Brief for the US in Opposition — Alcoa Steamship Co. v. United States

° INDEX

* Opinions below. __....-..-......-.--- “e Sah hal ching Oh ah kip sae

GNIS oats pa Se OU en SRS Re ag

Question presented eatipmil witew nis aie Se SS ONE <, RRR ee

Statute and contract provisions involved_........... 22.22...

( CS iinkiae cue okkuaduciieuawbnyinnosues mere

Argument... 5.5... He ees Bites bmeteie ware et:

Conclusion. ___...-.-. Se SMES ost ae A ASG Aa ERED ON hig eae

crfarions

Cazes: , . Stem,

~ Case & Richaud v. Baltimore Ins. Co., 7 C rangh Mccs ose

Christie v. Davis Coul & Coke Co... 05 Fed. 837...........

MeClure v. United State., 19 C. Cis. 173.00 2 oe - SAE

Pope & Talbot, Inc. v. G uernsesp W — Co., 159 F. ~

Te a ee oe a

Tornado, The, 108 U: 5, 3. eae ais Be SS aot

Toyo Kisen Reve? ve WLR. Grace & Co., 53 F. 2d 740

certiorari denied,--273 - Penis ce ok mueke wes

United States v. Coe eet Kees 312 U.S. 600. Seakabanwend

Statutes: s .

R. 8. 3648, 31 UL 8. C. 529... SD Ge GON, LAS ORM ;

Shipping Act of 1916, Secs. 16, 17, 46 U. 8. C. 81: 5-16. _

Tucker Act; 28 U. 8. C, 13462... .. 2202-2. Ch

Rs Oy a Reno isha busdbeweawwake Nee De

Miscellaneous: :

Angell, Carriers (5th ed. 1877):

OOK ciowcdken ees wk eLn kaa pa ae ais Lema ee

§ 399, note {a)_____. ERE pa OTS: EGG SEARLES? PAD TPE Se

C carver, Carriage of Goods by Sea (8th ed. 1938), $§ 543, 547.

Si Come. Gee 900 i a ca.

h Poor, ‘Charter Parties and Ocean Hills of” Lading (3a ed.

1948), OAs Ga Se lc cwk endl kobe oats

Robinson, Admiralty, § $2 (1939). Se ites tei aieies wale

Rerutton, Charter Parties (15th ed. 1948), Art. 139_. ___--

ay :

$ °o

K

854237— 49 F

3

— te ONO

Sniie Supreme Gout of he Wied Sites

Qctones Term, 1949

aereee

ees No. 271 an 4

ALcoa STEAMSHIP CoMPANY, INC., PETITIONER |

angle y

: * Ustrep STATES OF AMERICA

ON PETITION FOR A WRIT OF CERTIORARI TO THE UNIT#D

- STATES COURT OF APPEALS FOR THE SECOND CIRCUIT

BRIEF FOR THE UNITED STATES IN OPPOSITION

OPINIONS BELOW

The opinion of the United States District

Court for the Southern District of New York ©

(R: 46) is reported at 80 F. Supp. 158. The

opinion of the United States Court of Appeals

for the Second ‘Circuit & 62) is not yet

reported. Fak eee |

| JURISDICTION

' The fadbisoat of the Court of appal was.

entered on June 29, A949 (R. 72). The petition

for a writ of certiorari was filed on. August 16,

1949. The jurisdiction of this Court is.invoked

_. under 28 U. S.C. 1254 (1). |

| (1)

2:

QUESTION PRESENTED

Whether the standard form Government pill

_ of lading’ permits payment to an ocean carrier

“of freight to destination ‘on. Government cargo

which is lost and never delivered.

_ STATUTE AND CONTRACT PROVISIONS INVOLVED

. The statute prohibiting advance payments, R.

S.° 3648, 31 U.S. C. 529, provides in pertinent :

part as follows:

ww

No advance of publie money shall be made

_- invany ease whatever. And in. all cases of

contracts for the performance of any service,

or the delivery of articles of any description,

“for the uxe of the United States, payment

shall not exceed the value of the service

rendered, or of the articles delivered pre-

. viously to .sugh payment. * * *

The standard form Government bill of lading

(Form No. 1058, approved August 24, 1928; 8

‘Comp. Gen. 698) (Ex. 11, R. 28a-29a) and the

usual commercial ocean bill of lading are ‘printed

in pertinent part, infra, pp. 3-9.

