
    CALTEX (PHILIPPINES), INC., v. THE UNITED STATES
    [No. 48322.
    Decided July 13, 1954]
    
    
      
      Mr. Leo T. Kissam for plaintiff. Messrs. Albert E. Van Dusen, Henry J. Kiernan, and Joseph M. OLoughlin were on the briefs.
    
      Mr. Kendall M. Barnes, with whom was Mr. Assistant Attorney General Warren E. Burger, for defendant.
    
      
       Plaintiff’s petition for writ of certiorari denied January 31,1955.
    
   Whitaker, Judge,

delivered the opinion of the court:

Plaintiff sues to recover just compensation for its petroleum products stored at Cebu, Philippine Islands, which it alleges the defendant seized on December 8, 1941, immediately following the attack on the Philippines by Japan.

In November 1941 the Chief Quartermaster of the United States Armed Forces in the Far East, designated as USAFFE, ordered Colonel John D. Cook to proceed to Cebu and there to establish an Advanced Quartermaster Depot, of which he was to take command. This Advanced Depot was established to supply the Philippine Army which was then being mobilized and integrated into the Army of the United States. Colonel Cook proceeded to Cebu as ordered in late November 1941. He returned to Manila for conferences with the Office of the Chief Quartermaster, which were held on December 5, 6, and 7, 1941. He left Manila for Cebu at noon on December 8, 1941, after the Japanese had attacked the Island of Luzon in the Philippines. Cebu is one of the smaller islands of the Philippine archipelago about 350 miles south of Manila.

Upon his arrival in Cebu he called a conference with the representatives of the several oil companies having petroleum products stored at Cebu, including plaintiff, at which he advised them that he was freezing the price of such products at the level of the price being paid for them by the Army at the Manila depot, and that the oil companies would be allowed to dispose of only such amount of their products at Cebu as might be needed for essential public and civilian operations. A few days later military patrols were placed on their properties.

Thereafter, the oil companies were ordered by Colonel Cook to transfer as much of their petroleum products to various dispersal points designated by him as possible, depending upon the number of oil drums they could secure to hold the oil. The supply of drums was scarce, but the oil companies secured as many of them as they could and removed as much of their petroleum products to the dispersal points indicated as they could find drums to contain them. The last of the products removed in drums was removed some time in March 1942.

For all of the products removed in drums to the dispersal points indicated plaintiff has been paid by the defendant.

In the meantime, plaintiff was permitted to sell its products for essential public and private use, with the approval of the Commander of the Advanced Quartermaster Depot.

Early in the morning of April 10,1942, the Japanese troops were just offshore of Cebu and preparing to land. Thereupon, in performance of a prearranged plan, Colonel Cook ordered all remaining petroleum products on Cebu destroyed, to prevent them from falling into the hands of the enemy. This was done.

For the destruction of plaintiff’s petroleum products on Cebu on April 10, 1942, which had not already been taken defendant is not liable. United States v. Caltex (Philippines), Inc., et al., 344 U. S. 149. The case cited involved plaintiff’s facilities at Manila and determines the defendant’s liability to plaintiff for the destruction of its products at Cebu.

As stated above, for plaintiff’s products which were removed to dispersal points under orders of defendant, plaintiff has been paid. Defendant converted to its own use none of plaintiff’s products, except those which were removed in drums to the dispersal points.

It follows that defendant is not liable to plaintiff, unless Colonel Cook’s actions on December 8, at which time he had exercised control over, and placed restrictions upon, the disposition of plaintiff’s properties for the purpose of conserving them for possible use subsequently, amounted to a taking thereof under authority conferred upon him by the defendant, or was an unauthorized taking that was subsequently ratified. If what he did at that time amounted to a taking, and if at that time he was authorized to seize all of plaintiff’s products, or if his action was subsequently ratified, defendant would be liable not only for that removed in drums, which has been paid for, but also for all products later disposed of to private persons or other public institutions, less a credit for the amount received for them, and also for that destroyed upon the landing of Japanese forces.

The principal questions, then, are, first, whether or not Colonel Cook did on December 8,1941, in fact take plaintiff’s property for public use; second, whether or not he had authority at that time to take the property; and third, whether or not someone having authority ratified his action if he lacked authority.

