Case ID: us-ct-cl_62/html/0516-01.html
Source: Caselaw Access Project
Author: {"author": "Hat, Judge,", "license": "Public Domain", "url": "https://static.case.law/"}
Date Created: 2024-08-24T03:29:51.129683

SARA E. THOMPSON AND MARCELLA THOMPSON BERKLEY, ADMINISTRATRICES OF THE ESTATE OF JOHN W. THOMPSON, DECEASED, v. THE UNITED STATES
    [No. 34097.
    Decided July 1, 1926]
    
      On the Proofs
    
    
      Abandoned vessel; reduction to possession. — -A sunken vessel, abandoned by its owner in the navigable waters of the United States and reduced to possession by the party raising and floating it, becomes the property of the salvor.
    
      Eminent domain; act of June 15, 1917; payment of entire award; right to sue. — The act of June 15, 1917, does not limit the right to sue for just compensation to those cases where the plaintiff has only received 75 per cent of the amount fixed by the President. Where the plaintiff receives the entire amount and before its receipt reserves the right, he may sue for just compensation. 
      Same; condemnation interest. — See Booth & Company and Howard Phelps et al. cases, ante, p. 288.
    
      The Reporters statement of the case:
    
      Mr. Randolph Laughlin for the plaintiffs. Laughlin, Frumberg, Blodgett & Russell were on the briefs.
    
