#### ALASKA PACIFIC NAVIGATION CO. v. THE UNITED STATES

[No. C-693.

Decided December 7, 1925]

*On the Proofs*

*Settlements; compromise.*— Where, pursuant to the act of June 15, 1917, and the Executive order of July 11, 1917, the U. S. Shipping Board requisitions a motor ship on the time-form basis, on the first voyage the vessel’s engines break down, thereafter the Government refuses to pay any hire, and the owner of said vessel accepts without protest a cheek for charter hire in full to May 15, 1918, under a release from requisition on condition that “ all responsibility and liability ” of the said board shall cease as of that date, the settlement so made is final and binding and plaintiff is estopped from claiming hire after May 15, 1918.

*252
      *The Reporter's*statement of the case:

*Mr. Joseph W. Cox*for the plaintiff. Leckie, *Cox & Sherier*were on the brief.

*Mr. J. Frank*Staley, with whom was *Mr. Assistant Attorney General Herman J.*Galloway, for the defendant.

The court made special findings of fact, as follows:

I. The Alaska Pacific Navigation Company, plaintiff, is a corporation organized under the laws of the State of Oregon. During the years 1916-17 plaintiff built at Seattle, Washington, the motor ship Oregon, which had a capacity of 2,614.42 dead-weight tons.

II. Under the provisions of public act No. 23 of the Sixty-fifth Congress, entitled “ An act making appropriations to supply urgent deficiencies in appropriations for Military and Naval Establishments on account of war expenses for the fiscal year ending June 30, 1917, and for other purposes,” approved June 15, 1917, 40 Stat. 182, and the Executive order of July 11, 1917, pursuant thereto there was delegated to the United States Shipping Board, as agent for the President, all power and authority for the taking over- by requisition the possession of vessels then constructed and the operation, management, and disposition of such vessels. Pursuant to such authority the United States Shipping Board on December 2, 1917, effective at 2 p. m. of said day, requisitioned the use of said motor ship *Oregon.*

III. On December 3, 1917, the plaintiff and the United States entered upon an agreement, time-form basis, defining their respective rights and duties with respect to the vessels so requisitioned. Said agreement contained the following provisions:

“ First. * * * The vessel when placed at the disposal of the United States, as directed by it, shall be or shall forthwith be made by and at the expense of the owner tight, staunch, stroffg, well and sufficiently tackled, appareled, furnished, outfitted, and equipped and in every respect seaworthy and in good running order and condition. * * *■**Any deficiency in these respects must be remedied forthwith by and at the expense of the owner; and any time *253lost in remedying such deficiency is not to be paid for by the United States.

“ Second. The owner shall operate the vessel for the United States, shall provide and pay for all provisions * * * officers and crew * * * and shall main-

tain the steamship in thoroughly efficient state in hull and machinery, tackle, apparel, furniture, and equipment during the service.”

“ Eighth. The United States sh'all pay for the use of the steamship at the monthly rate which shall from time to time be established by the United States Shipping Board for a vessel of her description * *

“ Twelfth. The owner shall assume the marine risks 3fí Í! *

“ Twenty-second. In the event of loss of time from deficiency of men or stores, breakdown of machinery * * * preventing the working of the vessel for more than twenty-four consecutive hours, the hire shall be reduced one-half until the vessel be again in an efficient state to resume her service.”

IV. After requisition the *Oregon*was assigned to the Matson Navigation Company for operation. On her first voyage, from San Francisco to Honolulu, during February, 1918, her engines broke down, necessitating her being towed to Honolulu. As it was found she could not be repaired in the island the Government was obliged to send out a boat to bring her to San Francisco, where she arrived during the month of April, 1918. There the plaintiff took charge of the vessel and arranged for her repairs in accordance with the requirements of the charter party. These repairs continued from May, 1918, until June, 1919, during which time the vessel was in the hands of plaintiff, which was making the repairs at its own expense and on its own account.

The Government refused to, and did not, pay any hire after February, 1918.

Y. At the time the surveys and examinations were had and the repairs made “ serious questions ” arose as to whether defects in the engines were due to deficiencies in the equipment at the time the vessel was requisitioned. In the repairs so made at San Francisco said engines were altered and improved, in addition to making the repairs occasioned by the accident. The reports show that the *254repairs accounts aggregated $102,506.64, of which $57,712.24 represented the costs of various changes in the original design not occasioned in any way by the accident but considered as improvements to the original design, and the balance represented charges on account of the accident.

