Astoria Marine Iron Works v. United States Shipping Board Emergency Fleet Corp.
| Decision Date | 04 February 1924 |
| Citation | 295 F. 415 |
| Parties | ASTORIA MARINE IRON WORKS v. UNITED STATES SHIPPING BOARD EMERGENCY FLEET CORPORATION. |
| Court | U.S. District Court — District of Oregon |
Cake & Cake, and L. A. Liljeqvist, all of Portland, Or., for plaintiff.
O. P M. Brown, of Washington, D.C., and MacCormac Snow, of Portland, Or., for defendant.
This is an action brought by the Astoria Marine Iron Works against the United States Shipping Board Emergency Fleet Corporation to recover approximately $188,000 for labor and material alleged to have been furnished by the plaintiff in installing machinery and equipment in 20 ship hulls for the defendant under a contract dated March 25, 1918.
The defendant in its answer denies certain allegations of the complaint, and for a further and separate defense alleges That it is a corporation organized under the laws of the District of Columbia, by the United States Shipping Board, under authority of the Shipping Act of 1916 (Comp. St. 1918, Comp. St. Ann. Supp. 1919, Secs. 8146a-8146r), with power and authority to construct, maintain, and operate merchant vessels in the commerce of the United States. That the United States subscribed for and paid for all its capital stock with funds appropriated by Congress from the treasury, no part of which was used or to be used in connection with the machinery installation contract referred to in the complaint. That on April l, 1917, the United States declared war on the German Empire, and thereafter, on June 15th of the same year, Congress passed an act (Comp. St. 1918, Comp. St. Ann. Supp. 1919, Sec. 3115 1/16d) authorizing and empowering the President to place orders with any person or corporation for such ships or ship material as the interest of the United States, as determined by him, might require during the progress of the war, and to suspend, modify, cancel, or requisition any contract for the production of ships or ship material, and to make just compensation therefor, and to exercise such powers through such agent or agents as he might select. That by virtue of the authority thus vested in him, the President by executive orders selected and appointed the defendant corporation as his agent to carry out the powers vested in him with respect to the construction and equipment of vessels. That pursuant to the powers thus vested in the President, and by him delegated to the defendant, the defendant, acting solely as the agent of the United States, and not on its own behalf as a private corporation, entered into the contract with the plaintiff referred to in the complaint for the installation by plaintiff of machinery and equipment in 20 hulls constructed for, owned, and to be used by the United States in the prosecution of the war. That at the time the contract was entered into the defendant disclosed to plaintiff that it was acting as the agent of the United States and on its behalf, and not in its private capacity. That the money used and to be used in carrying out the contract was money of the United States, appropriated by Congress by the Act of June 15, 1917, and subsequent appropriations. That on April 23, 1919, the defendant, acting under authority of the Act of June 15, 1917, and executive orders referred to, canceled the contract, and that by reason thereof the plaintiff has become entitled to recover from the United States, and not the defendant, its just compensation for such cancellation.
The plaintiff has demurred to and moved to strike out this defense, on the ground that it is immaterial and irrelevant, and constitutes no defense to the present action.
The legal status of the Emergency Fleet Corporation has been a frequent subject of judicial consideration, and it has been definitely determined by the highest court of the land that it is a private business corporation having a distinct entity, and is not entitled to the immunity of the sovereign and may be sued as any other private corporation for its torts or on its contracts (U.S. v....
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