Source: https://supreme.justia.com/cases/federal/us/190/524/
Timestamp: 2019-04-19 04:43:38+00:00

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Justia › US Law › US Case Law › US Supreme Court › Volume 190 › Colombia v. Cauca Co.
There is a distinction between foreign states and foreign citizens. Congress did not mean to exclude a sovereign power which sees fit to submit its case to our courts from the right to appeal to the court of last resort. Under section 6 of the act of 1891, the decree of the circuit court of appeals is not made final where one of the parties is a foreign state.
Where the parties to a controversy have submitted the matter to a commission of three who have the power to and do resolve that all decisions shall be by majority vote, an award by a majority is sufficient and effective.
In an arbitration between a sovereign state and a railroad company and affecting public concerns, whatever might be the technical rules for arbitrators dealing with a private dispute, neither party can defeat the operation of the submission after receiving benefits thereunder by withdrawing, or by adopting the withdrawal of its nominee, after the discussions have been closed.
allow the office and traveling expenses and salaries of the officers, but not the cash paid by the corporation for the contract and concession or the amounts paid to the officers of the corporation for securing the agreement to submit the matter to arbitration.
This is an appeal by the Republic of Colombia from a decree of the circuit court of appeals affirming a decree of the circuit court upon a bill brought by the Republic and a cross-bill by the defendant, the Cauca Company. The bill is a bill to set aside an award under a submission entered into by the above-mentioned parties. The cross-bill is to establish the award as valid, notwithstanding the withdrawal of the representative named by the plaintiff, and prays specific performance. The decree confirms the award after rejecting certain items. Of course it does not attempt to order specific performance.
"in all cases in which the jurisdiction is dependent entirely upon the opposite parties to the suit or controversy being aliens and citizens of the United States or citizens of different states."
We see no reason to doubt that Congress was as well aware of the distinction between foreign states and foreign citizens when it passed the act of 1891 as when it passed the act of 1888, and that, when it spoke of aliens, it meant foreign citizens alone. We are confident that it did not dream of excluding sovereign powers that choose to sue here from the right to an appeal. The word "aliens" could be given that effect only by straining it beyond its natural meaning and away from the indications of the context. As the decree of the circuit court of appeals is not made final by § 6, an appeal lies to this Court.
of the road, and the company was to take his place under the Cauca Company's contract.
"determine the procedure to be followed in the exercise of the power conferred upon it, both as to its own acts and as to the proceedings of the parties."
In pursuance of this power, it resolved that all decisions should be by majority vote. Thereafter, the case was tried and several items were allowed to the company which it was contended by the representatives of Colombia were not within the scope of the submission. At the end of the trial, when hardly anything remained to be done except to sign the award, the questions remaining open concerning only matters of interest which have been disallowed, the Colombian commissioner announced his resignation to the commission.
from coming to naught was to ignore the communication and to proceed to the award. This it did. Colombia, by its bill and argument, now lays hold of the resignation of its commissioner as a ground for declaring the award void.
Colombia thus is put in the position of seeking to defeat the award after it has received the railroad in controversy and while it is undisputed that an appreciable part of the consideration awarded ought to be paid to the company under the terms of the submission. It is fair to add that the bill offers to pay the undisputed sum, but not to rescind the submission and return the railroad. We shall spend little argument upon this part of the case. Of course, it was not expected that a commission made up as this was would be unanimous. The commission was dealt with as a unit, as a kind of court, in the submission. It was constituted after, if not as the result of, diplomatic discussion in pursuance of a public statute of Colombia. It was to decide between a sovereign state and a railroad, declared by a law of Colombia to be a work of public utility. In short, it was dealing with matters of public concern. It had itself resolved, under the powers given to it in the agreement, that a majority vote should govern. Obviously that was the only possible way, as each party appointed a representative of its side. We are satisfied that an award by a majority was sufficient and effective. We are satisfied further that, whatever might be the technical rule for three arbitrators dealing with a private dispute, neither party could defeat the operation of the submission, after receiving a large amount of property under it, by withdrawing or adopting the withdrawal of its nominee when the discussions were closed. See Cooley v. O'Connor, 12 Wall. 391, 79 U. S. 398; Kingston v. Kincaid, 1 Wash. C.C. 448; Ex Parte Rogers, 7 Cow. 526; Carpenter v. Wood, 1 Met. 409; Maynard v. Frederick, 7 Cush. 247; Kunckle v. Kunckle, 1 Dall. 364; Cumberland v. North Yarmouth, 4 Me. 459, 468; Griffindley v. Barker, 1 Bos. & P. 229, 236; Dalling v. Matchett, Willes 215, 217. In private matters, the courts are open if arbitration fails, but in this case, the alternative was a resort to diplomatic demands.
