Sasportes v. Copacabana
Sasportes v. Copacabana
Opinion of the Court
The M/V Sol de Copacabana was a Spanish tuna-fishing vessel owned by the Spanish corporation Navexport, S.A. It ran upon hard times and was caught in its creditors’ nets and sold at judicial sale. Here two creditors compete for a portion of the proceeds of the sale. Appellee Banco de Crédito Industrial, S.A., a Spanish corporation, holds a preferred ship mortgage against the Copacabana. Appellant Star-Kist Foods, Inc., claims to hold a maritime lien against the ship under the Federal Maritime Lien Act, 46 U.S.C. §§ 971-974, for advances it made to and on behalf of the vessel. Because the Copacabana is a foreign ship, the maritime lien — at least to the extent it arose out of expenditures made in the United States — would take pri
Star-Kist Foods is, among other things, a tuna canning company. From December 26, 1971, through March 12, 1975, it repeatedly advanced money to the Copacabana and on its behalf. Of these expenses, $168,045.84 has not been repaid by Navex-port and Star-Kist claims that amount plus interest, or $214,968.86. Meanwhile, on January 23,1974, Navexport gave Banco de Crédito a mortgage of approximately $2,488,100 on the Copacabana. On March 21, 1975, Julien Andre Sasportes, a creditor of Navexport who is not a party to this appeal, brought an action in the United States District Court for the Canal Zone. He sued Navexport in personam and the Copacabana in rem. On June 4, 1975, appellant Star-Kist brought suit in the same court, and on July 17 appellee Banco de Crédito did likewise. That court entered default judgments against Navexport and the Copacabana. The Copacabana was sold at judicial sale on July 21, 1975, for $295,-000. These proceeds were paid into the registry of the federal district court pending its decision on the order of priority among the creditors.
On April 21, 1976, that court held, inter alia,
The district court based this conclusion on two contracts which Star-Kist
Courts and commentators have identified several characteristics of joint ventures. The parties’ intentions are important. Misco-United Supply, Inc., v. Petroleum Corp., 462 F.2d 75, 79 (5th Cir. 1972) (Tex. law). Joint ventures involve joint control or the joint right of control, see, e. g., Detachable Bit Co. v. Timken Roller Bearing Co., 133 F.2d 632, 635 (6th Cir. 1943), and joint proprietary interests in the subject matter of the venture, see, e. g., Swann v. Ashton, 330 F.2d 995, 996 (10th Cir. 1964) (Colo. law). Both venturers share in the profits, see, e. g., Beavers v. West Penn Power Co., 436 F.2d 869, 873 (3d Cir. 1971) (Pa. law), and both have a duty to share in the losses, see Pan American Airways, Inc., v. Quilez, 154 F.2d 496, 496 (5th Cir. 1946). But of course these elements cannot be applied mechanically. No one aspect of the relationship is decisive. See Hyman v. Regenstein, 258 F.2d 502, 513 (5th Cir. 1958), cert. denied 359 U.S. 913, 79 5. Ct. 589, 3 L.Ed.2d 575 (1959). Many business dealings other than joint ventures might involve, for example, joint property holdings. And although a joint right of control is one of the elements, it is commonplace for one joint venturer to delegate control of operations entirely to the other, creating the appearance that there is no shared control. See, e. g. Shell Oil Co. v. Prestidge, 249 F.2d 413, 416 (9th Cir. 1957). On the other hand, large creditors may exert some control over a business even when they are unquestionably not joint venturers. Finally, the definition of “joint venture” will vary with the context. If we were deciding whether two parties are jointly liable in tort because they are joint ventur-ers,
Joint venturers cannot hold maritime liens because they are not “strangers to the vessel,” P.T. Perusahaan Pelayaran Samudera Trikora Lloyd v. Salzachtal, 373 F.Supp. 267, 275 (E.D.N.Y. 1974), but rather occupy a position akin to that of the vessel’s owner. Perhaps the best example of a joint venturer would be a party whose prospective gains resemble the owner’s, who has the owner’s prerogatives, and who might otherwise appear to investigating creditors to be a part owner. Such a party may, of course, have an in personam contract claim
Certain aspects of the dealings between Star-Kist and Navexport may suggest that Star-Kist was such a joint venturer. Their relationship lasted for some time and involved quite frequent dealings. StarKist advanced funds for a few other purposes besides the provision of necessaries.
Banco de Crédito also argues, and the district court apparently agreed, that Star-Kist has no maritime lien because it relied only on the personal credit of the owner, Navexport, and not on the credit of the ship. Even under the best of circumstances this position is difficult to sustain. The Federal Maritime Lien Act explicitly instructs us to presume that those who furnish repairs, supplies, and other necessaries looked to the credit of the vessel itself and not just to the owner,
Our cases support the conclusion that Star-Kist was a maritime lienor and neither waived its rights nor became a joint venturer. In Inland Credit Corp. v. M/T Bow Egret, 552 F.2d 1148 (5th Cir. 1977), we dealt with the claims of creditors who had been promised a percentage of the vessel’s profits in addition to the repayment of their principal and interest. We affirmed the district court’s holding that they were not joint venturers. One of those creditors had obtained a personal guarantee of his loan from the president of the shipping company, and we held that this did not constitute a waiver of his lien rights. In Crustacean Transportation Corp. v. Atalanta Trading Corp., 369 F.2d 656 (5th Cir. 1966), the creditor advanced money for supplies in return for five percent of the ship’s profits in addition to his principal and interest. The creditor also took another security interest besides any interest he had in the vessel. We upheld the district court’s decision that there was neither a joint venture nor a waiver of lien rights. In Point Landing, Inc., v. Alabama Dry Dock Shipbuilding Co., 261 F.2d 861 (5th Cir. 1958), we held that the presumption that a creditor relied on the credit of the vessel was not overcome even when a creditor took a promissory note from the vessel owner, a chattel mortgage on the vessel, and a mortgage on real estate held by the vessel’s owner. Here, to be sure, we are reversing the district court; Inland Credit and Crustacean upheld lower court rulings. But the facts of those cases were far more unfavorable to the creditors asserting liens than our facts are to Star-Kist.
