Tampa Ship Repair & Dry Dock Co. v. Esso Export Corp.

• Citation: 237 F.2d 506
• Decision Date: 24 October 1956
• Docket Number: No. 16070.,16070.
• Parties: TAMPA SHIP REPAIR AND DRY DOCK COMPANY, Inc., Claimant, Appellant, v. ESSO EXPORT CORPORATION, Appellee.
• Court: United States Courts of Appeals. United States Court of Appeals (5th Circuit)

237 F.2d 506 (1956)

TAMPA SHIP REPAIR AND DRY DOCK COMPANY, Inc., Claimant, Appellant, v. ESSO EXPORT CORPORATION, Appellee.

No. 16070.

United States Court of Appeals Fifth Circuit.

October 24, 1956.

Chester H. Ferguson, Tampa, Fla., Thomas A. Hamilton, Hamilton, Denniston, Butler & Riddick, Mobile, Ala., for appellant.

George F. Wood, Pillans, Reams, Tappan, Wood & Roberts, Mobile, Ala., for appellee.

Before HUTCHESON, Chief Judge, and RIVES and BROWN, Circuit Judges.

JOHN R. BROWN, Circuit Judge.

On May 28, 1954, the S. S. Cortes, owned by Tampa Ship Repair & Dry Dock Co., Inc., was chartered under demise form with a restricted purchase option to South Pacific Steamship Lines, Inc. The charter contained, in the usual and unmistakable language, a provision¹ absolutely forbidding the creation of maritime liens.

Esso Export Corporation, with knowledge both of ownership of the vessel by Tampa and the fact of some character of charter (with purchase option) to South Pacific, thereafter supplied bunkers to S. S. Cortes at several ports in June and July 1954 without inspecting a copy of the charter party then aboard the vessel or attempting, by any means, to ascertain the terms of the charter from the owner whose presence in Tampa, Florida, was well known to it. Despite this the District Judge allowed a lien to Esso apparently on the theory that a previous exchange of letters somehow required the owner to warn the prospective supplier.

But when supplies have been furnished on the order of a charterer (or his ship Master) "* * * there is no question that the supplier is charged with knowledge of the provisions of the charter when he either knows them or by reasonable diligence could have ascertained them. * * * and When * * * the charter party, with knowledge of which the material-man is charged, prohibits the creation of a lien for supplies ordered by the charterer or * * * his representative, no lien will attach." Dampskibsselskabet Dannebrog v. Signal Oil & Gas Co., 310 U.S. 268, 273, 275, 60 S.Ct. 937, 940, 84 L.Ed. 1197, 1940 A.M.C. 647.

Oblivious as Esso was both to knowledge and the means of knowledge, the lien fell under the pungency of the Justice Holmes' few, but power-packed words in United States v. Carver, 260 U.S. 482, 489, 43 S.Ct. 181, 182, 67 L.Ed. 361, 1923 A.M.C. 47: "We regard these words² as too plain for argument. They do not allow the materialman to rest upon presumptions until he is put upon inquiry, they call upon him to inquire. To ascertain is to find out by investigation. If by investigation with reasonable diligence the materialman could have found out that the vessel was under charter, he was chargeable with notice that there was a charter; if in the same way he could have found out its terms he was chargeable with notice of its terms. In this case it would seem that there would have been no difficulty in finding out both."

The duty on Esso was plain and positive for, "* * * the statute places the burden of exercising diligence upon the furnisher of repairs, and not upon the owner or his agent * * *", The Western Wave, 5 Cir., 77 F.2d 695, 697, 1935 A.M.C. 985. Findley v. Red Top Super Markets (The Queen Anne), 5 Cir., 188 F.2d 834, 1951 A.M.C. 1113. As in Morse Dry Dock & Repair Co. v. United States, 2 Cir., 1 F.2d 233, 237-238, 1924 A.M.C. 1033, "* * * the Carver Case is decisive * * *. The libelant * * * was bound to inquire, and had no right to rest upon presumptions. If he had inquired, if he had exercised reasonable diligence, he could certainly have ascertained the terms of the charter party, and that the Steamship Company, in ordering the repairs, was without authority to bind the vessels. * * *" The Kongo, 6 Cir., 155 F.2d 492, 1946 A.M.C. 1200.

Nor was the earlier exchange of letters (of May 7 and 13, 1954, respectively) between Esso and the Owner, treated by the District Court as decisive, of any real...