THE WRIGHT

• Decision Date: 13 February 1940
• Docket Number: No. 188.,188.
• Citation: 109 F.2d 699
• Parties: THE WRIGHT. THE PAPOOSE. UNITED STATES v. PETROLEUM NAV. CO.
• Court: U.S. Court of Appeals — Second Circuit

109 F.2d 699 (1940)

THE WRIGHT THE PAPOOSE UNITED STATES v. PETROLEUM NAV. CO.

No. 188.

Circuit Court of Appeals, Second Circuit.

February 13, 1940.

Earle Farwell, of New York City (Barry, Wainwright, Thacher & Symmers and John C. Crawley, all of New York City, on the brief), for appellant.

Charles J. Carroll, Sp. Asst. to U. S. Atty., of Brooklyn, N. Y. (Harold M. Kennedy, U. S. Atty., of Brooklyn, N. Y., on the brief), for the United States.

Before L. HAND, CHASE, and CLARK, Circuit Judges.

CLARK, Circuit Judge.

Pursuant to the direction of this court in The Papoose, 2 Cir., 85 F.2d 54, reversing D.C.E.D.N.Y., 12 F.Supp. 743, certiorari denied 299 U.S. 603, 57 S.Ct. 230, 81 L.Ed. 445, the District Court entered its final decree in this consolidated cause dividing the damages resulting from a collision on May 2, 1931, of the U.S.S. "Wright" and the S.S. "Papoose" owned by Petroleum Navigation Company. The Navigation Company now appeals because the decree awarded the United States interest on the latter's damage prior to the date of the entry, but denied like interest to appellant.

Since the respective damages to the vessels, as fixed by stipulation, showed that the "Papoose" sustained a greater damage than the "Wright" by about $6,600, appellant would have been entitled to a recovery of $3,300 if interest and costs had been excluded from the calculation. But the District Court, by awarding interest of $9,339.66 to the United States, made the latter's claim greater than that of appellant. Since appellant recovered more costs, it finally found itself with a favorable decree, but only for $371.64. It complains of this inequitable result, urges that justice should be equal to all, and claims that interest should be either granted or denied to both parties alike. Normally, equality is the ideal of Anglo-Saxon law, but, as the District Court held, it does not apply to the sovereign who may claim as of right while granting only by favor. United States v. Verdier, 164 U.S. 213, 218, 17 S.Ct. 42, 41 L.Ed. 407; United States v. North American Transportation & Trading Co., 253 U.S. 330, 336, 40 S.Ct. 518, 64 L.Ed. 935. But such a rule may properly be confined to cases of "plain compulsion of law." American Propeller & Mfg. Co. v. United States, 300 U.S. 475, 478, 57 S.Ct. 521, 523, 81 L.Ed. 756. With the District Court we see no escape from the rule so far as concerns interest against the United States prior to final decree; but we do not agree that at the same time interest must be awarded to the United States. If, as Mr. Justice Holmes said in United States v. The Thekla, 266 U.S. 328, 340, 45 S.Ct. 112, 113, 69 L.Ed. 313, "the subject matter" of the cross-libels "is the collision, rather than the vessel first libelled," and the government's libel "is like a bill for an account, which imports an offer to pay the balance if it should turn out against the party bringing the bill," then that balance should not be made a loss to the claimant merely upon the passage of time and by the device of a unilateral grant of interest.

Without statutory authority no libel can be instituted against the United States or its vessel for damages caused by the negligent operation of the vessel. The Western Maid, 257 U.S. 419, 42 S.Ct. 159, 66 L.Ed. 299.¹ But when the United States libeled a private vessel, this was held to constitute permission for a cross-libel by the vessel owner and to justify the award of interest in favor of such owner if the latter's claim was sustained. United States v. The Thekla, supra.

