S. agreed with a Deputy Quartermaster-General, who acted on
behalf of the United States, to provide and furnish whenever called
upon during the coming fiscal year, such vessels as might be
required for a specified service in the harbor of New York. Each
vessel was to have an engineer and fireman, the remainder of the
crew to be supplied by the United States when required, and the
fuel to be supplied by them. The payment, if employed by the day,
was to be at the rate of $67
per diem for each vessel. The
government was to have the management and control of the vessels
while in its service. Under this contract, S. furnished a vessel
called the
Bowen on the requisition of the quartermaster,
which was accepted by the government, and went into its service.
While in government employ, a collision occurred whereby the
Bowen was so damaged that it had to be laid up for repairs
for 61 days. During the most of this time, S., at the government's
request, furnished another vessel called the
Stickney,
which was accepted. He hired this vessel, paying $55 a day, and
received from the government the contract price of $67 for its use.
When the
Bowen resumed service after the completion of the
repairs, S. claimed compensation for it for the 61 days at the rate
paid by him for the Stickney.
Held that the contract was
one for hiring, and not for service, and that the government,
during its possession of the vessel, was a special owner, and bound
to pay rent for it until returned to S.
The facts of this case are stated in the findings of the Court
of Claims. The first is that on May 28, 1886, the petitioner
entered into a contract with the Deputy Quartermaster General of
the Army for and in behalf of the United States, the important
articles of which are as follows:
"ARTICLE 1. That the said Daniel Shea shall provide and furnish
to the party of the first part, whenever called upon during the
fiscal year ending June thirtieth, eighteen hundred and
eighty-seven, such vessels of the descriptions hereinafter given as
may be required to take the place of the vessels now performing
service for the U.S. Army between New York city and Governor's
Island, New York, Governor's Island and Sandy Hook, and New York
harbor generally, respectively,
Page 152 U. S. 179
the steamers
Atlantic, Ordnance, and Chester A.
Arthur
; that the vessels furnished as aforesaid must each
have an engineer and fireman and conform to the following
conditions,
viz.: the steamer to take the place of the
Chester A. Arthur must be of about the size and the
character of the
Chester A. Arthur, and the steamers to
take the places of the
Atlantic and
Ordance,
respectively, must have the capacity for freight and passengers,
and be of the size and character, of the steamer
James
Bowen, and that all the vessels furnished must be staunch, in
first-class order in every respect, well equipped, and conform
fully to the requirements of the law."
"It is further agreed that the fuel required by said vessels so
furnished while in service under this agreement shall be supplied
by the government, and that this contract shall commence on the
first day of July, eighteen hundred and eighty-six."
"And it is further agreed that the party of the second part
shall furnish, when required, the remainder of the crew, consisting
of a captain, a mate, two deck hands, and a fireman. . . ."
"* * * *"
"ART. 4. That for and in consideration of the faithful
performance of the stipulations of this agreement, the party of the
second part shall be paid at the office of the Disbursing
Quartermaster, U.S. Army, at New York City, as follows: the sum of
sixty-seven (67) dollars per day for each vessel employed,
including the engineer and the fireman, when employed by the day,
and the sum of ten (10) dollars per hour for each vessel employed,
including the engineer and the fireman, when employed by the hour,
and for the said remainder of the crew, when required, the sum of
thirteen dollars per day."
"ART. 5. That in case of failure of the said party of the second
part to comply with the stipulations of this contract according to
the true intent and meaning thereof, then the party of the first
part shall have the power to hire vessels elsewhere in open market
at the sole expense and charge of the party of the second
part."
The second and third findings are as follows:
"2. After the making of said contract, and before the expiration
of the fiscal year (June 30, 1887), upon being called
Page 152 U. S. 180
upon by the Quartermaster's Department therefor, the claimant
provided and furnished a vessel called the
James Bowen,
then staunch, in first-class order in every respect, well equipped,
and conforming fully to the requirements of the law, and with such
part of the crew as the claimant was required by the contract to
furnish, and the same was accepted and used by the defendants."
"3. On the first day of January, 1887, while in the service and
under the exclusive management and control of the quartermaster's
department, and having an unlicensed captain or pilot, said vessel
was damaged in a collision with a ferryboat, in consequence of
which she was necessarily laid up for repairs until March 2 of the
same year, when, on the next day, she resumed work."
"The collision occurred during a fog, and the supervising
inspectors, on an investigation, found that it was accidental, and
was not due to inattention, unskillfulness, or lack of precaution
on the part of the pilots. The cost of repairs was paid by the
claimant."
"During the time said vessel was undergoing repairs, the
claimant, being called upon therefor, furnished another vessel
under said contract, for which he paid $55 a day. During said time,
the engineer and fireman of the claimant were on the vessel
watching and superintending the work."
