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BULL-INSULAR LINE, INC. v. NATIONAL SUGAR REF. CO.

January 26, 1960

BULL-INSULAR LINE, INC., Libelant,
v.
NATIONAL SUGAR REFINING COMPANY, Respondent. NATIONAL SUGAR REFINING COMPANY, Cross-Libelant, v. BULL-INSULAR LINE, INC., Cross-Respondent



The opinion of the court was delivered by: GRIM

The principal question in this case is whether the expense of holding a loaded ship at her discharging berth, where a longshoremen's strike prevents unloading, must be borne by libelant, the carrier, or respondent, the consignee.

 Libelant, a common carrier by water in interstate commerce, *fn1" carried on its chartered steamship Arizpa a full cargo of raw sugar in bags from Puerto Rico to respondent's pier, adjacent to its refinery, in Philadelphia. Unloading of the Arizpa was delayed almost 43 days by a longshoremen's strike. In this action libelant's principal claim is for demurrage at $ 1,700 per day for the period of the delay. The rate was fixed in the pertinent tariff, which, with the bills of lading and the Warshipsugar form of charter party, set forth the rights and liabilities of the parties. Respondent denies all liability for demurrage.

 The longshoremen's strike came about as a result of a change in the method of handling sugar cargoes at respondent's pier.

 At that pier prior to the Arizpa's arrival ships were unloaded by the jitney method: bags of sugar were placed in slings in the ship's hold, from where the slingloads of bags were picked up by the ship's tackle and lowered onto the pier alongside the ship. Then the slingloads were taken by electric trucks or jitneys over a scale and to more distant places on the pier within the pier shed. Up to this point all the work was done by longshoremen. From this point the bags were handled and taken into the refinery by respondent's employees who were not longshoremen.

 In the spring of 1954 respondent started work on a labor-saving device which would lower the cost of moving the sugar from where it landed alongside the ship by using fewer longshoremen than the jitney method required. The labor-saving device was an overhead monorail system, which was to pick up the slingloads of sugar from the pier alongside the ship and carry them to the places on the pier to which they had formerly been carried by the jitneys. Under the jitney system 163 longshoremen were required to move the bags of sugar from the ship's hold to the place on the pier alongside the ship and from there to the more distant places on the pier. Under the monorail system respondent proposed to do the same job with the use of only 108 longshoremen.

 While the monorail system was being built on respondent's pier, Local 1291 of the International Longshoremen's Association, the representative of the longshoremen who worked on respondent's pier, knew of the proposed labor-saving device and viewed it with apprehension, since it threatened the elimination of a number of jobs of the Local's members.

 The monorail system was completed just before the Arizpa's arrival, and the Arizpa was the first ship for which the monorail system was to be used. Unhappily for libelant, which had no direct concern with labor problems in Philadelphia, the discharge of the Arizpa would serve as the test to determine how the apprehensive longshoremen would react to the new labor-saving device.

 The Arizpa arrived, as scheduled, on the afternoon of March 21, 1955. It unloading should have started at eight o'clock on the morning of March 22, 1955. Shortly before eight o'clock on that morning some 170 longshoremen appeared outside respondent's pier, but refused to unload the ship because of the proposed reduction in the working force. Thus started a bitter longshoremen's strike which lasted for 43 days, and which, despite a court injunction and a contempt order against the union, ended only because all the members of the Philadelphia Marine Trade Association refused to hire any longshoremen until the strike was settled.

 Respondent did not directly employ any longshoremen for unloading. The longshoremen who did the unloading were employed by a stevedoring contractor, Dugan & McNamara, Inc. *fn2" The stevedoring contractor was a member of the Philadelphia Marine Trade Association, which on behalf of its members negotiated collective bargaining agreements with longshoremen's unions in the port of Philadelphia, and which attempted to settle controversies with the unions under the collective bargaining agreements which it had negotiated. *fn3" When the dispute arose over the reduction of the number of longshoremen on respondent's pier, the Philadelphia Marine Trade Association took the position that the dispute was subject to arbitration under the collective bargaining agreement, and that under its terms the dispute had to be settled by arbitration, and that the agreement prohibited a strike in reference to the disputed question of the reduction in the work force. The union contended that the controversy was of a type not subject to arbitration and that the no-strike provision of the agreement did not apply to this situation. The union's contentions were decided against it: Philadelphia Marine Trade Association v. International Longshoremen's Association, 1955, 382 Pa. 326, 115 A.2d 733, certiorari denied 350 U.S. 843, 76 S. Ct. 84, 100 L. Ed. 751.

 Respondent's denial of liability for demurrage is based upon the tariff's strike clause:

 'Laytime for discharging shall be suspended and no demurrage shall accrue during any period in which discharging is prevented by a strike or riot of any labor employed by the Owner or any of the Owner's agents or contractors (including labor employed by the Consignee or Receiver of the Vessel's cargo solely for the purpose of performing a stevedoring contract with the Owner) * * *'

 Respondent contends that the longshoremen who moved the sugar from the ship's hold to the distant points on the pier and who went on strike when the monorail system was to begin operation were, in the words of the strike clause, 'labor employed by the consignee * * * solely for the purpose of performing a stevedoring contract with the Owner.' Because of this, respondent contends, the strike clause operated to relieve respondent from liability for demurrage.

 Respondent contends that the longshoremen were employed solely to perform a stevedoring contract with the Owner (libelant) and bases its contention on the claim that all the work the longshoremen were doing was work that libelant was under a legal duty to perform. This contention rests in turn upon the contention that libelant was under a legal duty to lift the cargo not only out of the hold and onto the pier, but also to carry the cargo thence to more distant places on the pier. The applicable tariff provision is:

 'The Owner shall discharge, and the Consignee shall receive, the cargo alongside the vessel within reach of her tackle, or in accordance with the custom ...


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