Dexter & Carpenter v. Kunglig Jarnvagsstyrelsen, 356.

• Decision Date: 14 July 1930
• Docket Number: No. 356.,356.
• Citation: 43 F.2d 705
• Parties: DEXTER & CARPENTER, Inc., v. KUNGLIG JARNVAGSSTYRELSEN et al.
• Court: U.S. Court of Appeals — Second Circuit

43 F.2d 705 (1930)

DEXTER & CARPENTER, Inc., v. KUNGLIG JARNVAGSSTYRELSEN et al.

No. 356.

Circuit Court of Appeals, Second Circuit.

July 14, 1930.

Haight, Smith Griffin & Deming, of New York City (Charles S. Haight, Wharton Poor, and Laszlo Kormendi, all of New York City, of counsel), for appellant.

Covington, Burling & Rublee, of Washington, D. C., and Davis, Polk, Wardwell, Gardiner & Reed, of New York City (Edward B. Burling, of Washington, D. C., William C. Cannon, of New York City, and Porter R. Chandler, of Buffalo, N. Y., of counsel), for W. Bostrom, Envoy Extraordinary, etc.

Shearman & Sterling, of New York City (Carl A. Mead and Otey McClellan, both of New York City, of counsel), for appellees. the National City Bank of N. Y. and A/B Svenska Amerika Linien.

Before MANTON, SWAN, and CHASE, Circuit Judges.

MANTON, Circuit Judge.

Kunglig Jarnvagsstyrelsen, also known as the Royal Administration of the Swedish State Railways, filed a complaint in the District Court for the Southern District of New York, in 1922, describing itself as a corporation under the laws of Sweden, and sought recovery of $125,000, claiming breach of contract by appellant for the sale of coal. The National City Bank of New York was made a party defendant because funds were on deposit in that institution to cover the payment of the coal purchased. An answer was filed to this complaint, also a counterclaim in which the appellant sought affirmative relief by way of money damages for breach of the contract for the purchase of the coal. All parties now agree that the Swedish State Railways was not in fact a corporation, as alleged in the complaint, and in no way a distinct entity from the Swedish government; that the Railways were part of the Swedish government and were owned solely by Sweden. In Sweden it was not subject to the laws specially applicable to corporations and economic societies of the kingdom of Sweden. All its officials are appointed by the Swedish government and operate the railways under its direction. The net revenues are paid to the Exchequer, which is the same office to which taxes and other such revenues of the Swedish government must be and are delivered. In reply to the counterclaim, a replication was filed, and a motion was made to dismiss the counterclaim because the railways were an agency of the government and the counterclaim was not maintainable against it without its consent. This motion was overruled and the replication stricken out. Kunglig Jarnvagsstyrelsen, etc., v. Dexter & Carpenter, Inc. (D. C.) 300 F. 891. The mere allegation of agency, unsupported by any claim of immunity proceeding directly from the sovereign and unvouched for by our own government, was held to be insufficient.

The trial of the action resulted in a judgment dismissing the complaint, and a verdict was rendered by the jury for the plaintiff on the counterclaim. On appeal, the judgment in favor of the plaintiff on the counterclaim was reversed and the dismissal of the complaint was affirmed (C. C. A.) 20 F.(2d) 307; certiorari was denied, 275 U. S. 497, 48 S. Ct. 121, 72 L. Ed. 392. On the second trial, a judgment was rendered for the appellant for $411,203.72, which this court affirmed. 32 F.(2d) 195. An application for reargument was made, and a certificate, executed by the Swedish minister, stating the railways were not a corporation but an organic part of the Swedish government, and advancing the claim of immunity, was filed. Reargument was denied. When certiorari was again applied for, a suggestion through the Solicitor General, as to the petitioner's legal status and claim of immunity was presented to the Supreme Court by the Swedish minister, Ex parte Muir, 254 U. S. 522, 532, 41 S. Ct. 185, 65 L. Ed. 383, and the petition was denied, 280 U. S. 579, 50 S. Ct. 32, 74 L. Ed. 629.

When the case was here last, 32 F.(2d) 195, 199, this court, referring to the claim that "`the plaintiff is an agency of the friendly foreign sovereign government of Sweden'; that the counterclaim is in effect a suit against such government, and `as such is not maintainable in this court without the consent of the plaintiff'; and that the plaintiff does not consent to the determination of the counterclaim," said, at page 200 of 32 F.(2d):

"This is not an appearance by the kingdom of Sweden as a party to the suit, nor the assertion of immunity by that kingdom. It is an assertion by plaintiff corporation of a claim of sovereign immunity. But the assertion of the sovereign's immunity cannot be made by a private party litigant. In Ex parte Muir, 254 U. S. 522, 41 S. Ct. 185, 65 L. Ed. 383. * * *

"The reasons for requiring an accredited representative of a foreign government to present its claim of immunity are as potent when the claim is founded upon an assertion that a corporation defendant is an agency of the sovereign as when it is founded upon the assertion that an arrested vessel is the government's property. In either case the court presumptively has jurisdiction and may proceed unless the sovereign objects. Consequently, when a private corporation is sued at law, we do not think it is enough for an attorney to appear for it and say it is a governmental agency, and in his opinion immune from suit."

