THE CITY OF BRUNSWICK

• Decision Date: 20 March 1934
• Docket Number: 497,510.,508,500,498,505,No. 507,506,507
• Citation: 6 F. Supp. 597
• Parties: THE CITY OF BRUNSWICK. SAMUEL SANDAY & CO. et al. v. UNITED STATES, and seven other cases.
• Court: U.S. District Court — District of Massachusetts

6 F. Supp. 597

THE CITY OF BRUNSWICK SAMUEL SANDAY & CO. et al. v. UNITED STATES, and seven other cases.

Nos. 507, 497, 498, 500, 505, 506, 508, 510.

District Court, D. Massachusetts.

March 20, 1934.

Bigham, Englar, Jones & Houston, of New York City, and Burnham, Bingham, Pillsbury, Dana & Gould, of Boston, Mass., for Samuel Sanday and others.

Bigham, Englar, Jones & Houston, of New York City, and Burnham, Bingham, Gould & Murphy, of Boston, Mass., for C. Russell Walton.

Bigham, Englar, Jones & Houston, of New York City, Baker, Botts, Andrews & Wharton, of Kansas City, Mo., and Burnham, Bingham, Pillsbury, Dana & Gould, of Boston, Mass., for T. J. Brodnax and others.

Abbott, Fauntleroy, Cullen & Edwards, of St. Louis, Mo., Bigham, Englar, Jones & Houston, of New York City, and Burnham, Bingham, Pillsbury, Dana & Gould, of Boston, Mass., for William T. Brooking and others.

Bigham, Englar, Jones & Houston, of New York City, Burnham, Bingham, Pillsbury, Dana & Gould, of Boston, Mass., and Rosen, Kammer, Woof & Farrar, of New Orleans, La., for H. Janssen Lumber Co.

Bigham, Englar, Jones & Houston, of New York City, Burnham, Bingham, Pillsbury, Dana & Gould, of Boston, Mass., and Spencer, Gidiere, Phelps & Dunbar, of New Orleans, La., for Standard Export Lumber Co.

Burnham, Bingham, Pillsbury, Dana & Gould, of Boston, Mass., Bigham, Englar, Jones & Houston, of New York City, and

Burry, Johnstone, Peters & Dixon, of Chicago, Ill., for Mercantile Trading Co.

Barbour, McDavid & Barbour and F. W. Barrett, all of Springfield, Mo., Bigham, Englar, Jones & Houston, of New York City, and Burnham, Bingham, Pillsbury, Dana & Gould, of Boston, Mass., for Herman J. Meyer and others.

Frederick H. Tarr, U. S. Atty., of Boston, Mass. (by A. Chesley York, Asst. U. S. Atty., of Boston, Mass.), for the United States.

BREWSTER, District Judge.

These eight suits in admiralty, together with two other libels brought against the United States Shipping Board Merchant Fleet Corporation (hereinafter called the Fleet Corporation), were first consolidated for the single purpose of determining the question of the liability of the United States for the loss of cargoes on the City of Brunswick which stranded in Halifax Harbor in 1921. These suits came before Judge Lowell for hearing upon the merits, and he found that the United States was liable, notwithstanding the Harter Act § 3 (46 U. S. C. § 192 46 USCA § 192), by reason of failure to exercise due diligence in providing a seaworthy vessel. He also found that the United States was liable because of unnecessary deviation.

Thereafter the cases were consolidated for all purposes, including final decrees, and by amendment the United States now seeks to avail itself of the statute limiting liability. Rev. St. §§ 4283-4286, 46 U. S. C. 183-186 (46 USCA §§ 183-186). The amount of the loss sustained by each libelant is not in dispute, parties having stipulated in this regard.

According to Judge Lowell's opinion (4 F. Supp. 908, 909), it has been already adjudicated in this court that, notwithstanding error in navigation, the United States was liable because of a failure to exercise due diligence in making the City of Brunswick in all respects seaworthy; that the unseaworthiness was due to defective condensers, resulting in the disabling of two of her three boilers; that this want of due diligence was a contributing cause to the loss; that there was deviation which was not excused by any provisions of the bills of lading.

The controversy as it is now submitted presents two aspects, one involving the right of the several libelants to sue, and the other involving the right of the government to limit liability.

On the first aspect of the case it is necessary to refer to the 1932 amendment to section 5 of the Suits in Admiralty Act, which, as amended (46 USCA § 745), so far as material, reads as follows:

"§ 745. Causes of Action on Which Suits may be Brought; Limitations.

