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THE VALMAR

May 8, 1941

THE VALMAR; CELIO
v.
JONES



The opinion of the court was delivered by: KALODNER

Libellant, John Celio, is a resident of Brooklyn, N.Y.; respondent, Walter Jones, is a resident of New York City. Jones owns and operates the respondent M/S Valmar in foreign commerce under the Honduran flag. On September 16, 1940, Celio and Jones entered into a written charter party, under which Jones agreed to charter the Valmar to Celio for two trips and returns to Nicaragua and other ports, for the sum of $2,000 per trip, plus 50 per cent of the money obtained from the cargoes going south. Celio paid $1,000 at the time of the execution of the contract, and an additional $1,000 on September 21, 1940, as provided by the contract. Under the terms of the charter party the Valmar was to be ready to sail on September 26, 1940. It was not ready on that date and, according to the libel, Jones refused to proceed further with the performance of the charter party. On February 26, 1941, Celio filed the instant libel in personam and in rem against Jones and the Valmar.

Respondent Jones thereupon filed exceptions to the libel, upon the ground that the cause of action alleged in the libel and the damages claimed thereunder arose from the breach of an executory contract of charter party, for which breach libellant is not entitled to a maritime lien against the Valmar.

 A further exception to the libel was on the ground that the damages claimed therein are made up in part of expenses incurred by the libellant, and in part of loss of expected profits, which losses, it is contended are not recoverable in the in rem proceedings against the Valmar.

 It is undisputed that there was a breach of the charter party. The question raised by the exceptions is as to whether or not the breach entitled the libellant to a maritime lien upon the Valmar upon which an attachment in rem could be founded.

 A brief summary of the allegations in the libel is appropriate. Setting forth the charter party *fn1" the libel avers that after its execution and the payment of the $2,000 consideration, libellant engaged agents and a gang of men at a cost of $600 to "purchase, cut and gather growing crops of bananas and load same aboard the M/S Valmar for shipment to the libellant in New York"; that by reason of the breach, the libellant suffered an estimated loss of revenue of $1,000 from available cargo that the respondent refused to accept for the trip south, and an additional loss of profit from sales of banana cargoes in the sum of $14,482; that the libellant expended $100 for supplies, groceries, etc., put aboard the Valmar for the provisioning of its crew at the request of the respondent.

 Adding to the sums mentioned the $2,000 paid under the charter party, the libel seeks recovery from the respondent of the sum of $18,182.

 The crux of the respondent's exceptions to the libel is that while Jones, the owner of the Valmar, may have breached his contract with the libellant, that the libellant is not entitled to a suit in rem against the Valmar because the Valmar never entered into the performance of the charter party.

 It may be stated at this point that the respondent does not seriously dispute the libellant's right to an action in rem against the Valmar for the groceries and supplies put aboard the vessel for the provisioning of its crew -- although objection is raised to the inadequacy of the pleading with respects to the $100 outlay for the groceries, etc., to wit, that there was no averment as to the time or place of deliver, nor any schedule showing the amount of the supplies, etc. In any event, I am of the opinion that the libellant had a right to a lien for these provisions, and is entitled to an action in rem to the extent of that lien.

 Now as to the contentions with respect to the principal point in controversy -- Was the transaction and the breach of the charter party of such a nature as to entitle the libellant to an action in rem against the Valmar for the recovery of (1) the $2,000 consideration paid under the charter party; (2) the $600 expended for the hire of men to prepare the cargo in Nicaragua for the northbound voyage; (3) the estimated $1,000 loss of revenue from available cargo that the respondent refused to accept for the trip south; and (4) the $14,482 estimated loss of profits from the sale of banana cargoes in the scheduled northbound trips?

 The libellant premises his right to proceed against the Valmar on two contentions:

 (1) That the $2,000 was paid as advances "solely for the purpose of putting the vessel in a seaworthy condition", as set forth in paragraph 8 of the libel; and

 (2) That the $2,000 paid was advanced as prepaid freight in furtherance of the contract for the purpose of putting the ship in seaworthy condition, and that the acceptance by the respondent of the $2,000 in furtherance of the contract constituted a lien against the vessel enforceable in rem, since upon payment of the $2,000 the owner of the vessel enjoyed the benefit of ...


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