Compania Maritima v. United States

145 F. Supp. 935, 136 Ct. Cl. 697, 1956 U.S. Ct. Cl. LEXIS 207

• Court: United States Court of Claims
• Decided: November 7, 1956
• Docket: 50165
• Status: Published

Opinions

LARAMORE, Judge.

The plaintiff is a Philippine corporation which seeks to recover just compensation for two vessels requisitioned from it by the defendant shortly after the outbreak of war between the United States and Japan. At all times material to this case all of the plaintiff’s officers and stockholders resided in the Philippine Islands and a majority of the stockholders were Filipino citizens.

Prior to the outbreak of war the plaintiff had operated a fleet of vessels in the vicinity of the Philippine Islands. On December 21, 1941 (Philippine time), approximately two week's after the-commencement of hostilities, the defendant acting through officers of the United States Navy requisitioned from plaintiff the vessels Monadnock and Sarangani which were anchored near Manila.

On December 24, 1941, the United States forces began evacuating Manila for Bataan and Corregidor Island, and on December 25 or 26, 1941, Manila was declared an open city.

The Japanese forces occupied Manila on January 2, 1942, and on May 7, 1942, all United States and Filipino forces in the Philippines were finally surrendered to the Japanese.

Neither of the two vessels were ever returned to the plaintiff by the defendant and on June 22, 1946, plaintiff filed claims for compensation with the claims office of the United States Navy in Manila. The Navy Contract Settlement Commission determined a value for both vessels and payment was tendered to plaintiff by the Department of the Navy on March 24, 1947. Plaintiff rejected the payment and filed suit in this court on May 25, 1951.

The Government asserts that plaintiff’s claim is barred by the 6-year statute of limitations applicable to suits in this court. It takes the position that in Marcos v. United States, 102 F.Supp. 547, 106 F.Supp. 172, 122 Ct.Cl. 641, in which this court held that the war between the United States and Japan suspended the statute as to persons residing in the Philippine Islands, the court erred in selecting September 2, 1945, as the date upon which the suspension was lifted. It urges the court to adopt the date of April 16, 1945, because mail service between Manila and the United States was then' resumed and from that date the plaintiff could have communicated with attorneys in the United States and with the Coiirt of Claims.

In the alternative defendant urges that even if the court adheres to its former position that September 2, 1945, is the date on which the court was reopened to plaintiff, we should hold that plaintiff was under a legal disability which was removed on that date and that plaintiff had thereafter only three years in which to file its petition.

In this posture of the case it becomes necessary for the court to review and reconsider the decision in the Marcos case, supra.

The Marcos case was handed down by this court on February 5, 1952. The issues presented in that case are identical, insofar as the statute of limitations is concerned, with the issues involved in the case presently before the court.

The plaintiff in the Marcos case filed his petition on August 14, 1951, alleging that the defendant, acting through the United States Army, had requisitioned a number of cattle from his ranch on the Island of Mindanao in the Philippines during the period from December 9,1941, to January 28, 1942. The defendant moved, pursuant to rule 16(b), Rules of Court of Claims, 28 U.S.C.A., to dismiss plaintiff’s petition on the ground that the claim was barred by the statute of limitations, 28 U.S.C. (Supp. IV) § 2501, 62 Stat.' 976, which reads In part as follows:

“Every claim of which the Court of Claims has jurisdiction shall be barred unless the petition thereon is filed, or the claim is referred by the Senate or House of Representatives, or by the head of an executive department within six'years after such claim first accrues.

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“A petition on the claim of a person under legal disability or beyond the seas at the time the claim accrues may be filed within three years after the disability ceases.”