"Suits as authorized in this chapter shall be brought within two years after the cause of action arises: Provided further, That the limitations in this section contained for the commencement of suits hereunder shall not bar any suit against the United States or the United States Shipping Board Merchant Fleet Corporation, formerly known as the United States Shipping Board Emergency Fleet Corporation, brought hereunder on or before December 31, 1932, if such suit is based upon a cause of action whereon a prior suit in admiralty or an action at law or an action under subdivision (1) of section 250 of Title 28, was commenced prior to January 6, 1930, and was or may hereafter be dismissed because not commenced within the time or in the manner prescribed in this section, or otherwise not commenced or prosecuted in accordance with its provisions. * * *"

It is to be noted that Judge Lowell, in his opinion, further stated that it was admitted that all suits brought before him were "properly prosecuted under the terms of that act." Notwithstanding this admission, the government attacks the right of these libelants to maintain suits under this remedial statute.

While the government does not seem disposed to concede that any of the libels were properly brought under the Enabling Act, the objections raised to many of them do not call for separate consideration. In any event, what I will have to say about the cases which I am about to consider will effectually dispose of the less important objections made to the remaining cases.

I will take up first a group of cases which, for convenience, may be referred to as the "grain cases," viz.: Nos. 498, T. J. Brodnax et al., Trustees, v. United States; 500, William T. Brooking et al., Trustees, v. United States; 508, Mercantile Trading Co. v. United States. The facts common to these three cases, briefly stated, are as follows: Cargoes of grain were loaded at New Orleans. The shippers were Missouri corporations, to which were issued bills of lading by duly authorized agents of the Fleet Corporation. This grain was sold to the Belgian government, prior to the loading, which paid loading charges, freight, and took out insurance in the name of the Belgian government. After the loss, the Belgian government declared abandonment of its interest in the cargoes to underwriters, and received from the underwriters payments of their losses.

None of the libelants at the time of the loss had any interest in the cargoes. Each of the libelant corporations in 1926 filed in this court libels against the Fleet Corporation. Each of said suits was dismissed because of the decision of the United States Supreme Court in the case of Johnson v. Fleet Corporation, 280 U. S. 320, 50 S. Ct. 118, 74 L. Ed. 451. In each instance the libel now before the court is based upon the same cause of action as was the earlier suit, to which reference has been made. In each case amendments have been duly allowed by which it has been made to appear that prior to the loss the Belgian government was owner of the grain, and that each libel was filed on behalf of the Belgian government, which had requested and authorized the proceedings.

In No. 498, T. J. Brodnax et al., Trustees, v. United States, the bill of lading covering the shipment of grain involved ran to the Frisco Elevator Company, a Missouri corporation which had been dissolved by action of the state after forfeiture of its charter and prior to the filing of the original libel. In No. 500, William T. Brooking et al., Trustees, v. United States, the bill of lading covering the shipment of grain there involved had been issued to the Marshall Hall Grain Company, also a Missouri corporation, which, after the filing of the original proceeding and before the filing of the present libel, was dissolved by its own voluntary act. In 508, Mercantile Trading Co. v. United States, the bill of lading ran to the J. Rosenbaum Grain Company, a corporation organized under the laws of Illinois, the name of which corporation had been changed to the Mercantile Trading Company subsequent to the first proceeding. The Statutes of Missouri (section 4561 and 4622 of the R. S. of 1929 Mo. St. Ann. §§ 4561, 4622, pp. 2007, 2051) provided as follows:

"Sec. 4561. Upon the dissolution of any corporation already created, or which may hereafter be created by the laws of this state, the president and directors or managers of the affairs of said corporation at the time of its dissolution, by whatever name they may be known in law, shall be trustees of such corporation, with full powers to settle the affairs, collect the outstanding debts and divide the moneys and other property among the stockholders, after paying the debts due and owing by such corporation at the time of its dissolution, as far as such money and property will enable them; to sue for and recover such debts and property by the name of the trustees of such corporation, describing it by its corporate name, and may be sued by the same; and such trustees shall be jointly and severally responsible to the creditors and stockholders of such corporation to the extent of its property and effects that shall have come into their hands. (R. S. 1919, § 9755.)

"Sec. 4622. Trustees, in Case of Forfeiture. — When the forfeiture of the certificate, or license, of any corporation has been declared, the officers and directors or the manager, or managers, of the affairs of said corporation, at the time such forfeiture is declared, by whatever name they may be known in law, shall be trustees of such corporation with full power to settle its affairs and distribute its assets among its stockholders; after paying the debts due and owing by such corporation; and as such trustees to sue and recover debts and property due such corporation, and they shall be jointly and severally responsible to the creditors and stockholders of such corporations to the extent of its property and assets that may properly come into their hands. (R. S. 1919, § 9816.)"

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