The opinion of the court was delivered by: DOOLING
In a carrier's interpleader suit, defendant Goldsmith moves for summary judgment awarding him possession of certain bills of lading covering coffee made out to his order which the defendant Brazilian Coffee Institute, an agency of the United States of Brazil, holds in its possession. Goldsmith contends that he bought the coffee symbolized by the bills of lading from 'defendant' Exportadora e Importadora Visalia, Ltda., a Brazilian company, that the bills of lading issued against the coffee on Visalia's orders by the ocean carrier are to Goldsmith's order, that Visalia has disclaimed any interest in this litigation, that no other party claims any title not both derivative from Visalia's and subordinate to Goldsmith's, and that, in consequence, Goldsmith's right to possession of the bills of lading and the coffee is immediate and unconditional.
The Brazilian Coffee Institute contends that Goldsmith has not shown a sale to him, nor a legally enforceable sale to him, nor any right to get the bills of lading from it because it holds them to enforce Visalia's performance of its undertakings to the Institute to remit to Brazil the dollar proceeds of any sale of the coffee and to pay certain charges due Brazil.
Defendant Borchsenius contends that it has attached the bills of lading as Visalia's property in the hands of the Institute in an action in the State Court in which Visalia is the defendant. Borchsenius argues that if the bills of lading were still Visalia's at the moment of levy (November 22, 1961) its attachment lien should be given its wonted effect.
At the heart of the case is the fact that Brazilian exporters subject to Brazil's exchange control laws are said to receive for each dollar paid for their goods about 105 cruzeiros whereas the 'free' rate of exchange is said to be about 300 cruzeiros for each dollar (Tr. 61-62). Were Visalia prepared and able now to remit to Brazil the dollar proceeds of a fair sale of the coffee, pay the governmental charges and accept a cruzeiro equivalent at the rate of exchange prevailing in officially controlled transactions, the main part, if not all, of this litigation would terminate (Cf. Tr. 59-62).
Since Goldsmith has not possession of the bills of lading he must show that he has a right to possession of them or a right to claim the coffee of the carrier without surrendering the bills of lading. The first alternative requires a showing that the Institute's possession is not lawful as against Goldsmith. The second alternative requires a showing that Goldsmith is entitled to the possession of the goods and has a right to compel the carrier to forego surrender to it of the bills of lading as a condition of delivery.
The form of the bills of lading, listing Goldsmith as consignee, settles nothing. The bills of lading were not delivered to Goldsmith but to the Institute. Hence Goldsmith must show more and seeks to do so by bringing forward evidence of a sale of the coffee (not of the bills of lading) to him. If the seller had still the power to make an effective complete sale of the coffee at the critical moment, so that all of the property in the coffee vested in Goldsmith, then the bills of lading would not signify anything. To meet this point, therefore, and keep the bills of lading alive as controlling the coffee and its possession of the bills of lading lawful as against Goldsmith the Institute brings forward evidence to show that it has a special governmental property in the bills of lading as symbols of the coffee designed to secure performance by Visalia of its exchange duties and presents also an analysis of Goldsmith's evidence of the sale to him calculated to show that the supposed sale came too late and to show that the sale evidence is in any event so alive with suspicious circumstances as to be incredible.
A systematic examination of the evidence seems necessary and to facilitate reference the data will be set out in findings form.
1. The Brazilian Coffee Institute is a corporation or other business entity under the laws of the United States of Brazil with its principal place of business in Rio de Janeiro, Brazil. (Amended Complt. 'Fourth'; Goldsmith Answer 'Fourth'; Institute Answer '3'; Borchsenius answer '8').
2. The Institute is an agency of the United States of Brazil (Institute answer 3, 6; Rowan aff'd. 1/22/62, pp. 8-9, 17).
3. At the times in question the law of Brazil required that the foreign exchange proceeds of exports from Brazil be assigned and paid over to the Bank of Brazil and the Institute through a Brazilian commercial bank; such assignment in ordinary course is required of exporters before they are given, in the case of coffee exports, the requisite permission of the Institute to load coffee from warehouse to shipboard for export (Rego 11/28/61 p. 2, Ex. A-1).
4. Exportadora e Importadora Visalia, Ltda., is a Brazilian company with its principal office in Rio de Janeiro (Amended complaint 'Sixth'; Borchsenius answer, admits by not denying; Institute answer '1').
5. The banks of Brazil were closed by a strike from October 17 to October 30, 1960 (Rego 11/28/61 p. 2).
6. Under date of October 19, 1961 Visalia by letter offered 25,000 bags of yellow coffee of the last crop to Goldsmith (or invited an offer from Goldsmith) at $ 36.00 a bag for shipment to any European port (Platow 3/20/62, par. 3, Ex. A).
7. On October 24, 1961 Goldsmith cabled Visalia an offer or counter-offer for 25,000 bags of yellow coffee to be shipped 15,000 bags to New York and 10,000 bags to New Orleans; Goldsmith requested immediate shipment of 7,500 bags on the Cap Castillo and stated a Chase Manhattan credit of $ 314,000 was being called (Platow 3/20/62 par. 4(a), Ex. B).
8. On October 25-27, 1961 in Rio de Janeiro;
A. Visalia by two letters of identical terms on October 25, 1961 requested the permission of the Institute to ship on the S/S Cap Castillo to New York 14,350 bags of coffee valued at $ 598,661.91 without presentation of clearance papers, which Visalia undertook to present, together with a certificate of currency exchange issued by the Office of Bank Control, as soon as the bank strike was over; as further guarantee Visalia gave the Institute letters of October 25, 1961 addressed to and acknowledged by the S/S Cap Castillo's agent in which Visalia directed the ship to deliver the bills of lading for the coffee to the Institute (Rego 11/28/61 Ex. A, A-1, B, B-1, C, C-1, D, D-1).
B. On October 25, 1961 the Institute and the Bank of Brazil, Office of Bank Control, authorized the permission to ship by subscription to and endorsement on the letters of Visalia to the Institute (ibid.)
C. On October 26, 1961 the coffee was loaded aboard the S/S Cap Castillo and thirteen on board order bills of lading naming Visalia as shipper, Goldsmith, or order, as consignee, Rio de Janeiro as port of loading and New York as port of discharge were made out and signed by Visalia and the S/S ...