The Johnson Lighterage Co. No. 24

• Decision Date: 13 February 1917
• Citation: 240 F. 435
• Parties: THE JOHNSON LIGHTERAGE CO. NO. 24.
• Court: U.S. District Court — District of New Jersey

240 F. 435

THE JOHNSON LIGHTERAGE CO. NO. 24.

United States District Court, D. New Jersey.

February 13, 1917

[Copyrighted Material Omitted]

Foley &amp Martin, of New York City, for libelants, W. J. Scanlan Co. certain members of the crew, and the captain.

Runyon & Autenreith, of Jersey City, N.J., and Edward W. Norris, of New York City, for James Shewan & Sons, Inc.

E. Curtis Rouse, of New York City, pro se and for Seaboard Equipment Corporation, Silas B. Axtell, and certain members of the crew.

George J. Stillman, of Jersey City, N.J., for Andrew Brown.

HAIGHT District Judge.

The controversy now before the court relates to the distribution of the sum of $25,000, heretofore paid into the registry of this court by the owners of the cargo of the deck scow Johnson Lighterage Company No. 24 in settlement of a suit instituted on behalf of the owner, charterers, captain, and members of the crew of the steam tug John A. Seely to recover for salvage services rendered by them in respect to such cargo. The conflicting interests and the respective claims to the fund will hereinafter appear.

1. The main question is as to how that share of the salvage moneys which would ordinarily be awarded to the owner of a vessel rendering the salvage services (hereinafter referred to as the owner's share) should be distributed as between the charterers of the tug and those who have succeeded to the owner's interest (hereinafter, for convenience, referred to as the 'owner '). The tug, at the time the salvage services were rendered, was owned by the Seaboard Equipment Corporation, but was under charter to a partnership trading as W. J. Scanlan Company. The charter party, which consisted of a letter, written by the owner to the Scanlan Company, and accepted by the latter, was as follows:

'New York, December 23, 1915.

'Messrs. W. J. Scanlan & Company, New York Office, 31 Union Sq., New York City-- Dear Sirs: Confirming our telephone conversation of this morning, we will charter you bare tug John A. Seely from December 24, 1915, with her present equipment, which is now in good condition, for three months, with option of extending this charter. What we mean by 'bare tug' is tug with her present hawsers, bedding, equipment, etc. You to furnish crew, coal, water, and supplies, which you hereby agree to pay for promptly, and hold the boat harmless for the indebtedness. You also further agree to pay for the marine and fire insurance on this boat covering towing from New York harbor to Edgemere and Rockaway inlet. In case tug John A. Seely works in ice, you will be compelled to sheath bow at your expense; also put an ice breaker on the bow of this boat to protect the hull. You further agree to pay this company five hundred ($500) dollars per month for the bare boat as above described, on the tenth (10th) of each month, for the use of the boat. You also further agree to advance payment on account the first month's rental two hundred and fifty dollars ($250). It being further understood that you are to pay insurance premiums promptly, and in the event that the insurance companies will not place marine insurance for towing on the outside to Edgemere, Long Island, that you are to give this company a bond to protect this company in case of loss or damage to the boat while on this work. It is understood that you are to keep the present engineer that is on the boat at your expense, and in case this engineer resigns his position that an engineer acceptable to this company will be engaged.

'Very truly yours,

Seaboard Equipment Corporation, 'By John A. Seely, V. President and General Manager.

'This agreement is hereby accepted by W. J. Scanlan & Company, contractors, 31 Union Square, N.Y. City, by Louis H. Friedman, member of firm.' The charterers took possession of the tug on December 24, 1915, furnished their own crew and captain, and were in complete possession and control of it when the salvage services were rendered. Undoubtedly there was a demise of the vessel, so that the charterers were then the owners of her pro hac vice, because they acquired by the terms of the charter, and in fact had assumed, the exclusive possession, command, control, and navigation of her. United States v. Shea, 152 U.S. 178, 14 Sup.Ct. 519, 38 L.Ed. 403; The Del Norte, 119 F. 118, 55 C.C.A. 220 (C.C.A. 9th Cir.); Gibson v. Manetto Co., 194 F. 331, 114 C.C.A. 291 (C.C.A. 5th Cir.); Hahlo v. Benedict, 216 F. 303, 132 C.C.A. 447 (C.C.A. 2d Cir.).

