Case ID: us-ct-cl_64/html/0001-01.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

AMOS D. CARVER, S. E. TURNER, CLIFFORD N. CARVER, SCOTT BLANCHARD, P. B. BLANCHARD, JAMES B. PARSE, A. N. BLANCHARD, AND W. A. BLANCHARD v. THE UNITED STATES 
    
    [No. C-459]
    
      On the Proofs
    
    
      Suspension and cancellation of contract, act of June 15, 1911; charter party; just compensation. — Where at the’request of the United States Shipping Board an American-owned vessel was detained in a foreign port during April and May, 1918, in order that it might be decided whether it should carry on the return voyage to the United States a cargo of wheat for the United States Food Administration Grain Corporation, which it was thereafter required to do, and the owners of said vessel were thereby prevented from carrying out a more profitable charter party which had previously been entered into, the detention and subsequent requirement as to return cargo constituted a suspension and cancellation of said charter party under the act of June 15, 1917, for which the owners of the vessel are entitled to just compensation.
    
      Same; demurrage for period of detention. — Under the circumstances recited the owners of the vessel, having been relieved of the expenses incident to the canceled charter party, are not entitled to demurrage for the period of detention.
    
      The Reporter's statement of the case:
    
      Mr. F. E. Scott for the plaintiff.
    
      Mr. J. Frank Staley, with whom was Mr. Assistant Attorney General Herman J. Galloway, for the defendant.
    Decided January 17, 1927.
    Motion for new trial overruled December 19, 1927.
    
      The court made special findings of fact, as follows:
    I. Plaintiffs are citizens of the United States and' have at all times borne true allegiance to said Government and have not in any way voluntarily aided, abetted,, or given encouragement to rebellion against the United States. Amos D. Carver, one of the plaintiffs, was during the transactions hereinafter described the managing owner of a certain ship, called the Betsey Ross, and the ownership of said vessel during said time was vested in the plaintiffs in the following proportions:
    Amos D. Carver, ; S. E. Turner, |f; H. N. Blanchard, •|f; Clifford N. Carver, ff; James B. Parse, ; W. A. Blanchard, ; Scott Blanchard, ; and P. B. Blanchard, Said vessel was a five-masted sailing ship classed as 100-A-l, by British Lloyds Registry, and was of the measurement of 242.9 feet in length, 44.9 feet in width, and 19.7 feet in depth. Said vessel was built for plaintiffs by the Seaborn Shipbuilding Company at Tacoma, Washington, between the approximate dates of March 19, 1917, and October 8, 1917, at a cost to said plaintiffs of $176,000. Her' net tonnage was 1,503, her gross tonnage 1,670, and her dead-weight cargo capacity was approximately 2,950 tons.
    II. On August 30, 1917, plaintiffs entered into charter party with Messrs. J. J. Moore & Company, of San Francisco, California, for the transportation of a cargo of lumber from Chemainus, British Columbia, Dominion of Canada, to Melbourne, Australia, at the charter rate of $39 for each 1,000 feet, board measure. One of the conditions of said charter was as follows:
    “ This charter is subject to charter for return cargo being signed in New York, promptly after advice that this charter has been signed here.”
    Simultaneously with said lumber charter, plaintiffs entered into a charter party with the Mutual Chemical Company of America at New York which provided that said vessel on her return voyage should transport a cargo of chrome ore from the Island of New Caledonia (800 miles east of Australia) to New York or Baltimore, at the rate of $60 United States currency per ton of 2,240 pounds.
    
      III. Under the provisions of the act of June 15, 1917, the President, by Executive order of July 11, 1917, delegated to the United States Shipping Board all power and authority vested in him by said act, which act included the power to cancel, suspend, or requisition any contract pertaining to the construction or operation of ships.
    IV. On November 26, 1917, about the time of the departure of said vessel upon her outward voyage, plaintiffs, through their agents, Messrs. D. B„ Dearborn & Company, steamship brokers, New York City, applied to the United States Shipping Board for the approval of said voyage of the Betsey Ross, and obtained said approval, as follows:
    Address all communications to United States Shipping Board chartering committee, customhouse, New York
    UNITED States Shipping BOARD CHARTERING COMMITTEE,
    
      New York, November %6,1917.
    
    Messrs. D. B. Dearborn & Co.,
    
      8 Bridge Street, N. Y.
    
    American schooner Betsey Ross.
    
    Dear Sirs: We have your letter of November 26th in connection with charter of above vessel for a cargo of ore from New Caledonia to New York or Baltimore.
    This charter is hereby approved.
    Yours very truly,
    (Sgd.) Welding Ring, Chairman of the Chaptering Committee.
    
