Calmar Corp v. United States

• Decision Date: 27 April 1953
• Docket Number: No. 262,262
• Parties: CALMAR S.S. CORP. v. UNITED STATES
• Court: U.S. Supreme Court

345 U.S. 446

73 S.Ct. 733

97 L.Ed. 1140

CALMAR S.S. CORP.

v UNITED STATES.

No. 262.

Argued Jan. 15, 1953.

Decided April 27, 1953.

Mr. Edwin S. Murphy, New York City, for petitioner.

Mr. Hubert H. Margolies, Washington, D.C., for respondent.

Mr. Justice FRANKFURTER delivered the opinion of the Court.

By the Suits in Admiralty Act¹ the United States consents, under defined conditions, to the filing against it in the District Courts of libels in personam. Libels which concern vessels 'operated by or for the United States' and 'employed as merchant vessels' are authorized. The question in this case is whether a privately owned steamship, undoubtedly 'operated * * * for the United States', was 'employed as a merchant vessel' within the meaning of the Act while carrying military supplies and equipment for hire. Since a considerable volume of litigation appears to be affected, we granted certiorari, 344 U.S. 853, 73 S.Ct. 92, on a petition which the Government did not oppose.

The vessel here, the S. S. Portmar, and the voyage are those involved in No. 303, Calmar Steamship Corporation v. Scott, 345 U.S. 427, 73 S.Ct. 739, which was tried together with this suit. Calmar's claim against the United States is for additional charter hire and for the loss of its vessel. The latter claim is based on two theories. The United States it is said, is liable as an insurer to the extent that war-risk insurance purchased pursuant to the provisions of Article 2.17 of the charter² does not cover the loss. The United States is also liable, Calmer contends, because the loss of the Portmar was a result of compliance by its master with orders issued under authority of the United States, and the latter agreed in Article 2.11 of the charter³ to hold the owners harmless from all consequences of such compliance.

Other relevant provisions of the charter are as follows: The 'good steel steamship Portmar * * * with hull, machinery and equipment in a thoroughly efficient state' was chartered 'for trading for one round voyage.' Calmar agreed to deliver the Portmar to the United States 'ready to receive cargo with clean-swept holds and * * * tight, staunch, strong and in every way fitted for service' and manned by 'a Master and a full complement of officers and crew for a vessel of her tonnage.' Calmar was to exercise due diligence 'to maintain (the vessel) in such state during the currency of this Charter.' The Portmar was to be employed, the charter further provided, 'in carrying lawful merchandise, including petroleum or its products in proper containers, between safe ports or places, in lawful trades within the trading limits of this Charter, as the Charterer or its agents shall direct.' Hire was to be payable, 'in the case of a constructive total loss, to the time of the casualty resulting in such constructive total loss.' Otherwise hire was due for periods during which the vessel was prevented from working by damage resulting from warlike acts or caused by the fault of the United States. The wages of the Master, officers and crew were to be paid by Calmar. Drydocking, cleaning and painting expenses were likewise to be borne by Calmar. 'The Master (although appointed by the Owner) (was to) be under the orders and directions of the Charterer as regards employment, agency and prosecution of the voyages; and the Charterer (was to) load, stow, trim and discharge the cargo at its expense under the supervision of the Master, who (was) to sign bills of lading for cargo as presented * * * The Master, officers and crew of the Vessel, in supervising loading, stowing, trimming, tallying and discharging, (were to) be deemed the agents of the Charterer, except in so far as such supervision pertain(ed) to the safety of the Vessel.' Calmar agreed to investigate complaints of the United States against the master, officers and crew and make necessary changes in appointments. Finally, the charter specifically provided that '(n)othing herein stated is to be construed as a demise of the Vessel to the Charterer.'

The District Court found that the Portmar.

'was privately owned and operated for the profit of the owner, in charge of a master and crew, selected and employed by the owner and responsible to it alone. That the cargo was public stores and muni- tions did not render 'public' the character of the vessel. She was owned neither absolutely nor pro hac vice by the United States. Public service did not alter the merchant character of the vessel * * *.' 103 F.Supp. 243, 263.

Consequently the District Court assumed jurisdiction under the Suits in Admiralty Act. It awarded Calmar a decree against the United States for $238.50 due, in addition to the charter hire paid by the Government, as reimbursement for expenses incurred prior to February 19, 1942, when the Portmar was damaged and abandoned.⁴ But the court held against Calmar on the merits of the latter's claim for charter hire for the period following the date. It held also that the United States was not on any theory liable for the loss of the vessel. Id., 103 F.Supp. at page 269.

