Papers Relating to the Foreign Relations of the United States, With the Annual Message of the President Transmitted to Congress December 5, 1905
Minister Bowen to the Secretary of State.
Caracas, Venezuela, July 24, 1904.
Sir: I have the honor to inclose herewith a copy of my cablegram to you of the 22d instant relative to the embargo of the New York and Bermudez asphalt lake, a copy of the libel, and a copy of the protest of the manager of the New York and Bermudez Company. The proceedings were ex parte. Yesterday the Venezuelan gunboat Bolivar left La Guaira with the man Carner on board to take possession of the asphalt lake. I think an American fleet should be sent to La Guaira at once. If the asphalt lake is not returned to the American owners within twenty-four hours after the arrival of the fleet at La Guaira, I advise that the custom-house be seized there and also the one at Puerto Cabello, and that both of them be held until full satisfaction shall have been obtained by us and agreements made that will put a stop once and for all to the illegal attacks of President Castro on foreign corporations established in Venezuela. Since I sent my said cablegram to you, he has demanded 12,000,000 bolivars of the British railway company at Puerto Cabello and the transfer to him of the British central railway for the ridiculous sum of 1,000,000 bolivars, and he has begun proceedings to blackmail the British company that owns the railway from Caracas to La Guaira. He is annoying the Germans, I understand, at Ciudad Bolivar, and the only wealthy Italian landowner in Venezuela has been notified not to cut any wood on his property nor to raise any crops. He is also attacking the French Cable Company, and some time ago demanded the recall of the French minister, who had done nothing except protect French interests with due energy, and who, consequently, will be retained here by the French Government. * * *
I am, etc.,
The New York and Bermudez Company to Minister Bowen.
Sir: The undersigned, managing director of the New York and Bermudez Company, and owner of ten shares of the capital stock thereof, respectfully appears before you and most solemnly and sincerely protests against the Government of Venezuela, the federal court and court of cassation of Venezuela, the attorney-general of Venezuela, the minister of internal affairs of Venezeuela, and any and all other persons concerned, for their unjustifiable, inequitable, and illegal ex parte actions in placing an embargo on the property of this company and appointing a custodian thereof during litigation without having served any writ, summons, or notice on this company or its representative of such intended action; and for not giving said company any opportunity to appear in court and contest such action, and particularly for the appointment of A. H. Carner as custodian, said Carner not being a stockholder of record in the New York and Bermudez Company, and if said Carner holds any stock of said company by assignment it bears on its face the proof that said assignment is of no value until registered on the books of the company, said Carner being, moreover, notoriously antagonistic to said company.
It appears that this summary action has been taken on the ground that the Hamilton contract is a contract of rental and the Government of Venezuela has so averred in its demand; but a mere inspection of the contract itself shows that this is not the case, and it being therefore a question of law and interpretation of a contract the question should have been tried in open court before any such summary action was taken.
As a stockholder in said company and as the legally appointed representative of all the stockholders and bondholders of said company, I call upon you in the name of the New York and Bermudez Company to demand of the Venezuelan Government that it refrain from any interference with the property of this company in Venezuela, and failing this to call upon the Government of the United States of America to prevent by whatever means it deems suitable this unjust, inequitable, and illegal spoliation of the property of this American corporation.
So far as the undersigned has any official knowledge, no suit has yet been brought against this company in the premises.
Managing Director.
Certified copy of the declaration of the action instituted by the attorney-general of the nation against The “New York and Bermudez Company” to the end that it consent to the dissolution of the contract made by the minister of fomento with Mr. Horace R. Hamilton, and for other purposes.
July 22, 1904, at half-past 2 in the afternoon.
Robert K. Wright.
