text:
    GILROY v. PRUDENTIAL INS. CO. OF AMERICA.
    Civ. No. 1102-M.
    District Court, S. D. Florida, Miami Division.
    Oct. 25, 1945.
    Abe Aronovitz, of Miami, Fla., for plaintiff.
    Shutts, Bowen, Simmons, Prevatt & Julian, and L. S. Julian, all of Miami, Fla., for defendant.
   DE VANE, District Judge.

This suit is brought by Dorothea B. Gil-roy against the Prudential Insurance Company of America, a corporation, to recover on two policies of life insurance issued by the defendant on the life of her husband, Murray G. Gilroy, now deceased. The deceased carried six policies of insurance with the defendant, all of which were paid on his death save the two involved in this suit. Defendant, claiming these two policies had lapsed on date of death, declined to pay the same. Plaintiff, claiming the policies were in full force and effect on date of death of insured, brought suit to recover on said two policies.

The controversy centers around whether premiums were paid .in July, 1942, and whether premiums paid on September 1, 1942, were legally refunded. If the July premiums were paid or if the premiums paid in September were not legally refunded the policies were in full force and effect on date of death of the insured, and plaintiff is entitled to recover. If defendant is right on its contention as to both issues, then both policies had lapsed on date of death of insured and defendant is not liable on the policies.

At the trial plaintiff produced and filed in evidence a “temporary receipt” dated July 8, 1942 (Plaintiff’s Exhibit No. 2) showing payment of premiums on that date on the two policies in question. The temporary receipt was signed by J. R. Evans, an agent of the defendant, who usually collected the monthly premiums due on the two policies. Plaintiff testified that she found the receipt only a few days before the trial of the case began and neither the defendant nor its counsel had any knowledge of the existence of this temporary receipt until shortly before the trial. Evans appeared as a witness for the defendant and denied that he had received the premiums indicated by the receipt, although he acknowledged his signature on the temporary receipt. If the premiums indicated by the receipt of July 8, 1942 were paid to Agent Evans, by the insured, Evans never turned them in to the company.

Since the trial closed, counsel for defendant has submitted photographic copies of the receipt to a handwriting expert, who, in affidavit form, swears that the receipt is not in the handwriting of Evans and based upon this affidavit, counsel for defendant has filed in this case a Motion for New Trial on the ground of this newly discovered evidence, which was not available to the defendant at the time of trial.

If the case rested entirely upon the validity of this receipt the Court would grant the Motion for New Trial and explore fully tfie question of the validity of the July 8, 1942 receipt, held by plaintiff. However, if the second payment made upon the two policies in question was a valid and: binding payment, as between the insured and the Insurance Company, the policies were in full force and effect on the date of the death of insured and plaintiff is entitled to recover. It is, therefore, appropriate that the Court explore the second issue before granting a new trial to determine the validity of the purported temporary receipt dated July 8, 1942.

The circumstances surrounding the second payment are these: When agent Evans called on the insured in July, 1942, to collect the monthly premiums due on these policies in June, the insured advised Evans that he was not financially able to continue to pay premiums on the two policies. Whereupon Evans advised the insured that the loan value on the two policies was sufficient to carry them for an additional period and offered to secure a loan for that purpose. The insured readily agreed to the proposal. On August 14, 1942, a date subsequent to the expiration of the grace period in which the July premiums could have been paid, Evans presented the insured with a blank form application for a loan on the two policies. The form was also an application for re-instatement of the the two policies. The insured signed the blank form application before it had been filled out and as he is now dead and cannot speak the record is silent on whether he knew it was merely an application for a loan or an application to re-instate the policies and for a loan.

On September 1, 1942, the insured paid to another agent of the Insurance Company, Breitbart by name (Plaintiff’s Exhibit No. 8), $108.60 on, account of premiums on the two insurance policies. The record shows that Breitbart had not theretofore collected premiums from the insured on any of the policies carried by him with the defendant, but on that date he was in the business place of the insured collecting premiums on policies carried by some of insured’s employees with the defendant insurance company. The insured recognized Breitbart and told him that as he was going on a vacation and as he would likely be gone when the regular agent (Evans) came around to collect the premiums, he would like to pay his premiums to Breitbart. Breitbart immediately called the office of the Insurance Company, from insured’s place of business, ascertained $108.60 was due, collected this amount and turned it in to the Insurance Company.

When Breitbart turned this money in to the company, the policies had been reinstated, the loans on the policies had been approved and the amount of the loans applied to the payment of premiums then due and to Fall due for the next several months. The resident agent of the company decided that under these circumstances the premiums of $108.60, collected by Breit-bart, should be returned. The testimony of the employee of the Insurance Company who made out the check and handled the return, is to the effect, that she asked Breitbart in whose favor the check should be drawn and he advised her that it should be drawn to the order of the plaintiff, as plaintiff and not the insured had paid him the premiums. Breitbart denied this on the stand. He testified that the insured paid the premiums and that he gave no instructions as to how the check should be drawn.

The check was, in due course, drawn in favor of the plaintiff and mailed to her, but plaintiff was not in Miami at the time and the check was forwarded to her at some point in the North where she was visiting her parents. Plaintiff testified that she was carrying insurance with the defendant, also, and that while she had never received dividends on her insurance before, she assumed that the check represented dividend payments on insurance she carried with the defendant and was intended for her. She was in no hurry to cash the check and did not cash it until after her return to Miami in October. The check shows on its face the policy number of one of the policies involved in this suit. No letter of explanation accompanied the check and the check does not show on its face that it was a refund of premiums paid on September 1, 1942.

The question thus presented is whether the payment of this amount of money to the plaintiff constituted á refund of premiums paid by the decedent during his lifetime.

Some one is obliged to suffer as a result of the comedy of errors made in the handling of this payment, and the Court is of the opinion that the equities are with the plaintiff and against the defendant.

There is no dispute that the premium payments of September 1, 1942 were made, were accepted by the company and deposited to its account. No provisions of the insurance policies required their refund or their acceptance by insured, but, of course, the defendant could offer to return them, if it desired to do so. Defendant contends that the premiums were paid by the plaintiff and therefore defendant had the right to return them to plaintiff. The Court holds against the defendant on this contention. The Court is of the opinion that it makes no difference who paid the premiums. As the defendant accepted the premium payment, a duty rested upon defendant to apply them as insured intended they should be applied, or if defendant desired to return them, to refund them to the insured or secure his consent to refund them to his wife. The record contains no such proof and there is no evidence that the insured ever had any knowledge that the premiums had ever been returned by the defendant to his wife. Plaintiff testified she never told insured about the check received and defendant does not claim it notified him.

Counsel for defendant contends that plaintiff, as beneficiary under the two policies, should not be permitted to profit by her own misdeeds. If the action of plaintiff in accepting and cashing the check constituted the perpetration of a fraud upon the defendant there would be merit to this contention. However, the record does not support a charge of misconduct on the part of plaintiff for the reason that it is completely void of proof that plaintiff was aware that the check received by her and' payable to her order constituted a refund of the premium payments made by the insured on September 1, 1942. The evidence shows that plaintiff cashed the check at the office of defendant upon her return to Miami, Florida, in October, 1942, but shows nothing said to her as to the nature or purpose of the check.

Counsel for defendant also attaches great importance to the fact that when the next premiums fell due in March, 1943, the insured failed to pay any further premiums on the two policies and realized that they had lapsed and would continue in effect only as long as the paid-up insurance would carry them. The Court is of the opinion that this has nothing to do with the issues in the case. The sole question before the Court is whether or not these payments, together with the extended insurance, were sufficient to keep the policies in full force and effect until the death of the insured. The parties agree that they were sufficient to carry the insurance beyond the date of death of the insured.

Upon all the facts in this case the Court holds that the two policies were in full force and effect upon the date of death of the insured, and plaintiff is entitled to recover thereon.

Counsel for plaintiff will prepare Findings of Fact and Conclusions of Law in conformity with this Memorandum Opinion and submit copies thereof to counsel for defendant, who may file objections thereto with the Court and may submit additional Findings of Fact and Conclusions of Law.


source: Caselaw Access Project

author: De VANE, District Judge.

license: Public Domain

text:
    THOMPSON v. TAYLOR.
    Civil Action No. 234.
    District Court, S. D. Florida, Orlando Division.
    Sept. 24, 1945.

      W. A. Pattishall, of Orlando, Fla., for plaintiff.
    Claude L. Gray, of Orlando, Fla., for defendant.
   De VANE, District Judge.

