Commercial Trust Co. v. United States Shipping Bd. EF Corp.

• Decision Date: 09 March 1931
• Docket Number: No. 266.,266.
• Citation: 48 F.2d 113
• Parties: COMMERCIAL TRUST CO. v. UNITED STATES SHIPPING BOARD EMERGENCY FLEET CORPORATION.
• Court: U.S. Court of Appeals — Second Circuit

48 F.2d 113 (1931)

COMMERCIAL TRUST CO. v. UNITED STATES SHIPPING BOARD EMERGENCY FLEET CORPORATION.

No. 266.

Circuit Court of Appeals, Second Circuit.

March 9, 1931.

Lampke & Stein, of New York City (William H. Darrow, of New York City, of counsel), for appellant.

George Z. Medalie, of New York City (John C. Donovan, and William E. Collins, Sp. Assts. to U. S. Atty., both of New York City, of counsel), for appellee.

Before L. HAND, SWAN, and AUGUSTUS N. HAND, Circuit Judges.

L. HAND, Circuit Judge.

The plaintiff took out a summons, which it served upon the defendant, and which disclosed nothing further as to its place of incorporation than that the plaintiff's name was the Commercial Trust Company of New Jersey. The defendant, the Fleet Corporation, appeared, and by stipulation obtained several extensions of its time to answer. When, by the filing of the complaint, it appeared that the plaintiff was a New Jersey corporation, it moved to dismiss the complaint because the action was not brought in the proper district. The District Judge so held, and the plaintiff appealed.

There are two possibilities, between which we need not choose. The Fleet Corporation is organized under the laws of the District of Columbia, from which it may follow that, as it is not a citizen of any state, it may be sued without its consent in no federal court except that of the District. Yaselli v. U. S. Shipping Board Emergency Fleet Corporation (D. C.) 298 F. 198; Caceres v. U. S. Shipping Board Emergency Fleet Corporation (D. C.) 299 F. 968. This would not apply to actions brought under the Jones Act (46 USCA § 688), which specifically provides otherwise. Leon v. U. S. Shipping Board Emergency Fleet Corporation (D. C.) 286 F. 681. The other possibility is that the question of venue coalesces in this instance with that of the corporation's "presence" in the district. Puget Sound, etc., v. U. S. Shipping Board Emergency Fleet Corporation (D. C.) 293 F. 768. So far as we know, however, it has never been held that actions against the Fleet Corporation are between citizens of diverse states, and we can perceive no ground for so holding.

It follows that the dismissal was wrong in any case. If the Fleet Corporation may be sued without its consent only in the District of Columbia, then the defect appeared when the summons was served, and the general appearance excused it. Ex parte Chicago, R. I. & P. R. Co., 255 U. S. 273, 279, 41 S. Ct. 288, 65 L. Ed. 631. If it can be sued wherever it is "present," then the action was well brought, if it was in fact "present" in the Southern District of New York. If it was not, the error was at once apparent, and if the defendant meant to raise the question, it was bound to do so before general appearance.

Upon appeal, however, the question was raised of the substantive jurisdiction of the District Court; and as this is a point which can be taken at any stage of the proceedings, and of which indeed we must take notice ourselves, we are bound to consider it. It involves a consideration of the complaint. This alleged that the plaintiff was the assignee of certain freights due to a corporation, known as the United States Transport Company, upon two ships, operated by that company under a tripartite operating agreement between the defendant, a third company, and itself. The assignment was security for loans made by the plaintiff to the assignor, the Transport Company, which transferred to it the bills of lading. With knowledge of the assignment the defendant repossessed itself of the vessels, and collected the freights from the consignees by refusing delivery until they had paid.

In form, the action is in the common count for money had and received; in substance, it is a legal substitute for the equitable right to follow the proceeds of the plaintiff's property into the hands of a constructive trustee. The question is whether a suit might have been brought under the Suits in Admiralty Act for the same relief; for, if so, that remedy is exclusive. Johnson v. Fleet Corporation, 280 U. S. 320, 50 S. Ct. 118, 74 L. Ed. 451. When the loan is itself maritime, the admiralty will entertain a suit to trace the security into the hands of one with whom the pledgor has wrongfully mixed the proceeds with his own; so we held in Bank of British America v. Freights of the Hutton (C. C. A.) 137 F. 534. The initial maritime character of the transaction persists, into whatever form the proceeds may go. In general,...