Case ID: us-ct-cl_135/html/0722-01.html
Source: Caselaw Access Project
Author: {"author": "WhitakeR, Judge,", "license": "Public Domain", "url": "https://static.case.law/"}
Date Created: 2024-08-24T03:29:51.129683

HONGKONG & SHANGHAI BANKING CORPORATION v. THE UNITED STATES
    [No. 48334.
    Decided July 12, 1956]
    
      Mr. Martin P. Betels for plaintiff. Messrs. Watters & Donovan, Charles W. Harvey and Joseph J. Magrath, 3rd, were on the briefs.
    
      Mr. Kendall M. Barnes, with whom was Mr. Assistant Attorney General George Coehran Doub, for defendant. Mr. Melford 0. Cleveland was on the briefs.
   WhitakeR, Judge,

delivered the opinion of the court:

Plaintiff, a corporation doing business under the laws of the Crown Colony of Hongkong, seeks just compensation for certain cargo which was unloaded from the vessel Dona Nati at Manila, Philippine Islands, in December 1941.

Although plaintiff’s petition enumerates 18 separate lots of cargo for the taking of which just compensation is claimed, the taking of only two of these lots is presently before, the court for determination. One of the two claims involves 50 drums of petroleum grease, and the other involves 120 reels of galvanized steel wire. Plaintiff has selected these two claims as test cases, and if our decision as to them is against plaintiff, it will be determinative of the other 16 claims.

The vessel Dona Nati arrived in Manila from the United States on December 4,1941, carrying certain cargo belonging to plaintiff. The vessel immediately began to discharge that part of her cargo which was consigned to Manila and the surrounding area. On or about December 10, three days after the outbreak of the war with Japan, the Master of the vessel received orders from her owners to discharge all cargo consigned to Hongkong and Shanghai at Manila, and such unloading was commenced. When the Japanese landed on the Island of Luzon on December 12, the Manila office of the owners of the Dona Nati received notice from the United States Navy for the vessel to leave Manila as quickly as possible, in order to save the vessel. She sailed from Manila on December 13, and subsequently arrived at Fremantle, Australia, where she discharged the remainder of her cargo which had not been unloaded at Manila.

On about December 8, 1941, the commanding officer of the Quartermaster Depot at Manila received orders to take charge of all supplies having military value in the Manila Port Terminal Area. In order to carry out these orders, the Army took control of and posted guards over the Port Terminal Area. Nothing could leave the piers without Army permission. After the cargo had been removed from vessels in the harbor, a rapid screening of the unloaded cargoes ensued to determine what materials might be of military use. Property thought to have a possible military value was segregated, and either removed from the Area in military vehicles or placed in dumps within the Area for possible removal later. The property which was thought to have no military use was deposited in a large open storage site adjacent to the piers. In order to keep the piers as clear as possible, the Army urged all local Philippine consignees to remove all property consigned to them which did not have a military use. The proof does not show whether or not plaintiff received notice, or whether or not it sought to remove the cargo consigned to it.

Although the Quartermaster Depot had been instructed to give receipts for property taken, this was not done in all cases, because of the haste and the confusion existing in that area due to the imminent capture of the city by the enemy, and no records are now available which show what property was actually taken.

On December 24, Manila was declared an “open city” and the remaining military units proceeded to evacuate, taking as many supplies with them as deficient transportation facilities permitted. The Army succeeded in removing some military supplies, but estimates vary widely as to what quantity was removed and what quantity was still present when the enemy arrived on about January 2,1942.

On or about January 1, the piers and warehouses in the Area were thrown open and the civilian population was permitted to remove anything they wished. Efforts were made to destroy what was left to prevent it from falling into enemy hands. The evidence does not reveal whether the petroleum grease and the galvanized steel wire involved in this case were removed by the Army, taken by the civilian population, destroyed, or fell into enemy hands. Nor does it show whether or not it was put with other property thought to have a military value. Indeed, there is no proof as to what standards were used by the Army in classifying property as of military value or as of no military value. We are not told whether the Army set aside only property of evident military value or whether it included all property of any possible military value, or used some intermediate standard. It may be that the enemy was so near the Army did not want to bother with anything except items of undoubted value, or it may have thought it could not remove everything of any value. Nor do we know whether the Army intended to take everything that it set aside. For aught we know, everything of any possible military use was set aside, with the intention of later determining what to take and what not to take. If this was what was done, certainly in view of the imminent capture of the city, the property of unquestioned military value would have been removed first, and that of doubtful value last.

We are not told what sort of property the consignees were permitted to remove. Certainly it does not appear that plaintiff demanded the right to remove this petroleum grease and steel wire and that this permission was refused. It is impossible to say with any degree of certainty what became of plaintiff’s property. Plaintiff’s whole case rests on conjecture, on what may have happened, or what probably did happen. This does not afford sufficient basis for holding the United States liable.