As pointed out in the Memorandum Opinion heretofore filed in this case, 60 F.Supp. 395, this suit arises out of the Emergency Price Control Act of 1942 and the Stabilization Extension Act of 1944, 50 U.S.C.A.Appendix, § 901 et seq. and § 963 et seq. The Court decided for the plaintiff on that part of the case arising out of the Emergency Price Control Act of 1942 and for the defendant on that part of the case brought under the Stabilization Extension Act of 1944. At the time the case was heard defendant made no contention that the Stabilization Extension Act of 1944 constituted the sole basis for recovery. In the motion for a judgment notwithstanding verdict of the Court or for a new trial defendant now raises this point and vigorously contends that the Stabilization Extension Act of 1944 determines the amount of defendant’s liability notwithstanding the fact that the acts complained of, for which recovery is allowed, all occurred before the effective date of the Stabilization Extension Act of 1944 and the cause of action had already accrued when the Stabilization Extension Act became effective. Defendant relies chiefly upon the fact that plaintiff did not file suit until after the Stabilization Extension Act of 1944 became effective and therefore his right to recover is limited by the provisions of this Act.

The Stabilization Extension Act of 1944 amended the Emergency Price Control Act of 1942 in certain respects, among them being the amendment as to the amount of liability incurred by a landlord for overcharges in rent to his tenant. 50 U.S.C.A.Appendix, § 925(e). The Court holds that the amount of such liability fixed by the Stabilization Extension Act of 1944 is applicable only to violations of the Act occurring on or subsequent to the effective date and that for violations which occurred prior to its effective date the provisions of the Emergency Price Control Act of 1942 are controlling. The mere fact that plaintiff had not instituted an action to recover such liability prior to the effective date of the Stabilization Extension Act of 1944 does not effect his right to recover the penalties authorized under the Emergency Price Control Act of 1942. The motion of defendant for a judgment notwithstanding verdict or for a new trial, on the several grounds raising this question, is denied.

Ground No. 7 of the motion deals with the question whether or not plaintiff could recover for an alleged overpayment which occurred more than twelve months prior to the filing of this action. Plaintiff sought to recover for seven monthly overcharges, beginning December I, 1943, and running through June 1, 1944. The action was not filed until December 15, 1944, but at the trial of the case the parties entirely overlooked the fact that the first payment, which occurred more than twelve months prior to the date on which the action was filed, was barred by the Statute. And while no plea of bar on account of the running of the -Statute, against the first month’s payment, was filed by the defendant, it is the opinion of the Court that its jurisdiction to award damages under the Emergency Price Control Act of 1942 is limited by this Act, to violations committed within twelve months of the date action is instituted thereon. The judgment heretofore entered for the plaintiff in this case on May II, 1945, in the sum of $297.30, therefore, will be set aside and a new judgment entered in the sum of $247.30, together with the further sum of $100 allowed as attorney’s fees, plus the costs taxed in this case.


author: BRIGHT, District Judge.

text:
    NORDLING v. GIBBON et al.
    District Court, S. D. New York.
    Aug. 13, 1945.
    Sol H. Sleppin, of New York City, for libelant.
    Duncan & Mount, of New York City, (Wilbur H. Hecht and Russell T. Mount, both of New York City, of counsel), for respondent.
    John F. X. McGohey, U. S. Atty., of New York City (Edward L. Smith, of New York City, and Leavenworth Colby, of Washington, D. C., on the brief), for the United States, amicus curiae.
   BRIGHT, District Judge.

This libel is to recover $5,000 war risk insurance upon the life of Thor August Lindberg who was a member of the crew of the S. S. Casimir. Libellant was the designated beneficiary of that seaman under the policy of insurance. That ship, on February 26, 1942, collided with the S. S. Lara, subsequently sank, and Lind-berg lost his life.

The policy, issued by Lloyds and underwritten by the respondent and others, insured deceased and the other members of the crew of the steamship mentioned, at the time of the collision and loss of life, against war risks only, in accordance with the conditions of the Full Crew Form approved by the United States Maritime War Emergency Board and by their supplement to decision No. 1 of February 6, 1942.

That Form provided for insurance against loss of life and bodily injury to a member of the crew “directly occasioned by capture, seizure, destruction by men of war, piracy, takings at sea, arrest, restraints and detainments and other warlike operations (including collisions in convoy but with reservation of subrogation rights under owner’s marine policies or against other colliding vessel, in the event it is determined that such collision is attributable to marine causes) and acts of kings, princes and peoples in prosecution of hostilities or in the application of sanctions under international agreements, whether before or after declaration of war and whether by a belligerent or otherwise, including factions engaged in civil war, revolution, rebellion or insurrection, and including the risks of aerial bombardment, floating or stationary mines and stray or derelict torpedoes.”

The facts are not in dispute. Thor August Lindberg concededly was insured under the provisions of the policy. Prior to February 26, 1942, the Cassimir sailed from Santiago, Cuba, bound for Baltimore, Maryland. It was a tank steamship, owned by the Cuba Distilling Company, Inc., and was laden with a full cargo of Cuban invert molasses, all of which was owned by the Defense Supplies Corporation. It was being transported under the direction of that corporation to the Curtis Bay Distillery of the United States Chemicals, Inc., of which the Cuba Distilling Company was a wholly owned subsidiary, at Curtis Bay, Baltimore, Maryland, and was intended to be distilled by the Chemicals Corporation into alcohol, under the direction of the United States War Production Board, to be used in the manufacture of smokeless powder and other war materials. The Defense Supplies Corporation was a corporate instrumentality and agency of the Government, and was used and empowered by the Government to purchase and acquire, among other things, materials, drugs, commodities and all things necessary to it in the prosecution of the war with Germany and Japan. The Cassimir, in accordance with the orders of the Navy Department of the United States, was proceeding on its voyage, completely blacked out and without showing any navigation lights of any kind, except that immediately before the collision the navigation lights on both ships were lighted. In the early morning of February 26, 1942, and while it was still dark, the Cassimir collided with the Lara, which was also proceeding without navigation lights and blacked out under the orders of the Navy Department. The Cassimir was badly damaged and shortly thereafter sank.

After the collision, in petitions for limitation of liability filed by both ships, both were held by this court guilty of fault. The Cassimir, D.C., 55 F.Supp. 822, affirmed Cuba Distilling Co. v. Grace Lines, Inc., 2 Cir., 143 F.2d 499.

The sole question involved is whether or not the loss of Lindberg’s life was occasioned by “other warlike operations” underscored by me in the above quoted portion of the policy of insurance.

The Cassimir was not a war vessel. The cargo of the Cassimir was not capable of use for war in its then form. It was not consigned or to be delivered to the armed forces of this Government. The character of the Lara, of its cargo, or the nature of its business, were not shown. The collision and death, of course, occurred after the declaration of war against Germany and Japan.

It would seem to me that the determination of the meaning of the words “other warlike operations” might require a consideration of the nature of the vessels involved, their character and their destination. Clearly the insurance policy used the words in a comprehensive sense. The language used preceding these words, as well as that following other than “piracy” and the “application of sanctions under international agreements,” are significant of active warlike operations. “Other warlike operations” then can have been intended to include acts or occurrences not already defined or mentioned. In the determination of what was meant the construction to be given should be in favor of the insured and against those who used the words iñ their contract. But likewise must be considered the fact that the purpose of the policy was to take care of hazards other than those covered by marine risk policies.

The Supreme Court has said in a somewhat similar case, that the words in question should be construed in harmony with the English courts. Queen Insurance Co. v. Globe & Rutgers Fire Insurance Co.. (The Napoli) 263 U.S. 487, 44 S.Ct. 175, 68 L.Ed. 402, affirming D.C., 278 F. 770, and 7 Cir., 282 F. 976.

It has been held both here and in England that the fact that the vessels were proceeding without lights under orders of the naval authorities would not bring them within the definition of warlike operations. Queen Insurance Co. v. Globe & Rutgers Fire Insurance Co., supra, 263 U.S. at page 492, 44 S.Ct. 175, 68 L.Ed. 402; Clan Line Steamers v. Liverpool & London W. R. Association, 1942, 58 T.L.T. 369, 73 Lloyd’s L.R. 165-169; The Petersham, The Matiana, 1921, 1 A.C. 99-115. And although the cargo was ultimately intended to become a part of munitions of war, the carriage of it would not be a warlike operation unless such cargo at the time of the occurrence was of such a kind as to be then capable of use by the armed forces. That it had to be processed, as here, first into alcohol and then into smokeless powder, would be too remote. Clan Line Steamers v. Liverpool & London W. R. A., supra, 73 Lloyd’s L. R. pages 169, 172, 173; Peninsular & Oriental Branch v. Commonwealth Shipping Rep., 1922, 16 Asp.Mar. Cas. 33-36, [1923] A.C. 191. The nature of the cargo has been held by the Second Circuit not determinative in the Queen Insurance Company case, 282 F. at page 981. And the carriage of the cargo to the Curtis Bay Distillery at Baltimore would not be to a war base. Owners of Larchgrove v. The Crown, 1919, 1 Lloyd’s L.R. 498, 36 T.L.R. 108. And neither The Cassimir nor The Lara were war vessels owned by the Government or engaged in the transportation of war material from one war base to another.

It would appear, therefore, that the collision was purely the result of a marine peril and not the result of a warlike operation. See also Standard Oil Co. v. St. Paul F. & M. Insurance Co. (The Petter), D.C., 59 F.Supp. 470-475, 1945 A.M.C. 109.

