeds. 262 Recommendation The Board should find that Consolo is entitled to repara- tion in the amount of $259,812.26, plus interest at six per- cent from the date of arrival of each vessel from which he was shut out. C. W. Robinson, Presiding Examiner. G+tober 5, 1960 * * . * * * * [fc 1. 267] BEFORE THE F'EDERAL MarITIME Boarp Exceptions or Responpent Fiota Mercante GRrancotom- Brana, S. A. anp Brier 1n Support or Exceptions— December 2, 1960 For the reasons stated in the following brief, Flota Mercante Grancolombiana, S. A. (“Flota”), respondent in the above proceeding, hereby excepts to the Examiner’s Recommended Decision on reparations served on October 6, 1960. Exceptions Flota excepts to: 1. The Examiner’s ultimate recommendation that “Con- solo is entitled to reparation in the amount of $259,812.26 plus interest at six percent from the date of arrival of each vessel from which he was shut out.” 2. The Examiner’s failure to recognize that the Board’s decision of June 22, 1959 did not purport to determine lia- bility for the period prior thereto. 3. The incompleteness of the Examiner’s findings as to the facts and circumstances confronting Flota prior to and during the period for which reparations are sought, and to his failure to consider and make complete findings thereon, as contained in Flota’s opening brief on repara- a 263 tions, dated July 7, 1960, and in Part III of the brief fol- lowing these exceptions ; and his failure to find that in light of such circumstances Flota’s actions were completely reasonable and violated no provisions of the Shipping Act, and no obligation to Consolo. 4, The Examiner’s failure to find that in any event award of reparations would be inequitable and unjust, and for that reason should be denied. 5. The Examiner’s inclusion of voyages subsequent to the Board’s report of June 22, 1959, in calculating repara- tions, and to his failure to find that Flota acted promptly (fol. 268] thereafter to comply with the Board’s order, and therefore incurred no liability during that period. 6. The Examiner’s failure to find that the burden of proof upon all issues was upon Consolo, including the al- leged violation prior to compliance with the Board’s order of June 22, 1959; the alleged injury to Consolo during the period ; and the extent of any such injury; and to his failure to impose that burden on Consolo. 7. The Examiner’s failure to find that the record proves there was no injury to Consolo and that Consolo’s claim of injury is not bona fide. 8 The Examiner’s failure to find that Consolo’s claimed losses are speculative. 9, The application by the Examiner of an incorrect mea- sure of damages. 10. The Examiner’s incorrect computation of repara- tions, including his arbitrary allocation to Consolo of one third of Flota’s space, for calculation purposes; his failure to appreciate the significance of the 18.46 percent figure representing the allocation to Consolo following the Board’s order of June 22, 1959; and other errors set forth in the supporting brief. 11. The Examiner’s failure to hold Consolo is not the proper party coraplainant. ——uy 264 12. The Examiner’s conclusion that Consolo could not have minimized his damages, if any, by utilizing other available transportation, including specifically Grace Line, Chilean Line, and chartered vessels. 13. The recommended award of interest on reparations, 14. The Examiner’s subsidiary findings, or the Possible implications therefrom, inconsistent with the foregoing ex. ceptions, including, without limitation, the following: (a) that Consolo is an experienced and qualified banana shipper, and that there is no need to consider his ability to finance shipment on which reparations are claimed (Ree, Dee., page 2); [fol. 269] (b) that “it is undisputed that an ample quan- tity of good bananas was available to Consolo in Ecuador had he been able to secure space on Flota’s vessels” (Ree, Dec., page 2) ; (c) that Consolo was not required to make a tender in excess of his various letters requesting space (Ree. Dee., page 2); (d) that the bananas Consolo claims he wouid have shipped on Flota’s vessels would not have increased the volume of bananas delivered to the United States (Ree, Dec., page 2); (e) that such hypothetical bananas would have been sold at the market prices which in fact prevailed during the reparations period (Rec. Dec., page 3); (f) that the prices received by all importers at North Atlantic ports were the same (Ree. Dec., page 3); (g) that the greater the supply of bananas, the better the price received (Rec. Dec., page 7) ; (h) that Consolo could have sold all the bananas he would have been able to import via Flota; (i) the findings beginning at the bottom of Rec. Dec., page 2, and continuing through the middle of page 3, desig- ———S 265 nated “(a)”, “(b)”, and “(c)”, dealing with mitigation of damages ; (j) that Flota acquired the status of a common carrier, and that this occurred on August 23, 1957 (Ree. Dec., page 8); (k) to findings and conclusion that only three shippers should be considered in allocating Flota’s space for repara- tions computation (Ree. Dec., pages 5-6). 15. The Examiner’s failure to find that the renewal of Panama Ecuador’s contract in 1957 was based upon an option contained in the 1955 contract between Flota and Panama Ecuador, and upon F'lota’s action determining that Panama Ecuador’s bid was the most favorable to it, all of which occurred prior to the Board’s decision in the Banana Distributors case ; 16. The Examiner’s failure to find that there was no significant competition between Consolo and Panama Ecua- dor; (fol. 270] 17. The method of ascertaining damages em- ployed by the Examiner (Rec. Dec., page 7); 18. The Examiner’s failure to make subsidiary findings as to the components of the recommended $259,812.26 reparations ; 19. The Examiner’s failure to enter findings in accord- ance with the facts recited by Flota at pages 5-44 of its opening brief on reparations dated July 7, 1960. BEFrorE THE FEDERAL MaRITIME Boarp Report oF THE Boarp—Submitted January 25, 1961 and decided March 28, 1961 Thomas E. Stakem, Chairman; Sigfrid B. Unander, Vice Chairman; Ralph E. Wilson, Member. By the Board. "i 266 I. Proceedings By an order on June 22, 1959 the Board ordered that the proceeding docketed as No. 827 be held open for further proceedings on the claim of complainant, Philip R. Consolo (Consolo), for reparations, if any, (5 F.M.B. 633, 641) pursuant to Sec. 22 of the Shipping Act, 1916, as amended, (Act). The present proceedings are in response to a com- plaint to Docket No. 827 filed November 15, 1957 by Con. solo requesting an order by the Board ordering Flota Mercante Grancolombiana, S.A. (Flota) to pay reparation for damages during the period November 4, 1955 through November 4, 1957 in the amount of $600,000 and other relief and to a supplemental complaint filed November 18, 1959 (Docket No. 827, sub. No. 1) by Consolo requesting an order by the Board ordering Flota to pay reparation for damages during the period November 15, 1957 through September 1, 1959, in the sum of $250,000 and for other relief. By its report and order of June 22, 1959, served July 2, 1959, in Philip R. Consolo et al. v. Flota Mercante Gran. colombiana, S.A., 5 F.M.B. 633 (1959) the Board found Flota to be a common carrier by water in the operation of ships between the west coast ports of South America and United States Atlantic ports and found Flota’s practice [fol. 271] of contracting all of its refrigerated space on its ships operating between Ecuador and ports on the North Atlantic coast of the United States to a single shipper to be unjustly discriminatory and unreasonably prejudicial in violation of the Act. The further proceedings and hearing on the claim for reparations were had by an examiner who, on October 5, 1960, submitted a recommended decision that reparations were due in the amount of $259,812.26. Exceptions and re- plies thereto were filed. Oral argument before the Board was held on January 25, 1961. II. Facts Consolo, an experienced and qualified shipper of bananas for many years between Ecuador and the United States 267 was found to have proven his complaint that Flota’s prac- tice of excluding him was in violation of Secs. 14 ond 16 of the Act. The Board’s findings of fact, conclusions, deci- sion and order on this phase of the proceedings were en- tered of record and reported in Philip R. Consolo et al. v. Flota Mercante Grancolombiana, S.A. (Supra). In its report the Board found that Flota in the operation of its freight ships between Ecuador and the U.S. North Atlantic ports and U.S. Gulf of Mexico ports is a common carrier by water in the foreign commerce of the US. (page 638). No date was established for the beginning of such status, but Flota was shown to have operated since July 20, 1955 between Ecuador and the U.S. on an approximately weekly schedule with 5 ships and that it now operates 6 ships. Consolo did not use any of these ships until Sep- tember 1, 1959. Consolo first expressed an interest in space in the Spring of 1955 when he had a conference with Flota officers and “made inquiry as to the height of each chamber [for banana storage] and then the rate they were asking for the ships”. He inspected a ship later and found fault with the height of the storage chamber. Consolo was given figures as to what