28 (4) were adopted at a time when no appeal could be taken from an interlocutory decree, and consequently when every appeal involved damages and interest. Here, however, is in appeal allowed by the act of 1926 from a decree which did not even purport to touch the matter of the amount or the items to be allowed. To apply to such a decree rules adopted at a time when it could not have been brought before the Circuit Court of Appeals at all would simply result in depriving the libelant of interest, when, as a matter of fact, neither the District Court nor the Circuit Court of Appeals has ever considered or passed upon the question -- a rather tragic absurdity. I am of the opinion that the rules of the Circuit Court of Appeals referred to do not cover appeals from interlocutory decrees, at least so far as the matter of interest is concerned.
(2) As to the rate of interest: Fluctuations in the value of money or in current rates of interest have not, so far, been allowed to affect the rate of interest allowable on verdicts at law, and while the matter is, no doubt, discretionary in admiralty, I see no reason why the ordinary rate should not be adopted in this case. The idea that the government is in a special class by reason of its ability to borrow money at a lower rate of interest or for any other reason has been expressly repudiated by the Circuit Court of Appeals for the Second Circuit in The Comus, 19 F.2d 774.
(3) The interest allowed, however, should begin to run from the time when the money was spent, not from the date of the sinking. Like the rate, the time from which the allowance is made lies in the discretion of the court. There is no inflexible rule, as a reference to the decisions will readily disclose. Ordinarily, where the vessel is repaired, the interest runs from the date of disbursement. The Sitka (D.C.) 156 F. 427. If the Manhattan had been an actual total loss, there would have been some reason for allowing interest from the date of collision. But the fact is that she was raised and repaired.
The doctrine of constructive total loss is a limitation upon the amount of recovery rather than the substitution of a different base. In other words, what the libelant recovers is so much of its cost of raising and repairing as is not in excess of the value of the ship. Its recovery, however, is still recovery of money spent by it and I think the ordinary rule should apply. If the period between the sinking and the final recommissioning of the ship causes specific damage, it may, in a proper case, be recovered as a separate item. There is no showing in this case justifying it.
3. Cost of Removing the Wreck as a Derelict.
I fully agree with the Commissioner's conclusion that this is not an item which can be added to the government's recoverable damages. In the absence of any statute and before the enactment of the Wreck Statute, the owner of a sunken vessel always had the right to abandon her and thus entirely absolve himself from liability for damages caused by the obstruction of the channel. See Winpenny and Chedester v. Philadelphia, 65 Pa. 135. The theory of the law was that if the sunken vessel is a menace to navigation its disposition is a matter of public concern, and that the owner has suffered sufficient loss in the loss of the craft and no further loss will be imposed upon him by way of damages for subsequent accident, provided always that he has abandoned it. Gulf Coast Transp. Co. v. Ruddock-Orleans Cypress Company (D.C.) 17 F.2d 858. It follows that since the removal could not have been required of the owner, its cost in no way increased his loss and consequently could not have been charged by him to the wrongdoer.
The Wreck Statute, U.S.C. tit. 33, §§ 409, 414, 415 (33 USCA §§ 409, 414, 415), did not materially change the law in this respect. Section 415 reaffirms the duty to mark the wreck. It applies to the government as well as private owners. The Snug Harbor (Eastern Transp. Co. v. United States) 283 F. 1015 (D.C.). But we have nothing to do with that section in this case. Section 414 merely reaffirms the law as it stood by which the owner terminates his liability by abandonment (which may consist in doing nothing for thirty days) and the Secretary of War is authorized (but not required) to assume the general governmental duty of clearing the navigable channel. Section 415 provides that he may perform this duty without waiting for abandonment by the owner. The only possible change effected by these statutes is that the government is given either the wreck itself (in case of removal after abandonment) or a lien against it for the amount expended (in case of immediate removal before abandonment).
Although I think it clear that sections 414 and 415 of the statute were not intended to apply to government vessels sunk in navigable channels, the question is of no moment, because whatever cost falls upon the government in removing any vessel occurs by reason of its general powers and functions and not by reason of its ownership of the wreck. The burden upon the government is exactly the same whether the vessel sunk is government owned or privately owned, or whether it was sunk by wrongful act or by pure accident.
So far as I know the right of recoupment against a tort-feasor who causes a sinking has never been asserted by the government in case the wreck was privately owned, and I can find nothing in the statute which creates such a right either in the case of privately owned vessels or of those which are the property of the government. In fact, the rights in rem which are conferred would seem to negative that intent. At any rate the statute is silent upon the subject.
4. The Indeterminate Charge.
The Commissioner disallowed this charge. The question is not material here, but it may be pointed out that in an opinion filed at the same time as this ( United States v. Delaware Bay & River Pilots Association and Steam Vessel Philadelphia, No. 289 of 1923, In Admiralty, 10 F. Supp. 43) I held that it was a proper item of damages if supported by satisfactory evidence. In this case the Commissioner found that the evidence was insufficient to support it. Without passing upon that question, it is sufficient to say that if allowed it would only increase the cost of raising and repairing and would not change the application of the doctrine of constructive total loss.
The respondent's fifth exception is sustained.
The libelant's twenty-second exception is sustained.
All other exceptions are dismissed.
© 1992-2004 VersusLaw Inc.