Calmar SS Corp. v. Scott

• Decision Date: 12 May 1952
• Docket Number: 185,Dockets 22253,No. 184,22254.,184
• Parties: CALMAR S.S. CORP. v. SCOTT et al. CALMAR S.S. CORP. v. UNITED STATES.
• Court: U.S. Court of Appeals — Second Circuit

197 F.2d 795 (1952)

CALMAR S.S. CORP. v. SCOTT et al. CALMAR S.S. CORP. v. UNITED STATES.

Nos. 184, 185, Dockets 22253, 22254.

United States Court of Appeals, Second Circuit.

Argued March 4, 1952.

Decided May 12, 1952.

Edwin S. Murphy, New York City, Kirlin Campbell & Keating, New York City, Ira A. Campbell, Helen C. Cunningham, New York City, of counsel, for the Calmar Steamship Corporation.

Walter B. Hall and Russell T. Mount, New York City, Mendes & Mount, New York City, for respondent underwriters.

Edward L. Smith, Myles J. Lane, U. S. Atty., New York City, Admiralty Division, for respondent United States.

Before L. HAND, AUGUSTUS N. HAND and CHASE, Circuit Judges.

L. HAND, Circuit Judge.

I.

The first of these suits was brought by the Calmar Steamship Corporation against Scott and others, underwriters upon a policy of marine insurance, covering the libellant's ship, "Portmar," for a voyage from a United States Pacific port to the Philippines and return to a U. S. Pacific or Atlantic port through the Canal. The meaning of the policy is extremely difficult to grasp, owing to the confused and contradictory provisions in the "riders," which were attached to the ancient standard form of Lloyds, and which they completely superseded. We shall assume, however, that the labyrinth of verbiage, within which lurks whatever contract was made, is to be understood to agree that, although the ship might at the time be under the "restraint of princes," the policy should cover her loss, if that was occasioned by attacks of airplanes. We shall also assume that she became a "constructive total loss" through such attacks. These assumptions we may make because we hold that the policy was no longer in force when the loss occurred, the insured voyage having before then come to an end and the policy with it. The "Portmar" left San Francisco on November 28, 1941, bound for Manila, laden with war supplies only. That was less than a fortnight before the Japanese attack upon Pearl Harbor on December 7th, of which the master heard by wireless on the same day, when he was 600 miles to the southwest of Hawaii. Fearing that he might encounter Japanese ships or planes if he kept on his prescribed course, he at once turned due south, awaiting further orders which he got on the 11th, and which directed him to go to Suva, Fiji Islands. That port he reached on the 20th, where he got further orders to go to Sydney, Australia, and he arrived at that port on the 30th. These, and all later, orders came either from American naval officers, or from Australian officers who had been given authority to act for American officers. By the time the ship reached Sydney, not only had war broken out between Japan and ourselves, and between Japan and Great Britain, but the Japanese had sunk the British ships "Repulse" and "Prince of Wales"; and the judge found that this, following, as it did, upon the substantial annihilation of our own fleet at Pearl Harbor, "gave the Japanese full battle fleet command of the Pacific" and a "naval superiority which enabled them to transport troops to almost any desired point * * * and establish it for an air-naval fueling base." On January 2nd the "Portmar" was ordered to go to Brisbane on the east Australian coast 529 miles north of Sydney, her cargo still unbroken, and there she berthed on the 5th. She at once received orders that her cargo "was to be discharged, sorted and part of it reloaded, together with other cargo"; and on the 9th she left Brisbane under orders to report at Port Darwin, about 2100 miles distant, where she arrived on January 19th, after being for a part of the time under the escort of Australian corvettes. Here all her cargo — both what was left of that lifted in California and what was lifted at Brisbane — was discharged except 1500 drums of high octane gasoline, which she was directed to deliver at the nearby port of Wyndham, together with 500 drums, which she had carried to Port Darwin, and which had been discharged but reloaded. On her return — apparently light — from Wyndham to Port Darwin, she was laded with another military cargo — including field pieces, a naval launch and ammunition — to reinforce the defence of Koepang across the Timor Sea, north of Australia. With this cargo and a contingent of troops on board she set out on February 15, but when 250 miles out she was on the next day attacked by Japanese planes, and was ordered back to Port Darwin where she arrived on the 18th. While in the roads awaiting a berth to discharge, she was attacked on the 19th by swarms of Japanese planes and through "near misses" and gunfire suffered injuries that eventually forced her master to beach her, and, as the libellant asserts, made her a "constructive total loss."

