B-142277, AUG. 1, 1960

B-142277, AUG. 1, 1960

TO JOHNSON AND HIGGINS OF CALIFORNIA:

THE MILITARY SEA TRANSPORTATION SERVICE OF THE DEPARTMENT OF THE NAVY (HEREINAFTER REFERRED TO AS MSTS) HAS REFERRED TO OUR OFFICE FOR CONSIDERATION YOUR CLAIM FOR GENERAL AVERAGE CONTRIBUTION FROM THE UNITED STATES IN THE AMOUNT OF $642.06 TOWARD LEGAL EXPENSES INCURRED IN ATTEMPTING UNSUCCESSFULLY TO OBTAIN RECOVERY FROM THE THEN TERRITORY OF HAWAII FOR DAMAGES RESULTING FROM THE STRANDING OF THE S.S. PHILIPPINE TRANSPORT WHILE ENTERING THE HARBOR AT HONOLULU ON AUGUST 19, 1954, SUCH STRANDING ALLEGEDLY BEING DUE TO THE NEGLIGENCE OF THE HONOLULU PILOT.

OUR RECORDS DISCLOSE THAT A STATEMENT OF GENERAL AND PARTICULAR AVERAGE DATED OCTOBER 31, 1956, COVERING THE EXPENSES INCURRED AS A RESULT OF THE STRANDING HERE INVOLVED, WAS SUBMITTED TO MSTS ON BEHALF OF PACIFIC TRANSPORT LINES, THE OWNER OF THE S.S. PHILIPPINE TRANSPORT.

PURSUANT THERETO AND TO PROCEDURES THEN IN EFFECT, $4,102.91 WAS PROCESSED FOR PAYMENT BY MSTS AND $24.41 WAS PROCESSED FOR PAYMENT BY OUR OFFICE AND PAID BY VOUCHER DATED FEBRUARY 20, 1958. THESE AMOUNTS REPRESENTED THE UNITED STATES' SHARE OF THE GENERAL AVERAGE EXPENSES INCURRED IN CONNECTION WITH THE STRANDING.

IT WAS STATED ON PAGE 4 OF THE ORIGINAL STATEMENT OF GENERAL AND PARTICULAR AVERAGE SUBMITTED IN THIS CASE THAT: "IN CONNECTION WITH THE RESPONSIBILITY OF THE PILOT FOR THE STRANDING AUGUST 19, 1954, THE ASSURED HAS EMPLOYED COUNSEL AND SUIT HAS BEEN FILED AGAINST THE TERRITORY OF HAWAII. UNDERWRITERS WILL BE KEPT INFORMED OF DEVELOPMENTS.' THE SUIT WAS PURSUED TO AN UNSUCCESSFUL CONCLUSION AND THE PRESENT CLAIM FOR GENERAL AVERAGE CONTRIBUTION TOWARD THE EXPENSES THEREOF WAS SUBMITTED.

THERE ARE ONLY TWO BASES UPON WHICH LIABILITY OF THE GOVERNMENT FOR CONTRIBUTION TO THE EXPENSES HERE IN QUESTION COULD BE FOUNDED. ONE BASIS WOULD BE A CONTRACT OR AGREEMENT TO THAT EFFECT BETWEEN THE GOVERNMENT AND THE SHIPOWNER OR THE GENERAL AVERAGE ADJUSTER; THE OTHER WOULD BE A DETERMINATION THAT THE EXPENSE WAS A PROPERLY ALLOWABLE CHARGE IN GENERAL AVERAGE.

WHILE THE STATEMENT ON PAGE 4 OF THE ORIGINAL STATEMENT OF GENERAL AND PARTICULAR AVERAGE MAY BE CONSIDERED AS PUTTING THE UNITED STATES, THROUGH THE MSTS, ON NOTICE THAT THE SUIT WAS BEING INSTITUTED, NOWHERE IN THE RECORD IS THERE ANY INDICATION THAT AUTHORIZATION WAS REQUESTED FROM OR GRANTED BY THE UNITED STATES. OBVIOUSLY, THE MERE FACT OF NOTIFICATION CANNOT BIND THE UNITED STATES TO PARTICIPATE IN THE COSTS OF AN UNSUCCESSFUL ACTION. THE UNITED STATES HAS ITS OWN COMPETENT ATTORNEYS AVAILABLE TO EVALUATE POTENTIAL CLAIMS ON BEHALF OF THE GOVERNMENT AND TO PROSECUTE ANY SUCH CLAIMS AS MAY BE DEEMED PROPER. IN THE ABSENCE OF A SPECIFIC AGREEMENT, THE UNITED STATES IS NOT LIABLE FOR THE FEES OF ATTORNEYS UNILATERALLY SELECTED BY THE SHIPOWNER OR THE AVERAGE ADJUSTER. HENCE, IT APPEARS THAT NO CONTRACT OR AGREEMENT, EXPRESS OR IMPLIED, TO PARTICIPATE IN THE COSTS OF THIS UNSUCCESSFUL LEGAL ACTION, EXISTED BETWEEN THE UNITED STATES AND THE SHIPOWNER OR GENERAL AVERAGE ADJUSTER AND NO LIABILITY ON THE PART OF THE UNITED STATES CAN BE FOUNDED ON SUCH BASIS. VOLUNTARY SERVICES RENDERED ON BEHALF OF THE UNITED STATES, WITH CERTAIN EXCEPTIONS NOT HERE INVOLVED, DO NOT CONSTITUTE A BASIS FOR A CLAIM AGAINST THE UNITED STATES. SEE SECTION 3679 (B), REVISED STATUTES, AS AMENDED, 31 U.S.C. 665 (B).

