Court Opinion

ID: 8592468
Source: CourtListenerOpinion
Date Created: 2022-11-23 15:52:37.356672+00
Date Added: 2024-06-11T16:54:35.473933
License: Public Domain

Madden, Judge,
delivered the opinion of the court:
The plaintiff sues to recover money which, it asserts, was illegally exacted from it by the former United States Maritime Commission upon the occasion of the plaintiff’s transfer of four ships from American to foreign ownership and flag. During the years 1947 and 1948 the plaintiff purchased *358from the Maritime Commission four German merchant ships which had been acquired by the United States as reparations at the end of World War II. The Commission had limited the bidding for the ships to United States citizens, and had required the purchasers to agree that the Ships would be documented and operated under the United States flag. To make these foreign-built ships conform to United States standards required extensive conversion.
The plaintiff selected the one of the four ships which seemed to require the least alteration and had it converted. The cost of conversion was some $300,000 and was several times as much as the plaintiff had expected it to be. The consequence was that the plaintiff had more than $500,000 invested in a 4,200-ton ship, when the Commission was selling 10,400-ton American-built Liberty ships for $544,000. The plaintiff operated the converted German ship but the operation was at a loss. Conversion of the other three ships would 'have been still more expensive, and the plaintiff laid them up. Conversion to American standards not being economically feasible, the plaintiff would have had to scrap the ships if it could not obtain permission to operate them under a foreign flag, or sell them into foreign ownership.
The plaintiff sought permission to place some of the ships under Panamanian registry. The Commission refused to give such permission. The plaintiff found a potential Danish buyer for one of the ships, but the Commission refused permission for the transfer. The plaintiff found another Danish buyer for two of the ships and offered to buy three Liberty ships from the Commission and place them in American operation if the Commission would permit the foreign sales of the German ships. Some months later the Commission notified the plaintiff that it had approved the proposed sales of three of the German ships on condition that the plaintiff pay $450,000 to the Commission, pay to the Commission such further amount by which the cost of conversion of the converted German ship might, upon investigation, turn out to be less than $300,000, and purchase three Liberty ships from the Commission.
During the period of delay, the condition of the ships had deteriorated and the market price had fallen. The for*359eign purchasers insisted upon large reductions in the formerly agreed prices of the ships. The plaintiff requested the Commission to reconsider the amount of money demanded from it, but, its request being refused, it agreed to the conditions set by the Commission, paid the money and sold the ships. The fourth German ship was later sold, with the Commission’s permission, to an Israeli purchaser, the Commission requiring the plaintiff to pay $50,000 to the Commission and to buy another ship from the Commission.
For the three Liberty ships which the plaintiff agreed to buy at the time it sold the first three German ships to foreign purchasers, the Commission and the plaintiff later agreed to the substitution of two Victory ships. There is no issue in this case as to those ships, nor as to the ship which the plaintiff bought from the Commission at the time of the sale to the Israeli purchaser.
As to the condition inserted in the Commission’s permission to sell the first three German ships to foreign purchasers, that if, upon audit of the plaintiff’s cost of conversion of the first German ship, it should be found that the cost was less than $300,000, the plaintiff should pay the Commission the difference, the Commission required the plaintiff to pay $16,308.82. The amounts of the cash payments to the Commission in connection with the transfers were, then, $450,000, $16,308.82, and $50,000, a total of $516,308.82.
The plaintiff says that this case is, hi all essential respects, like the case of Clapp v. United States, 127 Ct. Cl. 505, cert. denied, 348 U.S. 834, and the case of Suwannee Steamship Co. v. United States, 150 Ct. Cl. 331. In those cases this court held that the Maritime Commission’s power to grant, or to deny, permission to an owner of a ship to sell it to a foreign purchaser, was intended to be exercised with due consideration of this country’s defense position, its foreign policy and its economic welfare; that if the granting of permission would have been detrimental to any of these interests, it would have been highly improper to have granted the permission, with or without a money consideration; that if the granting of permission would not have been detrimental to those interests, the exaction of a money payment for the permission had no relevancy to the transaction.
*360We have given consideration to the Government’s contention that the money in question was not required to be paid for the permission to sell the ships, but was for a number of other considerations, or possible considerations. The difficulty with the Government’s argument is that the Commission said in so many words that the permission was granted on condition that the money payment be made. The case is in all essential respects on all fours with the Clapp and Suwannee cases referred to above.
The Government urges that the title of the plaintiff to the ships in question was defective because Mr. Kulukundis, a citizen of Greece and a minority stockholder in the plaintiff corporation, advanced money to the plaintiff for the purchase of the ships. The Maritime Commission and its successor, the Maritime Administration, were at all times aware of all the material facts in this regard. There was nothing remotely approximating fraud, misrepresentation, concealment or other misconduct on the part of the plaintiff. The Maritime Administration was, as shown in finding 66, advised by Mr. Goertner, its special legal assistant who later became its General Counsel, that the applicable statute did not disqualify citizen corporations from purchasing ships with funds loaned by non-citizen individuals. The plaintiff had a valid title to the ships.
The plaintiff’s third claim, for $56,000 on account of the Commission’s delay in acting upon one of the plaintiff’s applications for permission to sell a ship, is not well founded, and is denied.
As appears from the findings, the defendant’s counterclaims have not been proved, and they will be dismissed.
The plaintiff is entitled to recover $516,308.82, and judgment will be entered in that amount.
It is so ordered.
Lttreee, Judge; Laramore, Judge, and Whitaker, Judge, concur.