Swift Co Packers v. Compania Colombiana Del Caribe 14 8212 15, 1949

Citation339 U.S. 684,70 S.Ct. 861,19 A.L.R.2d 630,94 L.Ed. 1206
Decision Date05 June 1950
Docket NumberNo. 230,230
PartiesSWIFT & CO. PACKERS et al. v. COMPANIA COLOMBIANA DEL CARIBE, S.A. Argued Dec. 14—15, 1949
CourtU.S. Supreme Court

Mr. Eberhard P. Deutsch, New Orleans, La., for petitioners.

Mr. Nicholas J. Healy, 3d, New York City, for respondent.

Mr. Justice FRANKFURTER delivered the opinion of the Court.

The question before us is the propriety of an order of the District Court for the Canal Zone vacating a foreign attachment of a vessel made in a libel in personam. We granted certiorari because important questions relating to the scope of admiralty jurisdiction and its exercise are in issue. 338 U.S. 813, 70 S.Ct. 76.

On March 7, 1948, the libel was filed against Compania Transmaritima Colombiana, S.A., a Colombian corporation, by Swift & Company Packers, a Nevada corporation, certain Cuban corporations and individuals, and a Colombian citizen. They brought the libel as owners of rice shipped from Ecuador to Cuba. It was alleged that the cargo had been delivered in good order to the M/V Cali, owned and operated by Transmaritima, and that the vessel had sunk, or partially sunk, off the island of Grand Cayman with resulting nondelivery of the cargo. This was supplemented by allegations of negligence. Process was prayed with the further request that if the respondent could not be found its goods and chattels be attached, particularly a vessel known as the Alacran, or Caribe. This vessel was thereupon attached by the marshal.

On March 8, libellants filed a supplemental and amended libel, and on the basis of the following allegations joined the Compania Colombiana Del Caribe, S.A., as respondent. On or shortly prior to March 4, the Compania Del Caribe had been organized under the laws of Colombia and the Alacran had been transferred by Transmaritima to Del Caribe in fraud of the rights of libellants. The latter company had been organized by directors, officers and stockholders of Transmaritima, but no funds had been paid into its treasury for the issue of its stock, and the transfer of the Alacran was without real consideration. Del Caribe was 'merely the creature or alter ego' of Transmaritima and 'they should be held to be, as they are, one and the same.' Del Caribe, on or about March 4, had had the Vessel's name changed from Alacran to Caribe, and a new register had been issued accordingly. In the alternative, the claim was that Del Caribe was indebted to Transmaritima for at least a substantial part if not all of the purchase price of the Caribe.

Attachment of the vessel was again prayed on what appears to have been either of two grounds: since Transmaritima and Del Caribe were really one and the same, it mattered not which was deemed to be the owner of the Caribe; since the transfer of the Caribe to Del Caribe was a fraudulent transfer to be set aside, the vessel was in reality Transmaritima's property and Del Caribe should be garnished. On the basis of the amended libel another attachment of the Caribe was made.1

With the supplemental libel, libellants submitted a list of interrogatories to be propounded to Del Caribe, calculated to disclose the true status of that company and of the transfer to it of the Caribe. On March 15, respondents gave notice that they would move for an order dismissing the libel and vacating the attachment. An accompanying affidavit relied primarily on the doctrine of forum non conveniens. The District Court overruled this motion on March 31. The parties then entered into stipulations whereby the respondents' time to answer the libel and interrogatories was extended to June 17. On June 11, they answered, putting in issue various questions relating to the liability arising out of the sinking of the Cali and to the transfer of the Caribe. At the same time Del Caribe objected to the nterrogatories on various grounds. No disposition of these objections appears from the record.

On August 16, Del Caribe gave notice of a motion to dismiss the libel as to it and vacate the attachment. Various grounds were urged calling into question the jurisdiction of the court, the propriety of its exercise, and the adequacy of the allegations to state a claim in the libel. An accompanying affidavit set forth matters relating to the transfer.

On September 20, the District Court found that the nondelivery of the cargo was due to the beaching of the Cali in January, 1948; that Del Caribe had been organized in the latter part of February, 1948; and that Transmaritima had sold and transferred the Caribe to Del Caribe on February 25.2 From these facts the district judge concluded that there was no jurisdiction in admiralty to inquire into the relations between the two respondent companies or the sale of the Caribe. In any event, the court declined to exercise jurisdiction to look into the transfer since it had taken place between two foreign corporations and in a foreign country. Accordingly, the attachment was ordered to be vacated. While libellants submitted additional evidence upon a rehearing, the court adhered to its original views. 83 F.Supp. 273.

