Case ID: us-ct-cl_8/html/0031-01.html
Source: Caselaw Access Project
Author: {"author": "Mr. Justice Field", "license": "Public Domain", "url": "https://static.case.law/"}
Date Created: 2024-08-24T03:29:51.129683

LEARY'S CASE. Arthur Leary, et al., appellants, v. The United States, appellees.
    (5 Court of Claims, R., p. 234; 14 Wallace, R., p. 607.)
    
      On the claimants’ Appeal.
    
    
      A charter-party provides that in ease the vessel “while executing the orders” of the charterers (the Government) shall he destroyed or damaged, hy a hostileforce; or “by being compelled” hythe charterers “to run any extraordinary marine risk,” then the owners to he indemnified. The Government’s military harbormaster in Port Boyal orders thevessel tomove out from the wharf; the captain objects, as the tide is low; the harbor-master peremptorily repeats the order ; the captain obeys, and the vessel strikes upon a sunken anchor and is lost. The existence of the anchor is known to the captain, but he supposes the vessel to be a long way on the outside of it. The owners bring their suit upon the indemnity clause. The Court of Claims decides that the loss ivas a usual marine disaster, and not an extraordinary marine risk as contemplated by the charter. Judgment for the defendants. The claimants appeal.
    
    I. Where a charter-party lets the entire vessel to the charterer, with a transfer of possession and command and consequent control over her navigation, the charterer generally will be considered as owner for the voyage; but where it lets only the use of the vessel, the owner retaining possession and command and control over her navigation, the charterer will be regarded as a mere contractor for a designated service, and the duties and responsibilities of the owner remain unchanged. Entire command and possession and consequent control over the navigation must be surrendered to the charterer, to hold him as special, owner for the voyage.
    II. Where a charter-party provides on the one side that the owners shall keep the vessel tight, staunch, &e., and provided with the necessary men and provisions, that the whole of the ship, except the necessary room for the crew and the provisions, shall be at the disposal of the charterers, and that no goods but the charterers’ shall be laden on board; and on the other side, that the owners shall be paid a per diem compensation for the use of the vessel, and be supplied with coal; and that, in case the vessel shall be damaged by a hostile force, or compelled to run an extraordinary marine risk, the owner shall be indemnified; possession and control do not pass to the charterers, and they cannot be held as owners for the voyage.
    III. The fact that the service stipulated for in a charter-party is to be rendered for the Government cannot affect the import of its ternjs or change its construction, although in a doubtful case the fact might be entitled to much consideration.
    
      IV. Whore a charter-party to the Government in time of war provides that if the vessel be damaged, ‘‘by being compelled to run any extraordinary marine risk,” the Government shall bear the loss, and afterward the vessel is destroyed by a sunken anchor which her master supposed to be at a distance, the disaster cannot be held an “ extraordinary marine risk” within the meaning of the charter, although a military harbor-master convened the captain to move his vessel at the time. That term is used to distinguish the risk assumed by the Government from those which might be covered by an ordinary marine policy.
    
      The Reporter’s statement of tbe case:
    In this case the court below found the facts to be as follows:
    1st. On the 19 th of November, 1862, the petitioner chartered to the defendants the steamboat Mattano, by a contract in writing. A material part of the charter which is brought into discussion is the second clause, which is in these words:
    “In case the said vessel, while executing thé orders of the said party of the second part, shall be destroyed or damaged by a hostile force from any quarter, or by being compelled by the party of the second part to run any extraordinary marine risk, then the party of the first part is to be indemnified; that is to say, in case of loss, her value is fixed at $26,000, and in case of damage, the amount to be assessed by a board.of survey, which shall be convened on her after her arrival at Port Boyal, South Carolina, or other friendly port, at the expense of the said party of the second part.”
    2d. While under charter, the Mattano was employed in the harbor of Port Royal, South Carolina, and was lying at one of the wharves there on the 12th May, 1803. On that day the military harbor-master, Captain King, ordered the Mattano out to make room for another steamer, the General Hunter. The captain of the Mattano objected to going out, as the tide was very low; and, as he believed, there was a considerable breeze from the N. N. W. Captain King, the harbor-master, ordered the Mattano peremptorily to back out, and her captain let go his lines and backed out.
    3d. In thus backing out the Mattano struck upon the fluke of a sunken anchor deeply imbedded in the sand, and sank in fifteen minutes. No one could have pointed out where the anchor was at that time. The captain of the Mattano knew of the existence of the anchor, but thought he was a long way outside of it. There was no unskilfulness in executing the order to back out.
    
