# Petition for Writ of Certiorari — L. N. Jackson & Co. v. Royal Norwegian Government

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## Record

- **Collection:** Supreme Court brief
- **Document type:** Petition for Writ of Certiorari
- **Published:** January 1, 1950
- **Citation:** 339 U.S. 914

## Text

oud Office - Supreme Court, U. & FF
FiILxD

EB 2 1950
CHARLES ELMORE CROPLEY

Supreme Court of the United States

Ocroser TeERM—1949

No. 576

L. N. Jackson & Co., Inc.,
Petitioner,
against

Tue Royat Norwecian GovERNMENT,
Respondent.

Oe

PETITION FOR WRIT OF CERTIORARI AND
SUPPORTING BRIEF

CopaL Mintz,
Attorney for Petitioner,
150 Broadway,
New York 7, N. Y.

INDEX

a,

Petition FOR Writ oF CERTIORARI

Judgment Sought To Be Reviewed
| The Opinions Below
The Matter Involved

A Summary Statement of the Facts

The Ratio Decidendi of the District Court
The Grounds of the Reversal

Judge Learned Hand’s Dissent

The Testimony of Defendant’s Representatives

Basis of Jurisdiction

SupportTinG Brier

Preliminary Statement
Summary of Argument

Port I: The Authorities Cited in the Prevailing
Opinion Do Not Countenance the Enunciation—
and Reject the Doctrine—That, Even Though a
Contract Is Valid and Binding, the Law Does
Not Hold the Promisor to Performance If, in the
Circumstances of the Case, it Appears to A
Court That ‘‘In Fairness and Justice’’ the
Promisor Should Not Be Held To His Promise

Summary of the Cases Cited in the Prevailing

li INDEX

PAGE

Pornt II: The Authorities Cited in the Prevailing
Opinion Do Not Countenance ‘‘Governmental
Coercion’’—as Distinguished From Frustration
By Law—As Releasing a Promisor From Lia- |
bility For Non-Performance .................. 4

Pornt III: Other Authoritative Decisions—Decisions
Not Mentioned in the Prevailing Opinion—Rule
Out ‘‘Governmental Coercion’’ As an Excuse .. 4

Pornt IV: No ‘‘New Circumstances’’ Require Or
Justify the Disregard Or Reversal of the Well-
Settled Principles of Law in the Field of Con-
tract Jurisprudence Which Are Involved Here 4

Porst V: The Factual Hypothesis of the Prevailing
Opinion—That the Defendant Was ‘‘Coerced”’
by the Government of the United States Which
Exercised and Exerted an ‘‘Overriding Power”’
—Are Without the Slightest Basis in the Record
and Directly Contrary to the Testimony of the
SE © WOMENS ny. uh cs ceuaebn sv nvce cen 47

Concuiusion: It Is Respectfully Submitted That the
Petition Herein Should be Granted and Writ of
Ces CE OID cc ccc ce ceenasa onde 47

APPENDIX

Testimony of Defendant’s Witnesses George Otto
Mejlaender and Per A. Lorentzen ........... 48-54

TABLE oF CasEs

Allanwilde Transport Co. v. Vacuum Oil Co., 248 U.S.

Ee SE Kéd deuce nkucavocNuRcna pen iwton ances 34
Arkell &€ Douglas v. N. H. Borenstein & Sons, 188

A, EX UR, Kee Bh. Es GH: GSR CEBEB) «on oo ceca 16

ill
PAGE

Baker Castor Oil Co. v. Insurance Company of North
America, 60 Fed. S. 32 (S. D. N. Y. Goddard, J.)
aff’d 157 F. (2nd) 3 (C. C. A. 2), ed. 329 U.S.

7, 14, 17, 35-7, 40-41, 44

Bank Line Ltd. v. Arthur Capell & Co., 1919 A.C. 485 28

Canadian Industrial Alcohol Co. v. Dunbar Molasses
Co., 259 N. Y. 193 (1932)

Cameron-Hawn Realty Co. v. City of Albany, 207
N. Y. 377 (1913)

Carnegie Steel Co. v. U. S., 240 U.S. 156 (1916)...

The Claveresk, 264 F. 276 (C. C. A. 2nd Cir.,, 1920,
Rogers, Hought and Manton, C. J.), affirming
8 a i RS ee aan 34-5

Chicago & Eastern Ill. Rwy. Co. v. Collins Produce
Co., 249 U. S. 186 (1918)

Columbus Railway & Power Co. v. Columbus, 249 U.S.
399 (1919)

Companhia De Navegacao Lloyd Brasileiro v. C. J.
Blake Co., 34 F. 2d 616, 619 (2nd C. 1929)

Day v. U. S., 245 U. &. 159 (1917)

Edward Maurer v. Tubeless Tire Co., 285 F. 113
(C. C. A. 6th Cir., 1922)

E. Hulton & Co., Lid. v. Chadwick & Taylor, 34 T. L.
R. 230 (1918)

Eppens, Smith & Wiemann Co. v. Littlejohn, 164 N. Y.
187 (1900)

F. A. Tamplin Co. v. Anglo-Mezxican Co., 1916, 2 A. C.

Gottesman v. Canada, Atlanta & Pacific Steamship
Co., 259 F. 298 (E. D. N. Y., 1919)

The Isle of Mull, 257 F. 798 (D. C. Md. Rose, D. J.,
1919) reversed 278 F. 131 (4th C. 1921) e.d. 257
SS ee eT re er eee eee 22-3, 28, 39

Joseph Constantine Steamship Line Ltd. v. Imperial
Smelting Corp., Ltd., 1941 2 ALL Eng. R 165. .28-30, 39

** Julian Blake’’, 107 U. S. ee pers 2
The Kronprinzessin Cecile, 244 U.S. 12 (1917) ...... 26-7
Krulewitch v. National Importing & Trading Co., Inc.,
195 A. D. 544, 186 N. Y. S. 838 (1921)........... 16
L. N. Jackson & Co. v. Seas Shipping Co., Inc, 185
SE cates bab cae and 6 O48 bale A AOS «cK aeE 38

Madeirense Do Brasil 8/A v. Stulman-Emrick Lum-
ber Co., 147 F. 2d 399 (C. C. A. 2nd Cir. 1945),
“SS 4 GERRI Cet SE ra SET OE es 16, 314

Mawhinney v. Milbrook Woolen Mills, 231 N. Y. 290
Nia nk he Cin 55 ths ashhi ot eoed heen ccknn 37

Megan v. Updike Grain Corp., 94 F. 2d 553 (8th C.,
DE Sat Giada cee ake atin awk eabandnd bah cdnee 16

Moore & Tierney, Inc. v. Roxford Knitting Co., 250 F.
278 (N. D. N. Y. 1918), aff’d 265 F. 177 (2nd C.),
ee ee es rere 24-6, 37, 41

BE chia cd x bKCMAN RAE CANRLS a Soe eee KER e AE 10, 39
New York Trust Co. v. Securities Exchange Commis-
ston, 131 F. 2d 274 (C. C. A. 2nd Cir., 1942), ed.
Bs i AK bath aed ae w Ramen eaaan sob 0 40k
7

PETITIONER’S BRIEF IN SUPPORT OF THE
FOREGOING PETITION FOR A
WRIT OF CERTIORARI

Preliminary Statement

Since the foregoing petition contains an adequate state-
ment of the opinions below (pp. 2, 6-12, supra), the basis
of jurisdiction (p. 13, supra), the facts, to the extent
material (pp. 3-6), and the questions involved (pp. 1314,
supra), those matters are not repeated here.

This brief is intended merely to supplement the petition
in only one respect—to demonstrate that the 2 to 2 prevail-
ing decision herein is a radical departure from, and cot
stitutes a reversal of, the law in such a vital branch of
jurisprudence as the law of contracts.

