*2 VAN GRAAFEI Before OAKES and LAND, MISHLEP, Judges, Circuit Dis Judge.* trict * York, Chief for the sitting by United States District Eastern District Court of New designation. valid; that
OAKES, they tracts were exec- Judge: Circuit accords; utory appel- bound upon This contract action founded our lant, NAC; contracts, and that under diversity jurisdiction many one of the law appellee fully paid appellant. National resulting suits the almost from incredible Corp. Republic Ni- American Federal purchase program ap- massive (S.D.N.Y.1978). geria, Ap- pellee Republic (Nigeria) Federal *3 negotiat- pellant argues that the principally in the spring mounted of 1975. Under this ed were ineffective because there Nigeria contracts program, sixty- contracted with minds, that if eight suppliers meeting of effec- appel- international of which no lant, (NAC), Corp. renegotiated National American were not tive the contracts one, purchase twenty accords, for the total of over executory and novations but million metric tons of cement to be unload- to addi- any in event NAC is entitled year port ed within one at the of a Lagos, court below tional because the port capable unloading only of one million Appellees, damages. its computing erred in year. per metric tons To add lime to the arguing Judge in Goettel’s addition to mix, the contracts —if one involved here correct, rulings argue that NAC’s typical example is a a built-in governmental —involved arise of claims out suppliers: demurrage bonanza for sovereign Nigeria and acts of are payable per per claims were diem vessel state, thereby rendering acts the claims of rates with no restriction on the number nonjusticiable. We for the reasons affirm suppliers might use and claim demur- set out below. single on a with vessel and no mini- mum required for each As vessel. FACTS result, port a when conges- the inevitable delayed unloading, huge tion a Assuming that the obtain reader began piling up claims because numerous familiarity certain Goettel’s ships carrying tonnages small small dif- for below, opinion only we review the facts in suppliers ferent waited in the harbor or legal issues sufficient detail elucidate or, port, outside in the case of appeal. carrying (cost, cement sold under CIF insur- stated, Nigeria’s pur- As 1975 cement contracts,1 freight) ance and simply rested NAC, program chase an American involved port at their home in somewhere the world. Spanish company with connections. On Faced with a national economic disaster a April Nigeria entered into con- growing congestion because the in its for purchase tract with NAC major port supply threatened the of vital per metric tons of Portland Cement at $60 goods, Nigeria August consumer in price Lagos, purchase for a CIF total placed shipping an embargo on all into La- $14,400,000. for provided The contract de- gos. Nigeria suppliers notified its consignee Nigeria murrage payable permit port would no vessels to enter the $3,500 exceeding at a diem. rate not except already for those under sail or those governed was to be contract giving two months’ advance sail- notice of City” laws “New York involved is- and ing and obtaining permission departure. for bank, appellee through suance the state Moreover, Nigeria formed a Nigeria (CBN), of an Central Bank of irrev- committee to renegotiate cement con- correspondent ocable letter of credit to its tracts and accompanying letters credit. bank, Morgan Guaranty Trust Co. New specifically It is renego- NAC’s contracts (Morgan). York favor CBN established dispute. tiated that are here in The United M^y a a letter of credit with States District for the NAC Court Southern Dis- $14,400,000, York, 1976j Goettel, expiration trict of New date Gerard F. Judge, renegotiation purchase price held these con- full amount of generally ing transportation. contracts 2-320 CIF call for N.Y. U.C.C. loading against lading (McKinney). tender of bills of cover- cement, subsequently government agreed pay policy decree issued demurrage expenses December 1975.3 excess credit assigned portions amount. NAC vessels, Of NAC’s first six four were payments due to it contract eventually Lagos; but unloaded in the Jo- corporations, assign- various principally two boy departed and the Jotina without dis- totaling ments to International charging cargoes. their Their owners exer- Española, (Intrafin- Trade Finance S.A. shipholder’s cised the ce- liens seized sa), Agustine headed one Arrau. Nigeria grant Subse- ment. would contracts, quently, renegotiation priority berthing, after the was run- ning payment.4 As to second hereinafter called the dis- deposition although there was charge, reassigned rights Intrafinsa Arrau testimony from Intrafinsa’s letter of credit with NAC some of them and in the were half loaded agreeing pay shipowner’s claims being process of loaded when im- damages.2 when NAC recovered *4 posed embargo shipowners the and that the Performance of the cement contract sold to Arabia some the Saudi of cement July started in late with the shipment lien, sufficiently his records were in- upon of 500 tons of cement the vessel Cre- adequate that the court below found that (which 10,500 tan Life also carried tons neither nor NAC Intrafinsa had established consigned by Nigeria’s one nu- another of any F.Supp. losses. 