      The court decided as matter of law that the disaster was a usual marine disaster, which is covered by ordinary marine policies of insurance, and not such extraordinary marine risk as is contemplated in the charter-party; and if the owners neglected to protect themselves against such perils by insurance the law makes them their own insurers, and they must bear the loss.
    
      Mr. IT. P. Ohipman and Mr. T. J. Darant for the claimants, appellants:
    First. The damage sustained by the Mattano arose from her being compelled to back out from her berth at the wharf at Port Royal, when the water was low, and .in spite of the remonstrance of the master that the movement was dangerous.
    This was such an extraordinary marine risk as the United States insured against in the charter-party, and it occurred where she was employed to do service, as the charter-party states her to be hired for the purjiose of plying in the harbor of Port Royal.
    Second. It was a risk which, in the language of the contract, the Mattano was compelled to run, for being in military service, and performing duty in the harbor of Port Royal, the peremptory order of the military harbor-master was what she was compelled to obey, and whatever risk there was in it, that she was compelled to run.
    Third. The United States, by the contract, insured the petitioners against such risk. The court below drew a distinction between ordinary and extraordinary marine disasters, and considering the one now under discussion as belonging to the former category, held that the United States was not liable as underwriter. But this is certainly an error. The contract in specifying “extraordinary marine risks” does no more than is done by all marine policies. The underwriter is liable only for loss and damage of an extraordinary kind. (See 1 Phillips on Insurance, p. 617, Art. 1086.)
    Fourth. This accident occurred because the Mattano was compelled to run the risk of low tide and what that danger carried with it, taking the ground, in consequence of the falling of the tide as one of the marine risks the underwriter insures against. (See 1 Phillips on Ins., p. 627; Fletcher v. Inglis, 2 Barn. & Aid., 315$ Ripley et al. v. Schaife, 5 Barn. & Cress., p. 167.)
    
      Fifth. By the legal effect of the contract, the United States became the owners of the Mattano pro hac vice, for the whole of the vessel is let to the United States, and the purpose of the service necessarily implies exclusive possession and control. Drinlaoater v. Brig Spartan, (Ware, 158 ;) Grade v. Palmer, (8 Wheaton, 633;) McIntyre v. Bonne, (1 Johnson, N. Y., p. 239;) Trinity Bouse v. Ciarle, (4 Maulé & Selwyn, p. .288.)
    
      Mr. Assistant Attorney-General Bill for the United States, appellees:
    The charter-party did not make the Government owners of the vessel for the voyage, but only hirers, paying a compensation for the use of the vessel, leaving her in’ the possession of the general owners. The vessel was chartered to ply in the harbor of Port Eoyal, and the Government agreed to indemnify the owners for damage done by a u hostile force,” that is, military risk, and by any “ extraordinary marine risk.” Any risk ordinarily arising from the service in which the vessel was employed and for which she was chartered cannot be considered as “ an extraordinary risk.” What is an extraordinary marine risk must be determined by the particular circumstances of each case, and confining it to the proximate cause of the loss. 3 Kent Com., (6th ed.,) 302.
    In the present case, the Mattano, while employed in the service for which she was expressly engaged, plying in Port Eoyal harbor, was lost by striking against a sunken anchor, the existence of which was known to the captain, who miscalculated as to where it was. This was the direct proximate cause of the loss. It is true that the captain protested against the order to back out on account of the then state of the wind and tide; but there is nothing to show that these contributed to the loss, in any way. Had the captain calculated correctly as to the position of the anchor, the vessel would have backed out with safety. Such a loss cannot be regarded as other than an ordinary peril of navigation. Peed v. United States, (11 Wall., 591.) United States v. Kimball, (13 Wall., 636.)
   Mr. Justice Field

delivered the opinion of the court:

The appellants seek a reversal of the decree in this case on grounds which amount substantially to these: 1st. That the United States were the owners of the injured vessel, by the terms of the charter-party, during the continuance of the service stipulated, and were consequently responsible for the damages sustained by the vessel whilst engaged in that service. 2d. That the damages to the vessel were occasioned by her running an extraordinary marine risk under compulsion from the United States, and for indemnity against such damages the charter-party stipulated.