Flota “wanted for the ships in its entirety” (sic) but he asked for a reduced rate on the lower chamber or for the two upper chambers at the proposed rates. The counter offers were rejected. Other negotiations, for a contract by [fol. 272] correspondence and by conversations in 1956 and 1957, did not result in a mutually acceptable arrangement. At no time before August 23, 1957 did Consolo ask for an allotment of space at a regular tariff rate, but accepted the prevalent trade custom of either bidding or negotiating for space on a contractual basis. Consolo proved that he could have bought and sold 5,000 to 15,000 additional stems of bananas if Flota had allotted him space. By a letter dated August 23, 1957 addressed to Flota at Bogota, Colombia, Consolo wrote asking “to be considered for a fair and reasonable amount” of space on Flota’s ships. The letter referred to our dockets Nos. 771 and 775 as the 268 basis for this request. Flota’s reply dated October 7, 1957 was that “reefer space on our vessels has been committed for the next two years”. By its order of June 22, 1959, served July 2, 1959 the Board ordered Flota to cease and desist and to abstain from entering into, or continuing or performing any of the contracts, agreements, or understandings for the carriage of bananas, found herein to be in violation of sections 14 and 16 of the Shipping Act, 1916 as amended, not later than August 1, 1959”. Respondent was also ordered ty offer, within 10 days after July 2, 1959, all qualified banana shippers refrigerated space for the carriage of bananas, No proofs were introduced in the present proceeding to show how this order was complied with. An allotment of space was made by Flota September 1, 1959 when Consolo was one of five qualified shippers who applied for and were allotted space. III. Discussion Sec. 22 of the Act authorizes any person to file a sworn complaint “asking reparation for the injury, if any,” caused by any violation of the Act. Exclusion of complainant, Consolo, from the use of Flota’s common carrier service from Ecuador has been found to be a violation of the Act. Consolo filed a sworn complaint asking for reparations. An examiner conducted proceedings in which the issues were limited to ascertaining the period of injury and the com- putation of the amount due as damages for injury. The examiner recommended that complainant is entitled to rep- [fol. 273] aration in the amount of $259,812.56 based on 105 voyages during the period August 23, 1957 to September 1, 1959, yielding a net profit of $779,436.78 of which Consolo was entitled to one-third. In interpreting Sec. 22 in R. Hernandez v. A. Bernstein Schiffahrtgesellschaft, 1 U.S.M.C. 686 (1937) the US. Maritime Commission held that defendants unjustly dis- criminated against complainant in violation of paragraph Fourth of See. 14 of the Act by refusing to book cargo in response to applications by complainants for the trans- 269 rtation of automobiles. Complainant was shown to have expotted unboxed automobiles by securing steamship book- ing and then purchasing the automobiles therefor. Com- lainant was also shown to have the ability to obtain auto- mobiles for shipment. In some cases complainant also had small lots of automobiles available in New York ready to ship to Bilbao, Spain before booking. Defendants were shown to have held themselves out as common carriers of unboxed automobiles from New York to Bilbao. Their ships were constructed to accommodate automobiles and capacity was available. The number of automobiles required to ful- fill complainant’s contract to sell to a dealer in Spain was shown. Complainant proved a loss of 15% profit on pro- spective shipments. Proximate injury was held to have been caused complainant because of his inability to supply automobiles pursuant to an agreement with the importer in Spain. The case was assigned further hearing to deter- mine the amount of reparations due, in the absence of evi- dence (1) that all the cars upon which reparation was based could have been carried by defendants, (2) as to the amount of space which was available and, (3) as to the value of the cars which could have been carried in such available space. te Roberto Hernandez, Inc. v. Arnold Bernstein S., M.B.H., 2 U.S.M.C. 62 (1939) the above elements were proven and reparations equal to the estimated net profits that would have been earned during the reparations period were established. The defendants having failed to comply with the order, the appellant brought suit for enforcement pursuant to See. 30 of the Act. The defendants resisted enforcement on the ground that (1) there was no basis for the plaintiff’s (fol. 274] claim and (2), it was plaintiff’s duty to mitigate any damages. The District Court agreed in Roberto Her- nandez, Inc. v. Arnold Bernstein S., M.B.H., 31 F.Supp. 76 (D.C.N.Y. 1940), but on appeal Cireuit Court, reversed in 116 F.2d 849 (C.C.A, 2d, 1941) stating that the District Court raised too high a standard on which to test the proof as to damages as found by the Commission. The Court 270 held that where the Commission’s findings “are supported by substantial evidence . . . and where no new evidence on the subject is introduced . . . it is the duty of the court to accept and give them effect”. The duty of the court is equally that of the Board. The basis for plaintiff's claim was found to exist and the Court stated that “burden to show a failure to mitigate the damages was upon the defendants”. In the reparation hearing in Waterman v. Stockholms Rederiaktiebolag Svea et al., 3 F.M.B. 248 (1950), the Board found that the complainants had not sustained the burden of proof because of want of proof on “cost, outturn and selling price” but in so holding acknowledged that dam. ages are to be based on the difference between cost and selling price, where there was a refusal to furnish refrig- erated space to the complaining fruit shippers. The Supreme Court has held that ordinarily “the mea. sure of damages in such case [refusal to carry] is the dif. ference between the value of the goods at the point of tender and their value at the proposed destination, less the cost of carriage.” New Mezico ex rel. McLean & Co. y. Denver & R.G.R. Co., 203 U.S. 38, 27 S.Ct. 1, 3 (1906). In accord are 9 Am. Jur. Carriers, §314, 3 Hutchinson on Carriers (3rd Ed.) $$1359, 1370, 2 Moore on Carriers §609, 13 C.J.S. Carriers, $33, and see Sonken-Galamba Corp. v. Atchison, T. dé S.F. Ry. Co., 124 F.2d 952, 958 (C.C.A. 8th, 1942). In the present case proof of damages meeting the specific standards of cost, outturn and selling price was offered in detail. Witnesses were agreed on the availability of ba- nanas in Keuador and the existence of a market for them in the United States. Consolo was shown to have the re- sources to buy and ship bananas. The loading sheets show- ing actual purchases and the outturn sheets showing actual [fol. 275] sales and “liquidation sheets” (report of commis- sion merchant to importer showing proceeds of sale, ex- penses, commission and net proceeds) were used, for each shipment of bananas by Consolo on Grace Line ships during the reparation period. The space that would have been used 271 on Flota ships at Flota’s freight rates during the reparation period was shown. Costs in Ecuador were taken from actual loading sheets showing actual purchases week-by-week. Freight charges were supplied from Flota’s records of actual freight collected on its voyages during the reparation period. Stevedoring costs came from testimony of banana shippers as to actual cost at New York. We find the figures used in the reparation computation to be fully supported inthe record. The computation itself, using the above data, established a dollar figure for profit or loss per banana stem shipped before stevedoring and freight. From the amount of profit per voyage the freight stevedoring and incidental administrative overhead and other expenses have been de- ducted. The examiner’s conclusions were based on these fully documented facts. Consolo excepted to the examiner’s recommendation that the reparation period did not begin until August 23, 1957 and to the failure to recommend that Consolo be awarded reparation for the period November 15, 1955 through Sep- tember 1959 inclusive. Consolo also excepted to an error in computing damages within the period August 23, 1957 to September 1, 1959 on the ground that the deduction from profit for stevedoring costs should be the cost for stevedor- ing in Philadelphia instead of New York. The New York costs were shown to be 48.8 cents per stem whereas the ac- tual Philadelphia costs were later shown to be 35.15 cents per stem. Flota excepted to the following: 1. The Examiner’s ultimate recommendation. 9 The Examiner’s failure to recognize that the Board’s decision of June 22, 1959 did not purport to determine lia- bility for the period prior thereto. 3. The incompleteness of the Examiner’s findings as to the facts and circumstances confronting Flota prior to and (fol. 276] during the period for which reparations are sought, and to his failure to consider and make complete findings thereon, as contained in Flota’s opening brief on hi 272 reparations, and in the present brief; and his failure to fing that in light of such circumstances Flota’s actions were com. pletely reasonable and violated no provision of the Act, and no obligation to Consolo. 