American-Mexican Claims Bureau v. Morgenthau

• Decision Date: 06 January 1939
• Docket Number: No. 67869.,67869.
• Parties: AMERICAN-MEXICAN CLAIMS BUREAU, Inc., v. MORGENTHAU, Secretary of the Treasury, et al.
• Court: U.S. District Court — District of Columbia

26 F. Supp. 904

AMERICAN-MEXICAN CLAIMS BUREAU, Inc., v. MORGENTHAU, Secretary of the Treasury, et al.

No. 67869.

District Court of the United States for the District of Columbia.

January 6, 1939.

Whiteford, Marshall, Hart & Carmody, of Washington, D. C. (Harry L. Ryan, Jr., of Washington, D. C., of counsel), for plaintiff.

David A. Pine, U. S. Atty., and Harry L. Underwood, Asst. U. S. Atty., both of Washington, D. C., for defendants Henry Morgenthau, Jr., Secretary of the Treasury, and William A. Julian, Treasurer of the United States.

Thomas H. Patterson, of Washington, D. C., for defendant Herbert S. Ward.

Victor E. Cappa, of Washington, D. C., for defendant Louis O. Bergh.

LUHRING, Associate Justice.

The defendant, Louis O. Bergh, is a non-resident of the District of Columbia. No process has been issued against him. The other defendants have appeared and answered.

On October 10th, 1938, Mr. Bergh, appearing specially, filed the following motion:

"1. To dismiss the action on the ground that there is a lack of jurisdiction over the person of the defendant Bergh, in that

"A. The said defendant Bergh, as he is a resident of the State of New Jersey and is not within the District of Columbia, is not subject to service of process.

"B. There is no property or res within the District of Columbia to give the Court in rem jurisdiction.

"II. To dismiss the action on the ground that

"A. There is lack of jurisdiction over the persons of the claimants listed in paragraph "5" of the bill of complaint, and that

"B. Such claimants are indispensable parties, and that

"C. Assuming there were jurisdiction, such claimants could not be brought in by amendment of the bill because the claimants could not be joined in one action.

"III. To dismiss the action on the ground that there is a lack of jurisdiction over the subject matter, in that

"A. The claims of the plaintiff against the said claimants are null and void under section 3477 of the Revised Statutes, and

"B. The bill of complaint fails to show that the Court has any equitable jurisdiction over the subject matter."

The motion is supported by the affidavit of Mr. Bergh.

The object of the suit is to determine the rights and interests of the plaintiff and the defendants, Herbert S. Ward and Louis O. Bergh, to and in certain funds paid to the Government of the United States by the Government of Mexico under the Special Claims Convention of April 24, 1934, 49 Stat. 3071, providing for the en bloc settlement of special claims against the latter government.

The plaintiff alleges that it entered into agreements with a number of claimants whereby it agreed through its attorneys and agents to prepare and present and prosecute their claims to final adjudication in consideration of the payment to it by the claimant of a percentage of the money damages awarded to such claimant. It is further alleged that by the terms of this agreement, the plaintiff was given full power, either itself or through its duly authorized counsel, to directly collect such awards as may be made, and, as an incident thereto, irrevocable powers of attorney were given constituting and appointing certain named law firms to be the true and lawful attorneys for each claimant for the presentation and prosecution of their claims against Mexico before the Special Mexican Claims Commission created by the Act of April 10, 1935, 49 Stat. 149, c. 55.

The bill in paragraph 5 sets out a list of claims awarded by the Commission in favor of the therein named claimants, and alleges that such awards were the result of its services and the services of its attorneys rendered pursuant to its contract with each of such claimants.

The bill further alleges that the law firm of Marvin and Pleasant, originally employed by plaintiff and clothed with power of attorney, went out of existence and was succeeded by the firm of Turnbull and Bergh, of which firm the defendant Bergh is a member. That the defendant Bergh continued for a time to act and be associated in the prosecution of claims before the Commission on behalf of the plaintiff and claimants with whom it had contracts. It is alleged, on information and belief, that the defendant Bergh subsequently in some instances secured additional powers of attorney from the claimants and has proceeded to represent such claimants without respect to their agreements with the plaintiff, and further, on information and belief, that Bergh has recently made attempts to have payment of the awards mentioned in paragraph 5 made directly to him rather than in accord with the agreement made by such claimants with the plaintiff, and, on information and belief, that the plaintiff will then be unable to protect its interests in such awards as the funds will then be beyond the jurisdiction of this court.

In considering the motion of the defendant Bergh, it is well at the outset to dispose of the plaintiff's contention that by joining with the motion to dismiss for lack of jurisdiction a motion to dismiss for want of equity and because of the failure to join indispensable parties defendant, the defendant has waived the special appearance.

The case of Ryan v. McAdoo, 46 App.D. C. 117, and the recent case of Herzog v. Hubard, 68 App.D.C. 383, 98 F.2d 255, decided April 25, 1938, settle the question. Furthermore, Federal Rule 12(b), 28 U.S.C.A. following section 723c, provides that "no defense or objection is waived by being joined with one or more other defenses or objections in a responsive pleading or motion."

The motion to dismiss for lack of jurisdiction over the person of the defendant Bergh presents the question whether or not there is a res within this jurisdiction which will permit either substituted service or service by publication pursuant to the provisions of section 105, Code D.C.1924; Tit. 24, § 378, D.C.Code 1929. That section provides that such services may be had in case of non-residents "in all actions at law and in equity which have for their immediate object the enforcement or establishment of any lawful right, claim, or demand to or against any real or personal property within the jurisdiction of the court."

The Convention, providing for the en bloc settlement of special claims, by Article 5 required the total amount of the special claims of the United States, as well as the deduction to be made therefrom, and the proportionate amount thereof to be paid, to be determined by a joint committee, whose report was to be accepted as final by both Governments.

The committee found that the amount to be paid by the Government of Mexico in settlement of the special claims comprehended in that Convention was $5,448,020.14. This amount, according to Article 2 of the Convention, was to be paid "at Washington, in dollars of the United States, at the rate of 500,000.00 (five hundred thousand dollars) per annum, beginning January 1, 1935, and continuing until the whole amount thereof shall have been paid." Provision was made for interest on the deferred payments.

On August 25, 1937, Congress by Joint Resolution (50 Stat. 783, c. 758) "relative to determination and payment of certain claims against the Government of Mexico," in the last preamble recited that "whereas payments on awards on the said Special Mexican Claims Commission from funds paid to the Government of the United States by the Government of Mexico under the Special Claims Convention of April 24, 1934, should not, in justice to the...