The opinion of the court was delivered by: RYAN
These two suits brought in the admiralty by Calmar Steamship Corporation, as owner of the S.S. Portmar, arise out of the voyage of that vessel from San Francisco which began on November 28, 1941. On that voyage she was damaged by Japanese air attacks while in the Timor Sea on February 15 and 16, 1942, and in the harbor of Port Darwin, Australia, on February 19, 1942, she was subsequently beached after these attacks near Darwin.
The suits were tried together and the findings of fact hereinafter made and the conclusions of law reached are to be applied to both suits.
The first libel (Ad. 129-295) was filed on February 11, 1944 by 'Calmar' against The United States of America. The libel as filed named a number of individual respondents; as to them it has been discontinued and now proceeds only against the United States. The suit asserts claims upon a time charter party for damage to the Portmar from Japanese bombing and strafing on February 15, 16, and 19, 1942 and charter hire from March 1, 1942 (later amended to February 19) to November 17, 1942.
The United States asserts, by answer, that this court has no jurisdiction over the suit against it and, in addition, denies any liability on its part. It pleads in support of the objection to jurisdiction that the suit is not within the permission to sue contained in the Suits in Admiralty Act, Secs. 1 and 2, 46 U.S.C.A. § 741, 742, due to the fact that the Portmar was not a merchant vessel operated by or for the United States and because the claims asserted are not cognizable under the Public Vessels Act, Sec. 1, 46 U.S.C.A. § 781, or other governmental consent to be sued in the district court. Liability is disclaimed for the damages sustained by the Portmar as a result of enemy action because such losses are either within the coverage of the war risk insurance taken out pursuant to the provisions of the charter, or are excluded from coverage by reason of risks assumed by the owner or its failure to take out adequate insurance. Liability is denied for charter hire in addition to that paid because the obligation to pay hire terminated by express provision of the charter by reason of the Portmar's becoming a constructive total loss on that date, or in the alternative because the owner's election to treat her as such terminated the obligation to pay hire.
'Calmar' filed the second libel (Ad. 133-332) on November 15, 1944 against the war risk underwriters of the Portmar, who have rejected liability for the losses sustained on this eventful part of the voyage of the Portmar. The suit is based on three policies of war risk insurance (all to the same effect and of the same tenor, except as to amount), totalling $ 860,000. The libel pleads claims totalling $ 902,761.12 with interest, of which $ 860,000 is sought to be recovered for a constructive total loss of the vessel, and $ 42,761.12 with interest for certain 'sue and labor' expenses. The libel asks that if it be held that the damage did not amount to a constructive total loss under the policies in suit, then that for a partial loss there be awarded the sum of $ 250,000 with interest.
The underwriters deny liability upon the ground that the vessel was not covered by the war risk insurance policies issued by them at the time the Portmar sustained the damage, because (a) she had been insured as a commercial and cargo vessel for trading and when damaged she was a ship of war and part of an invasion expedition; (b) that the voyage covered had terminated prior to the bombing, strafing and beaching of the vessel, (c) that she had been intentionally exposed as a warship to enemy attack, (d) that the 'capture, seizure, arrest, restraint, detainment, etc.' rider of the policies did not cover the damage sustained, (e) that if it be determined that the insurance had not terminated at the time of the damage, the 'held-covered' clause of the policies applied and the additional premiums thus due amount to not less than 75% of the insured value of the vessel, which should be set off against any recovery allowed, (f) that there was not a constructive total loss and that the tender of abandonment to the underwriters was ineffectual, and finally (g) that in view of the provisions of the charter party, there was at no time any capture, seizure, arrest, restraint or detainment of the Portmar.
The libel against the United States is largely alternative to the result of the suit against the underwriters. In January, 1948, 'Calmar' also filed suit against the United States in the Court of Claims (No. 45809), seeking to recover for substantially the same claims as those pleaded in the first libel herein. This suit is pending and undetermined.
With the issues thus framed, the suits herein proceeded to trail. After consideration of the testimony and exhibits, I make the following:
(1) Calmar Steamship Corporation is a corporation duly organized and existing under the laws of the State of Delaware, with its principal place of business at 25 Broadway, County, City and State of New York.
