Source: https://supreme.justia.com/cases/federal/us/250/246/
Timestamp: 2019-04-22 18:03:10+00:00

Document:
solely as merchant vessels, shall be subject to all laws, regulations, and liabilities governing merchant vessels, whether the United States be interested therein as owner in whole or in part or hold any mortgage, lien, or other interest therein,"
which provision was reenacted by the Act of July 15, 1918, c. 152, 40 Stat. 900, amending the Shipping Board Act. P. 250 U. S. 253.
It is not to be assumed that Congress intended that the power given by the Act of June 15, 1917, supra, should be exercised by the President arbitrarily, or that the President, by his order, intended to vest absolute powers in the Shipping Board and Fleet Corporation, subject only to such regulations as he might from time to time prescribe. Id.
On the contrary, in view of the establishment of the Board and the Corporation as government agencies, broadly empowered and definitely restricted under the Shipping Act, and of the mention of that act in the Act of June 15, 1917, supra, it is to be presumed that Congress at least expected that those agencies would be used under the latter act, and that the President, in employing them thereunder, did so because of those powers and restrictions, already provided. Id.
This view is confirmed by the Act of July 15, 1918, supra, and the companion measure of July 18, 1918, c. 157, 40 Stat. 913, read with the House and Senate reports accompanying the bills. P. 250 U. S. 255.
"any agreement, contract, lease, or commitment by which the possession or services of a vessel are secured for a period of time, or for one or more voyages, whether or not a demise of the vessel. Id."
Construing § 9 of the Shipping Act as a whole, the vessel in this case was employed "solely as a merchant vessel," though assigned to the New England coal trade when the government was rationing the coal supply of the country as a war measure. P. 250 U. S. 256.
Order to show cause discharged.
Upon petition of the United States, this Court granted an order to show cause why a writ of prohibition or mandamus should not be issued in order to prevent the United States District Court for the District of Massachusetts, sitting in admiralty, from directing the seizure, attachment, or arrest of a steam vessel known as the Lake Monroe, owned and operated by the government of the United States, to satisfy a claim of the master and part owner of the American auxiliary fishing schooner Helena for damages arising out of a collision between the two vessels which occurred on October 8, 1918, off the coast of Cape Cod.
A libel having been filed in the district court in behalf of the Helena against the Lake Monroe to recover damages, and praying that process issue for the seizure and attachment of the steamship, the United States appearing specially, filed suggestions to the effect that, as the steamer was the property of the United States and in its possession and control, the court was without jurisdiction to enforce claims against her by process.
commercial purposes. They selected the master and other officers of the vessel, put them in charge of her, and furnished her crew, and thereafter they manned, equipped, and repaired her, collected freight moneys from the consignees, and paid the expenses of manning, equipping, and supplying her, and other running expenses, and for these services they were to be paid by, and were to account for the moneys received by them to, the Emergency Fleet Corporation, as the agent of the United States Shipping Board. At the time of the collision, the Lake Monroe was loaded with coal and operating under a charter executed by Randall & Co., as agents of the Shipping Board, to the New England Fuel & Transportation Company, a private concern in Boston; the cargo having been purchased from a private owner for private use, and the freight for its carriage paid by the Transportation Company to Randall & Co.
The district court, conceding that the Lake Monroe, being a government-owned vessel, would be exempt from arrest except for the provisions of § 9 of the Shipping Board Act of September 7, 1916, c. 451, 39 Stat. 728, 730, held that, because, at the time of the collision, she was employed solely as a merchant vessel, by the terms of that section she was subject to arrest on process in rem to answer for the collision.
It is the principal contention of the government that the Shipping Board Act has no application to the Lake Monroe, because she was requisitioned by the President through the Emergency Fleet Corporation under the authority of other legislation, was documented in the name of the United States, and then employed by the President through the Shipping Board and the Fleet Corporation. This contention renders it necessary to review the several acts of legislation and the executive action that has been had pursuant thereto.
"An act to establish a United States Shipping Board for the purpose of encouraging, developing, and creating a naval auxiliary and naval reserve and a merchant marine to meet the requirements of the commerce of the United States with its territories and possessions and with foreign countries; to regulate carriers by water engaged in the foreign and interstate commerce of the United States, and for other purposes."
"vessels suitable, as far as the commercial requirements of the marine trade of the United States may permit for use as naval auxiliaries or army transports or for other naval or military purposes,"
and also (§ 7) to charter, lease, or sell to any citizen of the United States any vessel so purchased or constructed.
The important § 9 in its original form, provided as follows.
as merchant vessels, shall be subject to all laws, regulations, and liabilities governing merchant vessels, whether the United States be interested therein as owner, in whole or in part, or hold any mortgage, lien, or other interest therein."
There followed prohibitions not necessary now to be particularly considered.
Section 11 authorized the Shipping Board to form one or more corporations under the laws of the District of Columbia for the purchase, construction, equipment, lease, charter, maintenance, and operation of merchant vessels in the commerce of the United States, the total capital stock not to exceed $50,000,000, and the Board to acquire for and on behalf of the United States not less than a majority of the capital stock. The act contained numerous provisions imposing duties upon common carriers by water and conferring powers of regulation upon the Shipping Board.
The members of this Board were appointed by the President in December, 1916, and, having been confirmed by the Senate, were formally organized in the following month.
