United States v. Atlantic Mutual Insurance

Background

In 1918 the Logan, a U.S. Army transport, carried military supplies, Philippine government property, Red Cross goods, and officers’ effects to Manila. A fire in the hold, without negligence, forced the master to jettison part of the cargo and let water into the hold, damaging other cargo. The ship completed the voyage and on January 19, 1919 discharged and delivered the remaining cargo to owners without taking bonds for general average. The Philippine government’s items were insured; the underwriter paid those losses in April 1921 and became subrogated to the government’s rights. The underwriter’s contribution claim was denied administratively, an adjuster later prepared a general average statement in 1926, the accounting officers and Comptroller General denied the claim, and the underwriter sued in the Court of Claims in 1929.

Reasoning

The key question was when the right to demand contribution arose for filing limits. The Court explained that the law of general average gives a right to contribution once all elements exist, and that occurs when the voyage ends and cargo is delivered, even if the exact amount remains unliquidated. The United States can be sued in the Court of Claims under the statute cited, so the ability to bring a suit did not depend on a shipboard arrest. The adjuster’s statement was only a provisional calculation for the owner and did not create or delay the accrual date. Therefore the claim accrued on January 19, 1919.

Real world impact

Because the claim accrued when the transport reached port and cargo was delivered, the six-year statute of limitations ran before the 1929 suit. The Court reversed the lower court and held the claim time-barred, meaning late-filed contribution claims like this cannot proceed.