The Secretary of State to the Ambassador in Cuba (Crowder)

No. 720

Sir: The Department has before it for consideration the claim of Mr. Charles J. Harrah, an American citizen, against Cuba for damages growing out of the alleged illegal demolition of his railroad and appurtenances located on the beaches of Marianao, Jaimanitas and Santa Ana in the vicinity of the Province of Marianao, and the consequent destruction of the business for which the railway was built.

It is averred on behalf of the claimant that in 1908 he obtained a permit from the Cuban Government for the extraction of sand from that part of the coast known as the “Maritime Zone”, under the Ports Law (Ley de Puertos); that in order to provide for the transportation of the sand the claimant constructed twelve kilometers of railway of a fixed and permanent character, beginning at the town known as Playa de Marianao, running along the shore, passing through the town of Jaimanitas and ending at the town of Santa Fe or Santa Ana; and that the claimant fully equipped the railway with motive power, rolling stock, extensive terminals and complete switching and interchange facilities with the United Railways of Habana. It is stated that the railroad was constructed entirely upon public domain, under surveys authorized by the Department of Public Works; that it was of a fixed and permanent character, with a solid roadbed protected from the action of the sea by a concrete wall and breakwater, the bridges over the Quibu and Jaimanitas Rivers supporting the track being especially of a solid and enduring character; that in the construction of the road more than 30,000 square meters of swamp land were filled in and reclaimed, a portion of the roadbed being built upon this reclaimed land, as were also many of the terminal facilities and buildings; and that the project was in every way a permanent and fixed structure. It is also stated that, while the railway was primarily intended for the transportation of sand and stone, it served a public purpose in the transportation of drinking water to the inhabitants of Jaimanitas and other towns, and that for this service no chargé was made.

It is alleged on behalf of the claimant that in the construction of the road he complied with all the legal requirements pertaining to such undertakings, including the procuring of the validation of [Page 898] his project by the Railroad Commission, and that the road came into full operation in 1908 and continued in operation until 1917. It is stated that on June 16, 1915 a decree was issued by the then President of the Cuban Republic authorizing the demolition of the portable railway which was said to exist on the beach of Marianao by virtue of an alleged temporary (one year) permit to certain persons, namely Enrique Gomez y Pastor and another, and that an order was thereupon promulgated by the Secretary of the Treasury directing the demolition of the claimant’s property. It appears from the record submitted that one Enrique Gomez (Enrique Gomez y Pastor) who was in charge of claimant’s railway while the latter was absent from Cuba, appealed against the execution of the decree of demolition upon the ground that he (Gomez) was the real owner of the Harrah railway. It is stated that while this appeal was still pending suit was brought against Gomez by The Antillana Company for an alleged debt due by Gomez to the Company, which resulted in the issuance of an order by the municipal court of Marianao embargoing the railroad property for the alleged debt due the Company. Upon learning that his railroad property was to be sold to satisfy this judgment, the claimant returned to Cuba and instituted suit to recover his property from Gomez. By interlocutory order of the Court of First Instance in the proceedings brought by Harrah against Gomez to recover possession of the property, the property was placed in the hands of a judicial administrator for the account of Harrah pending the final disposition of the case. This administrator duly qualified, furnished bond and assumed possession and control of the railway and operated it pursuant to the orders of the court. Thereupon, it is stated, Gomez abandoned his counter proceedings for the vacation of the order of demolition of claimant’s railway.

When the proposed action of the Secretary of the Treasury in regard to his intention to proceed with the demolition of the railway was brought to claimant’s notice, the claimant states that he called the matter to the attention of the Judge of the Court of First Instance, who, it appears, on April 14, 1917, addressed a communication to the Secretary of the Treasury notifying him of the existence of the suit between Harrah and Gomez and the appointment of a judicial administrator of the property. The Court also requested the Secretary of the Treasury to protect the judicial administrator in the operation, maintenance and repair of the railroad. It seems that the Treasury Department by letter of May 21, 1917, to the Department of Public Works declined to entertain the request of the court; on the contrary the order for the demolition of the railroad was repeated, it being insisted upon by the Treasury Department that the fixed [Page 899] materials and rolling stock were alone subject to the decision of the suit in that court. The Treasury Department seems to have taken the position that the railroad which was the subject of the suit was a portable railway of a temporary character, the concession for which had been granted to Enrique Gomez and another. On July 10, 1917, the Court of First Instance of the East of Habana rendered its decision holding that the claimant was the owner and entitled to the possession of the railroad, which it found to be a fixed railway built as a permanent structure and not to be confounded with the portable railway authorized by the Treasury Department, above mentioned, and requiring that an accounting be made to claimant for the profits derived from the operation of such railroad during its unlawful detention by Gomez. This decision was immediately appealed to the Audiencia, which on December 23, 1924, decreed possession and ownership of the railway in the claimant, Charles J. Harrah, as against the stock society “La Antillana” and Enrique Gomez y Pastor. It seems that the Audiencia declined to confirm the sentence of the Court of First Instance with respect to an accounting covering the profits received during the period of unlawful detention or for the costs of suit. It is asserted by the claimant that the movable and fixed property which was the subject of the suit was illegally dissipated and destroyed during pendency of the litigation and that his real property, consisting of right of way and reclaimed lands, is now unlawfully in the possession of the Compania TJrbanizadora del Parque y Playa de Marianao, the principal owners of which were, and are now, Carlos Miguel de Cespedes y Ortiz, Carlos Manuel de la Cruz and one Cortina.

