American-Foreign Steamship Corp. v. United States, 126

• Court: United States Courts of Appeals. United States Court of Appeals (2nd Circuit)
• Writing for the Court: MEDINA and HINCKS, Circuit , and LEIBELL
• Citation: 265 F.2d 136
• Parties: AMERICAN-FOREIGN STEAMSHIP CORPORATION, Libelant-Appellant, v. UNITED STATES of America, Respondent-Appellee. STOCKARD STEAMSHIP CORPORATION, Libelant-Appellant, v. UNITED STATES of America, Respondent-Appellee. A. H. BULL STEAMSHIP CO., Bull-Insular Line, Inc., Baltimore Insular Line, Inc., Libelants-Appellants, v. UNITED STATES of America, Respondent-Appellee. NEW YORK AND CUBA MAIL STEAMSHIP COMPANY, Libelant-Appellant, v. UNITED STATES of America, Respondent-Appellee. DICHMANN, WRIGHT & PUGH, Inc., Libelant-Appellant, v. UNITED STATES of America, Respondent-Appellee. POLARUS STEAMSHIP CO., Inc., Libelant-Appellant, v. UNITED STATES of America, Respondent-Appellee. A. L. BURBANK & COMPANY, Ltd., Libelant-Appellant, v. UNITED STATES of America, Respondent-Appellee. T. J. STEVENSON & CO., Inc., Libelant-Appellant, v. UNITED STATES of America, Respondent-Appellee. NORTH ATLANTIC AND GULF STEAMSHIP CO., Libelant-Appellant, v. UNITED STATES of America, Respondent-Appellee. LUCKENBACH STEAMSHIP COMPANY, Inc., Libelant-Appellant, v. UNITED STATES of America, Respondent-Appellee. BLIDBERG ROTHCHILD CO., Inc., Libelant-Appellant, v. UNITED STATES of America, Respondent-Appellee. FALL RIVER NAVIGATION CO., Libelant-Appellant, v. UNITED STATES of America, Respondent-Appellee.
• Docket Number: 24200,24283-24289,24291,24400-24402.,214-225,No. 126,135,24292,Dockets 24190,126
• Decision Date: 28 July 1958

265 F.2d 136 (1958)

AMERICAN-FOREIGN STEAMSHIP CORPORATION, Libelant-Appellant,
v.
UNITED STATES of America, Respondent-Appellee.
STOCKARD STEAMSHIP CORPORATION, Libelant-Appellant,
v.
UNITED STATES of America, Respondent-Appellee.
A. H. BULL STEAMSHIP CO., Bull-Insular Line, Inc., Baltimore Insular Line, Inc., Libelants-Appellants,
v.
UNITED STATES of America, Respondent-Appellee.
NEW YORK AND CUBA MAIL STEAMSHIP COMPANY, Libelant-Appellant,
v.
UNITED STATES of America, Respondent-Appellee.
DICHMANN, WRIGHT & PUGH, Inc., Libelant-Appellant,
v.
UNITED STATES of America, Respondent-Appellee.
POLARUS STEAMSHIP CO., Inc., Libelant-Appellant,
v.
UNITED STATES of America, Respondent-Appellee.
A. L. BURBANK & COMPANY, Ltd., Libelant-Appellant,
v.
UNITED STATES of America, Respondent-Appellee.
T. J. STEVENSON & CO., Inc., Libelant-Appellant,
v.
UNITED STATES of America, Respondent-Appellee.
NORTH ATLANTIC AND GULF STEAMSHIP CO., Libelant-Appellant,
v.
UNITED STATES of America, Respondent-Appellee.

[265 F.2d 137]

LUCKENBACH STEAMSHIP COMPANY, Inc., Libelant-Appellant,
v.
UNITED STATES of America, Respondent-Appellee.
BLIDBERG ROTHCHILD CO., Inc., Libelant-Appellant,
v.
UNITED STATES of America, Respondent-Appellee.
FALL RIVER NAVIGATION CO., Libelant-Appellant,
v.
UNITED STATES of America, Respondent-Appellee

Nos. 126, 135, 214-225, Dockets 24190, 24200, 24291, 24292, 24283-24289, 24400-24402.