4. The Examiner’s failure to find that in any event award of reparations would be inequitable and unjust, and for that reason should be denied. 5. The Examiner’s inclusion of voyages subsequent to the Board’s report of June 22, 1959, in calculating reparations, and to his failure to find that Flota acted promptly there. after to comply with the Board’s order, and therefore in. curred no liability during that period. 6. The Examiner’s failure to find that the burden of proof upon all issues was upon Consolo, including the al- leged violation prior to compliance with the Board’s order of June 22, 1959; the alleged injury to Consolo during the period; and the extent of any such injury; and to his failure to impose that burden on Consolo. 7. The Examiner’s failure to find that the record proves there was no injury to Consolo and that Consolo’s claim of injury is not bona fide. 8. The Examiner’s failure to find that Consolo’s claimed losses are speculative. 9. The application by the Examiner of an incorrect mea- sure of damages. 10. The Examiner’s incorrect computation of repara- tions, including his arbitrary allocation to Consolo of one third of Flota’s space, for calculation purposes; his failure to appreciate the significance of the 18.46 percent figure representing the allocation to Consolo following the Board’s order of June 22, 1959. 11. The Examiner’s failure to hold Consolo is not the proper party compainant. 12. The Examiner’s conclusion that Consolo could not have minimized his damages, if any, by utiliging other avail- 273 able transportation, including specifically Grace Line, Chilean Line, and chartered vessels. (fol. 277] 13. The recommended award of interest on rep- arations. 14. The Examiner’s subsidiary findings, or the possible implications therefrom, inconsistent with the foregoing ex- ceptions, listing certain findings of fact. i5. The Examiner’s failure to find that the renewal of Panama Ecuador’s (Panama-Ecuador Shipping Corpora- tion, exclusive shipper on Flota’s ships) contract in 1957 was based upon an option contained in the 1955 contract between Flota and Panama Ecuador, and upon Flota’s action deter- mining that Panama Ecuador’s bid was the most favorable to it, all of which occurred prior to the Board’s decision in the Banana Distributors case; (Banana Distributors, Inc. v. Grace Line, Inc., 5 F.M.B. 278 (1957)). 16. The Examiner’s failure to find that there was no significant competition between Consolo and Panama Kcua- dor. 17. The method of ascertaining damages employed by the Examiner. 18. The Examiner’s failure to make subsidiary findings as to the components of the recommended $259,812.26 repa- rations. 19. The Examiner’s failure to enter findings in accord- ance with the facts recited by Flota in its opening brief on reparations. The arguments supporting the exceptions are essentially (1) that the Board did not, in Philip R. Consolo et al. v. Flota Mercante Grancolombiana (supra), find Flota guilty of violating the Act before June 22, 1959; (2) that in con- tracting all of its refrigerated space for bananas to a single shipper before then Flota acted legally, (3) that the failure of the Board or the Board’s staff, prior to June 22, 1959, to give Flota a legal opinion, in response to a petition for de- a 274 claratory relief, as to the validity of Flota’s exclusive pat. ronage contract prevents the Board from considering Flota as having acted wrongfully; (4) that the complaint and re. quest for the losses are speculative, the claim for reparation is not bona fide, and the burden of proving loss has not been sustained ; and , (5) the damages were incorrectly measured and computed and interest should not be added. For the reasons given below, we agree in part only with the respondent’s exceptions as to the computation of rep- [fol. 278] arations and to the award of interest on Trepara- tions. The remaining exceptions are rejected. Exceptions and proposed findings not discussed in this report nor re. flected in our findings have been considered and found not justified. The 1st and 13th exceptions refer to the award of interest on reparations. We find that it would be inequitable to award interest on an unliquidated claim before it was due and disallow any interest on the award herein. In exception 2 respondent argues that it acted reasonably and did not unjustly, unfairly or unreasonably discriminate against Consolo and therefore did not violate any statute during the period before the Board’s order of June 22, 1959, In exception 3 the incompleteness of the findings is averred and in exception 4 failure to find inequity in an award is excepted to. Our report in 5 F.M.B. 633 has already held that in the past “Flota has acted in violation of Sec. 14, Fourth and 16 of the Act.” (639). The facts and circum- stances omitted all relate to more arguments that Flota did not violate the Act before June 22, 1959. Such facts and the issues they raise have already been considered and decided in the first proceeding and are not appropriate subjects for exceptions in the reparations phase of this docket. The examiner properly did not review these facts nor retry the issues they raise. The previous report on these issues is plain and is final as far as the Board is concerned. The only remaining issue was the measure of the reparation Consolo is entitled to under Sec. 22 of the Act. Facts bearing on this issue alone were all the examiner was required to con- sider. 275 The exceptions are also based on the argument that be- cause Flota had contracted all of its space to another single shipper during the period involved reparations would be inequitable and unjust and the inclusion of voyages before June 22, 1959, when the favored shipper’s contract was still being performed, was not proper. This argument, too, uses the erroneous premise that performance of the exclusive patronage contract, during a time when Flota unjustly discriminated against a shipper in the matter of cargo space and gave undue and unreasonable preference or ad- vantage to particular persons, was a valid excuse for non- (fol. 279] performance of obligations under Sees. 14 and 16 of the Act. The performance of the contract is the very act which constitutes the violation of such sections. We have held that such conduct was improper in the following words: “Itis... clear that they (Consolo and Banana Distributors, Inc.) were denied reefer space accommodations by Flota, to their prejudice and disadvantage, and that Panama Ecua- dor, in receiving and using that space, was favored and ad- vantaged. We find no justification for this conduct on the part of Flota and conclude that in denying reefer space to complainants, and in granting that space to a single favored shipper, Flota has acted in violation of Secs. 14, Fourth and 16 of the Act.” Philip R. Consolo et al. v. Flota Mercante Grancolombiana, (supra at p. 638). In other words, as long as the contract caused the denial of space there was a vio- lation. The violation did not begin June 22, 1959, but long before this. There can be no question of inequity or unjust- ness to a respondent who violates the Act by means of an exclusionary contract. It is the excluded shipper who has the equities on his side under the Act, not the favored shipper nor the discriminatory and preference-giving car- rier. One of the arguments advanced to prove absence of fault in failing to offer non-discriminatory and non-preferential service was (1) that Flota had filed a petition for declara- tory relief (Docket No. 835, decided in Philip R. Consolo et al. v. Flota Mercante Grancolombiana, 5 F.M.B. 633 (1959) ) asking the Board to determine the validity of Flota’s con- 276 tracts and to terminate the uncertainty that had arisen ag g result of the conflicting demands upon Flota following the decision in Banana Distributors, Inc. v. Grace Line, Ine., 5 F.M.B. 278 and 5 F.M.B. 615 (1959) and, (2) that the Board failed to make a timely response thereto. It was not incum. bent on the Board, however, to give Flota a legal opinion on the effect of its conduct on shippers. The demands were conflicting only to the extent that Flota made them go by continuing to serve favored shippers. The subsequent un. certainty was the consequence of Flota’s own position that it could continue to contract refrigerated space to preferred shippers and to exclude complainants without violating the Act as was contended in Grace Line v. Federal Maritime Board, 280 F. 2d 790 (C.C.A. 2d 1960). In Philip R. Consolo (fol. 280] v. Grace Line, Inc., 4 F.M.B. 293 (1953) and Ba- nana Distributors, Inc. v. Grace Line, Inc., 5 F.M.B. 278 (1957) the Board decided that Grace Line, Inc. was a com. mon carrier by water under sufficiently similar facts as to lead the Board to state in the present case (5 F.M.B. 633) that what we said in the Banana Distributors case “is ap. propriate here, and we feel is dispositive of the issues in this proceeding”. Instead of accepting the Grace Line cases as providing a rule for its guidance, Flota refused to offer service and litigated the issues relying on “arguments relat- ing to the differences between Flota’s vessels and Grace’s vessels” (635) to justify such refusal. Flota was eventually found to have violated Secs. 14, Fourth, and 16 of the Act. No delay converted its past violations