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Sause Bros. Ocean Towing Co. v. Gunderson Inc.

June 1, 1973

SAUSE BROS. OCEAN TOWING CO., INC., APPELLANT,
v.
GUNDERSON, INC., RESPONDENT



Appeal from Circuit Court, Multnomah County. Alan F. Davis, Judge.

J. Laurence Cable, Portland, argued the cause for appellant. With him on the briefs were Souther, Spaulding, Kinsey, Williamson & Schwabe, and Robert G. Simpson, Ridgway K. Foley, Jr., and Terry C. Hauck, Portland.

William F. White, Portland, argued the cause for respondent. With him on the brief were White, Sutherland, Brownstein & Parks, Portland.

Bryson, Justice. O'Connell, Chief Justice, and McAllister, Denecke and Howell, Justices.

Bryson

Plaintiff commenced this action to recover $10,800 from defendant under the demurrage provision of a contract of affreightment. Defendant's answer consisted of a general denial and three affirmative defenses. The case was tried before the court sitting without a jury. After making findings of fact and conclusions of law, the court entered judgment for plaintiff in the sum of $800, based on two days' demurrage at $1,800 per day less $2,800 setoff as hereinafter discussed. Plaintiff appeals and defendant cross appeals.

Plaintiff is a private ocean freight carrier, and defendant is a manufacturing firm with a plant in Portland, Oregon. In July 1969 defendant hired plaintiff to ship 492 tons of hatch covers to Willamette Iron & Steel Co. in Richmond, California, and 665 tons of miscellaneous steel fabrications to National Steel & Shipbuilding Co. in San Diego, California. The contract

of affreightment consisted in part of a minimum rate schedule or tariff which was written and submitted by plaintiff to the Interstate Commerce Commission. The schedule provided:

"Demurrage on carriers vessels will be charged on all delay to the vessels at either the origin point or the destination point in excess of time allowed on individual rate pages of this schedule, at the rate of $1800.00 per day or fraction thereof. No demurrage will be charged when the delay in loading or discharging is occasioned by causes of force majeure.

"* * *.

"* * * Carrier shall notify shipper 12 hours in advance of estimated time of arrival at loading and discharge points. Shipper shall be allowed 24 hours to load cargo and 24 hours to discharge cargo. Time in excess of allowed loading and/or discharge time shall be charged demurrage as provided for in Item 20. * * *" (Emphasis in original.)

During the negotiations of this contract, defendant explained to plaintiff that it was desirable to schedule the cargo to arrive in San Diego prior to Saturday, September 6, because National Steel, consignee, was launching a ship on that date. The launching of the vessel rendered any cargo unloading operations impossible. Plaintiff assured defendant that it would do what it could to deliver the cargo to San Diego before the scheduled launch.

Plaintiff's tug Kokua and barge Kilchis arrived at defendant's dock in Portland at 11:30 a.m. on Monday, August 25. The Kokua had run aground while proceeding up the Columbia river and was dispatched to the shipyard at Swan Island in Portland for dry-dock and repairs. Defendant's crew loaded the Kilchis during the daylight hours of Monday, Tuesday,

and Wednesday. On Thursday, August 28, it appeared that defendant's crew would be finished in time for a Thursday night departure, but plaintiff learned that the Kokua would be unable to leave dry dock until Friday night. The parties determined that if plaintiff sent for a substitute tug from Coos Bay, Oregon, and the two vessels departed for Richmond, California, on Thursday night, the cargo would arrive there on Monday, September 1, which was Labor Day, and no unloading crew would be available. The substitute tug would also cost plaintiff an additional $2,800. The parties decided to wait until the Kokua was repaired.

At some point during these discussions, James Robertson, plaintiff's superintendent, informed defendant's sales manager that the cargo was estimated to arrive in San Diego at 8 a.m. on Friday, September 5.

The Kokua arrived at defendant's dock just after midnight on Saturday morning, August 30, and departed with the barge for Richmond, California, at 6 a.m.

At 7:10 p.m. (1910 hours) on Tuesday, September 2, the Kilchis was secured at the unloading slip of Willamette Iron & Steel Co. in Richmond. The cargo discharge was completed by 9:30 a.m. (0930 hours) on Wednesday, September 3. The total time for discharge of cargo at Richmond was 14 hours and 20 minutes.

At midafternoon on Friday, September 5, Jean Goodloe, a representative of plaintiff, informed Don Christensen, National Steel's purchasing agent, that the vessels would arrive in San Diego at approximately 10:30 p.m. that night. Christensen replied that

National Steel was launching a ship on Saturday, that the crew did not work on Sunday, and that National Steel would not be able to unload the cargo until Monday, September 8. Christensen requested that the vessels be sent to an alternative dock, pier 12, and wait there until an unloading berth was available at National Steel. Goodloe relayed this information to Captain Davis of the Kokua via radio.

As he approached San Diego on Friday evening, September 5, Captain Davis determined that the only pier 12 shown on his charts was located in a restricted military area. He contacted the harbor patrol and was assigned pier 10 (Tenth Avenue Terminal), berth 6, as a temporary mooring. The vessels were secured into this temporary dock at 12:35 a.m. on September 6, and Captain Davis immediately informed National Steel of his arrival. A representative of National Steel told Captain Davis later that morning that no unloading dock would be available until early Monday morning. At 4:40 a.m. (0440 hours) on Monday, September 8, the barge Kilchis was berthed at National Steel. The discharge was completed by 6:20 p.m. (1820 hours) on the same day, making a total of 65 hours and 45 minutes for cargo discharge at San Diego.

At the conclusion of the trial, the court found that plaintiff was entitled to two days' demurrage under the contract of affreightment. However, the court reduced the judgment from $3,600 to $800 because plaintiff had not been forced to expend $2,800 to hire a substitute tug to tow the Kilchis while the Kokua was being repaired in Portland.

Plaintiff first assigns as error that "[t]he Circuit Court erred in awarding plaintiff only 2 days of

demurrage," and contends that it is entitled to three days of demurrage on both the loading and unloading operations for a total demurrage of six days, or $10,800.

There are three points of vessel detention where demurrage might occur -- cargo loading at Portland and discharge at Richmond and at San Diego. The term "demurrage" is defined as:

"* * * The sum which is fixed by the contract of carriage, or which is allowed, as remuneration to the owner of a ship for the detention of his vessel beyond the number of days allowed by the charter-party for loading and unloading or for sailing. * * *" Black's Law Dictionary 519 (Rev 4th ed 1968).

The trial court found that the demurrage provision in the contract of affreightment was drafted by plaintiff and should be strictly construed against plaintiff. We agree. See 13 CJS 806, ...


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