United States v. The "Thekla,", 266 U.S. 328 (1924)

U.S. Supreme Court

United States v. The "Thekla,", 266 U.S. 328 (1924) United States v. The "Thekla"

No. 258

Argued November 2, 1924

Decided December 1, 1924

266 U.S. 328

CERTIFICATE FROM THE CIRCUIT COURT OF APPEALS

FOR THE SECOND CIRCUIT

Syllabus

1. When the United States comes into court to assert a claim, it so far takes the position of a private suitor that justice may be done with regard to the subject matter. P 266 U. S. 339.

2. In a collision case wherein libel and cross-libel of the respective owners had been consolidated and the first libelant had been ordered under old Admiralty Rule 53 to give security for the other's damages, the United States intervened, standing on the first libel, and filed a claim alleging its possession and ownership of that libelant's vessel at the time of collision, with a stipulation of the Emergency Fleet Corporation for security in a specified sum conditioned that the claimant (United States) and the Corporation should abide all orders of the court and pay the amount awarded by the final decree. The district court, finding that the United

Page 266 U. S. 329

state was owner, pro hac vice, of the vessel claimed, using it for war service, and that that vessel alone was at fault, decreed damages against the United States and the Fleet Corporation, as stipulator, with interest and costs.

Held:

(a) That the district court was empowered to enter the decree, p. 266 U. S. 339, since

(b) The subject matter was the collision, rather than the vessel first libeled, p. 266 U. S. 340;

(c) The reasons against creating government liability for tort were inapplicable, id.;

(d) The Government's joinder in the suit carried with it acceptance of whatever liability the courts might decide to be reasonably incident to that act, and, for such acceptance, no statute was necessary, p. 266 U. S. 341;

(e) The stipulation for security, ordered before the United States made itself a party, was valid, id.;

(f) Interest and costs can be recovered from the Fleet Corporation and the United States. Id.

Questions certified by the circuit court of appeals on an appeal from a decree of the district court against the United States, as claimant, and the Fleet Corporation, as stipulator, for damages resulting from a collision, with interest and costs. The questions propounded were: (1) was the district court empowered by law to render the decree entered? and, if that were answered in the negative, (2) must the Fleet Corporation, as stipulator, respond for the damages proven? The certificate is reported in full in 295 F. 1020.

Page 266 U. S. 338

MR. JUSTICE HOLMES delivered the opinion of the Court.

This case comes here upon a certificate from the Circuit Court of Appeals for the Second Circuit stating more at length the following facts. The Luckenbach Steamship Company, on behalf of itself and the other owners, libelled the barque Thekla in admiralty for a collision with the steamship F. J. Luckenbach. The owners of the Thekla moved under the old fifty-third admiralty rule for a stay until the libellant should give security to respond in damages as claimed in the cross-libel, and filed a claim, stipulation for value, an answer and a cross-bill against the steamer. On October 7, 1918, the motion was granted, and the libel and cross-libel were consolidated and proceeded as one cause. On June 4, 1919, the United States was made a party libellant upon its motion, and stood on the Steamship Company's libel. It filed a claim "without submitting itself to the jurisdiction" of the court, alleging possession and ownership at the time when the libel was filed. Thereupon, a stipulation executed by the United States Shipping Board Emergency Fleet Corporation was filed which recited that the F. J. Luckenbach was under requisition charter to, and in the possession of the United States, claimant at the time of the collision; that the liability, if any, was

Page 266 U. S. 339

that of the United States, acting through the Corporation, the operator of it, and that the Corporation agreed, in case of default on the part of the claimant, that execution should issue against its chattels and lands in the sum of $130,000. The condition was that the claimant and Corporation should abide by all orders of the Court, and pay the amount awarded by the final decree. On October 3, 1919, the Steamship Company, on behalf of itself and other owners, excepted to the cross-libel on the ground that, the steamship being under charter to the United States, the matters alleged in the cross-libel were not within the jurisdiction of the court. At the trial, it appeared that the United States was owner pro hac vice, as alleged, using the vessel for war service, and that the Luckenbach alone was in fault, a finding affirmed by the circuit court of appeals. A decree was entered against the claimant and stipulator for the damages, $120,619.71, with interest and costs.

