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BERIZZI BROS. CO. v. THE PESARO, 271 U.S. 562 (1926)

U.S. Supreme Court

BERIZZI BROS. CO. v. THE PESARO, 271 U.S. 562 (1926)

271 U.S. 562

No. 334.

Argued May 7, 1926.
Decided June 7, 1926.

[271 U.S. 562, 563]   Mr. Oscar R. Houston, of New York City, for appellant.

[271 U.S. 562, 565]   Mr. Homer L. Loomis, of New York City, for appellees.

[271 U.S. 562, 569]  

Mr. Justice VAN DEVANTER delivered the opinion of the Court.

This was a libel in rem against the steamship Pesaro on a claim for damages arising out of a failure to deliver certain artificial silk accepted by her at a port in Italy for [271 U.S. 562, 570]   carriage to the port of New York. The usual process issued, on which the vessel was arrested, and subsequently she was released, a bond being given for her return, or the payment of the libelant's claim, if the court had jurisdiction and the claim was established. In the libel the vessel was described as a general ship engaged in the common carriage of merchandise for hire. The Italian ambassador to the United States appeared and on behalf of the Italian government specially set forth that the vessel at the time of her arrest was owned and possessed by that government, was operated by it in its service and interest, and therefore was immune from process of the courts of the United States. At the hearing it was stipulated that the vessel, when arrested, was owned, possessed, and controlled by the Italian government, was not connected with its naval or military forces, was employed in the carriage of merchandise for hire between Italian ports and ports in other countries including the port of New York, and was so employed in the service and interest of the whole Italian nation, as distinguished from any individual member thereof, private or official, and that the Italian government never had consented that the vessel be seized or proceeded against by judicial process. On the facts so appearing the court sustained the plea of immunity, and on that ground entered a decree dismissing the libel for want of jurisdiction. This direct appeal is from that decree and was taken before the Act of February 13, 1925 (43 Stat. 936), became effective.

The single question presented for decision by us is whether a ship owned and possessed by a foreign government, and operated by it in the carriage of merchandise for hire, is immune from arrest under process based on a libel in rem by a private suitor in a federal District Court exercising admiralty jurisdiction.

This precise question never has been considered by this court before. Several efforts to present it have been made [271 U.S. 562, 571]   in recent years, but always in circumstances which did not require its consideration. The nearest approach to it in this court's decisions is found in The Exchange, 7 Cranch, 116, where the opinion was delivered by Chief Justice Marshall. There a libel was brought by citizens of this country against an armed vessel in the possession of French naval officers; the libelants' claim being that they were the true owners, that the vessel had been wrongfully taken from them and then converted into an armed vessel, and the they were entitled to have it restored to them through a proceeding in admiralty. Diplomatic correspondence resulted in the presentation by a law officer of this government of a formal suggestion in the suit to the effect that at the time of the arrest under the libel the vessel was claimed and possessed by the French government as a warship, was temporarily within our waters for a lawful purpose, and therefore was immune from the process whereon she was arrested. In the opinion the Chief Justice attributed to every nation an exclusive and absolute jurisdiction within its own territory, subject to no limitation not having its consent, observed that the consent might be either express or implied, and then said (page 136):

After discussing the statute of a sovereign, his ministers and his troops when they or any of them enter the territory of another sovereign, he proceeded (page 141):

And then, after suggesting that there is a wide difference between the status of private individuals who enter foreign territory, or send their private ships there for purposes of trade, and the status of public war vessels when a foreign waters, he further said (page 145):

It will be perceived that the opinion, although dealing comprehensively with the general subject, contains no reference to merchant ships owned and operated by a government. But the omission is not of special significance, for in 1812, when the decision was given, merchant ships were operated only by private owners, and there was little thought of governments engaging in such operations. That came much later. [271 U.S. 562, 574]   The decision in The Exchange therefore cannot be taken as excluding merchant ships held and used by a government from the principles there announced. On the contrary, if such ships come within those principles, they must be held to have the same immunity as war ships, in the absence of a treaty or statute of the United Stated evincing a different purpose. No such treaty or statute has been brought to our attention.

We think the principles are applicable alike to all ships held and used by a government for a public purpose, and that when, for the purpose of advancing the trade of its people or providing revenue for its treasury, a government acquires, mans, and operates ships in the carrying trade, they are public ships in the same sense that war ships are. We know of no international usage which regards the maintenance and advancement of the economic welfare of a people in time of peace of any less a public purpose than the maintenance and training of a naval force.

The subsequent course of decision in other courts gives strong support to our conclusion.

In Briggs v. Light Boats, 11 Allen (Mass.) 157, there was involved a proceeding against three vessels to subject them to a lien and to satisfy it through their seizure and sale. The boats had been recently acquired by the United States and were destined for use as floating lights to aid navigation. Whether their ownership and intended use rendered them immune from such a proceeding and seizure was the principal question. In answering it in the affirmative the state court, speaking through Mr. Justice Gray, afterwards a member of this court, said (page 163):

And again (page 165):

In the Parlement Belge, L. R. 5 P. D. 197, the question was whether a vessel belonging to Belgium and used by that government in carrying the mail and in transporting passengers and freight for hire could be subjected to a libel in rem in the admiralty court of Great Britain. The Court of Appeal gave a negative answer and put its ruling on two grounds, one being that the vessel was public property of a foreign government in use for national purposes. After reviewing many cases bearing on the question, including The Exchange, the court said:

Sometimes it is said of that decision that it was put on the ground that a libel in rem under the British admiralty practice is not a proceeding solely against property, but one directly or indirectly impleading the owner-in that instance the Belgian government. But this latter was given as an additional and independent ground, as is expressly stated in the opinion at page 217. [271 U.S. 562, 576]   The ruling in that case has been consistently followed and applied in England from 1880, when it was made, to the present day. Young v. The Scotia, (1903) A. C. 501; The Jassy, L. R. (1906) P. D. 270; The Gagara, L. R. (1919) P. D. 95; The Porto Alexandre, L. R. (1920) P. D. 30; The Jupiter, L. R. (1924) P. D. 236.

In the lower federal courts there has been some diversity of opinion on the question, but the prevailing view has been that merchant ships owned and operated by a foreign government have the same immunity that war ships have. Among the cases so holding is The Maipo (D. C.) 252 F. 627, and 259 F. 367. The principal case announcing the other view is The Pesaro ( D. C.) 277 F. 473. That was a preliminary decision in the present case, but it is not the one now under review, which came later and was the other way.

We conclude that the general words of section 24, cl. 3, of the Judicial Code (Comp. St. 991), investing the District Courts with jurisdiction of 'all civil causes of admiralty and maritime jurisdiction,' must be construed, in keeping with the last paragraph before quoted from The Exchange, as not intended to include a libel in rem against a public ship, such as the Pesaro, of a friendly foreign government. It results from this that the court below rightly dismissed the libel for want of jurisdiction.

Decree affirmed.

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