The Trading with the Enemy Act of 1917, 40 Stat. 411, as amended, 50 U.S. C.A.Appendix, § 1 et seq., was also in effect at all times pertinent to the plaintiff’s claim in the Marcos case. Section 2 of this act defined the word “enemy” as:

“(a) Any individual, partnership, or other body of individuals, of any nationality, resident within the territory (including that occupied by the military and naval forces) of any nation with which the United States is at war * *

Section 3(a) of the act made it unlawful for any person in the United States to trade with an enemy of the United States. The words “to trade” were defined in section 2 as meaning:

“(c) Enter into, carry on, complete, or perform any contract, agreement, or obligation.

“(e) To have any form of business or commercial communication or intercourse with.”

In its original opinion the court concluded that the outbreak of war between the United States and Japan on December 8, 1941, 50 U.S.C.A.Appendix note preceding section 1, by implication suspended the statute of limitations, and that the suspension was lifted on September 2, 1945, 59 Stat. 1733, giving the plaintiff six full years after that date in which to file his petition. Since, under this view, the filing of the plaintiff’s petition was timely, defendant’s motion to dismiss was denied.

Judge Whitaker dissented on the ground that since the plaintiff was under a disability to sue, he should have had the same length of time to file his petition after the disability was removed as others under a disability are given by the statute, i. e., three years.

The defendant moved for a rehearing and on July 15,1952, the court reaffirmed its previous holding 102 F.Supp. 547, 106 F.Supp. 172 at page 122 Ct.Cl. at page 650. In its second opinion, the court held that war is not a legal disability within the meaning of section 2501 of title 28 and that therefore the 3-year period was not applicable.

Judge Whitaker dissented on the ground that the plaintiff was prevented from suing. by ■ the Trading with the Enemy Act, supra, and that he was .therefore under a legal disability and should have had only three years in which to bring suit after the war.

After an extensive review of the authorities and a careful reconsideration of the court’s opinion in the Marcos case, we are of the opinion that the court was in error in certain respects and we expressly overrule the Marcos case insofar as it conflicts with the views expressed1 herein.

In the Marcos case the court relied primarily upon Hanger v. Abbott, 6 Wall. 532, 18 L.Ed. 939, to sustain its position that the outbreak of war between the United States and Japan suspended this court’s statute of limitations as to persons residing in the Philippine Islands. A careful examination of the Hanger case and the other authorities reveals that they do not support this holding.

It is a well-established rule of international law that war will suspend statutes of limitations as between citizens of belligerents. 137 A.L.R. 1455. The courts have applied this rule even though the specific statute involved contained no provision for such suspension. The reason for the rule is that during war international law makes all of the citizens of one belligerent enemies of the Government and the citizens of the other belligerent, forbids all intercourse between citizens of the belligerents, and closes the courts of one belligerent to citizens of the other. Since these principles of international law make it impossible for the citizens of one belligerent to sue in the courts of the other, .statutes of limitations are suspended as to such citizens during war.

These principles of international law were applied by the Supreme Court in a number of cases decided subsequent to the Civil War. In those cases the Court held that certain statutes of limitations were suspended during • the Civil War as between citizens of the United States and citizens of the Confederacy. A careful analysis of these decisions reveals that they were predicated upon the fact that under international;law citizens of the United States were enemies of citizens of the Confederacy and the courts of each belligerent were closed to citizens of the other.

In the leading case of Hanger v. Abbott, supra, a resident of New Hampshire brought suit against a resident of Arkansas in assumpsit. The right to bring suit had matured in October 1859, but suit was not brought until April 1865. Arkansas had a 3-year statute of limitations patterned after the English statute of limitations of 1623 which excepted minors, femes covert, non compos mentis, etc., but which made no mention of war. The problem before the court was whether or not the statute continued to run during the Civil War, thus barring the plaintiff’s suit. The opinion of the Court contained a lengthy historical discussion which explained why the statute of 1623 and its American antecedents did not include war in the list of exceptions. The Court concluded that the statute was suspended during the Civil War even though it contained no provision for such suspension. The following language appears in the Court’s opinion in 6 Wall, at page 539, 18 L.Ed. 939:

“Total inability on the part of an enemy creditor to sustain any contract in the tribunals of the other belligerent exists during war, but the restoration of peace removes the disability, and opens the doors of the courts. Absolute suspension of the right, and prohibition to exercise it, exist during war by the law of nations, and if so, then it is clear that peace cannot bring with it the remedy if the war is of much duration, unless it also be held that the operation of the statute of limitation is also suspended during the period the creditor is prohibited, by the existence of the war and the law of nations, from enforcing his claim. Neither laches nor fraud can be imputed in such a case, and none of the reasons on which the statute is founded can possibly apply, as the disability to sue becomes absolute by the declaration of war, and is a conclusion of law. Ability to sue was the status of the creditor when the contract was made, but the effect of war is to suspend the right, not only without any fault on his part, but under circumstances which make it his duty to abstain from any such attempt. His remedy is suspended by the acts of the two governments and by the law of nations, not applicable at the date of the contract, but which comes into operation in consequence of an event over which he has no control.”

From the language it appears that the decision of the Court rested mainly upon the fact that the plaintiff was an enemy to whom the courts of the Confederacy were closed under international law or the law of nations. We find no support in the case for the broad rule set out in the Marcos case that the outbreak of war between the United States and Japan by implication suspended this court’s statute of limitations to persons in the Philippine Islands. Indeed, the Hanger case was narrowly construed by the Supreme Court in University v. Finch, 18 Wall. 106, at page 110, 21 L.Ed. 818, where the following language appears:

“ * * * That case [Hanger v. Abbott] laid down the proposition that when a citizen of a State adhering during that war to the national cause brought suit afterwards against a citizen residing during the war within the limits of an insur-rectionary State, the period during which the plaintiff was prevented from suing by the state of hostilities should be deducted from the time necessary to bar the action under the statute of limitations. It decided nothing more than this. It did not even decide that a similar rule was applicable in a suit brought by the latter against the former. •* -X- * ”

In Brown v. Hiatts, 15 Wall. 177, 21 L.Ed. 128, another of the Civil War cases, the Court again considered the problem and held that a 3-year statute of limitations which was in effect in Kansas was suspended during the Civil War as to a resident of Virginia. The reasons for the suspension were discussed at page 184 of 15 Wall, where the following language appears:

“It is unnecessary to go at length over the grounds upon which the court has repeatedly held that the statutes of limitation of the several States did not run against the right of action of parties during the continuance of the civil war. It is sufficient to state that the war was accompanied by the general incidents of a war between independent nations; that the inhabitants of the Confederate States on the one hand, and of the loyal States on the other, became thereby reciprocally enemies to each other, and were liable to be so treated without reference to their individual dispositions or opinions; that during its continuance all commercial intercourse and correspondence between them were interdicted by principles of public law as well as by express enactments of Congress; that all contracts previously made between them were suspended ; and that the courts of each belligerent were closed to the citizens of the other.”

In the cases cited above, the Supreme Court held only that since the United States and the Confederacy were belligerents, the courts of one were closed to citizens of the other and statutes of limitation were suspended as between the citizens of the belligerents by international law. We are aware of no case in which the Supreme Court has extended these principles of international law to nonbelligerent nations or powers.

In Poccardi v. Ott, 83 W.Va. 166, 98 S.E. 69, a case decided by the Supreme Court of Appeals of West Virginia, it was held that the principle that statutes of limitation are suspended by the existence of a state of war is not applicable except as between citizens of opposing belligerent states. The court said, 98 S.E. at page 70:

“(2) On the other proposition, involving the existence of a state of war, it is sufficient to answer that' the rule or principle invoked is not applicable except as between citizens of opposing belligerent states, and when the courts of the one are closed to the citizens of the other. As the Kingdom of Italy and the Government of the United States of America were not at war between themselves, but were united against a common enemy, the rules of international law so appeared to have no application.”