      Mr. J. Robert Anderson, with whom was Mr. Assistant Attorney General Herman J. Galloway, for the defendant.
    The court made special findings of fact, as follows:
    I. On April 27, 1913, the iron tanker Gut Heil collided with two other vessels and sank in the Mississippi River near Baton Rouge, La. Several unsuccessful efforts were made to recover her. On February 3, 1914, the owner definitely decided to abandon the vessel, and caused the Engineer’s office of the United States Army to be so notified. The tanker remained a submerged and abandoned derelict for more than two years and nine months thereafter.
    II. The wreck was not in the channel of the river, nor did it obstruct or endanger navigation. The district engineer officer in charge of the channel for the United States Army so informed the agent of the former owner, and notified him that no action for its removal would be taken. The War Department advised Thompson’s representatives that a permit to raise the vessel was not necessary. The United States Army Engineer’s office in New Orleans informed Thompson’s agent that the ship had been abandoned and that the War Department would not object to Thompson raising the vessel. The district engineer’s office, fourth Mississippi river district, advised Thompson that the Government claimed no ownership or control of the vessel.
    III. In November, 1916, said Thompson took possession of the vessel as an abandoned wreck. By means of contract between him and the Atlantic Towing Company and the Atlantic Towing Company and King & Wotherspoon, and by the joint effort of Thompson’s men and King & Wother-spoon’s men, the vessel was successfully floated on December 5,1917.
    IY. In April, 1917, while the tanker still lay at the bottom of the Mississippi River, the Louisiana tax authorities assessed her as said Thompson’s property and sued him for the taxes levied on her. He contested payment by injunction on the ground that the wreck was of no taxable value unless and until she was recovered. In these proceedings Thompson’s title was alleged and admitted. The Supreme Court of Louisiana sustained the tax. Thompson sued out a writ of error to the Supreme Court of the United States, which dismissed the same for want of jurisdiction. Thompson then paid the tax.
    V. On or about January 15, 1918, the Atlantic Towing Company filed a suit in admiralty, No. 15808, in the United States District Court for the Eastern District of Louisiana, New Orleans Division, and libeled the Gut Heil for salvage services claimed to have been rendered by the towing company in raising the vessel and causing her to be towed to New Orleans. The vessel was thereupon seized under process duly executed, and remained in the custody of the United States marshal until about April 17, 1918. On or about January 17,1918, a motion was filed in said suit praying for an order permitting King & Wotherspoon to remove certain articles from the Gut Heil on the ground that the same did not belong to the boat, but were the property of King & Wotherspoon, used by them in the salvaging of the vessel.
    On or about January 18, 1918, on motion of the Atlantic Towing Company, the court ordered the marshal to permit the dry-docking of the vessel, the Atlantic Towing Company (libelants) to pay the costs of such dry-docking and any other expenses incident thereto. On or about the 31st day of January, 1918, the decedent herein filed an intervening libel in said suit, and thereafter, on or about February 4, 1918, the Deutsche-Amerikanische Petroleum Gesellschaft made and filed a claim in said suit, wherein it alleged that it was the bona fide owner of the Gut Heil, her boats, machinery, tackle, apparel, and furniture, then in the custody of the United States marshal under the process of said court theretofore duly issued. On March 6, 1918, the Atlantic Towing Company and the said John W. Thompson filed a joint motion in said suit, in which it was suggested to the court that the Gut Heil had been proceeded against for salvage and was in the custody of the United States marshal; that a claim had been filed in the suit “ by an alien enemy residing in enemy territory ”; that the steamer had lain on the bottom of the Mississippi River for five years or more, for the most part of the time entirely submerged, and that she was in great need of overhauling and repairs; that unless she was forthwith repaired, overhauled, and put in a seaworthy condition she would decay and deteriorate, her engines and machinery would rust and become of small, if any, value, as would appear from the affidavit of A. E. Wilson, surveyor, attached to the motion, which prayed that the claimant of the vessel (Deutsch-Amerikanische Petroleum Gesellscliaft) show cause on March 9,1918, why the Gut Heil should not be sold by the marshal and the proceeds deposited in the registry of the court to stand in lieu of the steamer.
    Thereafter, on or about April 17, 1918, the Atlantic Towing Company and the decedent jointly suggested to the court that they desired to have discontinued the original and intervening libel, and the same was thereupon discontinued by order of the court.
    VI. About April 1, 1918, the Atlantic Towing Company (which by contract with decedent had acquired a half interest in Thompson’s title to the vessel) made decedent a give-or-take offer on a half interest. He elected to take, and by virtue of that election and on April 13, 1918, he paid the Atlantic Towing Company $428,000 cash, and released it of about $60,000 which it was owing him for moneys advanced by him on its account in the operation of raising the vessel. Thereupon he received a bill of sale to the Atlantic Towing Compare’s half interest.
    VII. In the early part of 1918 said Thompson called on Commander E. C. Hammer, industrial manager of defendant’s navy yard at New Orleans, La., and stated that he came to see if the yard was in a position to do the necessary repairs to the steamer Gut Heil to put her in a proper condition to pass the highest classification of the Bureau Veritas. The industrial manager of the navy yard received permission from the Navy Department to undertake this work and did undertake it. The necessary repairs were begun early in the spring. The plans showing the details of the required work were made in the drafting office of the New Orleans Navy Yard under the supervision of the industrial manager of that yard. These repairs were carried out, the work being done as well as it was within the capacity of the yard to do such Avork. Under this contract decedent advanced defendant’s manager at said navy yard sums aggregating $140,000, and defendant made repairs from April 29 to August 12, 1918, when the vessel >vas requisitioned. At this time the repairs were about 90 per cent or more completed.
