Motor Distributors v. Olaf Pedersen's Rederi A/S, 16057.

• Decision Date: 08 January 1957
• Docket Number: No. 16057.,16057.
• Citation: 239 F.2d 463
• Parties: MOTOR DISTRIBUTORS, Limited, et al., Appellants, v. OLAF PEDERSEN'S REDERI A/S owner of THE SUNNY PRINCE, Appellee.
• Court: U.S. Court of Appeals — Fifth Circuit

239 F.2d 463 (1956)

MOTOR DISTRIBUTORS, Limited, et al., Appellants, v. OLAF PEDERSEN'S REDERI A/S owner of THE SUNNY PRINCE, Appellee.

No. 16057.

United States Court of Appeals Fifth Circuit.

November 27, 1956.

Rehearing Denied January 8, 1957.

William Warner, New York City, Douglas D. Batchelor, Miami, Fla., William G. Symmers, New York City, Smathers, Thompson & Dyer, Miami, Fla., and Dow & Symmers, New York City, for appellants.

Richard F. Ralph, Miami, Fla., Charles S. Haight, Gordon W. Paulsen, New York City, Fowler, White, Gillen, Yancey & Humkey, Miami, Fla., and Haight, Gardner, Poor & Havens, New York City, Richard G. Ashworth, New York City, of counsel, for appellee.

Before RIVES, TUTTLE and JONES, Circuit Judges.

TUTTLE, Circuit Judge.

This appeal requires an answer to two questions: (1) Under what circumstances should a district court dismiss a libel in rem filed against a foreign ship by nationals of other foreign countries in a cause arising out of a collision on the high seas between foreign vessels of different nationalities on the ground that all parties at interest are citizens of foreign states? (2) To what extent is the exercise by the trial court of its discretion in answering this question subject to review in the Court of Appeals?

This is an appeal from an order dismissing a libel against the M/V Sunny Prince because the trial court "refused jurisdiction of the suit."

The facts necessary for a determination of the questions raised here are not in dispute.

Appellants, the libelants below, are six owners of cargo on the M/V Hoheweg, a German vessel.¹

On February 14, 1955, the Hoheweg, proceeding from Germany to Ireland, was struck and sunk on the high seas by the Sunny Prince, a Norwegian vessel, proceeding from the Philippines to Holland. All the crew of the Hoheweg were picked up and the Sunny Prince put in at an English port, its damage was surveyed in the presence of representatives of the Hoheweg interests, and the same night it left for Holland to discharge its cargo and then to Germany to be repaired.

On February 17, 1955, the Norwegian underwriters of the Sunny Prince offered to guarantee British limitations (£39,300, at £8/net registered ton) and British jurisdiction, provided all the Hoheweg ownership and cargo interests agreed; this offer was accepted by the Hoheweg interests.

On March 5, 1955, owners of the Sunny Prince joined in the above offer of limitations and jurisdiction.

On March 14, 1955, German insurers of the Hoheweg hull accepted the above offer. (To the district court it was originally represented by the appellees that the acceptance was by the German insurers of the cargo; this was apparently not so.)

After repairs the Sunny Prince resumed her trading between the Hamburg-Antwerp area and the Far East, calling on German, Dutch, Bermudan, Cuban, and Philippine ports, but at no other British ports.

On October 21, 1955, Sunny Prince was libeled and arrested in Florida, as soon as she arrived at her first post-accident call on a United States port.

This is how matters stood when the trial court heard claimant-respondent's (appellee's) motion to dismiss the libel. However, before the matter was heard, testimony of the captain and of other officers and crew members was taken by deposition aboard the vessel; logs and other data material to the cause of the collision were produced and identified and appellants' surveyors examined the Sunny Prince's steering mechanism and plans.

The trial court declined to take jurisdiction primarily on the ground that: "This court could exercise jurisdiction, but will entertain jurisdiction in causes between foreign parties arising from losses occasioned by the collision of two foreign vessels on the high seas only in those cases in which an injustice would be visited on either of the parties if the court declined jurisdiction." The court found there was no such showing made.² Accepting as the leading authority in this field the Supreme Court's decision in The Belgenland, 114 U.S. 355, 5 S.Ct. 860, 29 L.Ed. 152, as do both parties here, we are convinced that the trial court departed from the correct principle of law applicable to situations such as here presented. That rule of law is succinctly stated by Mr. Justice Bradley:

"The subject has frequently been before our own admiralty courts of original jurisdiction, and there has been but one opinion expressed, namely, that they have jurisdiction in such cases, and that they will exercise it unless special circumstances exist to show that justice would be better subserved by declining it." (Emphasis added.) The Belgenland, 114 U.S. 355, 367, 5 S.Ct. 860, 866.

Instead of the rule being, as the trial court here stated, that jurisdiction should be denied unless such denial would work an injustice, the rule is, rather, that jurisdiction should be taken unless to do so would work an injustice.

Nothing in Canada Malting Co., Ltd., v. Paterson Steamships, Ltd., 285 U.S. 413, 52 S.Ct. 413, 76 L.Ed. 837, the other leading case cited by appellee, in any way detracts from this rule. In citing this case in its opinion the trial court failed to recognize the clear distinction between the facts here and those that led the Supreme Court in the Canada Malting Co. case to approve the refusal to accept jurisdiction there. The circumstances as to the libel in rem against the Sunny Prince bring it precisely within the fact situation of The Belgenland. There, as here, all of the parties were citizens of foreign states and the ship was of foreign ownership and registry and the collision occurred on the high seas. Under such circumstances, the Court said:

"Neither party has any peculiar claim to be judged by the municipal law of his own country since the case is pre-eminently one communis juris and can generally be more impartially and satisfactorily adjudicated by the court of a third nation having jurisdiction of the res or parties, than it could be by the courts of either of the nations to which the litigants belong." The Belgenland, 114 U.S. 355, 369, 5 S. Ct. 860, 866."

How different were the facts in the Canada Malting Co. case is clearly shown by the language of the opinion of the Supreme Court in declining to upset the refusal of the trial court to accept jurisdiction. The Court there said:

"There is no basis for the contention that the District Court abused its discretion. All the parties were not only foreigners, but were citizens of Canada. Both the colliding vessels were registered under the laws of Canada, and each was owned by a Canadian corporation. * * * The officers and crew of each vessel — the material witnesses — were citizens and residents of that country. * * * The cargo, in each case, was shipped under a Canadian bill of lading from one Canadian port to another. * * * It is difficult to conceive of a state of facts more clearly justifying the refusal of a District Court to retain jurisdiction in a cause between foreigners." Canada Malting Co., Ltd., v. Paterson Steamships, Ltd., 285 U.S. 413, 423, 424, 52 S.Ct. 413, 416.

The principle of law established in The Belgenland has been followed uniformly in cases where there was a similar fact situation. The Western Farmer, 2 Cir., 210 F.2d 754; The Mandu, 2 Cir., 102 F.2d 459; The Attualita, 4 Cir., 238 F. 909; The Kaiser Wilhelm der Grosse, D.C.S.D.N.Y., 175 F. 215; Chubb v. Hamburg-American Packet Co., D.C.E. D.N.Y., 39 F. 431.

It is manifest that the decisions of the Supreme Court, the Courts of Appeals and the District Courts have established a judicial policy in this important field of maritime law. This policy is stated in the opinion of the Court of Appeals for the Second Circuit in The Western Farmer:

"* * * As Bradley, J., said in The Belgenland, 114 U.S. 355, 365, 5 S.Ct. 860, 865, 29 L.Ed. 152: `althou

...