INTERNATIONAL REFUGEE ORGAN. v. Republic SS Corp.

• Decision Date: 11 May 1951
• Docket Number: No. 6249.,6245,No. 6202,6202,6249.
• Citation: 189 F.2d 858
• Parties: INTERNATIONAL REFUGEE ORGANIZATION v. REPUBLIC S. S. CORP. et al. INTERNATIONAL REFUGEE ORGANIZATION v. REPUBLIC S. S. CORP. INTERNATIONAL REFUGEE ORGANIZATION v. COLEMAN, Chief Judge.
• Court: U.S. Court of Appeals — Fourth Circuit

189 F.2d 858 (1951)

INTERNATIONAL REFUGEE ORGANIZATION v. REPUBLIC S. S. CORP. et al. INTERNATIONAL REFUGEE ORGANIZATION v. REPUBLIC S. S. CORP. INTERNATIONAL REFUGEE ORGANIZATION v. COLEMAN, Chief Judge.

Nos. 6202, 6245, No. 6249.

United States Court of Appeals Fourth Circuit.

Argued April 12, 1951.

Decided May 11, 1951.

As Modified July 11, 1951.

Francis M. Shea, Washington, D. C. (Warner W. Gardner, Lawrence J. Latto, and Oliver E. Stone, Legal Officer, United States Office, International Refugee Organization, Washington, D. C., on the brief), for appellant.

A. H. Feller, Gen. Counsel, and Paolo Contini, Legal Counsellor, United Nations, Lake Success, N. Y., on the brief of United Nations as amicus curiae.

No appearance for appellees and respondent.

Before PARKER, Chief Judge, and SOPER and DOBIE, Circuit Judges.

PARKER, Chief Judge.

These cases arise out of a controversy between the International Refugee Organization, an agency of the United Nations, and the Republic of Panama, and one Jose Jacintho de Medeiros, a citizen of Portugal. One aspect of the controversy was before this court in International Refugee Organization v. Maryland Drydock Co., 4 Cir., 179 F.2d 284, in which we resolved conflicting claims to the S. S. San Francisco. No. 6202 involves a charge of fraud and deceit made by the I.R.O. against the corporation and Medeiros in a suit instituted against them to recover damages and establish a constructive trust. No. 6245 is an appeal in a suit in admiralty commenced by a libel in personam against the corporation, in which a writ of foreign attachment was issued against the S. S. San Francisco and in which the same charges of fraud were made as were made in No. 6202. The allegations of fraud in both cases are that the corporation and Medeiros obtained $840,000 from I.R.O. by means of false and fraudulent representations with respect to the ownership, title and speed of the S. S. San Francisco, a vessel chartered to the I.R.O. by the Republic Steamship Company represented by Medeiros as president.

In No. 6202, the action against Medeiros and the Republic Steamship Company was dismissed by the lower court for lack of jurisdiction. In No. 6245 the lower court stayed proceedings because of an arbitration clause contained in the charter party and the I.R.O. appealed from that order. Admitting, however, that appeal does not lie because such an order is not final, the I.R.O. has filed a petition for a writ of mandamus, which is before us in No. 6249, asking that we require the District Court to hear and pass upon the case.

No. 6202.

The dismissal for lack of jurisdiction in No. 6202 is based upon the holding that a suit by the I.R.O. is not one of which the federal courts have been given jurisdiction. We think that this is error. The United Nations is an international organization of which the United States is a member, and article 104 of its charter provides that it shall enjoy in the territory of each of its members "such legal capacity as may be necessary for the exercise of its functions and the fulfillment of its purposes". 59 Stat. 1053. Article 13 of the Constitution of the I.R.O., which is an agency of the United Nations, contains a provision to like effect. In the International Organization Immunities Act, 59 Stat. 669, 22 U.S.C.A. § 288a, Congress has undertaken to discharge the obligations assumed under these provisions by providing that international organizations such as I.R.O. shall "to the extent consistent with the instrument creating them, possess the capacity —

"(i) to contract;

"(ii) to acquire and dispose of real and personal property;

"(iii) to institute legal proceedings". (Italics supplied.) This means, by necessary implication, that Congress has opened the doors of the federal courts to suits by such international organizations; for the right to institute legal proceedings means the right to go into court, and the federal courts are the only courts whose doors Congress can open.

As pointed out by the Secretary of State (hearings on U. N. Charter, 77th Congress, 1st Session, pp. 33, 134-135) and the Senate Committee on Foreign Affairs (S. Report, exec. No. 8, 77th Congress, 1st Session, p. 6), "It is apparent that an organization like the United Nations which will have offices and employees, will purchase supplies, and presumably rent or purchase office space, must have the legal capacity to enter into contracts, to take title to real and personal property and to appear in court (although its position as a defendant is protected by Article 105). The purpose of Article 104 is to make clear that the Organization has that legal capacity." Certainly an organization like the I.R.O., which is purchasing and chartering vessels and entering into all sorts of contracts in connection with the transportation of refugees, must have the right to go into court for the protection of its rights and interests; and in this country the logical courts for it to go into are the courts of the nation which has adhered to the international organization, not the local courts of the several states which have had no part therein. In determining its rights in this regard, we should give a liberal interpretation to the International Organization Immunities Act. As was well said by Judge Goodman in Balfour, Guthrie & Co. v. United States, D. C., 90 F.Supp. 831, 833: "The broad purpose of the International Organizations Immunities Act was to vitalize the status of international organizations of which the United States is a member and to facilitate their activities. A liberal interpretation of the Act is in harmony with this purpose."

We think also that there is jurisdiction to entertain the suit by reason of 28 U.S.C.A. § 1331, which provides that the District Courts shall have jurisdiction of civil actions arising under the "Constitution, laws or treaties of the United States". Under the principles laid down in Osborn v. United States Bank, 9 Wheat. 738, 6 L.Ed. 204, this was certainly a civil action arising not only under the treaties creating the United Nations and the International Refugee Organization into both of which the United States had entered, but also under the act of Congress which gives the right to sue to public international organizations in which the United States participates. The right of federal corporations to invoke the jurisdiction of the federal courts has been curtailed by act of Congress but this involves no limitation of the doctrine of Osborne v. United States Bank, supra. On the contrary, it is an express recognition of that doctrine. It will be noted that the statute, 28 U.S.C.A. § 1349, denying jurisdiction to a corporation created by act of Congress unless the United States is the owner of more than one-half its capital stock can have no application because the I.R.O. is not a corporation created by act of Congress but an international organization to which the United States itself is a party. If, as said by the Supreme Court in the case of Gully v. First National Bank, 299 U.S. 109, 114, 57 S.Ct. 96, 81 L.Ed. 70, there is no thought of disturbing the doctrine of the charter cases, that doctrine must be held to support the jurisdiction here. If a corporation may invoke the federal jurisdiction because created by a law of the United States, an international organization created by treaties to which the United States is a party may invoke the jurisdiction because created by a treaty of the United States. Especially is this true where the international organization is clothed by a law of the United States with the essential corporate functions of contracting, acquiring and disposing of property and suing in court.

It has been suggested that the jurisdiction of the court can be sustained under 28 U.S. C.A. § 1345 on the theory that a suit by an international organization is a suit by the United States as well as by the other nations which are parties to the organization and that jurisdiction of a suit by the United States is not defeated because other parties are joined as plaintiffs in the suit. See Erickson v. United States, 264 U.S. 246, 249, 44 S.Ct. 310, 68...