    V. Thereupon said vessel proceeded on her voyage and prior to and during said outward voyage plaintiffs built “ trunks ” in said ship for the return cargo of chrome ore at a cost to plaintiffs of $5,889.35. Said lumber shipped for trunks for the carriage of chrome ore was used- as dunnage for the carriage of a wheat cargo on her return voyage.
    VI. Said vessel completed her outward voyage, arriving in the port of Melbourne on March 9,1918. Between March 9, 1918, and March 27, 1918, said ship was discharged of her cargo of lumber. Between March 27, 1918, and April 3, 1918, said vessel was cleaned and painted, and on April 5, 1918, she was undocked and on April 10,1918, she was ready to sail for New Caledonia. However, before she sailed the vessel’s steering gear broke down, in her repairs.
    VII. On or about April 5, 1918, United States Shipping Board, and the United States War Industries Board, and of the British and Australian Governments, entered upon the discussion of requiring or requesting American-owned vessels, including the Betsey Boss, to return to an American port with cargoes of wheat. There were differences of opinion between the said various officials as to what action should be taken, which discussion continued until May 9, 1918.
    VIII. The master of the Betsey authorities at Melbourne, on April 5, 1918, for clearance papers. The Commonwealth authorities declined to grant clearance, advising plaintiffs’ agent at Melbourne that this action was taken at the request of the United States Shipping Board. On April 15th the plaintiffs’ agent at Melbourne rendered bills to the Commonwealth Shipping Board for demurrage on the vessel due to the embargo placed against her, but these bills were disallowed and returned with the following letter on April llth: ,
    COMMONWEALTH OF AUSTRALIA, Commonwealth Shipping Board,
    Liverpool Building, 155 William
    
      Melbourne, 17th April, 1918.
    
    No. 5625.
    Dear Sirs:
    S. I. Betsey Boss
    
    Deferring to your letter of the 15th inst., enclosing debit notes for demurrage in connection with above vessel; these are returned herewith, for, as previously advised, no responsibility can be accepted in regard to the matter.
    I am instructed to inform you for the information of the master that the following cable has been received from the Secretary of State, elated 15th April:
    “With reference to your telegram of 12th April, American Shipping Board consider Betsy Boss suitable wheat and requests she loads wheat not chrome ore.”
    Doubtless the master will receive instructions in regard to this vessel.
    Yours faithfully,
    (Sgd.) W. Heale,
    
      Secretary.
    
    Messrs. Wm. Haughton & Co., Melbourne.
    
    
      IX. Pending the continuance of the said embargo the owners of the Betsy Ross made various efforts to have the vessel cleared in order that she might carry out her chrome-ore charter, but action on these requests was delayed until May 9, 1918, pending a decision being reached by the United States Shipping Board that the vessel would be ordered to abandon her chrome-ore charter and return to the United States with a cargo of wheat. The said vessel in the meantime remained idle at Melbourne pending these negotiations from April 10, 1918, to May 10, 1918, a period of 30 days, at the expense of the plaintiffs. The fair and reasonable value of the use of said vessel as of that time was $500 per day.
    X. Shortly after plaintiffs were so notified by said Australian officials, and on or about May 15, 1918, the United States Food Administration Grain Corporation, at its office in New York, submitted to the managing owner of said vessel the so-called “Australian Government Form Wheat Charter,” which was thereupon signed on behalf of plaintiffs and by said Grain Corporation.
    Said charter contained the following provisions:
    “ New YoRK, May 15, 1918.
    