NO PROVISION HAS BEEN FOUND IN THE YORK-ANTWERP RULES, EITHER 1924 OR 1950, WHICH WOULD PERMIT OR REQUIRE THE INCLUSION IN GENERAL AVERAGE OF THE ITEM HERE IN QUESTION, NOR HAS ANY RULE BEEN CITED BY YOU IN SUPPORT OF YOUR CLAIM. LIKEWISE, NO COURT DECISION OR ESTABLISHED USAGE HAS BEEN FOUND WHICH WOULD PERMIT OR REQUIRE SUCH INCLUSION, NOR HAS ANY BEEN CITED BY YOU. RULE A OF THE YORK-ANTWERP RULES, BOTH 1924 AND 1950, PROVIDES:

"THERE IS A GENERAL AVERAGE ACT WHEN, AND ONLY WHEN, ANY EXTRAORDINARY SACRIFICE OR EXPENDITURE IS INTENTIONALLY AND REASONABLY MADE OR INCURRED FOR THE COMMON SAFETY FOR THE PURPOSE OF PRESERVING FROM PERIL THE PROPERTY INVOLVED IN A COMMON MARITIME ADVENTURE.'

IN CONSONANCE WITH THIS RULE, THE COURTS OF THE UNITED STATES HAVE HELD IN SUBSTANCE THAT IN ORDER TO CONSTITUTE A CASE FOR GENERAL AVERAGE THREE THINGS MUST CONCUR: (1) A COMMON DANGER; A DANGER IMMINENT AND APPARENTLY INEVITABLE, EXCEPT BY VOLUNTARILY INCURRING AN EXTRAORDINARY EXPENSE OR THE LOSS OF A PORTION OF THE WHOLE TO SAVE THE REMAINDER. (2) THERE MUST BE A VOLUNTARY EXTRAORDINARY EXPENSE OR A VOLUNTARY JETTISON OR CASTING AWAY OF SOME PORTION OF THE JOINT CONCERN, FOR THE PURPOSE OF AVOIDING THIS IMMINENT COMMON PERIL. (3) THIS ATTEMPT TO AVOID THE IMMINENT COMMON PERIL MUST BE SUCCESSFUL, AT LEAST IN PART. THE CONGRESS, 6 FED.CAS. 277 (CASE NO. 3,099); BRITISH AMERICAN ASSURANCE CO. V. WILSON, 31 N.E. 938, THE J. P. DONALDSON, 167 U.S. 599; BARNARD V. ADAMS, 51 U.S. 270; MCANDREWS V. THATCHER, 70 U.S. 347; THE STAR OF HOPE, 76 U.S. 203; RALLI V. TROOP, 157 U.S. 386; THE MARY F. BARRETT, 279 F.329; COLUMBIAN INS.CO. V. ASHBY, 38 U.S. 331; CAZE V. REILLY, 5 FED.CAS. 332 (CASE NO. 2,538).

