United States v. Seaboard Surety Company

• Decision Date: 17 December 1956
• Docket Number: No. 7295,7296.,7295
• Citation: 239 F.2d 667
• Parties: UNITED STATES of America, Appellant, v. SEABOARD SURETY COMPANY, Appellee. NATIONAL SURETY CORPORATION, Appellant, v. UNITED STATES of America, Appellee.
• Court: U.S. Court of Appeals — Fourth Circuit

239 F.2d 667 (1956)

UNITED STATES of America, Appellant, v. SEABOARD SURETY COMPANY, Appellee.

NATIONAL SURETY CORPORATION, Appellant, v. UNITED STATES of America, Appellee.

Nos. 7295, 7296.

United States Court of Appeals Fourth Circuit.

Argued November 12, 1956.

Decided December 17, 1956.

As Amended January 7, 1957.

Lino A. Graglia, Attorney, Department of Justice, Washington, D. C. (George Cochran Doub, Asst. Atty. Gen., Walter E. Black, Jr., U. S. Atty., Baltimore, Md., and Samuel D. Slade, Attorney, Department of Justice, Washington, D. C., on brief), for U. S.

Randall C. Coleman, Jr., Baltimore, Md. (Ober, Williams, Grimes & Stinson, Baltimore, Md., on brief), for Seaboard Surety Co. and National Surety Corp.

Before PARKER, Chief Judge, SOPER, Circuit Judge, and HOFFMAN, District Judge.

HOFFMAN, District Judge.

In three appeals involving actions consolidated by agreement the United States of America (hereinafter referred to as the Government) asks that the judgment of the District Court of Maryland exonerating the Seaboard Surety Company (hereinafter referred to as Seaboard) be reversed, and National Surety Corporation (hereinafter referred to as National) seeks a reversal of the District Court in upholding the actions of the District Director of the Immigration and Naturalization Service in imposing fines of $500.00 against the local agents for certain vessels hereinafter mentioned. Seaboard is involved in one case and National is concerned with two cases, the essential facts being the same in all three cases except that in the National cases there is no question as to whether or not the employment of the alien crewmen was terminated. The opinion of the Court below is reported in 140 F.Supp. 876.

Section 256 of the Immigration and Nationality Act of 1952, 66 Stat. 223, 8 U.S.C.A. § 1286, provides:

"It shall be unlawful for any person, including the owner, agent, consignee, charterer, master, or commanding officer of any vessel or aircraft, to pay off or discharge any alien crewman, except an alien lawfully admitted for permanent residence, employed on board a vessel or aircraft arriving in the United States without first having obtained the consent of the Attorney General. If it shall appear to the satisfaction of the Attorney General that any alien crewman has been paid off or discharged in the United States in violation of the provisions of this section, such owner, agent, consignee, charterer, master, commanding officer, or other person, shall pay to the collector of customs of the customs district in which the violation occurred the sum of $1,000 for each such violation. No vessel or aircraft shall be granted clearance pending the determination of the question of liability to the payment of such sums, or while such sums remain unpaid, except that clearance may be granted prior to the determination of such question upon the deposit of an amount sufficient to cover such sums, or of a bond approved by the collector of customs with sufficient surety to secure the payment thereof. Such fine may, in the discretion of the Attorney General, be mitigated to not less than $500 for each violation, upon such terms as he shall think proper."

The particular questions presented to us on these appeals are as follows:

(1) Whether Section 256 of the Immigration and Nationality Act of 1952, prohibiting the "pay off or discharge" of alien seamen in American ports without the consent of the Attorney General, prohibits the paying of an alien seaman\'s wages in full although his contractual employment under the ship\'s articles is not terminated, and

(2) Whether the fine imposed under Section 256 is in the nature of an in rem liability of the vessel assessable against any one of the persons responsible for the vessel and named in Section 256, regardless of which of them actually performed the physical act of paying off or discharging, or whether the fine is assessable in personam only and thus only the liability of the person performing the physical act as aforesaid.