VI. The hire agreed upon between the plaintiff and the Government was at the rate of $5.75 per dead-weight ton per month.

VII. There was a difference between vessels under requisition and those not under requisition, both as respects value and rates of hire.

VIII. On May 15, 1918, in the office of the Shipping-Board at San Francisco, the plaintiff’s representative made a proposal to the representative of the Shipping Board to have the ship released from the control of the board. The latter agreed that it was the best thing to do, and recommended that the ship be released. No action had been taken on this recommendation up to October 21, 1918.

IX. On or about October 31, 1918, Cornelius H. Hanford, as attorney for plaintiff, and C. W. Cook, on behalf of the United States Shipping Board, held a conference at Washington, D. C., at which they endeavored to adjust the differences growing out of said requisition charter. The former came to Washington for the especial purpose of trying to secure settlement for the hire of the ship. He was told that the Matson Navigation Co., which had operated and salvaged the *Oregon,*had not been paid in full, had earned more than it received, and had a claim against the ship which had to be taken care of; that the plaintiff was not entitled to anything, but that, inasmuch as the Government had been in possession of the ship for awhile and had started it to Honolulu, it was willing to pay something, and on October 21, 1918, made an offer of settlement as of May 15, 1918. On October 21, 1918, the Shipping Board adopted the following resolution:

“ Whereas the motor ship *Oregon,*owned by the Alaska Pacific Navigation Company, was requisitioned by order of the board on December 2, 1917; and

“ Whereas an agreement has been reached between the owner and the division of operations that the vessel shall be *255considered released from requisition and all responsibility and liability upon the part of the board shall cease as of May 15,1918:

“ *Be it*resolved, That the motor ship *Oregon*be released from requisition as of May 15, 1918, in accordance with the aforesaid agreement and understanding.

“ Lester SisleR, *Secretary.”*

On October 21, 1918, said O. W. Cook sent a telegram to the plaintilf, which was received by it on October 22, 1918. The telegram was as follows:

“ October 21, 1918.

“ From Cook, Washington, to Alaska Pacific Navigation

Company, Seattle, Washington.

“ Number ten hundred sixty-three. You are hereby notified that the motor ship *Oregon*is released from requisition in accordance with understanding and on condition that all responsibility and liability upon the part of the board shall cease as of May fifteenth, nineteen eighteen. Please acknowledge.”

Mr. Hanford, as attorney for plaintiff, also telegraphed plaintiff at Seattle his “ understanding of the substance of the agreement,” whereupon plaintiff telegraphed instructions to Hanford “ to take the money.” Thereafter, and on October 22,1918, said Hanford accepted from said Shipping Board a check which paid the charter hire in full to May 15, 1918, which check was afterwards paid. No written or verbal protest as to the amount of said payment was made by Mr. Hanford either at the time he received said check or subsequent thereto, although he continued as attorney for plaintiff until 1920.

It does not appear from the evidence that plaintiff, from the time it accepted said check on October 22, 1918, until some time subsequent to August 18, 1919, made any protest, either verbally or in writing, as to the amount of said payment.

X. On August 18, 1919, plaintiff sent the Shipping Board the following letter:

“ The Alaska Pacific Navigation Company, owner of the motor ship Oregon, hereby claims a balance of $3,310.82, per the annexed statement, on account of hire at the contract rate of the motor ship *Oregon.*

*256“In the month of December, 1917, the ship was requisitioned by the Shipping Board; and thereafter, by action of the board, the rate of compensation to be paid was fixed at $5.75 per ton per month, to be computed upon the ship’s dead-weight capacity, deduction of 50 per cent to be made for time lost for necessary repairs or other cause.

“ In settling the account in the month of October, 1918, it was agreed by the owner and Mr. Carey W. Cook, acting for the board, that the ship was deemed to have been released to the owner on May 15, 1918, and the payment made was based on a report by Mr. Edward S. Hough, of San Francisco, dated July 25, 1918, showing the dead weight to be 2,500 tons. In this there was a serious mistake, as now appears by Mr. Hough’s later report, dated July 31, 1919. For your information copies of the two reports are herewith inclosed.

“ There was no alteration of the ship subsequent to the time of Mr. Hough’s first survey, whereby her carrying capacity was increased; his report was erroneous and the settlement based thereon was affected by a mutual mistake of the parties with respect to a material fact; hence there should be no difficulty in readjusting the account.

“ To facilitate an early consideration of this claim and payment of the balance due we are sending copies hereof and the accompanying papers to the representative of the Shipping Board in San Francisco.”