into lawful conduct and Flota must take the consequences of its refusal, (it be- came a common carrier in 1955) to take Consolo’s cargo after Consolo asked for non-preferential service in 1957. Common carrier status is not created by nor are violations of the Act non-existent until the Board’s report is served. Both are brought about by Flota’s own actions beginning in 1955. The 5th exception relates to the inclusion_in the-repara- tions calculations, of voyages after June 22, 1959, which is the date our report in No. 827 was “decided”. The ex- aminer extended the damage period to September 1, 1959 277 when Consolo was actually allotted space in response to the Board’s order served on July 2, 1959. Respondents were ordered, within 10 days after the date of service of the order, to offer refrigerated space for the carriage of bananas on its ships to all qualified banana shippers. Flota made no offers between June 22 and July 12, 1959, but we have no reason to doubt that Flota would have offered space on July 12 if bananas had been tendered in Guayaquil at that time. None were tendered before then, as far as this record shows. No shipments were ready until September, but this does not furnish a reason for extending the dam- age period beyond the date when the Board’s order should have been complied with, in the absence of any offer of proof by complainant of a refusal, after July 12, 1959, and in the absence of proof of its own willingness to ship, nor of a tender of cargo. The damage period should not be (fol. 281] extended to the time when the complainant shipper was ready to provide a cargo, but is limited to voyages departing from Guayaquil through July 12, 1959, the date when compliance should have begun. (Cf. Swift é Company and Swift and Company Packers v. Gulf and South Atlantic Havana SS Conference, et al., Docket No. 854 Decided Feb- ruary 2, 1961. The 6th, 7th and 8th exceptions all concern the proofs of injury offered by complainant and allege a failure to maintain the burden of proof or to show actual damage. The burden of proof was maintained by extensive testi- mony and exhibits showing availability of bananas, cost, selling price (226 quotations over a period of four years were shown) and freight, stevedoring and other expenses as noted above. The actual damages were shown to be the proximate result of violations of the statute. Waterman v. Stockholms Rederiaktiebolag Svea et al., 3 F.M.B. 248, 249 (1950). The losses shown were not speculative, but fairly inferrible from the data supplied and testimony of _.witnesses-that-complainant-would_have shipped_on—Flota ships if he had not been excluded. The 9th, 10th and 17th exceptions deal with the method of measuring and computing the damages. The examiner be- 278 gan the measure of damages from August 23, 1957 instead of 1955 as claimed. We agree that the examiner’s date and with the finding that Consolo’s offers and counter-offers for service before then were for contract carriage and not for space on a non-preferential basis. He was not excluded before then because he never sought an allocation of Space on an equal basis with other shippers; rather, Flota’s facilities or charges for services were not acceptable to the complainant on complainant’s terms. These negotia- tions may not be translated into requests for a non-prefer. ential allocation of space on a common carrier by water, What Flota refused during this period was the demand for a special contract which would make Consolo a favored shipper too. The examiner found Consolo entitled to one-third of Flota’s space based on the fact that complainant was one of three qualified applicants for space. Other applicants were declared to be unqualified. When space was finally allocated five shippers actually qualified and measure- ment by Flota’s technical adviser showed that in actual prac. [fol. 282] tice over a period of time there had been an al- lotment to, and use by, Consolo of 18.46% of the cubic capacity of Flota’s ships on the U.S. Atlantic run. This actual experience with Flota appears to be a just and reasonable guide of what Consolo was entitled to for the purpose of measuring his past damages and it is adopted. Respondent’s exception on this point is valid. The 11th exception is found unsupported. | The 12th exception deals with complainant’s failure to minimize damages by using other means of transportation. Once the failure to perform common carrier obligations and exclusion is shown, “the burden to show a failure to miti- gate the damages was upon the defendants”. Hernandez v. Bernsteim, 116 F. 2d 849 (C.C.A. 2d 1941) at pp. 851, 852, Fiota offered no such proof other than a suggestion that chartered ships might be used, but no suitable ones were shown to be available. Respondents have failed to show any mitigating factors. _ 279 Exception 14 relates to the examiner’s subsidiary findings of fact on which the award of reparations is based. None is shown to be wrong, all have been fully established in this docket. ‘ The 15th exception likewise assumes the untenable prem- ise that discriminatory and preferential conduct did not exist until after the Board’s decision on Consolo’s com- plaint against Flota and that the contract which caused such conduct excused the disregard of statutory obligations. The 16th exception is unsupported by the record. The 18th and 19th exceptions relate to the ascertainment of damages. Complainant submitted extensive evidence of lost profits in the form of schedules of about 226 individual voyages between 1955 and 1959 showing for each voyage the number of banana stems actually carried by named ships on specified dates between Guayaquil, Ecuador and Philadelphia, Penna. (with the exception of two ships which discharged at Charleston, S.C. and Baltimore, Md. re- spectively because of a strike at Philadelphia, Penna.). In the absence of other proven data and of any disproof of the complainant’s data or challenge of complainant’s figures, such data and figures have been used in the com- putation of reparations found to be due. (fol. 283] The complainant’s profit per stem of bananas is the difference in cost at Guayaquil and the value or sale price at Philadelphia which is taken to be the total gross profit per stem. This amount has been multiplied by the number of stems on each shipment and the products added to get the gross profit. From such total gross profit there has been deducted (1) the total freight cost and (2) the total estimated cost of handling the bananas at Phila- delphia. The latter amount is 50.15 cents a stem (35.15¢ for stevedoring, plus 3¢ for overhead, plus 12¢ for insecti- cides, rope and bags) multiplied by 1,061,286 stems carried during the reparation period. Complainant did not show the 3¢ a stem deduction for overhead in its claim, but this amount was deducted by the examiner with the subse- 280 quent admission by the complainant that it was a proper amount. The examiner’s computation was also based upon the use of New York instead of Philadelphia stevedoring costs and omitted the deduction of the estimated incidental costs of handling bananas at Philadelphia in the amount of 12 cents. The latter figure was also furnished by complain. ant. Based upon the shipment of 1,061,286 stems of bananas on 98 voyages between August 23, 1957 and July 12, 1959, the use of the complainant’s statement of profits per Voy- age totaling $2,513,236.43 on all voyages allowed, and the subtraction therefrom of total freight in the amount of $1,204,343.95 and incidental costs in the amount of $532,. 234.93, as proven by complainant, we find the remainder is the proper net profit of $776,657.55. Consolo is entitled - to 18.46% of the net profit. An award is hereby made and shall be paid to complainant Philip R. Consolo of 4425 North Michigan Avenue, Miami Beach, Florida, on or before 60 days from the date hereof, in the amount of $143,370.98, with interest at the rate of 6% per annum on any amounts unpaid after 60 days, as reparation for the injury caused by respondent’s violation of Secs. 14 and 16 of the Shipping Act, 1916, as amended. By the Board. Thomas Lisi, Secretary. 281 (fol. 284] BerorE THE F'eperaL Maritime BoarD No. 827 Pum R. ConsoLo Vv. Fiota Mercante GRaNCOLOMBIANA, S.A. Orper—March 25, 1961 This proceeding being at issue upon complaint and an- swer on file, and having been duly heard and submitted by the parties, and full investigation of the matters and things involved having been had, and the Board, on the date here- of, having made and entered a report stating its findings of fact, conclusions and decisions thereon, which report is hereby referred to and made a part hereof ; It is Ordered, That respondent Flota Mercante Gran- ecolombiana, S.A. be, and it is hereby notified and directed to pay unto complainant Philip R. Consolo of 4425 North Michigan Avenue, Miami Beach, Florida, on or before 60 days from the date hereof, $143,370.98, with interest at the rate of 6% per annum on any amounts unpaid after 60 days, as reparation for the injury caused by respon- dent’s violation of Secs. 14 and 16 of the Shipping Act, 1916, as amended. By the Board. — Thomas Lisi, Secretary. 