Court Opinion

ID: 9727971
Source: CourtListenerOpinion
Date Created: 2023-08-26 13:54:01.632939+00
Date Added: 2024-06-11T18:25:44.741658
License: Public Domain

Henderson, J.,
delivered the following opinion, dissenting in part, in which Hammond, J., concurred.
Judge Hammond and I agree with the majority of the Court that the trial court obtained jurisdiction of the subject matter and the person of the defendant, and that there is no valid constitutional objection to the action upon a contract made in this state. We do not agree, however, that the defendant was relieved of its obligation to complete the purchase because of the condition imposed by the Maritime Administration' that there should be no change in the ownership of "registry of the vessels or “transfer of stock interest in * * * [Astral], to persons not citizens of the United States, without the prior approval of the Maritime Administration”.
It may be noted that the original contract merely stipulated that the escrow fund was to be paid over on delivery of proper bills of sale covering the vessels “after Government permission for the transfer has been obtained.” Paragraph 2 of the supplemental agreement provided that approval of the transfer by the Maritime Administration “subject to conditions prescribed * * * with respect to future use and disposition of any or all of these vessels” would amount to approval of the United States. Government. The Maritime Administration did approve the transfer. If we assume that the clause describing the general nature of the conditions that might *273be prescribed was a condition precedent, and in legal effect a stipulation that any condition of a kind not covered by the quoted clause, if prescribed, would avoid the contract, we think it involves no distortion of language to hold that “with respect to future * * * disposition of” the vessels, would include at least a transfer to aliens of a controlling interest in the corporation that, in substance if not in form, would effect a change in ownership of the vessels. In any event, we think the phrase is not so clear and unambiguous as to forbid resort to the surrounding circumstances as an aid to interpretation.
It seems clear from the record that both parties knew, or should have known, that such a condition was customarily imposed by the Maritime Administration, in connection with transfers of domestic vessels generally, and war vessels in particular. Indeed, in the case of vessels owned by domestic corporations, the federal statute requires approval by the Maritime Administration of transfers of stock in such corporate owners to aliens. Title 46, Section 835, U.S.C.. See also Sections 802 and 808, construed in Meacham Corp. v. U. S., 207 F. (2) 535, 543, (C.A. 4th) (Soper, J.). Moreover, the application form of the Maritime Administration, executed by Astral, referred to these sections and called upon Astral to give the names, addresses, nationality and percentage of stock owned by its stockholders. In the light of these circumstances, it strains credulity to suppose that Astral intended the phrase to comprehend a condition on use as banana carriers that might frustrate the whole purpose of the sale, but not to comprehend the customary limitation upon future transfers of stock that was properly within the scope of the regulatory powers of the Maritime Administration. In this connection, it may be noted that the real motive that led Astral to a repudiation of the sale was the simple fact that the cost of converting the vessels into banana carriers was greatly in excess of what it had estimated. This, of course, was an error of business judgment that would *274afford no legal ground for relief. We cannot escape the conclusion that the objection to the restriction as to future stock transfers was a mere pretext, not going to the essence of the bargain, and that the condition was well within the contemplation of the parties in the use of the words “with respect to * * * disposition”. We think the judgment of the trial court should be affirmed.