The cases cited by libellant do not seem to help her. Link v. General Insurance Co. of America, D.C., 56 F.Supp. 275, arose out of a collision with a navy tanker carrying fuel oil and gasoline for use by the Navy and aircraft in Alaska while the Japanese were in the Aleutians and at ICiska. The tanker was carrying war stores from one war base to another. In the Coxwold case, [1942] T.L.Rep. 6/5/42 at page 263, 73 LI. L.R. 1, the vessel was carrying petrol to the British military forces fighting in Norway. The collision in the Geelong case, Peninsular & Oriental Branch Service v. Commonwealth Shipping Rep., [1923] A.C. 191, 16 Asp.Mar.Cas. 33, was with a ship carrying military stores between war bases. The collision in The Argantock, [1921], 2 A.C. 141, was with a destroyer on patrol duty. In the Trevanion-Roanoke case, [1929] A.C. 534, the loss was the result of a collision with a mine planting ship returning to this country after the Armistice with a load of mines.

Public Law No. 17, 78th Congress, H.R. 133, 57 Stat. 45-51, to some extent relied upon by libellant, did not become a law until March 24, 1943 ‘and does not and could not change the contract sued upon.

The libel is accordingly dismissed.


author: BURKE, District Judge.

text:
    In re BURDICK.
    No. 35574.
    District Court, W. D. New York.
    Sept. 14, 1945.
    Karl Goldman, of Buffalo, N. Y., for petitioner.
    Saperston, McNaughtan & Saperston, of Buffalo, N. Y., (Howard T. Saperston, of Buffalo, N. Y., of counsel), for bankrupt.
   BURKE, District Judge.

The creditor’s application brings here for review an order made by the Referee in Bankruptcy vacating his previous order denying the bankrupt’s discharge, which was entered by the Referee upon the bankrupt’s failure to appear at the hearing on his application for discharge, and fixing a time for the bankrupt’s appearance for examination in relation to the objections to his discharge. The-only ground for review of the order is the asserted lack of authority of the Referee to vacate his previous order, in view of the provision concerning waiver of the right to discharge contained in section 14, sub. e, of the Bankruptcy Act, 11 U.S. C.A. § 32, sub. e.

The literal construction of section 14, sub. e, contended for by the petitioner would impose upon referees in bankruptcy a veritable strait-jacket in relation to matters of bankrupt’s discharges and would prevent a referee from- ever vacating an order determining that a bankrupt had waived his right to a discharge for failure to appear at a hearing upon his application for discharge, regardless of the merits of the application to reopen the default and regardless of the lack of blame upon the part of the bankrupt. Such an unreasonable construction was, in my opinion, never intended by Congress and should be avoided. A referee has the power to relieve a party from a bankruptcy decree entered against him through his mistake, inadvertence, surprise or excusable neglect. La Barbera v. Grubard, 2 Cir., 112 F.2d 738; In re Pot-tasch. Bros. Co. 2 Cir., 79 F.2d 613, 617, 101 A.L.R. 1182.

The order of the Referee vacating his previous order, and reopening the default, was in the exercise of his discretion and should be confirmed.


text:
    ELROD et al. v. LUCKENBACH S. S. CO., Inc.
    District Court, S. D. New York.
    Aug. 21, 1945.
    William L. Standard, of New York City (Ruth H. Saslow, of New York City, of counsel and on the brief), for libellants.
    Burlingham, Veeder, Clark & Hupper, of New York City (Eugene Underwood, of New York City, of counsel), for respondent.
   BRIGHT, District Judge.

Libellants, in behalf of themselves and others, sue for compensation for assistance rendered in the salvage of the S.S. Susan V. Luckenbach, belonging to the respondent. They allege, and it is admitted, that they were engaged by the respondent as seamen aboard that steamship, for a voyage commencing at New York on or about January 13, 1942, and that on or about April 10, 1942, that steamship, while at sea, came into collision with the S.S. Nea Hellas. It is further alleged and denied, that after the collision, the respondents and the remainder of the crew were ordered to abandon ship, which was done, and the crew arrived at Suez on April 12, 1942; that on April 13, 1942, the master advised libellants and the crew that the vessel had been located, that it had gone aground, and called for volunteers to assist in the salvage operations; that libellants voluntarily rendered assistance between April 13 and May 31, 1942, which was not their usual duties, and consisted of special duties in which they assisted a special salvage crew to save and finally make the steamship seaworthy. It is further alleged and denied that in the work libellants were subjected to special dangers of fire, they were without life boats, the vessel was subject to air raids and attack from enemy craft, was filled with water, there were no sanitary facilities, and the special salvage crew was frequently one-half mile away during the night. It is further alleged and denied that as a result of their work, the steamship was brought to Suez, and was able eventually to be repaired and complete her original voyage.

The law applicable seems fairly well settled. To earn salvage, there must be (1) a marine peril, (2) services voluntarily rendered when not required as an existing duty or from a special contract, and (3) success in whole or in part, or that the services rendered contributed to such success. The Sabine, 101 U.S. 384, 25 L.Ed. 982. A person who renders such service is called a salvor, and he is one who, without any particular relation to the ship in distress, proffers useful service and gives it as a volunteer adventurer without any pre-existing contract that connected him with a duty of employing himself for the preservation of the vessel. Seamen belonging to the ship cannot, as a general rule, claim compensation, not only because it is their duty to save both ship and cargo, if it is in their power, but because it would be unwise to tempt them to get the ship and cargo into a position of danger in order that by extreme exertion they might claim salvage compensation. The Clarita, 23 Wall. 1, 90 U.S. 1, 16, 17, 23 L.Ed. 146, 150. Judge Lacombe, in The C. P. Minch, 2 Cir., 73 F. 859, 864, after an extensive review of the cases upon the subject, wrote:

“Upon the question as to what is sufficient evidence of abandonment, reference may be had to Clarke v. The Dodge Healy, Fed.Cas.No.2,849, 4 Wash.C.C. 651, which in some respects resembles The John Perkins, supra. * * * The mate then left. The brig was subsequently saved. There was no question in this case of seamen’s salvage, but the court discusses the subject of abandonment. It is suggested that, when such a question arises, one’s actual intention is best determined by acts, rather than by declarations, contemporaneous or subsequent. After discussing all the facts, Judge Washington says:
“ T am, in short, quite satisfied that an abandonment of the brig, without the intention to return to her in case she should escape the danger that threatened her, was at no period of time in the contemplation of the mate; and that, when he spoke of her being abandoned, he was far from annexing a technical meaning to the phrase, but merely intended to express the danger he apprehended her to be in, and his abandonment of the possession of her until the danger should be over, or should appear to be less imminent. I consider the brig as having at no period of time been out of the constructive possession of the owners. * * * She was deserted on account of an immediate danger, and only during such danger; but animo revertendi if the danger should pass away. She was watched by the mate, and was always in his view whilst on shore.’
# * * * * *
“From this review of the authorities, it is apparent that, in every case where compensation in the nature of salvage has been awarded to seamen, the voyage has terminated by the shipwreck of the vessel, which has either gone to the bottom or left her bones on the shore, or she has been abandoned by all, or by all except the salvors, under circumstances which show conclusively that the abandonment was absolute, without hope or expectation of recovery, or the seaman has been by the master unmistakably discharged from the service of the shipowner. * * *
“The acts of the captain in hurrying at once to the tug, and the request he made of its master, show conclusively that he had not abandoned all hope of saving the schooner.”

To the same effect, see The Island City, 1 Black 121-128, 66 U.S. 1, 17 L.Ed. 70; The Macona, D.C., 269 F. 468; Drevas v. United States, D.C., 58 F.Supp. 1008, 1945 A.M.C. 254.

The facts admit of very little dispute. Libellants were the members of the crew of the Susan; Elrod the boatswain, Gillespie an oiler, Robert the carpenter, and Fenn a wiper. In January 1942, they had signed on for a foreign voyage for twelve months. Their vessel had discharged its cargo at Suez, and was proceeding under ballast toward Aden on April 10, 1942, and at about 11:14 in the evening, the vessel was struck on the port side abreast of No. 5 hatch by H.M.S. Nea Hellas, carrying troops for Suez. The collision tore a hole in the port side of the Susan, ten or twelve feet into the ship, and for its full depth. The vessel began making water rapidly, water entered the No. 4 hatch, the shaft alley was full of water, and the bulkhead between No. 4 and the engine room was leaking badly. The captain tried for five hours to get the ship back to Suez, until about 4:20 A. M. on April 11th, when he was informed by the chief engineer that he was unable to keep the ship afloat. The master then tried to beach the ship, but five minutes later, it looked as if the bulkhead between No. 4 and No. 5 hatches had collapsed. “Abandon ship” was then sounded, the crew was ordered to take to the boats, and the ship was placed in position with relation to the beach and the wind that she would beach herself if she remained afloat for a few more minutes. The Nea Hellas, which had stood by during the proceedings, picked up all of the crew and took them to Suez, where they were housed at the Grand Hotel, and remained there until they returned to the ship. Robert testified that the captain told the crew in the hotel that they were still all members of the crew and that he was going to see if he could locate the ship.