448 at 628. merous suppliers). Five additional 1976, early Nigerian In ce- January the vessels, Naimbana, Doro, including the Rio ment contracts committee invit- Cherryfield, Jotina, Joboy, and ce- carried Gero, president, ed NAC’s Dr. Ilona to rene- ment to for NAC. These the were gotiate the cement of contract and letter vessels”; 10, by September “first six credit. a prepared Gero and Arrau docu- 1975, Nigeria completed payment of ment, 28, 1976, January dated which was $2,257,800 cargoes for their of combined 38, introduced in evidence as Exhibit 37,630 Aristotle, ships, tons. Six other the $3,945,000; set at the Intrafinsa’s Astrid, Ardenal, Euna, Sandrina, and Nich- allegedly the represented amount demur- (the vessels”), olaos H. “second six at rage due on all vessels calculated prepared loading or partially for load- $3,500 document, per day. in the NAC Also Nigeria imposed ed when embargo. At promised Nigeria accept “cause” to to deliv- embargo the time of CBN also instruct- 28,370 of of ery an additional tons cement. correspondent ed its Morgan all to dishonor supporting demurrage Calculations claims, even those on accruing document, appear claim as a schedule to prior vessels that entered the harbor but the noted this district court docu- embargo, unless CBN had certified the doc- mysteriously listing contains a column uments payment. Nigeria (estimated arrival) formalized the “ETA” time of La- pay assignment Intrafinsa had authorized credit on the & dis- Ince Co. is proceeds although light of the letter of credit for cussed of our decision on vessel, Cherryfield, Co., on one grounds to Ince & alternative not resolved at note shipowner, April before the reas- infra. signment from Intrafinsa to NAC. The autho- Morgan, Morgan’s rization to well as as letter opinion 3. The trial his states of notification to Ince & lan- contained decree was issued December National guage specifying assignment not Corp. Republic Nigeria, 448 Am. v. Federal assignment part an of the letter of credit copy (S.D.N.Y.1978), but the itself, Summers, see R. J. White and Handbook appeal on is dated decree record of the Law Under the Uniform Commercial December 1975. See Defendant’s Exhibit (1972), any right Code 636-38 nor of actionable Appendix Appeal. FFFF in the Cherryfield demurrage. Nigeria never paid demurrage, and Ince Co. as- & never cargo ship’s against unpaid 4. As to lien any right assign- serted to collect under freight demurrage, see C. or G. Gilmore & assign- ment. The effect of Intrafinsa’s later Black, (2d 1975). Admiralty The Law of ed. expiration ment to NAC and the letter discharge,” “agreements had ments entitled gos six vessels which date for the first Ministry of Defense the Federal date for one with already arrived and “ETA” and one concerning sailed. the cement contract which had never second vessels of credit. concerning in- the letter Appellant at n.8. also with CBN payment for provided 38B and 71 These documents troduced in as Exhibits evidence cement, 70,830 represented as “ei- two with a similar format. tons other schedules ... pro [having] been delivered at a ther Exhibit 38B calculated delivery in present awaiting thirty-five per rata rate of cents within territorial day; lying thus calculations under schedule acknowledge in the savings The effect a if the waters.” would 10,000tons, conges- port less amount was than impossible deliveries cargoes most were. tion further here involved rendered Finally, each pro yielded demurrage This rata calculation of cement. liability $2,784,140, from all particular
due of exhibit released the others but this a of cement remaining also included claim for for “car- tons indemnify Ni- go paid agreed for” as 1976 and Intrafinsa (33,200 third-party ton).5 gerian against a all tons at Exhibit entities $60 payment provisos are attached apparently which Exhibit 38B is carbon claims. Two a “in copy, gives each after the “TA” or time of arrival for preceding the first six as witness whereof” clause but which are described is to the accepted by Nigeria[].” signatures parties. “vessels One thirty pay would within exhibit describes the second six vessels effect that CBN *5 for “awaiting delivery days agreement as of cargo of which and the execution already deliv- demurrage unpaid”; still and in a “the full value of the cement column lading the as the and entries of which should have indicated ered reflected in bills'of posses- already the lading (according