Case ID: us-ct-cl_61/html/0652-01.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

SUBMARINE SIGNAL COMPANY v. THE UNITED STATES
    [No. C-318.
    Decided February 15, 1926]
    
      On the Proofs
    
    
      Seizure of enemy property; implied, promise to pay. — Apparatus the property of plaintiff, a citizen of tbe United States, was installed by plaintiff’s alien licensee in vessels afterwards seized by the defendant under joint resolution of May 12, 1917, as enemy-owned. Held, that the apparatus so installed was seized as an incident of war power and not as a taking of private property for public use for which compensation can be demanded upon an implied promise to pay.
    
      The Reporter’s statement of the case:
    
      Mr. Andrew B. Du/vall for the plaintiff.
    
      Mr. L. A. Smith, with whom was Mr. Assistant Attorney General Hermam, J. Galloway, for the defendant. Mr. Marry E. Knight was on the brief.
    The court made special findings of fact, as follows:
    I. The plaintiff, the Submarine Signal Company, was incorporated under the laws of the State of Maine in 1910, and has its principal place of business in Boston, Mass. The plaintiff manufactures certain apparatus for submarine signaling, and is the owner of twenty letters patent of the United States and Germany and other countries, covering submarine signaling and receiving apparatus.
    The apparatus in question is known as the standard receiving apparatus, which consists of what might be called two submarine ears. These ears are internal tanks placed far below the water line between the frames of the ship. In these tanks are placed two ears or microphones, one pair on the starboard side of the vessel and one pair on the port side of the vessel. These two pairs of microphones or ears make up the “A” set and the “ B ” set, as shown on the indicator in the pilot house. With the tanks in the hull of the vessel, the microphones, and the wires leading to the indicator box in the pilot room or chart house, the receiving apparatus is complete. With it a captain is enabled by listening to a source of sound, such as the submarine bell on a lightship or lighthouse, to find his position in relation to this bell or source of sound.
    A great many lightships and lighthouses are equipped with submarine bells for sending signals and a large number of merchant as well as naval vessels are equipped with receiving apparatus of the plaintiff.
    The plaintiff on the 1st day of January, 1908, entered into a contract with the Norddeutscher Maschinen und Arm-aturen Fabrik Gesellschaft Mit Beschrankter Haftung of Germany, which contract later was assumed by the Atlas-Werke Company of Bremen, Germany, in which the latter company was licensed by plaintiff to manufacture, sell to governments, and lease to shipowners submarine receiving apparatus within a certain prescribed district or territory consisting of Germany, Belgium, Holland, Austria-Hungary, and Russia.
    This agreement provided for a joint account between the plaintiff and the Atlas-Werke Company, in which the cost of manufacture would be debited and the rents received from the leased apparatus credited, after which each was to have a one-half interest in the account, and further provided that when a vessel on which said apparatus had been installed passed out of the territory in which it was originally placed or changed its flag, responsibility for the collection of the rentals and for the maintenance of the apparatus passed to the agency into whose territory the vessel was transferred; and if there was no agency where the vessel was placed or transferred, the plaintiff was to collect all rents and maintain the apparatus.
    Pursuant to said agreement the Atlas-Werke Company manufactured, leased, and installed such submarine receiving apparatus on 53 German vessels which were subsequently seized by the United States, as hereinafter in these findings more fully shown.
    II. The President of the United States acting through the United States Shipping Board under the authority of the joint resolution of Congress of May 12, 1917, seized at various ports in the United States 53 German merchant vessels equipped with submarine signal apparatus which had been attached to said vessels under the terms of the lease mentioned in Finding I. The names of said vessels are set forth in Exhibit A attached to the plaintiff’s petition and made a part hereof by reference. The aforesaid seizure of said vessels was made pursuant to an Executive order of the President dated June 30, 1917, and immediate possession and title to said vessels was taken in the name of the United States.
    Beginning in April, 1917, and upon various dates thereafter, the plaintiff company in writing formally notified the Secretary of the Treasury, the chairman of the Shipping-Board, and the collectors of the various ports in this country and territories, that many of the German vessels which had been seized were equipped with apparatus which it claimed was the property of the plaintiff company.
    III. The said submarine receiving apparatus attached to the said 53 German vessels seized by the United States were manufactured and installed on said vessels by the said Atlas-Werke Company under and pursuant to the .terms of the said agreement of January 1, 1908, referred to in Finding I.
    IV. Subsequently to the seizure of the 53 German vessels with said apparatus attached and appurtenant thereto plaintiff was requested by various Government representatives to inspect and repair certain of the apparatus, and in response thereto plaintiff did make some inspections and repairs of some of the apparatus, but the number of inspections and kind of repairs made, the names of the vessels on which the inspections and repairs were made, or the value of services actually rendered do not appear in the evidence. It affirmatively appears in the record that plaintiff refused to .segregate the actual value of the inspection and repairs made from the amount which it is claiming as rental and •for the use of a patented invention.
    During all of this period the plaintiff endeavored to secure leases and be otherwise properly compensated for services rendered the various departments of the Government.
    In some instances leases were secured and payments made •thereunder, but finally the various departments of the Government stopped payment under the leases upon the ground ■that title to the apparatus was in doubt, and the company was able to collect only part of the compensation due it.
    On account of the many transfers of the various vessels from the jurisdiction of one department to another the company was unable even to ascertain which department of the Government was responsible for its charges.
    The company had extended negotiations with the Ship-ping Board, the War Department, and the Navy Department, to whose jurisdiction from time to time the vessels were transferred.
    V. Subsequently to the seizure by the United States of -the said 53 German vessels with said submarine receiving-apparatus attached and appurtenant thereto various officers of the United States Government entered into certain .agreements or leases with the plaintiff to pay plaintiff rent for the said apparatus on some of said vessels at its standard rates of rental, and caused to be paid to plaintiff, pursuant to said agreements or leases, a total sum of $27,262.70.
    No claim is made by the plaintiff under the said agreements or leases.
    VI. From the time the company notified the various departments that the ex-German vessels had its apparatus on board it made every effort to ascertain how many vessels had been seized and by what department each vessel was controlled.
    But the company was unable until the early part of 1923 to secure from the Government a comprehensive statement ■showing the date of seizure and the period of operation of .each vessel by the respective departments.
    Such a statement was finally secured in January, 1923.
    
