932.

the collision. In incurring this expense libellant followed the common practice in shipping circles to insure disbursements of this nature and prudent business administration demands that this course be followed.

The charge was included and allowed in the general average statement. See The Energia, supra.

In Siberia Steamship Corporation vs. Steamship Binghamton, (S. D. N. Y. 1919), former Judge Veeder was appointed Special Commissioner to take proof as to the amount and validity of certain items of damages. One of these items represented a commission to the Siberia Steamship Corporation on general average disbursements and special charges on cargo and another was the compensation to Mather & Company as settling agents for collecting and setting the general average. The Commissioner allowed both items on the ground that the expenses were customarily allowed in this country by general average adjusters. The question of their validity came before the Court upon exceptions to the Commissioner's report, and the Court said:

"I agree with the Special Commissioner in his conclusions, but I will briefly refer to three matters, (1) the item of $282.79, commission to the Siberia Steamship Corporation on general average disbursements and special charges on cargo, and (2) the item of $372.91, compensation to Mather & Company as settling agents for collecting and settling the general average ***

I think these two items are debatable, but as District Court I do not care to disturb what seems to have been the practice and custom in such regard." (Opinion of MAYER, D. J., December 13, 1919,

unreported.)

See also Erie & Western Transportation Co. vs. City of Chicago, 178 Fed. 42; Gray's Harbor Tugboat Co. vs. Peterson, 250 Fed. 956; Ralli vs. Societa Anonima, 222 Fed. 994, at 999.

The motion to amend the libel and for increased security is granted and libellant is entitled to recover both insurance premiums.

1924 A. M. C.

THE ARCADIA.

HARBOR SERVICE CORPORATION

vs.

UNITED STATES.

United States District Court, Southern District of New York, May 8, 1924.

MARITIME LIENS-221. Furnishing on Order of Owner, etc.-Receiver. A receiver appointed by the Court to manage and operate the vessels of an insolvent steamship company is not an owner, charterer, owner pro hac vice, or an agreed purchaser in possession, and consequently has no authority to make contracts under which maritime liens may be asserted against such vessels.

WALTER B. HALL, for Libellant.

WILLIAM HAYWARD, U. S. Attorney (WILLIAM B. GRAY, JR., and F. A. WHITNEY, of Counsel), for Respondent.

WARD, Ct. J.:

The United States by a bare boat charter party dated May 31, 1920 chartered its steamer Arcadia for eight months from the time of delivery to the Arcadia Shipping Company. It is agreed that the steamer was delivered to the Charterer August 25, 1920, so that the charter party terminated April 25, 1921.

The charterer covenanted that it "will not suffer nor permit to be continued any lien, encumbrance or charge which has or might have priority over the title and interest of the owner of the vessel." The charter was also what is known as a charter sales agreement, the charterer having an option to purchase. For repairs done or supplies furnished on the order of the charterer the steamer would not be liable, The Clio; The Morganza; United States vs. Carver, 260 U. S. 482, 1923 A. M. C. 47.

November 17, 1920 George W. Sterling, who was also assistant director of operations of the U. S. Shipping Board, was appointed receiver of the Arcadia Shipping Company and of the Atlantic & Adriatic Steamship Company, which seems to have controlled it and a number of other lines, with power "to manage and operate the businesses of the companies until the further order of this court" and "to incur such expenses and make such disbursements which may in his judgment be advisable or necessary in connection with the management, operation, care, custody, preservation and maintenance of the businesses and properties of the defendant."

936.

Some time in May, 1921 the American Bureau of Shipping notified the Shiping Board that Special Survey No. 3 for the Arcadia would fall due in June and that it was necessary to confirm her classification in the Record of American and Foreign Shipping.

May 27 the Shipping Board advised Sterling, Receiver, of this notice and asked what steps he was taking to put the vessel through the survey. June 7 it wrote again to the same effect.

The libellant, upon orders of Sterling, as Receiver of the Atlantic & Adriatic Steamship Company, furnished labor and repairs for the Arcadia in May and June, 1921 in connection with the third special survey.

June 2, 1921 the District Judge, on the application of the United States, ordered the Receiver to return the Arcadia to it.

Although the charter was not cancelled by the appointment of the Receiver, he was not bound to adopt it and there is no evidence that he did so. The charter party had expired when the work in question was done and may be entirely disregarded. The Receiver was operating the steamer under the order of the court and there is nothing to show that he ever paid any charter hire. All that the United States could have recovered of him would have been the net earnings, if any, of the steamer. Pennsylvania Steel Co. vs. New York City Railway Co. and others, 225 Fed. 734.

By the maritime law a vessel is liable in rem for the tort of anyone lawfuly in charge of her, e. g., a compulsory pilot, The China, 7 Wall. 53, but is liable in rem only for maritime contracts of the owner or of persons authorized by him to make such contracts.

The libellant relies upon the Act of June 23, 1910, 36 Stat. L. 604. The first section of the act provides that any person furnishing repairs, etc. to a vessel, whether foreign or domestic, upon the order of the owner or of a person authorized by him shall have a lien on the vessel and need not prove that credit was given to her.

