Compania Ithaca De Vapores, S. A. v. United States

delivered the opinion of the court:

Plaintiff’s amended petition is based upon an alleged settlement with the Maritime Commission of its claim for damage to its vessel while it was under time charter to the defendant. The question now presented to us is whether or not defendant’s obligation to respond in damages, which is of course maritime in nature, has been supplanted by a contract to pay a certain sum, which gives this court jurisdiction.

Before redelivery of plaintiff’s vessel, the SS. Moldova, it was surveyed, and redelivery specifications embodying 272 items were prepared and agreed upon by representatives of the plaintiff and the War Shipping Administration, with the exception of plaintiff’s claim for damage to its vessel as the result of the carriage of bauxite. All of plaintiff’s claims have been paid except this one. For this one it now sues for $60,400.91. While plaintiff’s petition has not been so amended, we suppose we should treat it as having been amended to sue for $19,270, the amount of the settlement agreed to by it, and which it alleges the Maritime Commission agreed to.

The parties negotiated for the settlement of plaintiff’s claim for bauxite damage, and finally reached an agreement with the Chief, Bureau of Operations. Accordingly, this official presented to the Maritime Commission a memorandum dated September 15, 1947, stating that the parties had reached an agreement as to the items clearly chargeable to the bauxite damage, and recommending the payment of 50 percent of the total amount of the items agreed upon, in full settlement of plaintiff’s claim. This 50 percent amounted to $19,270. The Assistant General Counsel endorsed the memorandum “no legal objection.”

After discussion of the memorandum, it was referred by the Commission to the General Counsel for review and report. He suggested that the memorandum be rewritten to show that the date of defendant’s obligation for this damage arose on the date of the contract, rather than on the date of the delivery. As rewritten, it was again presented to the Maritime Commission.

*862The minutes of the Commission, dated December 8, 1947, recited:

After discussion, by the unanimous “yea” vote of the members of the Commission present, the recommendations contained in the foregoing memorandum were approved subject to clearance by the General Oou/nsel, and the proper officers of the G'onvmission were authorized and directed to take any and all actions necessary and proper to carry the action of the Commission as above set forth fully into effect. [Italics ours.]

On the following day, December 9,1947, the Secretary of the Commission addressed a memorandum to the General Counsel reading as follows:

At a meeting on December 8, 1947, the Commission approved the attached memorandum dated September 15, 1947, from the Chief, Bureau of Operations, subject to clearance by you.

Kindly furnish me with your clearance as soon as possible.

Plaintiff’s counsel was advised of the action taken by the Commission by someone in the office of the Secretary of the Commission, on the occasion of his visit to the Secretary’s office on December 8,1947, to ascertain the action taken.

The plaintiff claims that this action of the Commission was an approval by it of the agreement entered into between plaintiff and the Chief, Bureau of Operations, and constituted a novation, the substitution of a contract to pay a definite amount for and in lieu of its original claim for damages, upon which contract plaintiff has the right to sue in this court.

We do not think this position can be sustained.

The Commission’s approval of the settlement was not unequivocal. It was approved, “subject to clearance by the General Counsel,” — whatever that may mean. Before the General Counsel had cleared it, Commissioner Raymond S. McKeough, who was not present when the Commission met on December 8, 1947, addressed a memorandum to the General Counsel advising him that he was asking the Commission to reconsider its action. At the next meeting of the Commission the matter was again discussed, but was “laid over” without action. The memorandum was later presented *863to the Commission at its meetings on January 9, January 13, January 20, February 4, February 24, and March 2,1948, and at each meeting was “laid over.” Finally, on March 5, it was again presented to the Commission, accompanied by a memorandum from the General Counsel recommending that plaintiff’s claim be disallowed. This recommendation was approved by the Commission, and the proposed settlement was disapproved.

We are not sure just what the Commission meant by its approval of the agreement by the plaintiff and the Chief of the Bureau of Operations, “subject to clearance by the General Counsel”; but, whatever the Commission may have meant by this, it is clear that no final action had been taken approving the settlement and, therefore, the Commission has never promised to pay the amount agreed upon. Since there was no promise to pay, plaintiff’s only right of action is on its original claim; there was no promise upon which it can sue.

If we assume, as plaintiff contends, that the phrase, “subject to clearance by the General Counsel,” means only, subject to his putting the agreement into formal legal terminology, still, there was no promise to pay until this had been done. Even if the phrase meant what plaintiff contends, no promise to pay would have arisen until after counsel had prepared the necessary documents setting forth the agreement and a promise to pay, in consideration of the release by plaintiff of its claim against the defendant, or whatever else counsel may have thought necessary and proper to include in the documents. As we have seen, this was never done.

The most that plaintiff can make out of the action of the Commission on December 8, 1947, was an agreement on the amount of the liability and of the amount payable in satisfaction thereof; but the terms and conditions on which payment would be made had not been specified. Therefore, plaintiff had no new promise upon which it can sue, and can avail itself of the purported agreement only in an action upon its original claim for damage to its vessel while it was under charter to defendant.