282 [fol. 285] In tHE Unitep States Court or APPEALS For THE District or CoLtumsiA Circurr No. 16,369 Fiota MercanTe GRaNncotomsi4nA, S.A., Petitioner, v. FeperAL Maritime Boarp and Unirtep States or America, Respondents, Pur R. Consoxo, Intervenor. Vacated by Order of the Court (August 31, 1961). Vacating so much of this order as consolidates No. 15,330 with Nos. 16,366 and 16,369. Before: Wilbur K. Miller, Chief Judge, and Washington and Burger, Circuit Judges. Orper—August 11, 1961 This case came on for consideration on intervenor’s mo- tion to dismiss or in the alternative to require petitioner to file a bond and said motion was argued by counsel. Upon consideration whereof it is Ordered by the Court that the aforesaid motion shall be held in abeyance pending hearing of this case on the merits. It is Further Ordered by the Court, sna sponte, that this case and cases No. 15,330, Flota Mercante Grancolom- biana v. United States and Federal Maritime Board and No. 16,366, Consolo v. United States and Federal Maritime Board are consolidated for the purposes of filing respon- 283 dents’ brief, filing a single joint appendix and for argu- ment. Per Curiam. Dated: August 11, 1961. (fol. 288] Berore THE FeperaL Maritime Boarp Transcript of Proceedings—(Excerpts)—November 5, 1958 Hearing Room 818 45 Broadway New York, N.Y. Hearing in the above-entitled matters was convened, pur- suant to notice at 10:00 A.M., before C. W. Robinson, Examiner. e * * * * ae * Josr J. Borrero having been previously duly sworn, was recalled and was examined and testified further as follows: Direct examination. By Mr. Kharasch: Q. Would you look at this Exhibit 15, please, and tell me, what clause governs the ports at which your ships will dis- charge bananas in the United States along the United States Atlantic Coast? A. Here, No. 1, for the transportation of bananas from Guayaquil or Puerto Bolivar or Esmeraldas, Ecuador, South America, to Philadelphia, Pennsylvania, U.S.A. Q. Mr. Borrero, please direct your attention to Clause 21 again on page 17. Now I asked you and you answered, yes, that the shipper had the option to carry on unloading op- 284 erations in Jacksonville, Charleston, and Savannah, and Norfolk, or Baltimore, and you answered, yes. Now, does not the next paragraph, after the first paragraph of 21, provide in the case where the shipper notifies Grancolom. biana of his choice of another port, after the vessel has sailed from Ecuador? Examiner Robinson: I think that just speaks for itself. [fol. 289] Mr. Kharasch: Well, apparently it does not for Mr. Giallorenzi. I think we ought to have the witness’ agreement. If you will permit him. A. Yes. Q. You agree? A. Reads that way, yes. Q. Now, I will ask you the question which was objected to before. Would it be correct to say that under your present arrangement with your present shippers, your ships load at Guayaquil, Ecuador and come to North At. lantic ports at the discretion of the shipper? A. Subject to those particular conditions. Q. Subject to the fact that they are the only ports named? A. These are the names before me, conditions of un- loading. * * * * * * * Q. Well, the answer to my question is, no. Do you know where the ships now load, your ships now load bananas at Ecuador? The particular place? Port? A. Well, the name of the port? Q. It’s either Guayaquil, or Puerto Bolivar? A. Yes. onl . * *. * — | * 2 =") 285 Hearing Room 818 November 6, 1958 45 Broadway New York, N.Y. Jack FRIEDLANDER was recalled as a witness, and having previously been sworn, was examined and testified as fol- lows: Direct examination. By Mr. Kharasch: Q. How did the seventy - seventy-two pound compare to the weight of the fruit arriving in Philadelphia? A. I’d say approximately three to five pounds heavier than Philadelphia. (fol. 290] Q. Heavier in Philadelphia? A. Yes. Q. Is there a reason for the Philadelphia fruit being heavier than the New York fruit? Examiner Robinson: City of Brotherly Love, of course. A. I don’t know. Generally our bananas come from dif- ferent areas, and the area from which the Philadelphia fruit is loaded, probably runs a little bit heavier in weight. At one time we were running substantially heavier in New York than in Philadelphia. Cross examination. _ By Mr. Kurrus: Mr. Giallorenzi: Have you loaded ships at Puna? The Witness: Grancolombiana vessels? Never. Mr. Kurrus: I said other than Puna. 286 A. We loaded at either Guayaquil or Puerto Bolivar. Q. Mr. Friedlander, isn’t it true that your total cost of - bananas f.o.b. the vessel are greater in Puna than they are in either Guayaquil or Puerto Bolivar? A. Substantially less in Puna. Q. Do you pay an extra charge for transporting bananas to Puna than you not on the Grace Line ships, that you do not pay in transporting the bananas to the Grancolombiana Line ships? A. Sometimes it costs us substantially less. Q. Why is the cost greater on the Grancolombiana Line ships? A. Cost of bananas from the area where we purchase the bana” »s is substantially higher. Q. Assuming that you have Puerto Bolivar fruit to be loaded at Puerto Bolivar, how would it compare to load that fruit, the cost, I mean, how would the cost compare to loading that fruit at Puerto Bolivar as opposed to load- ing it at Puna? A. I wouldn’t load Puerto Bolivar fruit at Puna, proved too costly. [fol. 291] Q. Have you done it? A. Yes, we’ve done it. Q. How did the cost compare? A. It was approximately 5 per cent higher. Q. How about Guayaquil fruit, if you loaded that at Puna, and loaded at Guayaquil, how would the cost com- pare to that? A. That would be about 5 per cent higher. Again, we wouldn’t do it. Just like buying potatoes, if you live in New York, and buying them in Chicago. Q. Where does the fruit for the Crace Line ships originate? A. Adjacent to Puna. Q. Do you know whether any originates in Guayaquil? A. Very, very seldom. 287 Q. Talking about your own? A. Our own? _ Does any ever originate from Puerto Bolivar? A. Very seldom. * . 7 + * 7 Redirect examination. By Mr. Kharasch: Q. Now, does the fruit that loads on the Grace Line ves- sels come from the same area in Ecuador that is loaded on the Grancolombiana Lines? A. Not usually. Q. Does not in your practice? A. Not usually, sometimes, yes. Pur R. Consoto was called as a witness and having been first duly sworn, was examined and testified as fol- lows: Direct examination. By Mr. Lippman: Q. You mention Puna, where is Puna, Mr. Consolo in relation to Guayaquil? A. Puna to the best of my knowledge is about 25 to 30 miles south of Guayaquil, just a body of water there that Grace Line ships are not able to come up to Guayaquil because of a draft problem, they picked this particular body of water and put up four poles and call it Puna, where the ship anchors we have to get down to Puna to load. « * + * * . * [fol. 292] Q. Now, where does your fruit originate, Mr. Consolo? A. Various areas. Q. At the present time where does it originate? 238 A. Some originate from Vinkes, some originate from Baba, some originate from Duran and some originate from Balao. Q. Are these places you mentioned closer to Guayaquil or Puna? A. Three of the areas I mentioned are closer to Guaya- quil and one area, Balao is of equal distance to Puna. Q. If you can load your fruit at Guayaquil, would you be able to save any of these expenses? Mr. Giallorenzi: I object to this question because the testimony is that the Grace Line vessels do not come up to Guayaquil because of the draft and I don’t see how it has anything to do with proceeding for reparations, Examiner Robinson: I don’t either. Mr. Lippman: Mr. Examiner, I think it has everything to do with the proceeding for reparations. Examiner Robinson: Why? Mr. Lippman: Mr. Consolo is establishing his costs at the present time. Now, in order to show that he is en. titled to reparations we should be able to prove whether or not those costs were decreased if he had been a shipper on Grancolombiana Lines, if he had space on Gran- colombiana Lines, in other words, neither one of those ships goes up to Guayaquil. The Witness: Yes. Q. Will you explain your answer? In what respect will you be able to save on the expenses? A. As you notice as you go down these expense sheets where it says Naranjal, where it says Baba, fruit from this area, Duran, fruit from this area for a barge transpor- tation or canoe transportation would be one sucres cheaper to Guayaquil than it is to Puna and on the stevedoring ex- pense when we take men to Puna we have to pay one and [fol. 293] half the rate as is paid in Guayaquil, plus the cost of canoe and tug service to Puna, plus the meals that we have to provide the men. 289 Q. Suppose you had steamship space available enabling you to ship additional 14,000 stems or some lesser amount than you have been shipping, what effect would that situa- tion have upon your costs in Ecuador? A. None. As a matter of fact, it may lessen my over- head. I would have to maintain the same office and the same management and the only additional expense would he extra selectors for these additional shipments so that maybe instead of paying 7 per cent to the local company, [may have reduced that to 5 per cent, that is the only dif- ference I could see. Q. If you could ship a greater volume? A. Yes. Hearing Room 818 November 7, 1958 45 Broadway New York, N.Y. By Mr. Lippman: Q. Mr. Consolo, at the conclusion of the hearing yester- day we were discussing the exhibit marked 24 for identifi- cation. A. Yes. A. When I was discussing with Mr. Penaranda and Mr. Borrero there was a question of three ports to come to; either Baltimore—we talked about Philadelphia or New York. Now, it is important in the banana business to try to get your bananas out to the port which after the ship leaves Buenaventura it comes directly to a North Atlantic port, which may be Baltimore first, which may be Philadelphia or New York, and they told me that Baltimore would be the first port that they would call at that time, probably Philadelphia—the first port before they would take off general cargo. 