Citizen Judge of First Instance of the Federal and Cassation Court:
I, Dr. F. Arroyo Parejo, attorney-general of the nation, acting in this character before you, with due respect, show: Mr. Horace R. Hamilton made a contract of lease with the minister of fomento, duly authorized by the President of the Republic, for the purpose of exploring and exploiting the natural products existing on the wild lands of the former state of Bermudez, and also for the purpose of taking therefrom woods for building, furniture making, and others useful for industry, and resins, plants, and aromatic seeds. The right was also granted to the contractor to exploit the asphalt deposits which are situated within the territory of the said state. (Articles 1 and 2.) The said contract, which is dated the fifteenth day of September, one thousand eight hundred and eighty-three, was added to on the nineteenth day of October of the same year, with the object of fixing the duties which the contractor should pay for the several kinds of woods which he might take and export. By a second additional clause, which is dated the thirtieth day of May of the following year, Hamilton entered into the obligation to canalize one or more rivers of the state of Bermudez, commencing by the Caño Colorado and Guarapiche as far as Maturin, for the purpose of facilitating importation and exportation. The government granted various other concessions to the contractor at different dates, as can be observed from the text of the contract itself, which is inserted in the Official Gazette, No. 8259, which I produce. Both the contract in question and its annexes were approved by the national Congress on the sixth day of June, one thousand eight hundred and eighty-four. Hamilton afterward assigned all his rights and obligations under the said concession referred to to the New York and Bermudez Company, an [Page 923] incorporated company, established in New York, United States of North America, which assignment was accepted by the Government of the Republic through the channel of the ministry of fomento and after the favorable report of the department of territorial wealth of the said ministry on the ninth of December of the year last mentioned. Twenty-one years have elapsed since the above-mentioned company entered upon the enjoyment of the Hamilton concession, and during this long period of time, notwithstanding that the said concession is one of the most extensive and favored that has been granted by the Government of Venezuela, the said company has restricted itself solely and exclusively to the exploitation of an asphalt lake discovered within the territory of the state of Bermudez, neglecting entirely to fulfill the other obligations stipulated in the contract. There is no doubt that the company has thought that the exclusive exploitation of the asphalt, which offers greater facilities and produces more enticing returns than that of other natural products, was a convenient way of executing the contract; but this singular judgment can not be shared by the government, which sees one of the most productive branches of the national wealth rendered unprofitable to the evident damage of the public interests. As a matter of fact, the exploitation of the natural products of the state of Bermudez other than asphalt has remained stationary for upwards of twenty years, and the government finds it impossible to activate it, on account of its obligation toward the company. Such a situation has become unbearable. The New York and Bermudez Company can not pretend that the exploitation of the natural products to which the contract relates was simply a right which it could renounce at its own will. A like interpretation would be absurd, because it would adjudge to one of the parties all the advantages and impose all the burdens on the other. It is well known that every right is the correlative of an obligation, and in the case in question the clauses of the contract show clearly that by the concessions which the government made to the original contractor they purposed to obtain immediate benefits in return, such as were those of fostering the progress of the state of Bermudez by all the means which are developed by a great enterprise; of canalizing its rivers and adapting them to navigation, and lastly, of receiving the duties which were expressly fixed for the exportation of natural products. The company rendered those objects nugatory by its proceedings; it has ignored its obligations and made it impossible to continue the contract. Furthermore the exploitation of the asphalt itself, the only natural product which the company exports, is carried on on so small a scale, as will be proved in the suit, that the profits which the government derives therefrom are so insignificant as to be ludicrous. On the other hand, the New York and Bermudez Company has not, in compliance with its obligation, canalized any of the rivers of the state of Bermudez, an improvement which was expressly agreed upon in the contract made with Mr. Horace R. Hamilton, and as in spite of the steps taken by the government to obtain of the company the strict fulfilment of the contract, it has not been able to succeed in effecting an amicable arrangement, I have received precise instructions to sue, as I in fact do, with all legal formality, and relying on article 1137 of the civil code, the New York and Bermudez Company, an incorporated company, established in Philadelphia, and domiciled in this city, in the person of its representative, Mr. Robert Kemp Wright, adult, and a resident, to the end that he consent to the dissolution of the contract made by the minister of fomento with Mr. Horace R. Hamilton on the nineteenth of October, one thousand eight hundred and eighty-three, approved by the National Congress on the sixth of June, one thousand eight hundred and eighty-four, and of which it is cessionaire, that it pay the nation for the damages which have been caused to the latter by the failure to execute the said contract, according to the just finding of appraisers and calculated in accordance with the bases established by the first additional article, and that it also pay the expenses occasioned by these judicial proceedings; and as to the contract made with Mr. Horace R. Hamilton, it is a contract of lease, the subject-matter of which is the enjoyment of all the natural products existing on the wild lands of the former state of Bermudez, and from the instrument of proof and telegram, which I annex, it is clearly demonstrated that the lessee has omitted to make improvements which by the contract it is bound to make, such as the canalization of the rivers of the said state, in conformity with the seventh particular of article 373 of the code of civil procedure, I move for a decree of sequestration of the mine which the company exploits at the place called Guanoco, in the jurisdiction of the state of Bermudez, together with all the apparatus and appurtenances of the exploitation, to answer the results of this suit. In accordance with the said mentioned article, I move that the person whom I shall in due time designate be appointed receiver. I consequently pray the citizen judge to admit the present action, substantiate it in accordance with law, and give a definitive judgment for the plaintiff, together with the costs, and to make the other legal orders. It is justice.—Caracas: twentieth of July, one thousand nine hundred and four. F. Arroyo Parejo.—This signature is over a stamp of one bolivar. There is a seal which says, “United States of Venezuela, office of the attorney-general of the nation.”