the of invoices in date the bill of commercial in Morgan Guaranty the Trust Co. format for the schedule of the first six sion of the vessels), by Nigeria designated the date is a hand- New York.” The other is demurrage within Lagos.” payment As the would for heading written as “TA make out, presentation the judge days of the of pointed district these schedules fourteen requisite Nigerian had the an “Alice in Wonderland” character documentation to Authority. Following is the execution impossible because it to calculate demur- Ports rage Lagos these of on Febru- at that never sailed of vessels 6, 1976, February ary by NAC letter ports. from their home at 630. dated 16,1976, requested to instruct CBN meeting At the New York late in Janu- 33,200 the Guaranty to the for release funds ary Gero and Arrau called in another six tons of cement the second vessels contract, Nigerian holder of a cement Doris carried. have Delia, act their in agent the cement Significantly, a certification dated negotiations. promptly committee Arrau contracts power attorney February au- the cement executed written of negotiate appel- committee certified thorizing parallel- negotiating Delia to terms with ing incorporated negotiations had concluded in Exhibit 38. lant that it claims Intrafinsa, agree- having in reached Delia returned from NAC and first cancellation, provided for a agree- week of with two form ments that Lagos” hibit “TA column for 5. noted 38B the The district court lower demur- blank, was, give “B/L but under claimed under Exhibit 38B second six vessels is thousand, given in take a few hundred offset Exhibit Date” it lists instead the dates payment cargo Lagos.” claim. See notes 15-18 the s..me as Exhibit 71 is 38 for "ETA accompanying except and text infra. six ves- that for the second Exhibit 38B is of dates under “B/L Date” sels the column 6. dates Exhibit included one column of handwritten notation headed the additional lading] “B/L and one headed bill Date” Lagos.” [for “TA Lagos.” Ex- column dates headed “ETA On compensation “awaiting delivery and with the referred to as vessels indemnities, cargo unpaid” of the balance met- of which still arrived actually as of ric tons cement under the con- at tract; that were under a column dates headed negotiate invitation to NAC to top page Lading “Bill of Date” supply; for future cement of all “TA but that bore the handwritten notation existing demurrage obligations, upon the inference, Lagos.” judge With this as the presentation documents, satisfactory “on stated, previously apparent it is be- pro basis rata of all construction sailed, “false cause the vessels had never ;7 Nigeria’s clauses” ac- demurrage claims were submitted ceptance as existing cargo Nigerians.”8 supporting The documenta- obligations of charges the vessels tion have smacked to the district listed on an attached as “at schedule Wonderland; as from Alice the cement present awaiting discharge cargo,” the committee, negotiating sug- his findings naming schedule all twelve vessels gest, many oysters Wal- so which the “time arrived” as the times were set forth Carpenter rus devoured. plaintiff’s Exhibit 71. 12 Morgan paid appellant On March said, “[t]hus, As district court $1,992,000 of the second inescapable, sup- inference almost and is bringing Nigeri- total that the ported by testimony of a member of the ship- paid ans had for twelve Committee, presented Cement that Delia Nigeria ultimately loads of cement. obtain- Nigerians support Exhibit to the cargoes ships, ed the cement four NAC-Intrafinsa claim.” however, paid $2,778,000 and thus ce- inference, 631. One left with the further received. never district court but implied did not spell out explicitly, that showing Delia’s discharge agree- In accordance with the 71 to ments, Exhibit presented com- led documents, mittee Authority committee to assume that Ports twelve sets of significance “pro rata construc- in London. Had the inclusion of this *6 is that only tion” the figure misleading would calculate demur- the link been with the tonnage schedules, based on rather than a flat it would be con- more difficult per amount vessel. false clude that sub- were claims Nigerians by the the mitted to Delia with judge metamorphosis trial The noted the of cooperation of either How- Arrau or Gero. Lagos the ETA and TA the various columns on ever, the there also exists a of certification schedules, ship supra, see note 6 and com- agreements by prepared Ce- settlement the mented, manner, appears stage “[i]n this the Committee, February dated request payment been set have for a her claims Delia delivered to Gero demurrage on the second six vessels.” along Agreements the Dis- with executed of Later, discussing import at 630. in the charge con- in mid-March. This document 38, 38B, of Exhibits trial the reached, a settlement firms that has been commented: supply would