Harbor Service Corp. v. United States

Second Circuit

Harbor Service Corp. v. United States

9 F.2d 613, 1925 U.S. App. LEXIS 2440, 1925 A.M.C. 1036

CourtCourt of Appeals for the Second Circuit

DecidedJune 13, 1925

DocketNos. 257, 347

StatusPublished

This text of 9 F.2d 613 (Harbor Service Corp. v. United States) is published on Counsel Stack Legal Research, covering Court of Appeals for the Second Circuit primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook

Harbor Service Corp. v. United States, 9 F.2d 613, 1925 U.S. App. LEXIS 2440, 1925 A.M.C. 1036 (2d Cir. 1925).

Pincite

Opinion

HAND, Circuit Judge

(after stating the facts as above).

We think it unnecessary to consider the other questions raised, because in our judgment the suits depend up[614]*614on the effect to be given to the letter of May 19, 1921, to Sterling from an acknowledged agent of the Shipping Board. Was this an “authorization” by the owner of the vessel, the board? We agree that it was not enough if the board merely induced him to order the work done; it must have permitted him to do it on its own behalf, in its own interest. Friendly intimation or advice would not necessarily constitute the authorization required by the statute; but the circumstances under "which the parties acted made it more than that.

In general, we think that, when the owner of a ship consents and the letter was surely a consent, to a receiver’s ordering work to be done upon her, the consent is sufficient authority. Such contracts make debts of the receivers, payable from the assets in his hands, of which the ship is a part. The consent includes as a necessary consequence that the ship may be used, if the receiver would otherwise be insolvent. Ignoring any questions of marshaling, with which we are not concerned, the owner can only mean that, if necessary, the ship shall be taken; that it is in fact pledged to the debt. So we should be prepared to say that any conduct would be enough from which it could be gathered that the owner consented to a receiver’s contract for such work. There is a valid distinction between such a case and one where the owner is dealing with a solvent charterer, with one whose personal responsibility he may assume to be sufficient to answer his engagements, and who has promised to discharge them as- between himself and the owner.

But the facts at bar make a much stronger case. The charter party Had expired; delivery to the board was imminent. The receiver was in fact without funds; he had written to the boar<jl, asking for authority to make the repairs (at least, so he swore, though the letter is not in the record). It had been necessary several times before for the board to disburse the ship by taking receiver’s certificates. The receiver was its official, in constant communication with it, appointed at its instance, to i protect its interests, the only interests of any conceivable moment which existed. Reclassification was important only that the ship might sail the seas for the board’s profit. With all this in mind, to say that a “suggestion” was not "an authorization to do the work on the board’s behalf seems to us beyond any reason. No one receiving such a letter could have any question that, if not directed, at least he was permitted, to pledge the ship according to the ordinary maritime law.

Decree reversed in the suit of the Harbor Service Corporation.

Decree affirmed in the suit of the Clinton Dry Docks, Inc.

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HAND, Circuit Judge

(after stating the facts as above).

We think it unnecessary to consider the other questions raised, because in our judgment the suits depend up[614]*614on the effect to be given to the letter of May 19, 1921, to Sterling from an acknowledged agent of the Shipping Board. Was this an “authorization” by the owner of the vessel, the board? We agree that it was not enough if the board merely induced him to order the work done; it must have permitted him to do it on its own behalf, in its own interest. Friendly intimation or advice would not necessarily constitute the authorization required by the statute; but the circumstances under "which the parties acted made it more than that.

In general, we think that, when the owner of a ship consents and the letter was surely a consent, to a receiver’s ordering work to be done upon her, the consent is sufficient authority. Such contracts make debts of the receivers, payable from the assets in his hands, of which the ship is a part. The consent includes as a necessary consequence that the ship may be used, if the receiver would otherwise be insolvent. Ignoring any questions of marshaling, with which we are not concerned, the owner can only mean that, if necessary, the ship shall be taken; that it is in fact pledged to the debt. So we should be prepared to say that any conduct would be enough from which it could be gathered that the owner consented to a receiver’s contract for such work. There is a valid distinction between such a case and one where the owner is dealing with a solvent charterer, with one whose personal responsibility he may assume to be sufficient to answer his engagements, and who has promised to discharge them as- between himself and the owner.

But the facts at bar make a much stronger case. The charter party Had expired; delivery to the board was imminent. The receiver was in fact without funds; he had written to the boar<jl, asking for authority to make the repairs (at least, so he swore, though the letter is not in the record). It had been necessary several times before for the board to disburse the ship by taking receiver’s certificates. The receiver was its official, in constant communication with it, appointed at its instance, to i protect its interests, the only interests of any conceivable moment which existed. Reclassification was important only that the ship might sail the seas for the board’s profit. With all this in mind, to say that a “suggestion” was not "an authorization to do the work on the board’s behalf seems to us beyond any reason. No one receiving such a letter could have any question that, if not directed, at least he was permitted, to pledge the ship according to the ordinary maritime law.

Decree reversed in the suit of the Harbor Service Corporation.

Decree affirmed in the suit of the Clinton Dry Docks, Inc.

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Bluebook (online)

9 F.2d 613, 1925 U.S. App. LEXIS 2440, 1925 A.M.C. 1036, Counsel Stack Legal Research, https://law.counselstack.com/opinion/harbor-service-corp-v-united-states-ca2-1925.