Seawind Compania, SA v. Crescent Line, Inc.

Decision Date09 July 1963
Docket NumberNo. 352,Docket 27593.,352
Citation320 F.2d 580
PartiesSEAWIND COMPANIA, S. A., Libelant-Appellant, v. CRESCENT LINE, INC., now known as Falcon Shipping Corp., Respondent-Appellee, Kulukundis Lines Inc., Kulukundis Lines, Ltd., and Michael Kulukundis, etc., Respondents.
CourtU.S. Court of Appeals — Second Circuit

Foley & Grainger, New York City (Robert P. Whelan, of counsel), for libelant-appellant.

Werner, French & Molloy, New York City (Henry P. Molloy, Jr., New York City, of counsel), for respondent-appellee.

Before WATERMAN, FRIENDLY and SMITH, Circuit Judges.

WATERMAN, Circuit Judge.

Seawind Compania, S. A., appeals from an order of the United States District Court for the Southern District of New York, Bonsal, J., sitting in the admiralty, by which the attachment of credits and effects of respondent-appellee, Crescent Lines, Inc., now known as Falcon Shipping Corp., was vacated. The attachment had been made pursuant to Rule 2 of the Rules of Practice in Admiralty and Maritime Cases promulgated by the United States Supreme Court. We affirm the order below.1

By its libel filed March 20, 1962, Seawind sought recovery of damages from Crescent Line and others for the alleged breach of a maritime agreement. The same day a citation in personam with a clause of foreign attachment in the usual form was issued to the United States Marshal for the Southern District of New York. The Marshal was directed to cite Crescent Line "if it shall be found in your District," and "if the said Respondent cannot be found," to attach its credits and effects in the hands of named garnishees. On March 21, 1962, a Deputy Marshal served the citation with clause of foreign attachment upon the named garnishees, and at the same time effected personal service upon the other respondents in the case. Although the Marshal's return certified that he was unable to find Crescent Line, Inc. "after due and diligent search," it is conceded that libelant did not inform the Marshal where Crescent Line, Inc., might be found and no attempt was made by him to locate or to serve this respondent.

By order to show cause dated March 29, 1962, Crescent Line moved pursuant to Rule 21 of the Admiralty Rules of the District Court for an order vacating the attachment. Appellee contended that it had been present and doing business in the Southern District of New York for several years, as Seawind well knew, and that the attachment was, therefore, illegally and improperly made. After a hearing, Judge Bonsal granted the motion and vacated the attachment on April 9, 1962. Reargument of the motion was held on April 17, 1962, and on the same day Judge Bonsal's Memorandum Decision was entered adhering to his original determination. This appeal followed.

An attachment under Rule 2 of the Admiralty Rules, customarily referred to as a foreign attachment, has a dual purpose: (1) to obtain jurisdiction of the respondent in personam through his property, and (2) to assure satisfaction of any decree in libelant's favor. 2 Benedict, Admiralty § 288 (6th ed. 1940); Swift & Company Packers v. Compania Columbiana Del Caribe, S. A., 339 U.S. 684, 70 S.Ct. 861, 94 L.Ed. 1206 (1950). The two purposes may not be separated, however, for security cannot be obtained except as an adjunct to obtaining jurisdiction.

Rule 2 provides, in pertinent part:

"In suits in personam the mesne process shall be by a simple monition in the nature of a summons to appear and answer to the suit, or by a simple warrant of arrest of the person of the respondent in the nature of a capias, as the libellant may, in his libel or information pray for or elect; in either case with a clause therein to attach his goods and chattels, or credits and effects in the hands of the garnishees named in the libel to the amount sued for, if said respondent shall not be found within the district. * * *" (Emphasis supplied.)

Thus, on motions to vacate foreign attachments, the essential issue before the district court is whether respondent could have been found within the district. We must affirm Judge Bonsal's determination that respondent-appellee could have been so found unless he applied an erroneous legal standard or his determination of subsidiary facts was clearly erroneous. McAllister v. United States, 348 U.S. 19, 75 S.Ct. 6, 99 L.Ed. 20 (1954); cf. Rule 52(a), Fed.R.Civ.P.

The Admiralty Rules do not define the expression "found within the district." In the cases construing Rule 2, however, the requirement is said to present "a two-pronged inquiry: first, whether the respondent can be found within the district in terms of jurisdiction, and second, if so, whether it can be found for service of process." United States v. Cia Naviera Continental S. A., 178 F.Supp. 561, 563 (S.D.N.Y.1959); see American Potato Corp. v. Boca Grande S.S. Co., 233 F. 542 (E.D.Pa. 1916); Insurance Co. of North America v. Canadian American Navigation Co. (The Melmay), 1933 A.M.C. 1057.

Considering the second question first, there is no doubt, we believe, that Crescent Line, Inc. (Falcon Shipping Corp.) could be found within the Southern District of New York on March 21, 1962, for service of process. In Admiralty, as under Rule 4(d) of the Federal Rules of Civil Procedure, service upon a corporation may properly be effected by service upon "an officer, a managing or general agent, or * * * any other agent authorized by appointment or by law to receive service of process." Ashcraft-Wilkinson Co. v. Compania De Navegacion Geamar, S.R.L., 117 F.Supp. 162, 164 (S.D.N.Y.1953); Patel Cotton Co. v. Steel Traveler, 107 F.Supp. 191, 193 (S.D.N.Y.1952); 2 Benedict, Admiralty § 280 (6th ed. 1940).

Here, appellant does not deny that during the relevant period of time Crescent Line had a managing agent within the district, James W. Elwell & Co., Inc., with offices at 17 State Street in New York City; that the Elwell office was in the charge of David W. Swanson, president of both Elwell and Crescent Line (Falcon Shipping Corp.), who was present in his office at 17 State Street during normal business hours on March 21, 1962; and that the Secretary and proctor for both Crescent Line and Elwell was Henry P. Molloy, Jr., Esq., with offices at 26 Broadway in New York City.

Moreover, the district court could properly conclude that appellant knew, or ought to have known, the above facts, for both Swanson and Molloy signed the contract in suit, as President and Secretary of Crescent Line respectively; James W. Elwell & Co., Inc. was referred to in the contract as the Managing Agent of the respondent; and on February 19 and February 26, 1960, appellant, through its President, directed correspondence to "Crescent Line, Inc., James W. Elwell & Co., Inc., Agent, 17 State Street, New York 4, New York, Attention: Mr. David Swanson, President."

Appellant argues that because Crescent Line, on or about February 26, 1960, changed its corporate name to Falcon Shipping Corp., and sold its former name and good will, appellant no longer knew whether Swanson, Molloy, and James W. Elwell & Co., Inc. continued to serve as officers and agents of respondent-appellee. On March...

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