STATEMENT |

This action was brought by petitioner against

the United States for the recovery, under the

Tucker. Act, 28 U.S. C. 1346, of $3,520.52 which

the Comptroller General had collected from it-by

offset and ‘deduction from other monies concededly |

due titioner. The facts giving rise to the claim

ee ey e.

s .

/

: | : S 3

of the United States to collect $3,520.52 from

petitioner by deduction are undisputed. :

On or before June 13, 1942, the War Depart-

ment shipped a Government: cargo ‘of lumber,

under the standard form: Government: bill of lad-

ing, from Mobile, \Alabama, to Port of Spain,

Trinidad, on petitioner’s SS Gunvor (Fng. 10, R.

39). On June 14, ‘1942, with the Government

cargo aboard, the -Gunvor was lost at sea by —

enemy action before reaching its destination (Fung.

13, R. 44). A claim for, payment of freight on

the lost Government cargo, in the amount of

$3,520.52, was subsequently presented by peti-

tioner on the prescribed. Government f reight -

voucher (Ex. B, R. 33a), and payment was made

by the War Department on or about. September

‘15, 1942 (Fng. 14, R. 44). Upon audit of the

account, the Comptroller General took exception

to the payment on theground that the freight had

not been earned, and on July 24, 1944, petitioner

- was advised that a deduction would be made from

an dmount otherwise due unless the overpayment

seg refunded within sixty days (Fng. 1b, R. 44;

Ex) 8, R. 2la—22a). On February 2, 1946, re-

‘fund/ not having been made by petitioner, col-

lection was effected by deduction (Fng. 16, R. 45).

~ The District Court for the Southern District of

New York concluded from’ these facts that peti-

tioner, under.the terms of the Gover nment bill of

lading, had earned the freight and that the sum

of $3,520.52 was improperly deducted by the

4

Comptroller General (R. 46-55). On appeal, the

Court of Appeals for the Second Circuit (one

judge dissenting) reversed, holding that the stand-

ard form: Government bill of lading ‘‘asserted the

privilege of any shipper under the admiralty law

. that it should not pay for what it does not get’’

(R. 66). Aves 7

| ARGUMENT —

1. It'is well settled that, absent a valid agree-

ment to the contrary, a carrier does not earn ©

and’ may not claim payment of freight unless

and until it: completely performs its contract by

‘delivering the goods to the proper, person at the

place of destination. See Caze & Richaud v.

Baltimore Ins. Co., 7 Cranch 358, 361; The Tor-

nado, 108 U. S. 342, 347; Angell, Canolive: § 399

(5th ed. 1877) ; Carver, Carriage of Goods by Sea,

§§ 543, 547 (8th ed. 1938) ; Poor, Charter Parties

‘and Ocean Bills of Lading, § 108 (3d ed. 1948) ;

Scrutton, Charter Parties, Art. 139 (15th ed.

1948); Robinson, Admiralty, §82 (1939).'- Al-

though this general rule may be varied by ex-

press ‘agreement, “‘such a stipulation should be

expressed in’ terms so clear and unambiguous

‘as to leave no doubt that such was the intention

in framing the contract of affreightment.””

1“Nor,” as the court below: observes, “is this result unjust

to, or hard upon, the petitioner. The law:throws upon all

carriers thé risk of performance, for performance is a condi-

tion upon the shipper’s promise to pay, just as performance i is

always a condition upon paym ment in any contract of service.’

(R. 66).

/

Angell, op. cit. supra, § 399, note (a); see also

Christie v. Davis Coal ¢ Coke Co., 95 Fed. 837,

838-839 (S. D. N. Y.). We submit that peti- —

tioner has not demonstrated that the standard

form Government bill of lading, which constitutes

the basic contract of carriage herein, clearly and

unambiguously departs from this long estab-

lished rule. To the contrary, the Government

bill of lading plainly provides for delivery of the

cargo at destination before the carrier’s right to

freight attaches.’ Cf. Pope & Talbot, Inc. v.

Guernsey-Weestbrook Co., 159 F. 2d 139 (C. A.

