Susquehanna Steamship Co. v. A. O. Andersen & Co.

208 A.D. 26, 203 N.Y.S. 568, 1924 N.Y. App. Div. LEXIS 4970
CourtAppellate Division of the Supreme Court of the State of New York
DecidedFebruary 1, 1924
DocketAppeal No. 1
StatusPublished
Cited by1 cases

This text of 208 A.D. 26 (Susquehanna Steamship Co. v. A. O. Andersen & Co.) is published on Counsel Stack Legal Research, covering Appellate Division of the Supreme Court of the State of New York primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Susquehanna Steamship Co. v. A. O. Andersen & Co., 208 A.D. 26, 203 N.Y.S. 568, 1924 N.Y. App. Div. LEXIS 4970 (N.Y. Ct. App. 1924).

Opinion

Kelly, P. J.:

There are three appeals in this action before the court for decision: First, the appeal from the judgment entered upon the verdict; second, an appeal from an order made at Special Term May 1, 1922 (as amended), denying defendant’s motion to dismiss the complaint because of the pendency of a prior action between the parties in New York county, involving the same issues (Susquehanna Steamship Co., Inc., v. Andersen & Co., Inc., Action No. 4—Appeal No. 2, 208 App. Div. 786); third, an appeal from an order made by the trial justice June 12, 1922 (as amended), denying defendant’s motion to correct the clerk’s minutes of the trial of the action by striking out the recital of motions made by defendant’s counsel and inserting instead what defendant claims were the actual motions as shown by the stenographer’s minutes. (Susquehanna Steamship Co., Inc., v. Andersen & Co., Inc., Action No. 4—Appeal No. 3, 208 App. Div. 787.) There is also before us for decision a motion made by the plaintiff, respondent, to dismiss the second appeal above referred to upon the ground that it is academic in that the action in New York county referred to has been discontinued pending argument of these various appeals upon plaintiff’s paying all costs, disbursements, allowances and damages under an injunction bond aggregating $6,000. Plaintiff also asserts as ground for dismissing the appeal that the pendency of the action in New York county was pleaded as a defense in the main action, was passed upon by the court on the trial, and is before the court on the main appeal. Defendant obtained no stay but went to trial upon the merits without objection, and plaintiff alleges that the preliminary motion and order thus became academic.

The plaintiff Susquehanna Company sues as the assignee of •the Lydia Company to recover $167,446.10, balance of $464,346.10 which it is alleged defendant owed the Lydia Company under a written agreement dated September 12, 1919. The Lydia Company had chartered the steamship Lydia to one Crotois for a period of about six months at $59,380 per month, payable in advance. It is alleged that in consideration of the Lydia Company making the charter to Crotois and assigning the hire to the Andersen Company, the latter company agreed to pay the charter hire. Plaintiff alleges that the total hire due was $464,346.10, that there was paid on account $296,900, leaving the balance due $167,446.10.

The plaintiff claimed that the agreement of September 12, 1919, was a direct obligation of the defendant Andersen Company to pay the charter hire. On the other hand the defendant asserted that it was an agreement merely to advance to the Lydia Steamship Company, Inc., by way of loan, the amount of the Crotois [29]*29charter hire, and to collect the said hire from Crotois under the said assignment by way of reimbursement, if possible, with, however, the right of recourse to the Lydia Steamship Company, Inc., for any amount so advanced in the event of Crotois’ default.”

The learned trial justice held that defendant’s letter to the Lydia Company of September 12,1919, bound defendant to pay the charter hire of $59,000 per month.

Defendant’s contention is based principally on the last paragraph in the letter reading: “ It is understood that in case the amount advanced by us should exceed money due by charterers, you will refund same.” Defendant says that reference to the charter shows that Crotois was obligated to pay every month the fixed and definite sum of $59,380, and this fixed and definite sum was the precise sum which Andersen in his letter of September twelfth agreed to pay; that the amounts the defendant agreed to pay were thus identical with the amounts to become due from Crotois to the steamship company and they become due from Crotois to the steamship company at the precise time when the defendant agreed to pay them under the letter of September twelfth. Defendant argues that there could be no difference, and that under the construction of the agreement by the court below, that sentence becomes superfluous.

The defendant, appellant, urges this last clause in the letter as a basis for the claim, first, that the agreement was for an advance or loan of money, and second, he insisted at the trial and claims here that it rendered the agreement ambiguous and authorized " the introduction of extrinsic evidence to show what the real meaning of the parties was. The trial justice held that the agreement was unambiguous and he excluded evidence of extrinsic facts.

The plaintiff, respondent, contends that the agreement is not ambiguous; that the Crotois charter provided for payment of the hire in advance; that the hire was to continue until actual redelivery of the vessel to the owners in New York. If the vessel was on her return voyage when the payment for hire fell due, payment was to be made for the estimated time necessary to reach port “ and when the steamer is delivered to owners’ agents any difference shall be refunded by Steamer or paid by Charterers, as the case may require.” And plaintiff refers to the fact that the charter was made for “ about six months,” and says that the provision for readjustment on redelivery was necessary, and that it is this readjustment which is referred to in the last paragraph of the letter of September 12, 1919, and that the inseparability of charter and guaranty is emphasized by these co-ordinate clauses. He says that the letter was the strongest [30]*30form of guaranty, that this was not merely an agreement that the debtor would pay (which would of itself be a primary obligation [Vetter v. Welz & Zerweck, 143 App. Div. 121]), but this letter or agreement goes much further. The defendant contracted to pay the hire direct to the Lydia Steamship Company and received an assignment of the charter hire, and in paragraph 4 of the charter to Crotois which specifies the amount payable there is inserted: “ Hire payable to A. O. Andersen & Co., Inc., New York." Respondent says that the charter and the defendant’s agreement interlock and that together they create one instrument. The defendant’s letter of September twelfth was answered by the Lydia Company on the same day agreeing to the assignment of the hire. Respondent argues that the defendant, appellant, has no right to emasculate the letter by referring to this last clause and at considerable length argues that defendant’s contentions that the clause renders the contract ambiguous, or that it furnishes any basis for defendant’s claim that the agreement was for a loan, are unreasonable and specious.

The learned trial justice agreed with the plaintiff, and I think he was right in his construction of the agreement and that the defendant was liable for the charter hire of the steamer.

The proper decision of this question largely determines the case.

This involves the serious result that defendant was liable for the entire charter hire, $464,346.10. There is no dispute about the aggregate amount of the charter hire. But of this large indebtedness, defendant was immediately relieved of $296,900 because ■ Crotois had obtained another guaranty covering the first two months of the charter from Dexter & Co. This left a balance of $167,446.10, plus interest, for which sum the trial justice directed a verdict for plaintiff.

But there are additional complications.

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Related

Hearn v. Leary
125 Misc. 446 (New York Supreme Court, 1925)

Cite This Page — Counsel Stack

Bluebook (online)
208 A.D. 26, 203 N.Y.S. 568, 1924 N.Y. App. Div. LEXIS 4970, Counsel Stack Legal Research, https://law.counselstack.com/opinion/susquehanna-steamship-co-v-a-o-andersen-co-nyappdiv-1924.