    VIII. On April 24, 1917, the Shipping Board tentatively ■decided that permission be granted to the owner of the Gut Heil to transfer the vessel to a citizen of an allied Government, with permission to change her flag, on condition that such allied Government give to the United States a satisfactory assurance that the vessel be confined during the period of the war to essential war trades. This decision was communicated to Thompson’s attorney by official letter of the secretary of the board. On March 19,1918, the Shipping Board sent said Thompson a letter advising that they could not depart from their uniform policy of refusing to grant exemption from requisition, but that the board was considering some other method of recognizing the efforts made by him in raising the tanker, and when a conclusion was reached he would be promptly advised. On June 27, 1918, the board sent him a final letter, advising that the board would permit the owners of the tank steamer Gut Heil to transfer the vessel to a citizen of an allied Government, with permission to change her flag, on condition that such allied Government giAre to the United States a satisfactory assurance that the vessel in question Avoulcl be confined during the period of the war to essential war trades.
    IX. On August 12,1918, the decedent, John W. Thompson, was the owner of the iron tanker Gut Heil. The actual deadweight tonnage of the Gut Heil was 4,400 tons.
    X. On August 7, 1918, the Secretary of the Navy gaA>e notice to the decedent that he would requisition the Gut Heil, the property of the decedent, and on August 12, 1918, the said vessel was requisitioned and taken over by the United States. At the time of the notice on August 7, 1918, the Secretary of the Navy demanded and received an affidavit setting forth the particulars of Thompson’s title.
    XI. On August 12, 1918, the commandant of the eighth naval district appointed two naval officers as a board to take an inventory of equipment and ordinary consumable stores on board the oil tanker Gut Heil and requested decedent to have a representative present to assist in taking this inventory. The board of inventory transmitted to the commandant an inventory and supplemental inventory listing goods of an appraised value aggregating $25,230.05.. Thompson submitted a bill for these stores. The bill was; approved but never paid. On August 12, 1918, Thompson’s agent surrendered the Gut Heil to the Navy Department and handed the commandant of the eighth naval district a paper reciting that the tank steamer Gut Heil, with all her equipment and consumable stores as shown by inventory, was thereby delivered and turned over to Commander Y. S. Nelson, United States Navy, representing the-United States Navy Department. The commandant of the United States Navy for the eighth naval district thereupon gave said agent a receipt, dated August 12, 1918, reciting that for and in behalf of the Navy Department receipt was acknowledged of the tank steamer Gut Heil owned by J. W. Thompson, with her equipment and consumable stores as per inventory attached. To this receipt was attached the inventory signed by the board of inventory and by said representative.
    XII. On October 2, 1918, the Secretary of the Navy wrote decedent a letter notifying him that the President had determined just compensation for the Gut Heil to be $700,000, and that the commandant of the eighth naval district had been authorized to pay him that sum, together with a further sum equal to the value of ordinary consumable stores on board at time of delivery. The value of consumable stores on board the vessel at the time of taking is not proven.
    XIII. Decedent was dissatisfied with the award, protested its inadequacy, and asked for a rehearing. The Secretary of the Navy referred him to the chairman of the board of appraisers in New York. He went to New York to see the chairman, by whom he was referred back to the Secretary of the Navy. He went back and told the Secretary of the Navy, and also the Solicitor of the Navy, that he was dissatisfied with the award and was going to make a claim in the Court of Claims. This was after the award, but before tender of any payment on the award.
    XIY. On November 29, 1918, the Solicitor of the Navy wrote the Chief of Naval Operations that there was no further objection to advising the commandant of the eighth naval district that settlement might be made with decedent for the amount of the appraisal; that in case this amount were refused, decedent should be paid 75 per cent thereof and the department so notified. On December 6 the acting commandant wrote the district disbursing officer, directing him to pay to decedent the full amount of the appraisal, or, in case this amount should be refused by him, to pay him 75 per cent thereof and report the fact of such partial payment. No notice ever was given to decedent of any of these interdepartmental communications. The notice of August 7, 1918, contained the following language:
    “ Your attention is invited to the provisions of the act before mentioned regarding compensation. A copy of that portion of the act relating thereto is enclosed.”
    Before the award was paid the decedent was required by the Government to give a bond of $350,000 against possible adverse claims.
    XY. On December 20, 1918, the district disbursing officer delivered Thompson’s agent a check for $700,000, payable to the order of Thompson. He did not communicate his instructions about any 75 per cent payment. He made delivery without comment. Thompson had previously advised his agent that he was going to make a claim on the boat and not to sign any receipt in full payment, and if any receipt was offered to send the same to him for approval. No receipt was requested and none was given. The agent took the check and mailed it to decedent at St. Louis. He did not have any authority to accept the check as an accord, and he had positive instructions not to sign a receipt in full for it.
    XVI. When the decedent learned of the three-fourths payment regulation he wrote a letter to the Secretary of the Navy offering to return one-fourth of the amount paid pending the adjudication of just compensation in the Court of Claims. The Secretary of the Navy replied that no official of the Navy Department was authorized to accept this tender, but that the offer would be placed on file for such' advantage as it might be to him in the future.
    XVII. There was a market and a market value for ships at the time the Gut Heil was requisitioned and taken by the United States on August 12, 1918. Prices current a'mong dealers in tanker tonnage ranged from $175 to $375 per dead-weight ton. The value of the Gut Heil on August 12, 1918, was $250 per dead-weight ton, which amounts to the sum of $1,100,000.
    XVIII. Since this case was- submitted to the court the plaintiff therein, John W. Thompson, has died, and Sara E. Thompson and Marcella Thompson Berkley have been duly appointed administratrices of his estate by the probate court in and for the city of St. Louis, State of Missouri.
    The court decided that plaintiffs were entitled to $1,100,000 (Finding XVII,) less $700,000 (Finding XV), and interest on the difference of $400,000 from December 20, 1918, to date of judgment $180,733.34, or to recover, in all, $580,733.34.
   Hat, Judge,