The subscriber, secretary of the chamber of resolutions of the tribunal of first instance of the federal and cassation court, certifies the correctness of the preceding copy. Caracas: twenty-first of July, one thousand nine hundred and four.
Juvenal Anzola.
[Page 924](The signature “Juvenal Anzola” is written across two Venezuelan postage stamps of the value of one bolivar each.—Translator.)
Federal and cassation court.
Tribunal of first instance.
Twenty-first of July, one thousand nine hundred and four. 94 and 46.
Mr. Robert Kemp Wright, resident of this city, representative of the New York and Bermudez Company, shall appear before this tribunal on the tenth court day at nine o’clock in the morning, and after having been cited, to answer this action. He shall give the porter a receipt for this copy.
(The preceding copy is engrossed on five sheets of Venezuelan sealed paper of the seventh class of the value of one bolivar each.—Translator.)
[Subinclosure 2.—Translation.]
Citizen President of the Federal and Cassation Court in your character as Judge of First Instance:
I, Robert Kemp Wright, managing director in Venezuela of the “New York and Bermudez Company,” before you very respectfully show:
I have unexpectedly learned that there is an action in your court with reference to the contract made by the government with Mr. Horace R. Hamilton, of which the company I represent is cessionaire, which action was instituted by the attorney-general of the nation in the latter’s name; and he asks, furthermore, the sequestration of the mine or asphalt lake and its appurtenances which the company owns and exploits in the municipality of Union (Guariquen), in the district of Benitez, state of Bermudez; and I have learned, with surprise, that the said sequestration was decreed yesterday, Mr. Ambrose H. Carner being appointed receiver.
I say with surprise, because, although I have not yet read the decree for sequestration, the action and the petition for sequestration induce me to believe that the latter is based on No. 7 of article 373 of the code of civil procedure, and this being so, it can not be more contrary to law.
As a matter of fact the plaintiff found himself obliged to pervert the nature of the contract in question, setting it forth purely and simply as a contract of lease; and did this with the deliberate purpose of bringing the petition for sequestration within the scope of said No. 7, article 373, of the code of civil procedure. In order to understand this it suffices to read the declaration and the contract. The latter has no characteristic whatsoever of a lease, and now that the pretension of the plaintiff is seen to be such it will be of the utmost importance to the suit to elucidate this point.
It is absolutely necessary that the precautionary measure of sequestration in the case of a lease, when it is requisite, should be grounded on a contract that is indisputably a lease—that is to say, that it has been accepted by the parties as a lease. To suppose anything else would be to establish the possibility of anyone whosoever bringing forward a contract of emphyteusis, vivim vadium, sale, loan in kind on security, etc., calling it a lease, and for him to obtain a sequestration based on the capricious denomination which he has given to the said pact.
Article 368 of the said code of procedure says that the judge may grant the sequestration in the cases provided for by the law. That is to say, it lies within the discretion of the judge to grant it or not, as should seem expedient to him, having regard to what is most equitable and rational in deference to justice and impartiality (art. 18 of the said code). And, indeed, citizen judge, no one will fail to note the immense loss and damage that will be suffered by the company through the sequestration ordered, nor will anyone of a serene mind think that the necessity for such a measure is justified, even if it were in accordance with law, which is denied.
As there is no appeal from the order to which I refer and it is therefore revocable (art. 175, civil procedure), I pray you for the reasons stated to review and reverse the same as a matter of justice.
Signed over a stamp of 1 bolivar.
Received by the court July 22, 1904, 4.45 p.m.