There is no express finding that any sum was ever paid to the
petitioner on account of this contract. It appears, however, from
the fourth finding that on April 1, 1887, the Deputy Quartermaster
General forwarded to the Quartermaster General a voucher, of which
the following is a copy:
The United States to Daniel Shea, Dr. Dols. Cts.
Place and date
N.Y. City, April
1, 1887 . . . For hire of the steamer James Bowen
from Jan'y 1st to March 2d, 1887,
inclusive, 61 days at $55 per day . . . . $3,355.00
Engineer and fireman, 61 days, at $7.00 . 427.00
---------
$3,782.00
Page 152 U. S. 181
Which voucher was accompanied with a recommendation that
authority be granted to pay the same, and with the following
explanation:
"The facts are as stated herein: the
James Bowen was
under charter to the Quartermaster's Department, and, as the
Quartermaster General is aware, was, on the first of January, 1887,
on one of her trips between the Battery and Governor's Island, run
into by the Brooklyn ferryboat
Atlantic."
"The
James Bowen was at the time under the exclusive
control and management of the government, being manned and
navigated by employees of the Quartermaster's Department."
"In the collision the
James Bowen was very badly
damaged, and while undergoing repairs her owner was compelled to
hire a vessel in her stead. The within claim is made for
reimbursement of that expense. I regard it as perfectly proper,
reasonable, and just, and therefore recommend its payment."
"Henry C. Hodges"
"
Deputy Q. M. Gen. U.S. Army, Depot Quartermaster"
That on April 6, 1887, the Quartermaster General called upon the
Deputy Quartermaster General for further particulars, and received
in response a letter, copied at length, the latter part of which is
as follows:
"The
James Bowen was under charter to, and employed by,
the Quartermaster's Department at the time of the collision under
the contract of Daniel Shea, dated May 28th, 1886. Immediately
after the collision, the contractor was called upon to furnish
another vessel under this contract. He furnished the steamer
E.
H. Webster, one of his own boats. That vessel, although a very
staunch, good boat, was not entirely satisfactory for the service,
and, upon search, the Joseph Stickney was found and put on the duty
by the contractor. The
E. H. Webster was on duty from
January first to 4th, inclusive, and the
Joseph Stickney
from January 5 to March 2, 1887. During this time, the
James
Bowen was undergoing repair of the damage done in the
collision. As the
James Bowen was at the time wholly in
charge and under the management and control of the Quartermaster's
Department, I was
Page 152 U. S. 182
under the opinion, and am still, that the department was bound
to save the contractor from loss on account of the damage, and to
pay for her time under the contract until restored to her owner
upon completion of the repairs."
"With this in view, she was reported, on my report of persons
and articles for January at the contract rate,
viz., $67
per day, including an engineer and a fireman. Upon further
reflection, however, I concluded to allow for the
Bowen's
time only at the rate which her owner was obliged to pay for the
vessel put in her stead. One of these, the
E. H. Webster,
was his own, and was in service, as before stated, from January 1
to 4, and the other, the
Joseph Stickney, was hired by him
at $55.00 per day, and was in service from January 5 to March 2. So
the matter stands thus:"
"The
E. H. Webster was in service from January 1 to 4,
and the Joseph Stickney from January 5 to March 2, and has been
paid for. The
James Bowen was laid up from January 1 to
March 2, inclusive, and her time has not been paid for, but I
recommend that her owner be paid at the rate of $55.00 per day for
the vessel. I enclose herewith a voucher covering the time, as well
as the item for an engineer and a fireman, embraced in Shea's claim
in article 1 of this letter. If the Quartermaster General desires,
supplementary reports of persons and articles covering this service
will be prepared and forwarded immediately."
On May 17, the Quartermaster General transmitted the claim and
voucher to the Third Auditor of the Treasury for adjudication and
settlement.
The fifth finding is that on
"November 29, 1887, the auditor reported against paying the
claim, on the alleged ground that the boat was wholly under the
control of the owner and his agents and employees, and if the
injury had been due to the negligence of anyone connected with the
management of the
James Bowen, and not due to the
ferryboat (with which the collision occurred), the United States
could not be charged with that negligence. The Second Comptroller
on the same day concurred with the auditor in disallowing the
claim, and it has not been paid. "
Page 152 U. S. 183
On these facts thus found, the Court of Claims decided as a
conclusion of law that the plaintiff was entitled to recover the
sum of $4,087.
Page 152 U. S. 186
MR. JUSTICE BREWER, after stating the facts in the foregoing
language, delivered the opinion of the Court.
This case turns upon the construction to be given to the
contract of May 28, 1886, taken in connection with the action of
the parties thereunder. Was this a contract of hiring or for
service? In
Reed v. United
States, 11 Wall. 591,
78 U. S. 600,
it was said by Mr. Justice Clifford, speaking for the Court:
"Affreightment contracts are of two kinds, and they differ from
each other very widely in their nature as well as in their terms
and legal effect."