states that NAC be invited to figure discharge agree- ton the [in resumed, imports if were *7 amount demurrage per included at the flat containing page contracts of additional diem rate prof- on the first six lost relating payment to payment provisos two cement, its on the undelivered unoccasioned already for cement as to which demurrage for the vessels that would have payment lading the it, possessed bills necessary been transport to charter ex- demurrage the documents penses, trial, basis of expenses. and incidental At out however, Appellant points also be submitted. proof there was a total failure of omits items, discharge agreements that the expense of the one of due as the trial court it, agreed put key phrase appellees in which allegedly unexpected “to the unavail- the was, likelihood, Nigerian waters. ability accept only which vessels in Arrau in all discharge part.” appellant argues deliberate that the F.Supp. on his 448 at 647. And vessels), Appellant Appellant go at 14 n. *. sets forth various calculations of on second $1,945,555. (allegedly profits in its amount of lost at as sets the brief — $14,400,000. 20, 14; $7,926,955 January 1976), (with at Suit was additional for car- but less
321 agreements are silent as demur- 448 at 631 & n. to whether 13. We also find per pro was be calculated or diem discrepancies that the further or inconsist- rata. agreements discharge that encies in the are cites immaterial. arguments of these convincing.
None parties prepared the of dis- objects trial Appellant also to the charge according to nego- the form that the figure tonnage reformation of the court’s tiating committee used in its settlements discharge agreements, contending the suppliers. Appellant’s with other cement meeting there no on the minds copies of the agreements contained agree discharge amount as reformed. The provisos that the district court construed 70,830 metric specifically ments do refer to determining the discharge terms of the cement, covering tonnage tons agreements with respect to the shipped on the first six as well as demurrage; any cement and omission from to have tonnage shipped been appellees’ copies would important if court, however, The district second six. they sought provi- to avoid the terms of do, controlling, read as as we provision sos, they do not. The omission one discharge agreements referred discharge forms tonnage actually to the as either “delivered “awaiting words delivery lying in vessels under the said Letter of Credit or Nigerian within territorial waters” obvi- present awaiting at delivery lying in vessels ously typographical error, a printer or Appel- within typist of the form territorial waters.” having skipped an entire Appellant, moreover, argues line. lant had full notice word “delivered” discharge from the other agreement of the meant delivered under the terms contract, is, contents the line original so omitted. CIF that it referred to the second six vessels which had Although agreements are loading process prepar- been in the or were question silent on the of the method of Nigeria imposed ed to load when the em- clear, calculation of demurrage, very it is bargo. Appellant argues that because found, district court so was neither a case of nor mistake and fraud acting committee was mistake, a case of mutual below court per basis that diem rates of as improperly reformed the contracts read- contained contract were a ing word “delivery” to mean “dis- major source of irritation between charged.” Appellant “delivery” states that suppliers, 629, and the be- simply letter of credit means provisions cause permitted such unlimited CIF,” “delivered the second six vessels regardless is, shipped ready ship. suppliers shipping number of single event, on a any vessel. In the “cer- It is true under a CIF contract tificates” of the negotiating committee dat- simply obligation seller fulfills his spoke ed pro of a rata calcula- loading forwarding though tion even specifi- did not refer buyer lading certifi bill insurance cally thirty-five rate; cents a ton Mersey cate. Thames & Marine Insurance this reference is clearly from different States, Co. v. United U.S. figure. diem important, plain- More S.Ct. L.Ed. 821 Seaver tiff’s Exhibits 38B and at least one of Light Lindsay N.Y. which the district court found was shown to *8 N.E. And supra. see note 1 upon by and acted negotiating the commit- tee, appellant here had delivered to the corre calculated demurrage on the basis of bank, pro spondent Morgan Guaranty, the docu rata rate of the thirty-five cents per day; and the mentation that the contract re appellant documents that actually quired payment on the submitted to the for for the cement Nigerian Ports Authority in support plain language second six vessels. But the sought payment claims pro agreements discharge at the rata rate. the re- both of which, committee, the