The Spica, 222.

• Decision Date: 14 March 1923
• Docket Number: 222.
• Citation: 289 F. 436
• Parties: THE SPICA. v. SUSQUEHANNA S.S. CO. MORSE DRY DOCK & REPAIR CO.
• Court: U.S. Court of Appeals — Second Circuit

289 F. 436

THE SPICA.

MORSE DRY DOCK & REPAIR CO. v. SUSQUEHANNA S.S. CO.

No. 222.

United States Court of Appeals, Second Circuit.

March 14, 1923

The Spica is an Italian vessel, whose owners, in the spring of 1918, desired to change her into an auxiliary. They were represented in the United States by a shipmaster, Capt Figari, and with him the libelant a ship-repairing concern, made whatever arrangements were made. Figari had an engine originally intended for use in another sailing vessel. This engine was obtained from or through the Southwark Foundry, etc., Co., which agreed to furnish 'foundation and erection drawings' for the same, and also to furnish a 'superintendent of erection for the purchaser.'

Libelant was undoubtedly employed to do all the rest of the necessary work and provide suitable materials. This meant designing and shipping a propeller and so changing the after body of the Spica as to permit the introduction of a propeller forward of her rudder post. There were also other repairs to be done. The work continued for upwards of 10 months. by which time libelant had presented bills aggregating $212,525.02, and the owners, through Figari, had paid $165,000. For the balance this libel was filed and it alleges that between dates specified it had, 'at the special instance and request of the master and owner of said bark Spica, performed certain work, labor, and services upon the said bark necessary for the equipping of said vessel, of the reasonable value' of the gross sum above set forth.

The owners appeared, claimed, and answered, and in their answer specifically admitted the allegation above quoted, except that they denied that the 'reasonable value' of the work done was as great as had been alleged. The answer then affirmatively averred that libelant undertook the work. and 'to do a good and workmanlike job, all for the sum of $130,000 or less. ' The answer then further alleged, with considerable detail, that libelant had performed the work negligently and improperly, so that in result claimant asserted that libelant was 'indebted to the said ship and to her owners in the sum of $100,000 and upwards. ' These new matters-- i.e., the assertion of a contract for a specific amount, and libelant's alleged failure to execute the job in a workmanlike manner, are pleaded as defenses only; in form no counterclaim was interposed.

The issues thus presented were never tried by the court, but certainly without objection, and we infer by consent, it was referred to a commissioner 'to ascertain and compute the amount of (libelant's) damages,' and by the same order it was directed that 'libelant recover herein from the bark Spica, her claimant and stipulators, the damages, if any, by it sustained by reason of the matters and things set forth in the libel. ' Such a document, though called an order, is in every essential an interlocutory decree on the merits.

The commissioner reported:

(1) That there was nothing in the testimony to substantiate claimant's assertion that a contract for $130,000 was made.

(2) That whatever failure in satisfactory performance the completed work displayed was due to the inability of the engine to make the necessary number of revolutions, and libelant was in no way responsible for the engine, and consequently there was no valid claim against libelant for defective workmanship.

(3) That the work had been done by charging for 'day's work, labor, and material'; the prices charged being the regular market prices for such labor and material.

(4) Yet he also found that the contract between Capt. Figari and libelant was that the work should be done on the 'cost plus percentage basis.' By reference to the testimony this means that libelant undertook to do the work in the same way as that pursued in the case of another vessel then at Morse's yard, viz. 'cost of labor and material plus 15 per cent'; it being expressly understood that 'cost includes our (libelant's) overhead expense.'

The commissioner then concluded:

(5) That the prices charged were proper and the libelant was entitled to a lien on the Spica for the sum of $44,863.98 with interest from the bill last rendered.

Exceptions to this report were overruled, and claimant appealed, assigning (inter alia) for error that the contract was 'to do work upon said bark upon the basis of actual cost of labor and material plus 15 per cent., whereas recovery was allowed to libelant upon the alleged theory of market or reasonable value of labor and material, and recovery allowed without any proof of the work done or the value thereof.'

Cass & Apfel, of New York City (Van Vechten Veeder, of New City, of counsel), for appellant.

Macklin, Brown & Van Wyck, of New York City (Horace L. Cheyney, of New York City, of counsel), for appellee.