The captain testified that when he ordered the crew to the boat, his intention was to take care of them, that he certainly had no intention of abandoning the ship, and that his subsequent action proved that he intended to return to the ship. When he went up on the bridge of the Nea Hellas, after being rescued from the boat, he had the captain radio the British Admiralty in Suez requesting that arrangements be made to take care of the Susan. Upon his arrival in Suez, he reported to the Admiralty and requested transportation to where he believed the Susan may have been beached, and that a salvage officer go with him to make the survey. The request was granted, and the master and the salvage officer left the same day and proceeded to where the ship had grounded in the Gulf of Suez. They boarded the vessel on April 12th, decided that salvage operations could be effected, and immediately radioed to the Admiralty requesting salvage service.

The captain then returned to Suez, met the crew, explained the conditions in which he had found the Susan, and advised them to stand by, that he might call on them at any time, as they were going to make an effort to salvage the ship. He asked for volunteers, every member of the crew responded, and four were selected, the chief officer McCandlish, the chief engineer Patterson, Elrod, Fenn and the steward Taylor.

Elrod testified that the captain also explained the condition of the vessel, stating that there was a little water in the quartermaster’s fo’c’s’le, that the vessel was sitting on a coral reef approximately around the forward end of No. 4 hatch on the port side, resting in such a manner that she had a list, and was up at the bow and down at the stern.

The services of The Confederate, a tug especially equipped for salvage, with a crew of 40 or 50, was employed by the master to do the work. The tug, with the captain and the members of the crew mentioned, returned to the Susan on April 15, 1942, and the work of placing a patch over the hole in the port side, pumping out the water, and towing the vessel back to Suez, continued until May 30th. Elrod remained on the Susan the entire period, Fenn until May 10th and was replaced by Gillespie, who was on the vessel from May 16th to May 20th. Robert was not upon the ship at any time during the work, and did not come aboard until she had been returned to Suez on May 31st. Those of the crew mentioned, who were on the ship, including the captain and the officers, during the periods mentioned, did what they could to assist the specially engaged salvage crew in the salvage work.

When the vessel arrived at Suez on May 30th, the captain of the tug The Confederate advised the captain of Susan that from then on his responsibility toward the vessel had ended, and that the captain of the Susan was thereafter responsible now that she was afloat and in safe anchorage. The ship was later placed in drydock on July 3rd or 4th, and the repairs completed. The crew rejoined the ship prior to the dry-docking some time in June, except that some of them were evacuated down the coast by the American Consul because of the advance of General Rommel’s army in Africa, and it was feared that they would take Alexandria and even the Suez Canal. They returned to the vessel in August, and she 'sailed late in October or early November for New York, arriving there on March 2nd 1943, and the crew signed off on March 10th.

No new articles were signed by the crew. Nothing was done to those already signed, and there was no suggestion at any time that the voyage had been abandoned or that the articles were abrogated. Advances of pay were made from time to time to the crew, the payment of allotments was continued to crew dependents without interruption, and the crew was paid off under the articles signed at the beginning of the voyage. They were all paid their wages from the time they joined the ship until they left it. When they were paid off before the Shipping Commissioner, protests were made as to the failure of payment of certain bonuses, and a decision upon that subject was rendered by the Maritime War Emergency Board, settling the dispute. It appeared that at the time of the trial, Elrod still had claims existing which he claimed should be paid under the articles signed by him.

This recital of facts, which are practically without dispute, convinces me that there was never any absolute abandonment of the ship without hope of returning or expectation to recover. That being so, the libellants have failed in their proof, and their libel must be dismissed.


author: LITTLETON, Judge. WHITAKER, Judge

text:
    DEPARTMENT OF WATER AND POWER OF CITY OF LOS ANGELES et al. v. UNITED STATES.
    No. 43727.
    Court of Claims.
    Nov. 5, 1945.

      Plaintiffs sue to recover $11,174.63 alleged to be due as a result of certain contracts with defendant for water purchased from plaintiffs by defendant and used by it at two veterans’ hospitals, one of which is known as the San Fernando and the other as the Sawtelle.
    Recovery is grounded on the claim that the water was used outside the city limits of Los Angeles and that the ordinance rate for water so used was higher per 100 cubic feet than the within-city rate provided in the contracts and paid by defendant. The difference between the higher or outside-city rate and the within-city rate is claimed after November 1, 1931, to September 6, 1933, as to the San Fernando Hospital, and from November 1, 1931, to January 1, 1932, as to the Sawtelle Hospital.
    The principal contentions made by defendant are that the within-city rate, which had been agreed to, chargeid, and paid long prior to November 1, 1931, for the water obtained from plaintiffs and used at the hospitals, was the proper and legal rate during that period and the periods here involved; but that if, in the circumstances, this was not the proper and legal rate, plaintiffs at no time had a contract expressed or implied in fact for a higher rate and this court is without jurisdiction of the claim.
    Special Findings of Fact