Therefore, there is a valid unsatisfied judgment against the Swedish State Railways as a corporation. But, as said by the judge below, "The outstanding feature of the case * * * is the fact that the Swedish Government has been in this suit from the beginning."

The government of Sweden represented its Railway Administration to be a corporation and voluntarily entered its suit in the jurisdiction of the District Court, and failed to file a proper plea of immunity from suit, answered the counterclaim, and litigated until eventually defeated, and now protests, in its present plea of immunity, against the effort of the judgment creditor to realize the fruits of its litigation by the medium of a writ of execution. It never amended or corrected the plaintiff's name.

The question presented is whether it may now intervene, appearing specially, and seek immunity. In the absence of consent expressed or implied, the court will not take jurisdiction of a suit against a sovereign or permit its property to be attached. Berizzi Bros. Co. v. S. S. Pesaro, 271 U. S. 562, 46 S. Ct. 611, 70 L. Ed. 1088; Oliver American Trading Co. v. Mexico, 5 F.(2d) 659 (C. C. A. 2); The Maipo, 259 F. 367 (D. C. N. Y.). But, where a sovereign invokes the jurisdiction of the court, appears voluntarily, and pleads to a counterclaim interposed, contesting the merits of the respective claims until judgment is rendered against it, the court has jurisdiction, and there is both a waiver of immunity and a consent to the exercise of the jurisdiction. Richardson v. Fajardo Sugar Co., 241 U. S. 44, 36 S. Ct. 476, 60 L. Ed. 879; Porto Rico v. Ramos, 232 U. S. 627, 34 S. Ct. 461, 58 L. Ed. 763; The Sao Vicente, 295 F. 829 (C. C. A. 3); The Sao Vicente, 281 F. 111 (C. C. A. 2). If the jurisdiction of the court continues in effect until the judgment is satisfied, the parties who have thus voluntarily appeared and submitted to the jurisdiction are normally subject to its mandates, and the successful litigant is entitled to the fruits of the litigation. In Riggs v. Johnson County, 6 Wall. 166, 187, 18 L. Ed. 768, the court said:

"Jurisdiction is defined to be the power to hear and determine the subject-matter in controversy in the suit before the court, and the rule is universal, that if the power is conferred to render the judgment or enter the decree, it also includes the power to issue proper process to enforce such judgment or decree. * * *

"Express determination of this court is, that the jurisdiction of a court is not exhausted by the rendition of the judgment, but continues until that judgment shall be satisfied. Consequently, a writ of error will lie when a party is aggrieved in the foundation, proceedings, judgment or execution of a suit in a court of record. * * * "Process subsequent to judgment is as essential to jurisdiction as process antecedent to judgment, else the judicial power would be incomplete and entirely inadequate to the purposes for which it was conferred by the Constitution." Central Nat. Bank v. Stevens, 169 U. S. 432, 18 S. Ct. 403, 42 L. Ed. 807; Bank of United States v. Halstead, 10 Wheat. 51, 6 L. Ed. 264.

In Pam-to-pee v. United States, 187 U. S. 371, 383, 23 S. Ct. 142, 147, 47 L. Ed. 221, the court approved the language of Taney, C. J., in Gordon v. United States, 117 U. S. 697, 702, saying:

"The award of execution is a part, and an essential part, of every judgment passed by a court exercising judicial power. It is no judgment, in the legal sense of the term, without it. Without such an award the judgment would be inoperative and nugatory, leaving the aggrieved party without a remedy. It would be merely an opinion, which would remain a dead letter, and without any operation upon the rights of the parties. * * *"

This execution is directed against the moneys held in the National City Bank of New York, also against debts owing to the government of Sweden by the Swedish American Line, and the testimony is that the debts represent advances made by the Swedish government.

But the question presented is whether execution may issue on this judgment against this sovereign power's property because the court acquired jurisdiction by expressed or implied consent. And does the jurisdiction of the court continue in effect until its judgment is satisfied even against this sovereign power, though a plea of immunity is interposed against such execution?

The judgment is entered against Sweden, as a litigant under a name of its own selection, representing it to be a corporation. A judgment should be enforced against a debtor upon proof of the litigant's true identity. All concede that Kunglig Jarnvagsstyrelsen and the government of Sweden are one and the same. The...