Archawski v. Hanioti

• Decision Date: 09 April 1956
• Docket Number: No. 351,351
• Citation: 350 U.S. 532,100 L.Ed. 676,76 S.Ct. 617
• Parties: R. V. ARCHAWSKI et al., Petitioners, v. Basil HANIOTI, Etc
• Court: U.S. Supreme Court

350 U.S. 532

76 S.Ct. 617

100 L.Ed. 676

R. V. ARCHAWSKI et al., Petitioners,

v Basil HANIOTI, Etc.

No. 351.

Argued March 5, 1956.

Decided April 9, 1956.

Mr. Harry D. Graham, New York City, for petitioners.

Mr. Israel Convisser, Washington, D.C., for respondent.

Mr. Justice DOUGLAS delivered the opinion of the Court.

The sole question in the case is whether the cause of action alleged comes within the admiralty jurisdiction of the District Court. The District Court held that this was an action on a maritime contract, within the admiralty jurisdiction, 129 F.Supp. 410. The Court of Appeals reversed, holding that the suit was in the nature of the old common law indebitatus assumpsit for money had and received, based upon the wrongful withholding of money. 223 F.2d 406. The case is here on a petition for certiorari which we granted, 350 U.S. 872, 76 S.Ct. 120, because of the seeming conflict of that ruling with Krauss Bros. Lumber Co. v. Dimon S.S. Corp., 290 U.S. 117, 124¹, 54 S.Ct. 105, 107, 78 L.Ed. 216.

The libel alleges that respondent, doing business in his own and in various trade names, owned and controlled a passenger vessel, known as the City of Athens, and held out that vessel as a common carrier of passengers for hire, and that petitioners paid moneys for passage upon the vessel, scheduled for July 15, 1947, to Europe. A contract for the transportation of passengers is a maritime contract within admiralty jurisdiction.² The Moses Taylor, 4 Wall. 411, 18 L.Ed. 397. The allegations so far mentioned are plainly sufficient to establish such a contract. The libel goes on to allege a breach of that contract through an abandonment of the voyage. If this were all, it would be plain that petitioners stated a claim for breach of a maritime contract. But the libel further alleges that the sums paid by petitioners as passage money were 'wrongfully and deliberately' applied by respondent to his own use and benefit 'in reckless disregard of his obligations to refund the same' and that respondent 'has secreted himself away and manipulated his assets * * * for the purpose of defrauding' petitioners. Then follow allegations of certain fraudulent acts and transactions.

The allegations of wrongfulness and fraud do not alter the essential character of the libel. For the ancient admiralty teaching is that, 'The rules of pleading in the admiralty are exceedingly simple and free from technical requirements.' Dupont de Nemours & Co. v. Vance, 19 How. 162, 171—172, 15 L.Ed. 584. And see 2 Benedict, American Admiralty (6th ed. 1940), §§ 223, 237. Though these particular allegations of the libel sound in fraud or in the wrongful withholding of moneys, it is plain in the context that the obligation to pay the moneys arose because of a breach of the contract to transport passengers. Lawyers speak of the obligation in terms of indebitatus assumpsit, a concept whose tortuous development gave expression to 'the ethical character of the law.' See Ames, The History of Assumpsit, 2 Harv.L.Rev. 1, 53, 58 (1888). As Mr. Justice Holmes once put it, 'An obligation to pay money generally is enforced by an action of assumpsit, and to that extent is referred to a contract, even though it be one existing only by fiction of law.' Thomas v. Matthiessen, 232 U.S. 221, 235, 34 S.Ct. 312, 314, 58 L.Ed. 577.

The fiction sometimes distorted the law. A line of authorities emerged to the effect that admiralty had no jurisdiction to grant relief in such cases 'because the implied promise to repay the moneys which cannot in good conscience be retained—necessary to support the action for money had and received—is not a maritime contract.'³ United Transportation & Lighterage Co. v. New York & B.T. Line, 2 Cir., 185 F. 386, 391. Yet that duty to pay is often referable as here, to the breach of a maritime contract. As Mr. Justice Stone said in Krauss Bros. Lumber Co. v. Dimon S.S. Corp., supra, 290 U.S. 124, 54 S.Ct. 107:

'* * * Even under the common law form of action for money had and received there could be no recovery without proof of the breach of the contract involved in demanding the payment, and the basis of recovery there, as in admiralty, is the violation of some term of the contract of affreightment, whether by failure to carry or by exaction of freight which the contract did not authorize.'

The truth is that in a case such as the present one there is neither an actual promise to repay the passage moneys nor a second contract. The problem is to prevent unjust enrichment from a maritime contract. See Morrison, The Remedial Powers of the Admiralty, 43 Yale L.J. 1, 27 (1933). A court that prevents a maritime contract from being exploited in that way does not reach beyond the domain of maritime affairs. We conclude that, so long as the...