(2) Calmar Steamship Corporation was the owner of the S.S. Portmar during the period beginning November 21, 1941 and ending at noon, Eastern Australian Time, November 17, 1942.
(3) The S.S. Portmar was a single screw ocean cargo steamship registered under the laws of the United States, built in 1919, classified and maintained in Class A-1, Lloyd's Register of Shipping. Her tonnage was gross 5,500, net 3,418, deadweight capacity 8,600 tons. Her dimensions were length 409.8 feet; beam 54.2 feet; depth 27.7 feet. Her speed on a consumption of 164 barrels of fuel oil per day was in excess of 9 1/2 knots.
(4) As of November 21, 1941 Calmar Steamship Corporation chartered the S.S. Portmar to the United States acting, pursuant to statutory authorities, by and through the United States Maritime Commission by a voyage charter on a time basis, which contained among other, the following provisions:
'Article 1.01. The Owner agrees to let, and the Charterer agrees to hire the Vessel, from time of delivery, for trading for one round voyage from United States Pacific Port or ports to a port or ports in the Philippine Islands, returning to U.S. North Atlantic port or ports.
'Article 1.02. The rate of hire payable as provided in Article 2.03 shall be $ 4.70 per ton of the Vessel's deadweight capacity as hereinbefore stated per month or pro rata for any portion thereof. The Charterer shall also pay the Owner at the rate of $ 1.50 per day per person for victualling of any personnel (in addition to the Vessel's normal complement) required to be aboard the vessel by written request of the Charterer of by any other agency or department of the Government, * * *
'Article 1.03. The valuation of the Vessel for insurance purposes as provided in Article 2.17 shall be $ 860,000.
'Article 1.04. The Vessel shall be delivered at the port of Portland, Oregon on or about November 21, 1941, and redelivered (unless lost) at a U.S. North Atlantic port, north of Cape Hatteras. * * *'
'Article 2.01. * * * The vessel on her delivery shall be ready to receive cargo with clean-swept holds and, as far as due diligence can make it so, tight, staunch, strong and in every way fitted for service, having water ballast, winches and power sufficient to run all the winches at one and the same time and a Master and a full complement of officers and a crew for a vessel of her tonnage, and due diligence shall be exercised by the Owner to maintain her in such state during the currency of this Charter. * * *
'Article 2.03. The Charterer shall (except as otherwise specifically provided herein) pay hire for the use of the Vessel at the rate stipulated in Article 1.02, beginning with the time of her delivery, and continuing until the time of her redelivery in like good order and condition, ordinary wear and tear excepted, to the owner at the port of redelivery specified in Article 1.04, or if the Vessel shall be lost, until the time of her loss, if known, otherwise to the time last heard from; or in the case of a constructive total loss, to the time of the casualty resulting in such constructive total loss, except that where two or more successive casualties contribute to such loss, the time of the casualty last occurring shall be the time when hire ceases. Redelivery shall not be made until completion of repairs of any damage arising from causes specified in Article 2.04 (ii), and hire shall continue until completion of such repairs, except to the extent that loss of time is caused by failure of the Owner to exercise due diligence to have such repairs effected promptly and to prevent loss of time. The hire provided for in this Charter shall be due and payable on the first day of each calendar month for the preceding month or portion thereof. * * *
'Article 2.04. Payment of hire hereunder shall cease to the extent that time is lost to the Charterer:
'(a) if the Vessel is prevented, in whole or in part, from working for twenty-four consecutive hours because of a deficiency of men or stores, breakdown of machinery, collision, stranding, or fire or other accident or damage to the Vessel; * * *
'Provided, however That, except to the extent that loss of time is caused by the failure of the Owner to exercise due diligence to keep the Vessel working and to prevent loss of time, payment of hire shall not cease because of:
'(ii) the happening of any event listed in (a) above caused by the fault of the Charterer or caused or contributed to by war or warlike acts, sailing in convoy, operating (contrary to peace-time custom) without lights or pilots, navigating or mooring in (contrary to peace-time custom) unlighted, unbuoyed, or overcrowded waters, excessive usage (because of war or warlike conditions) of machinery or equipment, navigating (contrary to peace-time custom) under the direction of naval, military, Cost Guard, or other governmental authorities, or discharging alongside or into ships; * * *
'Credit shall be given to the Charterer for expenses save by the Owner during any loss of time as to which no cessation of hire is provided for.