delivered the opinion to the court:

This is a suit brought by the plaintiff’s decedent to recover from the United States just compensation for the taking by the United States of the oil tanker Gut Heil, which at the time of the taking was the property of said decedent.

The defendant claims that the Gut Heil was the property of the United States, or if she was not, then she was the property of an alien enemy and became the property of the United States pursuant to the joint resolution of May 12, 1917; and that said decedent was only entitled to salvage, and to be reimbursed for the cost of repairs placed on the vessel before August 12, 1918, on which date the United States took the vessel. We do not think that this contention of the Government is tenable.

The facts show that the vessel was abandoned by its owners in the navigable waters of the United States, and being so abandoned it became the property of said decedent when he reduced it to his possession. This he did with the sanction of the authorities of the United States, and the United States recognized the ownership of said decedent when the United States requisitioned and took over the vessel and 'made an award to him for its value.

It seems well settled that when a vessel is derelict and abandoned in the navigable waters of the United States or anywhere else it belongs to that person who finds it and reduces it to possession. Congress could undoubtedly provide that the proceeds of derelicts and abandoned vessels in the navigable waters of the United States be paid into the Treasury; but no such law has been passed, and until it is the principles of natural law must prevail. See Gardner v. 99 Gold Coins, 111 Fed. 552; United States, v. Tyndale 116 Fed. 820; In re Moneys in Registry, 170 Fed. 470; Gibson v. United States, 166 U. S. 269; Hardin v. Jordan, 140 U. S. 871; Pollard's Lessee v. Hagan, 3 Howard 212, 230; Murphy v. Dunham, 38 Fed. 503, 509, 510. The acts of Congress cited by the defendant in its brief are not applicable to the facts of this case. Section 4, C. 211, 21 Stat. 180, 197, and 22 Stat. 191, 208. Navigation was not obstructed or endangered, and in this case the Secretary of War did not remove the wreck, but on the contrary stated, that he did not intend to remove it, nor did he undertake to sell or dispose of the vessel before it was raised. It is too late for the United States to claim ownership after some one else has found the property, reduced it to his possession, and exercised acts of ownership which have been recognized by the Government.

The claim that the vessel was alien property and became the property of the United States by virtue of the resolution of May 12, 1917, is obviously not well taken. The German owner had abandoned the property in the year 1914 and notified the United States authorities that it had done so. The vessel was no longer the property of the German owner, and the United States could not acquire title to property from a person who had no title.