confusion because of “delivery,” meaning “physical deliv- fers to lack of Nigeria’s total in the harbor and Nigeria rather than ery” of the cement situation, did not handle the capacity to the for “delivery on terms” to CIF agree after it executed find out until nothing whatsoever loading. There is ves six discharge that second ments of agreements in the of dis- about CIF terms court If the below sels had never arrived. suggests appellant a CIF charge. If as Gero, witness NAC’s appellant’s believed implied agreements provision were also did her statement that she president, in by the reference discharge incorporated or May 1976that second not learn until credit, language as to to the letter of the court Lagos, sailed to vessels had never tonnage by ly- the “vessels delivery of fact a mutual mistake have found could ing Nigerian territorial waters” within agree negotiation of the leading up to the totally superfluous: would be if “delivered” warranting reformation discharge, ments of loaded, cargo already would be when this of law. principles under well-established “awaiting delivery.” The delivered and not (Second) of Contracts Restatement See judge’s interpretation discharge trial 10, 1975).11 (Tent.Draft No. §§ think, thus, agreement is we correct. Gero, of if did not believe If the court Moreover, appellant it is curious that now ships had the second six Arrau knew that urges interpretation of the word “deliv- sailed, readily find the court could then ery” because Goettel noted against committed fraud that NAC had recognized “has for unde- noted in the committee. As negotiating March, livered cement in 1976 must be off- facts, inference supra, the discussion any recovery demurrage.” set from appellant’s agent inescapable that is almost accurately at 647. This follows obviously Exhibit presented Delia position deposition counsel’s at Arrau’s in Exhibit version of the schedule doctored past a due 38B, Nigeria as attempt to mislead cement,10 demurrage rather than for and it vessels; cer- of the second six the location In- parallels NAC’s answer to defendant’s claim, mis- tainly Exhibit settlement terrogatory light No. 31. In of these con- six vessels. the facts as to the second states cessions, apparent nego- executing agreements And in attempting change position appeal; its on clearly on the quite relied tiating committee position appellant now under point- previously representations because as urges, there would have been no undeliv- re- certification of ed out its ered cement. present as “at the second six vessels fers to correctly The court below reformed cargo” and notes discharge of awaiting agreements discharge regard finding fraud on arrived.” A their “time grounds either tonnage figure resulting mistake on part of NAC It was the ce mutual mistake or fraud. also warrant part would ment in the which the in harbor reformation of is, By tonnage figure, either mutual tended to covered. reflect the lower actually in of dis the six vessels mistake fraud Will, 4 charge re Wesche’s erroneously indicated the harbor. In See (1957); Re- making tonnage figure A.D.2d 169 N.Y.S.2d were there (Second) of Contracts greater Certainly §§ than it was in fact. there statement 11, 1976). (TentDraft No. part was mistake on the Arrau, reforming . . . .” Deposition Agustine the contract 10. June 509(2) 137-38, Appendix Appeal § 831-32. of Contracts at Restatement justify of a reformativo circumstances “Where part performance writing 11. “Where there has been a court discretion ... contract, preliminary . . and the a written reformation decree of writing is not in accordance with an identical give had been the transaction as if it effect to of both the time of the intention Id. reformed.” party judg- can have contract . . either
323 Any other permit rule would the defraud- become aware of the missing vessels until ing party in a settlement to benefit his after had made for their Analogous fraud. is the line of New York cargoes.
authority
permits
which
a party with a
Appellant
argues
also
that the dis
claim that he
is induced to settle
fraud
charge agreements cannot
it
bind
because
damages
to recover
for the fraud without
they were inconsistent with the authority
rescission of the
E.g.,
settlement.
Strong v.
gave
that it
agent
its
Delia and that the
Strong,
102 N.Y.
(1886);
including an
II. DAMAGES
state-
performance
impossible
is
and mutual
that the sum of
The trial court found
discharge.
ments of release and
the first six
demurrage claims for
Goettel,
Judge
considering
besides
was less
prove
able to
appellant
that
at the
language
agreements,
looked
paid ap-
Nigeria had
than the amount that
surrounding
negotiations
circumstances
six vessels
pellant
cement in the second
required by
Empire
Goldbard
State
that
impression
mistaken
while under the
Mutual Life Insurance
5 A.D.2d
inside its terri-
six vessels were
the second
1958).
