Larios v. Victory Carriers, Inc., 266

Citation316 F.2d 63
Decision Date17 April 1963
Docket NumberDocket 27950.,No. 266,266
CourtUnited States Courts of Appeals. United States Court of Appeals (2nd Circuit)
PartiesDemetrios LARIOS, Plaintiff-Appellant, v. VICTORY CARRIERS, INC., and Alexander S. Onassis Corp., Defendants-Appellees, and Boyd, Weir & Sewell, Inc., and Cia, Salaminia De Naviera S.A., Defendants.

Murray A. Miller, Gordon & Miller, New York City, for plaintiff-appellant.

Kirlin, Campbell & Keating, New York City, Vernon S. Jones, New York City, of counsel, for defendants-appellees, Alexander S. Onassis Corp. and Victory Carriers, Inc.

Before MOORE, FRIENDLY and SMITH, Circuit Judges.

FRIENDLY, Circuit Judge.

This action was filed on September 21, 1960, on the "law side" of the District Court for the Southern District of New York. The complaint asserted three causes of action. The first, seeking damages for personal injuries, and the third, seeking maintenance and cure, were laid against Cia, Salaminia de Naviera, S.A. and Boyd, Weir & Sewell, Inc., who were alleged to be in joint control of the SS. Ioannis, a vessel flying the Greek flag on which plaintiff Larios had been a seaman; the second, also seeking damages for personal injuries, was laid against Alexander S. Onassis Corp. and its general agent Victory Carriers, Inc., who were alleged to be in joint control of the SS. Stony Point. The Ioannis and the Stony Point had collided, off the coast of Europe, on June 18, 1957; the collision was claimed to have been due to the negligence of both vessels and to have injured the plaintiff. The complaint said nothing as to the latter's citizenship; the sole basis asserted for jurisdiction on the "law side" was a claim — highly dubious, we should suppose, in the light of Lauritzen v. Larsen, 345 U.S. 571, 73 S.Ct. 921, 97 L.Ed. 1254 (1953) and Romero v. International Terminal Operating Co., 358 U.S. 354, 79 S.Ct. 468, 3 L.Ed.2d 368 (1959) — that the first cause of action was sustainable under the Jones Act.

Although the summons was served on Boyd, Weir & Sewell, Inc. for itself and as agent for Cia, Salaminia, as well as on Victory Carriers, Inc. and Alexander S. Onassis Corp., the plaintiff seems to have taken no steps to prosecute the action against the two former defendants. The answer of Victory Carriers and Onassis Corp. stated that Victory Carriers was a Delaware and Onassis Corp. a Liberian corporation; in addition to various denials, it set up the affirmative defenses that plaintiff had executed a release and that the action was brought more than three years after the claim arose — three years being the period of limitation provided in § 49, subd. 6 of the New York Civil Practice Act for actions to recover damages for personal injuries due to negligence. After discussions between the attorneys as to the release, which plaintiff ultimately repudiated, defendants Victory Carriers and Onassis Corp. moved for summary judgment on the grounds of laches and the New York statute of limitations.

In addition to receiving affidavits, Judge Murphy held a hearing on factual issues relevant to determining whether Victory Carriers and Onassis Corp. had "one or more officers or other persons in the state on whom a summons for such corporation may be served," so as to render inapplicable the tolling provision of § 19 of the New York Civil Practice Act on which plaintiff relied. The judge found that these defendants had been amenable to service in New York throughout the three year period so that the statute had run, and, in an opinion proceeding solely on that ground, dismissed the complaint. From this dismissal plaintiff appeals.1 Although we accept the district court's conclusion that the New York statute of limitations had run, we vacate the judgment of dismissal and remand for further consideration of the issue of laches.

