Garcia & Diaz, Inc. v. Trans World Refining Corp.

Bergan, J. Plaintiff operates Piers 15 and 16 on the East River under revocable permits issued by authority of the City of New York as public owner of the wharves. Excessively long occupancy of the piers by goods placed on them by the defendant for the purpose of loading on shipboard having occurred, the parties contracted for a charge to be paid after a specified date by the defendant for continued occupancy of the piers by the goods. The charge thus agreed upon has been found reasonable at Special Term upon a record which would sustain reasonableness, and judgment has been directed accordingly for plaintiff; the question here is whether the parties could lawfully have agreed on such a reasonable charge which the plaintiff might enforce by this action. Since plaintiff claims no title to the piers, its rights in respect of their usage and its power to control their occupancy by cargo goods must be found in the terms of its permits from the city and in the statutory frame and administrative regulations upon which the permits rest. Plaintiff’s permits, one for each pier, were issued pursuant to subdivision b of section 707 of the New York City Charter. This section, headed “Leases of wharf property,” provides that the Commissioner of Marine and Aviation may “ grant temporary permits terminable at will ” to “ use and occupy ” any wharf property in the Port of New York as defined in section 706 “ belonging to ” the city. It seems reasonable to think that the difference between a lease of “ any wharf property ” (§ 707, subd. a) and a permit “ to use and occupy ” wharf property under subdivision b is merely a matter of duration of time and of the right of the city to terminate the special privilege on the wharf. The terms of plaintiff’s licenses were that it would “use said property for steamship operations ” of steamship companies for which the plaintiff acted as agents. Whether Piers 15 and 16 be regarded as “ public wharves ” in the sense that the title to them had been acquired by the city for the general purposes of the port and hence the city was fully in dominant legal control of how long the plaintiff’s rights should persist and how they should be exercised; or whether they be regarded as “ private wharves ” in the sense that a special private interest in them had been lawfully acquired by the plaintiff which for the moment had the hallmarks of title, — 78 — it seems clear that defendant had no right, as a member of the general public, to lay down its goods on these piers for the purpose of loading on board of steamships, or storage, or for its own convenience, without plaintiff’s consent. This legal right of the plaintiff under its permits to exclude defendant from the piers requires that for the purposes of this controversy we must treat the piers as private wharves even though in some jural relations other than those asserted in this litigation between these parties, they may very well be regarded in legal theory as public wharves. Whatever the general contour of the public-private wharf problem may be, it seems to have no controlling significance on the narrow actualities of this lawsuit. The public-private wharf problem is partly semantic. Judge Hough helped in the process of definition in The M. L. C. No. 10 (10 F. 2d 699) by noting that “ a wharf to which the public cannot resort” and “at which berths cannot be obtained” through the harbor authority “may well be called” private (p. 702). In that case a dock company which had erected a wharf in the port on land under water conveyed by deed from the State of New York under restrictions which led the court to think that the dock company held “a species of franchise” from “the state of New York ” (p. 704) was held to be entitled to charge wharfage; but the court also held that the amount charged was subject to public regulation. In the same direction in respect of a liability arising from the condition of a private wharf to a member of the public, see Kafline v. Brooklyn Eastern Dist. Term. Co. (180 App. Div. 858, affd. 228 N. Y. 521). There may, of course, be situations where the claims of the owners of private wharves must yield to public interests in the movement of commerce. One is by the demands of necessity, as, for example, where the wharf is the sole facility available in that part of navigable water. As to this Mr. Justice Bradley in Transportation Co. v. Parkersburg (107 U. S. 691, 699) was of opinion that it was open to question whether a private wharf might be maintained at all in such a situation (cf. Weems Steamboat Co. v. People’s Co., 214 U. S. 345, 358). Another is the reasonableness of the charge; and in this one aspect — the charge — the private wharf seems to be treated as something of a public utility. (See Townley, J., in Marine Lighterage Corp. v. Luckenbach S. S. Co., 139 Misc. 612.) Decisional law, therefore, seems to suggest two principles: (a) that a special legal right in a wharf acquired by title, or — 79 — by lease or license from the owner of the title, carries with it the right to limit and control public usage of the facility, subject to paramount public regulation; and (b) that charges for the use of such a wharf must conform with the standards fixed by public authority. No charges were fixed by the City of New York or by the present City Charter regulating storage of goods on wharves generally; nor was the subject provided in the licenses for these wharves particularly. On the other hand there was no prohibition against the charges here agreed upon; and the court at Special Term aptly commented that “ We search in vain for express or implied provisions in plaintiff’s permits prohibiting the charges sued for here. Nor do we find in the Rules and Regulations of the Department of Marine and Aviation any such prohibition.” (25 Misc 2d 604, 606.) There remains the possibility that charges of the kind agreed upon are deemed prohibited, absent some express authorization; and in favor of this theory it must be conceded