Petition — M. W. Zack Metal Co. v. International Navigation Corp. of Monrovia

Supreme Court brief1975

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MICHAE!

CHA

IN THE stot

Supreme Court of the Aniied

Tee eee eee

OCTOBER TERM, 1974

M.W. ZACK METAL COMPANY,

Petitioner,

INTERNATIONAL NAVIGATION CORPORATION

OF MONROVIA,

Respondent.

WRIT FOR SUMMARY REVERSAL OR FOR CERTIORARI

TO UNITED STATES COURT OF APPEALS,

FOURTH CIRCUIT

ROBERT W. CAULDWELL

ANTHONY B. CATALDO

Attorneys for Petitioner

111 Broadway

New York, N.Y. 10006

(212) 962-0965

———ee OE

Dick Balliey Printers ©P.C. Box X, Staten isiand, N.Y. 10302 * Tel. (212) 447-5358

TABLE OF CONTENTS

Page

Ns 65 wis S44 04 COE EA EERE OOORRKEE ES CORE 1

nn... 0G ae eebe eee eae a eka eke es eee -

Ce. cls ee ee ke aeebanedaneas 2

Constitution and Statutory Provisions Involved ........ 3

IS 5g occ nv okays 44s0knsarass es 8

Reasons for Granting Summary Reversal ............. 12

Reasons for Granting Writ of Certiorari .............. 23

CR oe ci atccuccs wasn ase eaeenias 25

Is os occa ees ieee ee ae ete seer 29

IG a 06s kh ieee sc hakerniaeeke 33

as ca adnan Kees ee cae 37

Appendix D — (Not printed original filed) ...........

I is vere hes bess cen eh deen deka beeeeawe 61

IN on 05 b5 hance eaves nenteesnheevaseiel 62

eee rer rT errr oe a ee ed eee 66

Page

CONSTITUTION, STATUTORY AND RULES

PROVISIONS, AUTHORITIES, AND CASES

Constitution

Article III, Section 2, Clause] .....:......0000 cece 3

Re Te Dei FCG no cc caweucdéikeceas 3

Amendment V tothe Constitution ................. 3

United States Code

I FO oo or RN te a alae dee 4

I tae ie eee 4

I ar eats tu neem 3

FB Sings EERE a gl ap SSO 4

Rules of Federal Civil Procedure

ae a rs ae a ree er ee rs 23

DT 2c. t vse nee euae cubed coos ce oles eeE eet 5,21

i a ete ae eet aaa 9

| a er ree ree 6,15

RR re ree er re rer ae rd meer 6,15

SE Gea hae lhee oc scar ceed aneeeeseeuancaees 7,19

Supplemental Rules for Certain Admiralty and

Maritime Claims

a er ere ee rr 4,15

i Lan vedas wane hE sae Cia hee Cea a eek es 5

EE ced ee Che CaS SED OREN NSD NSE R OSes ee 5

AUTHORITIES

Gilmore & Black, 2nd ed., The Law of Admiralty, 186

REEDE eae eos eae Cee ee ee 14

RA AE basinacdasc Coe sedeenawawecnees 24

Moore's Federal Practice, Vol. 6. OE ae ee ca a oe 18

DG Visakdnseees 19

iil

Page

Restatement of the Laws, 2nd ed., Conflict of Laws,

at fame ah spa ale Ei Prin ht AA eee om eae rae 13

CASES CITED

Archawskiv. Hanioti, 350 U.S. 532 .............. 21,23

Banco Continental v. Curtis National Bank of Miami

Springs, (5S CA. 1969) 406 F. (2) 510 ............ 22

Barker Co. v. Painters Union, 281 U.S. 462 ......... 20

Benton v. Maryland, 395 U.S. 784, 788 ............. 20

Bournuais v. Atlantic Maritime, Ltd., 220 F. (2) 153 ... 18

GA OG Pe IS OE nic cnc ccceveuseescds 22

Doremus v. Board of Education, 342 U.S. 429, 434,

ESERIES ass Py ment re Reem lors aR Bey es 20

Duke Power Co. v. Greenwood County, 299 U.S. 259,

Pe er ne ee a ee 19

Dupont v. Vance, 19 How. 162. 171-172 «2.2... 0.2... 21

Field vy. So. Atlantic S.S. Lines, 201 Fed. 301, 305 .... 18

First National Bank of Arizona, etc., v. Cities Service

i at Ne wane ea ek eee hERS 18

es Oe e's bce deen 22

Gans S.S. Lines v. Wilhelmsen, 275 Fed. 254, 262 .... 18

Page

piiten v. Gayot, (F0'U.S. T4S .s iis csccusceses an 18,24

Kennedy v. Silas Mason Co., 334 U.S. 249, 257 ...... 18

LSet V. SASSO Fnt.. FID Us TOO scewdaeedeneweaeean 20

Louis Cook Plumbing & Heating Inc., v. Frank Briscoe

Co., (10 C.A. 1971) 445 F.(2) 1177 ............. 21

Maty v. Grasselli Chemical Co., 303 U.S. 197 ....... 22

Mike Bradford Co. v. F.A. Chartain Const. Inc., (5

C.A. 1909) SB7 F.C SER bs vc nv ecuscdeneee 21

New Jersey Steam Navigation Co. v. Merchant's Bank,

47 U.S. (6 How) 344, 420-422 ................. 24

Ore S.S. Co. v. a/s Hassel, (2 C.A. 1943) 137 F.(2) 3260.21

Otis v. Rio Grande, Fed. Cas. 10, 613 (ce La. 1872),

atf'd 90 U.S. (25 Wall) 458, 23 L.ed. 158 (1875) ... 24

Patterson v. Alabama. 294 U.S. 600, 607

Penhallow v. Doane, 3 U.S. (3 Dall) 54, 1 L. ed. 507

(1795)

U.S. GOS nc ceceseeeuenucee eee 18

Sartor v. Arkansas Natural Gus Corp., 321 U.S.620 .. 17

SEC v. Medical Committee for Human Rights, 404

UES re 19

Pe ee

ow Mien hae rete bide er

CC ewer et nO cian al MEOW a te

)

Page

The Adeline, 9 Cranch 244, 3 L.ed. 719 ......66-55- 21,22

The Alert. 61 Fed. 113 ....... cc cece cece ee eeeceees 13

The Gazelle. 128 U.S. 474, 489 2... 6c eens 21

The Maggie Hammond v. Morland, 76 U.S. (9 Wall)

evens ceeceseseocvocecccess 15

The Marianna Flora, 11 Wheat 1,6 L.ed. 405 ......-. 21

The Resolute. 168 U.S. 437 2.0.0.6. eee eee ees 15

The Roanoke, 189 U.S. 185 2.0.0.6 6c ees 13

The W. Talbot Dodge, 15 F.(2) 459) «0. ee eee eee 24

United States v. International Mines etc., 190 F.(2) 865 ™

Warner v. Buffalo Dry Dock Co., (2 C.A. 1933) 67 F.

sa casssceveeere 7 > 13

Pe tat Meat

IN [HE SUPREME COURT OF THE UNITED STATES

OCTOBER TERM 1974

—

M.W. ZACK METAL COMPANY,

Petitioner.

INTERNATIONAL NAVIGATION CORPORATION

OF MONROVIA,

Respondent.

TO THE HONORABLE THE CHIEF JUSTICE AND

ASSOCIATE JUSTICES OF THE UNITED STATES

SUPREME COURT.

ee ee ee ee a

lhe Petition of M.W. Zack Metal Company seeking a

writ of certiorari to review the judgment of the United

States Court of Appeals for the Fourth Circuit, affirming

the dismissal of petitioner's complaint or for a summary

reversal of the same, respectfully shows:

OPINIONS BELOW

The decision of the Court of Appeals modifying its

decision of affirmance upon motion for re-hearing, but

again affirming the order of dismissal of the complaint by

the District Court is reported at S10 F. (2) 451. See ap-

pendix ‘A’. The first decision of the same Court of Ap-

peals affirming the order of the District Court is not of-

ficially reported: but is appendix ‘*B"’. The decision of the

| District Court dismissing the complaint is not officially

reported; it is appendix ““C"’. The Petition for re-hearing en

banc or by the panel, is appendix “‘D’’. It is not printed but

it is filed separately as an original part of the record.

JURISDICTION

The judgment of the Court of Appeals was entered on

March 10, 1975, after a timely motion for a re-hearing was

tiled from its decision of January 16, 1975 affirming the

District Court's order of dismissal of the complaint. This

court has jurisdiction under 28 U.S.C.A. 1254(1).

QUESTIONS PRESENTED

Petitioner having filed in the District Court its complaint

in admiralty alleging a traditional cause of action for cargo

damage to its cargo of steel coils, and that a German court

had adjudged the defendant liable for such damage, and

on motion to quash the service of process in Admiralty, the

district court dismissed the complaint, and on appeal, the

Court of Appeals affirmed, but only on the ground (not

decided by the District Court) that the German judgment

was an in rem judgment and it could not support a claim

against defendant in personam, and, almost

simultaneously with said decision of affirmance, the

German Court of Appeals had dismissed the suit against

defendant because of a time-bar provision as stated in the

German Civili Code and petitioner timely sought a re-

hearing in the Court of Appeals below to vacate its order of

affirmance as moot and to permit the cause of action for

cargo damage to proceed:

1. Whether the Court of Appeals erroneously violated

any Constitutional rights of the petitioner, when it failed to

acknowledge that the issue before it was no longer whether

this suit was to enforce a German Court judgment when the

Aan it BAA A wees

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dismissal of the suit against defendant in Germany was

communicated to it, while it still had jurisdiction over the

suit, but was one based upon the original cause of action

for cargo damage.

2. Whether the refusal of the courts below to

acknowledge that our Admiralty Courts have jurisdiction to

enforce a judyment of a foreign court in a case normally of

Admiralty and Maritime jurisdiction, should occasion this

court's use of its powers to settle that issue in favor of

jurisdiction.

CONSTITUTION AND STATUTORY

PROVISIONS INVOLVED

Article 111, Section 2, Cl. 1: The Judicial Power shall

extend to all Cases in Law and Equity, arising under this

Constitution, the Laws of the United States, and Treaties

made, or which shall be made, under their authority;— to

all cases affecting Ambassadors, other Ministers and

Consuls—to all cases of admiralty and maritime jurisidc-

tion; * * * to Controversies * * *—between citizens of

ditferent States;—* * *.

Article 1V. Section 2, Cl. 1: The citizens of each State

shall be entitled to all Privileges and Immunities of Citizens

in the Several States.

Amendment V to the Constitution: No person shall be

deprived of life, liberty, or property, without due process of

law © ¢ S,

United States Code Provisions

28 U.S.C.A. 1333: Admiralty, Maritime and Prize cases.

The district courts shall have original jurisdiction exclusive

of the courts of the states of:

(1) Any civil case of admiralty or maritime jurisdiction,

saving to all suitors in all cases all other remedies to

which they are otherwise entitled * * *.

28 U.S.C.A. 1254: Court of Appeal; certiorari; appeal;

certified questions;

Cases in the Court of Appeals may be reviewed by the

Supreme Court by the following methods:

(1) By writ of certiorari granted upon the petition of any

party to any civil or criminal case before or after rendition

of judgment or decree; * * *.

28 U.S.C.A. 1291: The courts of appeal shail have

jurisdiction of appeals from all final decisions of the district

courts of the United States, * * *,

28 U.S.C.A. 2106: Determination. The Supreme Court

or any other court of appellate jurisdiction may affirm,

modify, vacate, set aside or reverse any judgment, decree,

or order of a court lawfully brought before it for review,

and may remand the cause and direct the entry of such

appropriate judgment, decree, or order or require such

further proceedings to be had as may be just under the

circumstances.

The Following Rules of the Supplemental Rules

For Certain Admiralty and Maritime Claims:

Rule B. Attachment and Garnishment: Special Provisions

(1) When available; Complaint, Affidavit, and Process.

