Hamburg-American Line v. United States

• Decision Date: 10 May 1948
• Docket Number: No. 4274.,4274.
• Citation: 168 F.2d 47
• Parties: HAMBURG-AMERICAN LINE et al. v. UNITED STATES et al.
• Court: U.S. Court of Appeals — First Circuit

168 F.2d 47 (1948)

HAMBURG-AMERICAN LINE et al. v. UNITED STATES et al.

No. 4274.

Circuit Court of Appeals, First Circuit.

May 10, 1948.

Arnold W. Knauth, of New York City (Henry G. Molina, of San Juan, P. R., on the brief), for Hamburg-American Line, appellant.

Thomas Kiernan, of New York City (Earle T. Fiddler, of San Juan, P. R., on the brief), for Swiss Bank Corporation, appellant.

Thomas F. McGovern, Department of Justice, of Washington, D. C. (Herbert A. Bergson, Acting Asst. Atty. Gen., Philip F. Herrick, U. S. Atty., of San Juan, P. R., and J. Frank Staley, Department of Justice, of Washington, D. C., on the brief), for United States of America, owner of the Omaha and Somers, appellee.

Joseph W. Bishop, Jr., Atty., Department of Justice, of Washington, D. C. (David L. Bazelon, Asst. Atty. Gen., William T. McCarthy, U. S. Atty., of Boston, Mass., Max Isenbergh, Sp. Asst. to Atty. Gen., and David E. Feller, Atty., Department of Justice, of Washington, D. C., on the brief), for Tom C. Clark, Attorney General, as Successor to the Alien Property Custodian, appellee.

Before MAGRUDER, MAHONEY, and WOODBURY, Circuit Judges.

MAGRUDER, Circuit Judge.

These are consolidated appeals from an interlocutory order of January 30, 1947, and a final decree of April 30, 1947, as amended May 13, 1947, by the District Court of the United States for Puerto Rico, on a libel in rem filed by the United States on its own behalf and on behalf of the officers and crew of the U. S. S. Omaha and U. S. S. Somers for salvage service to the German motorship Odenwald, her cargo and freight. The final decree and accompanying opinion are reported at 71 F.Supp. 314 (1947).

The Odenwald is one of many Italian and German vessels damaged by their crews prior to requisition by the United States. The other vessels were damaged in American ports, and those taking part in the sabotage were prosecuted under 18 U.S.C.A. § 502, and libels filed for forfeiture of the ships to the United States under 50 U.S.C.A. § 193. The story of the Odenwald, however, is unique; it was described by the District Judge as "one of the great dramas of American peace time seamanship."

On the morning of November 6, 1941, the U. S. S. Omaha and the U. S. S. Somers while on neutrality patrol at approximately longitude 27.47 west and latitude 0.55 north, halfway between the hump of Brazil and the bulge of Africa, sighted a merchantman displaying American colors and the name "Willmoto Philadelphia" on her stern. She was apparently taking evasive courses. When hailed, she gave unsatisfactory answers, and she was ordered to heave to. A boarding party was dispatched from the Omaha. Before the boarding party arrived alongside, the merchantman hoisted the international flag signal meaning "I am sinking, send boats for passengers and crew". Upon coming alongside, the boarding party found that all of the company of the merchantman were in boats and, as the District Judge found, "had abandoned the said ship." Some detonations were heard within the merchantman. One of the company of the abandoned ship observed to the leader of the boarding party, "This is a German ship and she is sinking." The merchantman was in fact the German motorship Odenwald. The District Judge found as a fact "that the officers and crew of the Odenwald had attempted to scuttle their own ship after which they abandoned her."

After climbing aboard, the boarding party found that the holds were flooding with sea water, and that the vessel was in imminent danger of sinking. They consigned to the sea open cans of benzine and packages apparently containing bombs. A Navy diver descended into the Atlantic to find the origin of the leakage but was unsuccessful; during his attempt sharks appeared and were shot at by the other members of the party in an attempt to drive them away. Other members of the party went into the shaft tunnel and the bilges at great hazard. The boarding party, though receiving "no cooperation whatsoever from the officers and crew of the Odenwald," were successful in controlling and repairing the damage, and in so doing displayed "great skill, resourcefulness and courage." Had it not been for the efforts of the boarding party the Odenwald would have sunk. Subsisting on scanty rations, and in imminent danger of attack by German submarines, the 67 members of the boarding party, convoyed by the Omaha and Somers, brought the Odenwald to San Juan, Puerto Rico, on November 17, 1941, after eleven days at sea.

