The Pesaro

• Decision Date: 01 October 1921
• Citation: 277 F. 473
• Parties: THE PESARO (two cases).
• Court: U.S. District Court — Southern District of New York

277 F. 473

THE PESARO (two cases).

United States District Court, S.D. New York.

October 1, 1921

Supplemental Opinion December 13, 1921.

Harrington Bigham & Englar, of New York City, for libelants.

Kirlin Woolsey, Campbell, Hickox & Keating, of New York City, for special claimant.

MACK Circuit Judge.

Libel in rem against the steamship Pesaro to enforce a claim for damage to a cargo of olive oil shipped thereon. Previously when the ship was libeled to enforce the same claim, upon the direct suggestion by the Italian ambassador that the ship was owned by the Italian government and at the time of the arrest was in its possession and therefore was not subject to arrest, this court vacated the arrest. Upon appeal, the Supreme Court upheld the libelant's objection that this suggestion must come through the official channels of the United States. The court added that it had no occasion at that time to consider what the decree should have been if the matters affirmed in the suggestion had been brought to the court's attention and established in an appropriate way. The Pesaro, 255 U.S. 216, 41 Sup.Ct. 308, 65 L.Ed decided February 28, 1921.

By stipulation, the parties have agreed that the question of jurisdiction shall be decided upon the basis of the following facts: First. That the steamship Pesaro was owned by the kingdom of Italy, registered in the name of ministry for railway and maritime transportation, a department of the Royal Italian government charged with affairs of maritime and rail transportation, which has as its head a member of the Italian cabinet. Second. That the steamship was in the possession of the Italian government, being manned by a master, officers, and crew employed by and under the direction of the ministry for railway and maritime transportation and paid by it. Such master, officers, and crew were civilians not under the orders of or connected with the Italian naval or military forces, and the vessel was not carried on the roster of the Italian navy as a naval vessel. Third. That the steamship Pesaro was engaged in commercial trade carrying passengers and goods for hire, and in such trade was not functioning in a naval or military capacity, or under the immediate direction of the department of the Italian government having to do with naval and military affairs. Fourth. That the letter (the substance of which, so far as necessary, is given in a note below ^[1]) of Advocatto Francisco Montefredini, dated June 21, 1920, may be read by either party on the trial of the issues raised by the libel and the special claim and plea in abatement as the evidence of Francisco Montefredini with the same force and effect as if he had testified in accordance with the said letter; subject, however, to objection by either party to the case as to the materiality, relevancy, or competency of the matters referred to in the said letter, or any of them.

The Supreme Court has recently intimated that it considered the question whether the ship of a foreign government used and operated by it as a merchant vessel is, when within the waters of the United States, immune from arrest in admiralty, as 'important and also new,' and that the 'proper solution is not plain but debatable. ' In re Hussein Lufti Bey, 256 U.S. . . ., 41 Sup.Ct. 609, 65 L.Ed. . . ., decided June 6, 1921; In re Muir, 254 U.S. 522, 41 Sup.Ct. 185, 65 L.Ed. . . ., decided January 17, 1921. For that reason a re-examination of this question would seem to be justified, if not required, notwithstanding the decision in this court in The Maipo, 252 F. 627, 259 F. 367, and the views expressed by the Circuit Court of Appeals in the Carlo Poma, 259 F. 369, 170 C.C.A. 345, especially as the decree in the latter case was vacated by the Supreme Court for want of jurisdiction in the Court of Appeals, decided February 28, 1921, 255 U.S. 219, 41 Sup.Ct. 309, 65 L.Ed. . . . .