    “It is this day mutually agreed between Food Administration Grain Corporation, hereinafter called the charterers, of the one part, and Amos D. Carver for and on behalf of the owners of the good ship or vessel called the Betsy Ross, classed 100-A-l, of the measurement of_ tons net register, or thereabouts, and 2,150 tons dead-weight cargo capacity 10% more or less, now Melbourne, whereof -is master, of the other part.
    “ That the said ship being tight, staunch, strong, and every way fitted for the intended voyage, shall -load at Melbourne * * * a full and complete cargo of wheat and/or flour in bags, which the said charterers bind themselves to provide, not exceeding what she can reasonably stow and carry over her tackle, apparel, provisions, and furniture, and being so loaded, shall forthwith proceed as ordered by charterers on signing bills of lading, to New York * * *.
    “Freight being payable in sterling at and after at the rate of: (125/ — ) One hundred and twenty-five shillings. All per ton of 2,240 lbs. net weight, delivered, for wheat and/or flour. Ninety per cent of- the said freight to be paid on cable advice of having loaded and less advances, if any, to be paid on unloading and right delivery of the cargo, in cash at fixed rate of exchange of $4.76 per one pound sterling. Freight prepaid considered earned and not returnable ship and/or cargo lost or not lost. * * *
    “ Ten (10) working-days are to be allowed the said charterers or their agents (if the ship is not sooner dispatched) for loading the said ship at port of loading (Sundays and holidays excepted), to be reckoned from twenty-four hours after the master has given written notice to the charterers or their agents in business hours, that the ship is ready to receive cargo (the inward cargo or ballast then being all discharged and subject to clause 14), and the ship to be discharged with all dispatch as customary at the port of discharge. The said charterers or their agents to have the option of keeping the said ship ten days on demurrage, at 1/_per net register ton per day for every day detained beyond the total number of lay days; such demurrage to be payable day by day when and where incurred. * * *
    “ It is also mutually agreed that this charter is subject all the terms and provisions of and all the exemptions from liability contained in the act of Congress of the United States approved on the 13th day of February, 1893, and entitled an ‘Act relating to navigation of vessels, etc.’ ”
    At the time of or immediately prior to the signing of said wheat charter plaintiffs, as a result of their negotiations with the United States Food Administration, concluded that rather than have the United States Government take over the Betsey Ross said plaintiffs had better sign said wheat charter. This they did on May 15, 1918.
    XI. The United States Food Administration paid plaintiffs for the transportation of said cargo of wheat $63,784, the same being upon the basis of the cargo of 2,144 tons at 125 shillings per ton and $4.76 per pound sterling as provided in said wheat charter. Said sum so paid did not include any sums as payments for disbursements or demur-rage. The amount which plaintiffs would have earned under the terms of their ore charter of August 30, 1917, would have been $177,000.
    XII. The Betsey Ross upon her return voyage arrived in New York about the time of the armistice, 1918. The claim herein sued upon was presented to the United States Shipping Board for an award of just compensation, and on or about February 17, 1920, said Shipping Board made an award disallowing said claim and any part thereof.
    XIII. Just compensation to the plaintiffs for the cancellation of their contract with the Mutual Chemical Company of America is the sum of $113,216, with interest at the rate of 6 per cent per annum from May 9, 1918, until paid.
    The court decided that plaintiffs were entitled to recover the sum of $113,216, with interest thereon at 6 per cent per annum from May 9, 19.18, until paid.
    
      
       Certiorari granted.
    
   Hat, Judge,

delivered the opinion of the court:

This is a suit brought by the plaintiffs against the United States to recover three items: $15,000, $5,889.35, and $113,-216, making in the aggregate the sum of $134,105.35.

The plaintiffs, citizens of the United States, were at the times hereinafter mentioned the owners of a ship called the Betsey Ross. On August 30, 1917, the plaintiffs entered into a charter party with J. J. Moore & Company, of San Francisco, for the transportation of a cargo of lumber from Chemainus, British Columbia, to Melbourne, Australia. One of the conditions of said charter party was as follows: “This charter is subject to charter for return cargo being-signed in New York promptly after advice that this charter has been signed here.”

Simultaneously with said lumber charter plaintiffs entered into a charter party with the Mutual Chemical Company of America at New York which provided that said ship on her return voyage should transport a cargo of chrome ore from the Island of New Caledonia, 800 miles east of Australia, to New York or Baltimore at the rate of $60 per ton of 2,240 pounds.

On November 26, 1917, about the time of the departure of said ship upon her1 outward voyage, the plaintiffs through their agents applied to the United States Shipping Board for the approval of the charter for the return voyage of said ship, and received approval as follows:

New YoRK, November 86, 1917.
Messrs. D. B. DearborN & Co.,
8 Bridge Street, N. Y.
American schooner Betsey Boss.
DeaR Síes : We -have yonr letter1 of November 26th in connection with charter of above vessel for a cargo of ore •from New Caledonia to New York or Baltimore.
This charter is hereby approved.
Yours very truly,
(Sgd.) WeldiNG Ring, Ghairrnxm of the 0bartering Committee.

The Betsey Ross completed her outward voyage and arrived at the port of Melbourne on March 9, 1918. On April 10,1918, the ship was ready to sail for New Caledonia to load her cargo of chrome ore.

On April 5, 1918, the United States Shipping Board, the United States War Industries Board, and the British and Australian Government entered upon a discussion as to the desirability of requiring American-owned vessels in Australian ports to return to an American port with cargoes of wheat, but no decision was arrived at until May 9, 1918.

In the meantime the master of the Betsey Ross was refused clearance papers from the port of Melbourne upon the ground that the United States had requested that the Betsey Ross should make her return voyage with a cargo of wheat instead of chrome ore, and it was not until May 9, 1918, that the master of the vessel was advised that he was required to load a cargo of wheat.