290 [fol. 294] When I wrote this letter I wanted to establish the port that they would come first before taking off gen. eral cargo, whether it was Baltimore, Philadelphia or New York, and I was in agreement to take either one of those three ports provided it was the first port of call into the United States before taking off general cargo, and of al] my experience I never heard of a contract on a shipping company where a shipper can ask from ship to ship where he wants the ship to be discharged with prior notice before the loading. I have been operating with Grace Line for five years— * * * * . ‘\« . Q. Are you able to obtain approximately 12,000 to 14. 000 additional stems in Ecuador for export to the United States? A. Yes. Q. On what do you base your ability to do so, Mr, Consolo? A. From our experience in Ecuador and the availability of bananas in Ecuador, our financial ability, and our know- how in the business. Q. Would you be able to sell an additional 14,000 stems of bananas in the United States? A. Yes. * 7 * * * * * Q. On what do you base your ability to sell 14,000 stems of bananas a week in the United States? A. With our present experience, with our commission merchants, with our commission agents, or selling them directly ourselves to the trade. | Q. Have you had any recent experience, Mr. Consolo, _ which demonstrates your ability to do this kind of thing? A. Yes, I have. : Q. Would you explain what that consists of, Mr. Con- solo? A. August of 1958 I went into a temporary arrange- ment with the Chilean Line for the export of bananas from Ecuador to Baltimore. This is an irregular sched- il Rare 291 ale, calling Eeuador Puna—rather, every two weeks or less or more. In other words, no regular set day for its arrival in Beuador, and this was operated from two trips to two- trip basis, and the last one from trip to trip, and we were able to purchase bananas in Ecuador to load these ships and sell them in the United States at a comparatively [fol. 295] same sales and purchase them in Eeuador for approximately the same price that we purchased our regu- lar shipments on the Grace Line. Q. Mr. Consolo, at all times since November, 1955, could you have purchased up to an additional 14,000 stems of hananas in Ecuador for export to the United States? A. Yes. Q. At what price? A. The same price we are paying—we paid during that period. Examiner Robinson: Let’s still tie it down a little further. You say 14,000 stems? The Witness: Yes. Examiner Robinson: Over what period? Mr. Lippman: I said at all times since November, 1955. Examiner Robinson: I know. Do you mean by that for each shipment, otherwise it could go for 14,000 stems over a three-year period? Mr. Lippman: I think the record should clearly reflect that my question is premised upon i4,000 stems each week. The Witness: Yes. Q. Could you have purchased that amount of bananas? A. Yes. Q. In Ecuador? A. Yes. Q. At what price? A. At the same price that we paid during that period. Q. In connection with your Grace Line shipment could you have sold an additional 14,000 stems each week in the United States at prevailing market prices? 292 A. Yes. Q. Could you have sold such bananas if they had ar. rived at Philadelphia instead of New York? A. Yes. ' Q. At what price? A. About the same price. Q. Would it have made any difference from the stand. point of the proceeds of the bananas if the vessel had ar- rived in Philadelphia instead of New York? A. I don’t see any difference. (fol. 296] Mr. Kharasch: Mr. Examiner, may we go off the record for one minute? Examiner Robinson: Yes. (Off-the-record discussion. ) Q. Mr. Consolo, have you had any shipment on the Chilean Line which arrived at Philadelphia? Mr. Giallorenzi: You didn’t go to Philadelphia. The Witness: They made one trip to Philadelphia. They requested it was more convenient for the ship to dis. charge there. A. (Continuing) Yes, I think there was one shipment that went to Philadelphia. Q. Will you speak up, please. A. Yes, there was one shipment that went to Phila- delphia. Q. Which shipment was that? A. That was shipment No. 4. Q. When did that arrive in Philadelphia? A. It arrived in Philadelphia October 24, 1958, Q. What was the vessel? A. The vessel was the steamship Maipo. Q. How many stems were shipped on that shipment? A. 6,168 stems. Q. Were those bananas sold by R. Dixon & Co. for your account? A. Yes, they were. 293 Q. Did that vessel arrive in Philadelphia? A. Yes, arrived in Philadelphia at Pier 66, South Phila- hia. “ Did R. Dixon & Co, get the same price for those bananas as could have been obtained for bananas arriving on the Grace Line at the same time during the same period. a. Yes. _ Were such prices, in fact, realized? A. Ishould hope so. Q. Mr. Consolo, could you refer to your records and show us? A. Yes. Q. This vessel arrived on October 24, 1958, is that cor- rect? A. That is correct. Q. Would you refer to your records to show us the near- est arrival on the Grace Line, the arrival nearest to Octo- ber 24, 1958? A. October 23, 1958, the day before. (fol. 297] Q. Which vessel was that? A. That was the Santa Ines. Q. That vessel arrived at New York? A. Java Street, Brooklyn, New York. Q. The bananas were sold in New York? A. Yes, they were. Q. What price was obtained ? A. Practically the same price. Mr. Giallorenzi: Is that a responsive answer? Mr. Lippman: You can read the prices, Mr. Consolo. The Witness: Yes. Q. What price was obtained on the bananas shipped on the Chilean Line? A. The price obtained on the bananas shipped on the Chilean Line for select bananas was $8.50 per hundred- weight with the exception of one, two, three, four, five trailers. Two were received at $8.00 per hundredweight, one was received at $7.50 per hundredweight and two were received at seven cents per hundredweight. Q. In those trailers how many stems were involved? 294 A. Those trailers that were involved: 280, 350, 321, 340, and 500. Examiner Robinson: Let me ask you something. Diq you actually mean a hundredweight or a hundred pounds? The Witness: The price? Examiner Robinson: No, on the stems. Do you mean a hundredweight or a hundred pounds? Mr. Kharasch: There was also an expense of seven cents per hundred pounds. The Witness: Seven dollars per hundred pounds. Q. That was out of a total shipment of 6,168 stems? A. I want to elaborate on these prices. Q. What was the reason for the lower prices on those five truckloads? A. In Eeuador we have one of our suppliers who has small fruit, referred to eight hands, instead of the regular, Q. Is that the name of the supplier or the fruit? A. The fruit. Examiner Robinson: Off the record. (Off-the-record discussion. ) (fol. 298] The Witness: We had a supplier on this par. ticular shipment in Ecuador who had eight hand bananas who wanted to sell them to us and we agreed to buy them for about 40 per cent of the value of the others, and the cost sheet in Ecuador will so reflect the cost. Although I received the prices I have stated per hun- dred pounds here I realized more profit in dollars than if I had bought regular nine hand and better at the prevailing prices in Ecuador. ~ Q. Will you refer— The Witness: (Continuing) That was only a business adjustment. It has no reflection on profits where you see the lower price there. Q. Will you refer to the Grace Line arrival of October 23rd. A. Yes. 295 _ What were the prices which those bananas were sold, Mr. Consolo? A. All the select fruit was sold at $8.50 per hundred unds with the exception of one local trailer with a hun- dred stems at $8.00 per hundred pounds. Q. How did the ripes and rejects for those shipments compare, Mr. Consolo? A. It varies on each cargo the amounts of ripes and rejects. _ What about the experience on this Chilean arrival as compared with the Grace Line arrival? A. Some have a little less percentage of ripes on the Grace Line. I would have to go over the records. Q. Iam talking about this particular shipment. A. The ripes and rejects of 6,168 was 215 stems ripes and rejects. Q. That is the Chilean Line? A. Yes. Q. And the Grace Line vessel? A. 5,624 stems, about 430 stems of ripes and rejects. Examiner Robinson: Off the record. (Off-the-record discussion. ) Q. The number of stems arriving on the Santa Ines, what was the total number? A. Ican see from this record it was 5,624. > . * _ + * * [fol. 299] Cross examination. By Mr. Giallorenzi: * * * * * * * Q. You testified that you were engaged in the banana business under the name of Philip R. Consolo? A. My contract with Grace Line is under Philip R. Consolo. Q. Do you engage in business under any other names since that date? 296 A. Yes. I have corporate names that I use. Q. Will you please tell us the names of the corporations that you have used from 1953 to date? A. We have operated in Ecuador under Pacific Fryit Company, and presently as Ecuador Fruit Company. — In the United States under Atlantic Fruit Company and as Dover Banana Company. Q. Is that all? A. There is others I have operated. Q. In the banana business since the early part of 1953, is that right? A. The early part of ’53. . * e * * ° e Q. Now turn to Ecuador Fruit Company. A. Yes. Q. Is that an Ecuadorian corporation? A. Yes, it is. Q. Are you an officer of that corporation? A. Ecuador Fruit Company? Q. Yes. A. No, Iam not. Q. Are you a stockholder of that company? A. Yes. * * . . * * * Q. Are you the sole stockholder of the company? A. No, Iam not. Q. Are you the majority stockholder of the company, Mr. Consolo? A. Yes, lam. * * * o -_ 6 e [fol. 300] Q. Is Ecuador Fruit Company the successor to Pacific Fruit Company, Mr. Consolo? A. Yes. Q. And Pacific Fruit Company was formed about three months after you received the Grace Line space contract? 