9); Toyo Kisen Kaisha vy. W. R. Grace & Co.,

53 F. 2d 740 (C. A..9), certiorari denied, 273

U. 8. 717.

It is petitioner’s contention that Clause 6 of

the usual commercial ocean bill of lading, which —

provides that ‘‘Full freight to destination * * *

are due and payable * * * as soon as the

Goods are received for purposes of transporta-

tion; and the same * * ®* shall be deemed

fully earned and. due and payable * * *.

Goods or vessel lost or not lost, * * * and

the Carrier shall have a lien on the Goods there-

. for (whether payable in advance. or not and

though noted hereon as prepaid); * * *” (R.

43), is incorporated into the Government bill of

2Tn our view, R. S.. 3648 (supra, p. 2), the statute pro-

hibiting advance payments, compels this construction of the

Government bil] of lading. However, the court below found

it unnecessary to pass upon the applicability of the statute

(R. 67).

6.

lading | by, Condition 2 of leas ‘ment bill,

which directs that ‘‘Unless otherwise specifically

provided or otherwise stated hereon, this bill of

lading is subject to the same rules and conditions

as govern commercial shipments made on the

usual forms provided therefor by the ecarrier.”’

(R. 40). :

_ But the provisions of the Government bill of

lading do “otherwise state.’’* Condition 1 of

___the Government bill of lading declares that. ‘‘ Pre-

payment of charges shall in no case be demanded

by-- carrier, * * *.” (R. 39). As Judge

Learned Hand points out in the opinion of the

court below, even though the words just quoted |

_stood alone, ‘‘it would bé very unnatural to con-

strue them as applying only to the time of pay-

ment of an absolute obligation. We can see no

reason why the United States—which drew the

bill—should wish to defer the payment of a claim

* Petitioner argues that the Govertiment bill of lading ven

_ does not “specificelly” override the freight provision of the

commercial bill of lading (Pet. 13-14). While we believe

that the terms of the Government bill do specifically provide

otherwise, it should be pointed out that petitioner misreads

Condition 2. The condition is not “unless otherwise specifi-

cally provided hereon or otherwise specifically stated hereon”:

but (1) “unless otherwise specifically provided [elsewhere ]”

or (2) “otherw ise stated hereon.” In any event, as already

noted, the burden is not upon the Government to show that

‘the standard Government form specifically overrides the

commercial form but upon petitioner to show, that the.

Goverument bill of lading. taken as a whole, clearly and un-

ambiguously modifies the general rule that the carrier does _

not earn freight until it delivers the cargo at destination.

$

7

which it must inevitably pay at some time. It

was not, like a private person, in need of any ex-

tension of its, credit. Why, if the freight was

earned upon mere delivery, should it be interested -

in postponing its collection?’ (R. 65-66). But.

‘the words do not stand alone; the sentence goes

on to say ‘“‘nor shall collection be ‘made from

consignee.’’ The carrier is thereby deprived of

its lien for freight, a lien expressly provided for

in the freight clause of the usual commrerctatoceatt————

bill of lading (supra, p. 5). Clearly, the denial

to the carrier of its lier for freight had. nothing :

to do with the time of. payment.

The remainder of Condition 1 bears out and

strengthens this interpretation. — Continuing, Con-

dition i states ‘(*:.%.? On presentation to.

the office indicated on the face hereof of this bill

of lading, properly accomplished, attached to

freight voucher prepared on the authorized Gov- |

ernment form, payment will be made to the last

carrier, unless otherwise specifically stipulated. és

(R. 40). |

A “properly accomplished’’ bill is my

defined in Instruction 2 of the Government bill —

of lading (R. 40) which provides in pertinent

‘part that— 3

oe he consighee on receipt of the |

shipment will sign,’ the: consignee’s certifi-

cate on the original bifl of lading and sur-

render the bill of lading to the last carrier. °

The bill of lading then becomes the evi-~ |

8

dence upon which settlement for the service

will be made. * * *

The certification thus required of the consignee

for the ‘‘proper accomplishment”’ of the. bill of

_lading ‘is entitled ‘‘Certificate of Delivery”’ -

42) and certifies that—

I have this day received from (name

of transportation company) at (actual

point of delivery by carrier) the public

; property: described in this bill of lading,

in apparent good order and condition, ex-

cept as noted on the reverse hereof.