In Hongkong & Shanghai Banking Corp. v. The United States, No. 48331, decided by this court on January 31, 1956, (133 C. Cls. 753) which was very similar to the present case in many respects, we said:

The burden is on the plaintiff to show that the Army did appropriate it [the property involved] to its own use, and the difficulty of carrying that burden is another one of the fortunes of war. We cannot hold the Government liable on the theory of probabilities. We must have some proof either direct or circumstantial to show, not what the Army probably did, but what it actually did.

As in the earlier Hongkong case, plaintiff has failed to remove this case from the realm of conjecture, and for such failure its case must fail. Cf. Anderson, Clayton & Co. v. United States, 129 C. Cls. 347; Caltex (Philippines), Inc., v. United States, 129 C. Cls. 605.

Plaintiff is not entitled to recover just compensation for its petroleum grease and galvanized steel wire since it has failed to establish a taking, and its petition will be dismissed as to such cargo, and also as to the other 16 lots of cargo enumerated in the petition.

It is so ordered.

Labamobe, Judge; Madden, Judge; Littleton, Judge; and Jones, Chief Judge, concur.

FINDINGS OF FACT

The court, having considered the evidence, the report of Commissioner C. Murray Bernhardt, and the briefs and argument of counsel, makes findings of fact as follows:

1. Plaintiff seeks to recover for the taking by defendant of 50 drums of petroleum grease and 120 reels of galvanized steel wire, belonging to plaintiff, which were unloaded from the vessel Dona Nati onto pier 7 at Manila, Philippine Islands, in December 1941. The two claims, which represent two out of 18 bills of lading enumerated in the petition, have been selected by plaintiff as test cases.

Although the court, on plaintiff’s motion, previously ordered the issue of liability separated for trial from that of damages, with the consent of the parties the evidence has since been closed on all issues, both as to liability and damages, in the two claims in suit, and the facts presented herein pertain to such issues.

2. Plaintiff, the Hongkong & Shanghai Banking Corporation is, and at all material times was, a corporation organized and doing business under the laws of the Crown Colony of Hongkong, and registered to do business in the State of New York through its New York agency, with its principal New York office and place of business in New York City. It also had an agency in San Francisco.

3. The laws of the Crown Colony of Hongkong permit citizens of the United States to bring suit there against the Crown Colony.

4. The Dona Nati, operated by The De La Bama Steamship Company, Inc., arrived at Manila from the United States on December 4, 1941. The vessel immediately began to discharge onto pier 7 in the Manila Port Terminal Area that part of its cargo which was consigned to Manila and other inter-island ports. On or about December 10 (two days after the outbreak of war), the Master received orders from the owners of the vessel to discharge at Manila all cargoes consigned to Hongkong and Shanghai, and such unloading was commenced. On December 12 the Japanese landed on the Island of Luzon and the United States Navy notified the Manila office of the owners of the vessel to have the vessel ready to leave Manila as soon as possible. The same day the Master was advised by the Navy to leave Manila as soon as possible in order to save the vessel, and to proceed to Fremantle, Australia, by any route he chose. The safety of the cargo remaining in the vessel was not mentioned. The Dona Nati sailed from Manila at 1 a. m., on December 13 and thereafter arrived at Fremantle, where she discharged her remaining cargo.

At no time while the Dona Nati was at Manila were officers of the United States Army or Navy aboard, and the Master does not recall any requisitioning of tbe cargo by any Army or Navy authorities.

5. Shortly after December 8, 1941, orders were issued to the commanding officer of the Quartermaster Depot at Manila to take charge of all supplies of any military value in the Manila Port Terminal Area. The order embraced the supplies in warehouses, on docks and piers, and in vessels in the harbor. With permission of the Philippine Commonwealth Government which owned it, the Army established its control over the Port Terminal Area, including the piers, by posting guards on the piers and at certain stockpiles in the vicinity, and by occupying the Customs House opposite pier 5 as a control center for the Area. Nothing could leave the piers without Army permission. However, the Army authorities were anxious to keep the piers as clear as possible to allow room for incoming military cargoes that were anticipated but never arrived, and urged all local Philippine consignees to remove all property consigned to them for which the Army had no military use.

The evidence does not reveal whether or not plaintiff was requested to remove cargo belonging to it, or whether it made any attempt to do so.

Incoming merchant vessels whose manifests revealed the presence in their cargoes of property of possible military use were required to discharge on the piers that part of their cargoes. Once discharged, a rapid screening of the unloaded cargoes ensued. The property thought to have possible military use was in some cases hauled off the piers and transported directly in military vehicles to military locations beyond the Area, and in other cases deposited temporarily in dumps within the Area for later removal. That part of the segregated property thought to have no military use was deposited in a large open storage site adjacent to the piers.

