
    L. R. AGUINALDO, INC., ET AL. v. THE UNITED STATES
    [No. 48399.
    Decided October 2, 1956]
    
    
      
      Mr. Martin P. Detels for plaintiffs. Messrs. 'Waiters & Donovan, Charles W. Harvey, and Joseph J. Magrath, 3rd., were on the briefs.
    
      Mr. Melford 0. Cleveland, with whom was Mr. Assistant Attorney General George Cochran Doub, for defendant. Mr. Kendall M. Barnes was on the brief.
    
      
      Petition for writ of certiorari by plaintiff Hongkong & Shanghai Banking Corporation denied by the Supreme Court February 25, 1957.
    
   Whitaker, Judge,

delivered the opinion of the court:

The petition in this case is filed on behalf of the L. E. Aguinaldo, Inc., and seventeen other plaintiffs, including the Hongkong & Shanghai Banking Corporation. Only the claim of the Hongkong & Shanghai Banking Corporation is presented to the court at this time. The claims of the other plaintiffs are being held in abeyance until the claims of the Hongkong & Shanghai Banking Corporation have been decided.

All the plaintiffs had an interest in the cargo on board the 8. 8. O afilio ¡ which was destroyed by enemy fire on December 29,1941.

Plaintiff is a corporation organized under the laws of the Crown Colony of Hongkong, but the laws of that Colony permit citizens of the United States to bring suits against the Crown Colony.

The 8. 8. 0apillo was owned by the United States Maritime Commission, but had been chartered to the American Mail Line of Seattle. It sailed from Astoria, Oregon, on or about October 18, 1941, with a cargo consisting principally of flour, canned milk, cigaretttes, and lumber. It was scheduled to call at Shanghai, Hongkong, Manila, Cebu, and Iloilo, in that order. Just prior to sailing, however, the officials of the American Mail Line, in accordance with the advice of Navy or Coast Guard officials, directed the vessel to proceed first to Honolulu, and from that point on to follow the course prescribed by the Navy.

She arrived in Honolulu on October 27, 1941. The Navy charted her course from there on by way of the Gilbert and Marshall Islands, Port Moresby, and Torres Strait, and then to Manila._ She arrived in Manila on November 28, 1941. Her captain reported to Commander Portz of the United States Navy, who was the Port Captain at Manila, for instructions. She was directed to remain at anchor in Manila Harbor. Her captain requested permission to proceed to Shanghai, but this request was denied, presumably because of fear of her seizure or destruction by the Japanese, who were expected to attack at any time. They did attack on December 7,1941, about ten days after her arrival in Manila,.

In the meantime, her entire cargo remained on board.

Upon the outbreak of war with Japan, she was instructed to go outside the Manila Plarbor and anchor. She remained outside the harbor for eight days at various anchorages selected by the master, but on December 16 she returned to the harbor because the crew was becoming unruly.

Upon lier return to the harbor, a Navy officer boarded her and advised the captain that the discharge of her cargo was desired as soon as possible. An Army officer also boarded the vessel on the same day and advised the captain that the Army desired the lumber on board the vessel. On the following day lighters operated by the Army came alongside the Capillo at its anchorage, and took off all the lumber on the afterdeck, and about two-thirds of the lumber on the forward deck. This lumber has been paid for and is not involved in this litigation. No cargo, except the lumber, was removed.

On December 25, the Capillo was ordered by the Navy to move to Fort Mills, at Corregidor, which she did, anchoring just off the Fort. The Navy directed the master to move on to Mariveles, on the coast of Bataan, but countermanded this direction on the master’s representation that there was a gasoline-laden ship on fire at this place, and there was also adjacent thereto an ammunition dump, which was a tempting target for enemy attack.

Thereafter, the master inquired if there was not some more sheltered anchorage, but was advised that the vessel was as safe where she was as at any other location.

The Port Captain asked the master if he could discharge his cargo on the dock at Fort Mills, but the master replied that the dockside water was too shallow. The Port Captain replied that he would send lighters out to unload the cargo. Before this was done, however, the Capillo was hit by two enemy bombs and set on fire and destroyed.

The master' testified that he had requested permission to leave the Manila area on more than one occasion, but that this permission had been refused. Why it was refused, we do not know. It was, of course, the duty of the Navy to regulate the movement of all merchant ships in the way best calculated, in its judgment, to avoid the destruction or capture of the ship and its cargo by the enemy. This may have been the reason for the denial of permission to leave. On the other hand, much of the cargo of this vessel was of military value, and the Navy may have denied permission for her to leave because it wanted her cargo. However, if the latter had been the reason, it would seem she would have-been ordered to discharge her cargo shortly after arrival, instead of having been required to remain at anchor in the harbor for about a month.

