Texas & New Orleans Barge Line, Inc. v. Tug Patsy H

279 F. Supp. 697, 1968 U.S. Dist. LEXIS 9841
CourtDistrict Court, E.D. Louisiana
DecidedFebruary 12, 1968
DocketNo. 908
StatusPublished
Cited by2 cases

This text of 279 F. Supp. 697 (Texas & New Orleans Barge Line, Inc. v. Tug Patsy H) is published on Counsel Stack Legal Research, covering District Court, E.D. Louisiana primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Texas & New Orleans Barge Line, Inc. v. Tug Patsy H, 279 F. Supp. 697, 1968 U.S. Dist. LEXIS 9841 (E.D. La. 1968).

Opinion

WEST, Chief Judge:

Libelant, Texas and New Orleans Barge Line, Inc., brings this suit to recover what it alleges to be the balance due under a charter party entered into between it and the respondents on March 16, 1965, together with other debts connected therewith which are also alleged [698]*698to be due and payable. There is very little, if any, real dispute about the facts involved in this case.

On March 16, 1965, libelant, as the owner of the Tug PATSY H, entered into a bareboat charter party with respondent, Nagel Towing Co., Inc., whereby the Tug PATSY H was chartered to said respondent for a period of forty-eight months. The charter party was signed on behalf of libelant by Jack Neilson, President of Texas and New Orleans Barge Line, Inc., and on behalf of respondents by James Nagel, President of Nagel Towing Co., Inc., and by James Nagel, individually, and by Virginia Nagel, individually. The charter hire was set in the charter party at $2,500 per month for the first twelve months, and $1,900 per month for the subsequent thirty-six months. Respondents paid seven monthly payments of $2,500 each and then defaulted. Only two of these payments were actually made on time, the others being tardily made.

On December 29, 1965, respondents, through Mr. Nagel, returned the tug to libelant with the explanation that it was unable to make further payments. Upon request, libelant told Mr. Nagel where to leave the tug and it remained at the designated place until May 16, 1966. On that day libelant chartered it to a third party for $1,500 per month and received twelve monthly payments pursuant to that agreement. Libelant now seeks to recover from respondents the total amount that it would have received had respondents kept the tug without defaulting for the entire forty-eight months, less the seven payments made by respondent and less the sum of $18,000 received as charter hire from the third party under the agreement of May 16, 1966, together with the sum of $3,018 for rigging and supplies allegedly owed by respondents. Respondents answer claiming that because of" the fact that the charter party contained a provision allowing Nagel Towing Co., Inc. to purchase the tug at a stipulated price at the termination of the charter period, it was not really a charter agreement at all but rather amounted to a sale of the tug to respondents. Respondents then argue that under Louisiana law, particularly the Louisiana Deficiency Judgment Act, LRS 13:4106-13:4107, it would be against public policy to allow libelant to recover for “rentals” owed at the time the vessel was surrendered. The Court finds no merit to these contentions. In a charter party the parties may contract as they choose, J. B. Effenson Co. v. Three Bays Corp., 5 Cir., 238 F.2d 611, and they are of course, bound by the terms of the contract as written. When considering the charter party here involved, the Court finds nothing contained therein that could be construed to be against public policy, nor is there anything ambiguous about it. . In an action on a bareboat charter, the District Court’s function is not to re-write the charter agreement but to interpret it. B. H. Inc. v. Anthony M. Meyerstein, Inc., D.C., 149 F.Supp. 219. This charter party was a bareboat rental of the Tug PATSY H for a specified time at a specified price and nothing else. It was not a sale.

The real question presented though is, under the circumstances of this case, and under the terms of the charter party, how much of the total charter hire, if any, may the libelant now recover. Libelant argues that it is entitled to recover the total amount provided for in the agreement less the credits above referred to. Respondents, on the other hand, contend that if the agreement was not a sale, libelant is entitled only to rental payments up to May 23, 1966, the date it contends the charter party was terminated, subject to certain credits hereinafter discussed. After considering the provisions of the charter agreement, and the actions taken by libelant after respondents defaulted, the Court concludes that the charter party was, in fact, actually terminated by libelant on May 16, 1966.

Article I of the charter party provides :

“Owner agrees to and does hereby charter bareboat, and Charterers agree [699]*699to and do hereby hire bareboat, under the terms and conditions set out in this Charter ‘as is’ when delivered to Charterers, the PATSY H hereinafter referred to as ‘Vessel’, together with spare parts, tackle, apparel, furnishings and equipment now on board the Vessel, for a period of forty eight months beginning with the delivery of the Vessel to Charterers, afloat in the New Orleans area, Owner’s Option, and expiring forty eight months thereafter, the expiration -day, unless prior to the expiration day the Vessel shall become a total loss, actual or constructive (as constructive total loss shall be defined in the policies of insurance hereinafter referred to), or unless this Charter is sooner cancelled as hereinafter provided; that time from the beginning day to the expiration day is sometimes herein referred to as the ‘charter period’.”

And Article XIII provides, in pertinent part, as follows:

“If Charterers fail to pay charter hire or other amount herein provided after the same is due and payable, or if Charterers fail to observe, keep or perform any other provisions of this charter party required to be observed, kept or performed by charterers, Owner shall have the right to exercise any one or more of the following remedies:
“a) To declare the entire amount of charter hire hereunder immediately due and payable without notice or demand to Charterers.
“b) To sue for and recover all charter hire, and other payments, then accrued or hereafter accruing.
“c) To take possession of the Vessel, without demand or notice, where-ever same may be located, without any court order or any process of law. Charterers hereby waive any and all damages occasioned by such taking of possession. And said taking of possession shall not constitute a termination of this charter party unless Owner expressly so notifies Charterers in writing.
“d) To terminate this charter party.
“e) To pursue any other remedy of law, admiralty or in equity. Notwithstanding any repossession, or any other action which Owner may take, Charterers shall be and remain liable for the full performance of all obligations on the part of Charterers to be performed under this charter party. All such remedies are cumulative and may be exercised concurrently or separately,”

Of the several options available to libel-ant under Article XIII quoted above, it availed itself of the one provided by subsection (d), i. e., “to terminate this charter party.”

On or about December 29, 1965, when respondent realized it could no longer pay the charter hire on the tug, Mr. Nagel simply called Mr. Neilson, libel-ant’s President, and said he was returning the boat and asked where to leave it. Mr. Neilson designated some place in Harvey, Louisiana, and the vessel was delivered there by respondent. At that time, libelant could have exercised its option under sub-paragraphs (2) or (b). But it did not do so. It simply did nothing, and hence the charter party, according to its terms, remained in full force and effect.

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Bluebook (online)
279 F. Supp. 697, 1968 U.S. Dist. LEXIS 9841, Counsel Stack Legal Research, https://law.counselstack.com/opinion/texas-new-orleans-barge-line-inc-v-tug-patsy-h-laed-1968.