Prudential Steamship Corporation v. United States

• Decision Date: 24 February 1955
• Docket Number: No. 86,23222.,Dockets 23151,145,86
• Citation: 220 F.2d 655
• Parties: PRUDENTIAL STEAMSHIP CORPORATION, Libellant-Appellant, v. UNITED STATES of America, Respondent-Appellee. STATES MARINE CORPORATION OF DELAWARE, Plaintiff-Appellee, v. UNITED STATES of America, Defendant-Appellant.
• Court: U.S. Court of Appeals — Second Circuit

220 F.2d 655 (1955)

PRUDENTIAL STEAMSHIP CORPORATION, Libellant-Appellant, v. UNITED STATES of America, Respondent-Appellee.

STATES MARINE CORPORATION OF DELAWARE, Plaintiff-Appellee, v. UNITED STATES of America, Defendant-Appellant.

Nos. 86, 145, Dockets 23151, 23222.

United States Court of Appeals, Second Circuit.

Argued December 15, 1954.

Decided February 24, 1955.

Rehearing Denied March 29, 1955.

Thacher, Proffitt, Prizer, Crawley & Wood, New York City, for libellant-appellant, John C. Crawley and John J. Leibell, New York City, of counsel.

Kirlin Campbell & Keating, New York City, for plaintiff-appellee, John F. Gerity and Walter P. Hickey, New York City, of counsel.

Warren E. Burger, Asst. Atty. Gen., J. Edward Lumbard, U. S. Atty., New York City, Leavenworth Colby, Chief, Admiralty & Shipping Section, Dept. of Justice, and Hubert H. Margolies, Washington, D. C., and Benjamin H. Berman, New York City, Attys., Dept. of Justice, for the United States.

Before SWAN, FRANK and HINCKS, Circuit Judges.

SWAN, Circuit Judge.

These appeals, which were argued together, present closely related questions as to the jurisdiction of the District Court in suits to recover general average contribution from the United States as owner of part of the cargo carried on a privately owned and operated merchant vessel.

In the Prudential case the vessel owner brought a libel under the Suits in Admiralty Act, 46 U.S.C.A. § 741 et seq. An exception challenging the jurisdiction of the court was sustained and the libel was dismissed pursuant to an opinion by Judge Goddard reported in 122 F. Supp. 164. Although expressing doubt about the matter, Judge Goddard felt that in the interest of judicial consistency he should follow the interpretation of the Suits in Admiralty Act taken in Judge Irving R. Kaufman's opinion in the States Marine case, States Marine Corp. of Del. v. United States, D.C., 120 F.Supp. 585. That was an action brought under the Tucker Act, 28 U.S. C.A. § 1346(a) (2), on the civil side of the District Court, to recover a general average contribution from the United States as owner of part of the cargo carried on the plaintiff's vessel. Jurisdiction was challenged by the United States on the ground that the claims alleged in the complaint are cognizable exclusively under the Suits in Admiralty Act. In sustaining jurisdiction, Judge Kaufman, relying on prior district court decisions and a statement in Ryan Stevedoring Co. v. United States, 2 Cir., 175 F.2d 490, 493, certiorari denied 338 U.S. 899, 70 S.Ct. 249, 94 L.Ed. 553, ruled that the Suits in Admiralty Act does not apply to government owned cargo carried on a private vessel but concerns only cargo carried on merchant vessels operated by or for the United States.

Judge Goddard's doubt as to this interpretation of the Suits in Admiralty Act was well founded. We can see nothing in the language of the Act, or in the purpose of its enactment, to justify restricting the statutory phrase, "cargo owned or possessed by the United States", to cargo carried on a vessel operated by or for the United States. Under the Shipping Act of 1916, 46 U.S. C.A. § 801 et seq., merchant vessels of the United States were subject to seizure in admiralty proceedings.¹ Likewise, government owned cargo on a private vessel had been held to be subject to a libel in rem for salvage or general average claims.² The purpose of the Act was to free government shipping, both ships and cargo, from the inconvenience of arrest and seizure, and in lieu thereof to provide a remedy by a libel in personam for persons entitled to redress from the United States by reason of the operation of government ships or the transportation of government cargo.