      San Fernando Hospital

    1. In the early 1920’s it became desirable for the United States, through the Veterans’ Bureau, to construct an additional hospital in Southern California for the treatment of tuberculosis patients. Several sites were considered, among which was one containing 616.02 acres and known as the Ford Craig property or Loop Ranch. Thirteen and one-half acres of this tract were within the corporate limits of the City of Los Angeles and the remaining 602.52 acres were outside but adjacent to said limits.
    2. During 1923, 1924, and 1925, several conferences were held between representatives of the Veterans’ Bureau and representatives of the city and of the Board of Public Service Commissioners of Los An-geles, predecessor of the Board of Water and Power Commissioners of Los Angeles, relative to the possible purchase of the site by the United States and the furnishing of water to it by the City of Los An-geles, and the representatives of the Veterans’ Bureau were assured that the City of Los Angeles would furnish the water and at the lower rate charged patrons within the city limits instead of at the higher rate charged patrons outside the city limits. These conferences were mostly with Mr. William Mulholland, the engineer of the Board, whose recommendations to the Board were always followed, but other city officials, including the city attorney, were in some of the conferences.
    3. The United States purchased the site and constructed the hospital, referred to as the San Fernando Hospital, the construction of the hospital being completed in the spring of 1926.
    4. The Board of Water and Power Commissioners of the City of Los An-geles, by an indenture dated January 6, 1926, conveyed to the United States an easement in a plot of land, approximately 50' x 50' at the corner of Eldridge Street and Astoria Avenue, for the construction and operation thereon by the United States at its own expense of a pumping station, and also an easement across the land between this plot and the Maclay or Pacoima Reservoir, owned by the city, a distance of about 150 feet, for the laying by the United States at its own expense of a 10-inch suction pipe line from the pumping station to the reservoir. Both the plot and the reservoir were within the city limits.
    5. On January 9, 1926, a written agreement was entered into between the Department of Water and Power of the City of Los Angeles and the United States covering the construction by the city of an 8-inch pipe line along Astoria Avenue from defendant’s pumping station to the corporate limits of Los Angeles nearest the hospital site, a distance of about a half mile, the United States to pay for it at a certain rate per month during a period of five years, at the expiration of which time title to the pipe line should be and remain in the City of Los Angeles.
    6. The United States, at its own expense, constructed a pumping station on the plot of land mentioned in finding 4, and also at its own expense laid a 10-inch suction pipe line from it to the reservoir, installing thereon a meter for the measuring of the water going into the pumping Station from the reservoir.
    The Government paid the city a total of $4,315.67 for the construction to the city limits of the 8-inch pipe line referred to in the January 9, 1926, agreement described in finding 5, after first, however, acquiring a right-of-way a distance of 178.1 feet from the end of Astoria Avenue to the corporate limits of the city, inasmuch as Astoria Avenue actually did not extend to the city limits, as set forth in said agreement, and at said city limits said pipe line connected with the hospital’s own pipe system built by it on its own grounds. This work was actually done prior to the dates stated in findings 4 and 5 but pursuant to agreements arrived at in the conferences set out in finding 2.
    The United States bore the expense of operating the pumping station and, since the meter was between the pumping station and the reservoir, it bore all the expense of any line loss or leakage of water that might occur in the line after the water left the meter. The pumping station was necessary because the hospital site and grounds were higher than the Pacoima Reservoir.
    7. In October 1925, the first written contract for the furnishing of water was entered into between the city and the Veterans’ Bureau. It covered the period from November 1, 1925 to June 30,- 1926. It provided that the water would be furnished “at combined irrigation and domestic rate at five (5) cents per 100 cubic feet and in addition thereto, a monthly service charge of $1.00, subject however to change of rates by resolution of Board of Water and Power Commissioners and ordinance adopted by the Council of the City of Los Angeles.” It also provided that:
    “Delivery of water to be made at Reservoir of Department of Water and Power, said reservoir located south of Eldridge Street, between Sayre and Astoria Avenues, Los Angeles, California, officially known as the Pacoima Reservoir.”
    On May 27, 1926, a second written contract was entered into under and by which the city agreed to furnish water during the period from July 1, 1926 to June 30, 1927, “at combined irrigation and domestic rate of five (5) cents per 100 cubic feet and, in addition thereto, a monthly service charge of $1.50, subject however to change of rates by resolution of Board of Water and Power Commissioners and ordinance adopted by the Council of the City of Los Angeles.” This contract also provided that:
    “Delivery of water to be made at Reservoir of Department of Water and Power, said reservoir located south of Eldridge. Street, between Sayre and Astoria Avenues, Los Angeles, California, officially known as the Pacoima Reservoir.
    “The rates specified herein are not in excess of those charged the general public for similar service and are subject to any changes made by a duly authorized State or Government commission during the period of the contract.”
    This contract further provided that it should remain in force during the period stated unless terminated at the request of either party after ninety days’ notice in writing.
    A third contract similar to the first two was executed December 24, 1926, covering the period from July 1, 1927 to June 30, 1928, and on December 12, 1927, another contract, similar to the others, was executed covering the period from July 1, 1928 to June 30, 1929. All four of these contracts were in accord with the then existing within-city ordinance rates.
    8. A fifth contract was entered into November 27, 1928, covering the period from July 1, 1929 to June 30, 1930. This contract contained the following provision:
    “At the option of the Government, this contract may be renewed from year to year for a period of five years after the commencement- date as shown on page one, upon notice in writing to the contractor at least thirty (30) days prior to the expiration date, unless previously canceled in accordance with clause two hereof.”
    Clause two was the same provision that was in the former contracts, i. e., that the contract should remain in force during the period stated therein unless terminated at the request of either party after ninety days’ notice in writing. The contract also contained the following:
    “At combined irrigation and domestic rate a minimum charge of $2.45 per month will be made for monthly consumption of 1900 cubic feet or less and for all consumption in excess of 1900 cubic feet a charge will be made of 5 cents for 100 cubic feet, subject, however, to change of rates by resolution of Board of Water and Power Commissioners and ordinance adopted by the Council of the City of Los Angeles.
    “Delivery of water to be made at Reservoir of Department of Water and Power, said reservoir located south of Eldredge Street, between Sayre and Astoria Avenues, Los Angeles, California, officially known as the Pacoima Reservoir.
    “The rates specified herein are not in ■excess of those charged the general public for similar service and are subject to any changes made by a duly authorized State or Government Commission during the period of the contract.
    “Ten-inch meter on service.”
    The rates fixed in this contract were also in accord with the then existing ordinance governing within-city rates.
    9. All the contracts were executed on behalf of the city by the Comptroller, Mr. L. M. Anderson, pursuant to a resolution adopted by the Board of Public Service Commissioners of the city on August IS, 1919, as follows:
    “Whereas, the United States Government requirements make it necessary for this Department to enter into contract each time water is applied for by the several branches of the United States Government, and it will cause delay if the Board of Public Service Commissioners acts on each application separately;
    “Now, therefore, be it resolved, that the Comptroller be, and he is hereby, authorized to enter into contracts on behalf of this Board for furnishing water or light and power to the several Departments of the United States Government, at ordinance rates; and that he be authorized to sign said contracts for and on behalf of this Board.”
    10. Plaintiffs furnished and the defendant paid for water at the rate fixed by the contract of November 27, 1928, the then existing within-city ordinance rate, ¡until about November 1, 1931, the contract of November 27, 1928 having been renewed from year to year, at which time (November 1, 1931) the plaintiffs made the ■contention that the higher ordinance rate ■outside the corporate limits should govern and that the defendant should pay at that rate.
    11. On December 1, 1931, the plaintiffs began billing the defendant for water at ¡the higher without-city ordinance rate. The defendant refused to pay at the increased rate. Nevertheless plaintiffs continued furnishing water under renewals of the contract of November 27, 1928 until they cancelled this contract by 90 days’ written notice, effective September 6, 1933. Thereafter other arrangements for the furnishing of water were made which are not involved in this suit or other controversy. The following table shows the cubic feet of water furnished during the period in question, the amounts billed for it by plaintiffs at the without-city ordinance rates, the amounts paid for it by the defendant at the contract or within-city rates, and the amounts unpaid at the without-city ordinance rates:
    Month Water, cu. ft. Ain't of bill Ain’t paid Balance Nov. 1-31, 1931, incl.. 331,6C0 $663.20 $165.80 $497.40 Dec. 1-31, 1931, incl.. 245,100 480.20 122.55 367.65 Jan. 1-31, 1932, inch. 253,700 209.59 126.85 82.74 Feb. 1-29, 1932, incl... 207,700 177.39 103.85 73.54 Mar. 1-31, 1932, incl.. 303.000 244.10 153.15 90.95 Apr. 1-30, 1932, incl... 416,200 323.34 209.60 113.74 May 1-31, 1932, incl... 372,000 292.40 187.50 104.90 June 1-30, 1932, incl.. 627,800 471.46 315.40 156.06 July 1-31, 1932, incl.. 549,800 416.86 276.40 140.46 Aug- 1-31, 1932, inch. 632.800 474,96 317.90 157.06 Sept. 1-30, 1932, incl.. 565,200 427.64 284.10 143.54 Oct. 1-31, 1932, incl... 408,000 317.60 205.50 112.10 Nov. 1-30, 1932, incl.. 427,400 331.18 215.20 115.98 Dec. 1-31, 1932, incl... 218,600 185.02 110.80 74.22 Jan. 1-31, 1933, incl... 222,900 188.03 112.95 75.08 Feb. 1-28, 1933, incl... 186,000 162.20 94.50 67.70 Mar. 1-31, 1933, incl.. 269,000 220.30 136.00 84.30 Apr. 1-29, 1933, incl... 299,400 241.58 151.20 90.38 Apr. 30-May 31, 1933, incl................. 339,900 269.93 171.45 98.48 June 1-30, 1933, incl.. 421,000 326.70 212.00 114.70 July 1-31, 1933, incl.. 547,600 415.32 275.30 140.02 Aug. 1-31, 1933, incl.. 553,000 419.10 278.00 141.10 Sept. 1-29, 1933, incl.. 382,100 299.47 278.09 21.38 Totals ........... 7,567.57 4,504.09 3,063.48
    12. Plaintiffs filed a claim with the Comptroller General of the United States but on September 17, 1932, he ruled that the defendant was not required to pay at the without-city ordinance rate. On October 11, 1932, plaintiffs requested of the Comptroller General a review of his decision but on November 17, 1932, he affirmed his previous decision.
    Plaintiffs filed claims with the Veterans’ Administration November 8, 1935, but the same were rejected. Then, on May 21, 193o, plaintiffs.in writing again requested of the Comptroller General a review and allowance of plaintiffs’ claim but on August 7, 1936, he denied plaintiffs’ request.