*864This court has no jurisdiction of such an action, exclusive jurisdiction having been vested in the district courts under the Suits in Admiralty Act (41 Stat. 525; 46 U. S. C. sec. 742).

The foregoing is supported by the principle of M. & J. Tracy, Inc. v. United States, 125 C. Cls. 70, cert. den. 346 U. S. 854; Sinclair Refining Co. v. United States, 129 C. Cls. 474; Isthmian S. S. Co. v. United States, 131 C. Cls. 472; Fox v. Patton, 22 Fed. 746; and the case upon which plaintiff relies, Adams v. United States, 101 F. Supp. 956, affirmed (1st Circuit, 1953) 201 F. 2d 150. See also United States v. Massey, 5 F. 2d 1013.

It results that plaintiff’s petition must be dismissed.

It is so ordered.

dissenting.

I see nothing in this case except a refusal by the Maritime Commission to do what it had contracted to do, because it changed its mind after it had made the contract. Private persons and private enterprises do not have the privilege of changing their legal obligations, by changing their minds. It is apparent that clearing by the General Counsel was nothing but a formal procedural step, and there is no indication whatever that the General Counsel found anything wrong with the contract. The member of the Commission who was absent when the Commission accepted the plaintiff’s offer finally convinced the Commission that it should repudiate its contract, and the General Counsel had nothing to do with that action. I think what the Commission did was a plain breach of contract for which there was no moral nor legal justification. The court is aware, of course, that the relegation of the plaintiff’s claim to its status as a maritime contract is a complete denial of relief to the plaintiff, since the statute of limitations has run on the maritime contract claim.

*865FINDINGS OF FACT

The court, having considered the evidence, the report of Commissioner Marion T. Bennett, and the briefs and argument of counsel, makes the following findings of fact:

1. The 88. Moldova, owned by plaintiff, Compania Ithaca de Vapores, S. A., a Panamanian corporation, was chartered under wapshiptime (Forflag) charter to defendant, through the War Shipping Administration, on April 3, 1942, at a monthly rate of hire of $30,450. The vessel was employed by the defendant in the bauxite trade.

2. Prior to redelivery to plaintiff on February 28,1946, the 88. Moldova was surveyed and redelivery specifications embodying 272 items were prepared and agreed upon by representatives of the plaintiff and the War Shipping Administration. These items covered claims for damage as a result of the carriage of bauxite, collision and heavy-weather damage, removal of certain defense installations and restoration. All of these claims have been settled between the parties except those relating to bauxite damage for which plaintiff claims $60,400.91 in this suit.

3. In it amended petition, filed July 1, 1954, plaintiff alleges that its representatives entered into a compromise agreement with defendant for settlement of the bauxite claims but that after expiration of the time within which plaintiff might have commenced suit against the United States the Maritime Commission withdrew its administrative approval of the compromise and refused to pay plaintiff thereunder. In its opinion of October 5, 1954 (129 C. Cls. 745), on defendant’s motion for summary judgment, this court authorized amendment of the plaintiff’s petition and stated that if plaintiff is able to establish a binding agreement for the settlement of its claim, finally approved by the Commission, the court would have jurisdiction of an action brought on that agreement. The court directed that the “cause will proceed upon the cause of action stated.” There has been no further amendment of the petition.

4. After disallowance of the bauxite damage claim plaintiff’s attorneys conferred on numerous occasions with representatives of the War Shipping Administration and Mari*866time Commission and submitted a brief in support of plaintiff’s position. The charter, agency and traffic counsel of the Maritime Commission indicated defendant would make a settlement on a basis of 40 percent of the claim but this was rejected by plaintiff’s attorneys.

5. On December 19, 1946, the charter, agency and traffic counsel of the Commission in an office memorandum to the head of the Division of Redelivery of Chartered Vessels, stated that it was his opinion that plaintiff’s position had substantial merit although he believed defendant’s position would prevail in the event of litigation. The memorandum indicated a further belief that a settlement on the basis of 50 percent of the cost of repairs would be in the Government’s interest. This sum would be $19,270. The counsel indicated such a settlement would be without legal objection.

6. On August 5, 1947, the chief of the Bureau of Operations, Maritime Commission, presented to the Commission a memorandum dated June 27, 1947, entitled “SSs OON-staNtiNOS h, moldova and eueeka — Authorization to Settle Outstanding Claims for Repairs, Removals and Restoration on Redelivery from Time Charter.” The memorandum was sent back with the direction that it be resubmitted in accordance with the then current appropriation act.