With respect to any admiralty or maritime claim in per-

sonam a verified complaint may contain a prayer for

process to attach the defendant's goods and chattels, or

credits and effects in the hands of garnishees named in the

complaint to the amount sued for, if the defendant shall

not be found within the district. Such a complaint shall be

PN RES BS RE «WR oe: dO trate

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accompanied by an affidavit signed by the plaintiff or his

attorney that. to the affiant’s knowledge, or to the best of

his information and belief, the defendant cannot be found

within the district. When a verified complaint is supported

by such an affidavit the clerk shail forthwith issue a

summons and process of attachment and gar-

nishment. * * *

(3) Answer. * * *

(b) By Defendant. The defendant shall serve his answer

within 30 days after process has been executed, whether by

attachment of property or service on the garnishee.

Rule C. Actions in Rem: Special Provisions. * * * (b) * * *

Except as otherwise provided by law a party who may

proceed in rem may also, or in the alternative, proceed in

personam against any person who may be liable.

Rule E. * * * 2; Complaint; Security.

(a) Complaint. In actions to which this rule is applicable

the complaint should state the circumstances from which

the claim arises with such particularity that the defendant

or claimant will be able, without moving for a more definite

statement, to commence an investigation of the facts and

to frame a responsive pleading.

Federal Rules of Civil Procedure

Rule 8. General Rules of Pleading. * * *

(e) Pleadings to be Concise and Direct; Consistency.

(1) Each averment of a pleading shall be simple, concise

and direct. No technical forms of pleadings or motions are

required. * * *

(f) Construction of Pleadings. All pleadings shall be so

construed as to do substantial justice.

Rule 12. Defenses and Objections—* * *

(b) How Presented. Every defense, in law or fact, to a

claim for relief in any pleading, whether a claim, coun-

terclaim, cross-claim, or third-party ciaim, shall be

asserted in the responsive pleading thereto if one is

required, except that the following defenses may at the

option of the pleader be made by motion: (1) lack of

jurisdiction over the subject matter, (2) lack of jurisdiction

over the person, (3) improper venue, (4) insufficiency of

process, (5) insufficiency of service of process, (6) failure to

state a claim upon which relief can be granted, (7) failure

to join a party under Rule 19. * * * If, on amotion asserting

the defense numbered (6) to dismiss for failure of the

pleading to state a claim upon which relief can be granted,

matters outside the pleading are presented to and not

excluded by the court, the motion shall be treated as one

for summary judgment and disposed of as provided in Rule

56, and all parties shall be given reasonable opportunity to

present all material made pertinent to such a motion by

Rule 56.

** * *

(g) Consolidation of Defenses in Motion. * * *

If a party makes a motion under this rule but omits

therefrom any defense or objection then available to him

which this rule permits to be raised by motion, he shall not

thereafter make a motion based on the defense or objection

so omitted, except a motion as provided in subdivision

(h)(2) hereof on any of the grounds there stated.

Rule 15. Amended and Supplemental Pleadings.

(a) Amendments. A party may amend his pleading once as

a matter of course at any time before a responsive pleading

is served or, * * *

e ae ee

detense asserted in the amended pleading arose out of the

conduct, transaction or occurrence set forth or attempted

to be set forth in the original pleading, the amendment

relates back to the date of the original pleading.

(d) Supplemental Pleadings. Upon motion of a party the

court may, upon reasonable notice and upon such terms as

are just, permit him to serve a supplemental pleading

setting forth transactions or occurrences or events which

have happened since the date of the pleading sought to be

supplemented. * * *.

Rule 56. Summary Judgment.

* * %

served at least 10 days before the time fixed for the hearing.

* * * The judgment sought shall be rendered forthwith if

the pleadings, depositions, answers to interrogatories, and

admissions on file, together with the affidavits, if any, show

that there is no genuine issue as to any material fact and

that the moving party is entitled to a judgment as a matter

of law.

* KK

(ft) When affidavits are unavailable. Should it appear from

the affidavits of a party opposing the motion that he cannot

for reasons stated present by affidavit facts essential to

justify his opposition, the court may refuse the application

for judgment or may order a continuance to permit af-

fidavits to be obtained or depositions to be taken or

discovery to be had or may make such order as is just.

* * *

STATEMENT OF THE CASE

In January 1960, plaintiff caused a cargo of 93 coils of

steel to be placed on board defendant's vessel, Severn

River, to be transported from Antwerp, the port of loading,

to New York, its destination, under a clean bill of lading

signed by the master. Upon arrival the steel coils were

discharged heavily damaged in transit. Plaintiff duly filed

libels in Admiralty against the issuers of the bill of lading,

Contam Linie, and the ship, in the district courts of New

Jersey and of the Eastern and Southern Districts of New

York preparing to seize the vessel and obtain jurisdiction in

Admiralty. Before expiration of time to sue, as extended, a

suit was commenced by German counsel retained by

plaintiff against the Contam Linie and its partners and the

vessel owner, International, in the German Court in

Hamburg in May 1961. It became known at this time that

Contam Linie were the charterers of the carrying vessel.

The first judgment was rendered therein in 1966 but

against the charterers only, decision respecting the owner's

liability being deferred. In June and December 1971,

decisions were made by the same court holding defendant

liable as owner of the vessel but limiting the collection of

the judgment to an execution upon the Severn River which

the court said was then sailing the seas. In truth, plaintiff

learned afterwards, that the Severn River was totally

wrecked several years before the judgment. All parties took

appeals trom said judgments. The charterers provided

security and plaintiff agreed to stay execution against

them. The owner did not file any security pending its

appeal and plaintiff never agreed to stay execution against

it but sought to enforce the judgment.

When in 1972 another vessel of the defendant, the

Virtus, was scheduled to arrive at Norfolk, Virginia,

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plaintiff caused this suit to be filed in the district court at

Norfolk in admiralty making the usual allegation that the

suit was an admiralty and maritime claim within the

meaning of Ruie %h) of the Federal Rules of Civil

Procedure, intending thereby to invoke the admiralty

jurisdiction of the district court and becoming entitled to

all of the remedies available to a suitor in our Admiralty

courts, the most important being obtaining security by the

attachment of the vessel.

The complaint alleged the aforesaid facts of a cargo

damage claim, viz; the shipment at Antwerp in good order

and condition for delivery to New York under a bill of

ladirg signed by the master, and delivery at destination in

damaged condition. Also the German judgment was

alleged as awarding plaintiff a sum of approximately

$150,000.

Meantime, defendant by notice returnable April 17,

1972 moved to quash service of the summons and process

of attachment. This motion was not decided but a stay of

all proceedings was directed for six months pending

decision of the German Appeal Court. On February 9,

1973, at plaintiff's request to the court either that it extend

the six month period without prejudice to plaintiff or direct

deiendant to file its answer, the district court entered an

order directing plaintiff to file a brief discussing the finality

and scope of the judgment and the jurisdiction of the ad-

miralty court to proceed. Such a brief was filed June 7,

1973, and the court set the matter down for argument for

October 19, 1973. On October 15, 1973 defendant served

an alleged amended motion returnable October 19, 1973,

adding to its motion to quash and to vacate the at-

tachment, a request to dismiss the complaint. Plaintiff

immediately tiled objection to such a motion, filed ad-

ditional opposition papers but requested additional time or

a hearing at which proof of the proceedings had in the trial

court in Germany could be adduced to prove the validity of

plaintiff's contention that the judgment was an in per-

sonam judgment against the defendant.

The district court by decision dated March 4, 1974

dismissed the complaint, on various grounds, one of which

was that admiralty did not have jurisdiction to enforce a

judgment of a court of a foreign nation even if it decided a

case of maritime jurisdiction because the cause of action

would be merged within the judgment and an action on a

judgment is an actior on a debt enforcible only on the civil

side.

The Court of Appeals ignoring the reasons of the district

court for dismissal, affirmed on the sole ground that it

found the German judgment to be an in rem judgment and

not an in personam judgment against the defendant. It also

stated that plaintiff could not declare upon the original

cargo claim because that was outlawed under Cogsa and

that a substantial question was raised about the en-

forceability of the foreign judgment in Admiralty. The

Court of Appeals decision is dated January 16, 1975. On

January 9, 1975, the German court of appeals had

dismissed the suit there as against this defendnat by ap-

plying the German Commercial! Code which it said had

outlawed the action as against this defendant. Thus the

question of whether the German trial court’s judgment was

in personam or in rem was rendered moot. Whether

plaintiff could proceed on the balance of its complaint

became the issue. As the dismissal of its suit in Germany

was not on the merits—res judicata could not apply.

Petitioner timely moved the Court of Appeals for a

rehearing, en banc or by the panel, to vacate its decision of

January 16, 1975S, as contrary to law for it decided the fact

»¥

——

ot whether the judgment to be enforced was an in rem or an

in personam judgment despite the proof by plaintiff that it

was an in personam judgment. Also petitioner advised the

Court of Appeals of the dismissal of the action against the

owner making the question decided by the court below

moot. Plaintiff requested that it be permitted to proceed on

the original cause of action for cargo damage. Also plaintiff

requested that the court eliminate from its decision the

finding that such a cause of action was outlawed because

the fact was that the running of the time-bar had been

tolled in 1961 when four libels were timely filed, and that

its declaration of a doubt whether our Admiralty court had

jurisdiction should also be stricken. The Court of Appeals,

by its decision of March 10, 1975, modified its decision of

January 16, 1975 by omitting the references to the time-bar

and to the possible lack of Admiralty jurisdiction, but

affirmed again, restating that plaintiff had declared on the

judgment that that judgment was an in rem judgment and

could not support an action in personam. It paved the way

for plaintiff to commence another action on the original

cargo damage claim by expressly stating that it had not

passed upon the merits of such a claim. By its silence, it

refused to recognize that it had decided an issue which was

moot or that petitioner was entitled to proceed on the cargo

damage suit or to amend or supplement its complaint.

It is plain from the foregoing statement of the case, that

petitioner was deprived of its Constitutional right to the

remedies available in our Admiralty courts when it sought

to invoke that jurisdiction to vindicate its claim for damage

to its cargo of steel and also that the Court below exceeded

its jurisdiction in deciding an issue that was moot.

REASONS FOR GRANTING SUMMARY REVERSAL

Upon the face of the decision of the Court of Appeals

under review, that decision plainly decides the issue of fact

as to whether the judgment of the German trial court is an

in rem or in personam judgment against this defendant

despite the petitioner's report to that court that the Ger-

man appeal court had reversed the judgment which

reversal rendered the issue decided entirely moot. Not only

was the decision a determination of a moot question but

also it was a determination of a fact issue rather than a

holding that a fact issue was found. Hence, the court

exceeded its jurisdiction as defined in Article 111, Section

2, Clause 1 of our Constitution; and it contravened and

violated the due process clause and the equal protection of

citizens under the laws clause of our Constitution.

The allegations of the complaint and even the allegations

of the petitioner in its affidavits opposing the motion must

be taken as true. They recite a meritorious cause of action.

The complaint is attached as Appendix E, see also p. A3-

AS of Appendix below. It alleges the delivery of a cargo of

steel to defendant's vessel in good order and condition at

Antwerp and the re uelivery of the same at New York in

damaged condition. The carriage was performed under a

bill of lading of Contam Linie but signed by the master of

the vessel, the Severn River. Under the bill of lading,

Contam Linie acknowledged that the goods were received

on board the Severn River. Hence, both Contam Linie and

the vessel owner are carriers and their duties with relation

to the goods are defined under Cogsa. In the suit in

Germany, the trial court held both charterer and owner

liable. The damages demanded were $79,000. The trial

court had allowed a lesser amount. On the appeal that

followed the German court of appeals dismissed the suit as

against the owner and turther reduced the recovery against

the charterer. The dismissal was a time-bar spelled out

trom the operation of the German Commercial Code.

Hence, the dismissal is not on the merits and that judgment

is not res judicata to a suit on the original cause of action

against the owner; see p. 10 of Petition for re-hearing,

appendix D, citing Warner v. Buffalo Dry Dock Co., (2

C.A., 1933) 67 F. (2) 540; and Vol 1, Restatement, 2nd,

Conflict of Laws, Sec. 110. See also, Bournais v. Atlantic

Maritime Co. Ltd., 220 F. (2) 152.

The German appeal court reduced the recovery against

the charterer by applying the $500. per package limitation

of Cogsa to its liability as the charterer. The amount

allowed is $33,000. Yet, there were 93 coils in the whole

shipment and two carriers, and the total damage was over

$79,000. Interest dates from 1960. That court also said that

the owner was liable for ship-board damage but it did not

say how much of the total was shipboard damage. As it is,

petitioner, even if paid by the charterer, will not have a full

recovery and it has a valid claim against this defendant in

admiralty for the difference. Several questions of the

construction of the provisions of Cogsa that have never

before been decided are involved.