1. We do not think what Colonel Cook did on December 8 amounted to a taking of plaintiff’s products. What he did at that time amounted to no more than the exercising of reasonable control over, and the placing of reasonable restrictions on the disposition of plaintiff’s property, and the price to be obtained therefor, for the purpose of conserving and protecting them for subsequent possible use. This is evidenced by the fact that plaintiff thereafter was permitted to sell its products to private persons or private institutions and to public institutions, and to receive payment therefor, and to put the money into its own treasury, without making any account to the defendant.

It was defendant’s intention to appropriate for its own use so much of the products as the oil companies could remove to the designated dispersal points in drums, but it did not intend to appropriate, because it could not use, that part not so removed. During the four months between Colonel Cook’s conference with representatives of the oil companies and the landing of the Japanese on Cebu the defendant used, in fact, only those products that had been removed to the dispersal points.

The Commissioner has found in finding 14 that Colonel Cook told representatives of the oil companies that “he was taking over all of the [oil] supplies, and such of the facilities as were necessary to make use of them; that he was freezing tne price at the level of the contract price in Manila depot; and that the oil companies would he allowed to withdraw only such oil as was needed for essential public and civilian operations.”

By the expression “taking over” Colonel Cook could have meant only that he was placing controls on these products to conserve them for subsequent use. It did not mean that he was condemning these products for the use of the defendant. His freezing of the price which the oil companies could get for their products is inconsistent with an appropriation of them by defendant. His order permitting the oil companies to sell some of them to public and private institutions is inconsistent with an appropriation of them by defendant. His later use of only that part removed to dispersal points and the use of none other is inconsistent with an appropriation.

The exercise of control over, and the placing of restriction on the disposition of plaintiff’s products for the purpose of conserving them did not amount to a taking. Bowles v. Willingham, 321 U. S. 503; Neumaticos Goodyear, S. A. v. United States, 109 C. Cls. 535; Foreign Trade Management Co., v. United States, 109 C. Cls. 587; Snyder v. United States, 113 C. Cls. 61; St. Regis Payer Company v. United States, 110 C. Cls. 271, cert. den. 335 U. S. 815.

2. Furthermore, the proof falls far short of establishing authority in Colonel Cook to seize and condemn all of plaintiff’s products on December 8,1941. The extent of the proof is that Colonel Cook was instructed to set up this Advanced Quartermaster Depot in order to supply the units of the Philippine Army located on Cebu and surrounding islands, but the way in which these supplies were to be obtained is not shown.

Colonel Cook in his testimony says that he was instructed to procure supplies “in any manner he' saw fit”; but even if we assume that these instructions were sufficiently broad to include the requisitioning of private property, which we do not believe they were, the evidence fails to show that the officer giving such instruction had authority to requisition private property, or the authority to delegate such power. Property is never requisitioned, that is, seized or condemned under the power of eminent domain, where it can be secured by agreement with the owner, unless the exigencies of the case demand it. There is no showing whatever that Colonel Cook undertook to purchase plaintiff’s oil stocks, and that plaintiff refused to sell them, and certainly no emergency has been shown to have existed on December 8, 1941, which on that date would have authorized Colonel Cook to seize plaintiff’s products, on plaintiff’s refusal to sell them.

The authority to take private property for public use must be granted by Congress, either prior to the taking or subsequent thereto by ratification, subject to the exception that a Commander of an Army in the field may do so where the danger that necessitates its taking is immediate and impending and admits of no delay. This subject was discussed somewhat at length by us in the case of Charles N. Hodges v. United States, 125 C. Cls. 405. It appears from the authorities cited in that opinion that a Commander in the field has no authority to take private property for public use unless “its taking is demanded by an emergency, by a danger which is immediate and impending and which will not admit of the delay necessary to secure action by civil authority.”

It cannot be said in this case that on December 8, 1941, the danger to American forces in and around Cebu, 350 miles from the point of attack, was so immediate and impending as to admit of no delay. In the absence of such circumstances, express authority for the taking must be shown in the officer who takes. In United States v. North American Company, 253 U. S. 330, 333-334, it appeared that Congress had authorized the Secretary of War to acquire certain property taken by General Randall, the Commander of the Department of Alaska, but it did not appear that the Secretary of War had delegated his authority to General Randall and, therefore, it was held that General Randall’s action was unauthorized and, therefore, did not subject the United States to liability therefor. The Supreme Court said:

* * * But although Congress may have conferred upon the Executive Department power to take land for a given purpose, the Government will not be deemed to have so appropriated private property, merely because some officer thereafter takes possession of it with a view to effectuating the general purpose of Congress. See Ball Engineering Co. v. J. G. White & Co., 250 U. S. 46, 54-57. In order that the Government shall be liable it must appear that the officer who has physically taken possession of the property was duly authorized so to do, either directly by Congress or by the official upon whom Congress conferred the power.