20

21

Summary of Argument

L The authorities cited in the prevailing opinion do not
countenance the enunciation—and reject the doctrine—
that, even though a contract is valid and binding, the law
does not hold the promisor to performance if, in the cir-
cumstances of the case, it appears to a court that ‘‘in fair-
ness and justice’’ the promisor should not be held to his
promise (pp. 22-44, infra).

IL The authorities cited in the prevailing opinion do
not countenance ‘‘governmental coercion’’—as distin-
guished from frustration by law—as releasing a prom-
isor from liability for non-performance (p. 44, infra).

IIL Other authoritative decisions—decisions not men-
tioned in the prevailing opinion—rule out ‘‘governmental
coercion’? as an excuse (pp. 44-46, infra).

IV. No ‘‘new circumstances’’ require or justify the
disregard or reversal of the well-settled principles of law
in the field of contract jurisprudence which are involved
here (p. 46, infra).

V. The factual hypothesis of the prevailing opinion—
that the defendant was ‘‘coerced’’ by the Government of
the United States which exercised and exerted an ‘‘over-
riding power’’—are without the slightest basis in the
record and directly contrary to the testimony of the de-
fendant’s witnesses (p. 47, and appendix, pp. 48-54, infra).

22

The authorities cited in the prevailing opinion do
not countenance the enunciation—and reject the
doctrine—that, even though a contract is valid and
binding, the law does not hold the promisor to per
formance if, in the circumstances of the case, it ap.
pears to a court that “in fairness and justice” the
promisor should not be held to his promise.

This brief does not undertake an examination of the
authors referred to in the prevailing opinion, nor a com-
parison of their writings with views on the subject ex-
pressed by other eminent writers, for—whatever may be
the impact of those dissertations on the minds of the judges
—there necessarily is a variance between the products of
such unilateral thinking and the legal principles which the
courts apply as the result of their long course of resolving
concrete conflicts, in the light of the fuller understanding of
all sides wrought by adversary presentation and scrutiny.

Therefore, we proceed to test what is said in the prevail-
ing opinion of Judge Clark with the cases therein referred
to—in the order in which they appear therein.

The Isle of Mull, 257 F. 798 (D. C. Md. Rose, D. J., 1919),
reversed 278 F. 131 (4th C. 1921), ¢.d. 257 U. S. 662, was a
case of true frustration of a charter party by the lawful
requisition by the British Admiralty of the chartered
British vessel owned by a British corporation.

The District Court, recognizing the frustration, never-
theless held that, as a matter of justice and equity, the char-
terer should receive the amounts which the owner was paid
by the British Admiralty in excess of the stipulated charter
hire during the period of the charter party, for, otherwise
the frustration and consequent non-performance would
result in the enrichment of the non-performer at the ex-
pense of the promisee.

__.<gals

The Circuit Court of Appeals was much impressed with
the justice of that determination and catalogued ‘‘the
strong reasons in favor’’ of it. Nevertheless it felt itself
constrained to reverse the judgment for the amount of the
owner’s enrichment because, as a matter of law, the actual
requisition by a government in the exercise of its govern-
mental power over its nationals and over its ships ‘‘com-
pletely frustrated the contract and put an end to all rights
of both parties.’’ The Circuit Court discountenanced the
embarking by the courts on an effort to adjudicate con-
troversies over business contracts in accordance with a
judge’s appraisal of the equities, in these words (at p. 135):

-

“The hardship of applying [the rule of law] to some
cases in the meantime cannot be denied, but it will be
found in the practical administration of justice better
to allow even this hardship than for courts to enter
upon the confusing, if not impossible, task of adjusting
the equities. * * * The effort to measure [the] * * * fac-
tors entering into the adjustment of the equities would
involve the parties in intricate and costly litigation
and delay.’’

Certiorari was denied by this Court.

The Texas Co. v. Hogarth Shipping Co., 256 U. S. 619
(1921), likewise, was a case of true frustration by lawful
governmental requisition. There is nothing in the facts or
opinion in that case which lends support to the opinion of
Clark, J., in this case. The subject of the charter party
in that case was a British vessel owned by a British corpo-
ration. ‘‘While in British waters and being provisioned
for the intended voyage’’ the vessel ‘‘was requisitioned by
the British Government and pressed into war service’’ (at
p. 626). ‘*The owner made the usual preparations for com-
plying with the charter party, earnestly sought to prevent
the requisitioning of the vessel, urged the existence of the
charter party as a reason for leaving her free, and

24

respected the requisition when made, because no other
course was reasonably open”’ (at p. 627).

Upon those facts this Court said (at pp. 627-8):

‘* As the ship was British and in British waters and the
owner was a British corporation, the power of the
British Government to requisition the ship is beyond
question.”’

This Court held further that since the continued avail-
ability of the vessel was necessary to the performance of
the charter party, the contract necessarily ‘‘must be re
garded as subject to an implied condition that, if * * *
without the default of either party the particular thing
ceases to exist or be available for the purpose, the contract
shall be dissolved and the parties excused from performing
a

Continuing its exposition, this Court took the pain to
say that the principle did not apply where the terms or
nature of the contract did not import the implication ‘‘nor
where performance is not practically cut off but only
rendered more difficult or costly. * * * Here the ship * **
was rendered unavailable for the performance of the char-
ter party by the requisition’’ and thus ‘‘compliance of the
charter party was made impossible by an act of state. * **
The important consideration is that [the contract] became
impossible of performance through a supervening act of
state which operated directly on the ship and the parties
could not avoid’’ (at p. 631).

The Tornado, 108 U. S. 342 (1882), also was a case of
true and absolute frustration. There the disabling occur-
rence was the accidental burning of the vessel. That
involuntary destruction terminated the contract because
the continued availability of the vessel was a sine qua non
of the contract and thus an implied condition thereof.

Moore & Tierney, Inc. v. Roxford Knitting Co., 250 F. 278
(N. D. N. Y. 1918), aff’d 265 F. 177 (2nd C.), ¢. d. 283
U. S. 498, was a case of frustration by imperative law.

25

Nothing in the opinions therein give countenance to what
has been said in the case at bar. The National Defense Act
of June 3, 1916, c. 124, 39 Stat. 166, and the Naval Appro-
priations Act of March 4, 1917, ¢. 180, 39 Stat. 1168, were
construed, in accordance with their express provisions as
making it obligatory upon manufacturers to accept govern-
ment procurement orders end give them priority, under
penalties of fines and imprisonment and plant requisition.
Therefore, if compliance with orders placed by the govern-
ment under the Acts ‘‘made it impossible’’ for the con-
tractor to fill contracts with private individuals, the latter
contracts ended. ‘‘In such case or cases it is clear that,
under the provisions of the Acts of Congress referred to,
performance * * * was made impossible by the act and
requirements of the United States Government.’’ How-
ever, added the court, if a party (emphasis supplied)

“thinking it more profitable or patriotic, to work for
the government than in the performance of its existing
contract with B, voluntarily sought a contract with the
government * * * and voluntarily entered into such
a contract sought by it with the United States a teats
he is not excused, * * * In such case performance * * uf
is not prevented by act of God, or viz major. Non-
performance is the result of his voluntary act or acts,
not that of the government, and he acts under no com-
pulsion whatever’’ (at pp. 281-2).*

The Circuit Court of Appeals for the Second Circuit
(Ward, Rogers and Hough, C. J.) in an affirming opinion
by Judge Rogers said:

“Tt is not questioned that, if a party by his contract
charges himself with an obligation possible to be per-
formed, he must make it good, unless performance is
rendered impossible by the act of God, the law or the

* See directly in point Chicago & Eastern Ill. Rwy. Co. v. Collins
Produce Co., 249 U. S. 186 (1918).