(1st Dep’t
also
16.
fully
See note 15
The
of the trial
does not
legal
finding
state the
basis for his
that Ince &
Appellant
Cherryfield
right
assignment
Co. retains
the sole
to the
contends
proceeds
demurrage.
findings
opinion
from
The
of fact in the
Intrafinsa
to Ince & Co. was
merely
sufficiently
allowing
an authorization
are not
Ince
detailed to enable us to
& Co. to
money directly
validity
appellant’s contrary
Morgan. Ap-
collect
determine the
from
pellant
position.
assignment
rearranged
denies that
But because we resolve the issue of
existing legal rights
parties.
grounds,
on alternative
we refrain
language
deciding
question
Cherryfield
of Intrafinsa’s
instruction to
from
Morgan’s
assignment
demurrage.
modification of the
supports
appellant’s
to Ince & Co.
claims.
days
18. The disallowance of 10
of the demur-
explicitly
they
Both documents
disclaim that
Doro,
10,-
rage claim on the Rio
which carried
operate
give
any
right
Ince & Co.
actionable
cement,
demurrage per
$.35
500 tons of
Cherryfield demurrage.
If Ince & Co.
$36,750.
per day, amounts to a disallowance of
accepted
assignment
as satisfaction of
$35,-
greater
Because this amount
than the
obligations
pay
Intrafinsa’s
Ince & Co. char-
potential damages, given
074
the disallowance
hire,
ter
the intent of the
to effect a
Joboy
of claims on the
and Jotina the disallow-
clear;
binding assignment would be
but we are
days’ demurrage
of 10
ance
is sufficient
agreement
aware of no evidence of such an
any
recovery.
eliminate
further
the record.
reforming
In
Although
compli-
on Contracts
the facts are somewhat
cated,
instrument,
simple
into a
does not make a new
resolve themselves
the court
legal
agreement;
merely
issue. The
entered into writ-
declares what
providing for
Schongalla
ten settlement
v. Hick
agreement
actual
was.
denied,
(2d Cir.),
ey, 149
cert.
F.2d
ships.
The defendants believed that all
90 L.Ed.
326 U.S.
S.Ct.
twelve had reached
waters when
Indemnity
v. Travelers
Agee
aff’d,
fact six of them had never sailed. De-
(W.D.Okla.1967),
fendants’ mistaken belief was either
in-
1968);
(10th
66 Am.Jur.2d
Reformation be used to make conclusion. 297 of Tentative Draft Section an agree provides instrument conform the actual No. 10 of the Second Restatement Able, ment parties. writing embodying between the Beecher v. for reformation where a (2d 1978); gree- 575 F.2d agreement express 1015 Cir. Brubrad fails to Service, Co. v.. United States Postal 404 ment because of a mistake of both (E.D.N.Y.1975), aff’d, writing. 693 as to the contents or effect of the (2d denied, section, Cir.), F.2d 308 cert. In Comment “a” under this U.S. “province S.Ct. of refor- L.Ed.2d 99 3 Corbin drafters state that writing mation is to express make a N.Y.S.2d at 613.1 That is what the agreement district in this case. intended it did should” and that “reformation available It is clear beyond dispute Agree- parties, having when the agree- reached an Discharge ments of herein covered and and having attempted then to reduce were ships. intended cover all twelve writing, express it to fail to it correctly in The record shows Mrs. Delia went writing.” Nigeria intending negotiate payment ships. twelve all Section 308 of Tentative Draft No. 11 She containing took with a list her permits party’s reformation when mani- twelve, names of the presented and she festation of assent is induced the other Negotiating sup- list to the Committee in party’s misrepresentation fraudulent as to port of her claim. A principals’ certificate writing. contents or effect aof Com- subsequently Negotiating issued ment “b” thereunder states that the section Committee ships2 names applicable “only misrepresentations accepted states that they are accordance writing” contents or effect of a with paragraph of the certificate.3 De- the misrepresentation relates to “[i]f fendants’ testified that witnesses the Com- fact, other some the contract be voida- *13 “correctly mittee’s certificate summarize[s] 306, ble under but reformation is § not were negotiated that . . ..” appropriate.” This is the established New The total of cement amount on the twelve rule. York ships 70,830 tons, metric the amount Where writing expresses agree- which, Agreements Dis- according to ment, agreement but the by was induced charge, had either been delivered under misrepresentation, fraud or injured letter awaiting of credit or was then deliv- may party be entitled to rescission or ery lying Nigerian in in vessels territorial