Plaintiff is not entitled to recover both, on the ground that Colonel Cook’s action on December 8, 1941, did not amount to a seizure of plaintiff’s property for the use of the defendant, and also on the ground that Colonel Cook is not shown to have had the authority to seize it.

3. The record fails to show that Colonel Cook’s action on December 8, 1941, was ratified by anyone having the power to requisition private property for public use.

In the former case in this court of Caltex (Philippines), Inc., et al. v. United States, 120 C. Cls. 518, all three oil companies, Caltex, Shell and Standard-Vacuum, sought to recover for the destruction of their facilities at Pandacan on the Island of Luzon, when they were in imminent danger of capture by the Japanese, but the Standard-Vacuum Oil Company sought also to recover for its petroleum stocks on Cebu, which were destroyed under orders of the defendant immediately before the Japanese landed on Cebu. [Docket Nos. 48324,48265,48319,124 C. Cls. 831]. The present plaintiff interposed no such claim, but rested its case alone on the destruction of its facilities at Pandacan. The defendant in its brief relied on its argument in defense of the Pandacan claim to defeat Standard-Vacuum Oil Company’s claim with reference to its stocks on Cebu.

The attention of the court was centered on the Pandacan claim; but we did allow recovery for Standard’s oil products on Cebu on the theory that there had been a taking of them by Colonel Cook on December 8, 1941. [120 C. Cls. 553,

554]. This was in error, and to the extent that the opinion and decision in that case is inconsistent with what we have said above, they are overruled.

Plaintiff’s petition must be dismissed.

It is so ordered.

Laeamoee, Judge; MaddeN, Judge; LittletoN, Judge; and JoNes, Chief Judge, concur.

FINDINGS OF FACT

The court having considered the evidence, the report of Commissioner W. Ney Evans, and the briefs and argument of counsel, makes findings of fact as follows:

1. At the time of the Japanese attack on Pearl Harbor, four commercial oil companies, including plaintiff, were operating in the Philippine Islands. For several years before Pearl Harbor, each of the four companies had maintained terminals at Pandacan (Manila) on the Island of Luzon and auxiliary facilities in the harbor of the Island of Cebu.

2. The petroleum stocks stored by the oil companies at Cebu did not enter into the Army’s plans for the defense of the Philippines, in any important respect, prior to November 1941, when an advanced quartermaster depot was established at Cebu to supply a portion of the Philippine Army, then being integrated with the Army of the United States. Prior to November 1941 the Army had made purchases from time to time from the Cebu supplies, and had a contract with one of the oil companies (not plaintiff) for the supply of petroleum products on call at an agreed price.

3. The development of plans for the defense of the Philippine Islands in the event of attack was begun several years prior to 1941 by the United States Army, Philippine Department. These plans were incorporated in a formal, written compendium known as the Philippine Department Plan — Orange, which was subject to continual refinement. The Orange Plan related primarily to the Island of Luzon. It called for defensive action at the beaches of Luzon in the event of enemy landings, to be followed by a slow withdrawal of Army forces to Bataan peninsula, the defense to continue over a period of 180 days, using personnel and supplies available locally.

4. In planning for the day of emergency (M-Day in the Orange Plan), the Department Quartermaster never acquired or intended to acquire, before M-Day arrived, extensive supplies of petroleum products or extensive facilities for storage, handling, and distribution of such products. The Quartermaster planning was predicated upon the storage, handling, and distribution facilities and the petroleum stocks of the commercial oil companies operating in Manila.

In the refinement of the Orange Plan, 1940 Revision, it was contemplated that the G-4 (Supplies and Logistics) Annex would contain a section to be known as the gasoline supply plan, which was to be prepared by and under the supervision of the Department Quartermaster. A gasoline supply plan was developed by the Department Quartermaster and his staff in 1940 and was revised in 1941. No copy of the written statement of the gasoline supply plan was available for use in evidence in this case.

