Boston Sand Gravel Co v. United States

Decision Date19 November 1928
Docket NumberNo. 15,15
CourtU.S. Supreme Court

Messrs. John W. Davis, of New York City, and Foye M. Murphy, of Boston, Mass., for petitioner.

[Argument of Counsel from pages 42-45 intentionally omitted] The Attorney General and Mr. Farnham, Asst. Atty. Gen., for the United states.

Mr. Justice HOLMES delivered the opinion of the Court.

This is a libel in admiralty brought by the petitioner to recover for damages done to its steam lighter Cornelia by a collision with the United States destroyer Bell. It is brought against the United States by authority of a special Act of May 15, 1922, c. 192, 42 Stat., Part 2, 1590. There has been a trial in which both vessels ultimately were found to have been in fault and it was ordered that the damages should be divided. (C. C. A.) 7 F.(2d) 278. Thereafter the damages were ascertained (D. C.) 16 F.(2d) 643) and the petitioner sought to be allowed interest upon its share. (There was no crosslibel.) The Circuit Court of Appeals, going on the words of the statute, parallel legislation, and the general understanding with regard to the United States, held that no interest could be allowed. 19 F.(2d) 744. As there was a conflict of opinion with the Second Circuit dealing with similar language in a special act, New York & Cuba Mail S. S. Co. v. United States (C. C. A.) 16 F. (2d) 945, a writ of certiorari was allowed by this Court, 275 U. S. 519, 48 S. Ct. 121, 72 L. Ed. 403.

The material words of the Act are that the District Court 'shall have jurisdiction to hear and determine the whole controversy and to enter a judgment or decree for the amount of the legal damages sustained by reason of said collision, if any shall be found to be due either for or against the United States, upon the same principle and measure of liability with costs as in like cases in admiralty between private parties with the same rights of appeal.' On a hasty reading one might be led to believe that Con- gress had put the United States on the footing of a private person in all respects. But we are of opinion that a scrutiny leads to a different result. It is at least possible that the words fixing the extent of the government's liability were carefully chosen, and we are of opinion that they were. We start with the rule that the United States is not liable to interest except where it assumes the liability by contract or by the express words of a statute, or must pay it as part of the just compensation required by the Constitution. Seaboard Air Line Ry. Co. v. United States, 261 U. S. 299, 304, 306, 43 S. Ct. 354 (67 L. Ed. 664). Next we notice that when this special act was passed there was a recent general statute on the books, the Act of March 9, 1920, c. 95, § 3, 41 Stat. 525, 526 (46 USCA § 743), allowing suits in admiralty to be brought in personam against the United States, in which it was set forth specifically that interest was to be allowed upon money judgments and the rate was four per centum not the six per centum that the petitioner expects to get. The later general statute passed as a substitute for special bills like the one before us, allows suits in admiralty for damages done by public vessels but excludes interest in terms. Act of March 3, 1925, c. 428, § 2, 43 Stat. 1112 (46 USCA § 782).

We are satisfied by the argument for the Government that the policy thus expressed in the Act of 1925 had been the policy of the United States for years before 1922 and that the many private acts like the present generally have been understood, before and since the act now in question not to carry interest by the often repeated words now before us. This was stated by the Attorney General in a letter to the Chairman of the Senate Committee on Claims when the Act of 1925 was under consideration (Sen. Report 941, p. 12, 68th Cong., 2d Sess.) and the bill was amended so as to remove all doubt. The Act of March 2, 1901, c. 824, 31 Stat. 1789, believed to be the first of the private acts in the present form, was passed after an amendment striking out an allowance of interest, thus showing that the words now relied upon then were understood not to allow it. The same thing has happened repeatedly with later acts, and when by exception interest has been allowed it has been allowed by express words. Before 1901, since 1871, such cases had been referred to the Court of Claims which was forbidden by statute to allow interest. Rev. Sts. § 1091; Code, title 28, § 284, (28 USCA § 284). It is said that when the meaning of language is plain we are not to resort to evidence in order to raise doubts. That is rather an axiom of experience than a rule of law and does not preclude consideration of persuasive evidence if it exists. If Congress has been accustomed to use a certain phrase with a more limited meaning than might be attributed to it by common practice it would be arbitrary to refuse to consider that fact when we come to interpret a statute. But as we have said the usage of Congress simply shows that it has spoken with careful precision, that its words mark the exact spot at which it stops, and that it distinguishes between the damages caused by the collision and the later loss caused by delay in paying for the first-between damages and 'the allowance of interest on damages' as it is putby Mr. Justice Bradley in The Scotland, 118 U. S. 507, 6 S. Ct. 1174, 30 L. Ed. 153.

