Earn Line S.S. Co. v. Sutherland S.S. Co.

• Decision Date: 12 November 1918
• Parties: EARN LINE S.S. CO. v. SUTHERLAND S.S. CO., Limited.
• Court: U.S. District Court — Southern District of New York

254 F. 126

EARN LINE S.S. CO. v. SUTHERLAND S.S. CO., Limited.

United States District Court, S.D. New York.

November 12, 1918

This case arises on a libel in personam in the admiralty by the charterers against the owners of the steamship Claveresk for breach of a time charter party entered into in New York on February 8, 1913, under which the Claveresk was let for 'about five years from the time of delivery' within the following limits: United States, West Indies, Central America, Caribbean Sea, Gulf of Mexico, South America not south of Bahia Blanca, Europe, and Africa not east of Port Said. Delivery and redelivery were to be made United Kingdom or continent between Bordeaux and Hamburg, and the hire was .1,320 per month. Clause No. 17 read as follows: 'Should the vessel be lost, freight paid in advance and not earned (reckoning from the date of her loss) shall be returned to the charterers. The act of God, enemies, fire, restraint of princes, rulers, and people, and all dangers and accidents of the seas, rivers, machinery, boilers, and steam navigation and errors of navigation throughout this charter party always mutually excepted. ' The ship was not to carry 'molasses or wet sugar,' and there was the usual 'breakdown' clause.

The Claveresk entered upon the charter on April 17, 1913, and was used in carrying coal south and ore north between Cuba and the United States under a subcontract between the libelant and an iron company. On January 26, 1917, when the charter had a little over a year to run, the owners, who were situated at Newcastle-on-Tyne, in England, received a telegram as follows: 'Your steamer Claveresk required for government service after completion discharge in West Indies. Formal requisition follows. Please inform date steamer expected available for government service. Transports L Room 108a. ' This telegram was sent by a subordinate in the office of the Director of Transports, itself a department of the Lords Commissioners of the Admiralty, to which the respondents answered on the same day by telegram as follows 'Telegram received requisitioning Claveresk. This steamer arrived Baltimore January seventeen expect would discharge ore load coals and sail again about twenty-third. Therefore expect now on passage to Felton, Cuba, where due about thirtieth. Ought to be discharged there one day and ready your service end this month. Can you arrange for government agent in Cuba give captain orders? You will doubtless remember when you requisitioned Claveresk in May, 1915, time charterers intercepted our telegrams and prevented captain receiving orders until ship loaded when you released her.'

On January 27th one Cyril Hurcomb, for the Director of Transports, sent a letter to the respondents in confirmation of the Director's telegram. This letter inclosed a requisitioning letter and two copies of a pro forma charter party to be executed by the Lords Commissioners of the Admiralty. It stated that it was not proposed at the time to enter into a formal charter, but that hire would be paid in accordance with the agreement attached. It further stated that the ship would be required to load a full cargo of sugar and that the master should apply to A. H. Lamburn Company Havana, for instructions. The requisitioning letter, which was inclosed, stated that it had been found necessary by the Lords Commissioners of the Admiralty to requisition the steamer under royal proclamation and under the conditions of the pro forma charter party inclosed. It further stated that the rates of hire as fixed for requisitioned ships had been generally accepted by shipowners, and that payments on this basis would be made as soon as possible.

On January 29th respondents wired their captain as follows 'Steamer requisitioned national service by British government apply to Lemborn (sic?) Havana for orders. Telegraph us acknowledging this message. Refuse load iron ore. ' The master answered on February 1st 'Instructions received. Wiring Laborn (sic?) Havana.' On February 2d, Culliford & Clark, shipping agents, wrote the respondents that they had received the following cable from New York: 'Notify owners that hire has been paid. If steamer definitely requisitioned, collect hire from admiralty account Earn Line. ' To which the respondent answered on the same day that, owing to the action of the government, they had been 'frustrated' in completing the time charter and that no hire would be received thereafter on their account. This information was conveyed to the libelant in New York by the respondent's agent on February 17, 1917, at the time of refusing a half month's hire. The steamer was discharged at Felton, Cuba, on February 10, 1917, and has since that time been under requisition by the British Admiralty.

