THE LYDIA

• Decision Date: 02 June 1924
• Docket Number: No. 355,356.,355
• Citation: 1 F.2d 18
• Parties: THE LYDIA. HUGH D. MacKENZIE CO., Limited, et al. v. LYDIA S. S. CO. et al. (two cases).
• Court: U.S. Court of Appeals — Second Circuit

1 F.2d 18 (1924)

THE LYDIA.^*

HUGH D. MacKENZIE CO., Limited, et al. v. LYDIA S. S. CO. et al. (two cases).

Nos. 355, 356.

Circuit Court of Appeals, Second Circuit.

June 2, 1924.

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Edward H. Wilson and Alvin C. Cass, both of New York City, for appellants the Lydia and Susquehanna S. S. Co.

William J. Griffin and John M. Woolsey, both of New York City, for appellant National Surety Co.

Burlingham, Veeder, Masten & Fearey, of New York City (Ray Rood Allen and Frederic Conger, both of New York City, of counsel), for appellees.

Before HOUGH, MANTON, and MAYER, Circuit Judges.

HOUGH, Circuit Judge (after stating the facts as above).

It must be emphasized that this appeal has vacated the decree of the District Court and that the case is here tried de novo (the John Twohy, 255 U. S. 77-79, 41 Sup. Ct. 251, 65 L. Ed. 511), although such new trial is conducted in accordance with our own rules. We have recently considered at length the rights of stipulators for value in suits in rem (The Cartona, 297 Fed. 827; The Buckhannon, 299 Fed. 519), and the same rules apply to stipulators for costs. National Surety Company had under these decisions no right to intervene, and no such effort was made; but it has substantially sought to intervene by appealing from the decrees entered. This cannot be done.

It is almost elementary that any one upon whom a judgment or decree directly, immediately, and necessarily operates may appeal from it so far as it affects himself. Thus it has been held that "the sureties on the stipulation (for value) are entitled to an appeal from any decree that may be rendered against them." Ex parte Sawyer, 21 Wall. 235-240, 22 L. Ed. 617. The decrees at bar were entered in the form common, if not universal, in this circuit, and the practice as it has been followed for generations is laid down in Benedict's Admiralty (4th Ed.) § 498. This form is even less stringent, so far as sureties are concerned, than that considered by the Supreme Court in the Sawyer Case, supra. That decree provided that, unless an appeal be taken, "a summary judgment" be entered in favor of the libelants against the sureties, naming them; whereas, under the practice followed here, it is necessary to issue an order to show cause against the sureties, and no execution can issue against them until after they have been heard and such objections as they may make have been overruled. Yet in the Sawyer Case it was held that the decree was not final and did not authorize an appeal. As we have power to consider only appeals from final decrees in admiralty, it is clear that the surety company has no technical standing in this court.

The practice in the several circuits is not uniform in respect of methods of compelling stipulators to make good their stipulations. In the Fifth circuit a final decree seems to be in effect a final judgment against the stipulator by name, and it was held that such stipulator was a necessary party on appeal, unless a severance was had. The Bylands, 231 Fed. 101, 145 C. C. A. 289. The same practice seems to be followed in the Sixth Circuit, yet it was there held "that the sureties did not become parties to the suit in any such sense as to require their joinder in appeal." The New York, 104 Fed. 561, 44 C. C. A. 38.

To avoid, however, circuity and delay, we have considered the argument for the surety company and shall express opinion as to the stipulator's liability, without admitting any standing in this court, except that of amicus. The general principle regarding stipulator's liability was summarily laid down in Newell v. Norton, 3 Wall. 257, at page 266, 18 L. Ed. 271, viz. stipulators and sureties have no right to complain of any treatment of the res or any amendment of pleadings so long as their liability is neither increased nor diminished, and this is because "every person bailing such property is considered as holding it subject to all legal dispositions of the court." Citation might be extended, but the tendency to interpret admiralty stipulations in terms of common-law bail is quite noticeable. The matter was more fully considered in The Oregon, 158 U. S. 186, 15 Sup. Ct. 804, 39 L. Ed. 943. There the previous authorities were examined at length, with the result that interveners setting up wholly different causes of action were held unable to avail themselves of the stipulation given to answer the exigency of the original libel. In other words, a stipulation for value is given to secure only the demand propounded in the libel.

But that demand may be ill pleaded, or it may be propounded by a person who presently appears to be without full authority in the premises, and when it comes to changes naturally following from these conditions (one or both) the matter was fully gone into in The Beaconsfield, 158 U. S. 303, 310, 15 Sup. Ct. 860, 863 (39 L. Ed. 993): "Stipulations in admiralty are not subject to the rigid rules of the common law with respect to the liability of the surety, and so long as the cause of action remains practically the same a mere change in the name of the libelant" does not discharge the stipulator. And the court particularly approved Judge Ware's remark in Lane v. Townsend, 1 Ware, 286, Fed. Cas. No. 8,054, to the effect that it is not into the intention of the party that one should inquire, but into the intention of the court or of the law which required the stipulation and dictated its terms.

We turn now to the one assignment of error filed by the stipulator and above quoted, to the effect that it was error to grant any decree against the stipulator after the substitution of the "H. D." Company for the "Hugh" Company. This assignment would have been appropriate, had the appeal been taken by it from a decree finally made against it.

An answer on this record is that there never was any substitution. For all that this record shows, both these corporations still possess corporate existence. There is no evidence that bankruptcy or insolvency proceeding winds up a Canadian or Nova Scotian Company; that it has no such effect under our law is elementary. The "H. D." Company was brought in quite unnecessarily, as we think, but merely to insure its presence before the court as one on whose behalf the "Hugh" Company might continue the suit. Inasmuch as the contract out of which ut supra this whole trouble grew was made with the "Hugh" Company, we see no reason why that concern could not bring suit when it did, and continue the suit without any further multiplication of parties.

The argument for the surety appellant goes entirely beyond the assignment of errors, and asserts that "the procedure followed below has entirely changed the parties, the cause of action, and the risk." The change of parties may be summarily held to be no business of the stipulator. For this The Beaconsfield, supra, is sufficient authority, and The Horsa (D. C.) 232 Fed. 993, is a rather striking and...