Watts, Watts Co v. Unione Austriaca Di Navigazione

• Decision Date: 04 November 1918
• Docket Number: No. 25,25
• Citation: 248 U.S. 9,39 S.Ct. 1,63 L.Ed. 100
• Parties: WATTS, WATTS & CO., Limited, v. UNIONE AUSTRIACA DI NAVIGAZIONE
• Court: U.S. Supreme Court

248 U.S. 9

39 S.Ct. 1

63 L.Ed. 100

WATTS, WATTS & CO., Limited,

v UNIONE AUSTRIACA DI NAVIGAZIONE.

No. 25.

Argued April 17, 1918.

Decided Nov. 4, 1918.

Messrs. John M. Woolsey, J. Parker Kirlin, and Mark W. McClay, Jr., all of New York City, for petitioner.

[Argument of Counsel from pages 9-15 intentionally omitted] Mr. Charles S. Haight, of New York City, for respondent.

[Argument of Counsel from pages 15-19 intentionally omitted] Mr. Justice BRANDEIS delivered the opinion of the Court.

On August 4, 1914, Great Britain declared war against Germany and on August 12, 1914, against Austria-Hungary. Prior to August 4, Watts, Watts & Co., Limited, a British corporation, had supplied to Unione Austriaca di Navigazione, an Austro-Hungarian corporation, bunker coal at Algiers, a dependency of the French Republic. Drafts on London given therefor having been protested for nonpayment, the seller brought, on August 24, 1914, a libel in personam against the purchaser in the District Court of the United States for the Eastern District of New York. Jurisdiction was obtained by attaching one of the steamers to which the coal had been furnished. The attachment was discharged by giving a bond which is now in force. The respondent appeared and filed an answer which admitted that the case was within the admiralty jurisdiction of the court; and it was submitted for decision upon a stipulation as to facts and proof of foreign law.

The respondent contended that the District Court, as a court of a neutral nation, should not exercise its juris dictional power between alien belligerents to require the transfer, by process of judgment and execution, of funds by one alien belligerent to another; an act which it alleged was prohibited alike by the municipal law of both belligerents. The libelant replied that performance of the contract by respondent—that is, the payment of a debt due—was legal by the law of the place of performance, whether that place be taken to be Algiers or London; that it was immaterial whether it was legal by the Austro-Hungarian law, since Austria-Hungary was not the place of performance; and that the enforcement of legal rights here would not infringe the attitude of impartiality which underlies neutrality. The District Court held that it had jurisdiction of the controversy, and that it was within its discretion to determine whether it should exercise the jurisdiction; since both parties were aliens and the cause of action arose and was to be performed abroad. It then dismissed the libel without prejudice, saying:

'From the standpoint of this neutral jurisdiction the controlling consideration is that the law of both belligerent countries [Great Britain and Austria-Hungary] forbids a payment by one belligerent subject to his enemy during the continuance of war. This court, in the exercise of jurisdiction founded on comity, may not ignore that state of war and disregard the consequences resulting from it.' 224 Fed. 188, 194.

The dismissal by the District Court was entered on May 27, 1915. On December 14, 1915, the decree was affirmed by the Circuit Court of Appeals, on the ground that it was within the discretion of the trial court to determine whether to take or to decline jurisdiction (The Belgenland, 114 U. S. 355, 5 Sup. Ct. 860, 29 L. Ed. 152), and that the exercise of this discretion should not be interfered with, since no abuse was shown (229 Fed. 136, 143 C. C. A. 412). On June 12, 1916, an application for leave to file a petition for writ of mandamus to compel the Court of Appeals to review the exercise of discretion by the District Court was denied (Ex parte Watts, Watts & Co., 241 U. S. 655, 36 Sup. Ct. 726, 60 L. Ed. 1224), and a writ of certiorari was granted by this court (241 U. S. 677, 36 Sup. Ct. 726, 60 L. Ed. 1232). The certiorari and return were filed July 21, 1916. On December 7, 1917, the President issued a proclamation declaring that a state of war exists between the United States and Austria-Hungary. The case was argued here on April 17, 1918.

This court, in the exercise of its appellate jurisdiction, has power not only to correct error in the judgment entered below, but to make such disposition of the case as justice may at this time require. Butler v. Eaton, 141 U. S. 240, 11 Sup. Ct. 985, 35 L. Ed. 713; Gulf, Colorado & Santa Fe Ry. Co. v. Dennis, 224 U. S. 503, 506, 32 Sup. Ct. 542, 56 L. Ed. 860. And in determining what justice now requires the court must consider the changes in fact and in law which have supervened since the decree was entered below. United States v. Hamburg-Amerikanische Packetfahrt-Actien Gesellschaft, 239 U. S. 466, 475, 478, 36 Sup. Ct. 212, 60 L. Ed. 387; Berry v. Davis, 242 U. S. 468, 37 Sup. Ct. 208, 61 L. Ed. 441; Crozier v. Krupp, 224 U. S. 290, 302, 32 Sup. Ct. 488, 56 L. Ed. 771; Jones v. Montague, 194 U. S. 147, 24 Sup. Ct. 611, 48 L. Ed. 913; Dinsmore v. Southern Express Co., 183 U. S. 115, 120, 22 Sup. Ct. 45, 46 L. Ed. 111; Mills v. Green, 159 U. S. 651, 16 Sup. Ct. 132, 40 L. Ed. 293; The Schooner Rachel v. United States, 6 Cranch, 329, 3 L. Ed. 239; United States v. Schooner Peggy, 1 Cranch, 103, 109, 110, ...