'Article 2.05. The Owner shall provide and pay for: all provisions; all galley, cabin, deck and engine room stores; fuel for cooking; wages of, and consular, shipping and discharging fees and other expenses pertaining to, the Master, Officers and Crew (except as herein otherwise provided); 25% of all fresh water used by the Vessel if a steamer, or 75% if a motorship, all water ballast; and insurance (except as herein otherwise provided) on the Vessel.'
'Article 2.11. * * * The Master (although appointed by the Owner) shall be under the orders and directions of the Charterer as regards employment, agency, and prosecution of the voyages; * * *
'The charterer shall indemnify and hold harmless the Owner, the Master and the Vessel from all consequences and liabilities whatsoever arising from compliance with any orders or directions of the Charterer or its agents, given pursuant to this Article or any other Article of this Charter.'
'Article 2.16. * * * And neither the Vessel, her Master or Owner, nor the Charterer, shall, unless otherwise in this Charter expressly provided, be responsible for any loss or damage or delay or failure in performing hereunder arising or resulting from: act of God, act of war; act of public enemies, pirates, or assailing thieves; arrest or restraint of princes, * * *. No exemption afforded to the Charterer under this Article shall diminish its obligations for hire under the other provisions of this Charter.
'Article 2.17. The Owner may provide, and the Charterer shall pay for, or, if the Charterer shall so elect and give notice of such election to the Owner at or prior to the date of delivery of the Vessel with respect to the first voyage, or at or prior to the time when loading commences at the first port of loading with respect to any subsequent voyage during the charter period, the Charter shall provide and pay for or assume: (i) insurance on the Vessel, which shall be made payable to the owner, in the amount specified in Article 1.03, under full form of American Institute of Marine Underwriters' war risk policies, including malicious damage, sabotage, strikes, riots and civil commotion valued at the amount insured: (ii) all war risk insurance, as required, on the lives of or for injuries to officers and crew and loss of or damage to their personal effects, including sextants of deck officers, or leased equipment aboard for which the Owner is responsible, and on slop chests; and (iii) war risk protection and indemnity insurance, for the benefit of the Owner and the Charterer as their interests may appear, including Owner's liabilities to officers and crew until repatriated.
'The Vessel shall not be required to sail on any voyage until the insurance contemplated by this Article has been placed by the Owner or provided or assumed by the Charterer, as the case may be, provided, however, that written or telegraphic notice of assumption by the Charterer shall be sufficient.
'Article 2.221. Nothing herein stated is to be construed as a demise of the Vessel to the Charterer.
'Article 2.27. The Master and the Vessel shall have liberty to comply with any orders of directions as to loading, departure, arrival, routes, ports of call, stoppages, discharge, destination, delivery or otherwise howsoever given by the government of any nation or department thereof or any person acting or purporting to act with the authority of such government or of any department thereof, or by any committee or person having, under the terms of the war risk insurance on the ship, the right to give such orders or directions, and if by reason of or in compliance with any such orders or directions anything is done or is not done, such shall not be deemed a deviation or breach of orders or neglect of duty by the Master or the Vessel; provided, however, that whenever any such orders or directions given otherwise than by the Government of the United States or its representative are contrary to sailing directions or other orders of the Charterer as to the employment of the Vessel hereunder, the Master shall, if practicable, apply to the Charterer or its agents or to a representative of the Government of the United States for consent or advice and shall not comply with such orders or directions unless such consent or advice to comply is first obtained; provided further, however, that if it is impracticable in any case to act in accordance with the foregoing proviso, the Master's decision as to compliance with any such orders or directions shall be made with due regard to the interests of all concerned, including the Charterer, the Owner, the Vessel, her crew and cargo.'
(5) Pursuant to the provisions of Article 2.17 of said Charter, Calmar Steamship Corporation took out war risk insurance under full form of American Institute of Marine Underwriters' war risk policies, including malicious damage, sabotage, strikes, riots and civil commotion, in the hull and machinery of S.S. Portmar valued at $ 860,000. Said insurance was arranged through its brokers, Mather and Company, Philadelphia, and their London correspondent, Thomas Stephens & Sons, Ltd.
