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D/S A/S FLINT v. SABRE SHIPPING CORP.

April 13, 1964

D/S A/S FLINT, Libelant,
v.
SABRE SHIPPING CORPORATION, Respondent



The opinion of the court was delivered by: ZAVATT

This and two companion cases illustrate the means employed by some libelants to ensure against personal service of process upon respondents in admiralty cases, in order to embarrass them by having their property seized or their credits tied up. A simple device is employed. Instead of filing a libel in the United States District Court within which the respondent maintains its principal office, to the knowledge of the libelant, the libelant crosses the East River, files the libel in this court and prays for the issuance of process in personam with writ of foreign attachment. By this means, the three libelants caused the bank accounts of the respondent with the Manufacturers Hanover Trust Company to be tried up to the extent of $ 75,000 because of three purported attachments under alleged claims aggregating $ 55,116.57. Motions by the respondent to vacate the three attachments were granted by memorandum opinions, each dated and entered March 30, 1964, in which the court stated that explanatory opinions would follow.

This is a suit in admiralty pursuant to 9 U.S.C. § 8 to compel arbitration. The parties entered into a charter party, dated April 18, 1961, whereby libelant chartered a certain vessel to the respondent. Clause 17 thereof provides that disputes arising thereunder shall be resolved by three arbitrators to be appointed as therein specified. In this suit, libelant claims to be entitled to $ 25,000 under the terms of the charter party. This claim is disputed by respondent, a domestic corporation organized and existing under the laws of the State of New York, with its office and principal place of business at 19 Rector Street, City and County of New York, within the territorial jurisdiction of the United States District Court for the Southern District of New York. The respondent maintains a bank account at the 40 Wall Street office of the Manufacturers Hanover Trust Company, within the Southern District of New York. Had the libelant filed a libel in the United States District Court for the Southern District of New York, process in personam could have been served upon the respondent in that District and no assets of the respondent could have been attached before judgment. The libelant was fully aware of the presence of respondent and of the facility with which it could have been served within the Southern District of New York. Nevertheless, libelant crossed the East River and filed a libel in this District in an attempt to reach by writ of foreign attachment assets of the respondent having a situs within the Southern District of New York. The questionable propriety of this procedure is compounded by what must be a matter of common knowledge among those in the shipping industry, i.e., that the respondent loads and unloads vessels, which it owns or charters, at its terminal at Pier 20, Staten Island, New York, within this District. Respondent's name is painted in large letters over the entrance to and on the roof of this pier. Its listing in the Manhattan telephone directory includes not only its office at 19 Rector Street, New York, New York, but also its pier in Staten Island. Advertisements and listings in trade journals and directories proclaim Pier 20 as the place where respondent loads and discharges cargo.

Libelant filed its libel in this court on February 25, 1964 and prayed therein that process with a writ of foreign attachment issue. A deputy marshal of this court made no attempt to find the respondent in this District. Rather, he treated the process as one directed to the garnishees therein named (the Brooklyn branches of four banks) and served a copy thereof upon each of these banks at their Brooklyn branches as though they were respondents. He made the following return:

 'I hereby certify, that on the 27th day of February 1964, in my district, I personally served the within Process in Personam with Clause of Foreign Attachment upon the within named Manufacturers Hanover Trust Co., 177 Montague Street, Brooklyn, N.Y. by leaving a copy thereof at their above place of business with William D. Smith Ass't Sec.'

 It would appear that such procedure, however regrettable, is not unique to this District. See Federazione Italiana Dei Consorzi Agrari v. Mandask Compania De Vapores, 158 F.Supp. 107 (S.D.N.Y.1957).

