Bailey v. Sundberg

• Decision Date: 18 January 1892
• Citation: 49 F. 583
• Parties: BAILEY et al. v. SUNDBERG.
• Court: U.S. Court of Appeals — Second Circuit

49 F. 583

BAILEY et al. v. SUNDBERG.

United States Court of Appeals, Second Circuit.

January 18, 1892

George A. Black, for appellants.

Wm. W Goodrich and Robert D. Benedict, for appellee.

Before WALLACE and LACOMBE, Circuit Judges.

WALLACE Circuit Judge.

This is an appeal from a decree dismissing a libel in personam for collision. The questions presented arise upon the pleadings and are: (1) Whether a decree in a former suit is res adjudicata in the present suit; and (2) whether the claim of the libelants is stale.

The suit is brought by the owners of the schooner Shaw, and the owner by subrogation of her cargo, against Sundberg, to recover their losses sustained in a collision between the Shaw and the steam-ship Newport, of which steam-ship Sundberg was master at the time of the collision. The collision took place February 23, 1884. The Shaw was sunk, her cargo became a total loss, and all the persons on board of her were drowned. April 23, 1884,the owners of the Shaw filed a libel in rem in the United States district court for the southern district of New York against the steam-ship to recover the value of the schooner, her freight money, and the personal effects of her master and crew. Process was issued on that day, in the usual form, to the marshal of the court requiring him to attach the steam-ship, and to give due notice to all persons having anything to say, why she should not be condemned and sold, to appear in the district court on the 13th day of May then next, and interpose their claims and make their allegations. The process was executed by the marshal only so far as to attach the steam-ship. He did not publish or otherwise give any notice, and there was no proclamation or default on the return-day. Prior to the return-day of the process the owner of the steam-ship appeared and filed an answer. No other person appeared. Upon the owner giving bond with surety in the sum of $24,000, an order was made by the court, with the consent of the proctor for the libelants, discharging the steam-ship from custody. There was no appraisal of the steam-ship, and her value was more than $50,000. Proofs were subsequently taken in the cause, and after hearing the parties the court made a decree dismissing the libel, and adjudging that the steam-ship never struck or sunk the Shaw. When the libel was filed Sundberg was no longer master of the steam-ship. He was not named in any way as a party to the cause. He took an active part, however, in the defense of the suit, besides being examined as a witness. The decree dismissing the libel was entered on the 9th day of October, 1886. Subsequently the libelants appealed from that decree to the circuit court; and on October 15, 1888, a decree was made by the circuit court affirming the judgment of the district court. The libel in the present cause was filed on the 5th of February, 1890. It alleged the collision between the two vessels, and that it was caused wholly by the negligence of those navigating the steam-ship. Sundberg, by his answer, interposed as a defense the adjudication in the former suit. Thereupon an amended libel was filed, admitting the former adjudication, and setting up facts in avoidance. Sundberg filed exceptions to the amended libel.

Upon the facts stated we are of the opinion that the decree in the first suit is not an estoppel as to the owner of the cargo. If due service of process had been made, pursuant to admiralty rule 9 of the supreme court, and a default had been entered against all parties not appearing at the return-day, doubtless the owner of the cargo of the Shaw, as well as all other persons having any interest in the steam-ship Newport, would have been parties to the suit, and would have been concluded by the decree from litigating again any issue which was necessarily involved in the decision. The privilege or right of one who has sustained loss by a collision against the guilty vessel is inchoate from the moment of collision, although process in rem is essential to enforce it; and it is not displaced by a sale of the vessel to a bona fide purchaser without notice, or by the death of the owner, or by bankruptcy. It is more than a right to sue. It is a right in the thing itself, constituting an incumbrance upon the property, and existing independent of the process used to enforce it. The Young Mechanic, 2 Curt, 404; Vandewater v. Mills, 19 How. 82.

A suit in rem is, in substance, a suit against all parties in interest in the res, to the extent of their interests; and all such parties are parties to the suit, because they can intervene and make themselves actual parties, and bring their rights before the court. Consequently, all persons having any interest in the thing in controversy are concluded by the decree in the suit; and of course all the rest of the world are concluded by the decree, because the judgment binds and settles the rights of all those who have any interest in the property. The cargo-owners in the present case might, therefore, if the suit had been conducted according to the rules which give to proceedings in rem their conclusive effect, have intervened and become actual parties, and without becoming actual parties would have been parties in interest, and bound by the decree. The decree necessarily determined that any right or interest claimed by any party as arising from the alleged collision was without merit. 'The decree of the court in such case acts upon the thing itself, and binds the interest of all the world, whether any party actually appears or not. If it is condemned, the title of the property is completely changed, and the new title acquired by the forfeiture travels with the thing in all its after progress. If, on the other hand, it is acquitted, the taint of forfeiture is completely removed, and cannot be reannexed to it. The original owner stands upon his title, discharged of any latent claims with which the supposed forfeiture may have previously infected it. A sentence of acquittal in rem does, therefore, ascertain a fact as much as a sentence of condemnation. It ascertains and fixes the fact that the property is not liable to the asserted claim of forfeiture. ' STORY, J., in Gelston v. Hoyt, 3 Wheat. 246.

The supreme court, by authority of the laws of the United States,...