26

other party. If what is agreed to be done is possible
and lawful, it must be done. Sun Printing & Publish.
ing Assn. v. Moore, 183 U. S. 642; Carnegie Steel Co,
v. U. S. 240 U. S. 156, 165. The plaintiff admits that jt
entered into contracts with defendant which it did not
completely perform within the time agreed upon. The
performance was not prevented either by act of God or
the other party. Was-it prevented by the law? If
not, was performance excused under the clause in the
contracts declaring that the obligations assumed were
subject to ‘delays or nondelivery caused by * * * any
other reasons beyond our control?’ ’’ (at p. 178).

**If the orders [by the government for plaintiff's
manufacture of goods] were contracts voluntarily
made, we agree that the performance of contracts so
made was not entitled to precedence over other con-
tracts previously taken’’ (at p. 180).

E. Hulton & Co., Ltd. v. Chadwick & Taylor, 34 T. L. B.
230 (1918), also, was a case of true frustration by the law
of the land of which both the plaintiff and the defendant
were subjects and where the contract was to be performed.
Nothing in the opinion in that case gives support to the
judgment in this case.

The Kronprinzessin Cecile, 244 U. S. 12 (1917), like The
Texas Co. v. Hogarth Shipping Co., supra, turned upon an
implied condition. Performance of the contract with the
plaintiff in that case, as well as performance of the con-
tracts with the other shippers and with the passengers,
depended upon the safety of the ship. Therefore the con-
tracts imposed upon the carrier the obligation of reason-
able vigilance in safeguarding the ship. Consequently
what the master, reasonably and in good faith, deemed
necessary for the safety of the ship and of the cargo and
the passengers was in performance rather than in breach
of the contract. Hence, the master acted within the scope
of the contract as the nature of the engagement has been
understood for generations. The necessity of the safety

27

of the ship is so obviously vital to all contracts of carriage
by sea that, in the historical development of maritime law,
it has been the mutual and joint concern of the owners of
the cargo no less than of the owner of the vessel; therefore,
the master, in a sense, has been viewed also as the agent
of the owners of the cargo (see The “‘Julian Blake’’, 107

U. S. 418 (1882)).

There is no analogy whatsoever between that and this
case—factually or legally. No question of safety of the
vessel was involved here. The principles there enunciated
provide no support for exculpation of a voluntary and
wilful choice not to perform in furtherance of a purely
voluntary at-will commitment to a government which had
no sovereign jurisdiction in the premises.

W. J. Tatem, Ltd. v. Gamboa, 1939 1 K. B. 132, contains
nothing other than strict definitions of frustration. It was
there held that frustration occurs when the thing upon
which performance depends ceases to exist through circum-
stances beyond the control of the parties.

F. A. Tamplin Co. v. Anglo-Mexican Co., 1916, 2 A. C.
397, was another case of the requisition by Britain of a
British vessel. There was no disagreement among the
judges as to the effectiveness of the requisition to prevent
performance during the period of requisition and the
supervention thereof over the five year charter party
between the parties. The disagreement was over whether
the requisition effected a complete frustration of the char-
ter party or merely modified it or suspended it, and that
disagreement was not due to divergence of view as to the
underlying legal doctrine. Viscount Haldane of the minor-
ity expressed no dissent from Earl Loreburn of the ma-
jority who said that the only allowable principle upon
which the courts proceed is the existence of a releasing
‘implied condition in the contract * * * for no court has
an absolving power’’ (at p. 404). Since charter parties are
dependent upon the ‘‘continued availability’’ of the vessel,

28

there necessarily is an implicit condition (unless affirms.
tively negatived) that when the vessel ceases to be avail.
able ‘‘by reason of circumstances beyond the control of the
parties’’ the charter party ‘‘comes to an end’’.

That was repeated by Lord Haldane several years later,
in Bank Line Ltd. v. Arthur Capell & Co., 1919 A. C. 435,
where a vessel which was the subject of a charter party
was requisitioned by the government of which the owner
of the vessel was a national and whose flag the vessel flew.
He there said (at p. 445):

‘*What is clear is that when people enter into a
contract which is dependent for the possibility of its
performance on the continued availability of the sub.
ject matter, and that availability comes to an unfore-.
seen end by reason of circumstances over which its
owner had no control, the owner is not bound unless
it is quite plain that he has contracted to be so.”’

In the same case Lord Sumner remarked that it was
‘*well-settled that the principle of frustration of an adven-
ture assumes the frustration arises without blame or fault
on either side. Reliance cannot be placed on self-induced
frustration’’ (at p. 452).

Directly contrary to the rationale of the prevailing opin-
ion in this case, Lord Sumner said that cases of this charac-
ter should not be disposed of according to a jury’s view
‘‘of what is fair between man and man’’ (see p. 459), but
on rules capable of objective application without regard to
what may be deemed the ‘‘equities’’ of a particular case.
Lord Sumner did not claim for judges a power of sub-
jective disposition according to individual views which he
held improper for collective consensus and judgment by
juries (cf. the later decision by the C. C. A. 4th Cir. in
The Isle of Mull, swpra at pp. 22-3).

Joseph Constantine Steamship Line Ltd. v. Imperial
Smelting Corp., Ltd., 1941 2 All Eng. R. 165, concerned

al

29

itself solely with a question of burden of proof which is
not presented in the case at bar. There the performance
of the contract was frustrated by an explosion of the vessel
which everybody agreed excused performance unless such
explosion was caused by the defendant or its employees.
The presentation of all of the available proof left the
causation of the explosion a mystery. In those circum-
stances, it was decided that the presumption of innocence
and absence of fault led to the exculpation of the defend-
ant. The opinions rendered in that case seem to petitioner
significant here for the following contents.

Viscount Simon, L. C., said (emphasis supplied) :

“<* * * There is no doubt of course that * * * ‘self-
induced’ frustration provides no defense. Thus in
Mertens v. Home Freeholds Co., Lord Sterndale, M. R.,
observed, at p. 536: ‘It has never been held that a man
is entitled to take advantage of circumstances as a
frustration of the contracts if he has brought those
circumstances about himself’ * * * Similarly * * * Lord
Wright * * * laid it down. * * * ‘The essence of ‘‘frus-
tration’’ is that it should not be due to the act or elec-
tion of the party’ ’’ (p. 169).

“The most satisfactory basis, I think, upon which
the doctrine (of frustration) can be put is that it de-
pends on an implied term in the contract of the parties.
** * Tt has the advantage of bringing out the distinc-
tion that there can be no discharge by supervening
impossibility if the express terms of the contract bind
the parties to performance notwithstanding that the

' supervening event may occur. Discharge by super-
vening impossibility is not a common law rule of gen-
eral application like discharge by supervening ile-
gality. Whether the contract is terminated or not
depends on its terms and surrounding circumstances
in each case. * * * Every case in this branch of the
law can be stated as turning on the question whether,

30

from the express terms of the particular contract,
a further term should be implied which, when its con.
ditions are fulfilled, puts an end to the contract”
(p. 171).

Viscount Maugham observed that ‘‘the contract auto
matically comes to an end * * * provided only that the
event is ‘caused by something for which neither party was
responsible’ ’’ (p. 177).

Lord Russell of Killowen said:

“** * * as a general rule, impossibility of perform.

ance does not release from liability the person who
promised the performance. An exception, however,
exists in the case of contracts the performance of
which is necessarily dependent in the continued exist-
ence, or the continued existence in sound condition, of
a person or thing’’ (p. 180).

Directly contrary to the doctrine enunciated in the pre
vailing opinion in this case are the following remarks by
Lord Wright:

‘** * * the court is not claiming to exercise a dis-
pensing power, or to modify or alter contracts. The
parties did not express the qualification because they
did not think of the possibility of the occurrence * * *”
(p. 186).

. a * . * *

‘*The explanation which has been generally accepted
in English law is that impossibility or frustration de
pends on the court implying a term or exception and
that as part of the contract’’ (p. 187).

