Court of the United States
152 U.S. 178
March 5, 1894
This was a petition by Daniel
Shea to recover money claimed to be due for the hire of certain vessels,
furnished by the petitioner for the use of the government under a contract.
The court below rendered judgment for the petitioner, and the United States
Statement by Mr. Justice
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,-
[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
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 [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 1st 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
2d 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 guartermaster general a voucher,
of which the following is a copy:
The United States to Daniel
Shea, Dr. Place and date. Dols. Cts. 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 [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 1st 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 employes 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.
'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 1st to 4th, inclusive, and the Joseph Stickney
from January 5th to March 2d, 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 [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 1st to 4th, and the other, the
Joseph Stickney, was hired by him at $55.00 per day, and was in service
from January 5th to March 2d. So the matter stands thus:
'The E. H. Webster was
in service from January 1st to 4th, and the Joseph Stickney from January
5th to March 2d, and has been paid for. The James Bowen was laid up from
January 1st to March 2d, 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 inclose herewith a voucher covering the time, as well as
the item for an engineer and a fireman, empraced 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
On May 17th 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 employes, 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.' [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.
Asst. Atty. Gen. Dodge and
Conway Robinson, for the United states.
[152 U.S. 186] Franklin
H. Mackey and John W. Butterfield, for appellee.
Mr. Justice BREWER, after
stating the facts in the foregoing language, delivered the opinion of the
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. U. S., 11 Wall. 591, 600, it was said by Mr.
Justice Clifford, speaking for the court:
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
And subsequently, in Leary
v. U. S., 14 Wall. 607, 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 [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 Co.,
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. Insurance Co.,
8 Johns. 272; Clarkson v. Edes, 4 Cow. 470; 1 Pars. Mar. Law, p. 232, c.
These authorities, although
not all touching the question of [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 12 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
To like effect is the case
of Ripley v. Scaife, 5 Barn. & 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 [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 [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 [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 neigher 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 employes.' 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.