297 A. Just about, I would say—three or four months, I don’t know the exact time. Q. This company is your buying agent, as I understand it, in Ecuador? A. I don’t say it’s a buying agent—it’s a buying com- _ It buys bananas to sell bananas. Q. Will you explain that to me? A. It is a company, it is a separate company operating in Ecuador under the laws of Ecuador to buy and sell bananas and go into any business that it deems necessary to go into. It isn’t confined just to buying and selling bananas. It’s a corporation standing on its own right in Ecuador to do business. © * * * * e * Q. So that the two companies that it buys bananas for for distribution in the United States are yours and the Dover Banana Company? A. Presently? Q. Yes. A. Yes. * * * o * . -_ Q. When was Dover Banana Company formed? A. I would have to look at my records. Q. To your best recollection, Mr. Consolo. A. I believe in about 1957, April or May of 1957. * * * * * oe * Q. Do you know under the laws of what state it was formed, Mr. Consolo? A. I think it’s under the law and State of Delaware. * * * * * * * Q. Can you tell me where the principal place of business is, Mr. Consolo? A. Miami, Florida. * * * * * * * (fol. 301] Q. Are you the principal stockholder of this company, Mr. Consolo? A. No, I am not. 298 Do you know who is the principal— Yes. Would you tell us, please? . Charles Consolo. That is your brother? Yes. Are you an officer of this corporation? No, I am not. Are you a director of this corporation? . No, Iam not. POPOPOPOPO © . Does Dover Banana Company have a space contract with Grace Line? A. No, it does not. Q. I notice on your Exhibit 26, outturn report of R. Dixon— A. Yes. ' Q. (Continuing) —involves a shipment which arrived on October 23, 1958 on the Santa Ines? A. Yes. Q. This statement you testified was prepared by your agent, R. Dixon & Co., is that right? A. That is correct. Q. I notice that it is addressed to Dover Banana Com. pany, Inc., is that right? A. Yes. Q. Were these bananas imported for the account of Dover Banana Company, Inc.? A. Yes, they were. Q. That was using your space? A. That is correct. Q. Did you receive any compensation for that, from Dover Banana Company, Inc.? A. Yes, I did. * « . + * * 299 Q. Since Dover Banana Company, Inc. was formed, do you know how many shipments of bananas were carried on the Grace Line for its account? A. Well, I would have to go back to the records to find out how many. * * * oe * * * (fol. 302] A. October 30th there would be sixty-five ship- ments from Dover Banana Company. Q. They were all on the Grace Line, which you held the space contract, is that right? A. Not I alone. Q. Would you please explain to us what you mean by that last statement, Mr. Consolo? A. I had three-quarters of a chamber and Charles Con- solo has one-quarter of a chamber. * * * * * * * The Witness: Yes. Charles Consolo is my brother and associated in this business. Q. Did the Grace Lixe enter into a space contract with your brother? A. Yes. Q. Was that in the name of Dover Banana Company, Inc., Mr. Consolo? A. Yes. Q. Or Charies Consolo? A. Charles Consolo. Q. So that the sixty-five shipments which were carried on the Grace Line were outturned from that one particular chamber that you and your brother have individually? A. That is correct. Q. And the sale of these bananas, the proceeds, were credited by R. Dixon & Co. to Dover Banana Company, Inc., is that right? A. That is correct. 300 Q. Did you have an agreement with Dover Banana Com. pany, Inc. for the purpose of letting them use the space on the Grace Line vessels which amounts to three-quarters of one chamber? A. Do I have an agreement? Q. Do you have any such agreement? A. Not in writing. There is no written agreement. Q. Do you have an oral agreement for them to use this space, Mr. Consolo? A. They are using the space for the importing of the bananas into the United States. [fol. 303] Q. Is that pursuant to an oral agreement that you entered into with Dover Banana Company, Inc? Examiner Robinson: If it is not in writing, I think we will have to assume it is. Mr. Giallorenzi: All right. Q. When did you enter into this oral agreement with Dover Banana Company, Inc. where you allowed them to use three-quarters of your chamber on the Grace Line? The Witness: Let me verify that a little bit. The first nineteen shipments under Dover Banana Company—eight- een, rather, was the space held under Philip R. Consolo. Q. On the Grace Line? A. Yes. Q. Go ahead. A. Then I think October—the next shipment from there on was three-quarter space under my name, when the new contracts came out, and one-quarter space under Charles Consolo. Q. When did you enter into this oral agreement with Dover Banana Company wherein you allowed them to use three-quarters of your space, all of the three-quarters of the chambers which you had contracted with Grace Line? Mr. Kharasch: Before you answer that question, Mr. Consolo— 301 [ have a continuing objection to this inquiry, because it does not bear on the issues in this case, and I want to ad- yise Mr. Consolo of his—I guess it is a constitutional right to consult with his attorneys if he wishes to, before he an- swers questions along this line. Mr. Giallorenzi: Now I have something to say about that, Mr. Examiner. Examiner Robinson: You do not have to say anything. [have already ruled that it is all right. Mr. Lippman: Mr. Examiner, I want to interpose a further objection on the ground that there is no foundation laid in the record as to the existence of any agreement. (fol. 204] Examiner Robinson: We are trying to dig it out. Mr. Giallorenzi: The witness has been— Mr. Lippman: You are putting words in the witness’ mouth. Examiner Robinson: Let’s not harangue about it. I think you heve got to get to the bottom of it. It may turn out to be nothing. I think this goes to the very essence of your claim. Q. Is there any agreement between you and Dover Banana Company for the use of your space aboard the Grace Line? A. There is an oral understanding. Examiner Robinson: We are getting somewhere. When was it? The Witness: From the first shipment, shipment No. 1, July 30, 1957. Q. Is that agreement still in effect now, Mr. Consolo? A. The understanding is still in effect, yes. Q. With whom did you enter into that agreement on behalf of Dover Banana Company, Inc.? A. With Charles P. Consolo, who is the President of Dover Banana Company. 302 Mr. Kharasch: Meanwhile, my request— Examiner Robinson: Certainly? Mr. Kharasch: (Continuing) —for a recess, during which I will publicly consult with my client. Examiner Robinson: You go right ahead. (A short recess was taken.) Mr. Giallorenzi: What was the last question and the an. swer, if any? (Reporter reads back the last question and answer.) (fol. 305] Q. Will you tell us the terms of this agree. ment or understanding which was entered into between you and the Dover Banana Company, Inc.? A. They would use the space, Dover Banana Company would use my space and buy bananas for one of my corpo- rations. Q. What consideration did you receive for the use of this space, Mr. Consolo? A. Selling them bananas. Q. Will you please tell us for whose account the bananas which arrived on the 8.S. Santa Olivia were sold? A. For the account of Dover Banana Company. Q. Was the net proceeds of $11,852.68 remitted to Dover Banana Company, Inc.? A. That is correct. Q. You testified that in consideration of your giving your space to Dover Banana Company, Inc.— A. I didn’t give it to him, I made them use it. Q. —you testified that by you making them use it, they would buy bananas from your corporation? A. That is correct. Q. Which corporation is that? A. That is an intermediary corporation. Q. Intermediary corporation? 