United States v. Grain Importers

• Decision Date: 25 August 1944
• Docket Number: No. 3992.,3992.
• Citation: 144 F.2d 921
• Parties: UNITED STATES v. GRAIN IMPORTERS (EIRE), Limited, et al.
• Court: U.S. Court of Appeals — First Circuit

144 F.2d 921 (1944)

UNITED STATES v. GRAIN IMPORTERS (EIRE), Limited, et al.

No. 3992.

Circuit Court of Appeals, First Circuit.

August 25, 1944.

J. Frank Staley, of Washington, D. C., Francis M. Shea, Asst. Atty. Gen., and Arnold W. Knauth, Sp.Asst. to Atty. Gen. (Edmund J. Brandon, U. S. Atty., and George F. Garrity and Gerald J. McCarthy, Asst. U. S. Attys., all of Boston, Mass., of counsel), for appellant.

George deF. Lord, of New York City (Lord, Day & Lord, of New York City, Charles F. Dutch, and Putnam, Bell, Dutch & Santry, all of Boston, Mass., and Helen H. Robinson, of New York City, of counsel), for Grain Importers (Eire), Limited, appellee.

Albert T. Gould, of Boston, Mass. (Bingham, Dana & Gould, of Boston, Mass., and Wharton Poor, and Haight, Griffin, Deming & Gardner, and James McKown, Jr., all of New York City, of counsel), for Dampskibsselskabet af 1912.

Fitz-Henry Smith, Jr., of Boston, Mass., for Sivewright, Bacon & Co., and Lambert Brothers, Limited, appellees.

Before MAGRUDER, MAHONEY and WOODBURY, Circuit Judges.

WOODBURY, Circuit Judge.

This is an appeal by the United States from a final decree of the court below ordering present payment to Grain Importers (Eire), Limited, appellee, of $57,500 out of a fund of $200,000 deposited with the Treasurer of the United States as compensation for the Danish motor vessel Rita Maersk.

In brief the facts are as follows: On or about April 1, 1940, the Rita Maersk, owned by Dampskibsselskabet af 1912 Aktieselskabet, a Danish corporation, sailed from Philadelphia bound for Waterford, Eire, with a cargo of corn consigned to and owned by the appellee, Grain Importers (Eire), Limited, a corporation organized under the laws of the Irish Free State. On April 9, while on the high seas proceeding with the voyage the Master of the Rita Maersk was apprised by radio of the occupation of Denmark by armed German forces and fearing for the safety of his ship, her company and cargo, he altered course for Boston where he arrived safely on April 16. On June 13, 1940, Grain Importers (Eire), Limited, appellee herein, filed a libel in rem against the ship for breach of contract of carriage. Process was issued pursuant to this libel and the United States Marshal took possession of the vessel. In this cause one Arnold Maersk McKinney Moller, who described himself as "of Copenhagen, Denmark, temporarily residing in New York, N. Y.," intervened as agent of the Danish corporate owner and claimed the ship on its behalf reciting "that at the time of the filing of the libel herein said Dampskibsselsk af 1912 A/S. was and still is the sole owner of said vessel and that no other person, firm or corporation is the owner thereof." He subsequently filed an answer for the owner.

This was the state of affairs when Congress on June 6, 1941, passed the Idle Foreign Merchant Vessels Act, so called, 55 Stat. 242, the material parts of which, with the matter added by the amendment of March 24, 1943, 57 Stat. 48, underscored, is copied in the margin.¹ 50 U.S.C.A.Appendix, § 1271. Pursuant to this Act the United States took title to and possession of the Rita Maersk on June 16, 1941, and later, on January 31, 1942, deposited $200,000 with its Treasurer on account of just compensation therefor. Notice of the foregoing was published in the Federal Register on April 15, 1942.

On March 20, 1942, the United States Attorney at the request of the Attorney General asked all proctors in the cause to file proofs of their retainer with the court In compliance on July 13, 1942, the proctors appearing for the owner of the Rita Maersk filed the affidavit copied in the margin,² which the United States Attorney acknowledged to be "sufficient compliance" with his request.

