ROYAL MAIL STEAM PACKET CO.
v.
COMPANHIA DE NAVEGACAO LLOYD BRASILEIRO.
District Court, E. D. New York.
May 15, 1928.Burlingham, Veeder, Masten & Fearey, of New York City (Van Vechten Veeder and A. Howard Neely, both of New York City, of counsel), for libelant.
Purrington & McConnell, of New York City (Frank J. McConnell and James D. Brown, both of New York City, of counsel), for respondent.
*1003 INCH, District Judge.
Libelant is a British corporation. Respondent is a Brazilian corporation. Two steamships, one owned by libelant, one by respondent, collided in the waters of Belgium. Libelant has sued respondent in this, the Eastern, district of New York, acquiring jurisdiction through an attachment of one of the respondent's vessels in this district.
Respondent duly moves for an order vacating the attachment, and dismissing the libel, on the ground that this suit belongs to that class of cases where it is proper for this court to either agree to try or refuse to hear the controversy. It is not disputed but that this court has jurisdiction, should it decide to hear the suit. This decision, however, is not to be expressed arbitrarily, but only through the authority of the exercise of judicial discretion, and this exercise is therefore dependent for its validity on the law, as shown by decisions of the courts.
The question raised, therefore, is whether or not, in the exercise of this judicial discretion, this court should allow the suit to be tried in this court. It has been said that the court will not accept jurisdiction, unless it is necessary to prevent a failure of justice. Benedict on Admiralty (5th Ed.) vol. 1, p. 136, and cases therein cited.
It has also been said, apparently interpreting what a failure of justice would mean, "the controlling consideration being whether the rights of the parties would be best promoted by hearing the cause or by remitting it to a foreign tribunal." 1 C. J. p. 1259. If, therefore, this court feels that the suit should be tried here to do justice, or to best protect the rights of the libelant, as well as of the respondent, it will correctly exercise its discretion in allowing the suit to be tried in this district.
The two vessels, owned by these two parties, respectively, collided in the river Scheldt near Antwerp, Belgium, on August 24, 1927. If this were all, it might very well be decided that the suit should be tried in some other jurisdiction. The Kaiser Wilhelm (D. C.) 230 F. 717; The Iquitos (D. C.) 286 F. 383; Neptune Co. v. Sullivan Co. (D. C.) 37 F. 159; Goldman v. Furness (D. C.) 101 F. 467, and many other cases not cited by respondent, but which can easily be found. This, however, is not all there is to the matter, by any means.
There is another rule, laid down in this district in 1889, by Judge Benedict, where he says: "Moreover, the general rule is that, where there is a choice of forum, the libelant has the right of choice. To grant the defendant's application in this case would be to give to the defendant the right of choice." Chubb v. Hamburg Co. (D. C.) 39 F. 431. These motions, I am convinced, are not urged on the ground of convenience of witnesses, or on any of the other usual grounds, although, of course, the same are mentioned and discussed in the brief of respondent.
The point really involved is simply this. There has been damage done, and the respondent desires to limit its liability, under the law of Belgium. The libelant desires that, if such limitation occurs, it shall be governed by our law.
Aside, therefore, from an exact discussion of foreign law, which the papers submitted do not permit, and the ultimate rights of the parties to so limit, sufficient does appear to show that the rights of the libelant will be greatly impaired and from that standpoint an injustice done to libelant, if it is compelled to accept the forum now sought to be chosen by respondent, as against libelant's choice of this forum.
Moreover, it appears from the affidavits submitted by libelant in this proceeding that libelant offered to settle its dispute, either in Belgium courts, or in the English admiralty court, or by arbitration in London, provided the respondents gave security in a reasonable amount. This offer of the libelant was of no avail, for the reason that respondents refused to waive the Belgian right to statutory limitation of its liability.
According to those authorized to act on the part of libelant, as evidenced by the statement in the affidavit of Bolton, verified March 15, 1928, the libelant was at that date still willing to allow the merits of the collision to be determined by the Belgian courts, provided this unjust right to limit liability in Belgium was waived by respondent and sufficient security given. In return, libelant would be willing to give ample counter security.