The principle rests, he continued, ‘‘on the true meaning
of the contract, as it appears to the court. The essential
feature of the rule is that the court construes the contract,
7. ey

31

In Madeirense Do Brasil S/A v. Stulman-Emrick Lum-
ber Co., 147 F. 2d 399 (C. C. A. 2nd Cir. 1945, Swan, Clark
and Frank, C. J.), ¢.d. 325 U. S. 861, a seller in Brazil con-
tracted with a buyer in New York on December 5, 1940,
to ship certain lumber ‘‘up to December 31, 1940”. The
contract was entered into in contemplation of shipment on
a vessel for which arrangements had been made and at an
agreed upon freight rate of $14. The vessel thereafter
refused to take the lumber. Substitute carriage was ex-
tremely difficult to procure and, if procurable, only at a
freight rate of over $33. In those circumstances, the seller

declared the contract ‘‘canceled on account of force majeur
eee?)

Under the reasoning of the prevailing opinion in this
ease, the court should have said that since the contract had
been entered into in the expectation by both parties that
the arranged for vessel would carry the lumber and do so
at the agreed upon rate of $14, the radical change of condi-
tions through no fault of the seller, in fairness and justice,
exonerated the seller from his contract.

Directly to the contrary, however, did Judge Clark write
in that case (emphasis supplied) :

‘Even had there been no ships available, plaintiff
was not under the circumstances of this case excused
from performance. The plaintiff’s [seller’s] letters
indicate clearly that at the time of the making of the
contract * * * it was aware of the fact that boats were
at a premium. * * * There was no startling change in
conditions. * * * Hence the lack of ships in January
1941 was a foreseeable risk which plaintiff willingly
took upon itself; and it cannot under such circum-
stances plead the defense of ‘force majeur’. Com-
panhia De Navegacao Lloyd Brasileiro v. C. G. Blake
Co., supra, 34 F. 2d at p. 619.”

32

In the case last cited, the court refused to exonerate g
seller because of extreme difficulty in procuring shipping
accommodations where it appeared that the parties con.
tracted with knowledge of those conditions. Judge Learned
Hand, writing for himself and Judges Swan and Augustus
Hand, said: ‘‘* * * this was a risk which both parties well
understood, and in the face of which the seller made his
engagement’’. Therefore, the seller was bound to perform
his engagement irrespective of the conditions beyond his
control.

On a parity of reasoning, Judge Clark in this case should
have written that the defendant having contracted with the
plaintiff at a time when (according to the construction of
its ‘‘undertaking’’ to the Maritime Commission which de-
fendant successfully urged upon the courts below), it had
engaged itself to follow directions by the United States
Maritime Commission as to what to carry and what not
to carry—even to the point of giving the Commission
authority to direct the non-fulfillment of an unqualified
contract entered into with the Commission’s express ap-
proval—it, the defendant, ‘‘willingly took upon itself’’ the
risk and consequence of such an obstacle to performanee,
when, and in the face of its commitments, it unqualifiedly
contracted with the plaintiff to carry plaintiff’s 1,000 tons
of copra.

The important circumstance here cannot be an assump-
tion that defendant expected the United States Maritime
Commission to abstain from exercising the contractual
authority which it is said the defendant had granted to the
Commission, or that the defendant did not foresee the
arisal of an occasion for the exercise of that contractual
authority. The controlling consideration is that (according
to the defendant and the courts below) such contractual
authority had been granted. In consequence, the possi-
bility or likelihood of the exercise thereof plainly was
‘‘foreseeable’’ by the defendant. Surely, one who deliber-

33

ately and knowingly grants contractual authority cannot
pe heard to plead that he did not foresee the likelihood or
possibility of its exercise. Why is authority asked and
given if not in anticipation of its exercise—at least so that
it might be exercised?

It will be observed that in the cited case, the fact that
parties contracted unqualifiedly in the face of unusual cir-
cumstances known to both and risks foreseeable by both,
was held by Judge Clark (following the established rule
of construction) to preclude the implication that interfer-
ence with performance by the foreseeable contingencies
would excuse performance. In the case at bar, however,
Judge Clark adopted diametrically contrary reasoning and
construction and, to bring plaintiff into the orbit of a thus -
inverted rule, he imputed to the plaintiff (without an iota
of evidence) knowledge of, and complete familiarity with,
defendant’s contract with the United States Maritime
Commission.

The illogic of tne holding in this case, it seems to peti-
tioner, is indicated by (1) not only its head-on conflict with
the rule of construction heretofore unanimously applied,
(2) not. only by the necessity of charging the plaintiff, as a
matter of law, with as complete and intimate a knowledge
of the defendant’s business and commitments as the defend-
ant itself possessed, but (3) also by the fact that since
defendant certainly must be presumed to have fully
known its own business and its own outstanding commit-
ments, it follows that had defendant intended its engage-
ment with the plaintiff to be purely conditional and subject
to cancellation in the event of a request therefor by the
United States Maritime Commission, it would have said so
very plainly by such a simple statement as ‘‘subject to
cancellation at the request of the United States Maritime
Commission.’”’

It seems to petitioner strange reasoning indeed that fair-
ness and justice should be deemed to require that the court

34

insert a provision which the defendant knowingly failed to
include.

In the next case cited, Allanwilde Transport Co, y,
Vacuum Ou Co., 248 U. S. 377 (1918), there was an abgo.
lute frustration by law since the sailing in that case wa
absolutely prohibited by the lawful denial of clearanc
from New York.

The Claveresk, 264 F. 276 (C. C. A. 2nd Cir., 19%,
Rogers, Hough and Manton, C. J.), affirming 254 F. 1%
(L. Hand, J.), like most of the other cases mentioned in
the opinion, was an instance of a charter party frustrated
by the requisitioning by the British Admiralty of a British
vessel. In that case the charter party was entered into in
1913 by a British corporation as owner and a Pennsylvania
corporation as charterer. It contained the usual ‘break
down’’ and ‘‘restraint of princes’’ clauses. On January
25, 1917, the owner, at its home office in Newcastle, Eng.
land, received notice of requisition of the vessel. Pursuant
to that notice the vessel thereafter went into government
service at a rate of hire greater than specified in the char-
ter party. In an action for damages by the charterer, the
owner ‘‘substantially pleaded the requisition (1) as a
restraint of princes; (2) as a frustration of the commer-
cial adventure between the parties’’. The court found that
the owner ‘‘did not voluntarily—.e. did not seek to—with-
draw the Claveresk from libellant’s service, nor ask nor
induce the government to requisition.”’

In holding, in those circumstances, that the requisition
by the British government of a British vessel from a Brit-
ish owner located in England was a yielding ‘‘to that
restraint of princes’’ which was provided for in the charter
party, the court, in an opinion by Hough, C. J., said:

‘** * * The fundamental essential of a restraint of
rulers is that the restraining act should be govern-
mental. Northern, ete. Co. v. American ete. Co., 1%
Roa

35

* * * No citizen or subject is by lawful private con-
tract either required to or justified * * * in resisting or
evading the compulsion of its government’’.

In Edward Maurer v. Tubeless Tire Co., 285 F. 113 (C.
C. A. 6th Cir., 1922), the contract, by its terms, was ex-
pressly subject to all rules and regulations imposed by the
United States Government.

New York Trust Co. v. Securities Exchange Commission,
131 F. 2d 274 (C. C. A. 2nd Cir., 1942), ed. 318 U. S. 786,
held that where a valid and binding order of the Securities
Exchange Commission dissolved a corporation, such dis-
solution necessarily called for the liquidation of the un-
matured obligations and, therefore, contract provisions for
the payment of premiums in the event of voluntary pre-
payment had no application. That was a plain case of
termination of a contract by law or by lawful act of gov-
ernment having the force and mandate of law.