Before HOUGH, MANTON, and MAYER, Circuit Judges.

HOUGH Circuit Judge (after stating the facts as above).

The pleadings in this case so disguise and obscure the issues that it will be necessary, after investigating the proof, to give decree regardless of their technicalities, on the principles stated in The Volunteer, 149 F. 723, 79 C.C.A. 429, and Dampskibs Thor v. Tropical Fruit Co. (C.C.A.) 281 F. 740.

The procedure chosen in the court below for the ascertainment of facts requires some comment. We have inferred a consent to a reference, because in invitum such reference would have been illegal. The answer, however inartistic in form, proffered 'on the merits' two issues: (1) The existence of a special contract for $130,000; and (2) such injury to the vessel as to wipe out all claim for further payment. Doubtless, although not specifically so authorized by rule or statute, an admiralty court may send to a commissioner or the like the ascertainment of any special set of facts; but the report is merely advisory, the power of final decision being in the tribunal to which the report is made. The City of Washington, 92 U.S. 31, 23 L.Ed. 600.

But no party has a right to a reference; the court is empowered to try each and every part of every case, if so minded. United, &c. Co. v. Compagnie Generale (C.C.A.) 271 F. 184. And since equity and admiralty derive their respective methods from a common source, it is as true in admiralty as in equity that:

'It is not * * * competent for the court to refer the entire decision of a case to (a master or commissioner) without the consent of the parties. It cannot, of its own motion, or upon the request of one party, abdicate its duty to determine by its own judgment the controversy presented. ' Kimberly v. Arms, 129 U.S. 512, 524, 9 Sup.Ct. 355, 359 (32 L.Ed. 764); Garinger v. Palmer, 126 F. 906, 61 C.C.A. 436.

The commissioner in this case could only have proceeded to try the whole case by consent; hence our inference, we being loath to infer illegality. Result is that the decree appealed from rests on a commissioner's report, which to be sure allows a certain sum as damages, but is much more concerned in declaring why any damages are allowed, and why appellant should pay them; matters properly for the court's adjudication before assessment directed.

But this decree is 'vacated by the appeal,' as we are recently reminded by The John Twohy, 255 U.S. 77, 41 Sup.Ct. 251, 65 L.Ed. 511, and we must therefore investigate the matter de novo. Yet a new trial on appeal in admiralty does not mean that the appellate court cannot use from the findings and proceedings below whatever makes for celerity and brevity.

We therefore by reference to those proceedings dispose of three matters:

(1) There is no evidence that libelant and claimant ever made any contract for changing the Spica for $130,000.

(2) There is not enough evidence to enable libelant to recover as for an 'account stated,' by which the parties meant an agreement between Figari and libelant that the latter's bills as presented would be paid with certain inconsiderable deductions. While the reference was in progress, libelant applied to the court for leave to amend its libel, and set up such a promise. The application was denied, but we have examined the evidence without reference to this singular piece of practice or its fate.

(3) It is not proven by a fair preponderance of evidence that libelant did its work so badly, or so injured the Spica as to confer on claimant either a good defense or good counterclaim. It is true that the Spica as an auxiliary was a failure, but that misfortune was in our opinion wholly due to the engine. Whether the engine failed because of inherent vice, bad installation, or ignorance of how to operate and care for it, we cannot be certain; but for none of these faults was libelant responsible.

Beyond engine failure, claimant's charges are that due allowance was not made for the difficulty of enabling any propeller, inserted where this one was, properly to catch the water, and further that the space created for the propeller impaired the steering qualities of the Spica while under sail. As to those matters we hold that libelant did not guarantee results, and did not engage for anything but a mechanical job. But, even if more than that degree of skill was impliedly promised, the proof fails to show that Spica was not a fair merchantable piece of work. She certainly functioned as an auxiliary when supplied with another engine.

We are thus brought to the question whether libelant proved what it pleaded, a matter first to be considered without reference to claimant's attempted defenses.

The libel is in form a declaration in assumpsit, seeking recovery as for quantum meruit or valebat. This is a yielding probably unconscious, to the wonderful aggressive virility of the legal tradition that we call the common law. Yet the form of statement has directed argument along...