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HIS MAJESTY'S GOVT. FOR THE UNITED KINGDOM OF GREA

August 27, 1941

HIS MAJESTY'S GOVERNMENT FOR THE UNITED KINGDOM OF GREAT BRITAIN AND NORTHERN IRELAND
v.
COMPAGNIE GENERALE TRANSATLANTIQUE



The opinion of the court was delivered by: ABRUZZO

ABRUZZO, District Judge.

In November of 1940, the libellant instituted a suit in this Court by filing a libel in personam with a clause of foreign attachment. The United States Marshal for the Eastern District of New York attached the steamship Fort de France to secure libellant's alleged claim for $145,000, based upon an alleged conversion by the Compagnie Generale Transatlantique. Later, the vessel was released from the custody of this Court upon the deposit by the Compagnie Generale Transatlantique of $155,487 with the Clerk of this Court, in accordance with Admiralty Rule No. 21, 28 U.S.C.A. following section 723. On June 26, 1941, the libellant filed a discontinuance of this action in the office of the Clerk of the Court.

In March of 1941, the Royal Exchange Assurance, the petitioner herein, commenced an action in the Supreme Court of the State of New York, County of Kings, against the respondent of the discontinued action, Compagnie Generale Transatlantique, to recover the sum of $1,140,139.69 upon a series of unpaid bills of exchange.

 The petitioner, the Royal Exchange Assurance, applied for and was granted a warrant of attachment against the property of the Compagnie Generale Transatlantique in order to secure the payment of any judgment which the petitioner might recover against the Compagnie Generale Transatlantique in the Supreme Court of the State of New York.

 At the time of the granting of the warrant of attachment, the suit in admiralty was pending in this Court.

 The present application is one by the Royal Exchange Assurance, hereinafter referred to as the petitioner, for leave to attach the sum of $155,487, deposited with this Court by the Compagnie Generale Transatlantique, hereinafter referred to as the CGT; and for an order directing that the sum of $155,487 be turned over to the Sheriff of the County of Kings, pursuant to the warrant of attachment issued by the Supreme Court of the State of New York.

 The CGT resists the petitioner's application upon two grounds: First, that the funds in the registry of this Court are not subject to process of a state court as a matter of right; and second, that this Court as a Court, sitting in admiralty, has no power to attach these funds now in the registry of this Court.

 It becomes necessary in passing upon the petitioner's contention to determine whether or not the funds in the registry of this Court are subject to an attachment issued by the state court. These funds were deposited after the vessel, belonging to the CGT, was libelled and taken into custody by the Marshal of this district. The deposit of this money permitted the vessel to leave port. The libel has been discontinued and the funds are still on deposit in the registry of this Court. In effect, the depositing of this sum in the hands of the Clerk of this Court released the ship and the sum deposited, so to speak, represents the ship. The deposit is held in lieu of the vessel.

 The petitioner has cited many cases which it claims give authority to this Court to grant the relief it seeks.

 The latest decision cited in support of petitioner's contention is Huron Holding Corporation et al. v. Lincoln Mine Operating Co., 312 U.S. 183, 61 S. Ct. 513, 85 L. Ed. 725, which held that a state court attachment should be given full faith and credit in the United States District Court. However, in that case, no funds existed in the registry of the United States District Court, 27 F.Supp. 720; and it was not an action in which admiralty was at all concerned.

 Dunlop v. Patterson Fire Insurance Company, 74 N.Y. 145, 30 Am.Rep. 283, permitted the attachment of an appeal bond. The petitioners herein urge that this Court must follow the state rule as required by Erie Railroad Co. v. Tompkins, 304 U.S. 64, 58 S. Ct. 817, 82 L. Ed. 1188, 114 A.L.R. 1487. The latter case establishes the rule that the Federal statutes must be adhered to first; next, the state statutes; and finally, the common law of the state. But, the Dunlop case, supra, on its face, had nothing therein pertaining to admiralty. Maritime jurisdiction is exclusively within the Federal Courts.

 Buck v. Colbath, 3 Wall. 334, 18 L. Ed. 257, is not an action arising out of admiralty. It held that a United States Marshal may be sued for his own torts in levying upon the property of a man against whom a writ did not run, and on property which was not liable to it. This case is not in point for it does not relate to funds on deposit in the registry of this Court.

 The case of Lazarus v. McCarthy, United States Marshal, et al., Sup., 32 N.Y.S. 833, 834, seems to more closely resemble the situation involved herein than any others cited. It appears that an action was started in the Supreme Court of New York State against a foreign corporation in which an attachment against its property was issued; and previous to such action, the corporation had made an assignment for the benefit of creditors to one Daniels as assignee. Daniels filed a claim to the attached property. Later, the action was removed to the Federal Court and by direction of that Court, the United States Marshal took into his possession the property under attachment. The assignee, Daniels, then applied to the Federal Court for an order directing that the attached property be delivered to him; and such order was granted. The same day, before the actual delivery of the property, Lazarus, the plaintiff, commenced an action in replevin and the property was seized pursuant to a writ of replevin.

 Daniels, then, moved to vacate the levy under the writ on the ground that at the time of the levy the property was in the custody of the court. The single question presented for determination was whether the property was so situated that it was subject to levy under the process of the state court action. The court pointed out that if the property were in the custody of the United States Court in such a sense that that court maintained ...


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