Case Name: NEW YORK & PORTO RICO STEAMSHIP COMPANY v. THE UNITED STATES
Court: United States Court of Claims
Jurisdiction: United States
Decision Date: 1923-10-29
Citations: 58 Ct. Cl. 652
Docket Number: No. A-19
Parties: NEW YORK & PORTO RICO STEAMSHIP COMPANY v. THE UNITED STATES.
Judges: 
Reporter: United States Court of Claims Reports
Volume: 58
Pages: 652–657

Head Matter:
NEW YORK & PORTO RICO STEAMSHIP COMPANY v. THE UNITED STATES.
[No. A-19.
Decided October 29, 1923.]
On the Proofs.
Requisitioning of vessel: contract; waiver; just compensation. — The United States Shipping Board on October 12, 1917, issues an order by virtue o£ the act of June 15, 1917, 40 Stat. 182, and an order of the President dated June 11, 1917, requisitioning the use of a vessel belonging to plaintiff, and on December 10, 1917, enters into a written agreement with plaintiff for the hire of such vessel, stipulating to pay plaintiff just compensation for said vessel in case of loss or damage thereto, with interest from 30 days after proof of such loss or damage at the rate of 6 per cent per annum, such “interest not to be paid, however, if the owner resorts to any court for the purpose of establishing the amount of just compensation.” Held, that such stipulation does not deprive plaintiff of the right conferred by the act of June 15,1917, supra, to resort to this court if dissatisfied with the compensation offered, nor estop plaintiff from asserting a claim for interest as a part thereof.
The Reporter's statement of tlie case:
Mr. Everett Hasten for the plaintiff. Mr. William J. Dean and Burlington, Veeder, Hasten & Fearey were on the briefs.
Mr. W. L. Cole, with whom was Hr. Assistant Attorney General Robert H. Lovett, for the defendant.
The following are the facts of the case as found by the court:
I. The plaintiff, the New York & Porto Pico Steamship Company, at the time hereinafter mentioned was a Maine corporation engaged in the steamship business and was operating a passenger and freight service between Porto Pico and New York, and on October 12,1917, and thereafter until June 2,1918, was the owner of the steamship Carolina. The steamship Carolina was built by the Newport News Shipbuilding & Dry Dock Company in 1896 for the Ocean Steamship Company, a corporation of Savannah, Georgia, and at that time was called La Grande Duchesse. The contract price for her building was the sum of $497,000.
II. The vessel, owing to faulty construction, was unprofitable from the time of its construction until it. was sold in the year 1905 to the New York & Porto Pico Steamship Company for the sum of $257,801.28. The purchaser changed the name of the vessel to the Carolina and operated her from the date of the purchase until the year 1913, and during that time expended upon her for repairs the following sums of money: $50,719, $100,000, and $98,816.77.
III. In 1913 the plaintiff steamship company sent the Carolina to the Newport News Shipbuilding & Dry Dock Company for certain repairs, which amounted to a recon* struction of the ship. The total expenditure for these repairs amounted to the sum of $418,207.54. In all there was expended by the plaintiff on said vessel the sum of $925,544.59. The vessel was then used by the plaintiff between New York and Porto Rico in carrying freight and passengers, and continued in that service until Juno 2, 1918. After the reconstruction of the, Gar olma her service was profitable to her owners.
IY. On October 12, 1917, the United States Shipping-Board by virtue of an act of Congress approved June 15, 1917, 40 Stat. 182, and an order of the President dated July 11, 1917, requisitioned from the plaintiff the use of the Carolina. On December 10, 1917, the plaintiff made and entered into a written agreement with the United States which was designated “Requisition charter — Time form.” A copy of said agreement is filed in this suit marked “ Plaintiff’s Exhibit 1,” and is made a part of this finding by reference. In this agreement the United States assumed war risks, and the agreement contained the following:
“ In case of loss or damage due to the operation of a risk assumed by the United States, just compensation for such loss or damage, with interest at 6 per cent per annum, commencing 30 days after proof of such loss or damage, shall be paid by the United States in the District of Columbia,, interest not to be paid, however, if the owner resorts to any court for the purpose of establishing the amount of the just compensation.”
V. After the requisition of the Carolina by the United States, the vessel was operated by the owner for the Government under the requisition charter, and continued to ply between New York and Porto Rico; and on June 2, 1918,. about six o’clock in the evening was attacked by a German submarine off the coast of New Jersey. The passengers and crew were placed in the lifeboats, after which the Carolina was sunk by the German submarine and, with the exception of lifeboats of the value of $1,500, became a total loss.