This request for an additional allowance on account of an error made in stating the vessel’s dead-weight tonnage was granted, the mistake corrected, and the amount due plaintiff on account of this readjustment paid it May 28, 1923.

XI. R. M. Semmes was on December 4, 1918, a stockholder and director in said corporation. During part of 1918 he was the vice president and general manager of the plaintiff corporation; during the early part of that year he went to Honolulu to look after the repairs of the *Oregon;*in August, 1918, while assisting in conducting plaintiff’s business in Seattle, he requested C. H. Hanford, plaintiff’s attorney, to go to Washington in connection with the differences between plaintiff and the Shipping Board; during the latter part of 1918 he left Seattle and went East for the purpose of entering the military service of the United States; on October 25,1918, while in the city of Washington, he wrote the Shipping Board regarding the sale of the *257
      *Oregon;*and on December 4,1918, having returned to Seattle after the armistice, he sent the following telegram to C. W. Cook, U. S. Shipping Board, Washington, D. C.:

“ In line with your statement that you would recommend and do everything consistent to further sale of *Oregon*and settlement we accepted request you to expedite application in hands of Amberg to sale vessel to Alabama Steamship Company.”

XII. On November 26, 1918, plaintiff made formal application to the Shipping Board for the transfer of the *Oregon*to the Alabama Steamship Company for the price of $500,-000 cash. On December 16, 1918, the Shipping Board by resolution authorized such transfer.

The court decided that plaintiff was not entitled to recover.

Graham, *Judge,*

delivered the opinion of the court:

On and prior to December 2, 1917, plaintiff was the owner of the motor ship *Oregon.*On that date, while the ship was at Seattle, Wash., the United States Shipping Board, under authority of the act of June 15, 1917, 40 Stat. 182, and Executive order of July 11, 1917, delegating to that board as the representative of the President of the United States the power to take over, operate, and manage such vessels, requisitioned the *Oregon.*

On December 3, 1917, plaintiff and the Shipping Board entered into a requisition charter in writing, time-form basis, by which their rights and duties with respect to the vessel were defined. The charter contained the following provisions:

“ First. * * * The vessel when placed at the disposal of the United States, as directed by it, shall be or shall forthwith be made by and at the expense of the owner tight, staunch, strong, well, and sufficiently tackled, appareled, furnished, outfitted, and equipped and in every respect seaworthy and in good running order and condition. * * * Any deficiency in these respects must be remedied forthwith by and at the expense of the owner; and any time lost in remedying such deficiency is not to be paid for by the United States.

*258“ Second. The owner shall operate the vessel for the-United States, shall provide and pay for all provisions. * * * officers and crew * * * and shall maintain the steamship in thoroughly efficient state in hull and machinery, tackle, apparel, furniture, and equipment during, the service.”

“ Eighth. The United States shall pay for the use of the-steamship at the monthly rate which shall from time to-time be established by the United States Shipping Board for a vessel of her description * * *.”

“ Twelfth. The owner shall assume the marine risks * * * 5?

“ Twenty-second. In the event of loss of time from deficiency of men or stores, breakdown of machinery * * *- preventing the working of the vessel for more than twenty-four consecutive hours, the hire shall be reduced one-half until the vessel be again in an efficient state to resume her service.”

The motor ship was afterwards turned over to the Matson Navigation Company, an agency of the Shipping Board,, for operation. The ship started on a voyage from San Francisco to Honolulu in February, 1918, when her engines broke down and it became necessary to tow her into. Honolulu. Finding that she could not be repaired in that, locality, the Shipping Board was obliged to send out a. boat to bring her to San Francisco, where she arrived sometime during April, 1918. The plaintiff took charge of the.vessel there and arranged for the repairs, as the charter required. The repairs continued from May, 1918, until June, 1919, during which time the vessel was in plaintiff’s, hands and the repairs made on its account.

