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Kicinski v. Constable Hook Shipyard Inc.

decided.: May 24, 1948.


Author: Kalodner

Before GOODRICH and KALODNER, Circuit Judges, and FEE, District Judge.

KALODNER, Circuit Judge.

The petitioner in the court below, Harriet Kicinski, instituted this proceeding to enforce the rights of reemployment afforded to her as a veteran by Section 8 of the Selective Training and Service Act, 50 U.S.C.A.Appendix, § 308.*fn1

She waived any claim to reinstatement, and recovered a judgment for the loss in wages attributable to the refusal of Constable Hook Shipyard, Inc. (hereinafter referred to as the respondent), to "reemploy" her. From that judgment this appeal was taken, the respondent contending here, as it did in the court below, that the petitioner was never in its employ and did not leave its employ to enter the service.

What would otherwise be a simple issue is beclouded by the fact that the tenancy of the situs of the petitioner's pre-induction activities changed hands. The question presented for determination, then, is whether the circumstances surrounding the succession of tenants was such that there existed an obligation on the part of the respondent toward the petitioner by reason of the Act.

Preliminarily, it may be stated that the petitioner was first employed, insofar as we are here concerned, on October 19, 1942, as an industrial nurse by Marine Maintenance Corporation (hereinafter referred to as "Marine") to do duty at the shipyard which it owned and operated in Bayonne, New Jersey. As a result of events later to be detailed, Marine went into bankruptcy and the premises were occupied by East Coast Shipyards, Inc. (hereinafter referred to as "East Coast"), for whom the petitioner continued to work until April 19, 1943, when she entered the Army. While she was in the service, East Coast evacuated the premises and they were then occupied by the respondent under a lease from the Trustee of Marine. The petitioner was honorably discharged from the Army on September 28, 1945, and made timely application to the respondent for reemployment in November, 1945, which was denied because no nursing position was available.

The trial court grounded its determination in favor of the petitioner on its fourth enumerated "finding of fact" that the "respondent assumed operation of the property, equipment and business of the aforesaid East Coast Shipyards, Inc. and there was and is privity of obligation between the respondent and the said East Coast Shipyards, Inc. and Marine Maintenance Corporation". However, the facts from which the learned trial judge deduced the above conclusion were not specifically found. The view was taken that there was "continuity or privity of relationship" between the respondent and Marine, as well; that the lease between the respondent and Marine "is in the nature of a working agreement, rather than a strict lessee and lessor arrangement"; and that East Coast was an operating corporation organized by the Maritime Commission for the purpose of operating the industrial plant which had been taken in condemnation proceedings by the United States.

An examination of the record made in the court below discloses that there was no controversy with respect to the facts, nor was there contradictory testimony on the issues relevant here. The sole problem was that of determining the consequences of the record thus established. With that in mind, we test the validity of the fourth finding of fact.*fn2

During 1942, Marine was engaged in the repair of vessels for the War Shipping Administration, and in May had received a Maritime Commission contract for the construction of four vessels. In December, it was about to receive a Commission contract for the construction of twelve additional vessels when the hopeless state of its accounting methods, records and practices came to light. We have already had occasion to deal with one of the less attractive developments of that situation.*fn3

While the men at the hear of Marine were no longer acceptable to the War Shipping Administration, understandably the war effort required the participation of Marine's plant. Accordingly, beginning January 27, 1943, the shipyard at Bayonne was operated under a special arrangement, the then objectionable officers of Marine being ousted and a Maritime Commission man installed.*fn4

However, about February 14, 1943, Marine's contracts were cancelled. On February 18, 1943, condemnation proceedings for use of the yard were begun, and shortly thereafter Marine took advantage of Chapter X, 11 U.S.C.A. § 501 et seq. On that date, East Coast was placed in possession of the premises and a new contract for the completion of the four hulls which Marine had begun was given to East Coast. Although East Coast, in April of 1943, also received the contract for the twelve additional vessels, the arrangements made by it with the government, as disclosed by the Interim Report, were at all times materially different from those which had prevailed between the government and Marine, much to the misfortune of taxpayers generally.

At the time of the transition, it appears that Ferend, the disfavored president of Marine, had called together the heads of Marine's various departments and requested that they continue for East Coast. But East Coast brought its own corporate officials, and eventually also replaced practically all of Marine's departmental heads. McCartney, who was Marine's labor relations manager and purchasing agent, was about to complete a collective bargaining agreement when the change occurred. He testified that he continued as East Coast's labor relations manager, and negotiations on the labor agreement were begun anew. It may be assumed that the production employees of Marine, or most of them, continued with East Coast,*fn5 the petitioner did, as did another nurse, Miss Milligan, who had been hired at the same time.

Thenceforth, Marine was inactive and in a moribund condition, its business contracts terminated and its property appropriated, for in May of 1943, the condemnation petition was amended to provide for the taking of the fee. East Coast, on the other hand, was an entirely new concern, without and affiliation whatsoever with Marine, Marine's sole stockholder, or Ferend. Plainly it did not assume any of Marine's obligations or receive or become entitled to receive any of the funds or profits due Marine: all of those accompanied Marine to its judicial sanctuary under the bankruptcy laws. Further, East Coast obviously did not enter the premises as a result of any arrangement with Marine, nor was it orginized by the Maritime Commission. In fact, it came about as a result of negotiations begun in January, 1943, before Marine was ousted, by one Otterson to steer the contract for the twelve Commission vessels to another concern. On the failure of those negotiations Otterson proposed to the Commission the organization by him of a new company to receive the contract and suggested that the company be installed in Marine's yard. The successful launching of East Coast, therefore, hinged upon the Commission's willingness to furnish it with a locus operandi.

In March, 1945, East Coast, according to McCartney, finished its construction program and vacated the premises. There is only an intimation in the record that it still exists in a corporate capacity. In any event, while it does not affirmatively appear what happened in the condemnation ...

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