Court Opinion

ID: 8716945
Source: CourtListenerOpinion
Date Created: 2022-11-26 07:57:02.795149+00
Date Added: 2024-06-11T16:58:50.638171
License: Public Domain

WHITAKER, Judge
(dissenting).
I cannot agree with the opinion of the majority. It seems to me that it treats the vessels sold as the “standard” Liberty-type vessel for the purpose of ascertaining the statutory sales price, and then treats it, *401not as a standard vessel, but as a special sort of vessel for determining the adjustments necessary to put the vessel “in class.”
The 'Ship Sales Act of 1946, 60 Stat. 41, was passed for the purpose of fixing a uniform basic price for the sale of all vessels of the Maritime Commission which were of the same type. This statutory sales price was based on the prewar domestic cost of a “standard vessel”, section 3(c). The statutory sales price was to be 50 percent of the prewar domestic cost of a dry-cargo vessel, but 87% percent of the prewar domestic cost of a tanker. However, it was provided in the last paragraph of section 3(d) (4) that “For the purposes of this Act, * * * all Liberty vessels shall be considered to be vessels of one and the same type.” The vessels sold to plaintiffs were Liberty-type tankers.
In section 299.1 of General Order No. 60 of the Maritime Commission it was provided in subsection (f) that the “ ‘statutory sales price,’ as applied to a particular vessel, means, in the case of a dry-cargo vessel (as defined in paragraph (c) of this section), an amount equal to 50% of the prewar domestic cost of that type of vessel.” Within this definition of a dry-cargo Libery vessel comes a Liberty-type tanker, because in subparagraph (c) of that section it is provided that “the term ‘dry-cargo vessel’ includes a Liberty-type tanker * *
As the Court found in finding 13, the “ ‘standard’ Liberty-type vessel was the basic Liberty-type, dry-cargo vessel,” and the prewar domestic cost of all Liberty-type vessels “was made without considering the cost of any of the modified Liberty-type vessels.” The Court also found in finding 14:
“The Liberty-type vessels, converted to emergency tankers, cost more to build than the basic Liberty-type, dry-cargo vessel, their average cost being $1,995,000. The five tankers built in 1944 each cost $2,056,525. Their estimated prewar domestic price was $1,-518,000 each. This extra cost was not reflected in any of the' prices published in General Order No. 60. The Commission chose the basic Liberty-type, dry-cargo vessel as the ‘standard’ vessel for all Liberty-type vessels and offered the modified vessels, as well as the basic Liberty-type, dry-cargo vessels, for sale at prices estimated and determined on the basis of the cost of the ‘standard’ Liberty-type, dry-cargo vessel.
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“On the basis of this provision and the fact that there were over 2,500 Liberty-type, dry-cargo vessels, and 62 tankers, only 5 of the latter being delivered in 1944, and which could have been used in the cost base, the Commission (1) chose the Liberty-type, dry-cargo vessel as the ‘standard’ vessel, (2) determined the statutory sáles price for all designs on the basis of the cost of this ‘standard’ vessel, (3) defined the Liberty-type tanker as a dry-cargo vessel in General Order 60, (4) sold all designs at these prices, and (5) made no determinations, insofar as the sale of the modified designs was concerned, that the tanker equipment on the tankers constituted ‘desirable features’ under Section 3(d) (3) of the Act.”
Accordingly, the “statutory sales price”' of the vessels sold to plaintiffs, although tankers, was fixed upon the basis of the prewar domestic cost of a dry-cargo Liberty-type vessel. That it was a tanker and cost more to construct than a dry-cargo vessel was disregarded; it was treated as-a dry-cargo vessel.
The Ship Sales Act in section 3(d) (1)-provides that from the “Statutory sales-price” there shall be deducted the cost of putting the vessel “in class.” The Act contemplated that the vessels should be sold on the basis of the cost of a standard vessel,, and, hence, if the vessel actually sold was-not in condition to pass inspection, which is to say was not “in class,” the cost of putting it “in class” was to be deducted from the price. But, since the sales price was-fixed as if the vessel was a dry-cargo vessel, then the cost to be deducted was the cost of putting it “in class” as a dry-cargo-vessel.
What the plaintiffs are suing for in this case is the cost of fireproofing the vessels. *402sold plaintiffs. Hence, the question is, was this fireproofing necessary in order to put a standard Liberty-type vessel “in class.” As stated, a standard Liberty vessel was a dry-cargo vessel; it was not necessary to fireproof such a vessel in order to put it “in class.” Fireproofing was necessary only where the vessel was used as a tanker. Therefore, since the statutory sales price was not based on the prewar domestic cost of a tanker, but was based on the prewar domestic cost of a dry-cargo vessel, plaintiffs are not entitled to the cost of fireproofing, because this was not necessary to put a dry-cargo vessel “in class.”
It is incongruous to treat this vessel as a dry-cargo vessel for determining the statutory sales price and to treat it as something different for the purpose of determining what was necessary to be done to put it “in class.” Since it was not necessary to fireproof it to put it “in class” as a standard dry-cargo vessel, the plaintiffs, in my opinion, are not entitled to this cost.
LITTLETON, Judge, joins in the above dissent.