The defendant also contends that if the Gut Heil was not the property of the United States, but was the property of the decedent, he has received a sum from the United States largely in excess of just compensation, and that the United States is entitled to a judgment for the excess over just compensation paid for the vessel. We do not think the evidence sustains this contention. The facts found show the contrary to be true.

The defendant further contends that the acceptance by the decedent of the $700,000 awarded as just compensation for the Gut Heil precludes any further recovery in this suit.

To sustain this contention the defendant seems to rely on the case of Robert F. Mitchell et al. v. United States, 58 C. Cls. 443. In that case, which arose under a different statute from the one we are considering in this case, it was held by this court as follows:

“ Where an act of Congress provides -for the acquisition of land by the United States by purchase or requisition, giving to the President authority to determine just compensation to the owners thereof, who, if dissatisfied with his award, might receive 75 per cent thereof and sue in the Court of Claims for such amount as added to said 75 per cent would make just compensation, if the owners shall receive the full amount of said award of the President without protest, objection, or reservation, the court has no jurisdiction to consider a claim for any further amount.”

The facts in this case are not the same as those in the Mitchell case, sufra. In that case the compensation was accepted without protest, reservation, or objection; in this case before the award was paid the decedent notified the Secretary of the Navy that he was not satisfied with the amount of the award, and that it was his intention to bring suit in this court for just compensation. The Secretary of the Navy through his agents proceeded to pay the award, although he did not pay the full amount thereof, the award being for $700,000 and certain consumable stores. The consumable stores were not paid for. The payment of the award was made to the agent of the decedent; the agent had been told by the decedent that he was not to receive the payment as in full for just compensation, and that he was to give no receipt therefor which would preclude the decedent from bringing suit in this court for just compensation. The agent of the decedent gave no receipt, but accepted the check for the amount of $700,000 in part payment. The United States without inquiring as to the authority of the agent to accept the sum of $700,000 in full of the award paid the money and took no receipt therefor. The unauthorized acts of the agent can not bind the principal; and the decedent, having reserved the right to bring his action in this court before receiving the money can not be held to have precluded himself from suing here.

Moreover, the act of June 15, 1917, 40 Stat. 182, does not limit the right to sue to the cases where the plaintiff has received only 75 per, cent. Even if the decedent received the whole amount he could still sue in this court for just compensation. The Supreme Court of the United States in the case of Mitchell et al. v. United States, 267 U. S. 341, 344, says: The mere fact that compensation for the taking of the land was fixed by the President and was accepted does not bar recovery on the present claim, whether the suit be deemed to be upon a promise implied in fact for a taking or for the recovery of statutory damages.” See also Houston Coal Co. v. United States (262 U. S. 361).

The plaintiffs are entitled to interest from the date of the payment to their decedent of the $700,000 — to wit, from December 20, 1918. This is the opinion and judgment of the majority of the court. However, for the following reasons, the writer of this opinion dissents from that opinion and judgment. Section 177 of the Judicial Code provides: “ No interest shall be allowed on any claim up to the time of the rendition • of the. judgment thereon by the Court of Claims, unless upon a contract expressly stipulating for the payment of interest.” This statute is mandatory, and admits of no exception. Whatever may be the character of the claim, under the provisions of this statute the court has no discretion. In the case of United States v. North American Transportation & Trading Company, 253 U. S. 330, 338, Mr. Justice Brandéis in delivering tbe opinion of the court said: “ The loss to the company of the use of $23,800, which is found to be the value of the mining claim when it was taken nearly twenty years ago, must be deemed to be due, in part, to its delay in instituting the suit, and, in part, to the delays of litigation for which it may have been largely responsible. But as, in either event, the loss of the use of the money results from the failure to collect sooner a claim held to have accrued when the company’s property was taken, that which the company seeks to recover is, in substance, interest, and that Congress has denied to the Court of Claims power to allow.” The case at bar is similar in all respects to the case just cited. While in this class of •cases the interest claimed is asked for as a part of the just compensation sued for, it is in substance and in fact interest, and we are denied the power to allow it.