This objection of libelant to allowing the respondent to limit its liability, if any, in the Belgian court, appears to be neither fanciful nor technical. On the contrary, it is based on a sound reason. There is every appearance from the papers that the amount of damage, regardless of liability, will reach a considerable sum. The Belgian law, as to this right to limit liability, is the same as was enforced in that country prior to the World War, and has never been revised, so as to bring it into line with the depreciation of the Belgian currency. The result is, therefore, that, taking the value of the Belgian francs as they are to-day, and the Belgian *1004 law limiting liability to 200 francs per gross ton, the respondent, if ultimately found to be liable, and being allowed to institute this right to limit in Belgium, will be enabled to unjustly avoid a large portion of its liability, not because of the law, so far as the right to so limit is concerned, but because of a depreciation in the value of the franc.
Thus we have here a British ship and a Brazilian ship in collision. We have laws of four nations available, British, Brazilian, Belgian, and the United States of America. Neither of the first two have been adopted by the parties. The libelant has sought and first obtained the American forum. The respondent now seeks the Belgian forum. Why? Solely because the law of Belgium is so favorable in the above respect to its right to limit liability. This would seem to be unjust to libelant.
Respondent has done nothing in Belgium except the taking of a survey, and while, assuming the Belgian law to be the same as our law, in the absence of proof to the contrary, it might have had the right to institute its limitation proceeding in Belgium before any suit was brought by libelant (Ex parte Slayton, 105 U. S. 451, 26 L. Ed. 1066), it has not done so, and it is too late to do so, now that this court has acquired jurisdiction.
Respondent can in this suit, either by way of defense or as a separate proceeding, assert its right. The City of Norwich, 118 U. S. 468, 6 S. Ct. 1150, 30 L. Ed. 134. See practice originally laid down. Norwich Co. v. Wright Co., 13 Wall. (80 U. S.) 104, 20 L. Ed. 585.
This court, however, having rightfully taken jurisdiction, will administer this right of respondent to limit according to the law of this forum. Norwich Co. v. Wright, supra. "If they [the colliding vessels] belong to different nations, having different laws, since it would be unjust to apply the laws of either to the exclusion of the others, the law of the forum that is, the maritime law as received and practiced therein would probably furnish the rule of decision." The Scotland, 105 U. S. 24, 26 L. Ed. 1001.
The mere fact that there is but one claim is immaterial. White v. Island Transp. Co., 233 U. S. 346, 34 S. Ct. 589, 58 L. Ed. 993.
It may be very well claimed, if properly alleged and proved, that the foreign law applicable to the merits of the collision, on the theory of the lex loci, may be administered on the trial, in this forum; yet, as to this peculiar and statutory right of limitation of liability, the laws of the nations of neither of the owner parties having been invoked by them, it is and should be the law of this forum "that will furnish the decision."
It plainly appears, therefore, that the rights of libelant will be seriously prejudiced by allowing the respondent to avoid this forum for such a purpose. The right to limit in Belgium is unfortunately so inadequate as to be unjust and unfair.
Nor does the place of the collision offer an obstacle to thus retaining jurisdiction, whether such collision took place in the open sea (The Belgenland, 114 U. S. 355, 5 S. Ct. 860, 29 L. Ed. 152) or in any territorial water (The Kaiser Wilhelm (D. C.) 175 F. 215; The Hallgrim, 1924, A. M. C. 1401, Eastern District, Judge Campbell). This case, therefore, is not the usual case, not infrequently appearing in this and other courts of this port. Neither of the parties is in Belgium. It will be equally as hard on the libelant as on the respondent in regard to witnesses. Both parties are familiar with business at, and known in, the port of New York. Both have ships coming here. The real issue presented by the motions is different from the ordinary question arising in such cases.
While the court is naturally cautious about taking jurisdiction of such cases, and it requires some sound reason for doing so, yet it seems to me, and I am satisfied that, it is the only fair and just thing to do in this case. I am unable to see how any hardship, not otherwise present in the forum respondent seeks, will be visited on either party, by approving the choice of this forum, first selected by libelant.
The motions are denied, and jurisdiction retained.