Papers Relating to the Foreign Relations of the United States, With the Annual Message of the President Transmitted to Congress December 5, 1905

Chargé Hutchinson to the Secretary of State.

American Legation,
Caracas, October 29, 1904.

No. 349.]

Sir: I have the honor to acknowledge the receipt of the Department’s No. 222, of September 26, 1904, relating to the case of the New York and Bermudez Company, and reiterating the request of the United States Government to that of Venezuela to restore the said company’s property to it pending proper legal settlement, and instructing me to read the dispatch to the minister of foreign relations and to leave with him a copy of it.

In accordance with the Department’s instructions, I have the honor to report that I called upon Señor Gustave J. Sanabria, minister of foreign relations, on Wednesday, the 19th instant, at 10 a.m., and remained with him an hour. I began by reading the dispatch to him, but as he could get the meaning much better by reading aloud himself he did so, I explaining from time to time the meaning of certain words and sentences and pointing out the importance of certain paragraphs. The minister is a good English scholar, and I feel sure got the import of the dispatch perfectly well.

In the first place, he denied the company’s titles to the property, and said the Hamilton concession is still the only instrument in force, and that, by its terms, prevents any definite titles being given to the property in dispute. I simply replied that the company possessed titles signed by the highest authorities of the country.

As this had not to do strictly with the request for the restoration of the property, we turned to the matter of the seizure. He plainly and most forcibly declared that the taking possession was in full accord with the Venezuelan laws, and that there were “extraordinary circumstances” for so doing, the charge of “noncanalization” being only one of many complaints against the company; so, therefore, the seizure as a “precautionary measure” was correct, the precaution being necessary from the fact that the company could have transferred the property into other hands, or in some way got rid of it. If Venezuela is wrong, he said, in seizing the property in this manner, the company, if winning the suit, will be able to obtain damages hereafter.

As to the company not having had time to show cause why its property should not have been taken from it, he said it had had time and had put in its papers. I reminded him that the “receiver” had already gone to the asphalt lake to take possession, so what the company was able to do after his departure amounted to nothing, so far as preventing the sequestration was concerned. He then said the code gave the right to appoint the receiver anyway, and what had been done was perfectly legal.

Señor Sanabria said he thought our government had only had good opportunities for knowing one side of the case, and that he had quoted the articles and sections of the code which plainly upheld the act of sequestration in his note of August 6, 1904, to Mr. Bowen.

I replied that our government undoubtedly would not ask what it was asking of the Venezuelan Government without first having considered all the important documents in the case, the company’s title deeds, and the codes of Venezuela especially. I explained to him that Judge Penfield was the legal adviser of the Department, and had no connection with the New York and Bermudez Company, nor any interest in the case, except to arrive at the truth. I suggested, however, that he write out for the next mail, October 31, a full statement as a reply to the Department’s dispatch. By so doing, the Government of the United States might be better able to understand the position he is assuming in the case and how he reconciles himself to the unusual proceedings of the seizure. He said he would certainly do as I suggested and have his reply ready for the mail.

I pointed out to him, as related in the Department’s dispatch, the peculiar and secret manner of exploiting asphalt from the company’s property before the case has been decided by the courts. He replied that he knew nothing about the sending away of asphalt in chartered ships, except what he had casually noted in the newspapers; but, possibly, if this were true, it had been done for the purpose of getting sufficient funds to keep the property in repair. (This fact seemed to worry him somewhat, however.) I reiterated that this was hardly a proper and legal thing to do, to the extent it was being done, and that it lent an unpleasant color to the whole matter of the seizure.

As regards the soldiers who had been sent down, he did not deny they were sent, as he did once to Mr. Bowen, but said they were necessary, as the men employed by the company are mostly colored and very rough and lawless by nature, and as police do not exist at Guanoco the receiver required the security of his person and the fulfillment of his duty to take over the property without loss of time or possible contention.

As Señor Sanabria seemed earnestly to believe that his government had acted in accord with the Venezuelan codes, I did not discuss the point with him, but said it seemed to me the manner in which his government had acted was, if legal, at least most unusual and peculiar, and that he must see that each reiteration of the request for restoration by the Government of the United States was becoming stronger, and clearly something must be done; either the company’s property restored pending a proper decision by the tribunals, or a satisfactory proof that his government has proceeded absolutely fairly and legally in the matter of the sequestration.

I thereupon handed the minister a copy of the Department’s dispatch, as instructed, and this ended the audience, which had been perfectly open and cordial in every way. * * *

It seems evident to me that the Venezuelan Government will try to keep the company’s property as long as possible, if not for good, and ship away as much asphalt as it can. Captain Wright, the company’s manager here, tells me it is possible to ship enough Bermudez asphalt away in a few months to pave the entire city of New York. * * *

On Friday, the 21st instant, I saw Señor Sanabria again, by special appointment, and handed to him some notes which I prepared for him to be read in conjunction with the Department’s dispatch, a copy of which he has. These notes are short and clear in stating some of the principal arguments of the Department, supporting its request for restoration of the company’s property, and I thought I would not be going beyond my instructions in presenting them. In these notes I have laid particular stress on the point which Señor Sanabria gives as the chief defense for the sequestration, i. e., article 373, section 7, of the Venezuelan code of procedure, permits sequestration in the case of leases only. I have shown that as the company can not now be legally declared to posses a lease, and lease only, the law cited can not apply, and if the law does not apply, then the sequestration has been illegal.