On remand the court below will have to make two relatively minor adjustments in the amounts claimed by Star-Kist. Under the Federal Maritime Lien Act, “repairs, supplies, . . . [and] other necessaries” can give rise to maritime liens. 46 U.S.C. § 971. Star-Kist’s accounting reveals that by far the greater proportion of its advances were made for such purposes. Nevertheless, some of its payments were for insurance premiums, telephone calls, hotel rooms and similar items which may or may not be “necessaries.”
We reverse the district court’s holding that Star-Kist’s claims are not maritime liens, and we remand for proceedings consistent with this opinion.
REVERSED and REMANDED.
. It also concluded that Joseph Correia, the “fish” captain of the ship, had a valid maritime lien for wages and that Sasportes’s claim was not a maritime lien. These conclusions are not before us on this appeal.
. See pp. 1210-1211, infra.
. 46 U.S.C. § 971 provides:
“Any person furnishing repairs, supplies, . or other necessaries, to any vessel, whether foreign or domestic, upon the order of the owner of such vessel, or of a person authorized by the owner, shall have a maritime lien on the vessel, which may be enforced by suit in rem, and it shall not be necessary to allege or prove that credit was given to the vessel.”
. In fact the agreements were between Navex-port and Star-Kist Caribe, Inc., a wholly-owned subsidiary of Star-Kist Foods, Inc. The district court treated Star-Kist Caribe and Star-Kist Foods as the same entity. Indeed in its complaint Star-Kist Foods averred that the contracts were between it and Navexport. On appeal Star-Kist Foods insists that it and Car-ibe are not alter egos, but its brief proceeds on the assumption that they may be treated as one. We shall make the same assumption.
. The contract reads:
. Canner will from time to time negotiate with a majority of the U. S. flag tuna vessels operating for Canner . . upon (1) prices, or (2) a method of determining the prices, to be paid for fish. In the event agreement is reached with the majority of vessels as to such prices or method of determining prices, the prices to be paid pursuant to this agreement shall either be (1) those prices or (2) prices determined by the method agreed upon, for the period agreed upon.
In the event agreement cannot be reached with a majority of the vessels on prices or a method of determining prices, the prices to be paid hereunder shall be the prevailing market prices. App. at 7.
. The principal difference was that the January 1, 1973, contract permitted Navexport to sell at a higher price in Europe or the United States unless Star-Kist met the higher price “less a discount of ten dollars . . . per short ton.” App. at 14.
. Several of the cases cited by the parties involve such other contexts. See, e. g., Shell Oil Co. v. Prestidge, 249 F.2d 413 (9th Cir. 1957) (tort liability); United States ex rel. Altman v. Young Lumber Co., 376 F.Supp. 1290, 1296-97 (D.S.C. 1974) (suit under Miller Act, 40 U.S.C. § 270b).
. See 1210 infra.
. 46 U.S.C § 971, quoted at 1207 n. 3, supra, concludes “it shall not be necessary to allege or prove that credit was given to the vessel.”
. It might tend to show that Star-Kist was insufficiently diligent in prosecuting its claim, so that its lien is barred by laches. This defense is preserved by the Federal Maritime Lien Act — 46 U.S.C. § 974 provides that “this chapter shall not be construed to affect the rules of law existing on June 5, 1920, in regard to . laches in the enforcement of liens upon vessels” — and Banco de Crédito raises it. But whether a lien is barred by laches “is a question primarily addressed to the discretion of the trial court,” Gardner v. Panama R. Co., 342 U.S. 29, 30, 72 S.Ct. 12, 13, 96 L.Ed. 31 (1951), and the district court ruled against Banco de Crédito on this point, apparently because the defense was not properly raised. See Second Supp. Record on Appeal (Part I), at 64. This ruling was not an abuse of discretion, especially since we have held that the party asserting laches must show not only delay but delay prejudicial to its interests, see Marine Bank v. T. E. Welles, 289 F.2d 188, 191 (5th Cir. 1961), and Banco de Crédito has not made such a showing.
. On this point Star-Kist’s own accounting, App. at 21-25, may be misleading. It classifies Star-Kist’s expenditures on behalf of the Copacabana under six headings: seamen’s wages, fuel, supplies, accessories and repairs, “other,” and “non-priority.” The itemization reveals, however, that the bulk of the items comprised by the last two categories do give rise to liens.
Reference
- Full Case Name
- Julien Andre SASPORTES v. M/V SOL DE COPACABANA, her engines etc. and Navexport, S.A., Banco De Credito Industrial, S.A., Plaintiff STAR-KIST FOODS, INC., a Foreign Corp. v. M/V SOL DE COPACABANA, her engines, tackle, boilers appurtenances, etc., Banco De Credito Industrial, S.A., Plaintiff-Appellee BANCO DE CREDITO INDUSTRIAL, S.A. v. M/V SOL DE COPACABANA, her engines, tackle, etc. and Navexport, S.A.
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- 1 case
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- Published