6. Although the orders to the Quartermaster Depot to take charge of all property within the Port Terminal Area directed that receipts be given for property so taken, due to the confusion and haste attending the program and the sudden requirements produced by the onset of war, the direction was ignored in many cases. In any event, such receipts as may have been given were lost or destroyed and no documentary records are now available which describe specifically the property taken by reference to identifying marks or other description.

7. On December 24 Manila was declared an “open city” and remaining military units proceeded to evacuate to Cor-regidor and Bataan, taking as many supplies with them as deficient water and land transportation facilities permitted. The Army succeeded in removing some military supplies from the Port Terminal Area, particularly in the period December 24-January 1. However, estimates vary widely as to what quantity was removed and what quantity was still present in the Area when the enemy arrived on or about January 2, 1942, and it is impossible to determine with accuracy the quantity actually removed. On or about January 1 the piers and warehouses in the Area were thrown open and the civilian population was permitted to remove everything it wished that remained. Efforts were made to destroy what was left to prevent it from falling into enemy hands. It is not possible to determine whether the property referred to in finding 1 was removed by the Army, taken by the civilian population, deliberately destroyed, or taken by the enemy.

8. On September 30, 1941, the Starlight Refining Company, Inc., of Earns City, Pennsylvania, invoiced to Alex Ross & Company (China), Ltd., of Hongkong, China, 30 drums of amber petrolatum and 20 drums of cream white petrolatum at an invoice price of $894.33, C. I. F. Hongkong, plus $9.85 for war risk insurance, or a total of $904.18. This petrolatum was loaded on the Dona, Nati for shipment to Hongkong under a bill of lading listing the consignee as “Shipper,” and instructing that Alex Ross & Company (China), Ltd., be notified upon arrival of the shipment in. Hongkong.' The petrolatum was unloaded at Manila in December 1941 under circumstances described in finding 4.

9. Pursuant to a confirmed irrevocable letter of credit without recourse to drawers, Starlight Refining Company drew its draft on Alex Ross & Company (China), Ltd., for the total invoice price of the petrolatum and presented it to Hongkong’s New York agency for payment. On October 15, 1941, Hongkong paid the Starlight Refining Company $904.18 in exchange for the draft, and forwarded the same to its home office in Hongkong for collection from Alex Ross & Company (China), Ltd. Although there is no direct evidence, it is reasonable to conclude that the sum was not collected from Alex Boss & Company (China), Ltd.

10. On or about April 15, 1944, plaintiff was paid a sum covering its loss by the Automobile Insurance Company after execution of a subrogation receipt and an agreement wherein the amount paid by the insurance company was denominated as an advance which was to be repayable to the insurance company if it was later established that the property was not lost while insured under a policy issued by the said insurance company and not as a result of perils insured against under the said policy.

11. On October 29, 1941, Livingstone & Southard, Inc., of New York, invoiced to U. Spalinger & Co., S. A., of Hongkong, China, 120 reels of “soft quality common grade single galvanized steel strand of two different diameters, for $1,177.93 C. I. F., Hongkong, plus $9.80 war risk insurance, or a total of $1,187.73. This material was loaded on the Dona Nati at New York for shipment to Hongkong and was discharged at Manila under circumstances described in finding 4. The bill of lading accompanying the shipment named the consignee as “Shippers” with instructions to notify Spalinger upon arrival in Hongkong.

12. Pursuant to an irrevocable without recourse letter of credit, Livingstone & Southard, Inc., drew its draft on Spalinger in duplicate for the total invoice price of the wire and presented the same to Hongkong’s New York agency for payment. On or about October 29,1941, Hongkong paid Livingstone & Southard, Inc., $1,187.73 in exchange for the draft and forwarded the same to its home office in Hongkong for collection from Spalinger. Although there is no direct evidence, it is reasonable to conclude that the sum was not collected from Spalinger.

13. On or about September 2,1943, the plaintiff was paid a sum covering its loss by the Eagle Star Insurance Company after execution of a subrogation receipt and an agreement wherein the amount paid by the insurance company was denominated as an advance which was to be repayable to the insurance company if it was later established that the property was not lost while insured under a policy issued by the said insurance company and not as a result of perils insured against under the said policy.

14. The galvanized wire described in finding 11 would have been of use to the Army in the Philippines at the time in question. It is not established by a preponderance of the evidence that the petrolatum described in finding 8 would have been of such use.

CONCLUSION OP LAW

Upon the foregoing findings of fact, which are made a part of the judgment herein, the court concludes that as a matter of law the plaintiff is not entitled to recover and its petition is therefore dismissed.