I. There is no doubt that under some forms of a charter-party the charterer becomes the owner of the vessel chartered for the voyage or service stipulated, and consequently becomes subject to the duties and responsibilities of ownership. Whether in any particular case such result follows must depend upon the terms of the charter-party considered in connection with the nature of the service rendered. The question as to the character in which the charterer is to be treated is, in all cases, one of construction. If the charter-party let the entire vessel to the charterer with a transfer to him of its command and possession and consequent 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.

In examining the adjudged cases on this subject we find some differences of opinion, especially in the earlier cases, as to the effect to be given to certain technical terms used in the charter-party in determining whether the instrument parts with the entire possession and control of the vessel, but no difference as to the rule of law applicable when the construction is settled. 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. Christie v. Lewis, (2 Brod. & Bing., 410, 434.) Marcardier v. The Chesapeake Insurance Company, (8 Cranch, 39, 49.) The Schooner Volunteer and Cargo, (1 Sumner, 551, 556.) Drinkwater v. Freight and Cargo of Brig Spartan, (Ware, 145, 154.) Donahoe v. Kettell, (1 Clifford, 135.) Holt on Shipping, 461-471.

If, now, in the light of these observations we look at the charter-party in this case, we shall ñnd little difficulty in disposing of the first ground for reversal presented by the appellants. The vessel here was chartered for the purpose of plying in the harbor of Port Eoyal, in South Carolina, or for such other service as the Government might designate, and the provisions which the charter-party contains on the part of the owners sound only in covenant. By it they engage that during the existence of the charter the vessel shall be kept tight, staunch, well fitted, tackled, and provided with every requisite, and with the necessary men and provisions; that the whole of the vessel, with the exception of the necessary room for the accommodation of the crew and the storage for the cables and provisions, shall be at the sole use and disposal of the Government; that no goods or merchandise shall be laden on board otherwise than from the Government, or with the assent of its agent, on pain of forfeiture of the amount that may become due on the charter; and that the owners will receive on board all lawful goods and merchandise which the Government may think proper to ship. In consideration of these stipulations the United States agree that the owners shall receive the sum of $250 per day for each day the vessel is retained under the charter, and that they will supply the vessel with coal; and in case the vessel, while executing the orders of the Government, shall be destroyed or damaged by a hostile force, or by being compelled to run any extraordinary marine risk, that the owners shall be indemnified.

The stipulations here designated on the part of the owners imply the possession and command of the vessel by them, and would be inconsistent with such position and command by the Government.

Stipulations that the general owners shall keep the vessel in good condition during the existence of the charter and receive on board certain goods at the request of the Government, and refuse to receive other goods without its assent, would be out of place and inappropriate if the Government were, at the same time, special owners of the vessel for the service stipulated, having the vessel in its entire possession and control., Great weight was given to similar clauses by the King’s Bench in Saville v. Campion, (2 Barn. & Ald., 511,) and by the Supreme Court of New York in Clarkson v. Edes, (4 Cowen, 477.) In each, of these cases they were held conclusive that the possession and control of the vessel had not passed to the charterer, but had been retained by the general owner.

The fact that the service stipulated in the present case was to be rendered for the Government cannot alter the natural import of the terms used in the charter-party, or change its construction, although in a doubtful case that fact might be entitled to much consideration.

II. The second ground presented by the appellants for a reversal of the decree is readily answered. The risk that the vessel incurred in complying with the orders of the harbormaster was not an extraordinary marine risk within the meaning of the charter-party. The term extraordinary is there used to distinguish an unusual risk which-the-vessel might be compelled to run, by order of the Government, from those risks which would be covered by an ordinary marine policy and which might be expected to arise from the service in which the vessel was engaged. The contract of the Government was not intended to apply to the usual risks attendant upon the performance of a service such as was here mentioned, but risks outside and beyond them.'

The risk incurred was of a possible collision with a sunken anchor in the harbor. This was an ordinary risk which every vessel must run that enters a harbor, and is one which every marine policy covers.

Decree affirmed.