Similarly, Patch v. Solar Corp., 149 F. 2d 558 (C. C. A.
Tth Cir., 1945), c.d. 326 U. S. 741, was a case of suspension
of a contract by inexorable legal prohibition. In that case
the manufacture of the article which was the subject of
the royalty contract was prohibited by law, and the court
held that the royalty provisions were suspended coter-
minously with, and during the period of, the prohibition
of manufacture. Again, the prohibition was imposed by
a government upon its citizens within its territory, and
the parties had no lawful alternative to obedience of their
sovereign.

While the prevailing opinion in this case disposes of the
same court’s prior decision in Baker Castor Oil Co. v.
Insurance Company of North America, 60 Fed. Sup. 32
(S. D. N. Y., Goddard, J.), affirmed 157 F. 2d 3 (1946), e.d.
329 U. S. 800, as ‘‘not in point’’, it is respectfully sub-
mitted that the Baker Castor Oil Co. case is squarely in
point, because therein the courts held that the compliance
by the government of Brazil, in its operation of a ship-

36

warrant-holding Brazilian vessel, with a directive of th
War Shipping Administration (the successor to the Tegy.
latory functions of the United States Maritime Comnis
sion), legally, was voluntary as an act of choice by the
Brazilian government as owner, and was not an act of
state. What the Brazilian Government did, it was held,
was not in mandated obedience to the United States Gor.
ernment as sovereign and certainly not as sOvereign over
Brazil.

The facts virtually completely parallel those of the case
at bar. Yet, therein the same court with the concurrence
of Clark, J., found no occasion for ascribing to the United
States Government the exercise of ‘‘coercive power” nor
did it find therein a practical necessity to Brazil to do as
bidden by the Shipping Administration. There Judges
Augustus N. Hand, Chase and Clark, speaking through
Judge Chase, in affirming the District Court (Goddard, J,),
said:

“‘The District Court correctly held that there were
no acts by either the Government of Brazil or that of
the United States constituting a sovereign restraint
within the terms of this war risk policy * * *, What
Lloyd Brasileiro did as a private owner and with re-
gard only to its own ships was not the exercise of any
sovereign power. Nor were the acts of the War Ship-
ping Administration and its branches an exercise of
the sovereign power of the United States. Rather,
those acts were the exercise of a right voluntarily con-
ferred upon the War Shipping Administration by the
owners in order to secure the warrants and hull in-
surance. The United States did not purport to deny
all rights to any owner not obeying its rules * * *”
(emphasis supplied).

In the District Court, Goddard, J., said in that case that
“there is no evidence indicating’ that had the vessels
gone to the destination contracted for “*they would have

37

-jneurred any penalty other than forfeiting their right to
the priorities which they gained from the ship warrants
and voiding their insurance’. The election to avoid such
detriments to it is ‘‘voluntary conduet of the owner, how-
ever strong are the motives * * * for so acting”’.

Mawhinney v. Milbrook Woolen Mills, 231 N. Y. 290
(1921), does no more than parallel Moore & Tierney, Inc. v.
Rozford Knitting Co., supra at pages 24-26. The New
York Court of Appeals construed the 1916 National De-
fense Act as making the acceptance of and compliance
with government procurement and purchase orders ‘‘ob-
ligatory’’ and the giving of preference and priority thereto
as mandatory. Therefore, the court held that if, and to
the extent that, such mandated orders actually prevented
compliance with private contracts, there was presented a
case of true frustration by law. The limitations of the
principle are pointed out in the later decision in that case
(234 N. Y. 244) rendered after retrial. The New York
Court of Appeals there said that ‘‘it does not follow that
defendant could ignore plaintiff’s rights entirely. It was
bound to do the best it could for him under the circum-
stances * * *. With all the indulgence conceded to the
manufacturer by this Court in its former decision, no
intimation was given that it might unnecessarily ignore
the claims of its private customers prior to November 24,
1917’? when defendant’s plant was completely requisi-
tioned by the government.

In Nitro Powder Co. v. Agency of Canadian Car &
Foundry Co., 233 N. Y. 294 (1922), ‘‘the contract’’, said
the court, ‘‘is in terms conditional on governmental inac-
tion and subject to the condition that if the government
should requisition the goods and render it impossible that
the seller should perform its contract, performance should
be excused’. There was such a governmental requisition-
ing under express statutory provision. ‘‘Defendant had
no control over the situation’’, said the court; ‘‘defendant
merely acquiesced in action which it had no power to stop

38

***. It cannot be said that the taking by the governmey}
was induced or procured by the defendant. Defendant was
not an unwilling party, but the taking was not dependent
upon its consent. No doubt it was complaisant if no
eager. That its attitude had any effect upon the result
is purely speculative * * *. The case is destitute of the
suggestion that after the contract in suit was made defend.
ant went to the government and brought the material to its
attention, or induced it to action where inaction was im.
minent’’. Plainly, that is no authority for exoneration
when non-performance is a purely voluntary preference
resulting from the exercise of freedom of choice.

The decision by the trial court in L. N. Jackson & Co. y,
Seas Shipping Co., Inc., 185 Mise. 94, in so far as it deals
with the question of frustration, held only that the Seas
Shipping Co., Inc., a New York Corporation (which in that
case mistakenly was sued as the contracting party), was
bound to obedience of an order issued by the United States
Maritime Commission. But the contract herein in fact, as
that court held, was not by or with the Seas Shipping Co,
Inc.; the contract was by and with the Royal Norwegian
Government who itself was a sovereign, on a par with and
not in any way subject or subordinate to, the sovereign
power of the United States. Not a word in the opinion, or
in the findings or conclusions, of the New York Supreme
Court relates to the exculpability of the Royal Norwegian
Government. It is apparent from the record that the New
York Court of Appeals affirmed the judgment in favor of
the Seas Shipping Co., Inc. solely on the ground that hav-
ing contracted in behalf of the Royal Norwegian Gover-
ment as a disclosed principal, the Seas Shipping Co., Ine.
had no contractual obligation and, therefore, could not be
liable for any breach of contract. This appears from the
fact that the court refused to certify that it had passed
on any federal question (R. 50, 61-2, 81-4, 187, 231-2; Plf’s
Exs. 4, 5, admitted at R. 231-2 and printed at R. 2444
246-250; see also 296 N. Y. 529).

39

In the last case mentioned in the prevailing opinion,
Nash v. Southern Pacific Co., 260 F. 280 (D. C. N. D., Cal.
1919), petitioner can find nothing in point.

Summary of the Cases Cited in the Prevailing Opinion

The foregoing digest and discussion of each of the cases
referred to in the opinion of Clark, J., make clear, it seems

to petitioner, that the decision herein is contrary to every

fore, if it were practicable, and legally and socially de-

ease cited on the subject.

1. None of the referred to decisions suggests that where
legal prohibition of performance of a contract is absent,
the test of the excusability of non-performance is whether,
in the light of the circumstances known to the parties at
the time of contracting and as altered by subsequent
events, the promisor, ‘‘in fairness and justice’’, should be
held to his promise.

Indeed, such a subjective nebulous concept as a prac-
ticable basis for the determination of rights and liabilities
under business contracts, was considered in The Isle of
Mull, supra pages 22-23, 278 F. 131, ¢.d. 257 U. S. 662, only
to be emphatically rejected.

That idea was rejected also by Viscount Haldane in
F, A. Tamplin Co. v. Anglo-Mexican Co., supra at page
27, when he said ‘‘no court has an absolving power’’
and by Lord Wright in the more recent case of Joseph
Constantin Steamship Line, Ltd. v. Imperial Smelting
Corp., supra at pages 28-30, when he said that courts do
not ‘‘exercise a dispensing power’’.