On the next day, the United States filed the present libel for salvage in the United States District Court for Puerto Rico, pursuant to which the vessel and cargo were attached by the marshal. The Hamburg-American Line, as purported owner of the vessel, appeared through its attorneys on December 10, 1941, and secured an extension of time within which to plead to the libel. No answer having been filed within the extended time, a default was duly entered on December 15. On December 30, proctors for the Line filed a motion to vacate the default and to permit it to appear and answer the salvage claim. Hearing on this motion was extended several times by consent of the parties.

Meanwhile, on December 13, 1941, the United States Maritime Commission requisitioned title to, and possession of, the Odenwald under the Act of June 6, 1941, The Idle Foreign Vessels Act, 55 Stat. 242, 50 U.S.C.A.Appendix, § 1271,¹ by a resolution expressed to be "without prejudice to the rights of the United States under any libel or other proceedings against said vessel heretofore or hereafter effected or instituted." A copy of this requisition was duly served upon the marshal in custody of the ship, who complied by surrendering its custody. On December 27, 1941, the court, pursuant to a petition filed by the U. S. Attorney on behalf of the United States, entered an order approving the action of the marshal and directing him "to take all steps that may be necessary and proper in compliance therewith, and that due return thereof be made, without prejudice, however, to any of the rights of the parties under the Act of June 6, 1941, or to the proceedings heretofore instituted by the United States, or to any rights the United States may possess against said vessel, her cargo and freight."

The title to the cargo of the Odenwald was requisitioned by the Defense Supplies Corporation on December 24, 1941, under the Property Requisitioning Act of 1941, 55 Stat. 742, and Executive Order Nov. 19, 1941, No. 8942, 6 F.R. 5909, "without prejudice to the rights of the United States by way of salvage lien, or otherwise, or to any proceedings by the United States against the cargo or the vessel now or hereafter instituted." By order of December 27, 1941, the District Court, upon petition by the U. S. Attorney on behalf of the United States, approved the action of the marshal in surrendering his custody of the cargo, and ordered that a cargo surveyor be appointed to make an inventory thereof, and that the claim for just compensation for the cargo, and the proceeds thereof, should stand in lieu of the cargo in this proceeding, and that any sums paid on account of such compensation should be paid into the registry of the court, all "without prejudice to the rights of the United States by way of salvage lien or otherwise, or to any proceedings by the United States against the cargo or the vessel now or hereafter instituted."

On July 22, 1942, the Alien Property Custodian, pursuant to The Trading with the Enemy Act of 1917, § 5(b), 40 Stat. 411, as amended by The First War Powers Act of 1941, 55 Stat. 839, 50 U.S.C.A. Appendix, § 616, and Executive Order No. 9095, 50 U.S.C.A.Appendix, § 6 note, 7 F.R. 1971, as amended, vested in himself "all right, title and interest" of the Hamburg-American Line in the Odenwald, including "any claim against the United States for compensation for anything heretofore or hereafter done under the Act of June 6, 1941." This vesting was "without redress or right of compensation * * * except as may be otherwise provided by future legislation." The order recited that it was "in strict subordination to the rights of the United States including rights of forfeiture and salvage rights." Vesting Order No. 52, 7 F.R. 5738. On August 28, 1942, the Alien Property Custodian petitioned the District Court to be substituted as a party in place of the claimant Hamburg-American Line, to have the claimant adjudged without any right, title or interest in the vessel, her cargo, or in any claims for compensation for the requisitioning thereof, or in the proceeds of such claims, and for an adjudication that any right, title or interest of the claimant, existing prior to the promulgation of the vesting order, had become vested in petitioner.

Hamburg-American Line moved to dismiss the cause as moot, on the ground that the Odenwald and her cargo had passed from the control of the court so that there was nothing upon which a judgment of the court could operate.

By order of December 9, 1942, the District Court disposed of several motions then before it: (1) It ordered the default opened and vacated, and permitted the Line to answer and contest the libel, on the ground that notwithstanding the aforesaid requisition by the Maritime Commission, and vesting order by the Alien Property Custodian, the Line still had an interest to litigate the question of salvage inasmuch as the amount of salvage would affect the amount of compensation for the property interests of the Line taken over by the Alien Property Custodian, as might be provided by future legislation. It also ordered a stay of proceedings during the continuance of the war. (2) It refused to dismiss the action as moot. (3) It permitted the Alien Property Custodian to intervene as a party in the case, but denied his petition to be substituted as a party in place of and to the exclusion of the Line. (4) It also adjudged that the Alien Property Custodian was vested with all...