President Castro returned to Caracas a few days ago, and soon after his arrival Señor Senabria went to bed ill, and since that time the minister of foreign relations has not been visible, though he has been signing notes to the British legation.

* * * * * * * *

Señor Sanabria’s reply adds nothing new to his other replies and is evasive in character. It still reminds the United States Government that the courts of justice should not be interfered with, and carefully avoids making a systematic reply to the points made by Mr. Adee in favor of the restoration of the company’s property. As Señor Sanabria says, the executive has seen the copy of the Department’s No. 222 and has instructed him to reply as he has done.

I can not add anything further to the present dispatch, except to inclose a copy of a letter to the New York and Bermudez Company from their manager here, together with a notice from the director of the French Cable Company at Caracas, which informs Manager Wright that the Venezuelan Government is delaying his telegrams to his company. This is one more complaint against this government, and as it has also to do with the unfair way in which the company has been treated from the beginning of the legal proceedings I have included it in this dispatch. Mr. Wright has not asked me to make any complaint to the authorities.

I have, etc.,

Norman Hutchinson.

[Inclosure 1.]

Chargé Hutchinson to the Minister of Foreign Relations

notes.

1. It is said the appointment of the receiver has been made in strict accordance with the Venezuelan laws of procedure, and article 373, section 7, is cited as that part of the laws upon which the sequestration is founded.

This is correct provided the company possesses only a lease; the article and section refer to leases only. But the judge of first instance has taken for granted that the company possess a lease only. He can not take for granted that which forms a part of the questions at issue and which according to the complaint must be argued. It must be established that the company has a lease only without holding definite titles to the property sequestered. The company have documents proving their definite titles, which are on record in Venezuela, and which have been put before the court. Until the present time the Hamilton concession was never before called a “lease,” and surely the judge of first instance can have no legal right for taking for granted that it is a lease or that the company possess only a lease. Therefore as it has not been established by the courts that the company held a lease only, article 373, section 7, can not apply, and if they can not apply then the sequestration has not been legal.

2. It is said the failure to canalize the rivers is not the only complaint against the company.

It is, nevertheless, the only complaint that can be considered in the present proceedings, as regards the matter of sequestration.

According to the laws expert evidence is necessary to prove that the canalization has not been done. A technical commission is only at the present time about to be sent to report on the state of the rivers in question. Therefore the charge of noncanalization should not have appeared in the complaint, as no evidence of the kind required by the code had been procured at the time the proceedings began.

Further, by Minister Pulido’s decree of July 17, 1900, it was declared that the company had fulfilled up to date all the engagements and obligations of its contract. The decree did not call it a “lease.”

3. The “Felicidad” case can not relate in any way to the grounds upon which the Government of the United States request the restoration of the company’s property pending legal settlement. (That case, however, was decided in favor of the company.)

4. The fact that the receiver is shipping thousands of tons of asphalt of enormous value to New York in a secret manner does not lend a pleasing color to the case, which is sub judice.

5. The principal reason why the company’s property should be restored to it is that article 373, section 7, can not apply, as the question of a “lease” has yet to be established by the tribunals. The complaint and the company’s answer are sufficient to show that this step is first necessary.

Norman Hutchinson.

[Inclosure 2.—Translation.]

The Minister of Foreign Relations to Chargé Hutchinson.

Ministry of Foreign Relations of the United States of Venezuela,
Caracas, October 29, 1904.

Sir: In one of our recent interviews your honor had the kindness to read to me the note which under date of the 26th of August [September] last past was sent by Mr. Adee, Acting Secretary of State of the United States, regarding a certain request previously made by the American legation concerning a suit brought by the Government of the Republic against the New York and Bermudez Company. Your honor also kindly left me a copy of the note referred to.

I have informed the executive of the contents of the communication from the Department of State, and in accordance with the instructions which have been given to me in this matter I beg to give your honor the following reply.

As may be seen from the correspondence which I have had the honor to carry on regarding this matter with the worthy legation of which your honor is now in charge, the Government of Venezuela has always said to the Government of the United States that the above-mentioned suit having been submitted to the decision of a competent tribunal, the sole recourse of the interested parties was to take such steps and other measures of defense before the judges as they are entitled to. Such declaration is easily seen to be explainable, for apart from the fact that in Venezuela, as in all civilized countries, complete separation exists between the several branches of the public power, in the case of which we are treating the only power possessed by the executive is to cause this separation to be respected and by this means safeguard the independence of the courts of the nation And as it is a fact that the New York and Bermudez Company has been able under the Venezuelan laws to enter upon its defense in the way it has thought most expedient to select, it can be assured that any interference that any other persons might attempt to effect in the course of the suit would not be based on a just cause. With the exception of the persons who hold the position of either plaintiff or defendant in the controversy, it would be in vain endeavored to find any other who actually has the right to interfere in the suit now in course. The above means have existed and still exist for keeping the suit within the limits prescribed by the law which governs it according to extremely well-known principles, and it has also been taken into account by the executive that any discussion whatever outside of the court proceedings is entirely foreign to the ends aimed at by the legislator, not only because it is useless, since the magistrates who will have to decide the various points on which it is based will not pay any attention to it, but also because such a principle is unacceptable. Moreover, it tends to ignore the legitimate authority bestowed on the officials who have the sovereign authority to decide.