Even though we take all the other issues in the libellant's favor, the crucial question remains whether the dominion asserted over the "Portmar" by the American and Australian military authorities beginning at Brisbane had before February 19th put an end to the possibility of that return voyage for which alone the underwriters meant to insure her. From the time she was taken over at that port on January 5th until she was riddled by gunfire on February 19th, she had been under the absolute control of military authorities; no dominion could be more complete than, after discharging all but a small part of her outbound cargo at Brisbane and Port Darwin, to lade her with a partially new cargo, order her to Wyndham, fetch her back to Port Darwin, and set her out again as part of the military expedition to Koepang upon so dangerous a mission that the commander of the cruiser which was to act as an escort, told her that he would not risk his ship in the harbor of Koepang. The extent of this dominion being so comprehensive and absolute, the only question is as to its prospective duration. Was it certain to last beyond any period which the underwriters assumed that the return voyage would take; or if it is impossible to be "certain," was it for practical purposes beyond reasonable doubt that it would? That depended upon the condition of affairs in Australia during January and February, 1942. The testimony is uncontradicted that everyone responsible for the defence of that continent believed that its northern coasts at any rate were in the direst straits, and that the shortage of shipping was one of the most pressing dangers. Until the naval battle of the Coral Sea which was in May the Japanese carriers could range about unobstructed; and Japanese forces might land where they would, substantially unopposed.

We might indeed take judicial notice of much of this; but it is not necessary to do so for the same conclusion is inescapable from the testimony. Those in charge of the defence of the country seized and held anything that would float throughout the rest of 1942, and perhaps longer. Plant, an American Colonel, arrived at Melbourne at the end of March, as "Chief of War Transportation in the Southwest Pacific area, to organize and to operate water transportation down there." Immediate invasion of the northern part of the continent was threatened; the navy had abandoned Port Darwin; even the east coast down to Brisbane had been ordered evacuated. The army and navy took control of "every vessel we could get our hands on." There were not many, because Great Britain "had drawn practically all coastal ships from Australia," whose "life depends upon coastal shipping and they were desperate for covering their own needs, so we" — the military — "had very few Australian vessels we could depend upon. * * * We were looking around desperately for anything that was afloat or could be made to float," and Australia had few repair yards. It made no difference whether a vessel was owned or chartered by the U. S. or by anyone else; military considerations alone governed, commercial were disregarded.

The extremity of the need for ships is illustrated by what was done in this very instance. The "Portmar" for a week after the attack lay beached at some distance from Port Darwin, subject to a tidal rise and fall of 27 feet; most persons thought her worthless, indeed the libellant still strenuously maintains that she was not worth her repairs. Stowed in her holds were a number of field pieces which were sorely needed and it was found possible to unlade and salve them. In the process the officer in charge came to believe that the hull also might be salved, since there appeared to be no structural damage beyond the openings made by the concussion of shells and by gunfire. Therefore, after the lower holes had been plugged at low tide, she was floated and brought back to Port Darwin when she was enough reconditioned to venture upon a trip back to Brisbane. The earlier part of this was infested with Japanese ships and planes, and the ship, in charge of a picked crew though not under her own power, had to lie concealed in some bight during the day and move only at night. Moreover, this required her to hug the coast, and very greatly increased the distance to be covered. At Brisbane she was repaired and was later put in drydock at Sydney. The total cost of the repairs was $91,000, to which should be added $55,000 for towage and $20,000 for salvage: $166,000 in all. When all was done, it did not restore her to "commercial operating condition"; "it was strictly a patch job"; it made her "perfectly seaworthy but without any thought of restoring" her "to commercial operating condition," though enough to permit her "to be operated in Australian waters." The War Shipping Administration took title to her on November 17, 1942, and she made a few trips before she was torpedoed and sunk.

These facts seem to us to prove as well as practical affairs permit that when she was taken over at Brisbane it was practically certain that she would continue to be employed in military service for a period far extending beyond her return voyage, a period which in every probability would...