Federal Motorship Corp. v. Johnson & Higgins

192 Misc. 401, 77 N.Y.S.2d 52, 1948 N.Y. Misc. LEXIS 2124
CourtNew York Supreme Court
DecidedJanuary 28, 1948
StatusPublished
Cited by6 cases

This text of 192 Misc. 401 (Federal Motorship Corp. v. Johnson & Higgins) is published on Counsel Stack Legal Research, covering New York Supreme Court primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Federal Motorship Corp. v. Johnson & Higgins, 192 Misc. 401, 77 N.Y.S.2d 52, 1948 N.Y. Misc. LEXIS 2124 (N.Y. Super. Ct. 1948).

Opinion

Walter, J.

Plaintiff alleges that for a valuable consideration defendant agreed to arrange policies of marine insurance on plaintiff’s vessel, Badger State, with loss payable to plaintiff and United States of Mexico as interest may-appear, to collect the proceeds of the policies should any become due, and to pay over such proceeds to plaintiff to the extent that they were, in accordance with the terms of the policies,- payable to plaintiff; that defendant did arrange such insurance; that proceeds of the policies in the amount of $250,000 became due by reason of the vessel having become a total loss; that defendant then collected such proceeds; that United States of Mexico has no interest therein; that all are due and payable to plaintiff; that defendant has failed to pay the proceeds to plaintiff; that by reason thereof plaintiff has been damaged to the extent of $250,000, for which amount with interest and costs plaintiff demands judgment against defendant. .

Without answering, defendant (upon an affidavit stating that it had no claim to any part of the insurance proceeds mentioned in the complaint but that claim to a portion thereof had been made by United States of Mexico, a sovereign foreign State which cannot be sued without its consent and cannot be served with process in this State) moved for an order under section 51-a of the Civil Practice Act permitting it to give United States of Mexico notice of the pendency of the action.

That motion was granted by an order of August 27, 1946, which directed that such notice be given by sending by registered mail a copy of the summons and complaint, a copy of the order, and a notice in the form thereto annexed, to the President of the United States of Mexico, to the Ambassador of the United States of Mexico in Washington, to the Consul General of the United States of Mexico in New York City, and to a firm of attorneys in New York City described as attorneys for United States of Mexico. Such notice was given, and proof of mailing [404]*404was filed, and on September 11, 1946, another order was made staying the further prosecution of the action until September 6,1947, or until such earlier time as United States of Mexico shall intervene in the action.

United States of Mexico did not intervene and did not commence any action upon its alleged claim; and it now appears specially for the purpose of asserting its sovereign immunity from suit and its unwillingness to become a party to the action, and moves (1) for an order declining jurisdiction of the action on the ground that United States of Mexico is an indispensable party and has declined to submit to the jurisdiction of the court and the subject matter of the action is property in which it has a substantial interest, and (2) to vacate the above-mentioned notice of pendency of the action and the order pursuant to which it'was given.

The United States of Mexico is, of course, a friendly foreign sovereign, and that as such it is immune from suit and cannot be required to submit to the jurisdiction of this court is, of course, obvious and well recognized and undisputed.

But that the mere assertion by Mexico that it is entitled to a part of the proceeds of the insurance upon the vessel does not preclude the court from determining whether or not the assertion is well founded is authoritatively settled, at least for me, by Lamont v. Travelers Ins. Co. (281 N. Y. 362, 372). The first motion thus well might be, and perhaps should be, denied upon the authority of that case. In that case, however, the court, after pointing out that the action was for an accounting and directions as to the distribution of a fund which plaintiffs had received from Mexico and then had in their hands, and that in such an action an adjudication of the claims of one party requires also the adjudication of the claims of other parties who assert an interest in the fund, said (p. 374): We hold only that the Supreme Court has jurisdiction to pass upon the issues raised in the pleadings in this action and to render appropriate judgment, unless it shall appear at the trial that the Government of Mexico has, in fact, retained some right or interest in the property which is the subject of the accounting, and is a necessary party to any adjudication.” (Italics supplied.)

That I understand to mean that, even in an action involving specific property in which a sovereign asserts an interest, the court may proceed to trial for the purpose of determining whether or not the assertion is well founded, but if the court [405]*405finds the assertion to be well founded it must then refrain from making any adjudication.

If, therefore, I should merely deny the first motion upon the authority of Lamont v. Travelers Ins. Co. {supra) I would merely postpone until the trial determination of the fundamental and ultimately controlling question whether this is an action involving specific property in which a sovereign asserts an interest (in which event the action ultimately must be dismissed 'because no adjudication of the rights of others in that property can be made without affecting the interests of the sovereign [Civ. Prac. Act, § 193, as added byL. 1946, ch. 971; Minnesota v. United States, 305 U. S. 382; Morrison v. Work, 266 U. S. 481; New Mexico v. Lane, 243 U. S. 52; Oregon v. Hitchcock, 202 IT. S. 60; Naganab v. Hitchcock, 202 U. S. 473; Louisiana v. Garfield, 211 U. S. 70; Goldberg v. Daniels, 231 U. S. 218; Stanley v. Schwalby, 162 U. S. 255; Cummings v. Deutsche Bank, 300 U. S. 115; Ickes v. Fox, 300 U. S. 82]), or whether, on the other hand, the action is purely in personam to collect a debt (in which event Mexico has no interest in the action and is not only not an indispensable party but is not even a proper party because no judgment herein could affect Mexico or any right it may have to enforce any claim it may have against the underwriters or the defendant or anyone else [Chapman v. Forbes, 123 N. Y. 532; Bauer v. Dewey, 166 N. Y. 402; Garrigues Co. v. Casualty Co. of America, 220 N. Y. 588; Brooklyn Cooperage Co. v. Sherman Lumber Co., 220 N. Y. 642]).

That question as to the real nature of the action has been briefed and argued and I have considered the authorities cited by counsel, and it seems to me appropriate that I state the conclusion at which I have arrived, even though I possibly might with propriety leave determination of that question to the trial.

Unquestionably and concededly defendant received the money under a promise, express or implied, to pay it over to plaintiff or Mexico, or both, so that either or both properly may sue therefor.

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Bluebook (online)
192 Misc. 401, 77 N.Y.S.2d 52, 1948 N.Y. Misc. LEXIS 2124, Counsel Stack Legal Research, https://law.counselstack.com/opinion/federal-motorship-corp-v-johnson-higgins-nysupct-1948.