Swift & Co. Packers v. Compania Colombiana Del Caribe, S. A.

175 F.2d 513, 1949 A.M.C. 1338, 1949 U.S. App. LEXIS 3707

• Court: Court of Appeals for the Fifth Circuit
• Decided: May 30, 1949
• Docket: No. 12608
• Status: Published

Opinions

SIBLEY, Circuit Judge.

On March 7, 1948, Swift and Company, Packers, a Corporation of Nevada, U. S. A., joined by several corporations and citizens of Cuba and a citizen of the Republic of Columbia, brought a libel in personam in the District of the Canal Zone against Compañía Transmaritima Columbiana, a corporation of the Republic of Colombia, to recover for the loss of a cargo of rice by the wrecking of the vessel Cali, owned by the respondent, off the island of Grand Cayman. The cargo was shipped at Guayaquil, Ecuador, for Cienfuegos, Cuba, and libelants severally bought interests in it while in transit. Process was prayed against respondent, or if it could not be found within the District, then by foreign attachment against its goods and chattels within the District, and particularly a vessel known -as the Alacran, or Caribe. Process was issued accordingly, and the Marshal returned that he had served it on March 8 by going aboard the named vessel in the Canal locks and delivering a copy to the master, and taking into custody the vessel and her tackle, etc., and also some gear, hoists, winches, etc., from the vessel Cali, as goods and chattels of respondent. The same day a supplemental and amended libel was filed which on information and belief charged that about four days previously a new corporation, Compañía Col-ombiana del Caribe, had been formed under the laws of Colombia to take over respondent’s property, and especially the vessel Alacran, renamed the Caribe, in fraud of libelant’s rights, but the two Companies were really one and the same. Alternatively it was alleged that the new Company is indebted to respondent for the purchase price of the Caribe. New process was prayed against both Companies, and if not found, against their goods and chattels by foreign attachment, and that the Caribe be attached as the property of the original respondent and as security for the unpaid purchase money, and that the new respondent answer on oath as garnishee. There was a prayer that both respondents pay to libelants their several damages as at first claimed. The marshal made a similar return on this process. In neither return did he say that respondents were not found in the district. The master of the Caribe on March 15 filed a claim in behalf of the new corporation, swearing it was the bona fide owner and he in possession as its lawful bailee, and gave a cost bond. On the same day the new Company by its proctors made a motion, supported by an affidavit which is mainly a legal argument, that the court decline jurisdiction and vacate the attachment, on the grounds that the case is between foreigners, that the Caribe is not responsible for the damages claimed, and the question of alleged fraudulent transfer is a matter to be decided in the Republic of Colombia where it was made. There were exhibited the bills of lading for the rice, an opinion of a Colombian attorney that the transfer of the Alacran was not fraudulent under the laws of Colombia, and an authenticated copy of the registration of the Caribe as owned by the Campania del Caribe made at Baranquilla, Colombia, on March 4, 1948. The motion was overruled by the judge while he was absent in Kentucky. Two months later the original respondent answered to the merits, admitting the loss of the rice, but denying liability for reasons stated, and claiming a limitation of liability to the value of its interest in the Cali and her pending freight. The second respondent also answered to the merits, denying liability, and affirming its good faith ownership of the Caribe, and praying for a decree to that effect.

The district judge, having retired as such without returning to the Canal Zone, was succeeded by a new judge, and after another two months, on August 16, 1948, the proctors for the second respondent again moved to vacate the attachment of the Caribe, and to dismiss the supplemental libel as to itself on the grounds that no cause in admiralty was alleged against this respondent or the Caribe, and there was no jurisdiction to subject her to a lien, or to proceed in garnishment; that the matters alleged against this respondent belong to the jurisdiction and commerce of Colombia, and it is against good policy to seize in the Canal for debt vessels passing through. A new and more factual affidavit was submitted as to the ownership of the Caribe, as to the separate stockholding and officering of the new corporation, and the pend-ency in other jurisdictions of two other libels by libelants for the same damages against the original respondent and others. No reply affidavit was offered, and no objection was made by libelants to the consideration of those on file. On August 30, 1948, the motion was heard and briefs submitted, and the judge found the facts to be that the Cali was béached and lost Jan. 17, 1948; that in the latter part of February, 1948, citizens of the Republic of Colombia formed under the laws of Colombia the corporation Compañía Colombiana del Caribe, some but not all the stockholders being stockholders in Compañía T ransmaritima Columbiana;¹ the managing officers of the two corporations were different persons, except that one was chairman of the Board of Directors of both. The affidavit filed by movant states the Alacran was sold to the new corporation on Feb. 25, 1948, by public deed No. 4 made before the Consul General of Colombia in Panama, and recorded in the public records. On March 4 the name was changed to Caribe and the vessel registered in that name as owned by the new corporation at Barranquilla, Colombia. She was seized March 8 in the Canal. The court then held that while there was a proper claim in admiralty against the Compania Marítima in personam, there was no direct claim against the Compania del Caribe, for that corporation did not exist when the cargo was lost, and if because of fraud in disposing of assets to it Compania del Caribe was accountable in equity, still that would not be a maritime claim. Consequently no claim of which the court has jurisdiction is stated against that corporation, and it can be held only as garnishee for any property or effects it may have in its hands belonging to Com-pania Marítima. He further held that if there was jurisdiction to enquire into the organization of the new corporation and the acquisition of the Alacran, since it all depended on the laws of Colombia and all witnesses were there, and since all but one libelant are foreigners, as are both the respondents, he would exercise his discretion to decline the enquiry. On motion for rehearing these views were adhered to, and the evidence by affidavit having been criticized, he held that the main facts sufficiently appeared from libelants’ pleadings and the documentary proofs. It was adjudged that the attachment of the Caribe be vacated and the vessel delivered to Com-pania del Caribe free of costs and charges incident to seizure and custody, but that an answer as garnishee be made by Compania del Caribe within thirty days. This appeal was thereupon taken.