Section 1 of the Act, 46 U.S.C.A. § 741, provides that 1 "No vessel owned by the United States * * * or 2 in the possession of the United States * * * or 3 operated by or for the United States * * * and 4 no cargo owned or possessed by the United States * * * shall, in view of the provisions herein made for a libel in personam, be subject to arrest or seizure by judicial process * * *." Section 2, 46 U.S.C.A. § 742, provides that "In cases where 1 if such vessel were privately owned or operated, or 2 if such cargo were privately owned and possessed, a proceeding in admiralty could be maintained * * *, a libel in personam may be brought against the United States * * *, provided that such vessel is employed as a merchant vessel * * *." It will be observed that the references to "vessel" or "cargo" are in the disjunctive; each is given immunity from seizure, and the United States consents to be sued in personam in the district, among others, in which "the vessel or cargo charged with liability is found." There is nothing in the history or the words of the Suits in Admiralty Act to suggest that the claim against government cargo is limited to cargo carried on vessels operated by or for the United States. Indeed, so to limit it, would make superfluous the prohibition in section 741 against seizure of cargo owned or possessed by the United States, for government owned cargo was subject to seizure only when carried on a private vessel. If carried on a government vessel, it was "possessed" by the United States and immune from seizure. See The Davis, 10 Wall. 15, at pages 20-22. To leave subject to arrest government owned cargo, such as munitions of war, when carried on a private vessel, cannot reasonably be thought to have been the legislative intent. The proviso in section 742 that "such vessel is employed as a merchant vessel" apparently refers to government owned or operated vessels; if read broadly enough to include a privately operated vessel it is also satisfied since every privately operated vessel carrying cargo for hire is a merchant vessel. The additional requirement imposed by the district court restricting government cargo to that carried on government vessels or those operated for the government is not justified, in our opinion. "As the words of the section are plain, we are not at liberty to add to or alter them to effect a purpose which does not appear on its face or from its legislative history." Matson Navigation Co. v. United States, 284 U.S. 352, 356, 52 S.Ct. 162, 164, 76 L.Ed. 336.

This gloss upon the statute was introduced by Judge Hulbert in American President Lines v. United States, D.C.N. Y., 75 F.Supp. 110. It was accepted by the district court in Alcoa Steamship Co. v. United States, D.C., 80 F.Supp. 158; but that case was reversed on other grounds, 2 Cir., 175 F.2d 661, affirmed 338 U.S. 421, 70 S.Ct. 190, 94 L.Ed. 225. In Ryan Stevedoring Co. v. United States, 2 Cir., 175 F.2d 490, 493, certiorari denied 338 U.S. 899, 70 S.Ct. 249, 94 L.Ed. 553, this court cited the American President Lines as authority for the statement that "the liability referred to in the statute as arising from the government's ownership of cargo must be one `directly connected with the Government's ownership and operation of a vessel' * * *." The statement was unnecessary to the decision in the Ryan case, since there the government goods had not been loaded on a vessel but were still on the pier, and the actual decision was that goods were not "cargo" until placed aboard the vessel. The vessel on which the goods were to be loaded was a government vessel; hence the Suits in Admiralty Act would have been applicable, under Judge Hulbert's gloss, except for the decision that the goods were not yet cargo.

In a case decided by the Court of Claims, subsequent to the decisions pending before us on appeal, that court disagreed with the results reached by the district court in the cases above cited, and found our Ryan case inapplicable. Lykes Bres. S. S. Co. v. United States, Ct.Cl., 124 F.Supp. 622. In accord is Pacific Far East Lines, Inc. v. United States, D.C.Cal., 1952 A.M.C. 815. We agree with the Court of Claims' view that the Suits in Admiralty Act gives the district courts jurisdiction of libels to enforce general average contribution aganist government cargo carried on a private merchant vessel. Consequently the Prudential Steamship case will be reversed and remanded.

The States Marine appeal poses the question whether a suit against the United States for a general average contribution from government owned cargo can be brought only in admiralty under the Suits in Admiralty Act, as the United States contends, or whether, as the ship-owner contends, an alternative remedy on the civil side of the district court is available under the Tucker Act, 28 U.S. C.A. § 1346(a) (2), by which the district courts are given "original jurisdiction, concurrent with the Court of Claims" of any claim not exceeding $10,000 "upon any express or implied contract".

The pleadings establish that the plaintiff's vessel left the port of New York in December 1947 with a general cargo, part of which was government owned. She reached the port of Piraeus without accident, and there discharged cargo destined for that port. Between Piraeus and Salonika the vessel stranded without fault on her part. To get her off the strand general average expenditures were made. She reached Salonika on January 28, 1948 and all the government owned cargo destined for that port was there delivered and accepted in regular course, part of the cargo having been delivered from the vessel and part from lighters to which it had been transferred at the time of her strand. A general average statement was served on the United States in October 1951, and by subsequent stipulation the government's share was fixed at $1,623. The plaintiff's action was commenced January 22, 1954. This was timely under the Tucker Act, which provides a six year statute of limitations, 28 U.S.C.A. § 2401(a). It was barred by the two year limitation of the Suits in Admiralty Act, 46 U.S. C.A. § 745, if that statute provides the exclusive remedy. Judge Kaufman having ruled that the Suits in Admiralty Act applies only to government owned...