Moreover, many special acts were passed, authorizing the filing of libels against the United States for particular collisions. Some of these contained express provisions as to interest (compare 278 U.S. 41, at page 44, 49 S.Ct. 52, 73 L.Ed. 170), but most referred only generally to the award of "damages." This court construed such statutes to include interest as a part of the damages. Texas Co. v. United States, 2 Cir., 16 F.2d 948, certiorari denied 274 U.S. 752, 47 S.Ct. 765, 71 L.Ed. 1332; New York & Cuba Mail S. S. Co. v. United States, 2 Cir., 16 F.2d 945, certiorari denied 274 U.S. 753, 47 S.Ct. 765, 71 L.Ed. 1333. But the Supreme Court took the case of Boston Sand & Gravel Co. v. United States, 1 Cir., 19 F.2d 744, because of conflict with the cases just cited and, in an opinion by Mr. Justice Holmes (four justices dissenting), concluded that such an act did not authorize interest against the United States. 278 U.S. 41, 49 S.Ct. 52, 73 L.Ed. 170. The Court held this to be true even though the government could claim interest in its favor, since it, unlike the private claimant, did not need the aid of a statute to justify such an award. Cf. Robinson on Admiralty 268; 27 Mich. L.Rev. 815; 3 So.Calif.L.Rev. 66. In that case, however, there was no award against the United States, even though the damages were divided (1 Cir., 7 F.2d 278; cf. D.C. Mass., 16 F.2d 643), for the claimant had filed no cross-libel. Thereafter the Court held in United States v. Commonwealth & Dominion Line, Ltd., 278 U.S. 427, 49 S.Ct. 183, 73 L.Ed. 439, reversing 2 Cir., 20 F.2d 729, that the result would be the same even though the United States had filed a cross-libel; and distinguished The Thekla, supra, on the same ground, that there no statute had been needed to justify the cross-libel of the private claimant.

By the Shipping Act of 1916, 46 U.S.C.A §§ 801-842, vessels acquired by the government under its terms were subject to the liability of privately owned ships while operated as merchant vessels. But it was held that a government vessel could be libeled in rem, The Lake Monroe, 250 U.S. 246, 39 S.Ct. 460, 63 L.Ed. 962, and so in 1920, Congress passed the Suits in Admiralty Act, 46 U.S.C.A. §§ 741-752, providing for libels, in personam only, against the United States for damages caused by government merchant vessels. Robinson on Admiralty 269-278; 39 Yale L.J. 1189; Lord, Admiralty Claims Against the Government, 19 Col.L.Rev. 467. This statute permitted the court to award interest against the United States, but only at the rate of 4 per cent per annum unless a higher amount was stipulated by contract. 46 U.S.C.A. § 743. Relying on this statute this court in The Comus, 2 Cir., 19 F.2d 774, 777, held that in a collision case where damages were to be divided, interest at the rate of 6 per cent should be allowed to the United States, and at the rate of 4 per cent only against it. By amendment of 1932, 46 U.S.C.A. § 743a, it is now provided that no interest shall be allowed on any claim prior to the time when suit is brought.

Governmental responsibility for public vessels did not come until the Public Vessels Act of 1925, 46 U.S.C.A. §§ 781-790, which allowed a libel, in personam only, against the United States for damages caused by such vessels. Section 2 of that Act, 46 U.S.C.A. § 782, in providing for the venue of the suit in the appropriate district court of the United States, stipulated that "no interest shall be allowed on any claim up to the time of the rendition of judgment unless upon a contract expressly stipulating for the payment of interest." Section 3, 46 U.S.C.A. § 783, authorized the filing of a cross-libel or the setting up of a counterclaim in cases where the United States had filed a libel for its damages. Appellant claims that Section 2, denying interest, does not apply to a cross-libel, for, under The Thekla, supra, no statute was necessary for such a libel and for the award of interest against the United States in it. So appellant claims interest here because the United States instituted the original libel. Compare Robinson on Admiralty 269. But the District Court rejected this view, holding that there was no difference in the right to interest of a libellant and a cross-libellant. And for its conclusion that nevertheless the United States should receive interest, the court relied on Boston Sand & Gravel Co. v. United States, supra.

Whatever may have been the previous rule under The Thekla, supra, we think with the court below that the Public Vessels Act applied to all claims against the United States for damages caused by public vessels, whether by libel or by cross-libel. Authority for cross-libels against the government is now to be found in the Act, and Section 2 limits the award of interest on any claim for public vessel damage. This important right cannot depend upon which of the two parties involved — government or...