Section 2 enumerates as persons presumed to have such authority from the owner, "the managing owner, ship's husband, master, or any person to whom the management of the vessel at the port of supply is entrusted." Manifestly this last person must be entrusted by the owner. The Receiver in this case is not covered by the section. Section 3 provides that the persons mentioned in Sec. 2 may be appointed "by a charterer, by an owner pro hac vice, or by an agreed purchaser in possession of the vessel." The Receiver does not fall

1924 A. M. C.

within any of these categories. His authority to make contracts was derived exclusively from the court. Though the particular contract in question was maritime he had no authority under the general maritime law or under the Act of 1910 to bind the vessel.

A lien

did not follow from the contract as a matter of law. The libellant did the work on the order of the Receiver and it was work which the Receiver had full authority to order. Therefore the libellant is not entitled to a lien on the vessel unless the United States has done something to make itself liable. It is attempted to prove this as follows: At the trial the libellant called upon the United States to produce a letter from the American Bureau of Shipping to the Shiping Board with reference to the Third Special Survey and the proof makes it quite clear that such a letter was written. It also called for a letter from the Shipping Board to Sterling, Receiver, authorizing him to contract for this work. No such letter was produced and the only evidence in connection with it is the testimony of Crossing, port captain of the Receiver, who testified that he had negotiated with the libellant for the work to be done and had seen a letter from the Shipping Board authorizing it. Though I appreciate that the libellant was in a difficult position for getting proof as the result of the same person, Sterling, acting for the Shipping Board and also as Receiver of the Court, I think the testimony too vague to justify a finding that the United States did assume liability for the work done. The libel is dismissed but without costs.

ROTTERDAMSCHE LLOYD, ET AL, Appellants and Cross Appellees

vs.

GOSHO COMPANY, INC., Appellee and Cross Appellant. United States Circuit Court of Appeals, Ninth Circuit, May 12, 1924. Before: GILBERT, HUNT and RUDKIN, Ct. JJ.

Opinion by RUDKIN, Ct. J.

AFFREIGHTMENT-21. Regulations and Penalties-Restraints of PrincesCHARTER-15121. Governmental InterferenceREGULATION-136. War, Foreign Government.

1. Where a carrier has knowledge of an existing restraint imposed by the government of the ship's flag, of which the shipper has not knowledge, a "Restraint of Princes" clause in the contract will be construed to apply only to future restraints and not to such existing restraint. See: Roessler etc. Chemical Co. vs. Standard Silk Dyeing Co., 254 Fed. 777; Certiorari denied: 250 U. S. 663; 63 L. Ed. 1196; Williston on Contracts,

938.

Sec. 1968, Note 42; Furness, Withy & Co. vs. Rederiaktiebolaget Banco, 23 Com. Cas. 99.

AFFREIGHTMENT—22. Damages—CHARTER—25. Damages.

2. Damages for failure to carry goods include (a) additional freight charges incurred by shipper in forwarding by another carrier, (b) expenses of holding the goods in the interim, (c) interest on the value of the goods during the period of delay in shipment, together with (d) interest on each of such items to the date of decree, at the interest rate allowed by the lex loci contractus.

See: Inman & Co. vs. St. Louis etc. Ry. Co., 14 Tex. Civ. App. Rep. 39; 37 S. W. 37.

PRACTICE-34. Interest.

3. The rate of interest allowed by the lex loci contractus will be applied in Admiralty actions in the Ninth Circuit for breach of contracts of carriage. NATHAN H. FRANK and IRVING H. FRANK, for Appellants and Cross Appellees. ALLAN P. MATTHEW and MCCUTCHEN, OLNEY, MANNON & GREENE, for Appellee and Cross Appellant.

RUDKIN, Ct. J.:

On August 26, 1918, the libellee entered into three contracts of affreightment with the appellants, for the transportation of 12,000 bales of cotton from San Francisco to Japan; 4,000 bales on the steamer Willis leaving San Francisco October 25, 1918, 4,000 bales on the steamer Kawi leaving San Francisco on November 1, 1918, and 4,000 bales on the steamer Tjisalak leaving San Francisco on December 10, 1918. No part of the cotton was transported, except 650 bales carried by the steamer Kawi leaving San Francisco December 4, 1918. The present libel was filed in personam, to recover damages for the breach of these several contracts. The court below entered a decree in favor of the appellee for the sum of $37,443.69, made up of the following items: 1. Demurrage charges, $9,431. 2. Interest on the value of the cotton during the period of delay in shipment, at the rate of 6 per cent. per annum, $18,860.19. 3. Additional freight charges incurred by the appellee in transporting a portion of the cotton by another carrier, $1,188.92. 4. Interest on these several items at the rate of 6 per cent. per annum to the date of the decree. The appellants have appealed from the entire decree, and the appellee has appealed from the refusal of the court below to compose and award interest at the rate of 7 per cent. per annum, the rate fixed by law in the State of California, instead of at 6 per cent. per annum the supposed admiralty rate.