In the Seaboard case, the S.S. Lamyra, of Panamanian registry, arrived at Baltimore on January 21, 1953, with an alien seaman named Bouboulinis as a member of her crew. After inspecting the crew an Immigration Inspector issued to Bouboulinis a form generally referred to as a D-1 landing permit, permitting the seaman to land but requiring him to depart with the next sailing of the vessel. As the crewman desired to terminate his employment aboard the vessel, the Master, being willing to comply with the seaman's request, made application to the Immigration Service to change the alien's landing permit from D-1 to D-2 which, if granted, would have unquestionably permitted the pay off and would have allowed the alien to ship foreign on a different vessel from the one to which he was then attached. The Master's application was refused by Immigration. Thereafter, on January 23, 1953, and in accordance with the Panamanian law providing that earned wages are to be paid to crewmen in ports of discharge, the Master paid Bouboulinis all of his earned wages. As the vessel discharged cargo at Baltimore, it is conceded that the Master complied with the Panamanian law even though the seaman's articles of employment would not have expired for approximately six months. It was on January 26, 1953, that the seaman personally appeared at the Immigration office in Baltimore to again request a change in his landing status and again the request was refused but, during the course of conversation, it was ascertained that Bouboulinis had been paid all of his earned wages. Thereupon Immigration Service revoked the alien's D-1 landing permit, caused him to be placed aboard the vessel, and the ship sailed with Bouboulinis aboard on January 27, 1953. The following day Terminal Shipping Company, local agent for the vessel, was served with a notice of intention to impose a fine in the sum of $1000.00 for the alleged violation of Section 256 of the Act in paying Bouboulinis the entire amount of his earned wages without the consent of the Attorney General. In due time a bond in the sum of $1,000.00 was executed by Terminal Shipping Company as principal and Seaboard as surety, which said bond was on a prescribed form and filed with the Collector of Customs. Subsequently the District Director of the Immigration and Naturalization Service imposed a fine of $500.00 against Terminal Shipping Company, allowing the maximum mitigation of $500.00 as provided by law. The Board of Immigration Appeals declined to disturb the ruling of the District Director and, when the agent and surety refused to pay the fine, the Government instituted this action.

Substantially the same pattern was followed in the two cases involving National. One concerned a vessel of Greek registry in which the alien seaman was granted a D-1 landing permit upon the vessel's arrival at Baltimore on January 1, 1953. The seaman reported ill to the Master and on January 3, 1953, was sent to the United States Public Health Service Hospital where he was advised to return two days later for an operation. Upon reporting these facts to the Master and expressing a desire to be hospitalized in Greece, the Master "paid off" the seaman without the consent of the Attorney General, and with knowledge of the fact that the seaman intended to go to New York to be repatriated to Greece on another vessel. Being apprehended before he could leave Baltimore, the alien's D-1 landing permit was revoked, a detention notice was served on the Master and local agent, Cottman Company, and the crewman sailed with the vessel. The subsequent notice of intention to fine, posting of bond, imposition of fine, appeal, mitigation, and refusal to pay, all correspond with the Seaboard case and need not be repeated.

The distinguishing features of the third case present a vessel of Canadian registry in which the seaman was granted a D-1 landing permit and thereafter was taken before the British Consul in Baltimore, where the seaman was "paid off and discharged" by the Consul to permit the seaman to take his annual leave. The permission to discharge the crewman was not obtained from the Attorney General. The local agent, Penn-Maryland Steamship Corporation, was served with notice of intention to fine, the bond was posted, the fine imposed allowing maximum mitigation, the appeal dismissed, and thereafter followed a refusal to pay.

The District Court correctly construed the term "pay off" as words of art which, from accepted practice in the shipping industry, carry with it a clear indication that a seaman receive his wages upon termination of his employment under either the articles or his service on board the particular vessel. Termination of the employment by the affirmative act of either the employer or employee is a necessary element to the imposition of any fine under Section 256 of the Immigration and Nationality Act. Such was the construction of the term in the original decision of the Board of Immigration Appeals in the Seaboard case, but a later opinion interpreting the regulations promulgated by the Immigration and Naturalization Service (8. C.F.R. 256) treats as separate elements the words "pay off" and "discharge".

The Government urges that a fully paid seaman is more likely to desert his vessel than one to whom wages are still due. The fallacy of this argument is revealed in an examination of the statutes of the United States pointing out that a seaman on either foreign or domestic vessels must, upon demand, be paid by the Master to the extent of one-half of the balance of his earned wages remaining unpaid at every port in the United States where the vessel, after the voyage has been commenced, shall load or deliver cargo before the voyage is ended. Section 31 of the LaFollette Seaman's Act of 1920, 41 Stat. 1006, 46 U.S.C.A. § 597. The statute goes further and provides that if a Master fails to comply with the seaman's demand, the seaman is...