339 U.S. 684 (1950), 230, Swift & Company Packers v. Compania Colombiana del Caribe, S.A.
|Docket Nº:||No. 230|
|Citation:||339 U.S. 684, 70 S.Ct. 861, 94 L.Ed. 1206|
|Party Name:||Swift & Company Packers v. Compania Colombiana del Caribe, S.A.|
|Case Date:||June 05, 1950|
|Court:||United States Supreme Court|
Argued December 14-15, 1949
CERTIORARI TO THE UNITED STATES COURT OF APPEALS
FOR THE FIFTH CIRCUIT
Petitioners brought a libel in personam in the District Court for the Canal Zone against a steamship company on a claim arising upon a contract of affreightment supplemented by charges of negligence in the nondelivery of a sea cargo, and by process of foreign attachment secured the attachment of a vessel which the company allegedly had transferred to respondent in fraud of petitioners' rights. Concluding that there was no jurisdiction in admiralty to inquire into the alleged fraudulent transfer, and that, in any event, the exercise of jurisdiction would be inappropriate since the transfer had taken place between two foreign corporations and in a foreign country, the District Court vacated the attachment. The Court of Appeals affirmed.
1. The order of the District Court vacating the attachment was reviewable by the Court of Appeals under 28 U.S.C. § 1291. Pp. 688-689.
(a) The provision of 28 U.S.C. § 1291 for appeals to the courts of appeals only from final decisions of the district courts should not be construed so as to deny effective review of a claim fairly severable from the context of a larger litigious process. Cohen v. Beneficial Industrial Loan Corp., 337 U.S. 541. Pp. 688-689.
2. In the circumstances of this case, the District Court, to discharge its maritime jurisdiction, was not without power to determine whether the transfer of the vessel was fraudulent, and the power should be exercised. Pp. 689-695.
3. In the posture of the case in the District Court, the vacation of the attachment was not justified by petitioners' failure to establish a prima facie case of fraud, although the ultimate burden of establishing a fraudulent transfer was upon them. Pp. 695-696.
4. The District Court's order vacating the attachment was not justified as an exercise of discretion to decline jurisdiction under the doctrine of forum non conveniens. Pp. 697-698.
(a) It was improper under the circumstances here shown to remit a United States citizen to the courts of a foreign country
without assuring the citizen that respondents would appear in those courts and that security would be given equal to what had been obtained by attachment in the District Court. Pp. 697-698.
175 F.2d 513 reversed.
An order of the District Court vacating the attachment of a vessel in an admiralty proceeding, 83 F.Supp. 273, was affirmed by the Court of Appeals. 175 F.2d 513. This Court granted certiorari. 338 U.S. 813. Reversed and remanded, p. 698.
FRANKFURTER, J., lead opinion
MR. JUSTICE FRANKFURTER delivered the opinion of the Court.
The question before us is the propriety of an order of the District Court for the Canal Zone vacating a foreign attachment of a vessel made in a libel in personam. We granted certiorari because important questions relating to the scope of admiralty jurisdiction and its exercise are in issue. 338 U.S. 813.
On March 7, 1948, the libel was filed against Compania Transmaritima Colombiana, S.A. a Colombian corporation, by Swift & Company Packers, a Nevada corporation, certain Cuban corporations and individuals, and a Colombian citizen. They brought the libel as owners of rice shipped from Ecuador to Cuba. It was alleged that the cargo had been delivered in good order to the M/V Cali, owned and operated by Transmaritima, and that the vessel had sunk, or partially sunk, off the island of Grand Cayman, with resulting nondelivery of the cargo. This was supplemented by allegations of negligence. Process was prayed with the further request that, if the respondent could not be found, its goods and chattels
be attached, particularly a vessel known as the Alacran, or Caribe. This vessel was thereupon attached by the marshal.