Then on April 14, 1942, Grain Importers (Eire), Limited, pursuant to the Act, filed the instant libel against the fund. It is based upon the same claim as the libel previously filed against the vessel. Due notice under order of the District Court was given to all interested persons as required by the Act and the United States, the owner, and two other claimants, each with small claims, appeared and answered. On the eve of trial proctors for the libelant below, an appellee here, and proctors for the former owner, the Danish corporation, entered into a stipulation settling the libelant's claim for $57,500 without interest or costs and providing that a decree might be entered against the fund on deposit in the above amount. Subsequently, on July 21, and July 29, 1943, affidavits of Mr. Moller were filed. Both recited that the affiant was the representative in the United States of the corporate owner of the vessel; that he was an officer of that corporation, to wit, "procurist", and also a director of it; that he was familiar with its affairs; and that the corporation had purchased the Rita Maersk from her builders in 1939, and owned it until requisitioned by the United States on June 16, 1941. The earlier affidavit concluded with the statement,

"I have been informed that Grain Importers (Eire) Ltd. has agreed to settle its claim against the Rita Maersk on payment out of the fund of $57,500, without interest and without costs. I have approved that settlement, being duly authorized thereto;"

the later with the statement,

"The said s/s Rita Maersk was not mortgaged, and there was no valid claim by way of mortgage subsisting at the time of her requisition by the United States on or about June 16, 1941."

Upon the filing of these affidavits the libelant-appellee moved for a final decree based upon the stipulation of settlement. Proctors for the former owner and for the two minor claimants consented, but the proctor for the United States did not.

After hearing, the court below, rejecting the arguments offered on behalf of the United States, entered a decree ordering payment to the libelant from the fund in accordance with the stipulation but subject to license under the Trading With the Enemy Act, as amended, 50 U.S.C.A.Appendix, § 1 et seq., and Executive Order 8389, as amended, 12 U.S.C.A. § 95 note, and applicable rules and regulations. Thereupon the United States, whose representative describes it "as stakeholder or trustee of the Fund," took this appeal to us.

We pass the difficult and novel question of the right of the United States to appeal in this case because on reason and authority we think the decree of the court below should clearly be affirmed.

The fundamental question presented is whether the libelant's claim should be paid out of the fund now or not until after hostilities have ceased and free communication with Denmark and other enemy occupied countries is again possible. This, in the view most favorable to the government, is a question addressed to the sound discretion of the court below. For the purpose of this decision we shall so treat it, although counsel for the appellee argues with some force that present payment is mandatory under the wording of the Act.

The proctor for the United States takes the position that the court below abused its discretion in ordering present payment out of the fund to the libelant, and he asks us to reverse and remand with direction to stay any distribution of the fund or any adjudication with respect to rights in it until it can be definitely ascertained, first, whether the former owner is still represented by the proctors who purport to appear for it in this litigation, and, second, whether anyone in Denmark, or any other occupied country, held a ship's mortgage or other lien on the vessel at the time when it was condemned and taken.

His argument for delay rests upon the proposition that we ought to take judicial notice of the fact that at present free intercourse between residents of this country and residents of Denmark and the other occupied countries is physically impossible. We do so without the slightest hesitation. Watts, Watts & Co. v. Unione Austriaca, etc., 248 U.S. 9, 22, 39 S.Ct. 1, 63 L.Ed. 100, 3 A.L.R. 323.

Then he makes two points. First, admitting as a general proposition that there is a presumption that proctors are authorized to act for the clients they purport to represent and that the burden of proving the contrary rests upon the one who challenges their authority, he says that this presumption ought not to be relied upon in time of war and that no decree should be entered against the fund until there can be some "real showing" of the authority of proctors for the shipowner to enter into the stipulation for settlement upon which the decree in the case at bar is based. His second point is that even though the settlement of the libelant's claim was in fact authorized, still distribution of the fund should be postponed until other possible claimants against it who are now in enemy or enemy occupied countries have had a reasonable opportunity to appear and submit their claims. There is no evidence that there are such claimants, but it is asserted that there may be persons in the occupied countries who have claims of equal or superior rank to the libelant's; that there is at present no way to give such persons, if they exist, the notice of these proceedings or the opportunity for them to act upon it if received...