Consequently, the merits of petitioner's cause against

this defendant as owner of the Severn River have not been

determined against petitioner.

The owner is liable in personam, separately and in

addition to the charterer, for the damage to petitioner's

steel because the vill of lading was signed by the ‘‘master’’;

see Gans S.S. Lines v. Wilhelmsen, 275 F. 254 at 262; The

Roanoke, 189 U.S. 185, 195; Field v. So. Atlantic S.S.

Lines, 201 Fed. 301, 305; and The Alert, 61 Fed. 113. See

also Gilmore & Black, The Law of Admiralty, 2nd ed., pp.

209 and 217. At the same time the carrying vessel, was

subject to a maritime lien.

This suit was in personam against the owner. The

complaint states the elements of the original cargo damage

claim and the fact of the judgment in favor of petitioner in

the German trial court. Now that that judgment has been

reversed, the complaint still alleges the elements of the

original cargo damage suit. Consequently, determining

that the judgment of the trial court was an in rem judgment

so as to dismiss the action, the Court of Appeals exceeded

its jurisdiction in refusing petitioner’s application for

permission to proceed on its original cause of action. The

court of appeals closed the doors of the admiralty court to

this suit. Both actions are violative of rights which are

guaranteed to petitioner by the Constitution. Depriving

petitioner of the right to proceed with this suit will require

it to pay a bill of costs of several thousand dollars, the loss

of its security, and the expense of re-starting a new suit

against this same defendant, which was difficult enough in

1961 so as to compel petitioner to proceed in Germany

where jurisdiction was finally had. Why isn’t this suit

sufficient to bring the matter to trial?

Furthermore, the decision of the court of appeals

conflicts with decisions of this court, with the established

procedures in Admiralty, and with the Rules 8(e) and 15 of

the Federal Rules of Civil Procedure respecting the suf-

ficiency of pleadings and the allowances of amendments

and supplemental allegations of fact occurring after the

commencement of the action.

Furthermore, it sanctioned and condoned an irregular

proceeding resulting in a decision on the merits against

petitioner, dismissing its complaint without a trial, without

proper notice and sufficient specifications of grounds for

the dismissal found by the courts below, and even without

detendant ever filing its pleading. All this is in con-

travention to Rules 12 and 56 recited above.

Detendant had started out to quash the service of ad-

mirality process but it never pressed that ground. It

abandoned it and both courts accepted the fact that the

service was good and that there was proper in personam

jurisdiction as provided by Rule B of the Supplemertal

Rules for Certain Admiralty and Maritime Causes. See

page A48 of the Appendix for a copy of defendant's notice.

The reasons stated in defendant's motion for quashing the

service related to the merits of the action rather than to the

sufficiency of the service of the process used. See The

Resolute, 168 U.S. 437 where this court said at p. 439 that

when the jurisdiction of a cause in admiralty is attacked,

the sole question is whether admiralty has the parties

before it and whether the cause is one cognizable as a case

of admiralty and maritime jurisdiction. All other questions

belong to the merits. See also The Maggie Hammond v.

Morland, 76 U.S. (9 Wall) 435, 457.

The court had only the complaint, and an informal

translation of one part of a three part German judgment

and defendant's notice of motion to quash, before it. Proof

of service of the process had been filed by the Marshal

showing service of process upon the captain of the vessel

and at the same time showing the arrest of the vessel.

Arguments of the motion were had on its return date of

April 17, 1972, the transcription of which appears at p.

ASI et seq. of the same appendix. As stated the hearing

ended with the parties’ stipulation above mentioned.

On January 19, 1973 plaintiff's counsel wrote the district

judge respectfully requesting a trial date or otherwise

proceeding with the litigation. See p. All4, A115. No

answer or renewal of its motion had as yet been served by

defendant though six months had passed. On February 9,

1973 the district judge directed plaintiff to file a brief on

the issue of whether the judgment is final and binding, and

of the jurisdiction of the court to proceed. See A116. On

June 7, 1973 plaintiff served and filed the brief requested,

and, an affidavit by Dr. A. Drobnig, plaintiff's counsel at

Hamburg stating that no stay pending appeal was arranged

by defendant and the judgment was thus enforceable. See

Al17-A129 for the brief. Dr. Drobnig’s affidavit is an

addendum to respondent’s brief and is reproduced here as

Appendix F. The court set the matter down for oral

argument for October 19, 1973. Defendant then served an

amended motion to quash on October 15, 1973 adding a

request for the dismissal of the action on various grounds

stated but in conclusory form with no supporting affidavit

and no proof of the validity of the claims for dismissal save

an affidavit by Dr. Herbert Gienow its German counsel

who discusses German law and answers Dr. Drobnig’s

affidavit. See A137 et seq. for the motion and A133 et seq.

tor Dr. Gienow’s affidavit, which is Appendix G. New York

counsel for petitioner also filed an affidavit objecting to a

consideration on the merits and requesting time to gather

and submit proof of its claims.

These were all the papers before the court. Yet, a

decision on the merits was made. None of the grounds for

dismissal stated by the district court were adopted by the

Court of Appeals and the only ground for dismissal

adopted by the Court of Appeals was that the judgment of

the trial court in Germany could not be enforced in ad-

miralty because it did not make defendant liable in per-

sonam. This was a determination of an issue in dispute.

Dr. Drobnig’s affidavit and Dr. Gienow’s affidavits both

referred to the judgment as one against the defendant to

suffer an execution upon the carrying vessel. The last

paragraph of Dr. Drobnig’s affidavit states that in German

law the defendant will be held liable. The judgment itself

(A29 et seq) convicts the defendant not the vessel. It also

states that the defendant is International Navigation, not

the ship. The judgment states that the vessel was sailing the

seas assuming its existence as a vessel in operation. Also it

fails to show that the court had jurisdiction over the vessel a

prerequisite to a judgment in rem. Petitioner plainly

pleaded these facts in suppori of its claim that the German

court could not validly render a decree in rem as it had no

jurisdiction in rem and that, fraud had been perpetrated by

detendant upon the court by concealing the fact that the

vessel had been destroyed several years before the

judgment; see A145, A147, A155, A156, A601-2. At least,

an issue for trial should have been recognized.

This court clearly distinguished the difference between

liability for a wrong and the damages flowing from such

liability in Sartor v. Arkansas National Gas Corp., 321

U.S. 620. The court of appeals did not make this distinc-

tion but it seems to have confused the liability of the ship

owner to be liable for the wrong complained of with his

liability to have his ship subjected to execution, which is a

remedy available under German law. The German law

would have corrected its decree had it known that the

Severn River was not sailing the seas but had been wrecked

and totally lost several years before. At least, petitioner

should have been permitted to go to trial on the true

meaning of this judgment. In Sartor, this court said at page

268, “It may well be that the weight of the evidence might

be found on trial to be with defendant. But it may not with-

draw these witnesses from cross-examination, the best

method yet devised for testing the trustworthiness of

testimony.”

In Poller v. Columbia Broadcasting Systems Inc., 368

U.S. 464, this court said at p. 467; ‘‘The end of each one

(suits) of them, if courts remain true to their ancient

traditions of justice, is to try each case in a way that permits

truth to triumph."’ This quote is repeated by Mr. Justice

Black at page 306 of First National Bank of Arizona, etc. v.

Cities Service Co., 391 U.S. 253. Also the litany of the

deficiencies existing in that case as to why summary

judgment should not have been granted, apply with greater

force here, because here there are sound reasons for saying

that the failure to follow the Rules of Practice did not

afford but actually deprived the petitioner of a fair op-

portunity to be heard. Also, whether defendant was per-

sonally held liable and whether the limitation of execution

upon the Severn River was a correctible error, were issues

which could not be decided on the state of the Record as it

stood before the Court of Appeals. Besides in Hilton v.

Guyot, 159 U.S. 113, this court said that local remedies are

not binding upon our court in proceedings to enforce a

foreign judgment and that what is enforceable about a

foreign judgment is its conclusion of liability.

Also, 6 Moore's Federal Practice on summary judgment

says at p. 2020 that where it appears that a trial would be

best to arrive at the truth of the contentions, the motion

should be denied. Moore’s cites this court’s decision in

Kennedy v. Silas Mason Co., 334 U.S. 249, where at p. 257

this court remanded the case to the district court to

reconsider and amplify the record because “We consider it

the part of good judicial Administration to withhold

decision of the ultimate questions involved in this case until

this or another record shall present a more solid basis of

findings based on litigation or a comprehensive statement

of agreed facts.”

Here the failure of the facts to support the court's

determination unequivocally is plain. Yet, petitioner had

no notice that a decision was sought such as was given. Nor

was that decision one that naturally follows as a matter of

law trom such facts as were before it, and, anyway

petitioner's request for time and an opportunity to present

facts to establish that the judgment was a_ personal

judgment by introducing the transcript of the court records

and witnesses should have been heeded. This is provided by

subdivision (f) of Rule S56 of the Federal Rules of Civil

Procedure. Moore's says at p. 2300 that where there is no

dispute about the facts but there are about the inferences

that are to be drawn from them the motion should be

denied.

Leaving the foregoing errors aside, a violation of the

Constitutional provisions occurred in the failure of the

Court of Appeals to recognize that the question it decided

was moot while the matter was sub judice. This court said

in Duke Power Co. v. Greenwood County, 299 U.S. 259 at

267: ‘Where it appears upon appeal that the controversy

has become entirely moot, it is the duty of the Appellate

Court to set aside the decree below and to remand the cause

with directions to dismiss. * * * (Cases cited). If it appears

that supervening facts require a retrial in the light of a

changed situation, the appropriate action of the Appellate

Court is to vacate the decree which has been entered and

revest the court below with jurisdiction of the cause to the

end that issues may be properly framed and the retrial had.

See * * *" cases cited. This court vacated all decrees and

remanded the case with directions that the parties be

permitted to amend their pleadings in the light of the

existing facts, and the cause be tried upon the issues

presented.

This court refused to consider the issues presented in

SEC v. Medical Committee for Human Rights, 404 U.S.

—

403 for mootness, saying at p. 407 that:

‘It is well settled that federal courts may act only

in the context of a justiciable case or controversy.”

Benton v. Maryland, 395 U.S. 784, 788 (1969)

‘Our lack of jurisdiction to review moot cases

derives from the requirement of Article 111 of the

Constitution under which the exercise of judicial

power depends upon the existence of a case or

controversy.’ Liner v. Jafco Inc., 375 U.S. 301, 306

n. 3 (1964); ¢c/f Doremus v. Board of Education,

342 U.S. 429, 434 (1952).”

It is respectfully suggested that the Court of Appeal’s

action is inconsistent with these and many other decisions

of this court holding that it, an appellate court, has no

jurisdiction over an issue no longer in controversy between

the parties. Mr. Justice Holmes said in Barker Co. v.

Painter's Union, 281 U.S. 462, “But a court does all that

its duty compels when it confines itself to the controversy

before it.’’ It was said in United States v. International

Mine etc., 190 F. (2) 865 *** * * settled principles of our

jurisprudence forbid United States Courts to decide ab-

stract questions.’ Then the court cited many cases holding.

that courts do not have the power to decide moot questions.

Going beyond its duty under these circumstances is

going beyo ° its jurisdiction. In this case, the Court of

Appeals shoe have recognized the change in the

judgment unde ynsideration and not make a decision

as though it stili -—s in existence. Chief-Justice Hughes

said in Patterson v. Alabama, 294 U.S. 600 at p. 607, that

this court “in the exercise of our appellate jurisdiction we

have power not only to correct error in the judgment under

review but to make such disposition of the case as justice

requires. And in determining what justice does require, the

Court is bound to any change, whether in fact or in law,

which has supervened since the judgment was entered.”