(6) Slips binding said war risk insurance were submitted to the various underwriters representing members of syndicates of Lloyds, London, and to members of the Institute of London Underwriters, and to the Excess Insurance Company, Ltd., all of whom initialed the slips with notation as to amounts of portions of the risk subscribed.
(7) Said slips contained among others the following provisions:
'U.S. Dollar A/C 'Portmar /S/
'U.S. Pacific to at and from Philippines and return to U.S. Pacific &/or Atlantic port or ports and 15 days via port or ports in any order
HULL & MACHINERY valued $ 860,000.
'Against war, § .r. & c.c. and m.d. American Clauses N.Y.S.Cl. Unders. pay tax.'
Said slips were initialed by said underwriters on November 26 and 27, 1941.
(8) Prior to November 26, 1941, negotiations between the Secretary of State, Hon. Cordell Hull, and Japanese envoys, Admiral Kichisaburo Normura, and M. Saburo Kurusu, approached a critical state. The daily press carried news items of increasing tension in the Pacific situation. The possibility of war with Japan was openly recognized and provoked much discussion in American and British official circles. The British Prime Minister had discussed the extent of British naval participation in the Pacific in the event of war with Japan. It was generally expected that danger might develop at any moment in the Far East.
(9) Mather & Company sent to Thomas Stephens & Sons, Ltd. printed forms of marine hull insurance in the form 'American Institute Time (Hulls) (July 1, 1941)' and War Risk Clauses and riders to be attached thereto in the form published by the American Institute of Marine Underwriters, after adoption and promulgation by the American Marine Insurance Syndicate.
(10) On January 19, 1942, Sydney Keith Scott and other underwriting members of Lloyds, London, respondents herein, issued a policy of war risk insurance on said froms, insuring Calmar Steamship Corporation in the total sum of $ 714,000 on the hull and machinery of S.S. Portmar valued at $ 860,000, at and from a United States Pacific port to port or ports in the Philippine Islands whilst there and return to United States Pacific port or United States Atlantic port (via Panama Canal) via port or ports any order and for twenty-four hours after arrival.
(11) On January 19, 1942 Edinburgh Assurance Co., Ltd., Northern Maritime Insurance Co., Ltd., Fine Art & General Insurance Co., Ltd., British Law Insurance Co., Ltd., Planet Insurance Co., Ltd., Elders Insurance Co., Ltd., and National Provincial Insurance Co., Ltd., as members of the Institute of London Underwriters issued a policy of war risk insurance on said forms, insuring Calmar Steamship Corporation in the total sum of $ 111,000 on war risk insurance on the hull and machinery of U.S. Portmar valued at $ 860,000 on war risk insurance on the hull and machinery of U.S. Portmar valued at $ 860,000 at and from a United States Pacific port to port or ports in the Philippine Islands whilst there and return to United States Pacific port or United States Atlantic port (via Panama Canal) via port or ports any order and for twenty-four hours after arrival.
(12) On January 19, 1942, Excess Insurance Company, Ltd., issued a policy of war risk insurance on said forms insuring Calmar Steamship Corporation in the sum of $ 30,000 on the hull and machinery of S.S. Portmar valued at $ 8l0,000, at and from a United States Pacific port to port or ports in the Philippine Islands whilst there and return to United States Pacific port or United States Atlantic port (via Panama Canal) via port or ports of any order and for twenty-four hours after arrival.
(13) Libelant duly paid to respondents the issuing premiums required by said policies.
The said policies contained among others the following provisions:
'Only against the risks of war, strikes, riots and civil commotions as per American form attached.'
'Touching the Adventures and Perils which we, the said Underwriters, are contented to bear and take upon us, they are of the Seas, Men-of-War, Fire, Enemies, * * * and of all other like Perils, Losses and Misfortunes that have or shall come to the Hurt, Detriment or Damage of the said Vessel, &c., or any part thereof; excepting, however, such of the foregoing Perils as may be excluded by provisions elsewhere in the Policy or by endorsement. And in case of any loss of Misfortune it shall be lawful for the Assured, their Factors, Servants and Assigns to sue, labor and travel for, in, and about the Defense, Safeguard and Recovery of said Vessel, &c., or any part thereof, without prejudice to this Insurance, to the Charges, whereof the Underwriters will contribute their proportion as provided below. And it is expressly declared and agreed that no acts of the Underwriters or Assureds in recovering, saving or preserving the property insured shall be considered as a waiver or acceptance of abandonment.