An appeal was taken by the Gomez interests from the decision of the Audiencia to the Supreme Tribunal and after the expiration of more than four years the appeal was allowed to lapse. In the circumstances it is understood that the decision of the Audiencia became final. The result of the efforts of the claimant during the course of eight years’ litigation to confirm his assertion of ownership of the property and the exhaustion of his legal remedies in the courts of Cuba are asserted to have resulted merely in procuring an adjudication that he was the owner of property that was dissipated or destroyed while the litigation was going on and while the property was in the custody of the courts.

As before stated, in 1915 the then President of Cuba issued a decree authorizing the destruction of a portable railway that was said to exist on the beach of Marianao by virtue of a temporary permit. In the early part of 1917 the Secretary of the Treasury ordered the demolition of the claimant’s railway, insisting that the claimant’s railway was the portable railway authorized by the temporary permit. [Page 900] Claimant thereupon filed formal written protest with the Secretary of Public Works on March 30, 1917 against such order. The latter official addressed a communication, under date of April 14, 1917, to the Secretary of the Treasury, transmitting petition of claimant for the suspension of the order for the destruction of claimant’s railway until a definite decision had been reached legalizing the existence of the railway, calling attention to the placing of the property in the hands of the judicial administrator appointed by the Court of First Instance; that the court had given orders to the authorities of Marianao to protect the judicial administrator in regard to the property, and expressing the hope that as the legalization of the railway would be determined by another jurisdiction the Secretary of the Treasury would direct the suspension of the order for the demolition of the railway until it could be definitely determined whether the project should be legalized. The Secretary of the Treasury thereupon expressed the intention of proceeding for the fulfillment of the Presidential Decree concerning the demolition of the railway. A formal written protest was then lodged by the claimant with the President of the Republic, under date of June 9, 1917, reviewing the situation and requesting the President to authorize the Secretary of the Treasury to postpone the destruction of the railway. No reply was received to this protest except a letter, presumably from the President’s Secretary, stating that the matter would be brought to the attention of the President in due course. No action was taken by the Secretary of the Treasury until the month of November, 1917.

On October 31, 1917, claimant was apprised that his property was to be immediately destroyed. He lodged a second protest with the President of the Republic on November 1, 1917, and he filed a petition with the Secretary of the Interior in which it was stated that Mr. Carlos Manuel de la Cruz had initiated a proceeding in the Department of the Interior requesting the destruction of a narrow gauge railway existing at the beaches of Marianao and Jaimanitas. Attention was called to the institution of suit to determine rightful ownership of the property and request was made that the Department should perfect its information regarding the railway project before ordering its destruction, by calling for the record already existing in the Treasury Department, or forwarding the petition of Mr. de la Cruz to that Department, or seeking fresh instructions from the President of the Republic; request was also made that the Interior Department annul any orders that might have been given to the rural guard of Marianao to proceed to destroy the railway and that the guard be instructed to protect the judicial administrator in the work of the repair of the railway. Notwithstanding the efforts made by claimant to procure protection for his rights in regard to this property, it is averred that [Page 901] steps for its destruction proceeded and the railroad was destroyed by a large crew of workmen, who used dynamite for the purpose, the workmen being actually directed in the work of destruction by Mr. de la Cruz, a member of the Cuban Congress, supported by a contingent of the National Army. During the course of this destruction claimant again appealed to the President of the Republic on November 10, 1917, protesting against the unwarranted destruction of his property, but without avail. It is averred, also, that the judicial administrator used every effort to prevent the work of destruction but was unable to accomplish anything, although, it is said, he solicited the aid of the local authorities and the local court at Marianao, the officers in charge of the National Army on the property, and finally the Commander in Charge of the Army. It is further averred that the Commander in Charge of the Army informed the judicial administrator that he had received his orders from “El Chico”, the country home of the President of Cuba.

The claimant states that after exhausting every conceivable means to prevent the final destruction of his property, he filed criminal charges against Mr. de la Cruz. This, however, seems to have been a futile remedy as far as Mr. de la Cruz was concerned for the reason that as a member of the Cuban Congress he is said to have enjoyed immunity from arrest and prosecution.

Upon the available evidence the contention that Mr. Harrah has sustained a denial of justice would seem to be well founded. It is believed, however, that the fixing of the amount of damages which the claimant has sustained could best be determined by arbitration, which would afford an opportunity for the arbitrators to make visual inspections and surveys at the situs of the injury.

In these circumstances the claimant has made the suggestion, in which the Department concurs, that the claim be referred to a committee of two persons, one to be selected by the Government of Cuba and the other by the claimant. In the event that such persons fail to reach an agreement, a third member of the committee could be selected by the two persons so appointed. If an agreement cannot be reached with respect to the selection of such third person, the selection may be made by agreement between the Secretary of State of the United States and the Secretary of State of the Republic of Cuba.

The Department will be pleased to have you bring this matter promptly to the attention of the Cuban Foreign Office with the request that the Government of the United States be informed whether the plan outlined with respect to the adjustment of the claim would be agreeable to the Cuban Government.

I am [etc.]

For the Secretary of State:
Joseph C. Grew