 The history of the writ of foreign attachment reveals that it has always been auxiliary to process in personam and designed to compel the appearance of a party to a suit. Its history was summarized by the Supreme Court in Manro v. Almeida, 10 Wheat. 473, 23 U.S. 473, 6 L. Ed. 369 (1825) and in Atkins v. Fiber Disintegrating Co., 18 Wall. 272, 85 U.S. 272, 21 L. Ed. 841 (1874). In Almeida, supra, the Supreme Court reaffirmed the basic purpose of this writ as it had existed under English law, i.e., 'that where a defendant has concealed himself, or absconded from the kingdom, this process may issue.' Manro v. Almeida, supra, 10 Wheat. at 492, 23 U.S. at 492, 6 L. Ed. at 373. Although it recognized that an 'incidental' purpose of such process is to obtain security for the libelant's claim, the Court found it 'very clear that the primary object of the attachment is to obtain an appearance.' 10 Wheat. at 493-494, 23 U.S. at 493-494, 6 L. Ed. at 374.

 It has been held, consistently, that 'the proper object for the libellant to seek * * * by means of a foreign attachment (is) * * * to compel the appearance of * * * the respondent, to the suit instituted against him,' and that, to this end, the attachment is 'auxiliary to a capias or monition to the debtor, and subserves only the end which an arrest or appearance of the defendant by stipulation answered.' Smith v. Miln, 22 Fed.Cas. 603, 605 (S.D.N.Y.1848). Modern authorities, as well as the traditional commentators on the admiralty law, share this view. In Smith v. Miln, supra, the court cites Clerke's Praxis, 'the earliest historical record of admiralty practice,' as speaking of

 'attachments of property by warrant in admiralty, as an ordinary usage of the court, in case a debtor is concealed or absconded, and in case his goods are held by others, in order to compel his appearance in court, and also to appropriate his effects to the satisfaction of his debts. The primary purpose of the warrant was to enforce the personal appearance of the party * * *.' 22 Fed.Cas. at 606.

 Attachment was the 'easy and salutary remedy' recognized by Browne in his treatise on the Civil and Admiralty Law which was provided by the 'ancient proceedings of the admiralty court' when it was found that 'a person against whom a warrant had issued cannot be found, or that he lives in a foreign country.' Atkins v. Fiber Disintegrating Co., supra, 18 Wall. at 303, 85 U.S. at 303, 21 L. Ed. 844 (1874). Throughout all this time, the purpose of the foreign attachment has been twofold:

 'to obtain jurisdiction of the respondent in personam through his property and to the extent of his property; and to obtain security. These two purposes cannot be separated. An attachment for jurisdictional purposes also results in the obtaining of security, and security cannot be obtained except as an adjunct to obtaining jurisdiction.' 2 Benedict, Admiralty, § 288 at 346 (6th ed. 1940).

 Prior to Almeida, supra, process in personam was issued first. If the respondent could not be found it was then necessary to obtain a writ of foreign attachment. Dunlap's, Admiralty, 139-141 (1836). If the respondent was found and served but failed to appear, a writ of foreign attachment could also be obtained from the court 'for contumacy after monition.' II Conkling, Admiralty Practice 137-138 (2d ed. 1857); Manro v. Almeida, supra, 10 Wheat. at 496, 23 U.S. at 496, 6 L. Ed. at 374. The writ of foreign attachment issued neither as of course nor in the first instance, but only after an order of the court because of the respondent's contumacy or the inability of the Marshal to find him.

 It was not until Almeida, supra, that the Supreme Court held that the writ of foreign attachment could issue simultaneously with the monition. But this approved procedure was held to require an express order of the Court. Following Almeida, supra, Admiralty Rule 2 was promulgated. It codified the well established practice that an attachment under the writ of foreign attachment may be made only when the respondent cannot be found and codified the decision of the Supreme Court that the writ may issue simultaneously with the monition. Rule 2, however, eliminated the need of an express order of the court for the issuance of the writ. The writ may now be incorporated with the monition and be issued as a matter of course:

 'Rule 2. Suits in personam -- process in -- arrest in same

 'In suits in personam the mesne process shall be by a simple monition in the nature of a summons to appear and answer to the suit, or by a simple warrant of arrest of the person of the respondent in the nature of a capias, as the libellant may, in his libel or information pray for or elect; in either case with a clause therein to attach his goods and chattels, or credits and effects in the hands of the garnishees named in the libel to the amount sued for, if said respondent shall not be found within the district. But no warrant of arrest of ...


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