The court of appeals invoked an old rule of election of

remedies to justity its decided views of dismissal. Not only

was that old doctrine not applicable here because the

choice of saying that the action was to enforce the judgment

in a maritime case for cargo damage and of saying that this

was a cargo damage cause are not mutually exclusive, but

that doctrine is no ijonger an applicable doctrine unless just

reason exists to apply it; see, Louis Cook Plumbing &

Heating. Inc., v. Frank Briscoe Co., (10 C.A., 1971), 445

F. (2) 1177; Mike Bradford & Co. v. F.A. Chastain Const.

Inc., (S C.A. 1968), 387 (2) 942, and Ore S.S. Co. v. A/S

Hassel (2 C. A. 1943), 137 F. (2) 326.

Furthermore, in Admirality. pleadings are exceedingly

simple and tree from technical requirements; see Ar-

chawski v. Hanoitit, 350 U.S. 532, 534, citing Dupont v.

Vance. 19 How. 162, 171-172; The Adeline, 9 Cranch 244,

3 L.ed. 719, The Gazelle, 128 U.S. 474, 487; and The

Marianna Flora, 11 Wheat 1, 6 L. ed. 4085. In the

Marianna Flora, Mr. Justice Storey said at p. 38: “It is the

common usage and admitted doctrine of such courts,

(Admiralty) to permit the parties, upon the appeal, to

introduce new allegations * * *. It has been the constant

habit ©. the circuit courts to allow amendments of this

nature in cases where public justice, and the substantial

merits, required them; and this practice has not only been

incidentally sanctioned in this court; but on various oc-

casions in the exercise of its own final appellate jurisdic-

tion, it has remanded causes to the Circuit Court, with

directions to allow new counts to be filed.’ The 1966 rules

of this court did not change the forms of pleadings in

admiralty. Largely, Rule 8(e) of the Federal Rules codifies

the rule of pleadings in Admiralty. There is no requirement

for doing what the Court of Appeals has done here, viz;

oe)

refuse to allow this action to proceed in Admiralty upon the

old pleading which is sufficient as a cargo damage claim or

upon a supplemental pleading incorporating — the

allegations of the dismissal by the German court without

reaching the merits of the cause. However, anticipating a

defense ought not to be required. It was expressly stated in

the Adeline at p. 284, ““When merits clearly appear on the

record, it is the settled practice, in admiralty proceedings,

not to dismiss the libel, but to allow the party to assert his

claim in a new allegation. This practice is consonant with

equity and sound principles and has been deliberately

adopted by this court on former occasions.”

Even in law cases, the rule that pleadings are not

required to tollow forms but are simply required to allege

facts upon which relief may be granted was affirmed by this

court in Conley v. Gibson, 355 U.S. 41, and in Foman v.

Davis, 361 U.S. 178. This court in Foman quoted from p.

48 of Conley v. Gibson, the tollowing: ‘The Federal Rules

reject the approach that pleading is a game of skill in which

one misstep by counsel may be decisive to the outcome and

accept the principle that the purpose of pleading is to

facilitate a proper decision on the merits. c/f Maty v.

Grasselli Chemical Co., 303 U.S. 197.” Finally the ad-

monition of Ainsworth J., in Banco Continental v. Curtis

Nattonal Bank of Miami Springs, (5 C.A., 1969), 406 F. (2)

510 should be considered. He said at p. 514: ‘ta motion to

dismiss for failure to state a claim should not be granted

unless it appears to a certainty that the plaintiff would be

entitled to no relief under any statement of facts which

could be proved in support of his claim * * *."’

The claim here has merits entitling petitioner to proceed

as is its constitutional right to do. It is respectfully sub-

mitted that in the exercise of this court’s own appellate

jurisdiction it could grant the continuance of this action

upon the original cause of action. In any event, the decision

of the Court of Appeals is plainly erroneous and it should

be summarily reversed and the case remanded for trial

according to the rules and practices of the Admiralty court.

The merits ot petitioner's cause have not been but ought

to be judicially determined, to secure the just, speedy, and

inexpensive determination, which is stipulated in Rule | of

the Federal Rules of Civil Procedure.

REASONS FOR GRANTING WRIT OF CERTIORARI

If this court does not agree that summary reversal is in

order, then a tuller exposition upon an appeal ought to

convince this court that the violation of the Constitutional

rights of the petitioner properly invokes the jurisdiction of

this court, to review the decision below. There are im-

portant questions of Admiralty practice that may have

become diffused and confused with principles of civil

practice, resulting, very probably, from the promulgation

of the new rules for admiralty and maritime causes in 1966.

This court might well take this opportunity to impress the

admiralty bar that the jurisdiction of our federal courts has

not been whittled away by the changes in the new Rules of

practice. For example, both the district court and the

Court of Appeals in this case were imbued with the idea

that there was no jurisdiction in Admiralty to enforce a

foreign court's judgment on a cargo damage claim. Their

theory was the civil court theory that a merger of the

original cause of action into the judgment occurs, leaving

an ordinary action on a debt to be enforced. Logical, but

not quite correct. The judgment is nonetheless on a

maritime matter and a debt of a maritime nature is

cognizable in Admiralty. See, Archawski v. Hanciti, 350

U.S. 532. Also, the underlying reason for invoking

jurisdiction in Admiralty is whether the transaction is one

dealing in Maritime matters. A determination of a con-

troversy Over a maritime matter is necessarily a ‘“‘case of

admiralty and maritime jurisdiction.” c/f. New Jersey

Steam Navigation Co. v. Merchants Bank, 47 U.S. (6

How.) 344, 420-422. Gilmore & Black, in their second

edition of the Law of Admiralty, in Chapter 1 on

Jurisdiction, assert the fond hope that this court will

someday decree that matters maritime will all be brought

within the jurisdiction of an Admiralty court as the court

essential to that industry; see p. 29-31. Finding excuses for

denying jurisdiction over a maritime dispute just because it

has been converted into a decision or judgment would be

reverting to the old strife between the common law courts

and the courts of admiralty, a situation which has been

eschewed these many years by our admiralty practice.

Reading the decisions of the two courts below would or

should show to this court how judges sitting in admiralty

might deviate from well settled doctrines of admiralty

practice and start a new mixture of rules. Yet, uniformity

has always been a desirable end in Admiralty. This case

could be a first step in keeping deviations from forming

and growing. Petitioner had cited below, Penhallow vy.

Doane, 3 U.S. (3 Dall.) 54, 1 L. ed. 507, (1795) and Otis v.

The Rio Grande, Fed. Cas. 10, 613 (cc. La. 1872) aff'd 90

U.S. (25 Wall) 458, 23 L. ed. 158 (1875), which clearly held

that decrees in admiralty of other courts could be enforced

in the admiralty side of our federal courts. Also, petitioner

cited Hilton v. Guyot, (1895), 159 U.S. 113, and The W.

Talbot Dodge, 15 F. (2) 459 (SDNY 1956) where our

admiralty court assumed jurisdiction over a decree of

another admiralty court. Neither of the courts below were

impressed. They seemed to be impressed, rather. with the

new, the doing away with old forms in admiralty which to

them was doing away with the general maritime law if it

conflicted with their notions of the more familiar civil law.

WHEREFORE, petitioner prays that this court either

reverses summiarily the order of the Court of Appeals or

grants a writ of certiorari to review it.

Respecttully submitted,

ROBERT W. CAULDWELL

ANTHONY B. CATALDO

Attorneys for Petitioner

Appendix

APPENDIX A

DECISION AND ORDER

UNITED STATES COURT OF APPEALS

FOR THE FOURTH CIRCUIT

APPEALED FROM

No. 74-1544

M. W. ZACK METAL COMPANY

Appellant

INTERNATIONAL NAVIGATION CORPORATION

Appellee

Appeal from the United States District Court for

the Eastern District of Virginia, at Norfolk.

Richard B. Kellam, Judge.

Argued December 5, 1974 Decided March 10, 1975

Before HAYNSWORTH, Chief Judge, BUTZNER.

Circuit Judge, and THOMSEN, Senior District Judge.

Anthony B. Cataldo (Jett, Berkley, Furr and Heilig on

brief) tor Appellant; John W. Winston (Seawell, McCoy,

Winston and Dalton on brief) for Appellee.

Upon consideration of the Petition for Rehearing, it is

now ORDERED:

(1) that the opinion be modified to confotm to the copy

attached to this Order, and

(2) that the Petition be and it hereby is denied.

With the concurrences of Judges Haynsworth and Butz-

ner.

s/Roszel C. Thomsen

Roszel R. Thomsen

Senior U.S. District Judge

March 10, 1975.

THOMSEN, Senior District Judge

M. W. Zack Metal Company (Zack) appeals from an

order of the district court dismissing an action filed therein

by Zack against International Navigation Corporation, a

Liberian corporation (International). Zack had designated

its action as an admiralty and maritime claim within the

meaning of Rule 9(h), F. R. Civ. P., and caused the vessel

Virtus, owned by International, to be attached.

International chartered its vessel Severn River to Contam

Linie Hansen (the charterer), a German partnership, for a

voyage in 1960 from Antwerp, Belgium, to New York. The

charterer solicited cargo to be transported on board the

Severn River and issued its bills of lading for such cargo

signed by the vessel's master. Zack shipped with the

charterer 93 coils of hot-rolled steel, for which a clean bill

of lading was issued, but which were found to be damaged

when they were discharged in New Sork.

In 1961 Zack instituted a suit in a court in Hamburg,

Germany, where the charterer resided, against the

charterer, the individual partners of the charterer, and

International. In 1966 that court found the charterer and

its partners liable for the damage to Zack’s steel and en-

tered a money judgment for the full amount of the damage

in favor of Zack against the charterer and its partners.

Zack's claim against International was postponed for later

decision.

In 1971 the German court rendered a further decision

holding, according to the agreed translation, that “‘per-

sonal liability of the ship’s owner does not exist’, but that

the ‘‘claims because of cargo damages are secured through

a ship’s creditor's right, even if — as in the present case —

the carrier is not at the same time the ship’s owner’’. The

court entered a judgment that International ‘‘is convicted

to submit to execution being levied on the S. S. Severn

River’ of US $64,018.83, plus interest and part of Zack's

expenses. The affidavits of German lawyers submitted by

Zack and International respectively, as well as the agreed

translation of the judgment itself, show that the judgment

was essentially a judgment in rem against the Severn River.

All of the parties, including Zack, appealed to a higher

German court, which under the German practice may take

additional testimony and review both the facts and the law.

In early 1972 Zack learned that another vessel owned by

International, the Virtus, was to arrive at Norfolk.

Although the appellate proceedings in Germany were and

are still pending, Zack commenced the present suit against

International in the Eastern District of Virginia, and

caused an attachment to be issued against the Virtus.

International appeared specially and moved to quash the

attachment and dismiss the suit. The Virtus was released

after International agreed to post security. After two

hearings, the district court dismissed the suit, with a full

opinion.

Zack has declared on the German judgment, which

furnishes no basis for an in personam claim against the

owner or for the attachment gf the Virtus.

The judgment of the trial court in Hamburg is under

review on appeal. It may be that the appellate court will

impose some other liability upon the owner, but it is plain

that the trial court limited the owner's liability to its in-

terest in the Severn River. Essentially and substantively, it

is an in rem judgment against the Severn River, imposing

no in personam liability upon its owner, and furnishing no

basis for the assertion of an in personam liability of the

owner or the attachment of any other vessel owned by

International. The attachment, of course, may not be

based upon the speculative possibility that the reviewing

court in Germany may give Zack greater rights against the

owner than the trial court did.

The German judgment did not justify the suit in the

Eastern District of Virginia or the attachment of the

Virtus. The decision of the district judge dismissing that

suit will be affirmed.

We have treated the cause of action as being founded

solely on the German judgent. Nothing we have done or

said should be construed as intimating any opinion upon

any cause of action Zack may have against any person, firm

or corporation, including International, under the Carriage

of Goods by Sea Act, 40 U.S.C. 1300 et seq.

Affirmed.

APPENDIX B

DECISION AND ORDER OF

UNITED STATES COURT OF APPEALS

FOR THE FOURTH CIRCUIT

DATED JANUARY 16, 1975

(SAME TITLE)

Appeal from the United States District Court for

the Eastern District of Virginia, at Norfolk.

Richard B. Kellam, Rudge.

Argued December 5, 1974 Decided January 16, 1975

Betore HAYNSWORTH, Chief Judge, BUTZNER, Circuit

Judge, and THOMSEN, Senior District Judge.

