UNITED STATES DISTRICT COURT FOR THE DISTRICT OF COLUMBIA
July 31, 1967
ORIENT MID-EAST LINES, INC., Plaintiff,
COOPERATIVE FOR AMERICAN RELIEF EVERYWHERE, INC., Seventh Day Adventist Welfare Service, Inc., Church World Service, Inc., and Lutheran World Relief, Inc., Defendants, and United States of America, Defendant-Intervenor
The opinion of the court was delivered by: CORCORAN
CORCORAN, District Judge.
This consolidated action is in the nature of a libel in admiralty for money due on bills of lading.
I. THE PARTIES
The plaintiff Orient Mid-East Lines, Inc. is incorporated under the laws of Panama. At all times pertinent hereto it was the owner of the S.S. ORIENT MERCHANT and the time-charterer of the M.S. OLAU GORM.
The defendants, Cooperative for American Relief Everywhere, Inc. (CARE), Seventh Day Adventist Welfare Service, Inc., Church World Service, Inc., and Lutheran World Relief, Inc., are volunteer relief agencies to which the Commodity Credit Corporation (an agency of the United States) donated agricultural products under authority of 7 U.S.C. § 1431 for shipment abroad.
The United States, defendant-intervenor, entered the case with the consent of all parties as the real party in interest since it is required to pay all freight charges incident to any shipments of agricultural products donated to the defendant volunteer agencies (7 U.S.C. § 1723; 32 C.F.R. 202.2).
II. THE DISPUTE
In the Fall of 1964 the defendant relief agencies entered into contracts of carriage (bills of lading) with the plaintiff carrier to transport U.S. donated agricultural commodities from Great Lakes ports to points overseas.
The route of ocean going vessels from the Great Lakes to the open sea is, of course, the St. Lawrence Seaway. Due to icing, the Iroquois Lock
of the Seaway was officially closed at midnight December 5, 1964, before the OLAU GORM and the ORIENT MERCHANT could make their way through it.
As a result the two ships were locked in the Lakes and ordered to Toronto for winter berthing.
The plaintiff thereupon, on or about December 9, 1964 telegraphed to the various shippers:
"THIS IS TO ADVISE YOU THAT BECAUSE OF FORCE MAJEURE THE ORIENT MERCHANT AND OLAU GORM ARE UNABLE TO LEAVE THE LAKES AS A CONSEQUENCE OF THE CLOSURE OF THE ST. LAWRENCE SEAWAY. THE VOYAGE HAS THUS BEEN TERMINATED AND THE FREIGHT EARNED. IN ACCORDANCE WITH YOUR REQUEST WE WILL LEAVE THE CARGO ON BOARD THE VESSELS DURING THE WINTER MONTHS. WE SHALL BE GLAD TO DISCUSS WITH YOU THE ADJUSTMENT OF A NEW FREIGHT TO APPLY FOR THE NEW VOYAGE."
The above quoted notice by the plaintiff claiming a right to payment of full freight was founded upon the following pertinent clauses of the bills of lading:
"5. In case of war, hostilities, * * * ice or closure by ice, or the happening of any other matter or event, whether of like nature to those above mentioned or otherwise, whether any of the foregoing are actual or threatened and whether taking place at or near the port of discharge or elsewhere in the course of the voyage and whether or not existing or anticipated before commencement of the voyage, which matters or events, or any of them, in the judgment of the Master or carrier may result in damage to or loss of the vessel * * *, or make it unsafe or imprudent for any reason to proceed on or continue the voyage or enter or discharge cargo at the port of discharge, or give rise to delay or difficulty in reaching, discharging at or leaving the port of discharge, the carrier or Master may * * * (2) whether or not proceeding toward or entering or attempting to enter the port of discharge or reaching or attempting to reach the usual place of discharge therein or attempting to discharge the goods there, discharge the goods into depot, lazaretto, craft, or other place; or (3) proceed to return, directly or indirectly, to or stop at any port or place whatsoever, in or out of the regular route and short of or beyond the port of discharge as the Master or the carrier may consider safe or advisable under the circumstances and discharge the goods, or any part thereof at any such port or place. When the goods are discharged from the ship, as herein provided, they shall be at the risk and expense of the shippers and/or receivers; such discharge shall constitute complete delivery and performance under this contract, full bill of lading freight and charges shall be deemed earned and the carrier shall be freed from any further responsibility. For any services rendered to the goods as hereinabove provided, the carrier shall be entitled to extra compensation, for which, together with any unpaid freight and charges, the carrier shall have a lien on the goods.