Surely, a claim of novelty in circumstances cannot justify
a reversal in that regard, for whatever may be said about
the impact of new conditions upon the law, certainly the
striving for, and the concept of, fairness and justice are
ancient and perennial; old, too, is the problem of non-
performance of contracts when the unusual occurs. There-

40

sirable, to make the determination of the liability in suc)
cases dependent upon the court’s view of what was fair
and just in the particular case, that doctrine would haye
been enunciated long, long ago.

The unacceptability of such an absence of objective
standard or workable formula seems patent. ‘‘ Fairness
and justice’’, however idyllic, obviously furnish no rule,
no guide. Judges, no differently from other men, on the
same facts and circumstances, come to opposing conclusions
as to what is fair and just. Much depends upon which, of
what may appear equally logical major premises, is ac.
cepted or selected as the vantage point. That may he
conditioned by, and varies with, the judges’ personality
and experience in life. Some are exacting; others, lenient
or indulgent. If the personal nature and outlook of the
judge were to be determinative, how would businessmen
know when they have firm contracts on which they can rely
for either performance or full indemnification in the event
of non-performance?

Heretofore, the settled rule has been that every party
is held to his valid contract and is required to perform
(except when otherwise stipulated or implied) unless
performance is probibited by law or rendered impossible
by an act of God. Those rules furnish practicable and ob-
jective tests capable of uniform application. It is sub-
mitted that there have been no ‘‘new circumstances’”’ which
warrant or call for a judicial alteration of that long-
enforced basic principle of contract law.

2. None of the referred to cases countenances ‘‘govert-
mental coercion’’, as distinguished from true vis major,
as sufficient to excuse performance of a contract which
a party lawfully and in fact could perform.

Indeed, as late as 1946, the United States Circuit Court
of Appeals for the Second Circuit unanimously (with the
participation of Clark, J.), and the apparent concurrence
of this Court, refused to hold compliance with a directive

41

of the War Shipping Administration under the Ship War-
rants Act as a ‘‘restraint of princes’’ (Baker Castor Oil
Co. v. Insurance Co., supra at pp. 35-37).

The problem of interference with the performance of
private contracts by governmental action is not one which
arose only recently. The techniques used during the re-
cent war were fully developed during the First World
War. The fact that there was a broader use of them does
not change the underlying principles.

It is made abundantly clear in all of the cases that
only where there is an ‘‘act of state’’ which is binding
and mandatory on the promisor and which allows the
promisor no alternative to non-performance of his pri-
vate contract, is there a legal absolution from the private
eontract. In other words, there must be true frustration
by law—by the law itself or a lawful act of government
in its sovereign capacity which has the force of law. Vol-
untary election, in the legal sense—whether out of patri-
otism or the baser motive of more profit—to perform a
contract with the sovereign, expressly was said to furnish
no excuse in Moore & Tierney, Inc. v. Roxford Knitting
Co., supra at pages 24-26, 265 F. 177, ¢.d. 253 U. S. 498.
Such a voluntary preference to serve one’s government,
at another’s expense, does not present a case of preven-
tion ‘by act of God or vis major”’ and ‘‘is the result of
** * voluntary * * * acts, not that of the government”’
(id).

If the exigencies of total war had been thought to
require setting aside and nullification of all contracts, or
the elimination of private claims under contracts volun-
tarily ignored by parties in their fervor to render what
appeared to them a service more helpful to the war effort,
Congress, as the law-making branch of the government,
would have so legislated. Is it gainsayable that such
absolution is a matter of law making, not judicial con-
struction of contracts?

42

3. Except where there is true frustration by law ¢qp.
tingencies beyond a party’s control excuse performance,
in the absence of a provision therefor, only when a pn.
vision for such exoneration is implicit in the nature o
provisions of the contract. That implied condition is the
sole permissible basis of exoneration is virtually the
unanimous holding of all the authorities.

Therefore, under the cases cited in the prevailing opin.
ion the result reached therein is justifiable only if, as
matter of contract construction, the defendant’s contract
with the plaintiff may and should be read as embodying
(1) a reference to the fact that the defendant had con
tracted with the United States Maritime Commission to
place all its vessels, or the ‘‘Tropic Star’’ in particular,
under the complete supervision and control of the United
States Maritime Commission, (2) a statement that, under
that contract, the Commission is authorized to request
cancellation of the engagement to the plaintiff and in that
event defendant would be obliged to and would caneel,

and (3) accordingly, the engagement was subject to can-
cellation if and when requested by the United States Mari-
time Commission.

Is it reasonable to say that is what the parties meant
by their words? Is that what a reader of the contract
on November 7, 1941 would have understood it to say!
All the decisions, other than the 2 to 2 prevailing decision
in this case, say no.

Under the law as understood and applied heretofore,
because the contract, as written, was dependent for per.
formance upon the continued availability of the ‘‘Tropic
Star’’, it was impliedly conditioned upon the ‘‘Tropie
Star’’ not ceasing to be available through an act of God or
action by the enemy or other true vis major or unavoidable
accident. That condition was inherent in the nature of
the engagement and, therefore, under well-settled lav,
implicit in the contract.

43

But under the same well-settled law, interference with
performance by conditions which the defendant itself vol-
untarily brought on or by the obligations of a conflicting
eontract in which the defendant voluntarily entered, were
not implicit in—but directly in conflict with—the engage-
ment to which defendant signed its name and on which
the plaintiff, in good faith, relied. This contract cannot
be read differently without reversing existing law and
setting up as the law the converse of what heretofore has
prevailed.

It should not be overlooked that, in characteristic fash-
ion, the contract was written by the defendant; that the
writing of, and entry into, such contracts was part of
defendant’s regular course of business; that this was a
business engagement of defendant’s own election; that
the plaintiff, no differently from others, had the right to
assume that the defendant was acting with full knowl-
edge and appraisal of its outstanding commitments.
Surely, plaintiff had the right to assume that the defend-
ant knew what it was at, and plaintiff had the right to
take defendant at its word.

A business engagement should not be presumed to have
been intended as an illusory or misleading promise. That
the plaintiff placed in the contract full reliance is estab-
lished by the stipulated proof that the plaintiff did not
contract for the copra until the defendant, by a firm con-
tract, had engaged itself to transport it (R. 241).

If the defendant intended that its promise should not be
depended upon and was to be understood by plaintiff as
purely contingent, it easily could have, and, as a matter of
fair-dealing, should have, said so (Carnegie Steel Co. v.
U. §., supra, 240 U. S. 156, at p. 165). It could have done
80 by a simple clause. Plaintiff then would have had the
choice of whether or not to contract on that basis.

44

Since the above facts and considerations are typical,
the far reaching consequences of the decision herein seen
apparent.

The authorities cited in the prevailing opinion &
not countenance “governmental coercion”— as dis
tinguished from frustration by law—as releasing 1
promisor from liability for non-performance.

This, it is submitted, is evident from the digest of the
cases cited in the prevailing opinion, and is highlighted by
Baker Castor Oil Co. v. Insurance Co. of North Ameria
(supra at pp. 35-37).

In every case where a party was exonerated because of
prevention by governmental requisition or by priority man
dated for government contracts, it was emphasized that the
controlling consideration was the absence of legal alterna-
tive to compliance with the governmental mandate.

In every one of the cases, the governmental action was
by the government in its sovereign capacity and the
promisor owed allegiance to, and was subject to the
jurisdiction of, the government; compliance was absolutely
mandatory.

Other authoritative decisions—decisions not men
tioned in the prevailing opinion—rule out “gover
mental coercivn” as an excuse.

The prevailing opinion is significant for its omission of
any mention of Northern Pacific Railway Company \.
American Trading Co., 195 U. S. 439. In that case, the
‘‘governmental coercion’? was not a matter of hypothesis

45

in the absence of evidence. It was established beyond dis-

ute. It was real. It was imperative. It was irresistible
except by litigation which would have meant costly delay.
But, in point of law, the action of the Collector of the Port
was unlawful. Compliance therewith, therefore, was held
® no excuse when it resulted in failure to perform a corttract.