5. In June 1940, the Commanding General, Philippine Department, held a conference with officers under his command, following which work was begun in earnest on the 1940 revision of the Orange Plan. Data were obtained from the oil companies as to (1) the nature of their facilities for the storage, handling, and distribution of petroleum products and (2) the amount of such products on hand from time to time. As part of this survey various Army officers inquired from time to time and were told the amount of petroleum products on hand at Cebu. The Department Quartermaster determined that Army personnel would not be available to operate the oil companies’ facilities and that, in the event of emergency, the Army’s chief reliance for petroleum products on the Island of Luzon would fall upon the oil companies’ personnel, as well as their stocks and facilities.

6. The owner’s representative in charge of one of the terminals at Pandacan had been placed there by his company for the specific purpose of dealing with the increasing problems of defense. Prior to June 1941, he had had conversations with officers of all of the armed forces, the Army, the Navy, and the Air Force, concerning their needs for oil in the event of war. He was fully conversant with the intention of the Army Quartermaster Corps to rely, in the event of war, upon the supplies, facilities, and personnel of the oil companies for the supply, storage, handling, and distribution of petroleum products on Luzon. He referred to these plans in terms of the Army “taking over,” as did representatives of other oil companies and many Army officers, then and later.

7. In June 1941, the Army’s needs for petroleum products were obtained from the oil companies, by contract, on a day by day call or delivery to the different Army stations throughout the Philippines. This situation had obtained for several years and continued unchanged into December 1941. The Army had limited stocks of petroleum products in the nature of a war reserve. None of the reserve was on the island of Cebu.

8. In June 1941, the Department Quartermaster called a conference of officers on his staff and Manila representatives of the oil companies. Each of the oil companies was represented at the conference. The officer who conducted the conference for the Department Quartermaster reviewed the necessity for the Army to rely upon the oil companies in the event of war and stressed two points: (1) the need of the Army for petroleum products to the extent of at least 50 per cent of the volume storage capacity of the Pandacan terminals, and (2) the Army’s need to rely upon the personnel and facilities of the oil companies to handle and distribute the petroleum products. The oil companies readily agreed to make their personnel and facilities available if and when the Army “took over” in the event of war.

9. On July 28, 1941, the command known as USAFFE (United States Armed Forces in the Far East) was created, and General Douglas MacArthur was placed in command. The Philippine Department, United States Army, was continued in the echelon of command under Headquarters, USAFFE.

The officer who was then Department Quartermaster became Chief Quartermaster, USAFFE. He continued to discharge the duties of both offices until October 25,1941, when he was relieved as Department Quartermaster.

In November 1941, after the former Commanding General of the Philippine Department of the Army had been relieved and assigned to other duties, the Philippine Department was absorbed in the USAFFE Field Service Command, which was thereafter sometimes referred to as the Philippine Department Service Command. General MacArthur retained command of the Philippine Department Service Command as well as USAFFE. The order establishing the USAFFE Field Service Command and defining its functions was vague in defining and limiting the duties of control, administration, operation, and maintenance to the various echelons of command, and caused some confusion in the minds of the officers charged with the duties above mentioned.

10. Shortly after the organization of USAFFE, plans were formulated for the integration into it of the Philippine Army, which was then in course of mobilization. The Chief Quartermaster, USAFFE, was directed to prepare plans for the supply of the Philippine Army, and to take over its supply beginning December 1, 1941. Inasmuch as three or four of the Philippine Army divisions were to be mobilized in the southern islands, where there were no United States Army troops and no supplies, the Chief Quartermaster, USAFFE, recommended and General MacArthur approved a plan for the establishment of an advanced quartermaster depot at Cebu. This depot was activated some time in November 1941.

11. Plaintiff’s Cebu facilities were located in the town of Opon on Mactan Island, in Cebu Harbor. Its offices were in the City of Cebu, on the Island of Cebu.

12. In November 1941, orders initiated by the Chief Quartermaster, USAFFE, were issued relieving Colonel John D. Cook as Harbor Defense Quartermaster at Corregidor and directing him to proceed to Cebu and there to establish and command an Advanced Quartermaster Depot. As commander of the depot, Colonel Cook had final authority and responsibility, within applicable regulations, for the procurement, storage, and distribution of supplies in the southern islands. Under Army regulations applicable to his operations in time of peace, he was required to purchase the supplies which he obtained from civilian owners. He lacked authority, unless and until specifically granted by higher authority, to seize or commandeer private property.

13. Colonel Cook arrived in Cebu in late November 1941, after a series of conferences in Manila. He returned to Manila for further conferences with quartermaster officers on December 5, 6, and 7, 1941. He left Manila at noon on December 8, 1941, and arrived in Cebu about 3:30 o’clock that afternoon. War between the United States and Japan had begun during the morning of December 8, 1941, Philippine time. After the beginning of hostilities and before Colonel Cook left Manila, he was instructed to procure supplies, including fuel, in any manner he saw fit.