"Charterers or freighters may become the owners for the voyage
without any sale or purchase of the ship, as in cases where they
hire the ship and have, by the terms of the contract, and assume,
in fact the exclusive possession, command, and navigation of the
vessel for the stipulated voyage. But where the general owner
retains the possession, command, and navigation of the ship and
contracts for a specified voyage -- as, for example, to carry a
cargo from one port to another -- the arrangement, in contemplation
of law, is a mere affreightment, sounding in contract, and not a
demise of the vessel, and the charterer or freighter is not clothed
with the character or legal responsibility of ownership. . . .
Courts of justice are not inclined to regard the contract as a
demise of the ship if the end in view can conveniently be
accomplished without the transfer of the vessel to the charterer,
but where the vessel herself is demised or let to hire, and the
general owner parts with the possession, command, and navigation of
the ship, the hirer becomes the owner during the term of the
contract, and, if need be, he may appoint the master and ship the
mariners, and he becomes responsible for their acts."
And subsequently, in
Leary v. United
States, 14 Wall. 607,
81 U. S. 610,
MR. JUSTICE FIELD thus discussed the question:
"If the charter party let the entire vessel to the charterer,
with a transfer to him of its command and possession, and
Page 152 U. S. 187
subsequent control over its navigation, he will generally be
considered as owner for the voyage or service stipulated. But on
the other hand, if the charter party let only the use of the
vessel, the owner at the same time retaining its command and
possession and control over its navigation, the charterer is
regarded as a mere contractor for a designated service, and the
duties and responsibilities of the owner are not changed. In the
first case, the charter party is a contract for the lease of the
vessel; in the other, it is a contract for a special service to be
rendered by the owner of the vessel. . . . All the cases agree that
entire command and possession of the vessel, and consequent control
over its navigation, must be surrendered to the charterer before he
can be held as special owner for the voyage or other service
mentioned. The retention by the general owner of such command,
possession, and control is incompatible with the existence at the
same time of such special ownership in the charterer."
See also Hooe v.
Groverman, 1 Cranch 214, in which these words in
the charter party, "doth grant and to freight let . . . the whole
tonnage of the vessel," were held the operative words, and
indicating, in connection with other language, a contract for
service, rather than a demise of the vessel.
Marcardier
v. Insurance Company, 8 Cranch 39, in which Mr.
Justice Story, speaking for the Court, said:
"A person may be owner for the voyage who, by a contract with
the general owner, hires the ship for the voyage, and has the
exclusive possession, command, and navigation of the ship. Such is
understood to have been the case of
Vallejo v. Wheeler,
Cowp. 143. But where the general owner retains the possession,
command, and navigation of the ship, and contracts to carry a cargo
on freight for the voyage, the charter party is considered as a
mere affreightment, sounding in covenant, and the freighter is not
clothed with the character or legal responsibility of
ownership."
Gracie v.
Palmer, 8 Wheat. 605;
McIntyre v. Bowne, 1
Johns. 229;
Hallet v. Columbia Insurance Company, 8 Johns.
272;
Clarkson v. Edes, 4 Cowen 470; 1 Parsons on Maritime
Law, p. 232, c. 8, ยง 2.
These authorities, although not all touching the question of
Page 152 U. S. 188
rent, bring out clearly the essential differences between the
two kinds of affreightment contracts -- the one in which there is a
demise of the vessel, a parting with all possession and control,
and the other in which the owner, retaining the possession and
control, contracts simply for service -- it may be the entire
service -- of the vessel.
If the contract is one of the former kind, then rent is payable
until the end of the stipulated term and the return of the vessel.
In
Havelock v. Geddes, 10 East 555, there was a demise of
a vessel for a term of twelve months, and longer if the defendant
should think fit to keep the same. There was a stipulation that the
plaintiff, the owner of the vessel, should keep it tight, staunch,
etc., and a reduction was sought of rent for the time occupied by
defendants in making repairs during the term of the demise. Lord
Ellenborough held that no such reduction could be allowed,
saying:
"The question, then, is whether, because the plaintiff has
undertaken to keep the vessel tight, etc., the defendants have a
right to deduct anything out of the freight they are to pay in
respect of the time which may be taken up in making good such
defects as may occur during the period for which the vessel is
hired. And we are of opinion they are not. From the accidents to
which ships are liable, it was in the ordinary course of things to
expect that this ship might want repairs in the course of her
voyage, and when the defendants were making their bargain, they
should have stipulated to deduct for the time which might be
exhausted in making those repairs, if they meant to make that
deduction. Without such a stipulation, we think the true
construction of the charter party is that while those repairs are
going on, the ship is to be considered as in the defendants'
service, and the defendants liable to continue their payments."
To like effect is the case of
Ripley v. Scaife, 5 B.