      From the information obtained and supplemented by the accounting records of the company the plaintiff was finally able to ascertain the period during which each department of the Government had control of the various ships and, after allowing for all payments received on account, to figure the amount which it claimed was due it based upon the standard rental.
    VII. After the Government had been formally notified that the apparatus was-the property of plaintiff it proceeded to use the same and cali upon the plaintiff to inspect, repair, and maintain the same. And the plaintiff promptly rendered its services and performed its duty in inspecting and maintaining the apparatus, and the Government accepted the services and had the use of said apparatus. But the plaintiff has not shown the amount covering actual inspection and repair services, but has included that amount in the amount claimed as rental and for the use of the patented apparatus.
    The amount which is claimed by the plaintiff for rental and service charge together is the sum of $109,671.69, which is a reasonable charge for said rental and service charge if the property seized by the United States was the property of the plaintiff, and was not liable to seizure on board of enemy vessels.
    The value of the property which passed to the United States by virtue of the seizure of the said German ships was the sum of $52,500.
    The court decided that plaintiff was not entitled to recover.
   Hat, Judge,

delivered the opinion of the court:

Under the authority of the joint resolution of Congress of May 12, 1917, 40 Stat. 75, the President of the United States by a proclamation of June 30, 1917, took over to the United States the immediate possession of and title to 53 merchant vessels owned in whole or in part by citizens, corporations, or subjects of Germany, with which country the United States was at war. These vessels were at various ports of the United States when they were so taken over.

At the time they were taken over by virtue of the joint resolution aforesaid all of these vessels were equipped and had attached to them the apparatus for which the plaintiff is asking compensation in this suit, the said apparatus being used in the operation of said vessels.

The claim of the plaintiff is that the plaintiff is a citizen of the United States, that the apparatus so taken over was its property, and that the United States was not authorized by the joint resolution of May 12, 1917, to take over the title and possession of the said apparatus without making compensation therefor, and that the plaintiff is entitled to sue the United States under an implied contract, and that its recovery should be based upon a recognized standard rental schedule, which includes the use and maintenance of the apparatus. The amount sued for is the sum of $109,671.69, which the plaintiff alleges to be the rental standard schedule, including- the use and maintenance of the apparatus since it was taken over by the United States.

The plaintiff asks that in the event the court should hold that title to the apparatus did pass to the United States by virtue of the taking over of the vessels the court should allow the plaintiff the sum of $52,500, which is the value of the apparatus taken over by the United States, and it bases this claim upon the ground that the United States can not take the property of its citizens without making compensation therefor.

We have had occasion to pass upon the effect and meaning of the joint resolution of May 12, 1917. In the case of Deutsche-Australische Dampschiffs Gesellschaft v. United States, 59 C. Cls. 450, this court held: When enemy property is taken by the United States under the war power there arises no implied promise on the part of the United States to pay the owner the value of such property, and there is no jurisdiction in the Court of Claims under section 145, Judicial Code, to entertain a suit for the recovery of the value of such property; and the court further held that the court had no jurisdiction of a claim to recover the value of the property taken by the United States by virtue of the joint resolution of May 12, 1917, 40 Stat. 75. The opinion of the court was delivered by the Chief Justice, and states the law of the case with great ability and clearness. Attention is directed to that opinion, as it would be superfluous to undertake to restate here the reasons which govern the court in its construction of the joint resolution of May 12, 1917.