Whether the vessel would have avoided destruction or seizure by the enemy had she been permitted to leave is of course conjectural, although it is true that other merchant ships in the area had been permitted to leave, and some had managed to reach safe havens in Australia and elsewhere. At any rate, plaintiff has not shown that the reason for denial of permission to leave was for reasons other than the preservation of the merchant marine of the Nation.

The cargo of the Capillo consisted principally, as stated above, of flour, canned milk, cigarettes, and lumber. The lumber was wanted by the military authorities and was removed from the vessel by them, as stated, and the military authorities no doubt wanted to remove at least the flour and the canned milk, and perhaps also the cigarettes, if they could; and had they done so, they would have no doubt appropriated these articles to the use of the Army or Navy. However, they did not remove it, and, hence, there was no actual appropriation of the articles for which the Hong-kong & Shanghai Banking Corporation sues.

Befusal of permission to leave the area, under the circumstances then existing, did not amount to a taking. Nor did the later notification by the Port Commander to the master that he would send lighters out to unload the vessel amount to a taking. This is so, even though the vessel’s cargo was of definite military value, and probably would have been taken had the Army been able to take it.

Even a definite intention to take her cargo does not amount to a taking, unless the taking is accomplished. If, for instance, the vessel had been loaded with guns and ammunition — of definite military value — and had been ordered alongside the dock for the purpose of discharging her cargo, and then the enemy had come so close that there was not time to discharge it, and the vessel had been ordered to leave, and did leave, and succeeded in getting away, certainly in this case there would have been no taking.

The cargo was not appropriated to the use of defendant; it was destroyed by enemy action. For this defendant is not liable, even though the vessel might have escaped with her cargo, had permission to leave been granted.

The petition will be dismissed as to the claim of Hong-kong & Shanghai Banking Corporation.

It is so ordered.

LaRamoRe, Judge; Madden, Judge; Littleton, Judge; and Jones, Chief Judge, concur.

FINDINGS OE FACT

The court, having considered the evidence, the report of Commissioner C. Murray Bernhardt, and the briefs and argument of counsel, makes the following findings of fact:

1. a. This case presents for determination two claims of the Hongkong & Shanghai Banking Corporation, plaintiff (7) in the petition, for the taking by defendant of cargo belonging to plaintiff on board the 8. 8. Cafilio prior to her destruction by enemy action on December 29, 1941, while at anchor off Corregidor, Philippine Islands.

b. The decision as to these two claims will be largely determinative of the claims of 17 coplaintiffs representing their losses of cargo aboard the Capillo as enumerated in 61 bills of lading.

2. Plaintiff is, and at all times hereinafter mentioned was, a corporation organized and doing business under the laws of the Crown Colony of Hongkong, and registered to do business in the State of New York by its New York agency with its principal New York office and place of business in New York City, and in the State of California by its California agency with its principal California office and place of business in San Francisco, California.

3. The laws of the Crown Colony of Hongkong permit citizens of the United States to bring suit there against the Crown Colony.

4. The Capillo was an American flag vessel owned by the United States Maritime Commission and chartered to the American Mail Line of Seattle for operation under and pursuant to the terms of an agreement dated March 27, 1940.

5. 8. 8. Capillo sailed from Astoria, Oregon, on or about October 18, 1941, with a cargo consisting principally of flour, canned milk, cigarettes, and lumber. The vessel was scheduled to call at Shanghai, Hongkong, Manila, Cebu, and Iloilo, in that order.

Just prior to sailing the master of the Oafillo was advised by Navy or Coast Guard officials that the vessel’s first port of call should be Honolulu rather than Shanghai. With the consent of these officials, the master communicated these instructions to American Mail Line, which directed him to proceed to Honolulu, and from that point on to follow Navy orders.

6. The Oafillo arrived in Honolulu on or about October 27, 1941. There the master received instructions from U. S. Navy officers to proceed to Manila by way of the Gilbert and Marshall Islands, Port Moresby, and Torres Strait. The Oafillo sailed from Honolulu on or about October 28, 1941, and arrived in Manila on or about November 28,1941. No cargo was discharged or loaded en route from the United States to Manila.

7. Upon arrival at Manila, the American Mail Line’s Manila agent informed the O afilio'’s master, Captain Dreyer, that he was to take his orders from the United States Navy. Accordingly, Dreyer reported to U. S. Navy Commander Portz, Port Captain at Manila, for instructions. He was informed by Portz that he could not sail north or south from Manila and that the Oafillo should remain at anchor in Manila Harbor. Early in the morning of December 8, 1941, Manila time, the master was advised by Navy officers of the outbreak of war with Japan, and was instructed to go outside the Manila Harbor and anchor. These orders were complied with, and for the nest eight days the Oafillo remained outside the harbor at various anchorages selected by the master.