      There was' an agreement between plaintiffs and the Veterans’ Administration that plaintiffs’ acceptance of the amounts paid by the defendant should not prejudice plaintiffs’ right to recover the entire amount claimed.
    13. The Charter of the City of Los Angeles contains the following provisions:
    “The Department of Water and Power shall have the power and duty:
    “(1) To construct, operate, maintain, extend, manage, and control works and property for the purpose of supplying the city and its inhabitants with water and electric energy, or either, and to acquire and take, by purchase, lease, condemnation, or otherwise, and to hold, in the name of the city, any and all property situated within or without the city, and within or without the state, that may be necessary or convenient for such purpose.
    “(2) To regulate and control the use, sale and distribution of water and electric energy owned or controlled by the city; the collection of water and electric rates, and the granting of permits for connections with said water or electric works; and to fix the rates to be charged for such connections; and, subj ect to the approval of the Council by ordinance, to fix the rates to be charged for water or electric energy for use within or without the city, and to prescribe the time and the manner of payment of the same. Such rates shall be so fixed at least every two years; provided that, except as hereinafter otherwise prescribed, such rates shall be of uniform operation, as near as may be, and shall be fair and reasonable, taking into consideration, among other things, the nature of the use, the quantity supplied, and the value of the service; provided, further, that the rates inside the city may be less, but not greater, than the rates outside the city for the same or similar uses.
    “(3) To supply and distribute, at rates fixed as hereinbefore provided, any surplus water or surplus electric energy, owned or controlled by the city and not required for the use of consumers served by the city within its limits, to consumers outside the city for their own use, and to municipal corporations outside the city for municipal uses, or for resale, disposal, or distribution, to consumers-within their limits: Provided, That the supplying or distribution of such surplus water or surplus electric energy shall, in any case, be subject to the paramount right of the city, at any time, to discontinue the same in whole or in part, and to take and hold, or to distribute, such surplus water or surplus electric energy for the use of the city and its inhabitants: Provided, further, That contracts for supplying surplus water or surplus electric energy by the city to municipal corporations outside the city, or for interchange of surplus water or surplus electric energy with any such outside municipal corporations, may be made by the Board of Water and Power Commissioners in the name of the city for periods not exceeding fifteen years, and upon such terms and conditions, and for such compensation to the city, as shall be prescribed by resolution adopted by the board and approved by an ordinance of the city; but in every such contract the right shall be reserved to the city to terminate the same upon three years’ written notice to such municipal corporation, to be given by said board whenever it shall be determined and declared by resolution adopted by the board and approved by an ordinance of said city that the water or electric energy to be supplied under such contract is required for the City of Los Angeles and its inhabitants; and every such contract must, before the execution thereof, be assented to by the majority of the qualified electors of said city voting upon the proposition at a general or special election at which such proposition shall be submitted.”
    14. The ordinances fixing the without-city rates provided that “when water is supplied * * * to consumers outside the limits of the City of Los Angeles the rates to be charged and collected * * * are fixed as follows: * * The ordinances fixing the within-city rates provided that for “water supplied * * * to consumers inside the limits of the City of Los Angeles the rates to be charged and collected * * * are fixed as follows : * * The without-city rates were considerably higher than the within-city rates.
    15. The buildings on the hospital grounds were all on the 602.52 acres without the city limits. To obtain the site defendant had to buy more land than it actually needed, a part of the site being a mountainside, but about 40 acres were devoted to the growing of grapes, about two acres to grapefruit, and about five acres to lemons and oranges. There were also fig and olive trees on the site and some vegetables were raised. Citrus fruit is an important part of the diet of the hospital patients, and if vegetables had not been raised they would have had to be purchased by the hospital. The 13% acres within the city limits were first covered with Bermuda grass, but this was found to be too expensive to keep up, and the grass was taken up and about 2,000 trees were put out in its place. The purpose in planting the trees was to keep up the reforestation of the site, to prevent brush from growing and constituting a fire hazard, to temper the air in the summertime, as there was reflection from the 13% acres to the buildings, and to prevent soil erosion. The water obtained from the city was used for drinking and other purposes in the hospital and buildings and to water the site generally, including the things growing on it.
    16. There was no mistake of fact in the execution of the water contracts at the five-cent or within-city rate. Until November 1, 1931, all the representatives and officials of the city who had a part in the transactions were of the opinion that because 13% acres were within the city limits and because of the facts and circumstances under which the water was to be furnished the five-cent or within-city rate could be used. Whatever mistake there was, if any, was purely one of law.

      Sawtelle Hospital

      17. The hospital operated by the Veterans’ Administration, spoken of as the Sawtelle Hospital, was constructed prior to 1920.
    At that time, however, the hospital was one of the Soldiers’ Homes operated by and under the jurisdiction of the Board of Managers of the National Home for Disabled Volunteer Soldiers, being called the Pacific Branch of said Home. It is on a site containing 624.65 acres which is surrounded by the City of Los Angeles but is not legally within the corporate limits of the city. There are two main hospital buildings and several related buildings on the site.
    18. In 1920, the city desired to obtain a right-of-way across the site of the Saw-telle Hospital for the construction and maintenance of a pipe line for conveying water for distribution in the portion of the city known as Westgate. After conferences between representátives of the city and of the hospital, the hospital offered to convey to the city the right-of-way on condition that the city would permit service connections to be made for taking water from the pipe line for domestic use of the hospital and irrigation of the site and at rates and in accordance with the rules and regulations prescribed and fixed in pursuance of the Charter of the City, meaning at the within-city ordinance rates.
    19. The offer of the hospital was accepted and agreed to by the city and on December 29, 1920, the hospital conveyed to the city a permanent easement over the site upon condition that the service connections would be made and the water furnished.
    20. The city constructed the pipe line, a 24-inch trunk line, across the site; the service connections were made for the hospital and grounds, and from December 1920 to March 7, 1929, the city furnished water to the Sawtelle Hospital at the within-city rate without any formal written contract.
    21. On March 7, 1929, the first formal written contract was entered into covering the period from February 25 to June 30, 1929, for an estimated requirement of 8,000,000 cubic feet of water at rates in accord with the within-city ordinance rates. This contract also provided that if the price fixed by the city for like water service in adjacent within-city locations should fall below the rates therein stipulated then such prices should form the basis for payment to take effect as soon as such reduced prices should become effective in such adjacent locations. The contract also provided that the hospital could renew it annually by giving notice 60 days prior to expiration of the contract and each renewal thereof.
    22. On May 25, 1929, May 22, 1930, and May 22, 1931, new contracts were entered into similar to the one of March 7, 1929, each one being considered by the parties as a renewal of previous ones, and all in accordance with the then existing within-city ordinance rates. These contracts were for estimated requirements of 30,000,000, 40,762,666, and 41,333,334 cubic feet of water. The last mentioned contract was the first entered into by defendant through the Veterans’ Administration, all the previous contracts having been executed by the National Home for Disabled Volunteer Soldiers.

      23. Adjacent property owners paid the within-city ordinance rates as their properties were within the corporate limits.
    24. On November 1, 1931, the city began billing the Sawtelle Hospital at the higher without-city ordinance rates, which the hospital refused to pay.
    25. The bills for the months of November and December '1931 at the without-city rate amounted to a total of $12,-577.00, of which the hospital paid, at the contract or within-city rate, a total of $4,465.85, leaving a balance of $8,111.15. After January 1, 1932, other arrangements for the furnishing of water were made which are not involved in this suit or other controversy.
    26. November 8, 1935, plaintiffs filed with the Veterans’ Bureau Administration their claim in the amount of $8,111.15, and the same was rejected.
    May 21, 1936, plaintiffs filed a claim in writing with the Comptroller General who, on August 7, 1936, advised plaintiffs that he was seeking additional information from the Veterans’ Administration and that when he received it the claim would be given further consideration. On November 19, 1936, plaintiffs wrote to the Comptroller General giving further details, and on March 23, 1937, the Comptroller General wrote plaintiffs a letter denying the claim. There was an agreement between plaintiffs and the Veterans’ Administration that the acceptance of the $4,-465.85 by plaintiffs should not prejudice their right to recover the $8,111.15.
    27. There was no mistake of fact in the execution of the contracts and in the furnishing of water at the within-city rates. It was the intention and agreement of the parties from the beginning in 1920 that this be done and they were of the opinion that under the facts and circumstances the within-city rates could be used. Whatever mistake there was, if any, was purely one of law.
    Philip M. Fairbanks, of Washington, D. C. (Ray L. Chesebro, City Atty., S. B. Robinson, Chief Asst. City Atty., and John H. Mathews, Deputy City Atty., all of Los Angeles, Cal., on the brief), for plaintiff.
    S. R. Gamer, of Washington, D. C., and Francis M. Shea, Asst. Atty. Gen., for defendant.
    Before WHALEY, Chief Justice, and LITTLETON, WHITAKER, JONES, and MADDEN, Judges.
   LITTLETON, Judge.

The rate for each 100 cu. ft. of water obtained from plaintiffs by defendant and used by it for and in connection with its two veterans’ hospitals, as set forth in the findings, was the within-city ordinance rate as provided in certain written contracts made pursuant to and in accordance with certain prior arrangements and agreements, but plaintiffs contend that under the provisions of the City Charter and existing ordinances the higher outside-city rate was applicable, because the within-city rate so agreed upon was not expressly approved by the City Council.

During the period from October 1925 to November 1, 1931, during which an original and several renewal contracts relating to the San Fernando Hospital were made, the within-city water rate of 5 cents per 100 cu. ft., provided in such contracts, was billed by plaintiffs without any question or objection with reference thereto, and was paid by defendant. During the period November 1, 1931 to September 6, 1933, the effective date of a contract termination notice given by plaintiffs, water was furnished to this hospital under the same contracts and under the same circumstances, and was billed at the higher without-city rate of 20 cents per 100 cu. ft., but defendant paid therefor at the lower within-city contract rate under renewals by defendant of the contract of November 27, 1928, under a renewal option given it therein. Each of the contracts and renewals made on and after May 27, 1926 contained a provision that either party might terminate it on ninety days’ notice. Plaintiffs did not exercise this right until about June 8, 1933.

From December 1920 to March 7, 1929, plaintiffs furnished defendant water at the within-city rate for the Sawtelle Hospital under an agreement with defendant but without a written contract, and thereafter water was so furnished without question until November 1, 1931, under an original and annual renewal contracts, the last one of which extended to June 30, 1932. The controversy as to the water rate for this hospital continued from November 1, 1931 to January 1, 1932, when other arrangements, not here involved, were made by the parties.

The Sawtelle Hospital land and buildings, although not legally within the city limits, because it was a Government reservation, were wholly within the area encompassed by the outer boundaries of the corporate limits of the city.