that the licenses from the city to the plaintiff certainly did not contemplate that these waterfront piers, vital to commerce, be used as warehouses. Further, and perhaps more important, the whole history of the development of the port by public authority negatives a purpose to permit it to be clogged up by storing goods in the waterfront wharves. To a very large extent, however, this is a matter between the city and its licensee; and there can be no doubt that a permit “ terminable at will” (§ 707, subd. b) left public control of the course of operations on these two piers wholly unrestricted. We thus reach the vital center of this controversy. We think the charges agreed upon are sustainable, not because the licensee had the right to conduct warehouse or storage operations on the piers, but because the undue usage by defendant of the piers for which the charges have been agreed upon, were an incident to the purpose for which plaintiff was licensed to use the piers, i.e., for steamship operations, including by necessary implication, the placing, retention, protection and removal of goods on the piers in connection with those operations. Here the defendant got its goods onto the piers upon a representation that within a reasonable time they would be loaded on shipboard and removed in the ordinary course of business. The goods remained an excessively long time because of shipping difficulties, so long, indeed, that they interfered with the very uses which plaintiff was licensed by the city to make of the piers. — 80 — Both the placing of the goods on the piers in the first place, and their being left there an unreasonable length of time, were equally incidents to the shipping purposes of the plaintiff’s business on the piers. It is not easy to find interdiction of public policy which will stand in the way of an entirely reasonable agreed price for such an interfering occupancy by the defendant of plaintiff’s facilities, measured by the length of time of such occupancy; and no such specific interdiction lies in the statutes, the regulations, or the decisional law which has been brought to bear on the rights of wharf owners or their licensees. The defendant’s goods actually got on the plaintiff’s piers in this manner: defendant’s representative called plaintiff on January 8, 1959 and said defendant ‘ ‘ wanted space on the dock ” for plaintiff “to receive approximately 12,500 drums * * * of soybean oil, on a hold-on-dock basis ” to go out on the steamship Guadeloupe, which was to sail within a month. Shortly after this the goods were placed on the docks, accompanied by dock receipts, some of which contained notations that the goods were “intended for the S. S. Guadeloupe or substitute ’ ’. The oil did not go on that ship due to difficulties defendant had in completing arrangements contingent on certain aspects of a loan between Spain and the United States; a contingency of which plaintiff was not advised when defendant put the goods on the piers. Before that ship sailed plaintiff’s representative called defendant twice. He testified: “ The idea of my call is to get the stuff off the dock so we could load it on the first available vessel, which was the Guadeloupe. ’ ’ On January 24 defendant requested plaintiff to receive additional oil ‘‘ for hold-on-dock for the Steamer Govadonia, which was scheduled for February”. Plaintiff accepted this additional oil, and it then had on hand a total of 5,696 tons of the oil which occupied all of Pier 15, half of Pier 16 and Pier 14, which plaintiff found necessary to sublease to receive the oil. Arangements for the shipment of the oil were not made by defendant in February, and they were not made in March, and on March 25 plaintiff wrote defendant that unless the oil was released for shipment or removed from its piers by March 31 “ a charge of $0.28 per ton per day will be applied against this merchandise for each and every day commencing the 1st day of April, that the material is on our piers ”. On April 28, in consideration of plaintiff’s release of the oil defendant agreed to pay “ all said charges just and properly due ” but “ without waiver of the right of the undersigned to — 81 — question the correctness of such charges ’ In the end the oil got off the piers on May 7 and May 12, about four months after the first of it was placed there, and the plaintiff’s charges were $53,616.36. If the plaintiff had any right to make an enforcible agreement with defendant for these charges there is adequate proof they are reasonable. No charge was made for the excessively long period between early January and April 1 when the oil overtaxed plaintiff’s facilities. Late in March plaintiff was required to remove the oil which it had placed by arrangement with the lessee of Pier 14 and place it on the marginal street at a cost of 10 cents per ton per day payable to the city. Plaintiff established that by this clogging of its facilities it lost business. It had been handling a vessel a week on an average at Pier 15 alone, and during this period it was required to refuse business for its piers and to arrange for vessels for which it acted as agent to use other piers. It established that its actual out-of-pocket expense for holding the oil on its piers and on the marginal street after April 1 was $33,940.11 and this amount did not include overhead or profit. We see in all this no such clear condemnation of public policy as would interdict an agreement to pay plaintiff a fair amount in compensation for this excessive and unwarranted occupation of its facilities. The difference in legal theory between a failure to pay an agreed price for the occupancy, which in this case assumed something of the nature of an accord on a claim for damage after the event; and damage which would result from a breach of an express or implied condition that the occupancy would be reasonably related in time to the usual course of shipping, is not so great as to warrant, in any event, remission to be freshly litigated. The judgment should be affirmed, with costs.