Ishverlal Madanlal & Co. v. SS Vishva Mangal
Decision Date | 11 April 1973 |
Docket Number | No. 68 Civ. 4503.,68 Civ. 4503. |
Parties | ISHVERLAL MADANLAL & CO. et al., Plaintiffs, v. SS VISHVA MANGAL, her engines, boilers, etc., and the Shipping Corporation of India, Limited, Defendants. |
Court | U.S. District Court — Southern District of New York |
Wilson & Hopkins by Walter L. Hopkins, New York City, for plaintiffs.
Donovan, Donavon, Maloof & Walsh by Francis V. Elias, New York City, for defendants.
Defendants move for summary judgment dismissing the complaint, solely as to plaintiff "Director General of the India Supply Mission for and on behalf of The President of the Union of India" (hereinafter "Supply Mission"), pursuant to Rule 56, F.R.Civ.P., on the ground that there exists between plaintiff Supply Mission and defendants, no real "case or controversy" over which the Court may exercise jurisdiction under Article III, Section 2, Clause 1 of the Constitution.
There are no disputed issues of material fact. Plaintiffs are the owners of mixed cargo aboard the steamship VISHVA MANGAL. A fire occurred aboard the vessel on October 20, 1967 at Searsport, Maine.
Jurisdiction is founded on 28 U.S.C. § 1333. The dispute arises out of a maritime contract of carriage evidenced by a bill of lading issued by the Master of the VISHVA MANGAL at Pascagoula, Mississippi for 100,000 bags (5,000 metric tons) of ammonium phosphate owned by Supply Mission for discharge at Madras or Calcutta, India. Liability is founded upon claims of unseaworthiness and negligence.
Defendant vessel and her owner entered a general appearance in this Court, presumably because the vessel could have been arrested within this District.
While the action is, at least in name, between the owner of the cargo, and the vessel or her owners, in actuality, as Chief Judge Friendly of this Circuit has remarked Leather's Best, Inc. v. S. S. MORMACLYNX, 451 F.2d 800, 815 (2d Cir. 1971), ". . . the cargo insurerer is admittedly the true plaintiff here."
Permitting insurers of cargo to sue as subrogees in the name of the owners is a long standing admiralty tradition. As expressed in Colinvaux, Carver's Carriage By Sea, 12th ed. (London, 1971) vol. 2, p. 1183:
Against this factual background, defendants assert that because of the peculiar status of the nominal parties, this litigation may not proceed, because it is not an actual "case or controversy" within the meaning of Article III of the Constitution, which limits our jurisdiction.1
Plaintiff Supply Mission is an arm of the President of India.2 Supply Mission performs a governmental function, that is acquisition of and delivery to the Indian people of goods such as the instant cargo, needed for relief, economic development or warfare.
Defendants urge in support of this motion that The Shipping Corporation of India, Limited, owner of the VISHVA MANGAL, is likewise an arm of the Government of India, and that the government can't sue itself, because such a suit would not be a .
The Shipping Corporation was formed as a result of the merger of a corporation owned solely by President of India, with Western Shipping Corporation Limited ("Western"), a private company. This merger was effected in 1961 by the Indian Government, as an act of state, by an order or decree entitled "The Shipping Corporations Amalgamation Order".
This order of amalgamation provided ¶ 7(i) that the Western shareholders would receive shares "equivalent in number and value" in the resultant corporation, to the shares they held in Western prior to the merger.
Articles of Association were issued pursuant to the order, providing for the regulation of the affairs of the resulting company, defendant here. These articles contain several provisions which appear to recognize the existence of present, or possible future beneficial economic interests of private shareholders. For example, under article 9 thereof, the Corporation has a lien on the proceeds of sale of stock by a shareholder. This implies that a shareholder has at least some limited right to sell, on compliance with other provisions which require approval by the President of India. Article 21(1) authorizes the President of India, "so long as he is a member of the Company", to appoint a representative to attend meetings. This provision contemplates the possibility that the Government of India might at some future time choose to sell, transfer or distribute its shares in some manner, and cease to be the controlling shareholder.
There are 13 individual named shareholders, holding a total of 710 shares of stock of the Corporation.
The affidavit of Shashi Ranjan Prasad, sworn to July 17, 1972, indicates that Mr. Prasad is Administrative Director and Secretary of the Shipping Corporation of India, Limited, and has been associated with the Corporation since October 2, 1961. He advises as follows:
The shares are not traded on the market, and dividends are not taxable.
Plaintiff asserts that issues of fact exist with respect to the status of these shares and the owners, but sets forth no specific facts showing that there is a genuine issue for trial. He has not discharged the requirement to "at least specify some opposing evidence which it can adduce and which will change the result". Radio City Music Hall Corp. v. United States, 135 F.2d 715, 718 (2d Cir. 1943), cited with approval in Donnelly v. Guion, 467 F.2d 290, 293 (2d Cir. 1972).
Movant relies on Defense Supplies Corp. v. United States Lines Co., 148 F. 2d 311 (2d Cir. 1945), cert. denied 326 U.S. 746, 66 S.Ct. 43, 90 L.Ed. 446, which affirmed dismissal of a cargo libel brought against the United States under the Suits in Admiralty Act. The libellant was a corporation whose stock was wholly owned by Reconstruction Finance Corporation, the stock of which in turn was wholly owned by the United States. The Court of Appeals held that there was no real case or controversy for judicial determination (148 F.2d 311, 312):
As in the present case, an insurance company subrogated to the rights of Defense Supplies Corporation, was the real party in interest. This is of course obvious, since the United States could have directed itself, readily, to grant itself a discontinuance in its own courts were the situation otherwise. Judge Frank commented about this aspect of the litigation and said:
Citing in footnote Phoenix Ins. Co. v. Erie & W. Transportation Co., 117 U. S. 312, 6 S.Ct. 750, 29 L.Ed. 873; Globe & Rutgers Fire Ins. Co. v. Hines, 273 F. 774 (2d Cir. 1921).
Movant also cites Benevento v. United States, 160 F.2d 487 (2d Cir. 1947); Luckenbach S. S. Co. v. United States, 315 F.2d 598, 604 (2d Cir. 1968) and United States v. Interstate Commerce Commission, 78 F.Supp. 580, 583 (D.C. D.C.1948); this latter case was reversed. See 337 U.S. 426, 69 S.Ct. 1410, 93 L.Ed. 1451.
Defense Supplies Corporation was created pursuant to a charter promulgated by Reconstruction Finance Corporation (6 F.R. 2972, as amended 6 F.R. 3363). We will not discuss its nature in detail, except to observe that its formation was in aid of the war power, unlike merchant shipping, always a governmental function. The nature of Defense Supplies Corporation is best determined from a reading of Article Fifth of the charter, which provides in part as follows:
"That the Corporation shall be an instrumentality of the United States Government, shall be entitled to the free use of the United States mails and shall in all other respects be possessed of the privileges and immunities that are conferred upon the Reconstruction Finance Corporation. . . ."
The charter provided for partial tax exemption and for appointment of the directors by the Reconstruction Finance Corporation, which was not to be liable for the debts, contracts or engagements of the corporation.
Congress had authorized the Federal Loan Administrator with the approval of the President to organize such a corporation, and had authorized Reconstruction Finance Corporation to make loans to or purchase the capital stock thereof, by § 5d of the Reconstruction Finance Corporation Act, as amended by Chapter 427 of the Laws of 1940, 54 Stat. 572, Pub.L.No. 664 of...
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