The Collector’s erroneous action, this Court said ‘‘should
not be at the expense of the shippers who had obtained this
contract for transportation while all parties actwally knew
the difficulties that might concern the exportation’’.

Although the act of the governmental official made clear-
ance of the vessel with the plaintiff’s goods thereon impos-
sible, that, it was held, ‘“‘did not render unlawful the con-
tract to transport’’ and, since the Collector’s act was con-
trary to the law ‘‘it was not an act of the state’’; therefore,
whatever its practical effect and consequence, it was ‘‘not
sufficient as an excuse for the non-performance of the con-
tract’? with the plaintiff.

From the fact that the prevailing opinion below does not
mention that decision, it is to be inferred that the author
of that opinion deemed the decision outmoded. Yet, what
has happened since 1904 to impair the substance of that de-
cision? The expansion of governmental controls and the
consequent multiplication of occasions for directives or
refusals by governmental officials? That, it seems to peti-
tioner, sharpens, rather than dulls, the necessity of distin-
guishing authoritative and truly mandatory acts of state
from those which are merely advisory or precatory or
unauthorized. Surely, the same legal consequences do not
attach to utterances in the latter category as to acts which
truly are binding on parties. It cannot be that our battling
authoritarianism abroad has boomeranged to destroy for
us here the significance of our boast that ours is a ‘‘gov-
ernment of law and not men’’.

The prevailing opinion below is significant also for its
omission of any reference to Swayne & Hoyt v. Everett, 255

46

F. 71 (C. C. A. 9th C. 1919), where, again, ‘‘ governmental
eoercion’’, although not so labelled, was held no excuse for
non-performance of a contract. In that case, a California
corporation operating a vessel between Shanghai ani
United States ports, whose British Shanghai agent refused
to accept a shipment from Everett, a citizen of the Unite
States, because of orders against him by the British Gov.
ernment for his dealings with Germany which at the time
was at war with England, was held liable to Everett. The
orders of the British Government to the carrier’s agent, a
British subject, were held no defense because the British
Government had no governmental jurisdiction over the
American carrier.

IV.

No “new circumstances” require or justify the dis
regard or reversal of the well-settled principles of law
in the field of contract jurisprudence which are in
volved here.

To what already has been said above, petitioner deems it
necessary to add only that this case presented no new prob
lem nor a new phase of an old problem.

The number and variety of the cases mentioned in the
prevailing opinion and which are digested above—but a
fraction of the reported cases in point—make clear the
absence of novelty.

The novelty here is only the opinion of which review is
sought—an opinion which, it is earnestly and sincerely sub-
mitted, departs from established law as fully as it ignores
the facts proved by the evidence and postulates as facts
conclusions not drawn from, and contrary to, the record
in the case.

47

V.

The factual hypothesis of the prevailing opinion—
that the defendant was “coerced” by the government
of the United States which exercised and exerted an
“overriding power’—are without the slightest basis
in the record and directly contrary to the testimony
of the defendant’s witnesses.

The Court is respectfully referred to the testimony re-
produced in the Appendix (at pp. 48-54, infra).

CONCLUSION

It is respectfully submitted that the petition herein
should be granted and writ of certiorari should issue.

Respectfully submitted,

Copa Mintz,
Attorney for Petitioner.

February 1, 1950.

48

APPENDIX

Testimony of Defendant’s Witnesses George Otto
Mejlaender and Per A. Lorentzen

[At R. 68-69]:

‘*Grorce Orro MEJLAENDER, called as a witness on behalf
of the defendant, being first duly sworn, testified as follows:

Direct Examination by Mr. Murphy:

Q. Mr. Mejlaender, what is your business? A. Ship
brokers.

Q. In 1941 were you connected with the Norwegian
Shipping & Trade Mission? A. Yes, sir.

Q. In what capacity? A. As representative in
Washington of the Norwegian Shipping & Trade Mis
sion.

* * * *

Q. For how long were you connected with the Nor.

traship? A. From June 1941 until November 1, 194.

Q. Did your duties then take you into contact with
the United States Maritime Commission? A. Yes, sit.

Q. About how often during a week would you say
you were in consultation with various persons con
nected with the U. S. Maritime Commission? A. Every
hour of the day.

Q. Will you give us all the details, as best you recall,
of the business that you did on behalf of Nortraship
with the United States Maritime Commission from
June 1941 until the end of 1941? A. Why, tt com
sisted largely in consulting with the Maritime Com-
mission as to the utilization of ships, that is to sa,
where they were to go and what they were to load.

49
Appendix

The Court: Did you follow their instructions in
reference to where the ships were to go and what
they were to carry?

The Witness: Yes, sir.

[At R. 74-77]:

Q. Your main job was to offer the services of the
Norwegian merchant marine to the United States? Is
that the sum and substance of what you did? A. My
job was to determine together with the United States
where the ships were going to be used and to the best
effort, and where they could do their maximum service
in the war.

Q. Does the answer to my last question also extend
over to January 2, 1942, with respect to following the
orders of the Maritime Commission. A. I don’t quite
understand the question, Mr. Murphy.

Q. The last question I asked you, about Nortraship
obeying orders of the Maritime Commission from
June to the end of December, 1941, did that also extend
over to January 2, 1942? A. Yes, sir.

* . o aa
The Witness: I think I can say that the coopera-
tion between Nortraship and the United States after

Pearl Harbor was, of course, still more close than at

any other time prior to December 7th.

Cross-examination by Mr. Mintz:

Q. Mr. Mejlaender, was it a policy of cooperation
or of taking orders which your Government was fol-
lowing? A. The Norwegian Government had exactly
the same interests as the United States Government,

50

Appendix

that is to say, to win this war. It was a question tha
was never raised. We were just as interested in oy
ships being utilized to the fullest extent in the war
effort as the United States was because we had mor
at stake than anybody else.

Q. Were there occasions when there were differ.
ences of opinion between the officials with whom yu
were dealing in behalf of the United States Goven.
ment and your own Mission? A. Yes, sir.

Q. As to what would be the best thing to do under
certain circumstances? A. Yes, sir.

Q. What happened in cases where there were thos
differences of opinion? A. They were abways compro.
mised. It was a question of give and take and the
were compromised.

Q. So it was not a situation where your Gover.
ment was taking orders from the United States Gov.
ernment? <A. I don’t think you can say that tt wasa
case where the Norwegian Government took orders.
We are a democracy both in this country and in Nor.
way. It wasn’t a question of taking orders. It wasa
question of compromising any differences and arrit-
ing at a solution that was to the best purposes of th
war effort.

_ Q. Of course, during that period you maintained the
position that the Norwegian Government was a sov-
ereign power? A. I do, sir.

Q. On a par with the United States as a sovereign

power? A. I do, sir.

(Witness excused.)

51
Appendix

‘‘Pgr A. LoRENTZEN, called as a witness on behalf of the
defendant, being first duly sworn, testified as follows:

Direct Examination by Mr. Murphy:

Q. In 1941 were you connected with the Nortra-
ship? A. Yes, sir.

Q. In what capacity? A. I was manager of the
chartering department.

[At R. 109-112]:

Q. Mr. Lorentzen, prior to the execution of that
undertaking on October 4, 1941, did the Norwegian
Shipping & Trade Mission accept directions from the
Maritime Commission as to what routes your Nor-
wegian ships would follow and what cargo they would
earry? A. I will say we followed the requests.

Q. And you heard Mr. Mejlaender testify this morn-
ing, did you? A. Yes.

Q. Do you subscribe, from what you know of your
dealings personally with the Maritime Commission,
to what he testified this morning? A. Yes, sir.