VI. By letter to the plaintiff dated July 3, 1918, the Shipping Board’s ocean advisory committee on just compensation designated July 9, 1918, as the time for the presentation of the plaintiff’s claim for just compensation due for the loss- of the Carolina. This advisory board, after taking the testimony of witnesses, fixed the value of the Carolina at $1,-892,500 as of the date of loss. This finding of the advisory board was reported to the Shipping Board, which last-named board awarded for said loss the sum of $1,250,000, and notified the plaintiff of such award in a letter dated January 18, 1919. This award was unsatisfactory to the plaintiff, and it elected, pursuant to the act of June 15, 1917, 40 Stat. 182, to accept 75 per cent of said award and to bring this suit in this court to recover such further sum as added to $937,000 — seventy-five per cent of the award— will constitute just compensation. The plaintiff received payment of said $937,000 on April 21, 1920.
YU. The value of the vessel Carolina was at the time of her loss the sum of $1,892,500.

Opinion:
CONCLUSION OP LAW.
Upon the foregoing findings of fact the court decides, as a conclusion of law, that the plaintiff is entitled to recover as compensation for the loss of said vessel the sum of $1,891,000 (Findings V and VII), and as part of the just compensation to which it is entitled interest at the rate of six per centum per annum from August 8, 1918, to November 19,1923, less the sum of $937,500, paid as aforesaid, with interest at the rate of six per centum per annum from April 21, 1920, the date of said payment, to November 19, 1923, the difference between said sums amounting to the sum of $1,351,381.81.
It is therefore adjudged and ordered that the plaintiff recover of and from the United States the sum of one million three hundred and fifty-one thousand three hundred and eighty-one dollars and eighty-one cents ($1,351,381.81) with interest at the rate of six per centum per annum until paid.
MEMORANDUM BT THE COURT.
The only question presented for our decision in this case is one of value.
The plaintiff introduced five witnesses, who testified as to the value of the vessel Carolina at the time of her loss. Two of these witnesses, Martin and Murphy, were members of the ocean advisory board on just compensation of the Shipping Board, whose business it was to advise the Shipping Board as to what was just compensation for owners' vessels destroyed by the enemy or acquired by the Government. In July, 1918, these witnesses as members of the advisory board valued the Carolina, and in their testimony in this case concurred in placing a value upon the Carolina at the time of her loss in the sum of $1,892,500. The United States introduced no evidence of the value of the vessel, but did file the deposition of Bainbridge Colby, which was taken on May 21, 1920, in the cases entitled Gulf Refining Co. v. United States, and Brooks-Soanlon Corp. v. United States, at that time pending in the United States Court of Claims. This deposition per stipulation between the parties was read as evidence in this case. The deposition of Mr. Colby bore no inference to the value of the Carolina at the time of her loss or at any other time, and so far as the court is advised throws no light upon the question involved in this case. The court in arriving at the value of the Carolina has adopted the valuation placed upon her by the ocean advisory board on just compensation of the United States Shipping Board, ¡i Government agency, acting about a month after the loss of the vessel occurred. In adopting that valuation the court has also had in mind the testimony of other witnesses, who placed a higher valuation upon the vessel, but the reasons given by the witnesses Martin and Murphy in arriving at this conclusion seemed to the court conclusive of the question of value.
It has been suggested that under the "Requisition charter — Time form," the plaintiff is not entitled to interest, because it has resorted to this court for the purpose of establishing the amount of the just compensation due it. The provision referred to is as follows:
" In case of loss or damage due to the operation of a risk assumed by the United States, just compensation for such loss or damage, with interest at six per cent per annum, commencing thirty days after proof of such loss or damage, shall be paid by the United States in the District of Columbia, interest not to be paid, however, if the owner resorts to any court for the purpose of establishing the amount of the just compensation."
We are of opinion that this provision does not deprive the owner of the right conferred upon him by statute, 40 Stat. 182, to resort to this court if he is not satisfied with the compensation determined by the President. Indeed it will readily be seen that the Shipping Board could have placed any value it pleased upon the vessel, no matter how low, and have deprived the owner of his interest by thus placing a value which it knew the owner would not accept.
In connection with this question of interest in this case, and indeed in all cases in which the United States is bound to pay interest, it may be of interest to note how long it has taken to have this suit heard.
The plaintiff did not file its petition until January 24,1921, although it had refused to accept the valuation of the Shipping Board in January, 1919. After filing its petition it took no evidence until June 6,1921; it took its last deposition on June 22, 1922. The defendant took no evidence at all, but only filed the deposition of a witness taken in another case. The plaintiff did not file its brief until June 16, 1923, a year after taking its last deposition. The defendant filed its brief on June 21, 1923. The facts respecting this delay were not called to the attention of the court, and no rule was asked for by either party for the expedition of the case.
Such delays manifestly cost the Government very large sums in interest.
In reply to the motion by the defendant to amend the conclusion herein the court has accordingly done so. In ascertaining the compensation the court has adopted the method of computing interest on the ascertained value of the vessel and allowing interest on the payment made by the Government from the date thereof until judgment. It has not adopted the ordinary rule applicable to partial payments. The method adopted has been followed in cases in which judgments have been rendered in accordance with the principle laid down in Seaboard Air Line By. Co. et at. v. United States, 262 U. S. 299. See cases of Grymes, ante, p. 398; Berry, ante, p. 400; and Ashby, ante, p. 401.