cancellation. Reformation is not the waters. proper remedy. lading The bills of and commercial invoic- 1933New York Annotations the Restate- plaintiff presented Morgan es that ment of (emphasis Contracts at 309 origi- Guaranty in November 1975 covered nal). transport- worth of to be Wesche, 997, In re 4 A.D.2d 169 N.Y.S.2d through ships ed to seven (1957), by cited majority, 11, not to twelve. On March Central Bank contrary. There court held that the Morgan of Nigeria instructions to cabled Allegheny County Surrogate had equi- Guaranty the C.I.F. value pay power table twelve, reform instrument ships through cement on seven prior release “so as to agree- paid conform the Guaranty March parties.” ment of the 998, plaintiff $1,992,000. 4Id. A.D.2d at 2. The twelve 1. Sections 294 of Tentative Draft No. 10 and 306 of Tentative Draft No. 11 deal with avoid- ance of Committee’s ulently tlement and ceived. 2. Naimbana 1. Likewise they carried, Rio Doro Cretan Life majority contracts. That issue is not before us. Name induced Certificate, inapposite ships that restoring as shown to execute permit and the Metric first 2,730 are the cases cited are as follows: the consideration re- one, Tons tonnage rescinding a who was fraud- release, Negotiating of cement the set- to sue 3. murrage obligations rata lows: “That isfactory Paragraph 10. Sandrina 11. 12. 4. 9. 6. 7. Aristotle 8. 5. construction Jotina Ardenal Joboy Cherryfield Astrid Euna Nikolaos H. Name documents subject the Certificate reads as of all Metric Tons be met on the basis of all 10,800 70,830 —(Total 3,200 5,600 5,700 7,500 8,000 existing cargo 5,300 4,200 6,800 presentation figure clauses.” supplied) sat- pro fol- de- I am convinced also that it foregoing
All of the facts are conceded would be defendants,4 disputed and it argue cannot be of the facts to misstatement ships intended to include seven paid demur- plaintiff did not intend to be through twelve and their contents within ships. Although the for the second six Agreement Discharge. the terms of their pay- such agreement defendants’ to make so, fact, being This as the district court by the mis- ments have been induced found, that defendants misled into negotiat- taken belief of one or both believing through seven Nigerian ing parties were in waters at the time waters, pretend it will not do to Agreements executed the Discharge, did subject was not covered in justify reforming the district court in the written instruments. As defendants Agreements so as to eliminate these brief, Negotiating concede in their “[t]he coverage. from the instruments’ accepted set- good faith Committee Either the contracts covered included incorporated its terms tlement claim and ships, the twelve or there were no contracts. Discharge.” If the Agreements into the “There meeting must have been a meet, thus minds of the did not contracting parties minds of the concerning to cancel the appropriate remedy would be agreement, agreements, which the Pomeroy’s Equity Jurispru- Agreements. 3 court is asked to declare existent.” Metz- (5th 1941). ed. dence 870 at 383-84 ger v. Aetna Insurance 227 N.Y. plight of majority sport makes prior 125 N.E. “If no associates, overlooking the plaintiff and its existed, agreement or intention then the them, Intrafinsa, is fact that at least one of ” only remedy is . . rescission. It is undis- now in the hands of creditors.5 Am.Jur.2d, supra, at logic 383-84. The puted Nigeria, imperiously the majority’s argument concerning part force,6 contract breached a valid threat of performance escapes completely. me I fail *14 240,000 purchase tons of cement from “part perform- to see how the defendants’ being deprived plaintiff. Plaintiff is now ance”, paying which consisted of for cement right to recover of its ships, loaded second six can serve as Discharge”, by “Agreement an breach reforming the basis for the contracts so as agreed upon which were not the terms of completely requirement to eliminate the mind by were created in but payment. such I am convinced concur in judge. of the district I cannot designated district court erred when it inequity. $1,992,000payment for cement on sev- through “overpayment en twelve as an un-
der settlement” while at time same
holding plaintiff agreement bound involving
release all claims these same
ships. brief, Guaranty repre- pages gan