"* * *
"13. The terms of this bill of lading constitute the contract of carriage * * *
"* * *
"31. Full freight hereunder to port of discharge or port of destination, if anmed, shall be considered completely earned on receipt of the goods by the Carrier, whether the freight be stated or intended to be prepaid or to be collected at destination; and the Carrier shall be entitled to all freight and charges due hereunder, whether actually paid or not, and to receive and retain them under all circumstances whatsoever ships and/or cargo lost or not lost.
"If there shall be a forced interruption or abandonment of the voyage at the port of shipment or elsewhere, any forwarding of the goods or any part thereof by vessels of the same line or otherwise shall be at the risk and expense of the goods."
Lutheran World Relief had prepaid the freight on its shipments prior to the icing-in. CARE, Church World Service and Seventh Day Adventist had not prepaid but had executed "due bills" acknowledging receipt of bills of lading which Orient Mid-East marked "freight prepaid." These due bills provided in part:
"Receipt is hereby acknowledge of Prepaid, negotiable sets of Bills of Lading per numbered as follows without payment of freight, and in consideration of the acceptance by Orient Mid-East Lines of this Due Bill, it is herewith expressly agreed to pay ocean freight charges in U.S. Currency as undernoted within seventy-two hours after date, the vessel to have a lien on the cargo for full amount of ocean freight charges plus any expenses incidental to the collection thereof until payment has been effected."
Following the berthing of the ships in Toronto, a dispute arose as to the freight due under the bills of lading and the due bills.
The shippers and carrier thereupon entered into negotiations which resulted in an agreement dated March 3, 1965. The parties have stipulated to the following summary of that agreement:
"CARE, Church World Service, Seventh Day Adventists and Lutheran World Relief, having requested Orient Mid-East to retain the cargo on board throughout the period the vessels would be locked into the Lakes,
undertook to surrender the bills of lading originally issued and to pay the carrier the full freight due under the bills of lading first issued unless such freight had already been paid. Orient Mid-East, on its part, undertook to have new, second bills of lading issued, * * * and agreed that the OLAU GORM and ORIENT MERCHANT would perform the voyages in accordance with the terms of the second bills of lading when the Seaway opened for navigation in the Spring of 1965. The parties also agreed that if they were unable later to agree upon the amounts, if any, due the carrier in addition to the freight already paid, any party could institute suit in a United States court of competent jurisdiction for resolution of that issue 'all parties retaining all rights and defenses they presently have, and this agreement, issuance of the second bills of lading, and the payment provided for in article 1 above shall not be deemed to affect, waive or alter the rights or defenses of any party.' They also agreed therein that 'the failure of the Carrier physically to exercise any of its claimed rights, including the asserted right to discharge at Great Lakes ports or elsewhere, shall not be deemed to affect or diminish the amounts and/or remuneration to which the Carrier may be entitled under the contracts of carriage as evidenced by the second bills of lading and/or the bills of lading first issued.'"
Defendants CARE, Church World Service and Seventh Day Adventists thereafter paid the freight due under the first bills of lading on dates and in the amounts indicated below:
CARE March 16, 1965 $202,601.32
Church World Service March 10, 1965 165,968.64
Seventh Day Adventists March 19, 1965 11,694.92
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