Case Name: UNITED STATES v. DANIELS TOWING & DRYDOCK, Inc. et al.
Court: United States Court of Appeals for the Fifth Circuit
Jurisdiction: United States
Decision Date: 1954-06-30
Citations: 214 F.2d 501
Docket Number: No. 14597
Parties: UNITED STATES v. DANIELS TOWING & DRYDOCK, Inc. et al.
Judges: 
Reporter: Federal Reporter 2d Series
Volume: 214
Pages: 501–509

Head Matter:
UNITED STATES v. DANIELS TOWING & DRYDOCK, Inc. et al.
No. 14597.
United States Court of Appeals Fifth Circuit.
June 30, 1954.
Rehearing Denied Aug. 9, 1954
Dawkins, District Judge, dissented in part.
William T. Foley, Jr., Atty., Dept. of Justice, Leavenworth Colby, Sp. Asst. Atty. Gen., Admiralty & Shipping Section, Washington, D. C., Fred Botts, Asst. U. S. Atty., Miami, Fla., Warren E. Burger, Asst. Atty. Gen., James L. Guilmartin, U. S. Atty., Miami, Fla., for appellant.
Robert F. Underwood, Miami, Fla., Martin Sack, Jacksonville, Fla., Alexander S. Gordon, Knight, Smith & Underwood, Miami Beach, Fla., for appellee.
Before STRUM, and RIVES, Circuit Judges, and DAWKINS, District Judge.

Opinion:
RIVES, Circuit Judge.
This is an amended libel by Daniels Towing and Drydock, Inc. against East Coast Shipping Co., Inc., the bareboat charterer of certain Navy barges, for which its trustee in bankruptcy was substituted, and against the United States of America, the owner of the barges, the libel being based on a contract for tow-age services. Two principal questions are presented for decision by this Court: (1), whether the district court had power to refer the entire case to a special commissioner for findings and conclusions thereafter adopted by the court; and (2), whether, under the evidence, the United States became liable for the towage services. We pretermit decision of the first question, because we are of the opinion, for reasons hereafter stated, that, regardless of the method of trial, the second question must be answered in the negative.
On about June 1, 1950, Elmore Daniels, as president of Daniels Towing and Drydock, Inc., hereafter called Daniels, and Louis Berger, the then president of East Coast, entered into an oral contract for Daniels to tow the barges designated as YC-847, YC-848, and YC-849 from Cape May, New Jersey, to Miami, Florida. East Coast agreed to pay Daniels $3,000.00 in consideration of Daniels sending its tug, Marion Adele, from Miami to pick up the three barges and to return with them to Miami. A tug owned by East Coast was to tow three other similar barges. On the trip North, the accompanying tug of East Coast broke down and the Marion Adele towed it to Wilmington, North Carolina for repair, occasioning a delay of eight days. A further delay of four days was encountered at Cape May, New Jersey, awaiting the arrival of a third large oceangoing tug towing the six Navy barges from the Brooklyn Navy Yard. Daniels and Berger had a supplemental agreement that Daniels would be compensated for the aggregate twelve day delay at $75.00 per day, or $900.00. East Coast failed to meet Daniels' demand for payment of the $3,900.00, and this libel ensued. There is no question but that East Coast became liable for the $3,900.00 towage services. The decisive question is whether the United States also became liable.
There is a direct conflict in the testimony as to whether Daniels knew from the beginning that the barges it was engaged to tow belonged to the United States. Berger testified that he told Daniels that the barges were at the Brooklyn Navy Yard and were being leased from the Navy. Daniels testified, on the other hand, that Berger told him East Coast had purchased the six barges, that its tug would tow three and he wanted Daniels to tow three of the barges to Miami. We proceed upon the assumption, under the trial court's findings, that Daniels was the one who told the truth. Daniels admitted, however, that in prior dealings with Berger, he had heard that Berger had chartered other barges from the Navy. He also knew that Berger had been put out of the barge line business by the two people who had gone into the business with him, and had met financial reverses earlier in the same year, 1950. Daniels had nothing on which to rely as to the ownership of the barges other than the bare statement from Berger that East Coast had bought the barges. He made no request to see the bill of sale, and, in fact, no inquiries whatever concerning the alleged claim of purchase.