303 A. Yes. Q. If that be so, why did R. Dixon & Co. show on Ex- hibit 24 that the bananas were sold for the Dover Banana Company rather than the intermediary corporation? A. Because the intermediary corporation sells the ba- nanas to Dover Banana Company in Guayaquil. Q. What is the name of the intermediary? A. Darien Refrigerated Shipping Company. Q, Is that an Ecuadorian corporation? A. No, sir, it is not. Q. Do you know under the laws of what country or what state that company was formed? A. Panama. Q. Panama? A. Yes. (fol. 306] Q. Are you the principal or sole stockholder of that company, Mr. Consolo? A. Iam the majority stockholder of that company. Q. Is your brother Charles Consolo associated with you in that company, Mr. Consolo? A. No, he is not. Q. Are you an officer of that company? A. No. Q. Are you a director of that company? A. No, Iam not. _ Q. Are these bananas sold by your intermediary corpo- ration to Dover Banana Company, Inc. before they are shipped on the Grace Line vessels? A. They are sold to them F.O.B. Guayaquil. * * * * * - * Q. Referring to Exhibit 24— A. Yes. Q. —the fruit which was purchased from various growers— 304 Q. Was that fruit purchased by the Ecuador Fruit Company? A. Yes, it was. Q. For the account of this Panamanian corporation} A. Correct. Q. Then in turn the Panamanian corporation sold it to Dover, is that correct? A. That is correct. Q. —you testified that funds were remitted for the pur- pose of purchasing the fruit and meeting the other jp. cidental expenses set forth therein? A. Yes, Q. And that there was also a bank expense of 74,52 sucres, is that right? A. Yes, that’s right. Q. Did you personally remit those funds or did the Darien Corporation remit them? A. Darien Refrigerated remitted this fund. Q. The Ecuadorian Fruit Company, Incorporaied, the fruit which they purchased in Ecuador? A. Yes. Q. —is that all for the account of Darien Refrigerated Company, Mr. Consolo? A. Yes. Mr. Giallorenzi: Thank you. * * * * * * == (fol. 307] 305 Hearing Room 705 November 11, 1958 45 Broadway New York, N.Y. (Mr. Consolo resumed his testimony.) Examiner Robinson: Gentlemen, I’m ready whenever anybody else is. Have we decided where the witness will sit? Gross examination. By Mr. Giallorenzi: Q. Now, you testified at the last hearing, I believe that you have three-fourths of the space of the No. 4 upper tween deck on the Grace Line vessel under a present con- tract. And that your brother, Charles Consolo, has one- quarter of the space? A. Yes. The Witness: That’s on the freighters. Q. And how many cubic feet would you say you and your brother have jointly? A. Lwould say in the neighborhood of about 26,000. * * * * * * * Q. How many cubic feet would it take for each banana to load— * * * * * * a Q. Well, assuming you have an 80-pound stem? A. I would say on an 80-pound stem you could load around 5,800 to 6,000 stems. Q. And that prior to October, 1958, Turino gave up one- quarter of the No. 4 lower tween deck and that was taken 306 over by Mr. Pallis of Banana Distributors? Did you knov, Mr. Consolo, that Swanee and El Morro and Lebantino and Turino were going to give up their space on the Grace Line vessels? Mr. Kharasch: As of what time? Q. Let us fix it as of October, 1958? A. I did not know definitely, but there was talk about it. [fol. 308] Q. Did you know prior to October, ’58 that there was talk about some of the Grace Line shippers giv- ing up their space? A. There was talk about it. Q. Did you know when this talk commenced? A. I don’t know, I think I was called up from Miami to a meeting of all shippers on the Grace Line, the exact date I don’t know, may have been in, I can’t fix the date exactly, Q. Well, did you attend that meeting or meetings of all the Grace Line shippers in 1958? A. Well, I attended two meetings, that was all. Q. Yes. Now, tell us and fix it as best you can when these two meetings were held? A. I can’t fix them, may have been in the spring of 58 I think, and then there was one in maybe, in the summer of D8, in that neighborhood. * * * * * * * Q. Did you ask Mr. Grossman what was the.purpose of coming up to New York? A. Well, there were several things disenssed, several things. The question of reduced rates of the Grace Line, and the question of trying to get a minimum of freight weight for a certain period, the market was bad, a ques- tion of trying to get, some talk on the question of trying to get Standard Fruit on the ships and everybody giving up a little space to Standard Fruit, and things like that, nothing materialized, put it that way. Q. Who was present at the first meeting in the spring of 1958, Mr. Consolo, to the best of your recollection? P A. Mr. Staff was there. Mr. Morey was there. Mr. I. B. Joselow was there. Mr. Lavilla and Indies Fruit Com- pany. Mr. Lou Kurtz from the El Morro, I think that Mr. Parver, Mr. Lou Grossman, I was there, Mr. Consolo. There was an attorney Mr. Jack Friedlander was there, too, 1 don’t remember this meeting whether there was Mr. Sawanee, Mr. Levitt, Bill Levitt, from Sawanee, I think he was at the second meeting, I don’t remember whether Mr. Levitt was there. That’s the best of my memory. (fol. 309] Q. Was anybody there representing Naboa or Frutera? A. Yes, Mr. Lovella was. Q. And Naboa? A. I don’t think Naboa was there, I think Mr. Siminari second meeting. Q. Did anybody keep an agenda of what was discussed? A. I don’t know, I think Mr. Staff was taking notes. I didn’t keep an agenda, there was a general discussion, and everybody came up to listen to what everybody else had to say. 0 What was the condition of the banana market then in the United States? A. It was poor. A. I think the market was poor, I think it started some time in January. Q. Of 1958? A. 58. * * * * * * » A. I think that meeting, I don’t know whether the first or second meeting, trying to get together to submit a, I think the first meeting to appoint a committee to go to the Grace Line to try to reduce the freight rate, and try to get a waiver of the minimum load. I believe that was the purpose of the first meeting. If I remember correctly, we talked about many things, general conditions and Ecuador fruit wasn’t arriving too good in the United States, large percentage of ripes. That was about the only things I remember of that meeting. 307 308 Q. So, in other words, at that meeting you do remember you discussed the condition of the fruit which was con; in bad and that the price of the bananas in New York was poor? A. Well, something else was discussed, there was a plan, a discussion about trying to get a central selling organiza. tion, there were too many selling organizations on the same ship. In other words, R. Dixon was there, Joselow, Mr. Staff was selling bananas, and Banana Distributors was selling their fruit, I don’t think that Naboa was in that picture, he was selling Morro’s, and what’s this other fellow, Martin Associates, and the Indies selling their own fruit and too many prices being quoted, over the same ship, trying to get a central organization if we could get a company to sell the fruit in the account of all of the importers. [fol. 310] Q. Now, this committee, you testified to that was going to approach the Grace Line, for talks affecting the freight rates, do you know who it was, was any com- mittee appointed? A. I think there was, yes. Q. Do you know who the gentlemen were? A. Mr. Staff, Mr. Parvin and myself. Q. Who went to the Grace Line? A. Mr. Staff, Mr. Parvin, and myself. Q. And did you ask him to reduce the minimum and make other requests? A. Yes, we did. * * * * * * * Q. And that was requests that had been made you testi- fied to because the fruit business was bad, the banana busi- ness was bad? A. And the fruit wasn’t coming in good quality, and that was it. Q. Now then, you said you held a second meeting, which was in the summer, 1958, is that correct, Mr. Consolo? —_— A. That is correct. Q. And did you appear at that meeting? A. Yes, I did. Q. What did you discuss at that second meeting? A. Discussed at that second meeting, about the same thing, with the exception of trying to get each firm that exports bananas to the United States who had their own company in Keuador to instruct the companies to try to ta stricter selection, better quality of fruit to come into the United States, and we had Mr. Siminari, I think, who was there, too, of the growers’ association, to go to Ecua- dor and try to get a tax reduced, the export tax, and try to get the exchange reduced to a dollar, or seventy-five cents instead of $1.20 or $1.50, gives you more sucres on the open market and then Mr. Lovett, came up to propose that he would speak to the Standard Fruit Company, Standard Fruit Company wanted two or three chambers (fol. 311] on the Grace Line, if everybody would give up a little space in proportion, to give two or three chambers, there was some discussion about this, and about, I think, I made a statement I said I don’t think we should talk to the Grace Line, I said that was a matter for the Grace Line. Later on I called up Mr. Magner and asked him that if two or three chambers be given up from present shippers, would he give it to the Standard Fruit Company, directly, we didn’t want another shipper in it, because there was no purpose in having another shipper in it, and he says he would not. He says anybody wants to give up their space let them write letters in requesting to be relieved of their contract. So I didn’t pursue that any further when I knew from the head that the space would not be guaranteed to give to the Standard Fruit Company. Q. Was there a request for a lower minimum on other conditions reviewed after the September meeting, or rather after the meeting in the summer of 1958? 310 A. I think Mr. Joselow said he was going to ask not for a reduction in rate, he was going to take the initiatiy wanted to reduce the minimum and rather than ship 100 per cent minimum, ship 66 per cent, or 75 per cent, he was going to approach the Grace Line on that subj [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_IA40386411_0236%3A02. Public record. Not legal advice.