Italian Star Line v. United States Shipping Board EF Corp., 273.

• Decision Date: 25 August 1931
• Docket Number: No. 273.,273.
• Citation: Italian Star Line v. United States Shipping Board EF Corp., 53 F.2d 359, 80 ALR 576 (2nd Cir. 1931)
• Parties: ITALIAN STAR LINE, Inc., v. UNITED STATES SHIPPING BOARD EMERGENCY FLEET CORPORATION et al.
• Court: U.S. Court of Appeals — Second Circuit

80 ALR 576, 53 F.2d 359 (1931)

ITALIAN STAR LINE, Inc., v.UNITED STATES SHIPPING BOARD EMERGENCY FLEET CORPORATION et al.

No. 273.

Circuit Court of Appeals, Second Circuit.

August 25, 1931.

Vincent T. Follmar, of New York City, for appellant.

George Z. Medalie, U. S. Atty., of New York City(William E. Collins and Frederick H. Cunningham, Special Assts. to U. S. Atty., both of New York City, of counsel), for appellees.

Before MANTON, SWAN, and CHASE, Circuit Judges.

SWAN, Circuit Judge(after stating the facts as above).

It is urged by the appellant that under the doctrine of Slocum v. New York Life Ins. Co., 228 U. S. 364, 33 S. Ct. 523, 57 L. Ed. 879, the trial court had no power to dismiss the complaint after the jury had returned a verdict for the plaintiff; that the most which could be done was to set aside the verdict and declare a new trial.The procedure complained of would clearly be authorized in the state courts.Bail v. N. Y., N. H. & H. R. R. Co., 201 N. Y. 355, 94 N. E. 863;Fitzgerald v. Colt-Stewart Motor Co., 231 App. Div. 176, 246 N. Y. S. 535;New York Civil Practice Act, § 459.Under the Conformity Act(Rev. St. § 91428 US CA§ 724), this practice was properly followed by the District Court.A motion to dismiss the complaint for lack of proof had been seasonably made at the close of the plaintiff's case and again at the close of all the evidence, and decision thereon had been reserved, with the consent of the parties, until after verdict.The propriety of setting aside the verdict and passing upon the motion under such circumstances has been recognized by this court in Royal Card & Paper Co. v. Dresdner Bank, 27 F.(2d) 791.The Slocum Case has no application to such a situation.There is no violation of the right to trial by jury in dismissing a complaint for failure to establish a cause of action.Bohenik v. Delaware & Hudson Co., 49 F.(2d) 722(C. C. A. 2).

We pass, therefore, to a consideration of whether the evidence was such as to require any issue to be left to the jury.Although the record is voluminous, the essential facts may be stated in relatively small compass.The plaintiff was incorporated in 1919 to operate a steamship line.Early in 1920, E. Paul Yasselli became its president.Negotiations were begun with the United States Shipping Board for the purchase of a vessel, and on April 26, 1920, a formal contract was executed between the plaintiff and the United States acting by and through the Shipping Board and the Emergency Fleet Corporation.The contract was in the form of a charter party of hire with an option to purchase.The monthly hire was to be applied upon the purchase price in the event that the option was exercised.After making three monthly payments, Yasselli applied for an extension of time and for a modification of the plan of purchase and a reduction in price.He was informed by officials of the Shipping Board that his requests would be granted, but no new contract was ever executed.In the meantime the New York office of the Shipping Board continued to billthe plaintiff for unpaid charter hire.On October 18, 1920, a bill for $114,000 was rendered.This was apparently upon the basis of the proposed new plan of purchase but not at the reduced price desired by the plaintiff.Yasselli interviewed Conrad and was told by the latter that a receiver would have to be appointed unless the $114,000 was paid.In later interviews he was told that a receiver must be appointed in order to get access to plaintiff's records because Yasselli and others were to be criminally prosecuted for supposed illegal practices in connection with securing the charter purchase contract.Goff was appointed a special assistant to the Attorney General to conduct such prosecution.On December 6, 1920, a receiver was appointed by the District Court for the Southern District of New York upon a bill of complaint brought by the United States and the company's answer thereto, by its attorney, admitting the allegations of the bill and joining in the prayer for the appointment of a receiver.Carson, the brother-in-law of Conrad, was appointed attorney for the receiver.The receiver took possession of the plaintiff's books and papers and also of certain personal papers of Yasselli.In February, 1921, a criminal indictment was obtained against the plaintiff, Yasselli, and others, upon the trial of which the defendants obtained a directed verdict.In the receivership proceedings the Italian Star Line applied for leave to withdraw its answer and deny the allegations of the complaint, urging that its original answer had been obtained by threats and duress.This application was denied, as was also a motion to discharge the receiver on the ground that his appointment had been fraudulently obtained.The assets of the plaintiff were liquidated under court order, and distribution was made to creditors.Nothing remained for the corporation.The receiver was discharged in March, 1923.

The present suit was begun in June, 1924.The theory of the action is that Goff and Conrad, acting on behalf of the Emergency Fleet Corporation, devised and carried out the plan of causing a receiver to be appointed for the plaintiff, with the ulterior motives of obtaining access to its records to aid in the proposed criminal prosecution of the plaintiff and its officers, and of creating legal business for Carson by having him employed as the receiver's attorney; that as a result of the receivership plaintiff lost all its assets, which were of an alleged value of $422,000 at the date of the receivership.This sum, with interest from December 6, 1920, was demanded as damages.

It may be noted at the outset that the plaintiff does not attempt to recover on a theory of malicious prosecution, either with respect to the unsuccessfully prosecuted criminal proceeding, or with respect to the civil proceeding for a receiver.Not only does the complaint fail to allege necessary elements for such an action, but the New York statute of limitations applicable to malicious prosecution was set up in the defendant's answer and would apparently be a complete defense.SeeNew York Civil Practice Act, § 50.The plaintiff's contention is that an action for abuse of process was alleged and proved.

It has been observed by the courts on several occasions that the elements vital to an action for abuse of process are not clearly defined, either by the cases or by writers on the subject.SeeLambert v. Breton, 127 Me. 510, 144 A. 864, 866;Rock v. Abrashin, 154 Wash. 51, 280 P. 740, 741, 65 A. L. R. 1280.The reason apparently is that the term has been used as a label for a variety of dissimilar situations which have in common only the fact that actionable injury was inflicted in connection with the use of judicial process and under circumstances such that the narrowly circumscribed action of malicious prosecution was inapplicable.Thus the term has been applied to cases of excessive execution on a judgment, Churchill v. Siggers, 3 El. & Bl. 929;Barnett v. Reed, 51 Pa. 190, 88 Am. Dec. 574; attachment for greatly excessive amount, Zinn v. Rice, 154 Mass. 1, 27 N. E. 772, 12 L. R. A. 288;Id., 161 Mass. 571, 37 N. E. 747;Moody v. Deutsch, 85 Mo. 237;Black v. Spears, 209 Mich. 1, 176 N. W. 469; unnecessarily oppressive conduct in connection with the arrest of person or property, Baldwin v. Weed, 17 Wend. (N. Y.) 224; Rogers v. Brewster, 5 Johns.(N. Y.) 125;Wood v. Graves, 144 Mass. 365, 366, 11 N. E....