United States v. Cornell Steamboat Co.
267 U.S. 281 (1925)

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U.S. Supreme Court

United States v. Cornell Steamboat Co., 267 U.S. 281 (1925)

United States v. Cornell Steamboat Company

No. 265

Argued January 28, 29, 1925

Decided March 2, 1925

267 U.S. 281



Tug boats were chartered to the United States for a per diem for each and every day of the charter period, the owner agreeing to furnish everything for them, except coal and water, which were to be furnished by the United States; the government had the entire use of the boats ,and they were subject at all times to the orders

Page 267 U. S. 282

and directions of its officers. Held a demise, and that the United States was not entitled to make deductions from the owner's monthly bills for loss of service caused by short crews, ill condition, delay in taking on supplies, and by the sinking of one of the boats, which was raised and repaired by the owner. P. 267 U. S. 286.

8 Ct.Clms. 497 affirmed.

Appeal from a judgment of the Court of Claims allowing the claimant, appellee, recovery of deductions made by the United States from the bills rendered by the claimant under a charter of tug boats.

Page 267 U. S. 285

MR. JUSTICE McREYNOLDS delivered the opinion of the Court.

This proceeding was instituted to recover the sum of deductions made by the United States from monthly bills rendered by appellee for the hire of tugs.

During 1917 and 1918, under informal charters evidenced by letters, appellee hired twelve tugs to the United States for use in and about New York Harbor. The specified price was

"for each and every day of the charter period,' and the owner agreed 'to furnish everything for these tugs with the exception of coal and water, which you are to furnish."

The vessels reported for service in accordance with the several contracts, and the plaintiff rendered monthly bills

Page 267 U. S. 286

at the per diem rate stated therein. Those for December, 1917, were paid as rendered. Thereafter, deductions were made which amounted in all to $24,822.48. They were based upon the vessels' logs, kept by their captains and engineers as directed by the Army Transport Service, and were entered if a boat reported with a short crew, or not in condition to perform the service required, or if too long a time was consumed in taking on supplies. The owner saved its right through proper claims and protests.

While in the service of the United States, the Ira M. Hedges sank. It was raised and repaired by and at the expense of the owner, and was subsequently used by them. One of the challenged deductions was for loss of time incident to this accident.

"During the time when the tugs hereinbefore mentioned were in the service of the government, the Army Transport Service had the entire use of the tugs, and they were subject at all times to the orders and directions of the officers of the government, and at no time during the period did the plaintiff have the use of, and [it] did not in any way interfere with or direct the operations of, the said tugs."

The United States maintain that the owner did not part with possession, command, and navigation during the charter periods; that the charter was for service, and not a demise, and that consequently they rightly made deductions for the time the vessels were not at their disposal.

Relying upon the doctrine approved in United States v. Shea, 152 U. S. 178, the Court of Claims concluded that the charter amounted to a demise, and that the deductions were not permissible. It accordingly sustained the claim of the owner, appellee here. Accepting the facts as found, we agree with that conclusion and affirm the judgment.

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