A prescribed Government form of freight |

voucher which must accompany the ‘ properly

accomplished”? bill of lading when presented for

payment provides (Ex. B, R. 33a):

>

6. Payment for transportation charge

will be made only for the quantity of stores

delivered at destination * * *. |

The express language of these various ‘pro- |

' visions of the Government bill of lading plainly

prohibit the application of Clause 6 of the com-

mercial bill that full freight to destination is due

upon receipt of the goods by the carrier. Unless

the carrier receives surrender of the bill with the

- . Certificate of Delivery ‘“‘properly accomplished,”’

it cannot present it to the paying officer with the .

voucher for payment as required by Condition 1.

And there is no ambiguity as to what the ‘parties

meant by .“‘properly accomplished’’;: the con-.

signee is not authorized to surrender the bill of |

9

lading without receiving the goods. Only a bill

so receipted‘ is a ‘“‘properly accomplished’’ bill

_ of lading, the only kind. on which the abe

296

quantity of stores delivered _ at destination.

We submit, therefore, that, under the terms of

the Government bill of lading, petitioner did not

earn the freight in question and that the sum

__of $3,520.52 —was- aad uname by the

‘Comptroller General. pe

* Hetein,-the consignee ’s Certificate of Salbeaes was merely :

endorsed “S. S. ‘Gunvor’ has been lost due to enemy action”

“For the Acting District Engineer [signature illegible]

Superintendent, August 8, 1942” (Ex. 11; R. 28a).

‘Instruction 6 of the Government bill-of lading (R.

41) declares that “in case of loss or damage to property

while in the pessession of the carrier, such loss or damage

shall, when practicable, be noted on the bill of ladtng or cer:

tificate i in lieu thereof, as the case may be, before its accom-

plishment. * * *”

* The reliance of petitioner (Pet. 21) and J ude Augustus

_N. Hand, dissenting below (R. 69-70), on the Comptroller

_ General’s decision of April 7, 1942, 21 Comp. Gen. 909, as

evidence of a practice to pay unearned freight is misplaced.

That decision expressly adhered to the general rule that

“delivery of the cargo at the port of destination is a condi-

tion precedent to the right to freight” (p. 912) but held (p.

' 913) that since “the difficulty here is not that these particular

shipments were not transported to destination but rather that

due to conditions of war prevailing in the Philippine Islands

and Guam, it is not possible to establish of record that said

shipments were received by the consignee from the carrier at

destination. In view of the known conditions in said islands,

as commonly reported in public dispatches, any failure to

transfer the goods to, or fo take receipt from, the consignee

upon the discharge of cargo at destination at any time since

the early part of December 1941, reasonably may be assumed

‘10

_2. It appears unlikely that this question will

be of any continuing importance. The standard

form Government bill of lading, and particularly

the language here involved, is currently being

extensively revised by the General Accounting

‘and other interested Departments. In |

view of the correctness of the decision below,

further review would seein unwarranted.

to be due to the inability of the consignee to receive rather

than to any failure of the carrier to deliver, and so would

not defeat the right of the carrier to freight charges.” The

_ decision thus contemplates merely excusing the carrier from

obtaining the certificate and not from carrying the goods to

- destination. Cf. McClure v. United States, 19 C. Cls. 173,

181.

Petitioner’s roundabout. reliance (Pet. 7) on Sections 16

and 17 of the Shipping Act of 1946 (46 U. S. C. 815-816) —

prohibiting “any undue or unreasonable preference or advan-

tage” to a particular shipper—is also obviously unfounded.

-That statute does not apply where the United States is the

shipper, and the Maritime Commission. has consistently so

construed it. Cf. United States v. Cooper Corp., 312 U.S.

600; 49 U.S. C. 3 (2) and 22° (comparable provisions of the

Interstate Commerce Act). :

v

11

CONCLUSION

The decision below is correct, wad there is no

conflict of decisions. It is respectfully submitted

that the petition for a writ of certiorari ate

cntiecasi, be denied.

-Puiup B. PERLMAN,

_ Solicitor General,

HL G.z ‘Morison,

Assistant Attorney General,

SaMUEL D. SLADE,

BENJAMIN ForRMAN,

ie | = Attorney ys.

_ SEPTEMBER 1949.

_ ©. © COVERNUTWT PHinTiNG Office tees