The Court of Appeals reversed. While, it said, the Portmar could, indeed, under its charter, have been employed as a 'merchant vessel' in foreign commerce, the cargo she in fact carried indicated that she was not so employed. For her load consisted entirely of 'war materiel.' She carried military supplies and equipment, ammunition, and high-octane gasoline for use in war planes. A ship 'while so employed,' that is, while carrying such cargo, the court held, is not 'employed as a merchant vessel'. This was said to have been 'abundantly established' by The Western Maid, 257 U.S. 419, 42 S.Ct. 159, 66 L.Ed. 299, and by Bradey v. United States, 2 Cir., 151 F.2d 742, United States v. City of New York, D.C., 8 F.2d 270, and The Norman Bridge, D.C., 290 F. 575, and to have been 'at least recognized' in United States Grain Corporation v. Phillips, 261 U.S. 106, 43 S.Ct. 283, 67 L.Ed. 552. Calmar S.S. Corp. v. Scott, 2 Cir., 197 F.2d 795, 801—802.

In reaching its conclusion, the Court of Appeals adopted the Government's position below. In this Court, the Government changed its tune. Mildly suggesting that the view it pressed on the Court of Appeals 'has some support,' the Government urges now 'that the view that jurisdiction existed under the Suits in Admiralty Act is better grounded.' Thecases relied on by the Court of Appeals, the Government now argues, dealt with a significantly different problem than arises under the Suits in Admiralty Act and do not support the conclusion that the nature of the cargo is a necessary criterion for determining whether a privately owned vessel is 'employed as a merchant vessel' within the terms of that Act. The language of the Act does not impose this criterion. The phrase, 'employed as a merchant vessel', the Government now contends, is more appropriately read to refer simply to privately owned vessels operated for the United States for hire. Such a reading is not inconsistent with the legislative history, and, unlike that adopted by the Court of Appeals, tends to regard the Suits in Admiralty Act and its sister statute, the Public Vessels Act, 43 Stat. 1112, 46 U.S.C. § 781, 46 U.S.C.A. § 781, which permits suits 'for damages caused by a public vessel of the United States,'⁵ as manifestations of a single larger purpose, jointly forming a rational system free of random omissions and exceptions. Moreover, the Government points out, a test under which the arrangements effectuated by a charter-party are the controlling facts lends itself, unlike the cargo test, to simple and expeditious application, reasonably predictable in result. We agree with the Government's position here.

The Western Maid, supra, dealt with attempts to bring in the District Courts 'proceedings in rem for collisions that occurred while the vessels libelled were owned, absolutely or pro hac vice, by the United States and employed in the public service.' 257 U.S. at page 429, 42 S.Ct. at page 160. The Western Maid itself was Government property. The Liberty and the Carolinian, the other two vessels involved, were, at the time of the collisions, operated by the United States under bareboat charters. The Carolinian was an army transport manned by an army crew. The Liberty was commissioned and employed as a naval dispatch boat, manned, of course, by a navy crew. The Western Maid served as a transport. She carried foodstuffs for European relief, which, if not distributed in what had been enemy territory, were to be sold by the appropriate government official. But while, as we have noted, all three vessels were in government hands at the time of the collisions on which the libels were based, at the time of suit the Carolinian and the Liberty, though not the Western Maid, were privately owned. And so the principal question in the case, '(t)he only question really open to debate', Id., 257 U.S. at page 432, 42 S.Ct. at page 160, to which Mr. Justice Holmes, for the Court, addressed himself, was whether an enforceable liability could have been created when those two vessels passed into private ownership, although no such liability arose when the collisions occurred. The Western Maid, it was claimed, although publicly owned, was employed 'solely' as a merchant vessel, and hence as to it the collision at the time is occurred gave rise to a liability enforceable against the United States by virtue of the Shipping Act of 1916 as construed, a liability enforceable in rem and subjecting the vessel to seizure.⁶ It was this contention, on these facts, under this Act so construed, that Mr. Justice Holmes disposed of in passing by stating 'the obvious truth, that (the Western Maid) was engaged in a public service that was one of the constituents of our activity in the war and its sequel and that had no more to do with ordinary merchandizing than if she had carried a regiment of troops.' Id., 257 U.S. at page 432, 42 S.Ct. at page 160.

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