4. On 12-15 the sum of of defendants’ 33,200 senting $60 state: “The settlement claim identifies tons of cement question; (1224).” it states that total twelve vessels was tons; metric the value of the Nigeri- carry the terms of the In order to out $1,992,000; paid for amounted to and that total contract, buy Intrafinsa contracted due as of 1976 totaled Spanish Portuguese mills and cement from $2,784,140. Negotiating . . The Commit- through shipbroker agreed to charter seven- good accepted tee in faith the settlement claim Nigeria. transport with which to teen incorporated Agreements its terms into the (379-381). Discharge ... On March Sep- by telegram on 6. Plaintiff was informed Morgan Guaranty 1976 Central Bank instructed anyone violating Nige- tember respect to make to the documen- embargo his vessel ria’s “will liable to have Morgan Guaranty holding tation for Ce- Nigerian territorial waters denied entrance to e., Cargos, relating i. to the second necessary warning.” a final force if X This is (460). Payment six vessels was made Mor- notes cargoes purportedly derives from ments] the given pro vessels, plaintiff’s clauses will be con- rata aboard as reflected (i. e., tonnage) previously with on the struction reference discussed Exhibits 38B and reiterate, vessels, incorporates only 71. To of the the list first six of twelve only and, one had been unloaded and three re- amounts six their as to the second by time; in mained this the arrival, they last six fictional the dates of (The had never sailed. cement aboard the Thus, appear Exhibit 71. the inference fully paid first vessels had been for the inescapable, supported the almost and is previous September.) Gero testified testimony of Com- a member of the Cement agreement, signed when she and Arrau mittee, presented Delia Exhibit 71 to in, tonnage figure had not been filled support Nigerians in of the NAC-Intrafinsa although provisos stating claim. demurrage, terms cement and which were (emphasis added) (footnote F.Supp. at 631 part agreements of the form used omitted). Committee, Agree- part Cement of Discharge ments of when she first saw them vessel, profits, the court below found support in As to the lost corresponding to one each rate,” “pro discharge supersed- rata agreements claims at the thirty-five per per day, profits. cents Be- e., anticipation earlier ed the i. $3,500 regard to the diem rate calculation considering the trial court’s fore specified. The documents sub- originally agreements of dis- damages under the mitted for the first six vessels bore whether the charge, we must determine stamp ship’s master and included supersede original con- agreements did November, time sheets for several weeks tract. although no time sheets were submitted for period from the end of November to I. CONTRACTS SUBSTITUTE (the day following agreements). agreements of dis- discharge argues The documents for NAC was the second six vessels lacked not de- because there charge were ineffective minds, stamp tailed time sheets but also the and Intraf- meeting of the no ship’s acceptance duress, master and the date of the Delia exceeded signed insa under readiness, of the notice of which as the terms of the authority accepting her understandable, wryly Goettel remarked “is mere agreements agreements, and got Nigeria.” since never Presumably these executory accords. from F.Supp. at 632. Intrafinsa and one of its that NAC would arguments it would follow subsidiaries nevertheless certified these doc- damages be entitled to Originally Nigeria uments as correct. contract, what although we do not know ready $2,337,- to authorize of some total failure light these would be in demurrage; 713 for but when it became proof aforesaid and our lack of knowl- aware that some of the vessels covered edge profits.”9 as to “lost evidence agreements various settlement were not argument is that Appellant’s first suspended it waters all demur- discharge were ineffec involved, rage payments suppliers “meeting NAC, there was no including tive because response NAC. to a Appellant argues both that demanding explanation cable minds.” for the ambiguities missing ships, agreements were “riddled attaching filed this suit funds appellees well as with omissions in New York. and inaccuracies” as trial and that of material elements DISCUSSION figure judge reformed the contrary that which NAC intended when pretrial order, appellant In the claimed agreement. of the “am made the Some $11,471,114.42 theory “inaccuracies,” “omissions” biguities,” were inef- inclu decries arise from the fective. at 646-47. The appellant’s copies of the form sion in the