Anthony B. Cataldo (Jett, Berkley, Furr and Heilig on

brief) tor Appellant; John W. Winston (Seawell, McCoy,

Winston and Dalton on brief) for Appellee.

THOMSEN, Senior District Judge

M. W. Zack Metal Company (Zack) appeals from an

order of the district court dismissing an action filed therein

by Zack against International Navigation Corporation, a

Liberian corporation (International). Zack had designated

its action as an admiralty and maritime claim within the

meaning of Rule 9(h), F. R. Civ. P., and caused the vessel

Virtus, owned by International, to be attached.

International chartered its vessel Severn River to Contam

Linie Hansen (the charterer), a German partnership, for a

voyage in 1960 from Antwerp, Belgium, to New York. The

charterer solicited cargo to be transported on board the

Severn River and issued its bills of lading for such cargo

signed by the vessel's master. Zack shipped with the

charteter 93 coils of hot-rolled steel, for which a clean bill

of lading was issued, but which were found to be damaged

when they were discharged in New York.

In 1961 Zack instituted a suit in a court in Hamburg,

Germany, where the charterer resided, against the

charterer, the individual partners of the charterer, and

International. In 1966 that court found the charterer and

its partners liable for the damage to Zack’s steel and en-

tered a money judgment for the full amount of the damage

in favor of Zack against the charterer and its partners.

Zack’s claim against International was postponed for later

decision.

In 1971 the German court rendered a further decision

holding, according to the agreed translation, that ‘‘per-

sonal liability of the ship’s owner does not exist’, but that

the “claims because of cargo damages are secured through

a ship's creditor's right, even if — as in the present case —

the carrier is not at the same time the ship’s owner”. The

court entered a judgment that International “is convicted

to submit to execution being levied on the S.S. Severn

River’ of US$64,018.83, plus interest and part of Zack’s

expenses. The affidavits of German lawyers submitted by

Zack and International respectively, as well as the agreed

translation of the judgment itself, show that the judgment

was essentially a judgment in rem against the Severn River.

All of the parties, including Zack, appealed to a higher

German court, which under the German practice may take

additional testimony and review both the facts and the law.

In early 1972 Zack learned that another vessel owned by

International, the Virtus, was to arrive at Norfolk.

Although the appellate proceedings in Germany were and

are still pending, Zack commenced the present suit against

International in the Eastern District of Virginia, and

caused an attachment to be issued against the Virtus.

International appeared specially and moved to quash the

attachment and dismiss the suit. The Virtus was released

after International agreed to post security. After two

hearings, the district court dismissed the suit, with a full

opinion.

Zack has declared on the German judgment (indeed, it

could not have declared on the original maritime claim for

damaged cargo because of COGSA’s statute of

limitations.! There is thus a substantial question whether

the initial maritime claim has been merged in the German

judgment and the present action is a civil action on a debt,

without the jurisdiction of Admiralty.2 We need not decide

the jurisdictional question, however, for even if there were

jurisdiction in Admiralty, the German judgment) which

furnishes no basis for an in personam claim against the

owner or for the attachment of the Virtus.

The judgment of the trial court in Hamburg is under

review on appeal. It may be that the appellate court will

impose some other liability upon the owner, but it is plain

that the trial court limited the owner's liability to its in-

terest in the Severn River. Essentially and substantively, it

is an in rem judgment against the Severn.River, imposing

no in personam liability upon its owner. (Since Zack may

1. 46 USC §1303(6) (1970).

2. Cf. Restatement Judgments §47: Restatement. Second, Judgments

Tentative Draft No. | March 28, 1973, §47. The restatement rule is based

upon cases influenced by the full faith and credit clause of the Constitution,

not applicable here.

not now declare upon the original maritime claim and the

only cause of action it may presently assert is subject to the

substantive limitations of the unreviewed judgment of the

German trial court, there is), and furnishing no basis for

the assertion of an in personam liability of the owner or the

attachment of any other vessel owned by International. The

attachment, of course, may not be based upon the

speculative possibility that the reviewing court in Germany

may give Zack greater rights against the owner than the

trial court did.

The German judgment did not justify the suit in the

Eastern District of Virginia or the attachment of the

Virtus. The decision of the district judge dismissing that

suit will be Affirmed.

APPENDIX C

DECISION OF DISTRICT COURT

OPINION AND ORDER OF MARCH 4, 1974

On April 14, 1972, M. W. Zack Metal Company Zack)

filed in this Court a complaint against International

Navigation Corporation (International) asserting a claim

for $150,000.00 tor cargo damage, declaring it was ‘‘A case

of admiralty and maritime jurisdiction” and within the

meaning of Rule 9h) of the Federal Rules of Civil

Procedure. It asserts that defendant was the owner of the

Steamship SEVERN RIVER and employed the master and

crew; that in January 1960, there was shipped from Ant-

werp, Belgium, on board the SS SEVERN RIVER, a cargo

of hot rolled steel, loaded aboard in good order and for

which the masier issued a bill of lading; that when the steel

was discharged at New York it was damaged; and that

plaintiff, the owner of the cargo and bill of lading, was

damaged as aforesaid. Further, plaintiff alleges that in

1961 it filed an action ‘‘against the defendant, its vessel and

the charterer of said vessel in the District Court of Ham-

burg, Germany;"’ that after lengthy litigation, several

judgments were rendered in plaintiff's favor, the last

judgment being rendered December 7, 1971, whicu with

interest approximates $150,000.00, which has not been

paid. Plaintiff prays judgment against defendant and

requests process of attachment against defendant's vessel,

the steamship VIRTUS, which is or will be in this

jurisdiction. The SS VIRTUS was attached by the Marshal

on April 17, 1972, and copy of the summons was served on

the captain. The Marshal appointed Tidewater Port

Service as custodian.

Defendant appeared specially and moved to dismiss the

attachment and the action, and to quash service of process.

At a hearing on the motion, it was agreed there was

pending in the courts of Germany a civil action against the

vessel SEVERN RIVER, its time-charterer and defendant,

owner of the SEVERN RIVER; that plaintiff had oLtained

a judgment against SEVERN RIVER and its time-

charterer, and that judgment had been rendered for owner

defendant. )

In order to have the vessel released, defendant agreed to

post a bond for $150,000.00, with surety, to stand in the

stead of the VIRTUS, to answer the judgment of this Court

or any appellate court rendered in this suit against the

named defendant.

Defendant asserts the judgment of the German Court is

not against this defendant; that admiralty does not have

jurisdiction of this cause of action; that the judgment of the

German Court limits recovery from this defendant to the

ship SEVERN RIVER; that the judgment of the German

Court is not to be amended, changed or modified; that the

German judgment is res judicata and plaintiff is estopped

from maintaining this action; plaintiff's claim is barred by

the statute of limitations; and this Court ought not to

accept jurisdiction because the judgment of the German

Court is on appeal.

Counsel argued the matter orally and filed briefs. With

argument and briefs they have filed a copy of the German

judgment and some of the pleadings from the German

Court. Although there is dispute as to many of the facts

and the effect of the German Court judgment, the

following facts seem to be substantiated by the record as

agreed upon.

1. Zack instituted suit in the proper court of

Hamburg, Germany, against the Ship SEVERN

RIVER, its charterers, and its owner.

2. The German Court had jurisdiction of the

parties and the subject matter.

3. The German Court denied Zack the right to

recover a personal judgment against International

Navigation Corporation, but it awarded a

judgment against the charterers and the right to

enforce said judgment against the SEVERN

RIVER.

4. The basis of the cause of action filed in

Germany was damage to a cargo of steel which the

charterers of SEVERN RIVER agreed to transport

from Belgium to New York; that Zack became the

owner of the bill of lading and cargo; that the

damage was instituted by Zack in the German

Court in 1961.

5. That the German judgment provided that

International should suffer the distraint of the SS

SEVERN RIVER for the claim of $64,018.83, plus

5% interest from February 10, 1960, resulting

from the judgment of June 15, 1971, and that the

further claims of Zack against International were

dismissed.

6. That all findings by the German Court are on

appeal.

7. That Zack was entitled to seek enforcement of

its judgment against the SEVERN RIVER if it first

deposited security in the amount of 180,000

German Marks.

8. That Zack has not deposited the security

called for in 7 above. If and when deposited, the

pending appeal in the German Court would not

prevent attempts to enforce collection against the

SEVERN RIVER. .

9. That the SEVERN RIVER sunk prior to June

15, 1971, the date of the judgment mentioned in 5

above.

In argument, plaintiff asserts that at the time of entry of

the judgment in June 1971, the SEVERN RIVER

previously sunk and that such constitutes a fraud on the

Court. But, as will be hereafter shown, there is no

allegation of fraud, nor is it asserted the Court was not

aware of that fact.

Further, Zack says that is is not bound by the German

judgment; that since the original cause of action was one in

admiralty, that when action is brought to enforce a

judgment obtained in that action, the cause of action is not

changed, but remains one in admiralty; that Zack is not

bound by the judgment, but may institute suit on the

original claim; and that it may have this Court correct any

errors in the German proceedings.

It is readily apparent that several interesting issues have

been raisec and presented to the Court for determination.

(a)

| Does a court of admiralty have jurisdiction of an action

instituted to enforce a judgment obtained in another court.

and soevereign, on an admiralty claim? That is. is the

original cause of action merged into the judgment, or is the

action to enforce the judgment based on the original cause

of action?

Here the original cause of action arose in early 1960.

Zack sought to enforce its claim for damages in a German

court and voluntarily submitted its cause of action to that

court. It sought and obtained a judgment with which it is

not now content.

If plaintiff's action is upon the original cause of action,

namely, damage to cargo, the cause of action arose in 1960,

and applying the statute of limitations provided in 46

U.S.C. Section 1303(6), it would be barred in one year

following date of delivery.

(b)

But, it seems apparent the action here instituted is an

action to enforce the German judgment, and the admiralty

or maritime cause of action merged into the judgment. It is

simply an obligation to pay money or respond in the nature

of a debt upon a specialty. The debt and the right of

recovery is limited to the terms of the judgment, as is

hereafter shown. In any event, the admiralty cause of

action was merged in the judgment, and it seems a court of

admiralty is not the proper jurisdiction within which to

enforce the judgment. In an action on a debt, process may

not be served by attaching the ship as was done here. Since

there has been no proper service of process upon defendant

and the judgment is not a personal debt of International, it

may not be enforced against the VIRTUS. Without proper

service of process to give jurisdiction, the action may not be

transferred to the civil side of the Court.

Admiralty jurisdiction is limited. In Grant Smith-Porter

Co. v. Rohde, 257 U.S. 469, 476 (1922), the jurisdiction of

admiralty was thusly described:

The general doctrine that in contract matters

admiralty jurisdiction depends upon the nature of

the transaction and in tort matters upon the

locality, has been so frequently asserted by this

Court that it must now be treated as settled.

(Citations omitted)

See also Executive Jet Aviation v. City of Cleveland, 409

U.S. 249, 253-254 (1972), and Onley v. South Carolina

Electric, F.2d—— (4th Cir. decided December 7,

1943).

A cause of action on a judgment is different from that

upon which the judgment was entered. A judgment is an

obligation to pay money in the nature of a debt upon a

specialty, or a demand for the delivery of property or to

perform some act. An action upon the judgment is upon a

different cause of action from that merged into the

judgment. It is a security of record showing a debt due

from one person to another. Hence, upon recovery of a

judgment, the original cause of action merges in the

judgment.

Zack instituted action in a court having jurisdiction of

the parties and the subject matter and having obtained

judgment, its cause of action for cargo damage was merged

into the judgment. Titus v. Wallick, 306 U.S. 282, 291

(1939); Milwaukee County v. White Company, 296 U.S.

268, 275 (1935); Provident Savings Society v. Ford, 114

U.S. 635, 641 (1885); Gaines v. Miller, 111 U.S. 395, 399

(1884); Schuler v. Israel, 120 U.S. 506, 509 (1887); United

States v. Leffler, 11 Pet. 86, 9 L.Ed. 642: Biddle vy.

Wilkins, 1 Pet. 686, 7 L.Ed. 315.!

Ii]

Is Zack prohibited from maintaining this action by the

doctrine of res judicata or estoppel by judgment?2

1. For language from the cited cases see Appendix A.

2. Defendant readily admits that action may be maintained for en-

forcement of a judgment obtained in another court, but an action on the

original cause of action is foreclosed. And in any action to enforce a foreign

judgment, enforcement must be in accordance with the judgment.