The plaintiffs were also notified, and their contract with the Mutual Chemical Company of America was rendered impossible of performance. On May 15, 1918, having had submitted to them by the United States Food Administration Grain Corporation the so-called “Australian Government Form Wheat Charter,” they signed said charter dated May 15, 1918. Under the provisions of said charter plaintiffs were to be paid for the transportation of wheat at the rate of 125 shillings per ton of 2,240 pounds. The ship after clearing from Melbourne docked at Williams-town in the vicinity of Melbourne, and on May 29, 19Í8, the Betsey Boss sailed from Williamstown for New York with the cargo of wheat, 2,144 tons.

After the ship arrived at New York the plaintiffs were paid for the transportation of said cargo of wheat the sum of $63,784, the same being in full payment under the provisions of the contract.

Had the plaintiffs been permitted to perform their contract with the Mutual Chemical Company of America they would have earned the sum of $177,000.

The ship was idle 30 days in the port of Melbourne by reason of the fact that the United States Shipping Board requested that she be held until it could make up its mind whether the ship should make her return voyage loaded with wheat or chrome ore.

The claim which is sued upon here was presented to the United States Shipping Board for an award of just com-¡íensation, and on February 17,1920, the said board made an award disallowing the claim.

The act of June 15, 1917, 40 Stat. 182, confers upon the President the power and authority to suspend and cancel contracts with respect to the operation of ships. The President delegated this power to the United States Shipping Board Emergency Fleet Corporation as he was authorized to do under the act.. The act further provides that when contracts are suspended or canceled the United States shall make just compensation therefor to be determined by the President, and if the amount thereof so determined by him is unsatisfactory to the person entitled to receive it such person shall be paid 75 per cent of the amount so determined, and shall be entitled to sue the United States to recover such further sum as added to said 75 per cent will make up such amount as will be just compensation therefor, and the act conferred upon this court jurisdiction to hear and determine such cases.

In the case at bar the plaintiffs made their claim for just compensation to the United States Shipping Board Emergency Fleet Corporation, which board on February 17, 1920, disallowed the claim, whereupon the plaintiffs brought this suit.

The facts are that the United States Shipping Board suspended the contract of the plaintiffs for a period of 30 days while the said board was deliberating the question whether the ship of the plaintiffs and all other American ships in the ports of Australia should or should not on their return voyages to the United States be loaded with cargoes of wheat; and the plaintiffs’ ship by reason of these deliberations was forced to remain idle in the port of Melbourne, Australia, for the period of 30 days.

At the expiration of the said 30 days, on May 9, 1918, the plaintiffs were required by the United States Shipping Board Emergency Fleet Corporation to take on a cargo of wheat for its return voyage to the United States, and by this act the said board canceled the contract which the plaintiffs had with the Mutual Chemical Company of America to transport a cargo of chrome ore from the Island of New Caledonia to New York or Baltimore.

It is not denied that the contract under consideration is within the provisions of the act June 15, 1911, and that the power and authority of the President in relation thereto was duly delegated to the United States Shipping Board Emergency Fleet Coi’poration.

The act provides for compensation in case the Government shall exercise the power conferred as to suspending and canceling contracts. Having the right to suspend and cancel the contract, it must be held that the Government must pay to the plaintiffs the just compensation for the loss which they incurred by reason of the suspension and cancellation of their contract. The United States. Shipping Board having refused to pay to the plaintiffs any compensation the case is before us, and we must determine the just compensation due to the plaintiffs from the evidence in the record, and in so determining that compensation we have endeavored to give to the plaintiffs the sum of money which they lost by reason of such suspension and cancellation, and to place them in as good a position pecuniarily as if the contract had not been suspended or canceled.

We have not allowed the item of $5,889.35, for the reason that the’plaintiffs used the material in the transportation of the cargo of wheat, and it does not appear just what the plaintiffs lost bj reason of the change made in the vessel. We can not base a judgment upon guess work. We have not allowed the item of $15,000 because, while the plaintiffs were delayed thirty days, yet they were relieved from performing their' ore contract, and all the expenses incident thereto; and the plaintiffs being thus relieved can not claim the damages for delay and take advantage of the relief which they obtained by reason of not having to perform their contract to go to New Caledonia for the ore.

The Government took no evidence in this case, and the facts are undisputed.

We are of opinion that the plaintiffs are entitled to the sum set out in the conclusion of law, and judgment will be entered accordingly.

Moss, Judge; Booth, Judge; and Campbell, Chief Justice, concur.

Geaham, Judge, dissents.