& C. 167, in which Abbott, C.J., said:
"There is in the charter party an express stipulation for the
payment of freight from a certain day -- for six months certain and
so much longer as the vessel should be employed by the plaintiffs.
There not being any other stipulation for
Page 152 U. S. 189
the case of repairs, I think that the ship was in the employ of
the plaintiffs while those repairs were going on, and that they
were liable to pay freight during that period."
See also Spafford v. Dodge, 14 Mass. 66, in which a
vessel was hired to make a certain voyage "at the rate of three
dollars a ton per month, and so in proportion for a less time as
the said brig should be continued in the service of the
defendants." While making that voyage, she was captured as a prize
and detained for several months, but was finally restored, and
arrived at her port of destination. It was held that the owner was
entitled to rent for the full term of the absence, without
deduction for the time of the detention in consequence of the
capture. And this is but an application of the same rule which
controls in other cases of demise. If premises are rented for a
term of years at a stipulated rent per year, and no provision for
reduction in case of the destruction or injury of the buildings by
fire be inserted in the lease, the rent is payable for the entire
term, and until the premises are returned, and this though the
buildings may be injured or even destroyed by fire. In short, a
demise is not ended until the property is returned to the owner,
and so long as that demise continues, rent is payable at the
stipulated price unless there be some provision for a
reduction.
No technical words are necessary to create a demise. It is
enough that the language used shows an intent to transfer the
possession, command, and control. Now by this contract it was
stipulated that the petitioner should "provide and furnish to" the
government, whenever called upon during a specified year, "such
vessels of the descriptions hereinafter given as may be required to
take the place of the vessels now performing service," etc., and
that in case of his failure so to do, the government should have
"the power to hire vessels elsewhere in open market" as his "sole
expense and charge." These are the operative words. The contract is
for vessels, and not for any use of them. The vessels are to be
furnished to the government. They are to take the place of other
vessels, presumably belonging to the government, engaged in a
certain service, and if petitioner fails to furnish the needed
vessels, the
Page 152 U. S. 190
government may go elsewhere and hire them. There is no
stipulation which, in terms or by implication, casts upon the
petitioner the management or control of any vessel accepted by the
government. That the time for which the vessels were to be employed
might be limited by the wishes of the government does not affect
the question as to whether, while so employed, they were to be
under its exclusive control and management. A demise may be for a
day as well as for a year, and may be terminable at the will of the
lessor. The pay, by the fourth article, was to be "for each vessel
employed."
Not only this, but the conduct of the parties in the execution
of the contract removes all obscurity as to its scope and meaning.
As the findings show, the vessel, the
James Bowen, was
furnished by petitioner and was accepted and used by the
defendants. During the time of its use, it was under the exclusive
management and control of the defendants. The very condition
resulted which is the purpose and effect of a demise -- the
transfer of the exclusive possession, management, and control. The
vessel was not, when injured, returned to the petitioner, but, when
the repairs were finished, "resumed work." It is insisted by the
defendants that there was no demise, because, as claimed, the
petitioner did not contract to furnish one vessel for any length of
time, and could, if he wished, change vessels. It is doubtful
whether that is a correct interpretation of the instrument, and
whether it was in the power of the petitioner, after a vessel had
been tendered and accepted by the government, to substitute another
therefor. But even if it were so, the substituted vessel would pass
into the exclusive possession of the government the same as the
vessel for which it was substituted.
We think little significance is to be attached to the provisions
in reference to furnishing a crew or supplying fuel. They were
matters of detail, affecting the price to be paid, but throwing no
particular light on the question of hiring or control. If it be
said that the clause requiring the government to furnish fuel was
unnecessary in case there was a demise, it may also, in like
manner, be said that the further clause as to
Page 152 U. S. 191
the petitioner's furnishing a crew was unnecessary if he was to
retain the management and control. Any possible inference from one
clause may be set off against a different inference from the other,
but neither of them destroys the significance of the operative
words of transfer nor outweighs that of the action of the parties
in the execution of the contract.
The claim, when presented to the department, was rejected on the
ground that the "boat was wholly under the control of the owner and
his agents and employees." But the findings of fact show that that
alleged ground is a mistake -- that it was wholly under the
management and control of the Quartermaster's Department. Nothing
more need be said. While the question is not free from doubt, yet
in view of the fact that the petitioner was to provide and furnish
a vessel -- that this vessel, when tendered, was accepted, and was
not only in the service, but under the exclusive management and
control, of the Quartermaster's Department at the time of the
accident -- we think that it must be adjudged that the case
presented is one of a contract of hiring, and not for service, and
that the government, during this possession of the vessel, was a
special owner, and bound to pay rent for the vessel until returned
to petitioner.
The judgment will be
Affirmed.
MR. CHIEF JUSTICE FULLER and MR. JUSTICE JACKSON dissent from
this opinion and judgment.
