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Paragon Oil Co. v. Republic Tankers

November 5, 1962

PARAGON OIL CO., INC., LIBELLANT-APPELLEE,
v.
REPUBLIC TANKERS, S.A., RESPONDENT-APPELLEE, YACIMIENTOS PETROLIFEROS FISCALES, ERRONEOUSLY SUED AS YACIMIENTOS PETROLIFEROS FISCALES, S.A., RESPONDENT-APPELLANT. REPUBLIC TANKERS, S.A., PETITIONER-APPELLEE, V. YACIMIENTOS PETROLIFEROS FISCALES, RESPONDENT-IMPLEADED-APPELLANT.



Author: Friendly

Before LUMBARD, Chief Judge, and FRIENDLY and KAUFMAN, Circuit Judges.

FRIENDLY, Circuit Judge.

Paragon Oil Co., Inc., a New York corporation alleging itself to be owner and operator of the tanker Greenpoint, filed a libel in the District Court for the Southern District of New York against Republic Tankers, S.A., a Panamanian corporation, and Yacimientos Petroliferos Fiscales (hereafter YPF), an agency of the Argentine Government, for damages sustained by the Greenpoint on April 17, 1957, when she grounded near a dock in Buenos Aires harbor. At the time the tanker was under a voyage charter to Republic, which in turn had entered into a contract of affreightment with YPF. Republic, acting by a proctor who was an associate in the firm representing Paragon, impleaded YPF. After a trial Judge Levet sustained Paragon's claim against Republic and Republic's against YPF; Paragon's direct claim against YPF was dismissed. YPF alone appeals; we affirm.

The evidence warranted the judge in finding the facts to be as follows:

On March 16, 1957, Paragon, by Circle Shipping Co., Inc. as Agent, chartered the Greenpoint to Republic for a voyage from Puerto La Cruz, Venezuela, to Buenos Aires. The charter party contained a safe berth clause. Previous to this, in December, 1956, YPF had entered into an agreement with Paragon Oil Company, Inc. (Del.) for the purchase of seven cargoes of fuel oil (Purchase Order NY-1970) and a complementary Affreightment Contract with Republic for the transportation of these cargoes to Buenos Aires or LaPlata in the Argentine e8Purchase Order NY-1971). The Affreightment Contract, like so many commercial agreements, "carries its endorsements like bunting flapping in all directions," Devlin, Samples of Lawmaking (1962), 35. One of these appendages was a photostatic copy of some clauses from the same form of charter party, Warshipoilvoy (Rev.), used by Paragon and Republic in their Voyage Charter, among them the following:

"6. SAFE BERTH, SHIFTING. The Vessel shall discharge, at any safe place or wharf, or alongside vessels or lighters reachable on her arrival, which shall be designated and procured by the Charterer, provided that the Vessel can proceed thereto, lie at, and depart therefrom always safely afloat, any lighterage being at the expense, risk and peril of the Charterer * * *".

Thus, so far as here relevant, the Voyage Charter and the Affreightment Contract had identical safe berth clauses. Although a typewritten addition to the photostat explained that "The word Charterers do [sic] not mean that Yacimientos Petroliferos Fiscales had chartered any ships, in view of the fact that Purchase Orders NY-1970 and NY-1971 are only one order with condition C & F, as shown in the corresponding Purchase Orders", it is plain that YPF assumed any obligations which the printed form specifically imposed on a "Charterer". The only other clause in the Affreightment Contract that needs to be mentioned at this juncture is one reading:

"For your information the tankers which exceed 31 feet draft in fresh water, fully loaded, might require lighterage in Recalada, which expense, if any of course will be for seller's account because of the conditions C & F of combined Purchase Order NY-1970 and NY-1971. Other lighterage, if any, at discharge port to be for account of Y.P.F."

The Greenpoint had an agent, Milanowski, at Buenos Aires; he was appointed, as he said, "By the owners, the Republic Tankers, S.A., and by Circle Shipping". The Greenpoint kept Milanowski advised of its progress down the South American coast; he passed this information on to YPF, ultimately informing it that the tanker would arrive on April 16, 1957, at Recalada and with high tide would proceed to Interseccion.*fn1 On April 15, YPF told Milanowski that the Greenpoint was to take berth B,C or D in the South Dock at Buenos Aires; on April 16, it confirmed Berth C. Having been instructed by YPF "to take a chance of the exceptionally high tides prevailing during the last days and enter ship without lightering, if possible," Milanowski radioed the Greenpoint on April 16:

"Advise when Recalada pilot on board and indicate ETA Interseccion where would lighter if necessary stop however if recent high tides prevail try enter south dock Baires without lightering * * *".