7. At the meeting of the Maritime Commission on October 27, 1947, the chief of the Bureau of Operations presented to the Commission a memorandum dated September 15,1947, which had the same title as the one referred to in the finding above. This memorandum reviewed the nature of the use of the Moldova, the claims of damages, and reported that the chief of the Redelivery of Chartered Vessels Branch had conferred with the owner’s representatives on the claims submitted and had reached agreement as to which items were clearly chargeable to the excessive usage due to bauxite and that the owner’s agents had agreed to accept such figures. The memorandum recommended that the Commission find that certain charter redelivery obligations were then outstanding and unpaid and that the settlement on the basis of payment by the defendant of 50 percent of the amount of the agreed claim would be reasonable and proper. It was *867further recommended that the Commission authorize the chief of the Redelivery of Chartered Vessels Branch, Operating Contracts Division, to enter into agreements with the plaintiff by which the defendant would be released from all claims on the SS. Moldova in consideration of payment by the defendant of the amount of $40,436.07, of which amount $19,270 constituted the 50 percent proposed settlement of the bauxite damage claim. The memorandum bore at the bottom thereof the following endorsement:

No Legal Objection.

(Signed) Francis B. Goertner,

Assistant General Counsel.

By: Metz

After discussion the memo was referred to the general counsel for review and report to the Commission.

8. The general counsel on November 4, 1947, referring to the memorandum of September 15,1947, suggested that the chief of the Bureau of Operations rewrite it in accordance with the general counsel’s determination that the date of the contract rather than the date of redelivery should govern in determining the date the obligation arose. This had been done on another vessel and the suggestion would have made the practice uniform. The general counsel suggested that the rewritten memorandum be submitted to the Commission.

9. The minutes of the Maritime Commission of December 8,1947, contain the following statement:

Pursuant to action of the Commission at the special meeting on October 27, 1947 (1st Session), there was presented the following memorandum dated September 15, 1947, from the Chief, Bureau of Operations, as revised in accordance with memorandum from the General Counsel to the Chief, Bureau of Operations, dated November 4, 1947, which is in the files of the Commission:

Following the statement quoted above the minutes set forth the memorandum of September 15,1947, as described in finding 7. Thereafter the minutes contain the following statement:

After discussion, by the unanimous “yea” vote of the members of the Commission present, the recommenda*868tions contained in the foregoing memorandum were approved subject to clearance by the General Counsel, and the proper officers of the Commission were authorized and directed to take any and all actions necessary and proper to carry the action of the Commission as above set forth fully into effect.

The Secretary of the Commission, on December 9, 1947, gave a memorandum to the general counsel, stating:

At a meeting on December 8, 1947, the Commission approved the attached memorandum dated September 15,1947, from the Chief, Bureau of Operations, subject to clearance by you.

Kindly furnish me with your clearance as soon as possible.

10. Plaintiff’s counsel was advised by an unidentified person in the office of the Secretary of the Commission of the action taken by the Commission on December 8, 1947, when he visited the office on that date to inquire.

11. Commissioner Raymond S. McKeough was not present at the time of the action of the Commission on December 8,

1947. On December 18 he addressed a memorandum to the general counsel advising that he was asking the Commission to reconsider its action upon his return. He addressed such a request to the Secretary of the Commission. The memorandum of September 15, 1947, which had been approved on December 8, 1947, subject to clearance by the general counsel was, accordingly, brought up at the meeting of the Commission on January 6,1948. After discussion the matter was “laid over” without action.

12. The memorandum from the chief of the Bureau of Operations, dated September 15,1947, was presented to the Maritime Commission at meetings during 1948 on January 9, January 13, January 20, February 4, February 24 and March 2, and on each occasion the matter was “laid over.”

13. At the Maritime Commission meeting of March 5, 1948, there was again presented to the Commission the memorandum dated September 15, 1947, which was the subject of Commission action on December 8,1947. At this meeting the Commission also had before it a memorandum dated March 4, 1948, from the general counsel who recommended *869that the claims under consideration be disallowed. After discussion, the memorandum of September 15, 1947, was disapproved and the recommendations of the general counsel were approved.

14. Through its attorneys, plaintiff transmitted to the chief of the Division of Claims, Maritime Commission, on November 29, 1948, a public voucher claiming the amount of $19,270, equal to one-half of the cost of repairing the bauxite damage to the SS. Moldova. By letter dated August 22,1949, the defendant, through the Secretary of the Maritime Commission, advised that the Commission had directed that denial of plaintiff’s claim for bauxite damage to the 88. Moldova would not be reconsidered and returned the voucher.

15. The evidence establishes and it is found that plaintiff knew that any compromise of its bauxite damage claim had to receive the approval of the Maritime Commission and its general counsel, that such approval was never given and that no subordinate officials of the Commission had any authority to bind the Commission.

16. The opinion of the Court of Claims in this case on October 5, 1954, held that the claim asserted in the original petition, filed September 12, 1950, is without jurisdiction of this court under the authority of Polar Compania de Navegacion, LTDA., as owner of the Steamship Penelopi v. The United States (129 C. Cls. 471). On August 3, 1951, plaintiff filed a suit in the United States District Court in the Southern District of New York, Adm. 169-241, praying for judgment in the same amount as in its original petition in the Court of Claims and making the same allegations. The case was dismissed for failure to comply with the two-year statute of limitations of the Suits in Admiralty Act.

CONCLUSION OP LAW

Upon the foregoing findings of fact, which are made a part of the judgment herein, the court concludes that as a matter of law plaintiff is not entitled to recover, and its petition is therefore dismissed.