The first question certified is: was the district court empowered by law to render the decree entered? In answer, the government relies upon the proposition established by The Western Maid, 257 U. S. 419, that the collision inflicted no legal wrong upon the Thekla, and the further proposition that, generally speaking, a claim that would not constitute a cause of action against the sovereign cannot be asserted as a counterclaim, Illinois Central R. Co. v. State Public Utilities Commission of Illinois, 245 U. S. 493, 245 U. S. 504-505; see also Nassau Smelting & Refining Works v. United States, ante, p. 266 U. S. 101, and that a cross-libel is governed by the same rule, Washington-Southern Navigation Co. v. Baltimore & Philadelphia Steamboat Co., 263 U. S. 629.

We do not qualify the foregoing decisions in any way, but nevertheless are of opinion that the district court had power to enter a decree for damages. When the United States comes into Court to assert a claim, it so

Page 266 U. S. 340

far takes the position of a private suitor as to agree by implication that justice may be done with regard to the subject matter. The absence of legal liability in a case where, but for its sovereignty, it would be liable does not destroy the justice of the claim against it. When the question concerns what would be paramount claims against a vessel libelled by the United States were the vessel in other hands, the moral right of the claimant is recognized. The Western Maid, 257 U. S. 419, 257 U. S. 433-434; The Siren, 7 Wall. 152; The Athol, 1 Wm.Rob. 374, 382. The doubt in this case arises not from the absence of a maritime lien, but from the fact that the counterclaim is not against the Thekla libelled by the United States, but for affirmative relief against a different vessel, the F. J. Luckenbach. There certainly is a strong argument for regarding this claim as standing no better than those dealt with in the cases cited by the government. But we are of opinion that this is to construe the submission of the United States too narrowly. A collision involves two vessels. The trial of such cases in the ordinary course is upon libel and cross-libel, consolidated under authority of statute. Rev.Stats. § 921; The North Star, 106 U. S. 17. If both parties were in fault, the entire damage would be divided equally between them, and it could not be argued that the United States could avoid the consequences of the rule although the damage to the other vessel might bar its recovering anything. This shows that the subject matter is the collision, rather than the vessel first libelled. Bowker v. United States, 186 U. S. 135, 186 U. S. 139. The libel in such a case is like a bill for an account, which imports an offer to pay the balance if it should turn out against the party bringing the bill. Colombian Government v. Rothschild, 1 Sim. 94, 103; Goldthwait v. Day, 149 Mass. 185.

The reasons that have prevailed against creating a government liability in tort do not apply to a case like

Page 266 U. S. 341

this, and, on the other hand, the reasons are strong for not obstructing the application of natural justice against the government by technical formulas when justice can be done without endangering any public interest. As has been said in other cases, the question of damages to the colliding vessel necessarily arose, and it is reasonable for the Court to proceed to the determination of all the questions legitimately involved, even when it results in a judgment for damages against the United States. United States v. The Nuestra Senora de Regla, 108 U. S. 92; The Paquete Habana, 189 U. S. 453, 189 U. S. 465-466. We gather that our conclusion accords with the opinion of the English Courts. The Newbattle, 10 P.D. 33. The Tervaete, L.R. P.D. [1922] 259, 272. It is said that there is no statute by which the government accepted this liability. It joined in the suit, and that carried with it the acceptance of whatever liability the courts may decide to be reasonably incident to that act.

It follows from what has been said, without the need of going further, that the stipulation ordered before the United States made itself a party, is valid, and that interest and costs can be recovered from the Fleet Corporation. See Sloan Shipyards Corp. v. United States Shipping Board Emergency Fleet Corporation, 258 U. S. 549. Interest was allowed against the United States in Nuestra Senora de Regla and the Paquete Habana, supra, and interest and costs by the judgment affirmed in Porto Rico v. Ramos, 232 U. S. 627.

Answer to Question 1: Yes.