In the case of the Cherokee Nation v. United States decided April 12, 1926, 270 U. S. 476, Mr. Chief Justice Taft in delivering the opinion of the court said:

“ When we consider the rule requiring an express provision of contract or statute to justify the imposition of interest in adjudicating any claim against the United States, we can find nothing in the circumstances of this case to increase the interest as adjudged. The additional interest now claimed is sought really as damages for the delay of Congress in appropriating the sum due in 1895 as the United States promised in the 1891 agreement. But the rule as to interest against the United States does not allow us to adjudge interest as damages at all. Congress must expressly provide for it or the contract must so provide. The only contractual obligation here is for simple five per cent interest until payment.” See also United States v. Minnesota Mutual Investment Co., decided May 24, 1926, by the Supreme Court of the United States, 271 U. S. 212.

The plaintiffs rely on the case of Seaboard Air Line Railway Company et al. v. United States, 261 U. S. 299, 306. That case arose under the act of August 10, 1917, known as the Lever Act and under section 10 of that act, and was tried in the United States District Court of South Carolina. Under the provisions of that act the district court was-given jurisdiction by Congress to hear and determine all controversies which might arise under it, but there was no-provision in the act as to how the just compensation provided for should be arrived at, nor was there any inhibition as to interest contained in the act. Had Congress chosen it could have provided that no interest should be allowed on any amount which the court might have found to be the just compensation which accrued when the property was taken.

The jurisdiction conferred on this court by the act of June 15, 1917, 40 Stat. 183, provides that the United States shall make just compensation for the taking of ships, the said just compensation to be determined by the President; “ and if the amount thereof, so determined by the President, is unsatisfactory to the person entitled to receive the same, such person shall be paid seventy-five per centum of the amount so determined by the President and shall be entitled to sue the United States to recover such further sum as, added to the said seventy-five per centum, will make up such amount as will be just compensation therefor, in the manner provided for by section twenty-four, paragraph twenty, and section one hundred and forty-five of the Judicial Code.”'

Even if Congress had not passed this act the person whose property was taken would have had the right to bring the suit therein provided for under the provisions of section 145-of the Judicial Code; and the act of June 15, 1917, does not confer upon the person any greater rights or remedies than he already had, except to provide for the payment of 75 per cent of the just compensation determined by the President. Under the provisions of section 145 of the Judicial Code-interest could not be allowed on claims of this character in the face of section 177 of the same code. The suit in this class of cases is upon an implied contract. The Supreme Court and this court have so held in cases too numerous to mention.

The statute dealing with interest in this court makes no-exception, and leaves no room for the exercise of discretion in any case, no matter from what source the claim may arise,. 'Claims which may arise under the Constitution have no different standing from those which are based on contract, as the statute provides that no interest shall be allowed on “ any -claim.”

In the case of Brooks-Scanlon Corporation v. United States, 265 U. S. 106, which went up from this court, it is .said: “ Interest at a proper rate is a good measure of the amount to be added.” But in that case the statute which we are discussing was not referred to, and the question of adding what is in substance interest to the just compensation was not discussed by the Supreme Court. Just compensation is ■the value of the property taken at the time it was taken. Certainly interest on the value of said property after it was taken can not be logically regarded as a part of the just compensation.

The case of United States v. Benedict, 261 U. S. 294, arose under the Lever Act, while the case of Brown v. United States, 263 U. S. 78, arose under the provision of the reclamation act. The statute prohibiting the allowance of interest on “ any claim ” is confined to the jurisdiction of this court, and the court can not disregard its mandate.

The plaintiffs are entitled to a judgment. It is so ordered.

Graham, Judge; Booth, Judge; and Campbell, Chief ■Justice, concur.