The basis of the claim for $11,174.63 made by plaintiffs, representing the difference between the ordinance rate for water used outside the city limits and the rate for water used within the city limits, is the alleged erroneous and illegal application of rates for water which was supplied under contracts to the two institutions for uses which it is alleged were in both instances, outside the city, in which contracts the within-city rate was provided.

Plaintiffs contend that in the light of the fact that rates had been established by ordinance, as prescribed by the City Charter, for both within-city and outside-city uses, the executed contracts insofar as they provided for within-city rates for without-city uses were unlawful, discriminatory, ultra vires, and not binding on plaintiffs. They state their position herein to be that the Government purchased water under contracts for uses outside the city; that the Charter of the City of Los An-geles placed the duty and the power upon the Department of Water and Power to fix rates for such use; that rates were so fixed but, by mistake, the rates applicable to uses within the city were applied; that after plaintiffs discovered the mistake the water delivered to the two Federal institutions was billed for at the proper outside-city rate, and that it would have been illegal and improper for plaintiffs to have done otherwise, notwithstanding the existing contracts at a different rate.

The San Fernando Hospital buildings and a portion of the land of the site thereof were outside the city limits, but a portion of the land (13% acres out of 616.02 acres) and a pumping plant and a certain portion of the pipe lines constructed or paid for by defendant from the hospital buildings to plaintiffs’ reservoir were within the city limits.

We are of opinion on the facts and circumstances of the case that plaintiffs are not entitled to recover.

The Charter of the City of Los Angeles (finding 13) with respect to the Department of Water and Power provided as to water, so far as here material, that this Department “shall have the power and duty: (1) To construct, operate, maintain, extend, manage and control works and property for the purpose of supplying the city and its inhabitants with water, * * *. (2) To regulate and control the use, sale and distribution of water owned or controlled by the city; the collection of water rates, and the granting of permits for connections with said water works; * * * and, subject to the approval of the Council by ordinance, to fix the rates to be charged for water for use within or without the city * * *. Such rates shall be fixed at least every two years; provided that, except as hereinafter otherwise prescribed, such rates shall be of uniform operation, as near as may be, and shall be fair and reasonable, taking into consideration, among other things, the nature of the use, the quantity supplied, and the value of the service; provided further, that the rates inside the City may be less, but not greater, than the rates outside the City for the same or similar uses.”

The pertinent portions of the ordinances of the City Council (finding 14) approving within-city water rates fixed by resolutions of the Department of Water and Power provided that for “water supplied * * * to consumers inside the limits of the City of Los Angeles the rates to be charged and collected * * * are as follows: * * The ordinances approving without-city rates so fixed provided that “When water is supplied * * * to consumers outside the limits of the City * * * the rates to be charged and collected * * * are fixed as follows: * *

In the petition plaintiffs alleged as one of the grounds for recovery that the water contracts at the within-city rate of five cents per 100 cubic feet of water were entered into as a result of a mutual mistake of fact and should, therefore, be reformed. But there clearly was no mutual mistake of fact (findings 16 and 27), and plaintiffs have apparently abandoned this ground since no mention of it is made in their briefs.

As to the other ground on which recovery of the higher outside-city water rate is sought, namely, the erroneous and illegal application in the contracts between the parties of the within-city rate for water furnished defendant for consumption outside the city limits at the San Fernando Hospital, we agree with the defendant that this asserted illegality disappears when the City Charter, the ordinances, and the special and peculiar circumstances of the instant case are analyzed.

After a thorough investigation by defendant, acting through officials of the Veterans’ Bureau, in 1923, 1924, and 1925, as to the advisability of purchasing a site and erecting thereon a hospital near Los Angeles for disabled veterans, and after many conferences by these officials and official representatives of plaintiffs, the plaintiffs and the Veterans’ Bureau agreed that plaintiffs would furnish water, in the manner presently detailed, to a hospital proposed to be located upon a site, the purchase of which by defendant was then under consideration, at rates applicable under city ordinances to consumers located within the city limits. After the agreement mentioned had been reached, defendant purchased the site and the construction of the San Fernando Hospital thereon was completed in the spring of 1926. The buildings of the hospital proper were all outside the city limits, but a portion of the site, on which water was also used, and certain facilities of the hospital, consisting of a pumping plant and water pipe line, were located within the city limits. The plan worked out and agreed to between plaintiffs and the Veterans’ Bureau for the obtaining by defendant and the furnishing by plaintiffs of water at within-city rates for the proposed hospital, was as follows:

The City of Los Angeles had a reservoir which was located approximately % mile within the city limits nearest to the hospital site. Due to the fact, which everyone knew, that it would be necessary to .construct a pumping plant in order to get water to the hospital because the hospital site and grounds were higher than the city’s reservoir, it was agreed that the city would convey to defendant an easement in a plot of land approximately 50' x 50' located about 150 feet from the reservoir, .and that, on this plot, defendant would .at its own expense construct and operate a pumping plant and a 10-inch suction pipe line from the pumping plant to the reservoir over an easement, also to be grant•ed and conveyed by the City.

It was further agreed that there would 'be constructed by the city from defendant’s pumping station to the corporate limits of the city nearest the hospital site, a distance of % mile, an 8-inch pipe line through which water pumped by defendant from the reservoir would be conveyed by the pumping plant to the hospital, the balance of this pipe line from the city limits to the hospital being furnished and constructed by defendant. It was also agreed that the entire cost and expense to the city of constructing this % mile of pipe line within the city limits would be assumed by defendant and reimbursed to the city by it, although title to this portion of the pipe line was to be in and belong to the city. The defendant paid $4,315.67 to the city for this section of the pipe line. It was also agreed that the meter for measuring the water sold by the city and used by defendant was to be furnished and installed by defendant at the pumping plant.

The conferences at which this plant and arrangement were worked out and agreed to by plaintiffs were for the most part with William Mulholland, the engineer of the Department of Water and Power, whose recommendations to that Department were always followed, but other officials of the City of Los Angeles, including the City Attorney, participated in some of the conferences with reference to the arrangements to furnish defendant with water at the within-city rate. There is evidence that various members of the City Council also participated in some of these conferences. The City Council was, at least from early in 1925, familiar with the plan and the arrangement between the parties. It was originally proposed and agreed that plaintiffs would grant defendant a license or permit and that defendant would furnish and construct over the city’s streets the % mile of 8-inch pipe line, above mentioned, from the pumping station to the city limits, along with the construction of the remainder of the pipe line to the hospital. Some question arose within plaintiffs’ organizations as to the propriety or legality of plaintiffs granting defendant a license or permit to carry out such pipe-line construction work over the city’s streets, and the matter was brought to the attention of the City Council. After consideration the Council, at a meeting on July 13, 1925, requested plaintiffs to grant defendant the permit. The Department of Water and Power granted the permit on the following day. This grant was subsequently considered to be ineffective and the arrangement hereinbefore set forth, under which plaintiffs constructed this section of the pipe line at defendant’s expense, was agreed to.

The above described plan and arrangement for the sale of water to defendant at plaintiffs’ reservoir at 5 cents per 100 cu. ft., were fully understood, agreed to, and consummated by written contracts. The first written contract was executed in October 1925. There was no fraud, mistake, or concealment on the part of anyone. Plaintiffs obviously considered and it is clear that they believed, at least from 1923 until November 1931, that under the broad powers granted to the Department of Water and Power by the City Charter and under the existing ordinances of the City Council it was proper and legal in the circumstances for the Board of Water ,and Power Commissioners to make the special arrangement which was made with defendant and to enter into the contracts in question to sell water to defendant at the city reservoir at the within-city rate of 5 cents per 100 cubic feet, rather than to charge for water so obtained the outside-city rate of 20 cents per 100 cubic feet based, as this last-mentioned rate was, upon facilities and services constructed, maintained, and supplied by the city. In this we think plaintiffs were right, and that the Board acted within the scope of its power and authority under the City Charter and under the Ordinances. Plaintiffs simply sold defendant water at the reservoir and “supplied” and “furnished” it within the city. In the circumstances the fact that this water, or most of it, was to be conveyed and used by defendant outside the city is not controlling and did not, in our opinion, render the plan agreed to and the contracts made pursuant thereto unauthorized or illegal.

As to the contention that the arrangement and the contracts made for the within-city rate were illegal and ultra vires, because they were not expressly approved by ordinances of the City Council, we think such express approval of the within-city ordinance rate agreed to was not necessary in the circumstances. However that may be, there is enough in the record to support the conclusion that the Council was fully aware of what was being done and the reasons therefor. It expressly acquiesced on two occasions, in February 1925 and January 1926, in the arrangements by which defendant was to obtain water, and we think the circumstances are sufficient to show that it impliedly acquiesced in and agreed to the use of the within-city rate which was an important and integral part of this arrangement.

