Republic of Colombia v. Cauca Company

• Decision Date: 18 May 1903
• Docket Number: No. 259,259
• Citation: 23 S.Ct. 704,190 U.S. 524,47 L.Ed. 1159
• Parties: REPUBLIC OF COLOMBIA, Appt. , v. CAUCA COMPANY and Colombian Construction & Improvement Company
• Court: U.S. Supreme Court

190 U.S. 524

23 S.Ct. 704

47 L.Ed. 1159

REPUBLIC OF COLOMBIA, Appt.,

v CAUCA COMPANY and Colombian Construction & Improvement Company.

No. 259.

Argued April 23, 24, 1903.

Decided May 18, 1903.

Mr. William G. Johnson for appellant.

Messrs. John K. Cowen, John W. Beaumont, Edward H. Murphy, and Cowen, Cross, & Bond, for appellees.

Mr. Justice Holmes delivered the opinion of the court:

This is an appeal by the Republic of Colombia from a decree of the circuit court of appeals, affirming a decree of the circuit court upon a bill brought by the Republic and a cross bill by the defendant, the Cauca Company. The bill is a bill to set aside an award under a submission entered into by the above-mentioned parties. The cross bill is to establish the award as valid, notwithstanding the withdrawal of the representative named by the plaintiff, and prays specific performance. The decree confirms the award after rejecting certain items. Of course it does not attempt to order specific performance.

Before going further with the statement of facts we must dispose of an objection to the jurisdiction of this court to entertain this appeal. As a foreign government has seen fit to submit its case to the courts of the country with whose citizens its controversy exists, it would be unfortunate if, through any mistake, it was prevented from carrying questions of law to the court of last resort. We are of opinion that it had the right to appeal. The circuit court had jurisdiction under the Constitution, art. 3, § 2, and the act of August 13, 1888, chap. 866, § 1 (25 Stat. at L. 434),¹ as the suit is 'a controversy between citizens of a state and foreign states, citizens, or subjects,' within the words and meaning of the act. The Sapphire, 11 Wall. 164, 167, sub nom. The Sapphire v. Napolean III., 20 L. ed. 127, 130. The right to appeal from the decree of the circuit court of appeals is given by the act of March 3, 1891 chap. 517, § 6 (26 Stat. at L. 826, 828, U. S. Comp. Stat. 1901, p. 550), 'in all cases not hereinbefore, in this section, made final.' The only words of the section relied upon as making the decree of the circuit court of appeals final are those which declare it so 'in all cases in which the jurisdiction is dependent entirely upon the opposite parties to the suit or controversy being aliens and citizens of the United States or citizens of different states.' We see no reason to doubt that Congress was as well aware of the distinction between foreign states and foreign citizens when it passed the act of 1891 as when it passed the act of 1888, and that when it spoke of aliens it meant foreign citizens alone. We are confident that it did not dream of excluding sovereign powers that choose to sue here from the right to an appeal. The word 'aliens' could be given that effect only by straining it beyond its natural meaning and away from the indications of the context. As the decree of the circuit court of appeals is not made final by § 6, an appeal lies to this court.

Whether technically proved or not, we assume the commission making the award to have found the facts hereafter stated, and we think that they were fully warranted in doing so. The subject-matter of the award was a railroad intended to run from Buenaventura to the Pacific, via Cali, to the city of Manizales, and partly built. In 1890 one Cherry received a concession to build and operate this road, with land grants and various guaranties from the government, and with the right to transfer the concession, but all subject to the condition of the work being done in four years. Thereupon the Cauca Company was incorporated in West Virginia for the purpose, among other things, of building and operating the road, and Cherry transferred his concession to it, stipulating that he should be employed to do the work, receive all the company's stock and bonds and various benefits of the concession. On the same day the Colombian Construction & Improvement Company also was incorporated, for many purposes, including that of building the road, and Cherry forthwith assigned to it his contract with the Cauca Company, stipulating that he should receive in return a large amount of full-paid stock of the company and $135,000 in cash. Cherry was to be employed as chief constructor of the road, and the company was to take his place under the Cauca Company's contract.

The time for building the road went by, the road was not built, and the government claimed a forfeiture. On the other hand, the Cauca Company set up that the failure was due to the fault of the government, and other justifications, and the matter became a subject of diplomatic discussion between this country and Colombia. With the merits of this controversy we have nothing to do. As a result, a submission to a special commission, as it was termed, was agreed upon and signed. The essential features of the agreement were that the company by the second article surrendered the railroad, and that Colombia agreed to pay a just indemnity, the scope of which will be considered later, and which was to be determined by the commission. The commission consisted of three, one appointed on behalf of Colomibia, one on behalf of the company and the third by agreement between the Secretary of State of this country and the Colombian Minister at Washington. The commission, spoken of in the agreement in the singular, was to 'determine the procedure to be followed in the exercise of the power conferred upon it, both as to its own acts and as to the proceedings of the parties.' In pursuance of this power, it resolved that all decisions should be by majority vote. Thereafter the case was tried, and several items were allowed to the company which it was contended by the representatives of Colombia were not within the scope of the submission. At the end of the trial, when hardly anything remained to be done except to sign the award, the questions remaining open concerning only matters of interest which have been disallowed, the Colombian commissioner announced his resignation to the commission.

The agreement gave Colombia thirty days to appoint a new member, and on its failure the Secretary of State for the United States and the Colombian Minister were to appoint him. But the commission was allowed only one hundred and fifty days 'from its installation,' which might be extended sixty days more for justifiable grounds. It had sat two hundred and three days when the resignation was announced. Manifestly it was possible, if not certain, that its only way of saving the proceed- ings from coming to naught was to ignore the communication and to proceed to the award. This it did. Colombia by its bill and argument now lays hold of the resignation of its commissioner as a ground for declaring the award void.

Colombia thus is put in the position of seeking to defeat the award after it has received the railroad in controversy and while it is undisputed that an appreciable part of the consideration awarded ought to be paid to the company under the terms of the submission. It is fair to add that the bill offers to pay the undisputed sum, but not to rescind the submission and return the railroad. We shall spend little argument upon this part of the case. Of course, it was not expected that a commission made up as this was would be unanimous. The commission was dealt with as a unit, as a kind of court, in the submission. It was constituted after, if not as the result of, diplomatic discussion in pursuance of a public statute of Colombia. It was to decide between a sovereign state and a railroad, declared by a law of Colombia to be a work of public utility. In short, it was dealing with matters of public concern. It had itself resolved, under the powers given to it in the agreement, that a majority vote should govern. Obviously that was the only possible way, as each party appointed a representative of its side. We are satisfied that an award by a majority was sufficient and effective. We are satisfied, further, that whatever might be the technical rule for three...