The Court of Appeals affirmed. It held that jurisdiction to set aside a fraudulent transfer before judgment on the main claim was at best 'doubtful,' that there was discretion to decline jurisdiction on principles of forum non conveniens, and that, in any event, libellants had not sustained their burden of producing proof that the transfer was fraudulent.3 175 F.2d 513.

This we believe to be a fair re sume of an uncommonly confused and opaque record. It is especially hampering that the record is not clearer than it is when legal issues of real complexity are in controversy.

I. There is a threshold question as to the jurisdiction of the court below to entertain the appeal. It is claimed that the order vacating the attachment was not a final order and therefore not reviewable.

We believe that the order comes squarely within the considerations of our recent decision in Cohen v. Beneficial Industrial Loan Corp., 337 U.S. 541, 69 S.Ct. 1221, 93 L.Ed. 1528. The litigation arising out of the claim of the libellants has not run its entire course, but the order now here, like that in the Cohen case, 'appears to fall in that small class which finally determine claims of right separable from, and collateral to, rights asserted in the action, too impor- tant to be denied review and too independent of the cause itself to require that appellate consideration be deferred until the whole case is adjudicated.' 337 U.S. at page 546, 69 S.Ct. at page 1225, 93 L.Ed. 1528. Appellate review of the order dissolving the attachment at a later date would be an empty rite after the vessel had been released and the restoration of the attachment only theoretically possible. Cf. The Panaghia Kathariotisa, 3 Cir., 165 F.2d 430. Under these circumstances the provision for appeals only from final decisions in 28 U.S.C. § 1291, 28 U.S.C.A. § 1291, should not be construed so as to deny effective review of a claim fairly severable from the context of a larger litigious process. See Cobbledick v. United States, 309 U.S. 323, 328-329, 60 S.Ct. 540, 542, 543, 84 L.Ed. 783. The situation is quite different where an attachment is upheld pending determination of the principal claim. Such was Cushing v. Laird, 107 U.S. 69, 2 S.Ct. 196, 27 L.Ed. 391, which is urged on us. In such a situation the rights of all the parties can be adequately protected while the litigation on the main claim proceeds.

II. On finding that the Caribe had been sold by Transmaritima to Del Caribe prior to the filing of the libel the District Court deemed itself without jurisdiction to determine whether the transfer was fraudulent. In consequence it felt compelled to treat Del Caribe as the owner of the vessel, and since only the property of Transmaritima could be validly attached the attachment had to be vacated.4

The reasoning of the District Court was based on the view that a claim of fraud in the transfer of a vessel was a matter for determination by a court of equity and therefore outside the bounds of admiralty jurisdiction. There is a good deal of loose talk to this effect in the reports, concurrent with talk that courts of admiralty exercise their jurisdiction upon equitable principles. Even as to admiralty jurisdiction we must be wary of verbal generalizations unrelated to their applications. Not the least creative achievement of judicial law-making is the body of doctrines that has been derived from the brief words of the Constitution extending the judicial power 'to all Cases of admiralty and maritime Jurisdiction.' U.S.Const. Art. III, § 2. But it would be beyond human achievement even of a long line of judges especially equipped for dealing with admiralty matters to have produced a wholly harmonious body of admiralty law, or to have written opinions that should not have lent themselves through largeness or looseness of statement beyond the scope of their adjudications.

Unquestionably a court of admiralty will not enforce an independent equitable claim merely because it pertains to maritime property. E.g., The Eclipse, 135 U.S. 599, 608, 10 S.Ct. 873, 875, 34 L.Ed. 269 and cases cited. The reasoning of the District Court would be pertinent if the libellants, as creditors of Transmaritima, had gone into admiralty by way of a creditor's bill to set aside a pretended sale of the Caribe as a fraud- ulent transfer. But that is not the case before us. Libellants went into admiralty on a claim arising upon a contract of affreightment supplemented by charges of negligence in the nondelivery of a sea cargo—matters obviously within admiralty jurisdiction. As an incident to that claim, in order to secure respondents' appearance and to insure the fruits of a decree in libellants' favor, they made an attachment under General Admiralty Rule 2, 28 U.S.C.A.5 The issue of fraud arises in connection with the attachment as a means of effectuating a claim incontestably in admiralty....

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