New Orleans Coal & Bisso Towboat Co. v. United States

• Decision Date: 27 October 1936
• Docket Number: No. 8055.,8055.
• Citation: 86 F.2d 53
• Parties: NEW ORLEANS COAL & BISSO TOWBOAT CO. et al. v. UNITED STATES et al.
• Court: U.S. Court of Appeals — Fifth Circuit

86 F.2d 53 (1936)

NEW ORLEANS COAL & BISSO TOWBOAT CO. et al. v. UNITED STATES et al.^*

No. 8055.

Circuit Court of Appeals, Fifth Circuit.

October 27, 1936.

COPYRIGHT MATERIAL OMITTED

Esmond Phelps, W. B. Spencer, W. B. Spencer, Jr., and Selim B. Lemle, all of New Orleans, La., for appellants.

Lucian Y. Ray, Sp. Atty. in Admiralty, William I. Connelly, Senior Examiner, Ins. Division, U. S. Shipping Board, Edouard F. Henriques, M. A. Grace, Edwin H. Grace, Daniel H. Grace, and Milton C. Grace, all of New Orleans, La., for appellees.

Before FOSTER, HUTCHESON, and HOLMES, Circuit Judges.

FOSTER, Circuit Judge.

This is a case of limitation of liability in admiralty, arising from the loss of a steel barge and her cargo of levee building machinery, on December 4, 1924, while being towed in the Mississippi river, by the tug Leo. A libel was filed by the owner of the machinery, Fluker Gravel Company, and the Leo was attached. Thereafter a petition was filed by the owner of the tug, New Orleans Coal & Bisso Towboat Company, on January 5, 1925, denying liability but surrendering the tug in limitation of liability, under the provisions of the statute (46 U.S.C.A. § 183), in the event liability should be decreed. Though it does not clearly appear from the record, it may be assumed that the tug was appraised and released on bond in the sum of $20,000, with Joseph A. Bisso and the Union Indemnity Company as sureties. Limitation was opposed by the owner of the machinery, Fluker Gravel Company, on the ground that the tug was unseaworthy, and by the United States, owner of the barge, on that ground and also on the ground that the barge had been procured from the United States Engineers by fraud and misrepresentation on the part of William A. Bisso, president of the towing company, and was thereby converted to its own use by the owner of the tug, which became an insurer.

Evidence was taken before a commissioner. After a hearing before the late Judge Grubb, an interlocutory decree was entered by him on March 28, 1931, denying limitation as to the claim of the United States, on the grounds urged, and allowing it as to the claim of the gravel company.

Further evidence was taken before the commissioner as to the amount of damages. He reported, fixing the damages to the United States at $30,000 for the loss of the barge, basing his finding on the value at which she was carried on the books of the United States Engineers. He rejected a claim for replacement value and cost of an unsuccessful attempt to salvage her. The loss of the gravel company was stipulated at $40,000.

Exceptions to the commissioner's report fixing the damages were overruled by Judge Borah on December 16, 1935.

In the meantime the St. Paul Fire & Marine Insurance Company was permitted to intervene, claiming as subrogee of the United States, as insurer of the barge, in the sum of $24,476.51. The Louisiana National Bank of Baton Rouge was also permitted to intervene to assert its rights as assignee of the claim of the gravel company.

The final decree was entered on December 26, 1935, amended on January 7, 1936, against the New Orleans Coal & Bisso Towboat Company in favor of the United States in the sum of $5,523.49; in favor of the St. Paul Fire & Marine Insurance Company in the sum of $24,476.51; and in favor of the Louisiana National Bank of Baton Rouge in the sum of $40,000. Judgment was also rendered in solido against Joseph A. Bisso and the Union Indemnity Company, sureties on the stipulation for value, upon which the tug had been released, respectively in the sums of $20,000 and $23,000. The amounts were awarded with interest at either 5 or 6 per cent. from various dates.

The New Orleans Coal & Bisso Towboat Company had been placed in receivership in a state court and Joseph A. Bisso had been appointed receiver. This appeal was taken from the judgments above recited by the towboat company, through its receiver, and by Joseph A. Bisso individually. The Union Indemnity Company and its receivers were severed in taking the appeal.

Since all the evidence was taken out of court, we are not required to give effect to the presumption usually arising from the fact that the trial court saw and heard the witnesses. In considering conflicting testimony, there is no choice between the witnesses as to their interest, as nearly all of them are officers or employees of the contesting parties. The whole case is before us, and we are at liberty to draw our own conclusions from the evidence in the record. We must of necessity review the evidence somewhat fully.