What the Act authorizes the Court to ascertain and allow is the 'amount of the legal damages sustained by reason of said collision.' Of these interest is no part. It might be in case of the detention of money. But this is not a claim for the detention of money, nor can any money be said to have been detained. When a jury finds a man guilty of a tort or a crime it may determine not only the facts but also a standard of conduct that he is presumed to have known and was bound at his peril to follow. Nash v. United States, 229 U. S. 373, 377, 33 S. Ct. 780, 57 L. Ed. 1232. But legal fiction never reached the height of holding a defendant bound to know the estimate that a jury would put upon the damage that he had caused. As the cause of action is the damage not the detention of the money to be paid for it, it could be argued in a respectable Court, as late as 1886, that at common law, even as a matter of discretion, interest could not be allowed. Frazer v. Bigelow Carpet Co., 141 Mass. 126, 4 N. E. 620. And although it commonly is allowed in admiralty still the element of discretion is not wholly absent there. As stated by Mr. Justice Bradley in The Scotland, 118 U. S. 507, 6 S. Ct. 1174, 30 L. Ed. 153, 'the allowance of interest on damages is not an absolute right.' When the Government is concerned there is no obligation until the statute is passed and the foregoing considerations gain new force.

It has been urged that the United States would claim interest and that as the statute speaks of 'damages * * * due either for or against the United States' the claims on the two sides stand alike. But that is not true. The United States did not need the statute, and it has been held that, even in the adjustment of mutual claims between an individual and the Government, while the latter is entitled to interest on its credits it is not liable for interest on the charges against it. United States v. Verdier, 164 U. S. 213, 218, 219, 17 S. Ct. 42, 41 L. Ed. 407; United States v. North American Transportation & Trading Co., 253 U. S. 330, 336, 40 S. Ct. 518, 64 L. Ed. 935.

The mention of costs and the omission of interest against helps the conclusion to which we come. Compare Judicial Code, § 152, and the same, § 177; U. S. Code, title 28, §§ 258, 284 (28 USCA §§ 258, 284).

Decree affirmed.

Mr. Justice SUTHERAND (dissenting).

In collision cases between private parties, interest, as a general rule, is allowed upon the amount of the loss sustained. That the allowance may be to some extent in the discretion of the court does not affect the question presented here, since the court below denied interest not as a matter of discretion but upon the ground that it had no power to allow it against the United States. From an examination of the record, it fairly may be assumed that if the case had been one between private parties interest would have been allowed.

It is said that when interest is allowed it is no part of the damages. But, very clearly, I think, the settled rule is to the contrary. When the obligation to pay interest arises upon contract, it is recoverable thereon as damages for failure to perform;; 'and when recoversable in tort it is chargeable on general principles as an additional element of damage for the purpose of full indemnity to the injured party.' 1 Sutherland on Damages (4th Ed.) § 300, p. 939. In Wilson v. City of Troy, 135 N. Y. 96, 32 N. E. 44, 18 L. R. A. 449, 31 Am. St. Rep. 817, the New York Court of Appeals, holding that in certain actions sounding in tort interest is allowed 'as a part of the damages' as matter of law, said (pages 104, 105 (32 N. E. 46)):

'The reason given for the rule is that interest is as necessary a part of a complete indemnity to the owner of the property as the value itself, and in fixing the damages, is not any more in the discretion of the jury than the value. * * * In an early case in this state the principle was recognized that interest might be allowed, by way of damages, upon the sum lost by the plaintiff in consequence of defendant's negligence. Thomas v. Weed, 14 Johns. 255.'

These principles find abundant support in the decisions of this court.

In The Atlas, 93 U. S. 302, 310 (23 L. Ed. 863), the general rule is laid down that satisfaction for the injury sustained is the true rule of damages, and that by this is meant that the measure of compensation shall be equal to the amount of injury received, to be calculated for the actual loss occasioned by the collision, upon the principle that the sufferer is...

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