The issue of res judicata or estoppel by judgment may be

raised in a motion to dismiss. Thomas v. Consolidation

Coal Co., 380 F.2d 69, 75 (4th Cir. 1967), and cases there

cited. See also Southard v. Southard, 305 F.2d 730 (2d Cir.

1962); The Connelly Foundation v. School District, etc..

326 F. Supp. 241 (E.D. Pa. 1971); 348 Bloomfield Ave.

Corp. v. Montclair Mfg. Co., 90 F.Supp. 1020 (D.C. N.J.

1950); Cruz-Sanchet v. Robinson, 136 F. Supp. 52 (S.D.

Cal. 1956), aff'd. 249 F.2d 771 (9th Cir. 1957). Likewise

these issues may be raised on motion for summary

judgment. Smith v. United States, 369 F.2d 49 (8th Cir.

1957), cert. denied 386 U.S. 1010; Hadden v. United

States, 105 F. Supp. 1010, Ct. Cl. 1952; United States v.

State of Alaxka, 197 F.Supp. 834 (D.C. Alaska 1961):

Hodges v. Trail Creek Irr. Co., 154 F.Supp. 837 (D.C.

Idaho 1957); Daley v. Sears, Roebuck & Co., 9 F. Supp.

S62 (N.D. Ohio 1950); Sopp v. Gehriein, 236 F. Supp. 823

(W.D. Pa. 1964).

And, the issues may be raised by answer, Williams v.

Murdock, 330 F.2d 745 (3d Cir. 1964).

(a)

Res judicata is a doctrine of judicial origin, and applies

to repetitious suits involving the same cause of action. It

grew out of a consideration of economy of judicial time and

public policy favoring the establishment of certainty in

legal matters. The generally accepted rule is that when a

court of competent jurisdiction has entered a final

judgment on the merits of a cause of action, the parties to

the suit and their privies are forever bound not only as to

every matter which was offered and received to sustain or

deteat the claim or demand, but as to any other admissible

matter which might have been offered for that purpose. A

judgment in such a cause puts an end to the cause of ac-

tion, and it may not again be brought into litigation bet-

ween the parties upon any ground whatever, absent fraud

or some other factor invalidating the judgment. Com-

missioner v. Sunnen, 333 U.S. 591, 597 (1948): Tait v.

Western Md. Ry. Co., 289 U.S. 620, 623 (1933); Partmar

Corp. v. Paramount Corp., 347 U.S. 89, 91 (1954);

Thomas v. Consolidation Coal Co., 380 F.2d 69, 77 (4th

Cir. 1967); Bartsch v. Washington Metropolitan Area

Transit, 357 F.2d 923, 924 (4th Cir. 1966); Pan American

Match, Inc. v. Sears, 454 F.2d 871, 875 (1st Cir. 1972);

Wasoff v. American Automobile Insurance Co., 451 F.2d

767, 769 (Sth Cir. 1971). “Once a party has fought out a

matter in litigation with the other party, he cannot later

renew that duel. In this sense, res judicata is usually and

more accurately referred to as estoppel by judgment, or

collateral estoppel.’’ Commissioner v. Sunnen, supra [333

U.S. 598]. Where the judgment or decree is upon the same

cause of action “it is an absolute bar to the subsequent

action or suit betwveen the same parties or those in privity

with them, not only in respect of every matter which was

actually offered and received to sustain the demand, but

also as to every ground of recovery which might have been

presented.”’ Baltimore S.S. Co. v. Phillips, 274 U.S. 316,

319 (1927). In the last cited case, the Court pointed out

that the tendency of its decisions was to require ‘‘a plaintiff

to try his whole cause of action and his whole case at one

time; that he “‘cannot even split up his claim” and he

“cannot divide the grounds of recovery.”’ Id. 274 U.S. 320.

The last referred to principle was restated in Mine Workers

v. Gibbs, 383 U.S. 715, 723 (1966).

A tact, question or right adjudged in the original action

cannot be disputed in a subsequent action, even though the

determination was reached upon an erroneous view or by

an erroneous application of the law. Partmar Corp. v.

Paramount Corp., supra [347 U.S. 103]; Emich Motor

Corp. v. General Motors Corp., 340 U.S. 558, 569; United

States v. Moser, 266 U.S. 236, 242; Angel v. Bullington,

330 U.S. 183, 187 (1947); Baltimore S.S. Co. v. Phillips,

274 U.S. 316, 325; Thomas v. Consolidation Coal Co..

supra [380 F.2d 77].

In Angel v. Bullington, supra, at page 190, the Court

said a party may not “begin all over again in an action

involving the same issues before another forum.” In that

case it was suggested that the trial court did not adjudicate

the merits of the controversy. Dealing with this, the Court

said that it was ‘‘a misconception of res judicata to assume

that the doctrine does not come into operation if a court

has not passed on the ‘merits’ in the sense of the ultimate

substantive issues of a litigation. An adjudication declining

to reach such ultimate substantive issues may bar a second

attempt to each them in another court . . . * 330 U.S. 190.

In the Angel case, it was asserted a federal right was in-

volved and the state court was without authority to ad-

judicate such a right. There the court said at page 187:

That the adjudication of federal questions by the

North Carolina Supreme Court may have been

erroneous is immaterial for purposes of res

judicata. [330 U.S. 187}.

(b)

Where a claim arises in a subsequent action between the

same parties upon the same claim or demand, a judgment

on the merits is an absolute bar to the subsequent action. If

the suit is upon a different claim or demand, then the

a ee

inguiry turns to whether the point or question to be

determined in the second action is the same as that

litigated and determined in the original action. Tait v.

Western Md. Ry. Co., Supra [289 U.S. 623].

If the second action between the same parties is upon a

different cause or demand, the principle of res judicata is

applied more narrowly. ‘In this situation, the judgment in

the prior action operates as an estoppel” as to all matters

litigated. Commissioner v. Sunnen, supra [333 U.S. $98].

Simply by declaring that the second proceeding is on a

different “cause of action” the litigant may not escape the

binding effect of res judicata or estoppel by judgment. This

was put at rest by the decision of Baltimore S.S. Co. v.

Phillips, supra {274 U.S. 321|, and reaffirmed numerous

times thereafter, particularly made clear in Hurn vy.

Oursler, 289 U.S. 238, and in Mine Workers v. Gibbs,

supra, at 383 U.S. 723, where it quoted the following from

the Hurn opinion:

“Upon principle, it is perfectly plain that the

respondent [a seaman suing for an injury sustained

while working aboard ship] suffered but one ac-

tionable wrong and was entitled to but one

recovery, whether his injury was due to one of the

other of several distinct acts of alleged negligence

or to a combination of some or all of them. In

either view, there would be but a single wrongful

invasion of a single primary right of the plaintiff,

namely, the right of bodily safety, whether the acts

constituting such invasion were one or many,

simple or complex.

‘A cause of action does not consist of facts, but

of the unlawful violation of a right which the facts

Show. The number and variety of the facts alleged

————— — —————

do not establish more than one cause of action so

long as their result, whether they be considered

severally or in combination, is the violation of but

one right by a single legal wrong. The mere

multiplication of grounds of negligence alleged as

causing the same injury does not result in

multiplying the causes of action. ‘The facts are

merely the means, and not the end. They do not

constitute the cause of action, but they show its

existence by making the wrong appear.’”

A party “seeking to enforce a claim, legal or equitable,

must present to the Court, either by the pleadings or

proofs, or both, all the grounds upon which he expects a

judgment in his favor.’’ Baltimore S.S. Co. v. Phillips.

supra, at 320. He may not prosecute his claim piecemeal,

or present only a portion of the grounds in the first action

and reserve the others for a second suit if he fail in the first

one.

“A judgment merely voidable because based upon an

erroneous view of the law is not open tou collateral attack,

but can be corrected only by a direct review and not by

bringing another action upon the same cause.”’ Bultimore

S.S. Co. v. Phillips, supra [274 U.S. 316, 325]. See also

Angel v. Bullington, supra.

Plaintiff was free to pursue his remedy in the German

courts or in the courts of this Country. He elected to

proceed in the German courts. He made the choice, and is

now bound by that choice.

The Court pointed out in Magnolia Petroleum Co. vy.

Hunt, 320 U.S. 430, 443-444 (1943), that plaintiff's injury

or damages did not give rise to two causes of action merely

because recovery in Germany “‘is under a different statute,

or because each affords a different measure of recovery.”

The grounds of recovery are the same—the damage to the

goods. Plaintiff ‘‘was free to pursue his remedy in either

state (country) but, having chosen to seek it in Texas

(Germany), where the award was res judicata . . . (the law)

precludes him from again seeking a remedy in Louisiana

(United States) upon the same grounds."’ Magnolia

Petroleum Co. v. Hunt, supra. Magnolia further pointed

out that merely because one state authorizes compensation

not permitted in the other, “‘and in a different measure”

does not authorize the maintenance of the second action.

The mere fact that the decision is Magnolia, and others,

was grounded in the ‘‘full faith and credit’ clause of the

Constitution is of no moment. The Court pointed out in

Heiser v. Woodruff, 327 U.S. 726, 733 (1946) that “Before

Erie R. Co. vy. Tompkins it was recognized by this court

that, apart from the full faith and credit clause, a judgment

duly rendered in one court will be recognized as res

judicata in a suit between the same parties in a federal

court.’ (Citations omitted). Further, in Heiser, at page

733, the Court said:

But we are aware of no principle of law or equity

which sanctions the rejection by a federal court of

the salutary principle of res judicata, which is

founded upon the generally recognized public

policy that there must be some end to litigation and

that when one appears in court to present his case,

is fully heard, and the contested issue is decided

against him, he may not later renew the litigation

in another court. Baldwin v. Traveling Men's

Assn., 283 U.S. 522, 525-6.

In Ashe v. Swenson, 397 U.S. 436, 443 (1970), the Court

said:

“Coilateral estoppel” is an awkward phrase, but it

stands tor an extremely important principle in our

adversary system of justice. It means simply that

when an issue of ultimate fact has once been

determined by a valid and final judgment, that

issue Cannot again be litigated between the same

parties in any future lawsuit.

It does not matter that one cause of action was an in

personam and the other was an in rem action. Continental

Grain Co. v. Barge FBL-585, 364 U.S. 19 (1960); Simon v.

The M/V HIALEAH, 431 F.2d 867, 868 (Sth Cir. 1970),

and cases there cited.

It is clear Zack submitted its cause of action to the

German Court for determination. That Court exercised

jurisdiction. It rendered judgment, which is now on appeal.

Having selected that jurisdiction and that Court having

taken jurisdiction of the parties and the subject matter,

Zack may not now institute an action in this Court on the

same cause of action. Even if Zack was not prevented from

so doing by the doctrine of res judicata or estoppel by

judgment, it would be prevented under the doctrine that

when one court accepts jurisdiction, the plaintiff may not,

while that action is pending, compel the defendant to

defend itself in another court on the same cause of action.

While much of the law on the subject deals with actions

pending in courts of the various states of the United States,

and where an attempt is made to prosecute the same cause

of action in the federal courts or courts of another state, on

reasoning when a plaintiff has submitted its cause of action

to the courts of one sovereign and then seeks to prosecute

the same action in the courts of another sovereign, plaintiff

should be estopped from so doing.

This principle was dealt with in the early case of Jn Ke

Chetwood, 165 U.S. 443, at 459 (1897). The Court there

had tor consideration an action instituted by stockholders

of a defunct bank against directors and officers, after the

appointed receiver had refused to institute the action. Later

the successor of the receiver sought to institute the same

cause of action in another court. The Court said:

The suit was properly brought in the state court,

proceeded to judgment and was carried to the

Supreme Court of California on appeal. These

courts undeniably had jurisdiction over the suit

and the parties.

* * *

The doctrine is firmly established that where the

jurisdiction of a court, and the right of a plaintiff

to prosecute his suit in it, have once attached, that

right cannot be arrested or taken away by

proceedings in another court... .

Again, In Re Johnson, 167 U.S. 120 (1897), at page 125,

the Court stated:

Ever since the case of Ableman v. Booth, 21 How.

