Connecticut Fire Ins. Co. v. Lake Transfer Corp.

• Decision Date: 17 December 1934
• Docket Number: No. 73.,73.
• Citation: 74 F.2d 258
• Parties: CONNECTICUT FIRE INS. CO. v. LAKE TRANSFER CORPORATION et al.
• Court: U.S. Court of Appeals — Second Circuit

74 F.2d 258 (1934)

CONNECTICUT FIRE INS. CO. v. LAKE TRANSFER CORPORATION et al.

No. 73.

Circuit Court of Appeals, Second Circuit.

December 17, 1934.

Burke & Desmond, of Buffalo, N. Y., and Robert M. McCormick, of New York City (Charles S. Desmond, of Buffalo, N. Y., of counsel), for appellant Lake Transfer Corporation.

Slee, O'Brian, Hellings & Ulsh, of Buffalo, N. Y. (Dana B. Hellings, of Buffalo, N. Y., of counsel), for appellant Hanna Furnace Corporation.

Purdy & Purdy, of New York City (Edmund F. Lamb and John E. Purdy, both of New York City, of counsel), for appellee.

Before L. HAND, SWAN, and CHASE, Circuit Judges.

SWAN, Circuit Judge.

This litigation arises out of the refusal by the purchaser of a shipment of sulphur to accept delivery of the final barge load because two prior barge loads had been contaminated with iron ore. The seller employed Seaboard Great Lakes Corporation to transport the sulphur from New York City to Middleport, on the New York State Barge Canal. It was laden on seven barges, four of which carried their loads directly to Middleport, where they were delivered to the purchaser in sound condition. The other three barges, because when light they would have been unable to clear the canal bridges, proceeded to Buffalo in order to have their cargoes transferred to other barges for delivery at Middleport. Seaboard Great Lakes Corporation employed Lake Transfer Corporation to shift the cargoes at Buffalo, and it in turn engaged the Hanna Furnace Corporation to do the actual work. The cargoes of two of the three barges were transferred by the Furnace Corporation at its ore dock into other barges and delivered at Middleport. These two barge loads were found to be contaminated with iron ore, which resulted in the starting of serious fires when the sulphur was put through the unloading equipment and conveyor system of the purchaser. Consequently the purchaser notified the seller that it would reject the final barge load which was then in process of transfer to the barge Pelham at the Furnace Corporation's ore dock. The seller resold the rejected sulphur at a loss, which was paid by the carrier. The carrier was reimbursed by its insurer, Connecticut Fire Insurance Company, a Connecticut corporation, and the latter, as surrogate of its insured's claim, filed the present libel in personam against Lake Transfer Corporation for breach of a maritime contract. Lake Transfer Corporation impleaded the Hanna Furnace Corporation. Both respondents were held liable to the libelant by the interlocutory decree. See (D. C.) 60 F.(2d) 172. The damages having been determined by a commissioner and exceptions to his report having been overruled, the final decree was entered, from which the respondents have appealed.

Upon the appeal of the Furnace Corporation, the only question which need be considered is whether the court acquired jurisdiction over it. By special appearance, exceptions, and exceptive allegations, it raised this issue when first brought into the suit and saved it in its answer when its exceptions were overruled. Both Lake Transfer Corporation and the Furnace Corporation are New York corporations, each having its principal office in the Western district and doing no business and having no agent within the Eastern district. Service upon Lake Transfer Corporation was obtained by attachment of a debt owing to it by a debtor resident in the Eastern district. When the Furnace Corporation was impleaded under Admiralty Rule 56 (28 USCA § 723), a citation was served upon it in the Western district. Authority for service of process outside the territorial limits of the district of the court must be found in some statute. Section 52 of the Judicial Code (28 USCA § 113) is relied upon. But it will not serve. Section 52 is an exception to the general prohibition of section 51 (28 USCA § 112) against suing a defendant in a district other than that in which he or the plaintiff resides, as Mr. Justice Brandeis pointed out in Camp v. Gress, 250 U. S. 308, 315, 39 S. Ct. 478, 63 L. Ed. 997. It is perfectly well settled that section 51 does not apply to proceedings in the admiralty. Atkins v. Fiber Disintegrating Co., 18 Wall. 272, 21 L. Ed. 841; In re Louisville Underwriters, 134 U. S. 488, 10 S. Ct. 587, 33 L. Ed. 991. Indeed, because it does not is the only reason the libelant can proceed against Lake Transfer Corporation by foreign attachment. Compare Big Vein Coal Co. v. Read, 229 U. S. 31, 33 S. Ct. 694, 57 L. Ed. 1053; Ex parte Des Moines & M. Railway Co., 103 U. S. 794, 26 L. Ed. 461. If the general section does not apply to the admiralty, there is good ground for arguing that the section declaring an exception does not. But we need not now determine whether section 52 may be construed of broader application than section 51 and may include causes in the admiralty, as was assumed in Downs v. Wall, 176 F. 657 (C. C. A. 5). Even if the section be applicable, the libelant is not aided. It provides that, if there are two or more defendants, residing in different districts of the state, suit may be brought in either district and a duplicate writ may be issued against the defendants directed to the marshal of any other district in which any defendant resides. In the case at bar the respondent and the impleaded respondent did not reside in different districts; both resided in the Western district. The express condition under which a duplicate writ might be directed to the marshal of a district other than that of the forum was not met. The libelant's argument that in a suit in the admiralty a defendant must be deemed a resident pro hac vice of the district in which his property is seized by attachment has no sound foundation; it is based on pure fiction. Although it finds some support in two ...