In the light of the authorities we are of the opinion that the court erred in the Marcos ease in holding that the outbreak of war between the United States and Japan by implication suspended this court’s statute of limitations as to citizens or residents of the Philippine Islands. The Philippine Islands and the United States were allies rather than belligerents and the citizens of the Philippines were not enemies of the United States to whom the courts of this country were closed. Therefore, the rule of international law that war suspends statutes of limitation as between citizens of belligerents which was applied by the Supreme Court in the Hanger ease was not applicable in the Marcos case nor is it applicable in the case presently before the court.

Although the outbreak of war between the United States and Japan did not have the effect of suspending this court’s statute of limitation as to persons in the Philippine Islands, it is the opinion of the court that the plaintiff in the present case was under a legal disability when its cause of action accrued, and remained under this disability until the end of the Japanese occupation of the Philippine Islands.

In this dissenting opinion in the Marcos case, supra, 102 F.Supp. 547, 106 F.Supp. 172 at page 180, 122 Ct.Cl. at page 660, Judge Whitaker expressed the view/ that the Trading with the Enemy Actr supra, prohibited citizens of the Philippines from suing in the Court of Claims during the war. He based this view upon section 2 of the act which included in the definition of “enemy” all persons residing in enemy occupied territory, and upon section 3(a) of the act which forbade citizens of the United States to trade with enemies of the United States. The term “to trade” was defined in section 2 of the act to mean, inter alia, “ ‘to have any form of business or commercial communication or intercourse’ with.” The pertinent parts of the act are quoted above in this opinion.

Since the act made residents of the Philippines “enemies” while the Philippines were occupied by Japanese forces, and since it forbade intercourse between citizens of the United States and its enemies, we conclude that it in effect closed the courts of the United States to persons in the Philippine Islands during the period in which the Philippines were occupied by the military forces1 of Japan and prevented such persons from suing in this court during that time. Thus, since it was the law, i. e., the Trading with the Enemy Act, which prevented persons in the Philippine Islands from suing during the Japanese occupation, we conclude that such persons were under a legal disability while the occupation continued.

Section 2501 of title 28, quoted above in this opinion, provides that a person who is under a legal disability “at the time the claim accrues” has three years to file his petition in this court after the disability ceases. In his dissent in the Marcos case, Judge Whitaker stated that the Trading with the Enemy Act made inhabitants of the Philippine 'Islands enemy aliens as of December 8, 1941, and placed them under a disability as of that date. We find nothing in the act and nothing promulgated pursuant to the act which specifically supports this date.

In order to determine whether the plaintiff was under a legal disability at the time its cause of action accrued, it is necessary to determine whether it was resident within territory occupied by the enemy on December 21,1941, the date its property was taken by the defendant. As of that date the military forces of Japan had landed in many parts of the Philippine Islands and were in possession of large areas. Chaotic conditions existed in the Manila area and it is doubtful that any communication, other than military, existed between Manila and the United States. The immediate fall of that city appears to have been inevitable. We believe that the conditions then existing were sufficient to make the territory where the plaintiff was resident “enemy occupied” within the meaning of the Trading with the Enemy Act, and that the plaintiff was therefore under a legal disability when its cause of action accrued.

The plaintiff’s disability was removed when the Japanese occupation of the Philippine Islands ended and the courts of this country ceased to be closed to it under the Trading with the Enemy Act. The act contains no criterion for determining when the Japanese occupation ended. We have considered the various dates urged by the parties in the Marcos case and we conclude that September 2, 1945, is the date upon which the plaintiff’s disability ceased. Although there is some possibility that the plaintiff might have managed to file a petition in this court at an earlier date, September 2, 1945, is the most logical and practical of the dates suggested. On that date Japan formally surrendered to the United States and there can be no doubt that on that date, the Japanese occupation of the Philippines was at a complete end.

Plaintiff had three years after the disability was removed within which to file its petition in this court under section 2501 of title 28. It did not file until May 25, 1951, more than five years after the disability was removed, and its petition will therefore be dismissed.

It is so ordered.

WHITAKER, Judge, and JONES, Chief Judge, concur. ■