On February 11, 1925, the Council adopted an ordinance which was approved by the Mayor February 16, 1925, authorizing the granting by deed of an easement on and over the plot of land near the reservoir for the construction and operation by defendant of a pumping station and pipe line connection to the reservoir “for pumping and filtration purposes.” At that time the Council must have known of the entire arrangement under which neither the City nor the Department of Water and Power was to furnish or supply any facilities or services for “furnishing” or “supplying water” outside the city limits. Under the plan and arrangements agreed to and the contracts made pursuant thereto, plaintiffs, as above stated, simply sold water within the city to defendant at the within-city ordinance rate, and it seems clear that everyone understood that this was what was being done. The parties proposed and agreed that defendant would go to the reservoir and get the water needed by it and convey it at its own cost and expense by proper means to its hospital and grounds for use both within and without the city. In effect there was a within-city sale of a commodity rather than the furnishing of the usual water facilities and services to an outside consumer. There is evidence that the ultimate cost to defendant of the water so obtained for the San Fernando Hospital was from 7% to 18 cents per 100 cubic feet.

Plaintiffs contend that the proper interpretation of the City Charter and the Ordinances in effect when the original plan and subsequent contracts were agreed to, is that the place of use of water, rather than the point of sale and delivery, must be the determining factor as to whether the within-city or without-city rate is applicable, but we think this contention overemphasizes the word “use” and leaves out of consideration the peculiar and special nature of the transaction, which, as we have said, was within the power and authority of the Department of Water and Power to conclude and carry out under the existing ordinances and the broad powers granted by the Charter. Moreover, part of the water, and probably a considerable part, purchased by defendant was actually used within the City. Plaintiffs make no allowance for this.

In the circumstances of this case we think the classification of defendant as a within-city consumer was within the power of the Board of Water and Power Commissioners, and that it was proper.

Plaintiffs are therefore not entitled to recover the amount of $3,063.48 claimed with respect to water sold to the San Fernando Plospital.

For water sold to defendant for use at the Sawtelle Hospital, plaintiffs and defendant agreed upon the within-city rate which was billed and paid without question from 1920 to November 1, 1931. On November 1, 1931, and until January 1, 1932, plaintiffs claimed and billed defendant as for water furnished outside the city at 20 cents per 100 cubic feet, which defendant refused to pay and $8,111.15 is claimed on this account.

The facts with reference to this claim are set forth in findings 17 to 27. This hospital was constructed prior to 1920 on a site purchased and owned by defendant containing 624.65 acres. This hospital and grounds are within the outer boundaries of the city but the site is not legally a part of or within the corporate limits of the city. It is for this last-mentioned reason that plaintiffs claim this hospital was an outside consumer and chargeable with the outside-city ordinance rate.

In 1920 the City of Los Angeles desired to obtain from defendant a right-of-way across the hospital grounds for the construction and maintenance of a pipe line for conveying water from its reservoir for distribution to consumers located in the portion of the city known as Westgate. The officials of the hospital representing defendant proposed that defendant would convey the desired right-of-way to plaintiffs on the condition that the city permit defendant to obtain water service at the within-city rate through connections with the proposed water main, or pipe line. Conferences and negotiations were had between authorized representatives of the parties as a result of which defendant’s offer was accepted by the city. The agreement was consummated and carried out. Defendant conveyed a permanent easement over the hospital grounds on December 29, 1920, on the condition that the service connections would be made and water furnished in accordance with the above-mentioned agreement of the parties. Plaintiffs constructed a 24-inch trunk pipe line across the grounds; made service connections therewith and furnished the hospital water at the within-city rate until a question as to the propriety and legality of this arrangement was raised by plaintiffs in November 1931. During the period 1920 to May 7, 1929, water was so furnished and paid for under the above-mentioned agreement without such formal written annual contracts as the parties executed in connection with the San Fernando Hospital. The first formal contract for the furnishing of water at the within-city rate was executed May 7, 1929, covering the period February 25 through the remainder of the fiscal year ending June 30, 1929. This contract gave defendant the right to renew it in accordance with all of its terms from year to year. It was so renewed for three succeeding years, the last renewal being until June 30, 1932.

What we have hereinbefore stated concerning the San Fernando Hospital with reference to the power and authority of plaintiffs under the City Charter and Ordinances to make and enter into such an arrangement and contract, as is here involved, applies to this item of the claim. In the circumstances disclosed by the record we think this hospital was properly and legally classified by plaintiffs as a within-city consumer. The pipe line from which the defendant obtained water was a within-city facility of plaintiffs through which they supplied water- to residents within the City at the within-city ordinance rate. Plaintiffs received from defendant a valuable consideration in the form of the right-of-way which enabled plaintiffs to give water service to other within-city consumers at less cost to the city, which had the effect of removing in considerable measure, at least, the main reason for the higher ordinance water rate for water and service supplied to outside-city consumers. Tonawanda Board & Paper Co. v. City of Tonawanda, 198 App. Div. 760, 190 N.Y.S. 874; Pavilion Natural Gas Co. v. Hurst, 123 Misc. 477, 205 N.Y.S. 847; Village of Long Beach v. Long Beach Power Co., 104 Misc. 337, 171 N.Y.S. 824; Penn Iron Co., Ltd. v. City of Lancaster, 25 Pa.Super. 478.

Plaintiffs are not entitled to recover on this item of the claim.

We have decided plaintiffs’ claim on the ■merits and therefore find it unnecessary to discuss the defense of estoppel.

It should be pointed out, however, that, as contended by defendant and as has been uniformly held in cases brought in this court, if the contracts in ■question as to both hospitals were illegal, ultra vires, and, therefore, void, plaintiffs can only claim on the basis of a promise implied in law, rather than in fact, or on the basis of quantum meruit for the value of water and services furnished. A claim •based on a promise implied in law cannot be enforced against the United States in this court. Ida F. Braun et al. v. The United States, 98 Ct.Cl. 176, 199, 200, 46 F.Supp. 993, and cases therein cited. There was no promise or agreement implied in fact that the outside-city ordinance rate would be paid by defendant. The record shows that plaintiffs carefully considered all phases of the agreements made, including the rate that was applicable in the circumstances. The rate to •be charged and paid was, of course, the subject matter concerning which the negotiations and agreements were had and •as to which the written contracts were made. When plaintiffs considered that approval of the City Counsel was necessary as to any phase of the subject matter under consideration, they obtained such approval. It is obvious that throughout the period subsequent to 1923 and at the times the contracts were made plaintiffs considered the matter whether the within-city or the outside-city ordinance water rate was applicable in the circumstances and whether the Board of Water and Power Commissioners had the power and authority under the Charter and the Ordinances to agree to the, within-city rate. It is also obvious from the record that the Board came to the conclusion that it did have this authority. There is no substantial evidence that in the agreements arrived at with defendant and in the written contracts made pursuant to and in accordance therewith either party thought or considered that it was making a contract for payment by defendant of any rate other than the within-city rate. There is, therefore, no support for plaintiffs’ contention that the parties intended only to ■contract for payment by defendant of the “applicable legal ordinance rate” and that this was the outside-city rate. The conclusion by plaintiffs, as shown by the facts and circumstances, and the provisions of the formal contracts, that the Board of Water and Power Commissioners was acting within the scope of its authority, is entitled to great weight. The Board and the defendant expressly agreed to the within-city rate, and no other promise or contract by defendant for another or higher rate can be implied. Hawkins v. United States, 96 U.S. 689, 697, 698, 24 L.Ed. 607; Smithmeyer v. United States, 147 U.S. 342, 359, 13 S.Ct. 321, 37 L.Ed. 196.

If it were held, contrary to what we think, that the contracts for the within-city rate were illegal and, therefore, unenforceable by either party, plaintiffs would only be entitled to recover on quantum meruit for the fair and reasonable value of the water and service furnished, and there is no proof in the record that this would be in excess of the within-city contract rate paid. See Douglas Aircraft Co., Inc. v. United States, 95 Ct.Cl. 140, 147. The rate fixed by the parties arid paid by defendant would seem to be a fair and reasonable value since the proof shows that plaintiffs did not, at their expense, furnish defendant with any of the facilities and services customarily furnished by plaintiffs to outside-city consumers. It is doubtless for this reason that plaintiffs make no claim on quantum meruit.

The petition is dismissed. It is so ordered.

WHALEY, Chief Justice, concurs.

WHITAKER, Judge

(concurring).

I am in doubt whether or not the Department of Water and Power of the City of Los Angeles had the authority to enter into the two contracts for the furnishing of water to the San Fernando and Sawtelle Hospitals at the within-city rate. On the one hand, if it did have such authority, then of course the plaintiffs are not entitled to recover because the contracts define the obligations of the parties, and the obligation cast upon the defendant has been fully performed. On the other hand, if it did not have the requisite authority, plaintiffs still are not entitled to recover because their suit would then be based on a contract implied, not in fact, but in law, and this court has no jurisdiction of such suits, as the majority opinion says.

Because I am in doubt about plaintiffs’ authority to enter into the two contracts in question, I would prefer to place tb«> decision of the court on the ground that in either event plaintiffs are not entitled to recover.

MADDEN and JONES, Judges, took no part in the decision of this case.