S06, it has been the settled doctrine of this court

that a court having possession of a person or

property cannot be deprived of the right to deal

with such person or property until its jurisdiction is

exhausted, and that no other court has the right to

interfere with such custody or possession.

(Citations omitted)

it may be stated that as a general cule the court which

first acquires jurisdiction should be permitted to proceed

without hindrance or interference from another court. The

court ‘‘whose jurisdiction first attached, retains jurisdiction

over this matter to the exclusion of all other courts

. . until its duty has been fully performed."’ Wilson v.

Schnettler, 365 U.S. 381, 385 (1961). Wilson cited

Harkrader v. Walder, 172 U.S. 148 (1898), where at 164 it

said:

When a state court and a court of the United States

may each take jurisdiction of a matter, the tribunal

where jurisdiction first attaches holds it, to the

exclusion of the other, until its duty is fully per-

formed and the jurisdiction involved is exhausted;

and this rule applies alike in both civil and

criminal cases. (Citations omitted)

Wilson also cited Peck v. Jenness, 7 How. 612, 624-5, 17

Dec. of Supreme Court, Curtis 320-327, and set out in the

footnote numbered 4 on page 384, the language of that

opinion, i.e.—

“It is a doctrine of law too long established to

require a citation of authorities, that . . . where

the jurisdiction of a court, and the right of a

plaintiff to prosecute his suit in it, have once at-

tached, that right cannot be arrested or taken away

by proceedings in another court. These rules have

their foundation, not merely in comity, but on

necessity. For if one may enjoin, the other may

retort by injunction, and thus the parties be

without remedy; being liable to a process for

contempt in one, if they dare to proceed in the

other."’ Peck v. Jenness, supra, at 624-615.

The principle that the tribunal which first gets

jurisdiction of the matter holds it to the exclusion of the

other, applying in both civil and criminal cases, was set out

in Lynch v. Snepp, 472 F.2d 869, 772 (4th Cir. 1973).

In Ryan v. Seaboard and Roanoke Railroad Company.

et al, 89 Fed. Rep. 397 (Circuit Court, E.D. Va. 1898),

defendant sought to have the action dismissed because

there was a suit pending between the same parties on the

Same subject matter in a federal court in Maryland. At

page 408, the Court said:

When a court has assumed jurisdiction of a

subject, all other courts should refrain from in-

terference. In no other way can be prevented

unseemly conflict between courts.

Hence, it is clear that this Court ought not to accept

jurisdiction of a cause of action pending in another court.

A defendant ought not be required to defend a single cause

of action in two jurisdictions.

The mere fact this Court may have jurisdiction does not

require it to exercise it. United Mine Workers v. Gibbs,

383 U.S. 715, 725 (1966); Ratliff v. Cooper Laboratories,

Inc., 444 F.2d 745 (4th Cir. 1971); Webb v. Bladen, et al.

F.2d—— (4th Cir. 1973).

Is a judgment of a court of admiralty of Germany, which

has jurisdiction of the parties and of the subject matter,

when sought to be enforced in the courts of the United

States, conclusive, or only prima facie evidence of what it

purports to be?

It seems to be established by the great weight of

authority in this Country that a foreign judgment of a court

of admiralty having jurisdiction of the parties and the

subject matter is entitled to conclusive effect and binding

on all parties, sometimes described as conclusive against all

the world. Ritchie v. McMullen. 159 U.S. 235 (1895);

_ Hilton v. Guyot, 159 U.S. 113 (1895); Flota Maritima

Browning v. Motor Vessel Cuidad, 218 F. Supp. 928, 942

(D.C. Md. 1963), aff'd. on another issue, 335 F.2d 619 (4th

Cir.); The Chiquita, Hartwig v. United States, 19 F.2d 417

(Sth Cir. 1927); Williams v. Armroyd, 2 Dec. of Supreme

Court 603, 7 Cranch 423, 3 L.Ed. 329; Petition of

Bloomfield Steamship Co., 298 F. Supp. 1239, 1241 (D.C.

N.Y. 1969), aff'd. 442 F.2d 728, 733 (2d Cir. 1970); The

East F. cas. 4251 (D.C. N.Y.); The Kaiser Wilhelm Der

Grosse, 175 F. 215 (D.C. N.Y.); The W. Talbot Dodge, 15

F.2d 459 (D.C. N.Y. 1926); Applewhaite v. The SS SUN-

PRINCESS, 150 F. Supp. 827 (D.C. N.Y. 1956)0 The

Sark, 245 F. 909 (D.C. La. 1912; Zimern Coal Co. v. Coal

Trading Association, 30 F.2d 933 (Sth Cir. 1929); Harrison

v. Triplex Gold Mines, 33 F.2d 667, 671 (ist Cir. 1929);

Mpiliris v. Hellenic Lines, Ltd., 323 F. Supp. 865, 872

(S.D. Texas 1969), aff'd. per curiam 440 F.2d 1163 (Sth

Cir. 1971); Vol. 47 Am. Jur. page 239, Subject Judgment,

Section 1238; 50 C.J.S., Subject Judgments, page 54S,

Section 906(d).

In those jurisdictions where judgments of foreign

nations, in other than admiralty actions, are only prima

facie evidence of what they purport to be, and are subject to

attack on certain grounds, the grounds of attack are

limited to fraud and lack of jurisdiction. Not only are

neither of these grounds alleged here, but no grounds are

alleged which would require the Ccurt to give other than

conclusive effect to the German judgment.

But, to “warrant the impeachment of a foreign judgment

because procured by fraud, fraud must be distinctly alleged

and charged (citation omitted)? Ritchie v. McMullen, 159

U.S. 235, 242 (1895); Chamberlain Machine Works v.

United States, 270 U.S. 347, 349 (1926). See Toledo Scales

Co., 261 U.S. 399, 421; Hilton v. Guyot, 159 U.S. 113, 207

(1895); Fogg v. Blair, 139 U.S. 118, 127; Wollensar v.

Reihen, 115 U.S. 96; Vol. 46 Am. Jur. 2d, Subject

Judgments, page 1018, Section 876; Martin v. Williams,

194 Va. 437, 73 S.E.2d 355, 359 (1952).

Again, there is no allegation or evidence of fraud in this

case. After reviewing the cases, the Court in Harrison v.

Triplex Gold Mines, 33 F.2d 667, 671 (Ist Cir. 1922), set

forth the fraud necessary to be shown in an attack upon a

foreign judgment, namely:

In any case to justify setting aside a decree for

fraud, it must appear that the fraud practised,

unmixed with any fault or negligence of the party

complaining, prevented him from making a full

and fair defense, and that the fraud complained of

was not involved in, or presented to, the court of

first instance either at the original trial or in a

petition for review. This rule is universal. False

testimony or fabricated documents are not suf-

ficient to justify the interference of a court of

equity, if they have been presented to the court

determining the law and the fact in the first in-

stance. The reason for the rule is that there must

be an end to litigation.

In the case of Toledo Scale Co. v. Computing

Scale Co., 261 U.S. 399, 421, 43 S.Ct. 458 (67

L.Ed. 719) Chief Justice Taft Says:

‘We do not find ourselves obliged to enter upon

a consideration of the sometimes nice distinctions

made between intrinsic and extrinsic frauds in the

application of the rule, because in any case to

justify setting aside a decree for fraud whether

extrinsic or intrinsic, it must appear that the fraud

charged really prevented the party complaining

from making a full and fair defense.”

The facts in Ritchie v. McMullen, supra [159 U.S. 235]

are quite similar to those here, except that case did not deal

with admiralty. There action was instituted in the United

States Court for Ohio to enforce a judgment recovered by

McMullen against Ritchie in Canada. Ritchie had ap-

peared in the Canadian Court and defended the action. In

the Ohio Court Ritchie sought to set up defenses to the

contract which was the basis of the judgment in Canada.

He also sought to establish that the judgment was entered

without a hearing and without his knowledge, that the

judgment was irregular and void, without jurisdiction or

authority. The Supreme Court pointed out that by the law

of England prevailing in Canada, ‘‘a judgment rendered by

an American Court under iike circumstances would be

allowed full and conclusive effect.’’ 159 U.S. 242. After

pointing out that Ritchie could not set up the same

defenses made to the Canadian action and try anew the

merits of the original claim, the Court said:—

Upon principle, therefore, as well as upon

authority, comity requires that the judgment sued

on should be held conclusive of the matter ad-

judged.

Hilton v. Guyot, 159 U.S. 113 (1895), decided the same

day as the Ritchie case, supra, was a S to 4 decision, while

Ritchie was a unanimous decision. In the Hilton case,

Guyot brought action on a judgment obtained in France

against Hilton. Hilton raised numerous defenses such as

lack of jurisdiction, lack of service of process, etc. The

issue finally determined by the majority opinion was that

inasmuch as France did not give conclusive effect to the

judgments of other nations, in actions on French

judgments in the courts of the United States, we would only

hold the judgment was prima facie evidence of what it

purported to be. The Court expressed it this way:

there is a distinct and independent ground

upon which we are satisfied that the comity of our

nation does not requrie us to give conclusive effect

to the judgments of the courts of France; and that

ground is, the want of reciprocity, on the part of

France, as to the effect to be given to the

judgmentsof this and other foreign countries. [159

U.S. 210].

And, continuing, again at page 228, the Court concluded:

In holding such a judgment, for want of

reciprocity, not to be conclusive evidence of the

merits of the claim, we do not proceed upon any

theory of retaliation upon one person by reason of

injustice done to another; but ‘upon the broad

ground that international law 1s founded upon

mutuality and reciprocity . . . [159 U.S. 228}.

Too, the Court held that in most countries “the fraud

alleged in its procurement would be sufficient ground for

disregarding it."’ Id. p. 228.

Mr. Chief Justice Fuller, joined by three other Justices,

dissented. The dissent pointed out that the fraud alleged

had been considered by the French Court, and that this

Court should not therefore permit it to again be

reexamined upon the merits. The dissent said at page 229:

This question I regard as one to be determined

by the ordinary and settled rule in respect of

allowing a party, who has had an opportunity to

prove his case in a competent court, to retry it on

the merits, and it seems to me that the doctrine of

res judicata applicable to domestic judgments

should be applied to foreign judgments as well,

and rests on the same general ground of public

policy that there should be an end of litigation.

This application of the doctrine is in accordance

with our own jurisprudence, and it is not necessary

that we should hold it to be required by some rule

of international law. The fundamental principle

concerning judgments is that disputes are finally

determined by them, and I am unable to perceive

why a judgment in personam which is not open to

question on the ground of want of jurisdiction,

either intrinsically or over the parties, or of fraud.

or on any other recognized ground of im-

peachment, should not be held inter partes,

though recovered abroad, conclusive on the merits.

And on page 231:

Obviously the last persons who should be heard

to complaint are those who identified themselves

with the business of that country, knowing that all

their transactions there would be subject to the

local laws and modes of doing business. The

French courts appear to have acted “judicially,

honestly, and with the intention to arrive at the

right conclusion;"’ and a result thus reached ought

not to be disturbed.

The following view of the rule in England was

expressed by Lord Herschell in Nouvion y.

Freeman, L. R. 15 App. Cas. 1, 9, quoted in the

principal opinion: ‘‘The principle upon which |

think our enforcement of foreign judgments must

proceed is this: that in a court of competent

jurisdiction, where according to its established

procedure the whole merits of the case were open,

at all events, to the parties, however much they

may have failed to take advantage of them, or may

have waived any of their rights, a final adjudication

has been given that a debt or obligation exists

which cannot thereafter in that court be disputed,

and can only be questioned in an appeal to a higher

tribunal. In such a case it may well be said that

giving credit to the courts of another country we

are prepared to take the fact that such ad-

judication has been made as establishing the

existence of the debt or obligation.”

The Hilton opinion is some 60 pages long. In it Mr.

Justice Gray dealt with numerous decisions from other

countries. in fact, with decisions from most of the civilized

nations of Europe. It is clear from the opinion that most of

those nations held the judgments of other nations when

used as a basis for an action in their countries,9 as con-

clusive.

In summary—

1. The admiralty claim merged into the judgment and an

admiralty court does not have jurisdiction. Since there is no

jurisdiction, and no proper service of process, the action

may not be transferred to the civil side of the Court.