'Notwithstanding anything herein contained to the contrary, this Policy is warranted free from Particular Average under 3 percent., or unless amounting to $ 4,850, but nevertheless when the Vessel shall have been stranded, sunk, on fire, or in collision with any other ship or Vessel, Underwriters shall pay the damage occasioned thereby, and the expense of sighting the bottom after stranding shall be paid, if reasonably incurred, even if no damage be found.
'No recovery for a Constructive Total Loss shall be had hereunder unless the expense of recovering and repairing the Vessel shall exceed the insured value.
'In ascertaining whether the Vessel is a Constructive Total Loss the insured value shall be taken as the repaired value, and nothing in respect of the damaged break-up value of the Vessel or wreck shall be taken into account.
'Notwithstanding anything to the contrary contained in the Policy, this insurance is warranted free from any claim for loss, damage or expense caused by or resulting from capture, seizure, arrest, restraint or detainment, or the consequences thereof or of any attempt thereat, or any taking of the Vessel by requisition or otherwise, whether in time of peace or war and whether lawful or otherwise; also from all consequences of hostilities or war-like operations (whether there be a declaration of war or not), piracy, civil war, revolution, rebellion or insurrection, or civil strife arising therefrom.
'If war risks are hereafter insured by endorsement on the Policy, such endorsement shall supersede the above warranty only to the extent that their terms are inconsistent and only while such war risk endorsement remains in force.
'It is agreed that this insurance covers only those risks which would be covered by the attached policy (including the Collision Clause) in the absence of the F.C. & S. warranty contained therein but which are excluded by that warranty.
'This insurance is also subject, however, to the following warranties and additional clauses:
'The Adventures and Perils Clause shall be construed as including the risks of piracy, civil war, revolution, rebellion or insurrections or civil strife arising there from, floating and/or stationary mines and/or torpedoes whether derelict or not and/or military or naval aircraft and/or other engines of war including missiles from the land, and warlike operations and the enforcement of sanctions by members of the League of Nations, whether before or after declaration of war and whether by a belligerent or otherwise, but excluding arrest, restraint or detainment under customs or quarantine regulations, and similar arrests, restraints or detainments not arising from actual or impending hostilities or sanctions.
'The Franchise warranty in the attached policy is waived and average shall be payable irrespective of percentage and without deduction of new for old. The provisions of the attached policy with respect to constructive total loss shall apply only to claims arising from physical damage to the insured vessel.
'Held covered in the event of any breach of warranty as to date of sailing or deviation or change of voyage, provided prompt notice be given these Insurers when such facts are known to the Assured and/or their managers and an additional premium paid if required.' F-300.
'Notwithstanding anything to the contrary contained in this policy, it is understood and agreed that this insurance is warranted free of claims arising from Capture, Seizure, Arrest, Restraint, Detainment, Requisition, Nationalization or Condemnation by or under the authority of the government of Great Britain or any of its dominions, colonies, possessions or allies, or by any forces acting in co-operating with or under the control of them or any of them; but unless the insured Vessel in condemned this warranty shall not exclude losses otherwise covered by this policy which are caused by gunfire, torpedoes, bombs, mines or other implements of war, or by stranding, sinking, burning or collision, provided such losses would not be covered by a marine insurance policy (in the form hereto attached) warranted free of claims arising from Capture, Seizure, or Detention. B.C. 2.'
(15) Clamar Steamship Corporation by letter of November 26, 1941, informed the United States Maritime Commission of the kind and amount of insurance that it had taken for this voyage.
(16) The said policies of insurance were approved by the United States Maritime Commission, and were in accordance with Article 2.17 of said charter.
(17) During the period beginning November 21, 1941 and ending November 17, 1942, the Master of the Portmar was Axel Michelson, a duly licensed and competent master mariner, employed by Calmar Steamship Corporation, and who had been in the employ of Calmar since 1927.
