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ALLIANCE ASSUR. CO. v. UNITED STATES

November 15, 1956

ALLIANCE ASSURANCE COMPANY, Ltd., Plaintiff,
v.
UNITED STATES of America, Defendant



The opinion of the court was delivered by: LEVET

This is an action brought under the Federal Tort Claims Act, 28 U.S.C.A. § 1346(b) and the Tucker Act, 28 U.S.C.A. § 1346(a)(2).

Plaintiff is an insurance corporation organized under the laws of the United Kingdom of Great Britain, with its office and place of business at 90 John Street, New York City. Plaintiff issued an insurance policy covering a case containing six pieces of woolen goods. On or about January 12, 1953, the goods were delivered into the custody and control of the Appraiser of Merchandise, Bureau of Customs of the United States of America, at the United States Public Stores, 201 Varick Street, New York City. The government admits that said case contained six pieces of woolen goods valued at $ 2,460.59. The government also admits that the goods were demanded by the licensed broker, H. W. Robinson & Co., Inc., and that delivery to said broker was not made since the case could not be found. Being unable to deliver the case of woolen goods, the government refunded the customs duty paid for said goods. In accordance with its Certificate of Insurance, the plaintiff paid to the owner of the case of woolen goods the value of said goods, thereby becoming subrogated to the owner's rights therein.

Plaintiff predicates its claim on two theories, namely, breach of an implied contract of bailment, and an action for negligence by reason of the loss of said goods.

 At the trial, the plaintiff rested its case on the basis of the admissions by the government. It was stipulated by the parties that should plaintiff succeed in this action it would be entitled to recover the sum of $ 2,460.59, said sum being the monetary value of the woolen goods.

 At the close of the trial the government renewed its motion to dismiss the complaint for lack of jurisdiction and moved for judgment on the ground that the plaintiff had not established a claim for which relief could be granted in that the government acted with care and prudence in the handling of the woolen goods.

 The case of woolen goods in question was purchased by Carlyle Clothes, Inc., and consigned to H. W. Robinson & Co., Inc., customs brokers and agents for Carlyle. The goods arrived aboard the S.S. Queen Mary on December 21, 1952. The customs broker made an entry at Public Stores, pursuant to 19 U.S.C.A. § 1499. An entry consists of a group of documents which enables the importer of the goods to enter the foreign merchandise into American commerce. A duty of $ 708.25 was paid by the customs broker and an entry permit was dated and marked 'Paid.' Thereafter, the goods were released by the customs inspector to the carrier, Cunard Steamship Lines, for delivery to the government cartmen for shipment to the Public Stores, where the goods were to be inspected and appraised for duty purposes.

 The goods arrived at the Public Stores on January 13, 1953, with ten 'Elliott Fisher' tickets. These tickets contain information to the effect that the goods are dutiable, the name of the ship on which they arrived, the entry number, the name of the importer of record, and the initials of the customs examiner who was to inspect the goods at the Public Stores. The case of woolens was sent to the examiner's section on the fifth floor. There it was opened and the goods were examined and were found to be properly invoiced. Thereafter, the case was repacked, nailed and marked by a 'verifier' who worked under the supervision of the examiner.

 The examiner testified that although the importer had forty-eight hours within which to pick up the case after the examination, it was his belief that the case of woolens did not remain on the fifth floor after January 13, 1953, because if it had, he would have noticed it at the end of the day.

 It appears that a delivery ticket was sent down to the first floor invoice section and was placed in the box which was assigned to H. W. Robinson & Co., Inc., the customs broker. It further appears that said customs broker gave the delivery order to its trucking company, Dependable Trucking Co., who presented that ticket at the delivery section of the Public Stores on January 13, 1953 at 4:19 p.m. The trucking company was required to return the next day in order to pick up the goods since the delivery ticket was presented late in the afternoon. A notice was sent to the examination floor advising the examiner that the trucking company had presented the delivery ticket and that the goods were to be sent down to the delivery floor. From this point, there is no evidence to indicate what happened to the case of woolen goods.

 An administrative assistant in charge of receiving and delivery at the Public Stores testified that he personally searched the fifth and first floors as soon as the goods were reported missing. Thereafter, he checked the invoice section in order to determine whether or not the goods had been misdelivered. He stated that in such event the records would have revealed a misdelivery. A search notice was sent out on January 21, 1953, to every foreman in the Public Stores building. The search notice was returned by all the foremen with the notation thereon that they could not find the case of woolens.

 There were 525 employees in the Public Stores building in 1953 and over 325,000 packages were routed through the Public Stores during said year. It also appears that guards are stationed at all exits and merchandise cannot leave the building without first being checked by them.

 The plaintiff's cause of action for breach of an alleged contract of bailment is governed by Section 1346(a)(2) of 28 U.S.C.A., commonly known as the Tucker Act. This Act constitutes a waiver by the United States of its sovereign immunity and its consent to be sued for certain claims not sounding in tort. The statute provides:

 ' § 1346. United States as defendant

 '(a) The district courts shall have original jurisdiction, concurrent with the Court of Claims, of:

 '(2) Any other civil action or claim against the United States, not exceeding $ 10,000 in amount, founded either upon the Constitution, or any Act of Congress, or any regulation of an executive department, or upon any express or implied contract with the United States, or for liquidated or unliquidated damages in cases not sounding in tort.'

 It is well settled that although the Tucker Act confers original jurisdiction upon a federal district court to entertain suits against the government based on express or implied in fact contracts, said Act does not give federal district courts jurisdiction over actions founded on equitable considerations and implied in law. United States v. Minnesota Mutual Investment Company, 271 U.S. 212, 46 S. Ct. 501, 70 L. Ed. 911; Merritt v. United States, 267 U.S. 338, 45 S. Ct. 278, 69 L. Ed. 643; Sutton v. United States, 256 U.S. 575, 41 S. Ct. 563, 65 L. Ed. 1099; Tempel v. United States, 248 U.S. 121, 39 S. Ct. 56, 63 L. Ed. 162; Baltimore Mail S.S. Co. v. United States, 4 Cir., 1935, 76 F.2d 582, certiorari denied 296 U.S. 595, 56 S. Ct. 111, 80 L. Ed. 421; Gallant v. Waterman S.S. Corp., D.C.S.D.N.Y.1950, 90 F.Supp. 495; Bielecky v. United States, D.C.E.D.N.Y.1928, 26 F.2d 746.

 The distinguishing feature of a contract implied in law is that it is not based on the apparent intention of the parties to undertake the performance in question, nor is it a promise. The obligations flowing from a contract implied in law are created by law for reasons of justice without reference to the intentions of the parties. Such contracts are not really contracts at all since they do not arise from mutual agreement and intent to promise. They have been termed 'quasi contracts' in order to avoid confusion with the other classes of contracts. The distinction between a contract implied in fact and a quasi contract was clearly expressed in Miller v. Schloss, 218 N.Y. 400, 113 N.E. 337, as follows:

 '* * * The courts recognize by the language of their opinions two classes of implied contracts. The one class consists of those contracts which are evidenced by the acts of the parties and not by their verbal or written words -- true contracts which rest upon an implied promise in fact. The second class consists of contracts implied by the law where none in fact exist -- quasi or constructive contracts created by law and not by the intentions of the parties. A contract cannot be implied in fact where the facts are inconsistent with its existence, or against the declaration of the party to be charged, or where there is an express contract covering the subject-matter involved, or against the intention or understanding of the parties; or where an express promise would ...


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