Q. By the way, in your dealings with the Maritime
Commission were there times when you differed with
them with respect to what cargo a ship ought to carry
and what type of cargo was best fitted for that ship?
A. Yes. -

Q. When you differed with them, you then discussed
it with them and explained what your knowledge of
the ship was and what was best for the safety of the
ship for it to carry? <A. Yes.

The Court: And did you follow their orders?

The Witness: Well, your Honor, I am—I don’t
think it ever came to a question of ordering. It was
a question of cooperation.

52
Appendix

The Court: At all times you complied with their-
The Witness: Requests.
The Court: Requests.

Cross Examination by Mr. Mintz:

Q. You regarded them as requests and not a
orders, is that not so? A. Well, as I repeat, I don
think it came to becoming an order, because it was
never necessary to give an order.

Q. In other words, you from time to time had dis
cussions and came to agreements and then you com
plied with whatever you agreed to comply with, is
that correct? A. That is right.

Q. You did have the right to refuse to comply? A
If there was—if we thought we had reason to do w.

Q. In other words, you did not surrender the sor.
ereign rights of the Norwegian Government with r
spect to these vessels, is that so?

The Court: Do you understand that question!
The Witness: Yes, I understand.

Q. What is the answer? A. I think I understand it
My answer is, yes, we did not submit.

The Court: You what?

The Witness: We did not submit.

The Court: Have you any objection: to that ques
tion?

Mr. Murphy: He is talking about before the exe
eution of this undertaking, your Honor, I take it
I have no objection, if it is before October 4th.

The Court: There is no limitation put on th
question, as I heard it.

Mr. Murphy: Then I do object to anything afte
October 4th, your Honor.

53
Appendix

The Court: That objection is sustained.

Mr. Mintz: I respectfully except.

Q. In October—

The Court: The answer is stricken out, if there
was an answer.

Q. Let me put it this way: Were you dealing with
the United States Maritime Commission as a repre-
sentative of another sovereign power? A. Yes, sir.

The Court: At what time? I think you should
indicate it.
Q. Was that so in October, November and December
of 19417 A. Yes.
Q. And in January 1942? A. Yes.’’

[At R. 120-121]:

**Q. And between October 1941 and January 1942,
if you decided you want to take the Tropic Star and
send her elsewhere than the United States, you were
at liberty so to do, weren’t you? A. That I couldn’t
answer.

Q. Well, who was in control of the vessel? A. The
Norwegian Shipping & Trade Mission.

Q. Who employed the captain? A. The Norwegian
Shipping & Trade Mission.

Q. Who employed the crew? A. The Norwegian
Shipping & Trade Mission.

Q. Under whose orders did the captain operate? A.
Under the orders of Norwegian Shipping & Trade
Mission.

Q. Had he received any orders from you to proceed
elsewhere than to the United States— A. No, sir.

——Q.-No, I say, had he received orders, he would have
been bound to obey your orders, would he not? A. Yes.

54
Appendix

Q. The captain? The captain was acting under or.
ders of the Norwegian Shipping & Trade Mission!
A. To proceed when he could.

Q. If he had received orders from you not to pn.
ceed, he would have been bound to obey your orders,
isn’t that so? A. Yes.

Q. You expect him to take your orders, do you not!
A. Yes.’’

[At R. 123]:

**Q. You say any request would have been followed
Suppose you regarded a certain request as being w-
reasonable? A. I would discuss it.

Q. So it wasn’t a case of taking orders? A. 4s/
said before, t never came to the question of taking
orders to my knowledge.”’

No witness testified in contradiction of the above.

MAR 2 1950

Ocroser TeRM—1949

No. 576

y*
a4

L. N. Jacxson & Co., Inc.,

Petitioner,
against

Tue Roya Norwecian GOVERNMENT,

Respondent.

wp
v

PETITIONER’S REPLY MEMORANDUM

Petitioner begs leave to respectfully submit the following
several brief observations in reply to the respondent’s
brief.

(1) In its argument as to the effect and scope of re-
spondent’s ‘‘undertaking’’ to the United States Maritime
Commission, and the consequences of failure to heed a
request or directive thereunder, respondent’s brief over-
looks not only (a) the testimony of respondent’s own rep-
resentatives (quoted in Petitioner’s Br., Appendix, pp. 48-
54) and (b) the sovereignty of the respondent, but also that
(c) the ‘‘undertaking’’, by its terms, was limited to the
scheduled vessels, (d) the applicability of the ‘‘undertak-
ing’ to any vessel was terminable by the surrender of the
warrant therefor, and (e) the agreement (R. 263) ‘‘to give
priority to the transportation of materials specified by the
Commission, to the extent of the full cargo carrying capac-

2

ity of any vessel,’’ was qualified by the following language
immediately following that quoted in respondent’s brief:
‘‘the terms and/or condition of such transportation to be
fair and reasonable. The Commission will equitably ap.
portion, insofar as is practicable, requests for such trans.
portation between operators of suitable and available
ships’’ (R. 263). Respondent’s brief ignores those quali-
fications in the abbreviated quotations on pages 3, If
and 18.

(2) At several points of its brief, respondent cites as
established facts the wholly uncorroborated generalized
utterances of a witness, which, if true, could have been
properly documented. That applies to the footnote on
page 4, the quotation from the Record on page 9, and the
footnote on page 13.

(3) Respondent’s discussion of, and quotation from, the
opinion and decision of Mr. Justice Irving L. Levey of the
New York State Supreme Court overlook the fact that that ©
Justice was discussing the obligations of the defendant in
that suit, the Seas Shipping Co., Inc., who was a resi-
dent national of the United States. Mr. Justice Levey was
not called upon to consider, and offered no views on, the
obligations and liabilities of the sovereign Royal Nor-
wegian Government (who was not before him as a party
or otherwise).

(4) Respondent’s brief appears to be a complete rejec-
tion of the opinion on and by which the Court of Appeals
reversed the judgment of the District Court. Surely, Judge
Clark would not have written the lengthy opinion reported
in 177 F. 2d 694, and Judge Swan would not have con-
curred in it, if they deemed this a case where the law
intervened to enjoin performance and rendered it unlavw-
ful. And if that were the situation, Judge Learned Hand
would not have written as he did.

3

(5) Respondent’s argument of res judicata was rejected
by the District Court and by Judge Learned Hand and
cannot be claimed to have been sustained by Judges Clark
and Swan. The suggestion that Mr. Justice Levey’s deter-
mination in the New York court that respondent’s disclosed
agent, the Seas Shipping Co., Inc., was not liable to peti-
tioner for breach of the contract of its principal The Royal
Norwegian Government, is available to the latter as res
judicata that it is not liable, is contrary to the basic prin-
ciples of estoppel by judgment and is opposed by a host
of cases of which several examples are: U.S. v. California
Bridge & Construction Co., 245 U. S. 337; Bigelow v. Old
Dominion Copper Co., 225 U. S. 111; United Shoe Machin-
ery v. U. S., 258 U. S. 451; U. S. v. Pink, 315 U. S. 203,
216-218; Hansberry v. Lee, 311 U. 8S. 32; Anderson v. Ab-
bott, 321 U. S. 349, 354-5; Drummond v. U. S., 324 U. S.
316, 317-318; Land v. Dollar, 330 U. S. 731, 736-7; U. S. v.
Kales, 314 U. 8. 186, 197-200; U. S. v. Nunnally Investment
Co., 316 U. S. 258; Commissioner of Internal Revenue v.
Sunnen, 333 U. S. 591, 597-602; Fish v. Vanderlip, 218
N. Y. 229.

Respectfully submitted, |

CopaL Mintz,
Attorney for Petitioner.

February 28, 1950.

---

Source: Frix Law Library, https://www.frixlaw.com/law-library/documents/brief%3Amicro_IA40386416_2550%3A1. Public record. Not legal advice.