"a just indemnity por las obras y trabajos (literally, the works and labors) which the company may have executed during the time in which the undertaking has been in its charge, and for the rolling stock,"
"The government of Colombia and the company recognize in advance as just and sole indemnity a sum which shall equal that which the company shall prove that it has expended en los trabajos y obras ejecutados por ella en la construccion de la expresada via ferrea y en los materiales rodantes, herramientas, etc., etc., introducidos con destino a la misma via."
It is argued for Colombia that the untranslated words limit the indemnity to the immediate cost on the ground of the works and labors executed there. On the other side, it is argued, especially in view of the previous dealings, that indemnity for the total cost of the enterprise was intended. Our opinion falls between these two extremes. The company, to be sure, was claiming the larger amount, but Colombia had asserted a forfeiture. The submission was a compromise, and presumably the company meant the most, and Colombia the least, which the words used were capable of meaning. The only fair way is to take the language in its natural sense, not straining it either way. In article 5, it is contemplated, as the means of reaching the indemnity mentioned, that the commission shall appraise obras, trabajos, y materiales aforesaid; that it shall examine the books and accounts of the Cauca Company in New York, and that it shall inspect on the ground los obras y trabajos of the railroad and the rolling stock. In article 10, it is said that Colombia calculates approximately that the Cauca Company has disbursed in the obra of the railroad a sum of $200,000 (somewhat less than the cost on the ground as agreed before the commission), while the company considers that sum as much below the just price to the obras y trabajos por ella ejecutados.
And the sum named is paid on account in advance for the purpose of obtaining the immediate delivery of the railway. Whether the preliminary negotiations be considered or not, it seems to us to carry out the import of the words used if we limit the indemnity to expenditures which fairly could be found to have contributed in a direct way to the result on the surface of the earth, but extend it to such expenditures, even when they took place at a distance. If the latter were not included, there was no sufficient reason for a commission meeting in New York.
It is for us to determine the scope of the commission, whatever may have been its own finding with regard to its powers. But, when its powers are established, we are not called upon to revise any finding that could have been made without going beyond the line which we lay down. On this footing, subject to a further point to be mentioned, the salaries of executive officers of the Colombian Construction & Improvement Company ($108, 181.42), the traveling expenses of these officers ($29,386.30), and the office expenses of the New York office ($21,727.58), properly were allowed, so far as appears. Although the facts were gone into with superfluous detail, it cannot be said, as matter of law, that those items might not have been necessary in order to lay the tracks upon the ground. The company devoted itself wholly to the business of building the road. The initial expense naturally would be the greatest, and the company's contention was that, but for Colombia, the work would have been done.
finding by the commission that the cost of building, by whomsoever incurred, was part of the Cauca Company's work.
On the other hand, we cannot uphold the award of $135,000 for cash paid for purchase of the concession. If, as would seem, this was the sum which the construction company was to pay Cherry for the assignment of the Cauca Company contract, it requires a layman's superiority to form in the interest of substance to connect this with the Cauca Company at all. But, assuming that connection established, the expense is too remote from cost of construction to be allowed under the words used in this submission. It was contemplated by the concession that it might come to the hands of a corporation having its headquarters elsewhere, and the expenses which we have allowed might have been found necessary, if a Virginia or New York corporation were to begin the construction of this road in Colombia. But the purchase of the right to do the job was an accident. The cost of it would not have been incurred, so far as appears, if the concession had been made to the company direct. Therefore it is not to be paid for unless we adopt the view that the company is to be made whole for all that it paid in connection with the enterprise, rather than for what it paid to get the tracks laid, assuming that it had the right to lay them. As we have said, we adopt the latter view. We think it unlikely, and not within the clear meaning of the words, that the government undertook to pay an additional sum because its own concession had changed hands.
It is much more obvious that the submission did not warrant charging Colombia with an extra sum of $29,200, voted by the construction company to its officers for services in securing the agreement of submission. We have indicated our reasons sufficiently above.
items, some of which may be disallowed without affecting the rest. If they should not be considered, the only course would seem to be to presume that the commission followed its authority, and to sustain the award for the whole original amount. Certainly they could not be given a partial consideration and be taken account of so far as to invalidate the award, and yet be denied examination on the further question whether they could not be stricken out without affecting the residue of the award.
Decree reversed, and cause remanded to the Circuit Court with directions to enter a decree confirming the award for and up to the sum of $193,204.02.

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