Supreme 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 appeal.

Statement by Mr. Justice BREWER:

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:

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.

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:

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: 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 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. U. S., 11 Wall. 591, 600, it was said by Mr. Justice Clifford, speaking for the court:

And subsequently, in Leary v. U. S., 14 Wall. 607, 610, Mr. Justice Field thus discussed the question: 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. 8, 2.

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 payments.'

To like effect is the case of Ripley v. Scaife, 5 Barn. & C. 167, in which Abbott, C. J., said:

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.