U.S. Supreme Court The South Coast, 251 U.S. 519 (1920)
The South Coast
Submitted November 10, 1919
Decided March 1, 1920
251 U.S. 519
CERTIORARI TO THE CIRCUIT COURT OF APPEALS
FOR THE NINTH CIRCUIT
In purchasing necessary supplies, the master of a demised vessel, appointed by the owner but under the orders of the charterer, is the charterer's agent. P. 251 U. S. 523 .
A charter-party demising a vessel required the charterer to pay all expenses and save the owner harmless from liens, allowed the owner to retake the vessel should the charterer fail to discharge any liens within a stated period after they were imposed, and placed the master, appointed by the owner, under the charterer's orders. Applying the Act of June 23, 1910, held that the charter-party, if it did not grant, at least assumed authority in the charterer to bind the vessel for necessary supplies purchased by the master in a domestic port, and that the statutory presumption of such authority could not be dispelled by denials and warnings from the owner to the supply man. Id.
247 F. 84 affirmed.
The case is stated in the opinion.
MR. JUSTICE HOLMES delivered the opinion of the Court.
This is a libel against the Steamer South Coast, belonging to the claimant, a California corporation, and registered in San Francisco, for necessary supplies furnished in San Pedro, California. The answer denies the authority of the master to bind the steamer. The bare vessel at the time was under charter to one Levick, the contract stipulating that Levick was to pay all charges and to save the owner harmless from all liens or expenses that it might be put to in consequence of such liens. There was also a provision that the owner might retake the vessel in case of failure of Levick to discharge within thirty days any debts which were liens upon it, and another for surrender of the vessel free of all liens upon Levick's failure to make certain payments. When the supplies were ordered, representatives of the owner in San Pedro warned the libelant that the steamer was under charter and that he must not furnish the supplies on the credit of the vessel. He replied that he would not furnish them in any other way, but the reply does not affect the case, because, by the terms of the charter, the master who ordered them, although appointed by the owner, was under the orders of Levick. It is agreed by both courts below that, if the owner had power to prevent the attaching of a lien by its warning, it had done so. Both courts, however, held that the charter gave the master power to create the lien. 233 F. 327; 247 F. 84.
By the Act of June 23, 1910, c. 373, § 1, 36 Stat. 604, a maritime lien is given for such supplies, and by § 3 a presumption is declared that a master appointed by a charterer has authority from the owner to procure them. It is true that the act goes on that nothing in it shall be considered to give a lien where the furnisher knew, or by the exercise of reasonable diligence could have ascertained, that, because of the terms of a charter party or for any other reason, the person ordering the necessaries was without authority to bind the vessel. But the authority of the owner to prohibit or to speak was displaced, so far as the charter went, by that conferred upon the charterers, who became owners pro hac vice, and therefore, unless the charter excluded the master's power, the owner could not forbid its use. The charter party recognizes that liens may be imposed by the charterers and allowed to stand for less than a month, and there seems to be no sufficient reason for supposing the words not to refer to all the ordinary maritime liens recognized by the law. The statute had given a lien for supplies in a domestic port, and therefore had made that one of these ordinary liens. Therefore, the charterer was assumed to have power to authorize the master to impose a lien in a domestic port, and if the assumption expressed in words was not equivalent to a grant of power, at least it cannot be taken to have excluded it. There was nothing from which the furnisher could have ascertained that the master did not have power to bind the ship.
MR. JUSTICE McKENNA, MR. JUSTICE PITNEY, and MR. JUSTICE CLARKE dissent.
* The docket title of this case is
South Coast Steamship Company, claimant of the steamer "South Coast," etc. v. J. C. Rudbach.