It follows, therefore, that if the apparatus taken over had been enemy property there could be no question that this court would have no jurisdiction to entertain this suit for the recovery of its value.

The plaintiff, however, is a citizen of the United States, and the apparatus taken over belonged to it. The apparatus was found and seized upon vessels belonging to the enemy, and was taken over by the act of Congress in its exercise of the war power, and the question arises whether the limitations or restrictions of the Fifth Amendment affect the exercise of the war power conferred upon Congress when property is taken, whether belonging to an enemy or to a citizen of the United States. In this case the President in taking the property of the plaintiff was acting under the authority of the joint resolution and was exercising the war power of the Government. If the war power of the Government is legitimately exercised and the property taken thereunder found on vessels of the enemy belongs to a citizen of the United States the injury done is incidental to the exercise of the war power, and there is no taking of the property under the limitations or restrictions of the Fifth Amendment, and there is no right to compensation on account of such taking. If the property taken is so situated that it can not be separated from the enemy property its taking is an incident to the exercise of the war power, and it is not the taking of private property for public use for which compensation can be demanded. And in the exercise of the war power it is immaterial whether the owner of the property taken is a citizen of the United States or not. The apparatus was on vessels of the enemy, was placed on said vessels by the licensee of the plaintiff, which licensee was an enemy, was being used by the enemy, and was being devoted to the enemy’s use by the agent of the plaintiff, and is a proper subject for confiscation.

But if it be conceded that the apparatus so taken is the property of a citizen of the United States and that the plaintiff is entitled to compensation, yet it does not follow that this court has jurisdiction to entertain this suit. “ The action is not founded upon thé~ Constitution or a law of •Congress. The joint resolution authorized the President to take title and he did so. It does not in terms declare a liability of the Government or of itself to create a right in the plaintiff.” 59 C. Cls. 450, 453.

The history of the enactment of this legislation shows that it was not the intention of Congress to confer upon this ■court jurisdiction to deal with the question of compensation. A very full statement of this will be found in 59 C. Cls. 457, 459, and 460, and it is not necessary to restate it here. It is difficult to see how under the circumstances of the taking of these vessels the claim of the plaintiff can be separated and treated differently from the claim of the owners of the vessels. If the court has no jurisdiction in the latter case, it has none in the former.

Furthermore, it can not be maintained that an 'implied contract arose out of the circumstances of the taking, and that is the only ground upon which this court can take jurisdiction of the suit. “ The right to bring this suit against the United States in the Court of Claims is not founded upon the Fifth Amendment, but upon the existence of an implied contract entered into by the United States.” United States v. North American Transportation & Trading Co., 253 U. S. 330, 335; Tempel v. United States, 248 U. S. 121, 129; Horstmann Company v. United States, 257 U. S. 138, where it is said: “ It is to be remembered that to bind the Government there must be implication of a contract to pay, but the circumstances may rebut that implication.” In this case the circumstances do rebut the implication, for the property was taken in the exercise of the war power by the Government, was on enemy-owned vessels, and the consequences to the plaintiff were only incidental, and no liability was incurred by the United States. At the time of the taking the Goirernment claimed title to the property, and now claims title to it, and denies title in the plaintiff; that being so, this court is prevented “ from assuming jurisdiction of the controversy.” See Tempel case, supra, p. 130.

The plaintiff had certain written contracts with the Shipping Board and the War and Navy Departments, by virtue-of which it was paid the sum of $27,262.70 for rent for the-said apparatus at its standard rates of rental. The plaintiff,, however, is not suing on these contracts, but specifically states that as those contracts have been repudiated by the-Government the plaintiff is suing the United States “ under • the implied contract for the use and maintenance of its-apparatus, and to recover a quantum meruit, and that its recovery should be based upon recognized standard rental schedule.” It is therefore unnecessary to comment on or-pass upon the written contracts.

The plaintiff might have some claim for compensation: for repairs and inspections actually made of the submarine-apparatus attached to these vessels which were rendered after they were taken and which were done at the request of authorized officials of the Government. .But the plaintiff has failed to prove such a claim, and has stated that there was no practical way of preparing a statement showing the-value of such services. Therefore that claim must be disallowed for failure of proof.

The petition of the plaintiff must be dismissed. It is so-ordered.

Geaham, J^dge; DowNey, Judge; Booth, Judge; and Camfbell, 0hief Justice, concur.