By the time the United States declared war, April 6, 1917, the world's merchant shipping had reached the stage of demoralization. The President, by a proclamation dated February 5, 1917, had declared an emergency, and brought into play the prohibition of one of the clauses of § 9 of the above act against the sale, lease, or charter to a person not a citizen of the United States or the transfer to a foreign registry of flag of any vessel registered or enrolled and licensed under the laws of the United States.
States. It was officered by the commissioners of the Shipping Board and their nominees, and was but an operating agency of that Board.
"to purchase, requisition, or take over the title to, or the possession of, for use or operation by the United States, any ship now constructed or in the process of construction or hereafter constructed, or any part thereof, or charter of such ship."
"The President may exercise the power and authority hereby vested in him . . . through such agency or agencies as he shall determine from time to time: Provided, that all money turned over to the United States Shipping Board Emergency Fleet Corporation may be expended as other moneys of said corporation are now expended. All ships constructed, purchased, or requisitioned under authority herein, or heretofore or hereafter acquired by the United States, shall be managed, operated, and disposed of as the President may direct."
"The powers herein delegated to the United States Shipping Board may, in the discretion of said Board, be exercised directly by the said Board or by it through the United States Shipping Board Emergency Fleet Corporation, or through any other corporation organized by it for such purpose."
It was under the authority thus conferred that the Lake Monroe was requisitioned while in process of construction, and carried to completion by the Fleet Corporation, and thereafter operated by the Shipping Board through that corporation. She was documented in the name of the United States, and assigned to Randall & Co. as operating and managing agents, and, at the time of the collision, was operating under a charter executed by them as agents of the Shipping Board to a private concern for carrying coal in coastwise commerce.
"The term 'charter' means any agreement, contract, lease, or commitment by which the possession or services of a vessel are secured for a period of time, or for one or more voyages, whether or not a demise of the vessel."
adduced in support of it would cause the restrictive provisions of the Act of 1916 to operate only with respect to vessels constructed or acquired under that particular act, and would render the powers conferred upon the Shipping Board and the Fleet Corporation by the executive order of July 11, 1917, absolute powers, subject to no regulation except such as the President might from time to time prescribe.
But, at the time of the emergency provision of June 15, 1917, the Shipping Board had been established as a public commission, with broad administrative powers and subject to definite restrictions, and the Fleet Corporation had been created as its agency, financed with public funds. The emergency shipping legislation evidently was enacted in the expectation that the President would employ the Shipping Board and the Fleet Corporation as his agencies to exercise the new powers, for the Fleet Corporation was mentioned in the act, and it was known to be but an arm of the Board. It is not necessary to hold that Congress, while entertaining this expectation, went to the extent of restricting the President to those agencies, but it is not to be believed that they intended he should exercise the powers arbitrarily. And when in fact he designated the Fleet Corporation to exercise those powers so far as they pertained to the construction of vessels and the requisitioning of vessels in process of construction, and the Shipping Board so far as they applied to the operation, management, and disposition of vessels, it is to be presumed that he did so because of the general powers that already had been conferred upon them by law, and because they were subject to the regulatory provisions that Congress had enacted.
governing merchant vessels, whether the United States were interested therein as owner or otherwise, was a most material restriction, deemed by Congress to be essential to subject them to the same duties and liabilities as privately owned merchant vessels with which they competed.
That Congress considered this provision and the other provisions of the Act of 1916 as having living force and general application after the executive order of July 11, 1917, is manifest from the amendatory act approved July 15, 1918, while the war was at its height, and treated by Congress as an emergency war measure. See H.R. 568 and S.R. 536, 65th Cong., 2d Sess.; also H.R. 569 and S.R. 535, same Session, relating to the companion measure. These reports and the accompanying bills show that the Shipping Board was understood to be executing all its powers under the regulations prescribed by the Act of 1916.
The government contends further that § 9 of that act has no application to the present case, because liability is imposed thereby only with respect to vessels "purchased, chartered or leased from" the Shipping Board, and only when "employed solely as merchant vessels," it being insisted that the Lake Monroe does not come within either of these descriptions. The return, however, makes it clear that, at the time of the collision, she was operating under a charter executed by the agents of the Board to a certain coal company, and even were it merely an agreement whereby the shippers paid a stipulated rate per ton for the cargo carried, we think that this would be a charter within the meaning of the Act of 1916. The words "purchased, chartered or leased" indicate an intent to include a contract for the temporary use of a vessel or its services, not amounting to a demise of the ship -- in short, the term "charter" was here employed in a sense as broad as the definition afterwards embodied in the Act of July 18, 1918.
was not employed "solely as a merchant vessel" because she was assigned to the New England coal trade, and because, at that time, the government, through the Fuel Administration, was rationing the coal supply of the country. The language of § 9, "such vessels, while employed solely as merchant vessels," must be read in connection with the phrase "whether the United States be interested therein as owner, in whole or in part, or hold any mortgage, lien, or other interest therein." Her service at the time was purely commercial, and she was subject by the terms of the act to the ordinary liability of a merchant vessel, notwithstanding the indirect interest of the government in the outcome of her voyage.
We deem it clear also that among the liabilities designated by the section is the liability of a merchant vessel to be subjected to judicial process in admiralty for the consequences of a collision.
Order to show cause discharged, and petition dismissed.
* The docket title of this case is Ex parte in the Matter of the United States, Petitioner.

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