## Facts

- John Bournias, a seaman, worked aboard a vessel during a change of registry from Panama to Honduras.
- His employment ended on December 27, 1950.
- On December 29, 1952, Bournias filed a maritime libel in federal court against the vessel and related corporate respondents.
- The libel sought recovery under provisions of the Panama Labor Code for (1) a change-of-registry payment, and (2) vacation, overtime, and holiday pay.
- Bournias also sought U.S. statutory penalties for alleged failure to timely pay amounts due, and later amended to add claims concerning allegedly unlawful advances and additional penalty provisions.
- Respondents asserted that the Panamanian wage-and-benefit claims were time-barred by Article 623 of the Panama Labor Code, which sets a one-year prescriptive period for labor-contract actions not otherwise specifically enumerated.

## Issues

1. Whether Article 623’s one-year prescriptive period must be applied by a U.S. court as a substantive, right-extinguishing condition on Panamanian wage-and-benefit rights.
2. Whether Article 623 should instead be treated as a procedural limitation, permitting the U.S. forum to apply its own timeliness doctrines (including laches) to claims based on Panamanian substantive law.

## Decision

- The Second Circuit reversed the district court’s ruling that Article 623 barred the Panamanian wage-and-benefit claims.
- The court held Article 623 was a general limitation provision and did not extinguish the underlying rights asserted.
- Because the Panamanian limitation was not “built in” to the specific rights sued upon, the U.S. forum was not required to apply it.
- The timeliness of the Panamanian wage-and-benefit claims was therefore left to be evaluated under the forum’s procedural rules rather than Panama’s one-year period.
- Related U.S. penalty claims premised on nonpayment were not defeated solely on the theory that the underlying foreign wage rights had been extinguished by Article 623.

## Legal Principles

- A forum enforcing a right created by foreign law generally applies its own procedural rules; statutes of limitation are ordinarily treated as procedural for conflict-of-laws purposes.
- A foreign limitation period is treated as substantive, and applied by the forum, only if it extinguishes the right itself rather than merely barring the remedy.
- To determine whether a foreign limitation is substantive, a court should examine the foreign law’s structure to see whether the limitation is specifically attached to, or specifically directed at, the particular right sued upon.
- A general, code-wide prescriptive period that is not specially linked to the specific cause of action is typically procedural in a U.S. forum; a special limitation expressly engrafted on a specific right is more likely substantive.

## Conclusion

The Second Circuit held that Panama’s general one-year labor-contract prescriptive period did not operate as an integral condition that destroyed the seaman’s asserted wage-and-benefit rights, so the U.S. court could disregard that foreign time bar and evaluate timeliness under forum procedural standards.


Bournias v. Atl. Mar. Co., 220 F.2d 152 (2d Cir. 1955)