(18) Pursuant to said charter, on November 23, 1941, high octane gasoline in drums was loaded on the Portmar at Oakland, California, and military equipment, supplies and ammunition were subsequently loaded at San Francisco, California.
(19) Prior to sailing on the voyage the Master received secret written and oral orders from the U.S. Naval Control officer in San Francisco, 12th Naval District, imposing radio silence shortly after leaving San Francisco, and stating the following successive positions to bf passed through by the Portmar on the outward voyage from San Francisco to Manila, Philippine Islands: (1) Lat. 37 degrees 45' N; Long. 122 degrees 41' W; (2) Lat. 32 degrees 30' N; Long. 129 degrees 30' W; (3) Lat. 22 degrees 50' N; Long. 140 degrees 00' W; (4) Lat. 13 degrees 50' N; Long. 149 degrees 40' W; (5) Lat. 3 degrees 45' N; Long. 160 degrees 00' W; (6) Lat. 6 degrees 00' S; Long. 170 degrees 45' W; (7) Lat. 11 degrees 50' S; Long. 180 degrees 00'; (8) Lat. 12 degrees 50' S; Long. 166 degrees 30' E; (9) Lat. 15 degrees 25' S; Long. 157 degrees 30' E; (10) Lat. 12 degrees 10' S;Long. 148 degrees 10' E; (11) Lat. 5 degrees 35' S; Long. 130 degrees 00' E; (12) Lat. 6 degrees 00' N; Long. 123 degrees 05' E, to destination.
(20) The routing orders thus given the Portmar were given by the United States as sovereign and not as charterer, and were such as were customarily issued during this period to those in charge of American flag, cargo vessels regardless of ownership or charter arrangements. The prescribed course did not follow the usual and customary commercial lanes travelled in normal time between San Francisco and the Philippines.
(21) The Master did not inform Calmar Steamship Corporation of the points stated in the said Naval Orders, and Calmar did not know the route thus prescribed.
(22) On November 28, 1941, the Portmar, fully manned, equipped, supplied and seaworthy in all respects, sailed from San Francisco pursuant to said charter and followed the course prescribed in the Naval Orders.
(23) At the time the Portmar sailed there were three U.S. Army Sergeants on board as supercargoes, one of whom had a complete manifest of all cargo on board.
(24) On December 7, 1941, the Japanese attached Pearl Harbor.
(25) On December 7, 1941, at about 8 a.m. the Master of the Portmar heard a radio report of the Japanese attack on Pearl Harbor. The Portmar was then at about Lat. 15 degrees 0' N; Long. 149 degrees 0' W, about 600 miles south east of Hawaiian Islands.
(26) The U.S. Naval routing orders required the Portmar to pass between or near Fanning and Christmas Islands. The Master knew of cable landings on those islands, and feared that he could not pass said islands by night or day without being observed, attacked and possibly captured by the Japanese. Properly, for the safety of his vessel, he put the Portmar on a southerly course to avoid all the islands until further naval orders were received.
(27) On December 8, 1941, the United States and Great Britain declared war against the Japanese Empire.
(28) On December 9, 1941 H.M.S. Prince of Wales and H.M.S. Repulse were destroyed by Japanese aircraft off the east coast of the Malay Penisula. The loss of these two ships together with United Stated losses at Pearl Harbor gave the Japanese full battle fleet command of the Pacific. The Japanese then had naval superiority which enabled them to transport troops to almost any desired point, possess themselves of it, and establish it for an air-naval fueling base.
(29) On December 11, 1941 when the Portmar was at about Lat. 2 degrees 0' S; Long. 148 degrees 0' W, the Master received an order by radio from the Commandant of the 12th U.S. Naval District, San Francisco, ordering the Portmar and three other vessels to proceed to Suva, Figi Islands, and there receive further instructions from the British Naval Authorities. The Portmar in compliance changed course toward Suva.
(30) The Portmar arrived at Suva on December 20, 1941, and a British Naval Control Officer, Commander Gray, accompanied by a United States naval officer, also named Commander Gray, came on board the vessel. British Commander Gray gave the Master written and oral orders to proceed to Sydney, Australia. In answer to the Master's questions as to taking orders from the British Naval Control officer, Commander Gray, U.S.N., told him that it ...