1. We gravely doubt that the order is appealable, not being final nor determining fully any party’s rights. We resolve the doubt in favor of our jurisdiction because the vessel, now held for more than a year, ought to be disposed of. The court correctly held that no maritime liability is asserted against the Compania del Caribe or the vessel Caribe; and that the libel in personam against the Compania Marítima is good, as is the garnishment against Compania del Caribe, requiring it to answer as to all property of the other Company in its hands and debts owing to it.

2. As to the foreign attachment of the Caribe as the property of the Com-pania Marítima, we note that the Marshal did not return that respondent was not to be found in his district. Unless he failed to find the respondent, neither Admiralty Rule 2, 28 U.S.C.A., nor the process in his hands authorized him to attach any property. But as the fact of the respondent’s absence is apparently unquestioned, and as the return could be amended in this respect, we pass that point. But it remains that only property of the respondent can be attached. The purpose of foreign attachment in admiralty is to secure an appearance. Manro v. Almeida, 10 Wheat. 473, 6 L.Ed. 369; Seminole Lumber & Export Co. v. Bronx Garage Carp., D.C., 11 F.2d 982, and cases cited. And see historical discussion in The Bremena v. Card, D.C., 38 F. 144. Appearance has been entered here and answer filed. The vessel is now sought to be held as security for a money claim not yet proven. And she is not claimed by the respondent, but by a third person who is a vendee corporation by act of sale recorded prior to her seizure. If the respondent has any interest in her it must be an equitable one or one arising from unpaid purchase money; and after the lapse of a year no evidence has yet been put into this record that there is any such interest. The vessel when seized was not in the possession or service of respondent, and the burden is surely on libelants to show a justification for her seizure. The present possessor, and apparent owner of title, has a right to a prompt enquiry. Rule 23 of the District Court of the Canal Zone provides for it. It reads in part: “In case of the attachment of property * * * any person having a right to intervene in respect of the thing attached may, upon evidence showing any improper practice or a manifest want of equity on the part of libelant, have an order from the judge requiring libelant to show cause instanter why the * * * attachment should not be vacated.” ² The motion made in this case is pursuant to the rule. One of its grounds is in the very words of the rule. The affidavit evidence and the exhibits, while not of the most satisfactory kind, were enough under this rule to require the libelants to show some cause why the vessel should be held as the property of respondents. Neither on the hearing, nor on the rehearing completed September 20, 1948, more than six months after seizure, have libelants proved anything at all to support their contention, alleged on information and belief only, that the vessel is really the property of respondent Compañía Marítima. As a summary remedy the motion to vacate was properly sustained. There is, however, no adjudication of the title.

3. As to the amended libel against Compañía del Caribe, the court concluded that it is without jurisdiction to enter before judgment for the debt upon the trial of a creditor’s rights in property alleged to have been fraudulently transferred to a third person. The claim in personam against Marítima has not yet been established. Admiralty Rule 20 provides for collecting money decrees by execution, but not by such anticipatory proceedings. The jurisdiction is doubtful. The present Rule 20 concludes: “And any other remedies shall be available that may exist under the state or federal law for the enforcement of judgments or decrees.” It is probable that after judgment the admiralty court could, like a court of equity, seek out and condemn equitable assets. Lee v. Thompson, Fed. Cas. No. 8,202, involved a proceeding after judgment. Gardner v. Dantzler Lumber & Export, 3 Cir., 98 F.2d 478, did not adjudicate Hie equitable title to the ship, the only luestion being which of two brothers was liable in personam for a loss of cargo. Both were held liable. We believe there is no precedent for what was attempted in the libel against Compañía del Caribe, before a judgment has been obtained against Com-pañía Marítima. But there is a discretion, as the court held, to refuse enquiry, even if there be jurisdiction, where the case is about foreign business and the transaction was between foreigners and depends on foreign law, and the witnesses reside abroad.

The authorities on all these points are well discussed in The Melmay, 1932 A.M.C. p. 1396, in which a summary motion under Canal Zone Rule 23 was granted on facts much like those here presented. On the whole we find no error in the judgment complained of and it is, without prejudice to further enquiry into the ownership of the Caribe in the garnishment or on proper proceedings to enforce a judgment in personam against Compañía Marítima, if obtained, Affirmed.

1 The affidavit is that Keene, who owns 39 percent of the stock in the Transmaritima, owns about the same percent in del Caribe; but Echeverri, who owns 12 percent in Transmaritima, owns 58 percent in del Caribe; that Losada and Marulanda, who own 12 and SO percent in Marítima, own none in del Caribe; and that three other stockholders in del Caribe own no stock in Mhritima.

2 Similar rules are stated to exist in the Southern District of New York, the Eastern District of New York, and Northern District of California in 2 Benedict on Admiralty, 6 Ed. p. 399. A claim is stated also to be a proper mode of intervention by a third person whose property may be attached. Id., p. 428.