United States v. Carver

Background

Carver and others, American citizens who owned the vessel Betsy Ross, sued the United States under the Emergency Shipping Fund provision of the 1917 Act. The ship had an outward charter carrying lumber to Melbourne and a return charter to carry chrome ore to New York. Australian officials delayed clearance and communicated that U.S. authorities preferred the ship to carry wheat. To avoid a government takeover, the owners signed a wheat charter on May 15, 1918, carried wheat home, and were paid by the Grain Corporation. They later claimed compensation for loss from the abandoned chrome ore arrangement. The Court of Claims awarded them $113,216 with interest.

Reasoning

The core question was whether the United States, through the Shipping Board, had lawfully requisitioned the vessel or cancelled the chrome ore contract in a way that required payment under clauses (a), (b), or (e) of the 1917 Act. The Supreme Court found the facts did not show any formal cancellation or taking by the Government. Clause (b) dealt with contracts to build or buy ships, not freight contracts, and clause (e) required an actual taking of a ship or charter. The owners stayed in possession and voluntarily entered the wheat charter, so no statutory requisition or charter takeover occurred. Because the statutory conditions for compensation were unmet, the Court reversed the judgment for the owners.

Real world impact

The decision denies these ship owners compensation and narrows what wartime losses the 1917 Act covers. Owners cannot recover simply because officials preferred a different cargo or pressured a change; there must be an actual government requisition or an authorized cancellation of the specific kinds of contracts the statute covers. The reversal removes the Court of Claims award and leaves the owners without the larger payment they sought.