On March 8, libellants filed a supplemental and amended libel, and, on the basis of the following allegations, joined the Compania Colombiana Del Caribe, S.A. as respondent. On or shortly prior to March 4, the Compania Del Caribe had been organized under the laws of Colombia, and the Alacran had been transferred by Transmaritima to Del Caribe in fraud of the rights of libellants. The latter company had been organized by directors, officers, and stockholders of Transmaritima, but no funds had been paid into its treasury for the issue of its stock, and the transfer of the Alacran was without real consideration. Del Caribe was "merely the creature or alter ego" of Transmaritima, and "they should be held to be, as they are, one and the same." Del Caribe, on or about March 4, had had the Vessel's name changed from Alacran to Caribe, and a new register had been issued accordingly. In the alternative, the claim was that Del Caribe was indebted to Transmaritima for at least a substantial part if not all of the purchase price of the Caribe.
Attachment of the vessel was again prayed on what appears to have been either of two grounds: since Transmaritima and Del Caribe were really one and the same, it mattered not which was deemed to be the owner of the Caribe; since the transfer of the Caribe to Del Caribe was a fraudulent [70 S.Ct. 864] transfer to be set aside, the vessel was in reality Transmaritima's property, and Del Caribe should be garnished. On the basis of the amended libel, another attachment of the Caribe was made.1
With the supplemental libel, libellants submitted a list of interrogatories to be propounded to Del Caribe, calculated to disclose the true status of that company and of the transfer to it of the Caribe. On March 15, respondents gave notice that they would move for an order dismissing the libel and vacating the attachment. An accompanying affidavit relied primarily on the doctrine of forum non conveniens. The District Court overruled this motion on March 31. The parties then entered into stipulations whereby the respondents' time to answer the libel and interrogatories was extended to June 17. On June 11, they answered, putting in issue various questions relating to the liability arising out of the sinking of the Cali and to the transfer of the Caribe. At the same time Del Caribe objected to the interrogatories on various grounds. No disposition of these objections appears from the record.
On August 16, Del Caribe gave notice of a motion to dismiss the libel as to it and vacate the attachment. Various grounds were urged calling into question the jurisdiction of the court, the propriety of its exercise, and the adequacy of the allegations to state a claim in the libel. An accompanying affidavit set forth matters relating to the transfer.
On September 20, the District Court found that the nondelivery of the cargo was due to the beaching of the Cali in January, 1948; that Del Caribe had been organized in the latter part of February, 1948, and that Transmaritima had sold and transferred the Caribe to Del Caribe on February 25.2 From these facts, the district judge concluded that there was no jurisdiction in admiralty to inquire into the relations between the two
respondent companies or the sale of the Caribe. In any event, the court declined to exercise jurisdiction to look into the transfer, since it had taken place between two foreign corporations and in a foreign country. Accordingly, the attachment was ordered to be vacated. While libellants submitted additional evidence upon a rehearing, the court adhered to its original views. 83 F.Supp. 273.
The Court of Appeals affirmed. It held that jurisdiction to set aside a fraudulent transfer before judgment on the main claim was, at best, "doubtful," that there was discretion to decline jurisdiction on principles of forum non conveniens, and that, in any event, libellants had not sustained their burden of producing proof that the transfer was fraudulent.3 175 F.2d 513.
This we believe to be a fair resume of an uncommonly confused and opaque record. It is especially hampering that the record is not clearer than it is when legal issues of real complexity are in controversy.
I. There is a threshold question as to the jurisdiction of the court below to entertain the appeal. It is claimed that the order vacating the attachment was not a final order, and therefore not reviewable.
We believe that the order comes squarely within the considerations of our recent decision in Cohen v. Beneficial Industrial Loan Corp., 337 U.S. 541. The litigation arising out of the claim of [70 S.Ct. 865] the libellants has not run its entire course, but the order now here, like that, in the Cohen case,
appears to fall in that small class which finally determine claims of right separable from, and collateral to, rights asserted in the action, too important
to be denied review and too independent of the cause itself to require that appellate consideration be deferred until the whole case is adjudicated.
337 U.S. at 546. Appellate review of the order dissolving the attachment at a later date would be an empty rite after the vessel had been released and the restoration of the attachment only theoretically possible. Cf. The Panaghia Kathariotisa, 165 F.2d 430. Under these circumstances, the provision for appeals only from final decisions in 28 U.S.C. § 1291, should not be construed so as to deny effective review of a claim fairly severable from the context of a larger litigious process. See Cobbledick v. United States, 309 U.S. 323, 328-329. The situation is quite different where an attachment is upheld pending determination of the principal claim. Such was Cushing v. Laird, ...
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