United States Court of Appeals Second Circuit.

Argued January 15, 1957.

Original Opinion Filed September 25, 1957.

On Rehearing Decided July 28, 1958.

Petition for Rehearing Denied March 26, 1959.

265 F.2d 138

COPYRIGHT MATERIAL OMITTED

265 F.2d 139

J. Franklin Fort, Kominers & Fort, Washington, D. C. (John Cunningham, Israel Convisser, Washington, D. C., and Edwin K. Reid, New York City, of counsel), for all libelants-appellants except American-Foreign S. S. Corp

Burlingham, Hupper & Kennedy, New York City, of counsel, for North Atlantic & Gulf Steamship Co. and Luckenbach Steamship Co.

Cravath, Swaine & Moore, New York City, of counsel for New York & Cuba Mail S. S. Co.

Hill, Betts & Nash, New York City, of counsel for Dichmann, Wright & Pugh, Inc.

Kirlin, Campbell & Keating, New York City, of counsel for A. H. Bull S. S. Co., etc.

Lester Levin, New York City, of counsel for Polarus S. S. Co., Inc., A. L. Burbank & Co., Ltd., and T. J. Stevenson & Co., Inc.

Zock, Petrie, Sheneman & Reid, New York City, of counsel for Stockard S. S. Corp., Blidberg Rothchild Co., Inc., and Fall River Nav. Co. (Roberts & McInnis, Washington, D. C., Francis J. O'Brien, New York City, Charles B. McInnis, and Roger H. Muzzall, Washington, D. C., of counsel for Fall River Nav. Co.

Arthur M. Becker, Washington, D. C., Foley, James & Conran, New York City (Becker & Maguire and Gerald B. Greenwald, Washington, D. C., of counsel), for libelant-appellant American-Foreign S. S. Corp.

Benjamin H. Berman, Atty. in Charge, New York Office, Admiralty & Shipping Section, Dept. of Justice, New York City (George Cochran Doub, Asst. Atty. Gen., Arthur H. Christy, U. S. Atty., S.D.N.Y., New York City, Paul W. Williams, U. S. Atty., S.D.N.Y., New York City, Leavenworth Colby, Chief, Admiralty & Shipping Section, Dept. of Justice, Washington, D. C., and William E. Gwatkin, Atty., Admiralty & Shipping Section, Dept. of Justice, Washington, D. C., on the briefs), for the United States.

Before MEDINA and HINCKS, Circuit Judges, and LEIBELL, District Judge.

On Rehearing before Court en banc, Decided July 28, 1958.

Petition for Further Rehearing en banc Denied March 26, 1959.

HINCKS, Circuit Judge.

Each of the libelants herein chartered ships from the Government pursuant to the Merchant Ship Sales Act, 50 U.S. C.A.Appendix, § 1735 et seq., and agreed to various terms of a standard charter, which made the rental price depend in part on the amount of the profit realized by the charterer. The libelants claim that the Maritime Commission, contrary to provisions of the Act, exacted from them too great a percentage of the profits and these actions were brought under the Suits in Admiralty Act, 46 U.S.C.A. § 741 et seq., to recover the illegally collected amounts. The foregoing cause of action is asserted in each of the libels. In several of the cases some payments were made by the shippers after redelivery of the ships and within two years of the filing of the libel. And some of the libelants sought to obtain refund of certain alleged overcharges caused by the Commission's refusal to allow certain expense deductions and its refusal to permit cumulative accounting under certain circumstances.¹

In each case, the Government moved to dismiss the libels because of lack of jurisdiction, on the ground that all of the claims stated therein were barred by the two-year limitation of the Suits in Admiralty Act, 46 U.S.C.A. § 745. As to this, the Government's position was that the causes of action accrued as of the

265 F.2d 140

time the libelants returned their ships to the Commission, and that this "redelivery" date in all cases was more than two years prior to the commencement of suit. We append to this opinion a chart showing the dates pleaded in the libels and, in some cases, in the Government's exceptive allegations. Since the dates in the exceptive allegations were not challenged, we accept them as true

Judge Palmieri, in an opinion reported at D.C., 141 F.Supp. 58, dismissed all the libels, except those of Blidberg Rothchild and Fall River Navigation Co., and denied leave to amend because, however pleaded, the actions were time-barred. Judge Herlands, in a memorandum opinion set out in the margin,² dismissed the Blidberg Rothchild and Fall River Navigation Co. libels for the same reason. The sole question presented on this appeal is whether it was correct to dismiss the libels and deny amendment because jurisdiction was lacking.