Daniels personally never did see the Navy barges. His employees first saw the barges and their markings when they took the barges in tow at Cape May. At that time the words "U S Navy" were painted on the barges in letters three feet high, and together with the Navy numbers and symbols were clearly visible and were, in fact, observed by the Captain and crew of Daniels' tug. Even after such notice, no further inquiry was made as to the ownership of the barges. Daniels' employee Emery admitted:
"Q. (By Mr. Underwood) Have you ever seen a barge you knew was owned by some particular individual, which still had the numbers and letters on them? A. No. I don't know who owned them."
The charter party provided:
"Neither the Charterer nor the Master of any of the Vessels shall have the right, power or authority to create, incur or permit to be imposed upon any of the Vessels any liens whatsoever. The Charterer agrees to carry a properly certified copy of this charter party with the papers of each of the Vessels and on demand to exhibit the same to any person having business with any of the Vessels which might give rise to any lien thereon. The Charterer further agrees to fasten and maintain in a conspicuous place on each of the Vessels during the life of this charter party a notice reading as follows:
" 'This tug (or barge) is under charter from the United States of America, represented by the Chief of the Bureau of Ships of the Department of the Navy, to the East Coast Shipping Co., Inc. and by the terms of said charter neither the Charterer nor the Master has any right, power or authority to create, incur or permit to be imposed upon this tug (or barge) any liens whatsoever.' "
The barges, however, were open barges with no place provided for papers, and East Coast did not post the notice as it had agreed.
The libellant answered "No" to the following interrogatory:
"Tenth: Please state whether li-belant or any of its officers, employees or agents made or caused to be made any inquiries as to what agreement the lighters YC-847, YC-848 and YC-849 were being operated under at the time the towage services and assistance mentioned in the libel and complaint, as amended, and Schedule A, annexed thereto, are alleged to have been requested and rendered."
If it be assumed that these Navy barges owned by the United States were employed as merchant vessels when the towage was performed, still the United States would be liable for the towage only if a vessel privately owned and possessed would be liable under the same facts and circumstances. 46 U.S. C.A. § 742. A person furnishing towage would have a maritime lien on the barges, if privately owned, only if such tow-age were procured by an authorized person, 46 U.S.C.A. § 971, 972, and reasonable diligence to ascertain such authority is required of the person furnishing such towage. On the facts taken most favorably to Daniels, and under cases decided on similar facts, we think it clear that no maritime lien for towage would have attached to the barges had they been privately owned, and, hence, that the United States did not become liable for the towage services.
The judgment is, therefore, reversed and the cause remanded with directions to dismiss the libel as against the United States. See 28 U.S.C.A. § 2106.
Reversed and remanded with directions.
. "Q. As a matter of fact, you knew he was chartering his equipment, the barges, from the navy? A. No, I have heard it, but I don't know."
.
"Q. You knew he was not financially well off, didn't you? A. I did not think he was; I couldn't say.
"Q. Did you ask him whore he had bought these barges? A. No, I did not.
"Q. From whom he had bought them?' A. No.
"Q. How much he had paid for them? A. No."
. Libellant's witness Emery testified:
"Q. Do barges, or would this particular barge, or these three barges have any place for such papers? A. No, sir.
"Q. There wasn't any pipe there in the head of it that would contain them, if it had any? A. No, sir.
*
"Q. (By Mr. Gordon) These three barges were open barges, is that correct?
A. That is correct."
. 46 U.S.C.A. § 973 :
"Notice to person furnishing repairs, supplies, and necessaries
"The officers and agents of a vessel specified in section 972 of this title shall be taken to include such officers and agents when appointed by a charterer, by an owner pro hac vice, or by an agreed purchaser in possession of the vessel; but nothing in this chapter shall be construed to confer a lien when the furnisher knew, or by exercise of reasonable diligence could have ascertained, that because of the terms of a charter party, agreement for sale of the vessel, or for any other reason, the person ordering the repairs, supplies, or other necessaries was without authority to bind the vessel therefor."
. United States v. Carver, 260 U.S. 482, 43 S.Ct. 183, 07 L.Ed. 303; The Western Wave, 5 Cir., 77 F.2d 635; The Kongo, 6 Cir., 155 F.2d 492.