Tbe evidence does not establish that the officer who gave him these instructions had the power to requisition, or the authority to delegate the power of requisition.

It is not established by the evidence (1) that a delegation of authority to seize private property in Cebu was made by the Commanding General of USAFFE or other officer commanding a theater of operations, or (2) that Colonel Cook was at any time the commanding officer of a theater of operations.

14. On December 8, 1941, in an evening conference with Cebu representatives of the oil companies, including plaintiff, Colonel Cook announced that, because of the war, and because the oil supplies at Cebu were the only supplies in the Philippines outside of Manila, he was taking over all of the supplies, and such of the facilities as were necessary to make use of them; that he was freezing the price at the level of the contract price in the Manila depot; and that the oil companies would be allowed to withdraw only such oil as was needed for essential public and civilian operations.

15. It is not established by the evidence that Colonel Cook intended, on December 8, 1941, to requisition (in the sense of seizing or commandeering) the oil supplies of plaintiff and the other companies. He did intend (1) to sequester and conserve them, (2) to use such of them as might be needed, and (8) to make payment at a stated price. Whether he intended to pay only for such supplies as were used, or to pay for all supplies on hand, is not established by the evidence.

16. Regardless of Colonel Cook’s intentions in the matter, his actions effectively deprived plaintiff of its control over, but did not deprive it of its interest in, the stock of petroleum products in its Opon terminal on and after December 8,1941.

17. Incident to the “taking over” by the Army, Colonel Cook requested the oil companies’ representatives to place guards on their properties until military patrols could be furnished. The companies complied. Military patrols replaced the civilian guards within a few days.

18. Also incident to the “taking over” by the Army, Colonel Cook requested the representatives of the oil companies to begin at once placing the petroleum stocks in containers (large metal drums and smaller cans) to the end that as much as possible might be moved from the terminals and dispersed. The companies complied as rapidly as containers could be obtained.

Plaintiff’s representative in Cebu kept a record of the stocks withdrawn in packages by the Army from the Opon terminal. No billing therefor was made by plaintiff at that time, because of advice from Colonel Cook that there were no funds with which to pay for them.

19. The removal and dispersal of petroleum products in portable containers was continued intermittently, as cans and drums could be found.

Late in March 1942, the supply of containers was exhausted. At that time the Army’s requirements were being supplied from the dispersal dumps on Cebu. When the movement of packaged products was stopped, an unspecified quantity of oil at plaintiff’s terminal had been packaged, but not removed.

20. Plans for the destruction of the Opon terminals, including the facilities and all petroleum stocks remaining in them, to prevent their falling into the hands of the enemy, were made by Colonel Cook. Early in the morning of April 10, 1942, when Japanese troops were just offshore and beginning their landings on Cebu, the plans were executed. Plaintiff’s Opon terminal and all of the petroleum products remaining in it were destroyed.

21. Plaintiff has been paid by the Army for the petroleum products removed from the Opon terminal and shipped to dispersal dumps on Cebu. The amount so paid is not established by the evidence.

The United States has refused to pay plaintiff for the petroleum products not removed from plaintiff’s Opon terminal.

22. On December 1, 1941, plaintiff had in bulk storage at its Opon terminal 847,139 gallons of kerosene, 720,496 gallons of gasoline, and 1,223,905 gallons of diesel oil. No additional petroleum products were received into Opon terminal after December 1, 1941. The exact amounts of the various products on hand on December 8, 1941, are not in evidence. The stocks had not been substantially depleted during the days intervening between December 1 and December 8.

23. Some of the products not removed from the terminal were destroyed by enemy air raids on December 22 and 30, 1941, before the terminal was demolished. The amounts so destroyed were 43,911 gallons of gasoline and 318,117 gallons of diesel oil.

24. The products withdrawn, packaged, and removed by the Army were 264,965 gallons of kerosene, 662,444 gallons of gasoline, and 386,270 gallons of diesel oil. Additional diesel oil to the extent of 45,486 gallons was loaded on a tanker.

25. Products destroyed by demolition of the terminal on April 10,1942, were 83,274 gallons of kerosene, 19,074 gallons of gasoline, and 469,460 gallons of diesel oil.

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 the plaintiff is not entitled to recover, and the petition is therefore dismissed.  