Before dealing with this question, we note that we are without appellate jurisdiction over the Dichmann, Wright & Pugh appeal. Dichmann, in its reply brief, conceded that, since the second count of its libel was still pending in the District Court, its appeal from the dismissal of the first and third counts was interlocutory. It cited 28 U.S.C.A. § 1292(3) as express statutory authority for us to entertain this appeal. But our authority to entertain interlocutory admiralty appeals is limited by the requirement of 28 U.S.C.A. § 2107 that the appeal be filed within 15 days after entry of judgment. Here, the judgment appealed from was filed on May 22, 1956 and the appeal was not filed until August 10, 1956, — more than 15 days later. The appeal therefore is too late, and must be dismissed. The Fanny D (Eggers v. Southern Steamship Co.), 5 Cir., 112 F. 2d 347, certiorari denied National Union Fire Ins. Co. v. Eggers, 311 U.S. 680, 61 S.Ct. 49, 85 L.Ed. 438; Blaske v. Dick, 7 Cir., 126 F.2d 96, 98.

In the appeals which are properly before us, the following facts are pertinent to the issues raised. The Maritime Commission in 1946 was authorized by statute to charter vessels owned by the Government. The statute, 50 U.S.C.A.Appendix, § 1735 et seq., provided for rental rates in § 1738, which incorporated by reference § 709(a) of the Merchant Marine Act, 46 U.S.C.A. § 1199 (a). This latter section provided that every charter executed by the Maritime Commission should contain provision that, whenever the charterer's adjusted profits exceed a certain amount, the charterer

265 F.2d 141

must pay as additional charter hire one-half of the profits in excess of a 10% return of employed capital. The Commission, claiming that § 709(a) merely set a minimum additional charter hire, proceeded to charter its ships pursuant to charters which provided a sliding scale for the additional charter hire depending on the amount of profit per day in excess of the 10% return. The libelants, as charterers, agreed to progressive rates which allowed the Commission to recapture 90% of the profits in excess of $300 per day, per vessel, above the 10% return, and made payments accordingly

However, the libelants objected to the sliding scale rate as illegal before making payment thereunder and obtained from the Maritime Commission the assurance that payments of charter hire were to be deemed preliminary and subject to adjustment until final audit. In recognition of this the Commission inserted Clause 13 in the charters.³ In addition, the libelants claim that all parties to the charters operated under the assumption that, until final audit, charter hire payments were merely preliminary. To support this, they point to Commission regulations, 46 CFR §§ 299.31(k) (1), 299.37-2(a) (1), (2) and (b) (3), to instructions such as the one set out in the margin,⁴ and to the Commission's routine procedure, established pursuant to instructions from the General Accounting Office, of depositing the additional charter hire in an "unearned money" account rather than in the "miscellaneous receipts" account required by statute, 50 U.S.C.A.Appendix, § 1745(d).

The libelants argue that the cause of action for return of charter hire illegally exacted accrued as of the date of final audit, or — at the earliest — when the last payment or credit entry in their account with the Commission was made. In all cases this would avoid the time bar. The Government contends that the statute commenced running as of the date when each libelant redelivered the chartered vessels to the Commission. If this be so, these libels would be time-barred.

We agree with the judges below that the basic issues in this appeal were decided adversely to the appellants in our decision in Sword Line v. United States, 2 Cir., 228 F.2d 344, affirmed on petition for rehearing 230 F.2d 75, affirmed as to jurisdiction 351 U.S. 976, 76 S.Ct. 1047, 100 L.Ed. 1493, and in American Eastern Corp. v. United States, 133 F. Supp. 11, affirmed 2 Cir., 231 F.2d 664, certiorari denied 351 U.S. 983, 76 S.Ct. 1050, 100 L.Ed. 1497.

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