On August 3, 1914, the King of Great Britain issued a proclamation authorizing the Lords Commissioners of the Admiralty to requisition any British ship or vessel within the British Isles or the water adjacent thereto. On November 10, 1915, he issued a second proclamation that any British ship registered in the United Kingdom might be requisitioned for the carriage of food stuffs, and that such requisition should take effect on notice thereof served as therein provided. The notice was to be deemed sufficient and effective if addressed to the corporation owner in proper cases, and might be signed by any person authorized for such purpose by the president of the Board of Trade. On March 16, 1916, Parliament passed an amendment to the Defense of the Realm Act declaring that, when the fulfillment by any person of a contract is interfered with by the necessity of such person's complying with any requirement of the Admiralty, such necessity should be a good defense, and no action should be taken against such person for nonfulfillment of his contract. An analogous amendment was also passed on July 10, 1917, the details of which it is not necessary to set out.

The testimony was taken in London by deposition of Sir Henry Erle Richards, for the libelant, and Charles Robertson Dunlop, Esq., for the respondent, upon the validity of this proclamation and of the requisition made in accordance with it. Mr. Dunlop was of opinion that the prerogative of the Crown authorized it to seize British property anywhere for the defense of the realm, and that this prerogative was limited in no sense by the terms of any proclamation which the King might utter. Sir Henry Erle Richards was of opinion that the prerogative extended only to the seizure of such property within the realm as was necessary for its defense, and that, regardless of the terms of the proclamation itself, the King could not under his prerogative seize property outside the realm. He also thought that the prerogative extended only to the actual seizure of property, and did not include a notice operating in personam upon the individual.

Mr. Dunlop was also of opinion that, the notice of requisition being legal, the owners were bound to obey it, and if they disobeyed would be liable to punishment by fine and imprisonment as for a misdemeanor, without specific statutory authority; also that the Crown could compel the owners to obey by a writ of mandamus issuing from the King's Bench Division of the High Court. He believed that the right itself could also be enforced directly by the Crown's seizing the ship on the high seas, or indirectly in a foreign port if the British representatives at such port had power to refuse clearance papers to the master. On these questions Sir Henry Erle Richards expressed no opinion.

Upon the trial of the cause Mr. Frederic R. Coudert and Lieut. Col. Howard Thayer Kingsbury prayed leave to intervene as amici curiae, on the ground that they had been retained by the British Embassy at Washington to suggest upon the record that the Claveresk had been requisitioned by the government of Great Britain for government service upon the prerogative of the British Crown, on January 27, 1917, at which time the steamer was at sea; that the period of requisition was indefinite, and became operative on February 10, 1917, that she had remained continuously thereafter in the service of the British government under the orders of the Lords Commissioners of the Admiralty, and that such requisition was a governmental act of the government of Great Britain. This suggestion was evidenced by a certificate under the Embassy's seal, signed by Colville Barclay, British Charge d'Affaires, in the absence of the British Ambassador. The suggestion was entered upon the record and the certificate received in evidence over the objection of the libelant.

Two points were raised: First, whether the requisition of January 27th was a valid excuse within the 'restraints of princes' clause, and whether it justified the respondent in finally withdrawing the Claveresk from her charter on February 17, 1917; and, second, in case this point went against the libelant, whether in this proceeding it might have a decree for the difference between the hire received from the admiralty for the duration of the charter and the charter hire under the charter party.

Upon the second point the respondent raised the question of pleading and of jurisdiction. The libel was drawn for a breach of the charter party by repudiation, and contained no allegations concerning hire received by the owners from the Admiralty. The respondent asserted that under the pleading there could be no such award, and that in any event the action was at most for money had and received which was not properly cognizable in a court of admiralty. To meet this objection the libelant, upon the hearing, was allowed to file a replication setting up as new allegations that hire was due under the pro forma charter party between the Admiralty and the owners, and...