Since Larios' claim against Victory Carriers and Onassis Corp. was for an injury on the high seas, the applicable principle with respect to the effect of his delay in bringing suit is laches and not the statute of limitations. This is so whether his suit against these defendants be treated as a libel in admiralty, The Key City, 14 Wall. (81 U.S.) 653, 20 L.Ed. 896 (1872); Gardner v. Panama Railroad Co., 342 U.S. 29, 72 S.Ct. 12, 96 L.Ed. 31 (1951); Czaplicki v. The Hoegh Silvercloud, 351 U.S. 525, 533-534, 76 S.Ct. 946, 100 L.Ed. 1387 (1956), or as an action on the "law side" of the federal court based on diverse citizenship under the saving clause, 28 U.S.C. § 1333(1), as we expressly held in Oroz v. American President Lines, Ltd., 259 F.2d 636 (2 Cir.1958), cert. denied, 359 U.S. 908, 79 S.Ct. 584, 3 L.Ed.2d 572 (1959). Indeed, it would also be true if the suit against Victory Carriers and Onassis Corp. had been brought in a state court under the saving clause. For it is now clear that the maritime law controls all "substantive" issues in the disposition of maritime claims regardless of the form or forum of suit. See Chelentis v. Luckenbach S.S. Co., 247 U.S. 372, 38 S.Ct. 501, 62 L.Ed. 1171 (1918); Garrett v. Moore-McCormack Co., 317 U.S. 239, 63 S.Ct. 246, 87 L.Ed. 239 (1942); Pope & Talbot, Inc. v. Hawn, 346 U.S. 406, 409-411, 74 S.Ct. 202, 98 L.Ed. 143 (1953); and see, as to the "substantive" character of rules relating to limitations, Guaranty Trust Co. v. York, 326 U.S. 99, 65 S.Ct. 1464, 89 L.Ed. 2079 (1945). Judicial recognition of this principle wholly undermined the basis for the rigid application of state statutes of limitation to maritime claims that had been expressed in McGrath v. Panama Railroad Co., 298 F. 303 (5 Cir. 1924), which this Court followed in Marshall v. International Mercantile Marine Co., 39 F.2d 551, 552 (2 Cir.1930) — namely, the supposed "inconsistency of permitting a plaintiff, who may sue either in a common-law court or a court of admiralty, to maintain his action in the latter court after his right to sue in the former has been lost by delay."

The Supreme Court has made it plain that although the analogous state statute of limitations is still relevant to the determination of laches in suits on maritime claims, "the matter should not be determined merely by a reference to and a mechanical application of the statute of limitations. The equities of the parties must be considered as well." Gardner v. Panama Railroad Co., supra, 342 U.S. at 31-32, 72 S.Ct. at 13, 14; accord, Czaplicki v. The Hoegh Silvercloud, supra, 351 U.S. at 533, 76 S.Ct. at 951. Recognizing this, defendants seek to sustain the dismissal on the ground that expiration of the state statute of limitations creates a "presumption of prejudice" which the plaintiff must "rebut" by showing, affirmatively, that his own delay was excusable and, negatively, that the defendant was not prejudiced thereby — a burden allegedly not met here. Language along these lines can indeed be found in this Court's two opinions in Redman v. United States, 176 F.2d 713, 715 (1949) and 185 F.2d 553 (1950), the first of which cited the McGrath and Marshall cases, supra. But both Redman opinions antedated the Supreme Court's Gardner decision; the first may have been influenced by what now appears the erroneous reasoning of McGrath and Marshall; and the second, although retreating in some degree by recognizing proof of excusable delay or lack of prejudice as sufficient, was naturally framed in the light of the first. Moreover, the Redman opinions do not stand alone in this circuit. LeGate v. The Panamolga, 221 F.2d 689, 691 (2 Cir. 1955), placed on the defendants the burden "to show inexcusable delay in filing the suit with resulting prejudice" — a solution that would bear too heavily against them as a general rule, however appropriate it was in the peculiar situation there presented where the plaintiff's suit was within the state period as to his unseaworthiness claim but beyond it as to his claim for negligence, see Gilmore & Black, Admiralty (1957),...

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  • Scope of Due Diligence Investigation in Obtaining Title to Valuable Artwork
    • United States
    • Seattle University School of Law Seattle University Law Review No. 23-02, December 1999
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