The circumstances attending the renting of the barge were these: A verbal contract of towage was entered into between O. O. Ogden, president of the gravel company, and Wm. A. Bisso, president of the towing company, for the hiring of a barge and tug for the transporting of certain levee building machinery, from a point near Cook's Landing, La., to a point near Ferriday, La., both on the Mississippi river, for the purpose of using the equipment in the building of a government levee. The price to be paid was fixed on a per diem and demurrage basis, in conformity with a previous contract between the parties. The machinery was not to be moved until some time later. It was contemplated that the towing company would furnish one of its barges and its tug, Patton, a light draft stern wheel boat, and the gravel company would load the machinery on the barge at its own expense. About two weeks later, when the gravel company was ready to move its equipment, Ogden telephoned from Cook's Landing to Wm. A. Bisso at New Orleans and advised him he was ready to move. Bisso replied that he was also ready. However, the next day Bisso rang up Ogden and advised him that the large barge intended to be used was not available nor was the Patton, as she was at Natchez; that he could use the tug Leo and could get a government barge to carry the equipment. Ogden demurred as to the use of the Leo but not as to securing a government barge. Bisso advised him that he would use the Leo to tow the barge to Angola near where the Patton would meet the tow and resume the voyage. Ogden agreed to this and said to Bisso, "All right, Billy. Go to it."

It is the settled policy of the United States Engineers to rent one of their barges to a levee contractor for the purpose of moving his equipment, to be used on government work, when he can not procure a suitable barge elsewhere. The contractor renting the barge is required to give security for her value or to furnish an insurance policy covering the barge. Under no circumstances would a barge be rented to any other party to be used for profit. The barge was rented through Schmidt, chief clerk in the office of the United States Engineers at New Orleans. He did not have authority himself to rent the barge and sent a telegram in the name of his chief, Major Bennion, to the president of the Mississippi River Commission, asking for authority to rent the barge to Ogden. He received a telegram in reply, addressed to Bennion, giving the necessary authority. An insurance policy covering the barge for her full value as carried on the books, $30,000, was delivered to Schmidt, and after that the barge was turned over to the Leo and was taken up the Mississippi river by her. The day after his conversation with Bisso, Ogden telephoned to Schmidt to inquire whether Bisso had secured the barge and was advised that he had. So far there is no dispute in the evidence.

As to the negotiations for the barge, Schmidt testified that Wm. A. Bisso made all the arrangements for renting the barge, delivered the insurance policy to him, and then received an order for the delivery of the barge. He did not know the Fluker Gravel Company and considered that Bisso was acting for Ogden. Bisso did nothing that would lead him to believe that he was acting for himself personally; that, if he had done so, it would have been necessary to refuse the barge.

Ogden testified that Bisso made all the arrangements for renting the barge and he had nothing to do with it and, in response to a leading question by his counsel, he said that he did not directly or indirectly at any time authorize Wm. A. Bisso to represent to any official of the United States government that he was acting for him in securing the barge.

Bisso admitted securing the insurance, paying the premium and delivering the policy. He testified that he knew he could not secure the barge for himself; that Ogden made all the arrangements for renting the barge; that Schmidt first telephoned to him about the barge, advising that Ogden had secured it; and that he had nothing to do with renting it.

There is evidence in the record tending to show the general custom as to the renting of barges by the United States Engineers to levee contractors. Ogden testified that he had used the same barge 10 or 12 times previously, in some of which movements the towing company had towed it; that he always made all the arrangements himself with the Engineers' office by letter, paid the rent of the barge to the United States, and paid the insurance premium.

Hearin, another levee contractor, testified that for a long time it was impossible to secure barges for moving heavy levee equipment from any one except the United States; that he frequently had rented them, usually by a personal application, but on one occasion when Bisso was doing the towing Bisso had made all the arrangements as to securing a barge for him, had taken out the insurance, paid the premium, and had charged the premium to him. Hardin, president of Marshall J. Smith & Co., the agents who issued the policy, testified that according to his records his agency had insured the same barge a number of times, on two of which occasions Bisso had arranged for the insurance and paid the premiums; and that the policies, in the usual course of business, were delivered direct to Schmidt.

In resolving the conflict in the testimony of Ogden,...