United States Grain Corp. v. Phillips
Headline: Navy captain’s claim for a one-percent fee to carry gold for a government agency is rejected; Court affirms no payment owed when cargo is essentially government property.
Holding: The Court held that because the gold was effectively government property and the Navy had authorized its shipment without charge, the commanding officer could not claim the customary one-percent transport fee, so the lower verdict for the carrier stands.
- Prevents naval officers from collecting freight percentages for government-owned cargo.
- Treats government-created corporations as public for transport payment rules.
Summary
Background
A Navy commander who was captain of the destroyer Laub sued to recover one percent of the value of gold carried from Constantinople to New York. The gold had been shipped for a corporation created and owned by the United States to handle wartime food relief. Navy rules generally let commanding officers sign bills and collect a customary percentage for carrying privately owned treasure. For this shipment the Secretary of the Navy approved an order recognizing the cargo as government-related and directing that the usual charge be suspended. The commander refused a release and insisted he still could collect his fee. The District Court directed a verdict for the corporation; the Circuit Court reversed and the case reached the Court of last resort.
Reasoning
The central question was whether the officer could claim the usual transport percentage. The Court examined the statutes, the Navy regulation, and the facts showing the corporation acted as a government agency and the gold was in substance United States property. The Secretary’s cable and related orders were treated as recognizing the shipment as government service. The Court decided that, on those facts, the officer was performing a public duty and could not demand the private-style fee, so the verdict for the carrier was correct.
Real world impact
The ruling means that Navy officers cannot claim customary freight percentages when the cargo is effectively government property or shipped under government direction. It clarifies that government-created corporations acting for public purposes are treated as public for such transport rules, limiting officers’ ability to collect private payments.
Ask about this case
Ask questions about the entire case, including all opinions (majority, concurrences, dissents).
What was the Court's main decision and reasoning?
How did the dissenting opinions differ from the majority?
What are the practical implications of this ruling?