The general principle of the immunity of a sovereign state from suit without its express consent is too deeply imbedded in our law to be uprooted by judicial decision. See Ex parte in the Matter of the State of New York, Edward S. Walsh, Superintendent, 256 U.S. . . ., 41 Sup.Ct. 588, 65 L.Ed. . . ., U.S. S.Ct. June 1, 1921. While the principle has been fervently defended by some jurists as vital and fundamental to sovereignty (see dissenting opinion of Justice Gray in U.S. v. Lee, 106 U.S. 196, 1 Sup.Ct. 240, 27 L.Ed. 171), the extent to which it has been carried or retained in modern law has been the subject of strong criticism (Story, J., in U.S. v. Wilder, 3 Sumn. 308, Fed. Cas. No. 16,694; Laski, The Responsibility of the State in England, 32 Harvard Law Review, 447; Maguire State Liability for Tort, 30 Harvard Law Review, 20; cf. Lord, Admiralty Claims Against the Government, 19 Col.L.R., 467; Weston, Actions Against the Property of Sovereigns, 32 Harvard Law Review, 266), and there is observable a tendency to restrict its application or to guard against its extension (U.S. v. Lee, supra; cf. South Carolina v. U.S., 199 U.S. 437, 26 Sup.Ct. 110, 50 L.Ed. 261, 4 Ann.Cas. 737).

Where the application of the doctrine is not clear, a solution is not to be found by reference to strict Austinian theory which assumes, by mere definition, that the sovereign is not subject to his own laws. Nor is it to be found by uncritical reference to historical origins. The reasons which in the past led to the exemption of the sovereign from suit may or may not justify the extension of the principle in modern law. In dealing with admiralty causes, historical or theoretical conceptions peculiar to the common law must not be assumed to be a part of the maritime law of nations.

In attempting to solve a confessedly new and unsettled problem, the court, while conforming its decision to certain forms or standards evolved from within the legal system, should not determine the application of these standards solely by logic. It may have to choose between competing judicial analogies and parallel trends of juristic thought; its conclusions should, if possible, conform to the practical ends of the law in a moving, working world.

So in dealing with an unsettled problem in the application of sovereign immunity, the court must not only consider history and logic; it must also look behind and beyond both and inquire whether the public interests justify or require an extension of sovereign exemption from the usual processes of judicial justice. With the growth and development of state activity, it behooves the court to consider the consequences which would flow from a ruling removing from the ordinary judicial administration matters of vital importance to the community, which have for centuries been handled through the regular judicial processes.

The question of the exemption from attachment of a ship of a friendly sovereign first arose in our courts in the case of The Exchange, 7 Cranch, 117, 3 L.Ed. 287. It concerned a public foreign ship of war. Bynkershoek had stirred the question whether any ship was immune from seizure, having laid it down as a general proposition that the property of a foreign sovereign was not exempt from attachment De Foro Legatorum, ch. IB. Marshall, C.J., pointed out that--

'The jurisdiction of the nation within its own territory was necessarily exclusive and absolute and susceptible of no limitation not imposed by itself. * * * All exceptions to the full and complete power of a nation, within its own territories, must be traced up to the consent of the nation itself. * * * This consent may, in some instances, be tested by common usage and by common opinion growing out of that usage. * * * One sovereign being in no respect amenable to another; and being bound by obligations of the highest character not to degrade the dignity of his nation, by placing himself or its sovereign rights within the jurisdiction of another, can be supposed to enter a foreign territory only under an express license, or in confidence that the immunities belonging to his independent sovereign station, though not expressly stipulated, are reserved by implication, and will be extended to him.'

Marshall consequently concluded as a principle of public law that ships of war entering the port of a friendly power, open to their reception, are to be considered by the consent of that power as exempt from its jurisdiction.

While the court had no occasion to consider the case of a public ship used for trading purposes, Marshall (page 145) pointed out 'a manifest distinction between the private property of the person who happens to be a prince and the military force which supports the sovereign power and maintains the dignity and independence of a nation. A prince by acquiring private property in a foreign country may possibly be considered as subjecting that property to the territorial jurisdiction; he may be considered as so far laying down the prince and assuming the character of a private individual; but this he cannot be presumed to do with respect to any portion of that armed force, which upholds his crown, and the nation he is entrusted to govern.'

While Marshall was probably referring to the private property of a prince as a private person, it is interesting to note the similarity of his language to that employed by him in the case of a state engaging in a commercial undertaking. In Bank of U.S. v. Planters' Bank of Georgia, 9 Wheat. 904, 6 L.Ed. 244, he said:

'It is, we think, a sound principle that when a government becomes a partner in any trading company, it divests itself, so far as concerns the transactions of that company, of its sovereign character, and takes that of a private citizen. Instead of communicating to the company its privileges and its prerogatives, it descends to a level with those with

...