The Government refused to, and did not, pay hire after February, 1918. Serious questions had arisen during the-examinations and surveys for the repairs as to whether the-breakdown of the engines was not due to defects therein at. the time of requisition. There was a difference with respect to value and rates of hire between vessels under requisition, and those not under requisition, the value being higher in the latter case. Plaintiff having received no payment for hire after Febru'ary, 1918, its attorney came to Washington,. D. C., sometime prior to October 21 for the purpose of' endeavoring to secure the payment and a settlement. He-*259sought and held a conference with a representative of the Shipping Board with this purpose in view. The latter contended that the Matson Navigation Company, which had salvaged the *Oregon,*had not been paid in full for salvage, and had a claim against the ship which had to be taken care of in the settlement; that in the Government’s view the plaintiff was not entitled to anything, but that as the Government had possession of the ship for a time it was willing to pay something. An offer of a sum in settlement, effective May 15, 1918, was made by the Government and was accepted, with the understanding and on condition that the ship would be released from requisition and that all responsibility and liability upon the part of the Government would cease May 15, 1918. The sum offered was paid to plaintiff’s representative on October 22, 1918. A resolution based on this agreement was adopted by the Shipping Board on October 21, which released the vessel from requisition as of May 15, 1918. On the same date plaintiff was notified of the release and the condition on which it was made. The notice was received without protest or objection by plaintiff-

No written or verbal protest was made by plaintiff’s representative at or after the time he received the settlement money, nor does it appear that any objection was made to the settlement by plaintiff until August 18, 1918, when by letter it called the Shipping Board’s attention to an error in the settlement which it claimed placed the dead-weight tonnage of the ship at too low a figure. As stated in plaintiff’s letter, it was “ a mutual mistake of the parties.” The error was corrected, the account adjusted, and a sum due plaintiff on account of this adjustment was paid to and accepted by it.

On November 26, 1918, plaintiff made formal application to the Shipping Board for the transfer of the *Oregon*to the Alabama Steamship Co., which transfer was authorized by resolution of the board on December 16. The ship was afterwards sold to that company.

The claim involved here was adjusted upon definite and well-understood terms. It is plain that the settlement was intended to be final, and was so regarded by both parties. The principles controlling the question of a final settlement and acquiescence where the amount claimed is “ confessedly *260due ” and a smaller sum is accepted and received are fully discussed by the Supreme Court in the case of *The St.*Louis, *Brownsville & Mexico Railway Co.*v. *United*States, 268 U.S. 169, which has been cited in the briefs of both parties. That was a case where a sum was confessedly due plaintiff and a smaller amount was paid to it. While the facts of this case, like those in the case cited, show conduct on the part of plaintiff before payment which led the Government to believe that the amount offered would be received in satisfaction by plaintiff, and conduct after payment which was calculated to lead the Government to believe that the amount received was accepted in full satisfaction of the claim and that the settlement was acquiesced in, it is not necessary to rest a decision on that case. This is not a claim for an amount admittedly due plaintiff. On the contrary the Government took the position at the outset of the negotiations for a settlement that there was nothing due plaintiff. It was a case of the compromise of a disputed claim — not a claim confessedly due either in law or in fact. The Government had stopped payment of hire in February, 1918, and made no payment after that time. Under the contract, where repairs were needed growing out of deficiencies in regular equipment, plaintiff was entitled to no hire during the period the ship was undergoing such repairs. There were serious questions as to whether the breakdown of the engines on the voyage to Honolulu, which rendered the boat useless to the Government after February, 1918, was not due to deficiencies in equipment existing when the Government took possession. At the time of settlement the ship was still undergoing repairs, which were not completed until eight months thereafter. Plaintiff not only received the money paid as consideration for the settlement, but also secured what it had been seeking — the release of its vessel from requisition. By this release the Government surrendered its rights under the charter contract. The vessel released from requisition had a higher market value and would bring a higher rate of hire than the plaintiff was receiving under the requisition charter. It is hardly probable that the Government would have paid this amount of money and released the vessel for any other purpose than a final settle*261ment. It did not intend to leave open for future litigation and adjustment the question of additional hire. The plaintiff had asked for a release of the vessel, which was granted upon the condition that the Government should be released of all responsibility and liability under the contract after May 15, 1918. When plaintiff accepted this release it consented to the abrogation of the contract as of May 15, 1918, and was estopped from claiming hire after the date fixed. It certainly can not be reasonably assumed that the Government intended to surrender the ship and the use of it to plaintiff as of May 15, 1918, and continue to pay hire thereafter. The plaintiff can not have both its ship and the hire thereof. It can not hold and let go at the same time. The question of settlement of disputed claims was passed upon by this court in the case of *St. Louis Car Co.*v. *United*States, 59 C. Cls. 547, 554, where many authorities are cited.

It must be held that the settlement in this case was final and binding upon both parties. This precludes the plaintiff from a recovery. The petition should be dismissed, and it is so ordered.

Hay, *Judge;*Downey, *Judge;*Booth, *Judge;*and Campbell, *Chief*Justice, concur.