It is the insistment of the charterers that, in the absence of an express provision in the charter party to the contrary (of which there was none in that in question), a demise of a vessel entitles the charterer to all of the 'owner's share' of any salvage money, to the exclusion of the actual owner. The decisions of Judge Brown in the Southern district of New York in The Kaiser Wilhelm Der Grosse (D.C.) 106 F. 963, and of the British Court of Admiralty in The Scout, 1 Aspinall's Reports of Maritime Cases (N.S.) 259, and in The Maria Jane, 14 Jurist, 857, are cited in support of that proposition. On the other hand, it is urged on behalf of the owner that such share should be awarded to the one upon whom would fall the loss if the vessel were injured or destroyed while engaged in the salvage operation. In order to ascertain the correct rule, a somewhat extended discussion of the reported cases which have dealt with the question seems necessary:

That part of Dr. Lushington's opinion in The Maria Jane, supra, which is applicable to this case, was merely a dictum. He was dealing with a supposititious case, and expressed the opinion, but not without doubt, that where there was a demise the salvage moneys would inure to the benefit of the charterer. The facts which called for a decision are so different from the facts of this case that his actual decision cannot be considered a precedent on the point in question. While it was held in The Scout, supra, where there was a demise of the vessel, that the owner had no claim to a salvage award, it appears from the opinion that the charterer 'in case of damage to the vessel, would have been bound under the charter to repair her. He was bound to deliver her up to the general owners in good condition. ' Also, while some of the remarks of Judge Brown in The Kaiser Wilhelm Der Grosse, supra (106 F. 970), lend support to the charterers' contention, it must be noticed that he also said, before reaching his conclusion:

'It (the charterer) * * * agreed unconditionally to return her (the salving vessel) to the owner in as good condition as it received her, reasonable wear and tear alone excepted. If the vessel was damaged in any salvage operation, the charterer alone was bound to make good the loss.'

Thus it appears that in both of those cases the risk of injury to or loss of the vessel during the salvage operations was upon the charterer and not the owner. That was apparently considered a controlling circumstance in each. On the other hand, in The New Orleans, 23 F.

909 (C.C.E.D. La.) , Judge Pardee held that the salvage money, after deducting the actual expenses of the charterers in the salvage operations, should be divided equally between the charterers, the owner, and the crew. That the charter in that case was one of demise seems clear, for he stated that the cases of The Alfen, Swab. 189, and The Waterloo, 2 Dod. 433 (the latter of which is also referred to by Judge Brown in The Kaiser Wilhelm Der Grosse, supra), were not in point because:

'They refer to charterers who are not in possession of and navigating the ship-- were freighters under charter party.'

On page 911 of 106 F. (in explaining the reason for his subsequent holding) he said:

'At the same time, the owners' property was used to some extent and was risked in the rendition of services to the New Orleans. If it were a mere question of compensation for work and labor, the owners would be entitled to nothing; but I think the case is very different, so far as it is a question of reward for the use and risk of property and encouragement for the rendition of salvage services. Why reward a temporary owner and leave out the real owner? Neither one had really anything to say as to whether the services should or not be rendered.'

In The Camanche, 8 Wall. 448, 473, 19 L.Ed. 397, Mr. Justice Clifford, in speaking of the rights of charterers to salvage moneys, said that they are not in the same position as owners, unless there be a stipulation in the charter party giving them the benefit of the salvage, 'or unless the vessel is chartered and sailed on their responsibility. ' In The Arizonan, 136 F. 1016, 1017 (D.C.E.D.N.Y.), where it was held that there was not a demise of the vessel, Judge Thomas said:

'The general rule is that the owner is entitled to such award (salvage moneys) unless there is a demise of the tug, or the contract of hiring stipulates to whom it shall belong.'

He held that the charterer was not entitled to anything. His decision was, however, reversed by the Circuit Court of Appeals of the Second Circuit (144 F. 81, 82, 75 C.C.A. 239, 240), and in the opinion of the latter court Judge Coxe said:

'It is true that several text-writers have stated the rule broadly that a charterer is not entitled to salvage unless he becomes the owner pro hac vice, but we are referred to no controlling authority to that effect and are not impressed by the rationale of the rule. The theory of salvage is to reward all who have contributed anything to the work of saving the imperiled property. Thus it has included the risk assumed by the salving vessel, her services and the services of her master and crew not only, but it has been extended to services rendered by passengers; in some instances, remuneration has been awarded

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