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

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## Record

- **Collection:** Supreme Court brief
- **Document type:** Brief for the US in Opposition
- **Published:** January 1, 1949
- **Citation:** 338 U.S. 421

## Text

° 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

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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

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