THE MANDU

• Court: U.S. Court of Appeals — Second Circuit
• Writing for the Court: AUGUSTUS N. HAND and CHASE, Circuit , and PATTERSON
• Citation: THE MANDU, 102 F.2d 459 (2nd Cir. 1939)
• Decision Date: 06 March 1939
• Docket Number: No. 197.,197.
• Parties: THE MANDU. Petition of COMPANHIA DE NAVEGACAO LLOYD BRASILEIRO.

102 F.2d 459 (1939)

THE MANDU. Petition of COMPANHIA DE NAVEGACAO LLOYD BRASILEIRO.

No. 197.

Circuit Court of Appeals, Second Circuit.

March 6, 1939.

Forrest E. Single, of New York City (Roscoe H. Hupper, Douglas D. Crystal, and Wilbur H. Hecht, all of New York City, of counsel), for appellants.

Purrington & McConnell, of New York City (T. Catesby Jones, Frank J. McConnell, James D. Brown, and Leonard J. Matteson, all of New York City, of counsel), for appellee.

Before AUGUSTUS N. HAND and CHASE, Circuit Judges, and PATTERSON, District Judge.

PATTERSON, District Judge.

There was a collision between the Brazilian steamer Mandu and the German steamer Denderah in Brazilian waters at the port of Santos on July 31, 1929. The Denderah went down, and most of its cargo was lost. In June, 1930, Great American Insurance Company brought libel in rem against the Mandu in the District Court. The libel set forth that the Mandu was wholly at fault; that the Great American had insured cargo on the Denderah, had paid the loss incident to the collision, and had become subrogated to the shipper's rights; further, that certain other insurers had paid the losses suffered by other owners of cargo, had become subrogated to the owners' rights, and had for value assigned their claims to the Great American. An amendment was filed in October, 1930, specifying two shippers whose losses had been paid by the Great American and giving particulars on the insurers, cargo owners, items of cargo and losses in respect to which the Great American alleged ownership of claims by assignment. Damages of $225,000 were claimed. The owner of the Mandu filed bond and the ship was released. In October, 1930, a second libel was brought by the Great American against the Mandu, setting forth that insurers had insured other owners of cargo on the Denderah, had paid the losses and had assigned their claims to the Great American for value. Names of insurers and cargo owners, items of cargo and losses were given. After the filing of the second suit the owner of the Mandu brought the present proceeding for limitation of liability.

The petition, filed December 10, 1930, was in the usual form, alleging that the collision was due wholly to the fault of the Denderah and demanding exoneration or in any event limitation of liability. Bond for $281,000, the value of the Mandu, was posted, the bond in the first suit discharged and proceedings in both suits stayed. The Great American filed claim for $364,000 and answered the petition, averring ownership of a large number of claims substantially as in the libels. No other claimant appeared. Numerous depositions were taken concerning the conduct of the two vessels at the time of the collision. The petitioner by amended petition added allegations that the collision occurred in territorial waters of Brazil, that the Mandu was a Brazilian vessel and the Denderah a German vessel, that both Brazil and Germany were parties to the Brussels Convention of 1910, that the Brussels Convention provided that if both vessels in a collision were at fault, the liability of each should be in proportion to the degree of fault committed and that damages to vessels and likewise to cargoes should be borne by the vessels at fault in such proportions. Under this head the petitioner pleaded that the fault of the Denderah was very great and the fault of the Mandu, if any, very slight, and that damages against the Mandu should in any event be proportioned according to its degree of fault. The Great American's exceptions to these allegations concerning the Brussels Convention were overruled (D.C., 15 F.Supp. 627).

The case having come on for trial in May, 1937, the Great American undertook to prove title to two claims, since its standing as a claimant in any degree had been challenged by the petitioner. The proof showed that Siemens Schuckert Werke, a German concern, shipped merchandise on the Denderah, that the merchandise was lost as a result of the collision, that the Siemens concern was insured against loss by a group of insurance companies, that the group paid the loss in the amount of $6,450, that the Great American had 2½ percent interest in the insurance, that it paid to the Siemens concern $164.69 as its share of the loss, that the Siemens concern assigned its claim against the Mandu to Assekuranz Union, a German insurance company, and that the latter in turn assigned the Siemens claim to the Great American. The assignment to the Great American was in the conventional form in use in this country, reciting payment of $1 and other valuable consideration, and was dated July 22, 1930. There was also proof that the Borsig company, another German concern, shipped two locomotives on the Denderah, that the shipment was insured by the Wurttemberg Insurance Company of Germany, that the locomotives were lost and that the Wurttemberg company paid $80,000 as loss. The Wurttemberg assigned its claim to the Great American by cable of June 27, 1930, and followed it up by a formal assignment under date of July 2, 1930. The Great American conceded that it had not paid value for either of these two assignments, the arrangement being that any proceeds collected were to be accounted for to the foreign insurance companies. Proof tendered by the parties on the facts of the collision was also taken.

On motion by the petitioner the District Court dismissed the claim of the Great American (20 F.Supp. 820). It held that claims must be filed by the real party in interest, that the proof showed that the Great American was not the real party in interest and did not own the claims, no value having been paid for the assignments. But the court refused at that time to permit the petitioner to withdraw the petition. On the contrary, it extended the time for filing claims to October 1, 1937, so that those whom it deemed the real parties in interest might file claims. Some ninety claims were then filed for an aggregate $384,000, the claimants being in the main German insurance companies which had purported to assign their claims to the Great American. These claims the court later dismissed on the ground of laches (21 F.Supp. 372). There being then no claimant in the case, the court entered final decree permitting the petitioner to withdraw the petition and dismissing the case.

The Great American and the later claimants assign as error the dismissal of their claims and the granting of leave to the petitioner to withdraw the petition. They also assign as error the order overruling exceptions to the pleading of the rule of liability in collisions laid down by the Brussels Convention.

1. The Great American proved ownership of the two claims on which evidence was offered, and the court below erred in throwing it out as an intruder. It may be that the mere fact that an underwriter has paid its proportionate share of a loss as one of a group of underwriters insuring an owner of cargo does not give it standing to file a libel against a vessel said to have caused the loss or to file claim in a limitation proceeding commenced later. Fairgrieve v. Marine Insurance Company, 8 Cir., 94 F. 686. But the Great American proved that owners of cargo lost on the Denderah had assigned to it their claims against the Mandu by instruments of assignment absolute in terms. It cannot be doubted that as between the assignors and the Great American the latter had legal title to the claims. Payment to the Great American or recovery by it would be a bar to subsequent suit by the assignors. In non-maritime causes a person who takes legal title to a claim by out-right assignment is deemed the real party in interest and is entitled to maintain suit in his own name, and it makes no difference that he is merely collecting for the account of the assignor. Sheridan v. Mayor, 68 N.Y. 30; Anderson v. Reardon, 46 Minn. 185, 48 N.W. 777; King v. Miller, 53 Or. 53, 97 P. 542; Chase v. Dodge, 111 Wis. 70, 86 N.W. 548. The practice in admiralty is the same, The Rupert City, D.C., 213 F. 263, and so far as we know the title of one who holds an outright assignment from the original owner of a demand or claim has not been questioned until the present case. The court below seems to have put its decision on the fact that the assignments were made for purposes of collection. That fact is of no significance so far as concerns the title of the assignee to the claims.

2. The petitioner...