Rice Growers Ass'n v. Rederiaktiebolaget Frode

176 F.2d 401, 1949 A.M.C. 1761, 1949 U.S. App. LEXIS 3754
CourtCourt of Appeals for the Ninth Circuit
DecidedJune 24, 1949
DocketNo. 12074
StatusPublished
Cited by3 cases

This text of 176 F.2d 401 (Rice Growers Ass'n v. Rederiaktiebolaget Frode) is published on Counsel Stack Legal Research, covering Court of Appeals for the Ninth Circuit primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Rice Growers Ass'n v. Rederiaktiebolaget Frode, 176 F.2d 401, 1949 A.M.C. 1761, 1949 U.S. App. LEXIS 3754 (9th Cir. 1949).

Opinions

DENMAN, Chief Judge.

This is an admiralty proceeding m limitation of liability in which the Rice Growers Association, hereinafter called Growers appeals from an interlocutory decree determining the value for limitation of appellant Frode’s steamer Frej, burned while carrying Growers’ 5060 tons of rice, shipped on bills of lading at San Francisco on a voyage to Havana, Cuba, ■ via Panama.

Both parties agree that the valuation of the vessel in the fund for limitation is that at the termination of the voyage. They agree that the voyage continued until some later date after June 6, 1947, when Growers libeled the Frej for damages to the rice in excess of the Frej’s value at that time.

Growers contends that the court erred in holding the voyage of the Frej terminat[403]*403ed on June 19, 1947, when Frode gave notice of the abandonment of the voyage and refused to carry the cargo forward and in determining that her then value of $117,-000 is the ship’s item in the fund for limitation. It claims that the notice of abandonment is invalid for reasons later considered and that the voyage was not terminated until the rice in fact was delivered by Frode to its consignees in Havana, at which time the Frej’s value is stipulated to be $275,000.

The Frej, laden at San Francisco with a full cargo of Growers’ rice, cast off from her pier in San Francisco, thus beginning her voyage. Twenty minutes later a fire broke out in her engine room and spreáding therefrom severely damaged the vessel. Nearly 40% of the rice was injured by fire, water and smoke.

The vessel was returned to San Francisco by salvaging vessels and the cargo discharged. The damaged cargo was sold. The remainder on pier continued in possession of the vessel under her bills of lading. Bids for her repairs were received and that of the General Engineering & Dry Dock Company for $122,638, to be completed in forty-eight days, was accepted. The Frej was taken to that yard on May 23, 1947, and the repairs begun on May 26th. Further repairs of the fire damage were found necessary. The total repairs of damage caused by the fire $167,498.99. In addition, new betterments to the ship were added in the sum of $17,349.40. The repairs and betterments proceeded and were finished by August 4, 1947.

On June 6., Growers filed in the court below a libel in personam against Frode and in rem against the Frej, claiming damages to the rice in the amount of $365,990, and that day the Frej was seized and held by the United States Marshal. This libel was greatly in excess of the then value of the injured vessel, its value on June 19, 1947, when some repairs had been made, being stipulated at $117,000. A claim for a further sum for refusal to carry the rice forward to Havana in the amount of $100,000 was added to Growers’ libel on July 17, 1947.

Frode on June 6 was then in a position to file its petition for limitation of liability, but it awaited such filing until July 25, 1947. Frode elected not to treat the voyage as terminated on May 7, when the Frej was burned, but held the cargo under the bills of lading at least until June 19, 1947, when it notified Growers that it elected to abandon the voyage for carrying Growers’ rice stating that it did so pursuant to bill of lading provisions. Frode thereafter continued to hold the rice under its bill of lading provision 10 to maintain the lien thereon for the salvage claim of the Shipowners & Merchants Tugboat Company, for which that company filed a libel m the court below against the rice and the vessel.

That the vessel’s voyage continued at least until the notice of abandonment is conceded in Frode’s brief, the summary of which states, “The value of the ship and pending freight must be fixed as of the end of the voyage. The voyage of the S.S. ‘Frej’ ended on June 19, 1947, when the voyage was abandoned by Frode, the shipowner and appellee herein.” It is confirmed by the further statement of Frode’s brief here concerning what it calls “the original voyage which began at San Francisco May 6, 1947, and terminated at San Francisco on June 19, 1947.”

On July 26, 1947, the day after the petition for limitation was filed, the parties entered into an agreement for carrying the rice to Havana, it being stipulated that

“6: The carrying on of the cargo and/ or this agreement shall in no way prejudice any right or rights which either party now has and shall not affect the present status quo of the purported abandonment of the voyage at San Francisco, California.

“7. Cargo has now furnished full general average security and the Frej and her owners will not require further general average security.”

Growers waived its amendment to its libel for $100,000 for refusal to carry the rice forward and agreed to pay $10,000 as consideration for this contract. It is further stipulated that “12. Pursuant to said agreement and between August 4 and [404]*404August 8, 1947, the said 3232 tons of rice formerly loaded in Holds No. 1, 2, 4 and 5 were reloaded on the ship at San Francisco. On August 11, 1947, the ship sailed from San Francisco for Havana with only said 3232 tons of rice cargo aboard and she ■arrived in Havana on August 31, 1947, and ■completed discharge of the said 3232 tons ■of rice on September 18, 1947.”

The value of the ship as repaired is agreed to be $275,000, exceeding the cost ■of repairs by over $100,000. Growers contends that under such conditions Frode was required to repair its vessel and proceed with the voyage, citing such cases as The Maggie Hammond, 9 Wall. 435, 19 L.Ed. 772 and the leading British case of Assicurazioni Generali v. S.S. Bessie Morris Co., (1892) 1 Q.B. 571, 576, 577, holding that the cargo owner may recover in damages if the vessel fails after repairs to carry the cargo forward. Frode, being so liable in damages, Growers contends that the abandonment of June 19 and the refusal to carry the cargo' forward is a wrongful termination of the voyage. The contention continues that, being wrongful termination, Frode cannot by its wrong assert such termination in a limitation proceeding, since equitable principles there control as held in Hartford Accident & Indemnity Co. v. Southern Pacific Co., 273 U.S. 207, 47 S.Ct. 357, 71 L.Ed. 612, and by us in the earlier appeal of Growers, 9 Cir., 171 F.2d 662.

Frode contends that none of these cases considered such a question as the termination of the voyage and invokes the latest decisions of the Supreme Court that the limitation proceedings must be construed favorably to the shipowning petitioner,1 stating in Just v. Chambers, 312 U.S. 383, 385, 61 S.Ct. 687, 690, 85 L.Ed. 903 that “The statutory provision for limitation of liability, enacted in the light of the maritime law of modern Europe and of legislation in England, has been broadly and liberally construed in order to achieve its purpose to encourage investments in shipbuilding and to afford an opportunity for the determination of claims against the vessel and its owner. Norwich & N. Y. Transp. Company v. Wright, 13 Wall. 104, 121, 20 L.Ed. 585.

Free access — add to your briefcase to read the full text and ask questions with AI

Related

In The Matter Of Cross Contracting Company, Inc.
454 F.2d 408 (Fifth Circuit, 1972)
Cross Contracting Co. v. Law
454 F.2d 408 (Fifth Circuit, 1972)

Cite This Page — Counsel Stack

Bluebook (online)
176 F.2d 401, 1949 A.M.C. 1761, 1949 U.S. App. LEXIS 3754, Counsel Stack Legal Research, https://law.counselstack.com/opinion/rice-growers-assn-v-rederiaktiebolaget-frode-ca9-1949.