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THE MANDU

July 21, 1937

THE MANDU; In re COMPANHIA DE NAVEGACAO LLOYD BRASILEIRO


The opinion of the court was delivered by: INCH

INCH, District Judge.

Companhia De Navegacao Lloyd Brasileiro, a Brazilian corporation, owner of the steamship Mandu, to which I shall hereafter refer as the "Ship-Owner," has brought this proceeding for exoneration from, or limitation of, liability for a collision which occurred on July 31, 1929, in the harbor of Santos, Brazil, between the Mandu and the German steamship Denderah.

The sole claimant that has appeared in the proceeding is the Great American Insurance Company, a New York corporation, to which I shall hereafter refer as the "Insurance Company."

 The total amount of its claim, if it had been properly proved, would be in the neighborhood of $364,000, and purports to represent losses on insured cargo on the Denderah paid by a group of foreign underwriters.

 The trial of the limitation action has taken place, and the question of claims is usually referred to a commissioner after determination of the question of liability. But, in this case, the Ship-Owner has strenuously contested the right of the Insurance Company to present any claim. It asserts that it is not real party in interest, that this is simply a subterfuge in the real interest of the foreign underwriters who still own any claim or claims and have not duly proved same in this proceeding.

 Accordingly, the Insurance Company was put to its proof, and the first part of the trial was devoted to this controversy as to whether there was any properly proved claim in the proceeding.

 Claiming that the proof shows there was no claim proved, the Ship-Owner asks that permission be granted it to withdraw this limitation suit and that a previous libel as well as the present claim by the Insurance Company be dismissed.

 The decision as to liability for the collision, if any, depends on deposition evidence which was introduced at the trial, but, in view of this attack by the Ship-Owner on the sole claim and the attempted proof by the Insurance Company, the court was compelled to pause before deciding the question of liability and determine this preliminary issue.

 Accordingly, the sole issue now decided is whether the Insurance Company is the real party in interest and has a right to prove the claim.

 A brief statement of undisputed facts should here be made.

 A collision occurred between the Brazilian ship and the German ship in the harbor of Santos, Brazil, on July 31, 1929. The Brazilian ship at that time, and possibly up to the present time, was making frequent trips between the port of New York and Brazil. Approximately a year after the collision and on June 3, 1930, while the Mandu was thus in the port of New York, the Insurance Company filed a libel and arrested her. The Ship-Owner released her by filing a proper stipulation. Exceptions to the libel, filed by the Ship-Owner, were thereafter substantially sustained. Upon the return of the Mandu to New York, in October, 1930, the Insurance Company again filed a libel. Thereafter, on December 10, 1930, the Ship-Owner filed this petition for limitation or exoneration, and later a stipulation for value. The prior stipulation for value by which the arrested vessel had been released in July, 1930, was by order, canceled and discharged. Thereafter the Insurance Company filed its claim with the Commissioner, verified January 30, 1931, and this claim set up all of the items contained in both libels.

 On their face, both the libel and the claim indicates that the Insurance Company, in addition to its own right to sue or prove a claim, owned all of the other rights of the foreign underwriters by reason of assignments for a valuable consideration.

 Here the matter rested for several years, for what reason does not appear.

 In the early part of 1935, the Insurance Company sent letters rogatory to Germany. These letters were returned in July, 1935, but, on objection, were suppressed. The Ship-Owner asserts that then, for the first time, it discovered that the only interest of the Insurance Company was $164.69 in a loss of some $6,500, representing its proportion (2 1/2 per cent.) of a total payment by the German underwriters on a particular loss, and that the remainder of the ...


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