Consistently with this, although on April 16 YPF had assigned a vessel to lighter the Greenpoint at Interseccion, it later cancelled the order. The Rio de la Plata pilot, Granelli, who boarded the Greenpoint at Recalada on April 16, found her draft to be 30.8inch both fore and aft; his deposition does not make clear whether this was a salt or fresh water reckoning. Upon the vessel's arriving at Interseccion early in the morning of April 17, Granelli was relieved by port pilots; they advised that, because of the continued high tides, there was sufficient water for the tanker to proceed directly to the berth without lightering. Their advice proved correct; the Greenpoint arrived off South Dock C at 11:30 A.M. on April 17 without incident - only to find the berth occupied by the barge Esso Rosario.

On April 16 Milanowski had learned from YPF of the barge's being at Dock C; however, YPF advised that it would finish discharging at 5 P.M., and later that day confirmed that it had. Camerata, one of the port pilots who boarded the Greenpoint at Interseccion at 6:30 A.M. on April 17, advised her captain that Dock C was occupied by the barge but said he expected the barge would leave before the Greenpoint arrived. Milanowski had procured a tug to go out to Interseccion for lightering and attendant customs formalities if the tide required this. When he received a message from Camerata that the Greenpoint was coming directly to her berth, he went there. Finding the Esso Rosario at the dock, he phoned the YPF office, and was told that "they were waiting for Esso to take the barge immediately out." By this time the Greenpoint was approaching the berth and could not longer be ordered to turn around and anchor in deep water. She anchored alongside the barge, some 35 meters from the dock. Her fresh water arrival draft was 30foot8inch forward, 31foot00inch aft, mean 30foot10inch. The YPF workers on the dock did not have a hose long enough to discharge her. Around 1:30 P.M. the Esso Rosario departed under its own power. Attempts were made to move the Greenpoint to the dock, but she was aground. At the afternoon high tide, around 6:00 or 7:00 P.M. on April 17, there were further efforts to move her, again without success. Later that night she was brought within 25 meters of the dock; discharge began on the morning of the 18th. By that evening she had been lightened enough to be brought against the dock. Next day, April 19, the chief mate reported she was leaking; surveyors were called and found her bottom plating damaged.

Paragon's case against Republic and Republic's against YPF rested on a simple series of propositions: A place to which the Greenpoint could proceed and from which she could depart "always safely afloat" was warranted; it was not provided; therefore the warranty was broken and the warrantor was liable for the resulting damage. Although such simplicity is often delusive, courts should not spurn it when, as here, it is sufficient and appropriate.

YPF makes much of the fact that the Greenpoint's agent and captain both knew before her arrival at Buenos Aires that the Esso Rosario was at Berth C, and relies on the statement in Panama R.R. Co. v. Napier Shipping Co.,166 U.S. 280, 288, 17 S. Ct. 572, 575, 41 L. Ed. 1004 (1897), that the obligation to supply a safe berth "is manifestly inapplicable where the agent of the vessel is already acquainted with the danger, and assumes the responsibility of providing her with a safe berth." This reliance is misplaced, for three reasons. The first is that the Panama Railroad was only a wharfinger, who, in the absence of an express contract creating a higher standard, "does not guarantee the safety of vessels coming to his wharves," although he is "bound to exercise reasonable diligence in ascertaining the condition of the berths thereat, and if there is any dangerous obstruction to remove it, or to give due notice of its existence to vessels about to use the berths." Smith v. Burnett, 173 U.S. 430, 433, 19 S. Ct. 442, 443, 43 L. Ed. 756 (1899). In contrast, Republic's liability to Paragon and YPF's to Republic was that assumed by a charterer, bound by the express terms of his contract "to furnish, not only a place which he believes to be safe, but a place where the chartered vessel can discharge 'always afloat.'" Constantine & Pickering S.S. Co. v. West India S.S. ...


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