8. On December 16, 1941, Dreyer moved the Oafillo back into Manila Harbor because his crew was becoming unruly. A Navy officer boarded her in Manila Harbor and told Dreyer that immediate discharge of his cargo was desired, although nothing of a formal nature was said or done about a requisition of the cargo by military authorities. An Army officer boarding the ship the same day examined the ship’s manifest and stated that the deck cargo of lumber would be useful for bridge building, but said nothing about a military requisition. On December 17 privately owned lighters operated by the Army came alongside the Capillo at its anchorage in Manila Harbor and commenced discharging the lumber stored on deck.

9. Discharge of the deck cargo of lumber continued through December 24, 1941, at which time all of the lumber on the afterdeck and about two-thirds of the lumber on the forward deck had been removed. The lumber which was removed has been paid for. During this period no cargo was removed from below deck, and the hatch covers were not opened.

10. As stated, war with Japan had broken out on December 8, Manila time. Intermittent enemy bombing and strafing of targets in Manila Harbor and port facilities had occurred. Manila was declared an “open city” by General MacArthur on or about December 24, 1941. Emergency conditions existed in Manila throughout and following this period. Supplies for the defending military forces were precariously short. Anticipated supplies had not arrived. A heavy demand existed for almost all commodities of military utility.

11. Early on the morning of December 25 the Capillo was ordered by the Navy to move to Fort Mills, at Corregidor, which it did, anchoring just off the Fort. On arrival, the Navy wanted the master to move the Capillo to Mariveles on the coast of Bataan, but desisted in its demand on the master’s complaint that at Mariveles there was a gasoline-laden ship on fire as well as an ammunition dump which was a tempting target.

12. Feeling excessively vulnerable to enemy attack at his anchorage off Fort Mills, on December 28 the master requested the Navy officials at Corregidor for advice as to an anchorage more sheltered from enemy bombing. He consulted Portz, then on Corregidor, concerning this subject on the morning of December 29, and was asked by Portz if the Capillo could discharge its cargo on the dock at Fort Mills. On learning from the master that this could not be done because the dockside water was too shallow, Portz de-dared that he wanted the Capillo'’s cargo and would send lighters out to unload it at its place of anchoz-age. But no lighters were available, and Portz advised the master that the Capillo was as safe in its existing location as it would be elsewhere.

13. At or about noon on December 29,1941, the Capillo was hit by two enemy bombs and set on fire. The crew abandoned the vessel and she was still burning fiercely when last seen by the master on December 31. It is safely presumed that the Capillo was sunk and that the cargo, documents, orders, logs, etc., were destroyed.

14. On many occasions the master requested permission of the Navy authorities for the Capillo to leave the Manila area, but was refused. Other merchant ships in the Manila area had been permitted to leave during the same period, some managing to reach safe havens in Australia and elsewhere. It is probable that the Capillo was detained in the area because the military authorities wanted much of its cargo, but there was no requisition of it beyond the appropriation of the deckloaded lumber. The failure of the military authorities to unload the cargo was probably due to a shortage of unloading and warehousing facilities. Whether the Capillo would have avoided destruction or seizure by the enemy had it been permitted to depart from the Manila area for safer ports is conjectural.

15. In 1944 plaintiff was reimbursed its losses by the Fireman’s Fund Insurance Company and the Insurance Company of North America after execution of agreements reading in part, respectively, as follows:

Supplementing the subrogation receipt executed by the undersigned with respect to the property referred to below, the undersigned agree that the sum received from the FIEEMAN’S FUND. INSURANCE COMPANY and acknowledged in said receipt has been advanced by the insurance company and received by the undersigned without prejudice to the question whether the said property was lost while insured under a policy issued by the said insurance company and as a result of perils insured against under the said policy. The said advance has been made by the insurance company for the purpose of putting the undersigned in funds pending ascertainment of the circumstances of the loss and determination of the question of liability, and the undersigned agree to return the amount of the said advance unless the said merchandise was lost by a peril against which the said insurance company insured it at the time of the loss.
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Supplementing the subrogation receipt executed by the undersigned with respect to the property referred to below, the undersigned agree that the sum received from Insurance Company of North America and acknowledged in said receipt has been advanced by the insurance company and received by the undersigned without prejudice to the question whether the said property was lost while insured under a policy issued by the said insurance company and as a result of perils insured against under the said policy. The said advance has been made by the insurance company for the purpose of putting the undersigned in funds pending ascertainment of the circumstances of the loss and determination of the question of liability, and the undersigned agree to return the amount of the said advance unless the said merchandise was lost by a peril against which the said insurance company insured it at the time of the loss.
* * Sc # *

conclusion of 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 the plaintiff, Hongkong & Shanghai Banking Corporation, is not entitled to recover, and the petition as to it is dismissed.  