TRANSATLANTIC FINANCING CORP. V. UNITED STATES
363 F.2d 312 (D.C. Cir. 1966).
NATURE OF THE CASE: Appeal from an order dismissing Transatlantic's (P) action to recover
from United States (D) the costs attributable to diverting P's ship from the normal sea
route caused by the closing of the Suez Canal.
FACTS: On July 12, 1956, the Government of Egypt nationalized the Suez Canal Company and
took over operation of the canal. On October 2, the United States (D) hired Transatlantic
(P), operator of a cargo ship, to carry a full cargo of wheat from a United States Gulf port
to a safe port in Iran. The planned route included sailing through the Suez Canal. Two days
after P set sail on October 27, Israel invaded Egypt. On October 31, Great Britain and
France invaded the Suez Canal Zone, which resulted in the Egyptian Government's obstruction
and closing of the Suez Canal. P's representative then contacted a Department of Agriculture
employee with relatively no authority to arrange for additional compensation for the trip
around the Cape of Good Hope. The employee advised P that, although P was probably not
entitled to additional compensation, P was free to file such a claim. P went by the Cape of
Good Hope and incurred an additional $43,972 in expenses. P sued in quantum meruit for the
additional amount, claiming that performance was impossible because it could not travel the
'usual and customary' route that was allegedly implied in the contract. The district court
dismissed the action in libel (an admiralty action). P appealed.
ISSUE:
RULE OF LAW:
HOLDING AND DECISION:
LEGAL ANALYSIS:
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