It is well that the company should allege in due time each and every of the reasons which Mr. Adee’s note contains. It is well that the company should petition the court, as it has done, for the revocation of the decree of separation. It is well, finally, that the company should submit to the consideration of the court any complaints it may have to make against all or any of the acts of the person appointed depositary, who necessarily will be responsible for them in such capacity. All this comes within the provisions to which the suit in course is subject, and consequently within the faculties of the judicial authority called to decide it; but consequently the Executive could not take cognizance of the various points to which I have just referred and which are analyzed at length in the communication from the Secretary of State, without usurping the authority given by the constitution to another department. By acting in this way, the Government of Venezuela not only complies with its primordial duty of obeying the provisions of the federal constitution, but submits to well-defined and universally adopted precedents and principles.

For the rest, the reasons the Executive has had to ask for the sequestration of the mine which the company possessed under the Hamilton contract are justified by peremptory duties that public administration is called upon to fulfill for the good of the community. They appear from the judicial proceedings, as well as from the decision now appealed from, which in first instance confirmed that measure which legally and justly the plaintiff asked for.

The Executive can neither refute declarations which the judge will necessarily take into account in due time nor be wanting in respect toward the highest court of justice in the state, and it must forbear to qualify any acts or facts which only the court is in a position to consider and define.

The Executive hopes that these friendly and frank declarations will be duly accepted by the American Government not only in behalf of the interest that on various occasions has inspired the traditional harmony existing between both nations, but also in consonance with the careful respect in which the United States have held the inalienable authority of courts of justice.

I have, etc.,

Gust. J. Sanabria.

[Inclosure 3.]

extracts from the code of civil procedure.

• Art. 281. In cases of indemnity and guaranty, the plaintiff as well as the defendant may ask, at the moment of answering, for the citation of the person liable to indemnify or guarantee, and the judge shall order the same to be done immediately; but the course of the cause shall not be suspended except when there is authentic proof either directly of the obligation to indemnify or guarantee or of the act from which such obligation arises as of right.
• Art. 284. The party who requests that an extraordinary term be granted him for the taking of evidence in places which are situated at more than two thousand kilometers from that at which the suit is being carried on, shall necessarily make his request at the moment of answering the action, and put forward the proofs or securities on which the petition is based. The opposite party shall state whether he objects or not to the granting of the request, and the tribunal shall restrict itself to declaring that the petition has been duly made and shall make the necessary order after the taking of the evidence in conformity with the provisions on the matter.
• Art. 368. At any stage or epoch of the cause whatsoever, if there is proof of the right sued for, although it be by the deposition of witnesses, when this proof is admissible according to the civil code, any of the parties may request, according to the case, and the judge may grant:
  • First. Prohibition to alienate the subject-matter of the dispute.
  • Second. The sequestration of determinate properties.
  • Third. Deposit of security, and in default thereof the attachment of sufficient property.
• Art. 369. None of the measures stated in the three preceding numbers shall be ordered, or shall be executed if they are ordered, if the party against whom they have been requested or decreed give sufficient security or guaranty.
• If the other party should object to the efficacy or sufficiency of the guaranty, the tribunal shall decide on the proofs put forth at the first hearing.
• Art. 370. Refers to those who sue in forma pauperis.
• Art. 373. Sequestration shall be decreed:
  • First. Of the chattel, the subject-matter of the action when the defendant has no responsible property and it is with reason feared that he may conceal, alienate, or deteriorate it.
  • Second. Of the subject-matter when its possession is doubtful.
  • Third. Of the wife’s property and in default thereof of that of the conjugal partnership or of the husband, sufficient to cover the former when the husband wastes the wife’s property.
  • Fourth. Of sufficient property of the inheritance, or, in default thereof, of the defendant, when he who has been deprived of his lawful property reclaims it from those who take or hold his inherited estate.
  • Fifth. Of the real property which the defendant purchased and is enjoying without paying the purchase money.
  • Sixth. Of the subject-matter in dispute when, definite judgment having been given against the holder thereof, the latter appeals without giving security to answer to the said subject-matter and its fruits, although it be real estate.
  • Seventh. Of the property leased if the defendant is sued for default in payment of the rental; on account of the property becoming deteriorated; or on account of having failed to make improvements to which he is bound by the contract, provided any of the circumstances be proved in the manner indicated in article 368.

In this case the owner, and the purchaser in the case mentioned in number five, may demand an order that they themselves be named repository, and the property shall remain subject to answer the lessee or purchaser when necessary.