United States v. Carver
| Decision Date | 02 January 1923 |
| Docket Number | No. 402,402 |
| Citation | 1923 A. M. C. 47,43 S.Ct. 181,67 L.Ed. 361,260 U.S. 482 |
| Parties | UNITED STATES et al. v. CARVER et al |
| Court | U.S. Supreme Court |
The Attorney General and Mr. Norman B. Beecher, of New York City, for the United States.
Mr. E. Curtis Rouse, of New York City, for Carver and Morrell.
[Argument of Counsel from pages 483-487 intentionally omitted] Mr. Justice HOLMES delivered the opinion of the Court.
This is a libel in personam against the United States and the receiver of State Steamship Corporation, a company of the State of Delaware, bankrupt, to charge the United States for supplies furnished to the steamships Clio and Morganza. Act of March 9, 1920, c. 95, 41 Stat, 525. The United States owned the vessels, but they were in the possession of the corporation under charters by which the corporation was to pay all costs and expenses incident to the use and operation of the vessels, and 'will not suffer nor permit to be continued any lien, incumbrance or charge which might have priority over the title and interest of the owner in said vessel.' It was stipulated further that in any event within fifteen days the charterer would make adequate provision for the satisfaction or discharge of every claim that might have priority over the title, &c., or would cause such vessel to be discharged from such lien in any event within fifteen days after it was imposed. Supplies or necessities were furnished to the Clio upon the orders of the corporation's port captain who was charged with the duty of procuring them. The libellants did not know any facts tending to show that the corporation did not own the vessel, and so far as appears made no inquiry or effort to sustain what the facts might be. The case of the Morganza is similar except that before furnishing some of the supplies the libellants' agent who dealt with the corporation knew facts putting the libellants upon inquiry but preferred to avoid making it. The liability of the corporation is admitted. That of the vessels is asserted under the Act of June 23, 1910, c. 373, 36 St. 604 (Comp. St. §§ 7783-7787), and the Ship Mortgage Act, being section 30 of the Merchant Marine Act, 1920; Act of June 5, 1920, c. 250, § 30, subsections P. Q, and R, 41 Stat, 988, 1000, 1005.
The questions certified are whether a maritime lien would have arisen against (1) the Clio or (2) the Morganza, if they had been privately owned; (3) if yes, whether the United States is liable for the amount of what would have been the lien; and (4) whether the United States is liable for the personal indebtedness of the State Steamship Corporation for supplies in respect of which no maritime lien would have arisen if the vessel had been privately owned.
We take up first questions 1 and 2. The Act of 1910 by which the transactions with the Clio were governed after enlarging the right to a maritime lien and providing who shall be presumed to have authority for the owner to procure supplies for the vessel, qualifies the whole in section 3 (Comp. St. § 7785) as follows:
'But nothing in this Act shall be construed to confer a lien when the furnisher knew, or by the exercise of reasonable diligence could have ascertained,...
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