2. Plaintiff submitted its claim to the German Court

which had jurisdiction of the parties and the subject

matter, which rendered a decision denying a personal

judgment against International, but limited recovery,

insofar as International was concerned, to the SEVERN

RIVER. It granted judgment against the character. That

action is on appeal. Plaintiff was granted the right to seek

enforcement of its judgment pending the appeal, upon its

posting bond set forth in the judgment order of the German

3. The exaci language is set out in Appendix B.

Court. It has not posted the bond.

3. Plaintiff here seeks to maintain this suit on the same

claim presented to the German Court. It and International

were parties to that suit. The cause of action is the same.

[he doctrine of res judicata stands as a barricade to this

action. Plaintiff is estopped by the judgment of the German

Court from relitigating its cargo damage claim, and is

bound by the terms of the German judgment. It cannot

here assert the German Court misinterpreted its law or

exceeded its power. Appeal provided by the German

procedure is the jurisdiction to correct any such errors.

It must be understood that plaintiff has a right to enforce

its German judgment by bringing suit on it in the Courts of

the United States, but not to relitigate the issues deter-

mined by the German Courts, nor to amend, modify or

change the judgment. If it is based upon an erroneous view

of the law, it is not open to collateral attack, but must be

corrected by direct review and not by bringing another

action upon the same cause.

4. The admiralty judgment of the German Court is

binding and conclusive, when sued on in the Courts of this

Country, except for fraud, lack of jurisdiction, or other

matters not present in this case. It is admitted the German

Court had jurisdiction of the parties and the subject

matter. Plaintiff selected that forum. No fraud is alleged. If

International in fact practiced fraud upon the German

Court by improper evidence or misrepresentations, then

the place to allege and correct it is in the German Court,

and not by attempting to relitigate the cause of action or by

a collateral action in this Court.

5S. The German Court first acquired jurisdiction of the

cause of action submitted to it by plaintiff. It still has

jurisdiction. Plaintiff may not seek to circumvent the

rulings of that Court by instituting a suit on the same cause

of action in this Court, or by collaterally attacking the

judgment of the German Court.

For the reasons above stated, the plaintiff may not

maintain this suit, and it is accordingly DISMISSED.

s/Richard B.

United States District Judge

Nortolk, Virginia

March 4th, 1974

APPENDIX E

COMPLAINT

(SAME TITLE)

Plaintiff files this complaint in a cause of cargo damage

and seeks the sum of One hundred fifty thousand

($150,000.00) dollars from the defendant on the following

grounds:

1. This is a case of admiralty and maritime jurisdiction

as hereinafter more fully appears. This is an admiralty and

maritime claim within the meaning of Rule 9(h) of the

Federal Rules of Civil Procedure.

2. The plaintiff at all times hereinafter mentioned was

and still is a corporation with its main office in Detroit,

Michigan.

3. The defendant, International Navigation Corporation,

Monrovia, Liberia, was and still is a corporation organized

and existing under and by virtue of the laws of the Republic

of Liberia.

4. At all times hereinafter mentioned the defendant was

the owner and operator of the Steamship SEVERN RIVER

and it employed the master and crew of said vessel.

5S. In January 1960 there was shipped at Antwerp,

Belgium on board the SS SEVERN RIVER a certain cargo

of hot rolled steel consisting of ninety-three (93) coils,

which cargo was loaded aboard said vessel in good order

and condition and for which the masters of said vessel

issued a bill of lading unto the order of the shipper of said

goods.

6. The SS SEVERN RIVER then proceeded to the port

of New York, New York and there discharged the cargo of

steel, but not in the like good order and condition as when

shipped as the steel was seriously damaged.

7. Ac the time of the discharge of said cargo at the port of

New York, the plaintiff was the owner of said cargo and the

bill of lading and became entitled to delivery of said

shipment.

8. The plaintiff, having complied with the terms of the

contract of affreightment, thereby became seriously

damaged due to the fault of the vessel and its owner, the

defendant, and has suffered damages in the sum of ap-

proximately $150,000.00 as nearly as can now be

estimated.

9. Thereafter in 1961, plaintiff timely filed a law suit

against the defendant, its vessel and the charterer of said

vessel in the District Court of Hamburg, Germany. After

lengthy litigation, several judgments were rendered in

plaintiffs favor, the last judgment being rendered on

December 7, 1972. The judgment, together with interest

and costs, approximates the sum of $150,000.00, but has

never been paid by the defendant.

WHEREFORE, the plaintiff demands judgment against

the defendant in the sum of One hundred fifty thousand

($150,000.00) dollars, plus interest and costs, and further

requests the Court to issue process of attachment against

defendant's vessel, the Steamship VIRTUS, which is or will

be within the jurisdiction of this Court during the pendency

of process. Since the defendant is a foreign corporation and

cannot be found within the district, it is prayed that the SS

VIRTUS be attached as the property of the defendant.

M. W. ZACK METAL COMPANY

By s/Carter B. S. Furr

Of Counsel

APPENDIX F

AFFIDAVIT OF ISA DROBNIG

Mrs. Isa Drobnig, LL.M. of Hamburg 11, Cremon 3,

West Germany

1 am a lawyer in Hamburg, West Germany, admitted to

the Hamburg bar in 1959 and having practised in the law

firm Hasche Albrecht Fischer since 1958, being a partner

in this firm since 1962. The law firm deals principally in

matters of commercial and shipping law.

Regarding the proceedings of M.W. Zack Metal Co.,

Detroit, versus inter alia International Navigation cor-

poration, Monrovia, Liberia, before the Hamburg courts, I

give, to the best of my knowledge, the following affidavit to

be used in the United States District Court for the Eastern

District of Virginia, Norfolk Division:

1. The aforementioned proceedings concern a shipment

of steel coils consisting of *‘93 open hearth hot rolled coils

prime in every respect including condition and quality in

SAE 1008" shipped from Antwerp to New York in SS

‘Severn River’ which belonged to International Navigation

Corp., under B/L no. 35 dated Antwerp, 14th January

1960 and issued by Contam Linie Jansen & Co.

In the proceedings the Hamburg Regional Court (first

instance) judged that the Defendant (International

Navigation) submit to execution of the SS “Severn River”

for an amount of US $64,018.38 plus 5% interest from

February 10th, 1960.

The court further decided that this judgment be for the

time being enforceable provided Plaintiffs put up security

in the amount of 180,000 German marks.

Both Plaintiff and Defendant have appealed against this

decision. The Appeal is now pending before the Hamburg

Appellate Court.

2. Under the German Code of Civil Procedure, provided

the Plaintiff puts up security in the amount ordered by the

court of Ist instance, the judgment rendered by the court is

enforceable in spite of the pending appeal. The legal

provisions are arts. 704, 710 and 717 Zivilprozebordnung

(German Code of Civil Procedure).

The security is afforded in order to guarantee a

possibility for the Defendant to recover any damages

suffered by enforcement of the judgment of the court of Ist

instance in case the Appellate Court changes the judgment

in Defendant's favour.

The tact that there is an appeal against the judgment of

Ist instance currently pending does not in itself prohibit

enforcement. There has been no application or order to

stay the enforcement.

3. Insofar as appeal is lodged against the judgment of Ist

instance a completely new hearing can be held before the

Appellate Court regarding facts and laws including the

taking of additional testimony by the Appellate Court (arts.

525, 529 German Code of Civil Procedure). This does not

atlect the possibility of enforcing the judgment of Ist in-

Stance as long as the Appellate Court itself has not come to

its decision (art. 717 para 1. German Code of Civil

Procedure).

If the Appellate Court should change the judgment of Ist

instance and this judgment has already been enforced, the

Plaintiff has to make restitution to the defendant isnofar as

the judgment has been changed in favour of the Defendant.

The security ordered is to guarantee the possibility of

restitution.

4. The judgment against International Navigation Corp.

was limited to an execution against the ‘Severn River’.

This was because the court decided that there is a maritime

lien only on the vessel. Under German law the vessel is not

regarded as a person but as part of the assets of its owner.

The liability created by the vessel is a liability of her owner.

This is why the owner was made a party to these

proceedings.

If the Appellate Court applies German Law regarding

International Navigation corp. (the court of Ist instance

applied Liberian Maritime Law) it will have to change the

judgment of Ist instance into a judgment ordering the

Defendant to pay the amount due to M.W. Zack Metal Co.

It is provided under German law (art. 774 Han-

delsgesetzbuch — German Commercial Code) that where a

maritime lien has arisen and the vessel is then (i.e. later)

sent out on a new voyage, the owner is personally liable for

the amount covered by the maritime lien.

s/Isa Drobnig

APPENDIX G

AFFIDAVIT OF DR. HERBERT GIENOW

DR. HERBERT GIENOW, RECHTSANWALIT,

HAMBURG, WEST GERMANY

1 am a lawyer in Hamburg/West Germany admitted to

the Hamburg bar in 1954 and having practised law,

principally commercial and maritime, in my own law firm

since that date.

I have read in copy the ‘Brief on Behalf of Plaintiff" in

the civil action.

Zack Metal v. International Navigation Corp. with

attached affidavit by Mrs. Drobnig.

To be used in the aforementioned proceedings before the

US District Court for the Eastern District of Virginia

Norfolk Division, | give to the best of my knowledge the

following affidavit:

The brief summary of facts contained in Mrs. Drobnig’s

affidavit is correct, though restricted to very few elements

of the merits. It should be amended by stating that

— the plaintiff has obtained from the cargo underwriters

for the damages in question the sum of roughly 59.000 US

Dollars for capital and interest where against the plaintiff

agreed to split any recovery from the defendants on a 45/55

basis with said underwriter. The underwriter’s share has

later been assigned to the defendants.

— the judgment of the first instance is enforceable only

against the vessel, i.e. by seizing the SS SEVERN RIVER,

but with a view to the vessel having been scrapped plaintiff

is in the second instance seeking for a judgment en-

forceable against the owners. The existing judgment (of the

first instance) appears to be equivalent to a judgment in

rem, because notwithstanding the owners being the

defendants, its execution is restricted to seizing and for-

mally selling the vessel.

— Enforcement of the Judgment of the first instance, if

the vessel were still existing, would require an ‘“‘enforceable

duplicate” (vollstreckbare Ausfertigung) from the court's

clerk, which to the best of my knowledge has not been

applied for by the plaintiff. Enforcement further requires

the plaintiff to put up prior to execution the security

provided in the judgment; such security, as far as I know,

has not been posted.

— Plaintiff has sued for identical damages owners and

charterers of the SS SEVERN RIVER. Upon his being

successful in the first instance, charterers have put up a

security satisfying the plaintiff. The amount of damage

awarded to plaintiff by the Hamburg court of the first

- instance is the same and identical against owners and

charterers.

— It is true that

“The fact that there is an appeal against the

judgment of Ist instance currently pending does

not in itself prohibit enforcement. There has been

no application or order to stay the enforcement.”’

Enforcement against the defendants in this case however

is conditioned by the plaintiff putting up certain security,

which he has not done wherefor application or order to stay

the enforcement was neither necessary nor advisary.

Concerning the “Brief on behalf of plaintiff’ itself |

should like to state that:

— The suit in Hamburg was and is (inter alia) against

International Navigation, only a person being capable to

sue and detend in a German court. The judgment rendered

so far, against International Navigation, however, can

merely be enforced against the vessel, all other assets of

International Navigation not being seizable under this

judgment, whether the court applied the law properly or

not.

— The judgment was but partly rendered in favour of the

plaintiff who claimed and claims damages higher than

awarded.

— As can be seen from the wording of the judgment it is

not upon the defendant to file any bond whatsoever, but

the plaintiff as a precondition of enforcement would have

to post the requisite security before he would be permitted

to enforce.

— Under the German judgment and law the plaintiff is

not legally entitled to any security. It is Zack Metal who has

to file a bond or equivalent for security before they can take

any steps. Enforcement and/or security in favour of the

plaintiff abroad would strongly interfere with the intention

of the German judgment which in turn is based on the

German Civil Procedure Code.

Without prejudice to the decision of the second instance it

may be added, that during the passed hearings the judges

of the appellate court made clear that they were not to

support various opinions on which the judges of the first

instance has based their decision in favour of the plaintiff.

s/Herbert Gienow

This is a copy of a public record, reproduced as it was published. It is not legal advice, and it may not be the version a court would rely on. Check the official source before you cite it.