OBVIOUSLY, THE EXPENDITURE FOR WHICH CONTRIBUTION IS REQUESTED FAILS TO SATISFY THE CRITERIA ESTABLISHED BY RULE A AND BY THE COURTS FOR A GENERAL AVERAGE EXPENDITURE. THE GENERAL AVERAGE ACT HERE INVOLVED WAS THE SAVING OF THE SHIP AND CARGO FROM THE IMMINENT COMMON PERIL CAUSED BY THE STRANDING. IT SEEMS CLEAR THAT THESE LEGAL EXPENSES HAD NOTHING WHATSOEVER TO DO WITH THE SAVING OF THE SHIP AND CARGO FROM THAT PERIL AS REQUIRED BY THE SECOND CRITERION STATED ABOVE. THE SUIT FOR DAMAGES AROSE FROM THE ALLEGED NEGLIGENCE PRECEDING AND CAUSING THE STRANDING, WHEREAS THE EXPENSES PROPERLY CHARGEABLE IN GENERAL AVERAGE AROSE FROM THE SAVING OF THE SHIP AND CARGO FROM THE PERIL SUBSEQUENT TO AND CAUSED BY THE STRANDING. THE STRANDING GAVE RISE TO TWO SEPARATE AND INDEPENDENT CAUSES OF ACTION--- ONE IN GENERAL AVERAGE FOR THE EXPENSES PROPERLY INCURRED IN SAVING THE SHIP AND CARGO FROM THE PERIL OF THE STRAND, AND THE OTHER FOR THE DETERMINATION OF LEGAL LIABILITY FOR THE STRANDING AND THE COLLECTION OF DAMAGES THEREFOR. NEITHER CAUSE OF ACTION IS IN ANY WAY DEPENDENT UPON THE OTHER. THE ANDREE, 41 F.2D 812, REVERSED ON OTHER GROUNDS, 47 F.2D 874, CERTIORARI DISMISSED GREEN STAR SS CO. V. ARMOUR AND CO., 296 U.S. 668. ALL EXPENDITURES PROPERLY INCURRED IN SAVING THE SHIP AND CARGO ARE INCLUDABLE IN GENERAL AVERAGE AND CONTRIBUTION IS TO BE MADE THEREFOR REGARDLESS OF THE PRESENCE OR ABSENCE OF A CAUSE OF ACTION FOR DAMAGES ARISING FROM NEGLIGENCE. LIKEWISE, A CAUSE OF ACTION FOR DAMAGES DUE TO NEGLIGENCE WILL LIE, WHERE NEGLIGENCE IS INVOLVED, REGARDLESS OF THE PRESENCE OR ABSENCE OF A CAUSE OF ACTION FOR GENERAL AVERAGE CONTRIBUTION. MOREOVER, EVEN IF IT BE ASSUMED, ARGUENDO, THAT THESE LEGAL EXPENSES COULD BE CONSIDERED AS BEING RELATED TO THE SAVING OF THE SHIP AND CARGO FROM THE PERIL OF THE STRAND, IT IS OBVIOUS THAT THEY FAIL TO SATISFY THE THIRD CRITERION--- THAT IS, THEY DID NOT TERMINATE IN SUCCESS. THUS, THE LEGAL EXPENSES NOW BEING CLAIMED CANNOT BE CONSIDERED AS PROPER CHARGES IN GENERAL AVERAGE.

WHILE OUR DECISION OF APRIL 26, 1957, B-131206, PUBLISHED AT 36 COMP. GEN. 745, ALLOWED CERTAIN LEGAL EXPENSES IN A GENERAL AVERAGE CLAIM,THAT DECISION IS READILY DISTINGUISHABLE FROM THE PRESENT CASE. THE LEGAL EXPENSES INVOLVED IN OUR DECISION CITED WERE INCURRED IN SETTLEMENT OF A SALVAGE CLAIM. OUR DECISION WAS BASED UPON THE FACT THAT EXPENSES OF SALVAGE ARE CUSTOMARILY INCLUDED AS PROPER GENERAL AVERAGE EXPENSES. BECAUSE OF THE NATURE OF SALVAGE CLAIMS, LEGAL EXPENSES ARE GENERALLY NECESSARY IN THE SETTLEMENT THEREOF AND, HENCE, WE HELD THAT SUCH EXPENSES ARE PROPERLY TO BE REGARDED AS PART OF OR INCIDENT TO THE SALVAGE CLAIM AND CONSEQUENTLY ARE ALLOWABLE AS PROPER EXPENSES UNDER GENERAL AVERAGE. NO SUCH CONSIDERATIONS ARE PRESENT HERE.

IT IS NOTED THAT RULE E OF THE YORK-ANTWERP RULES, BOTH 1924 AND 1950, PROVIDES THAT:

"THE ONUS OF PROOF IS UPON THE PARTY CLAIMING IN GENERAL AVERAGE TO SHOW THAT THE LOSS OR EXPENSE CLAIMED IS PROPERLY ALLOWABLE AS GENERAL AVERAGE.'

THIS, OF COURSE, IS NO MORE THAN A POSITIVE RESTATEMENT IN GENERAL AVERAGE RULES OF THE COMMONLY ACCEPTED LEGAL PRINCIPLE THAT ANYONE ASSERTING A CLAIM AGAINST ANOTHER MUST PROVE HIS CLAIM. IN OUR OPINION, YOU HAVE NOT FURNISHED PROOF THAT THE LEGAL EXPENSES HERE CLAIMED ARE PROPERLY TO BE CONSIDERED AND ALLOWED AS GENERAL AVERAGE EXPENSES.

IN VIEW OF THE ABOVE, WE HAVE NO ALTERNATIVE ON THE PRESENT RECORD BUT TO DISALLOW YOUR CLAIM FOR GENERAL AVERAGE CONTRIBUTION FROM THE UNITED STATES TOWARDS THE LEGAL EXPENSES INCURRED IN THE UNSUCCESSFUL SUIT AGAINST THE TERRITORY OF HAWAII.