P. H. Gill & Sons Forge & Machine Works v. United States

WOODS, Circuit Judge. The libelant, the P. H. Gill & Sons Forge & Machine Works, assign errors in the decrees of the District Court dismissing its libels setting up claims against the United States, owner of the steamships Morganza and Moosabee for repairs and supplies. Both vessels were owned by the United States and operated by the States Steamship Corporation under charter contracts with the Shipping Board containing options of purchase. The contract for the Morganza was in writing, with the familiar provision: “The charterers will not suffer nor permit to be continued a.ny lien, incumbrances, or charge which has or might have priority over the title and interest of the owner in said vessel.” The Moosabee had been substituted by oral agreement for the Oyaka, which had been chartered under a written contract like that for the Morganza. The documents on both vessels showed that they were owned by the United States. The libelant contends that the cases are taken out of the rule requiring inquiry by the furnisher as to the right of a person in possession of a vessel to put a lien upon it by the fact that before the repairs wore made and the supplies furnished the officers of the States Steamship Corporation represented that corporation to be the owner of the vessels. The slatutory requirement of reasonable diligence on the part of a furnisher of a vessel to ascertain the authority of a person in possession to bind the vessel is not necessarily met by reliance on the mere statement of the person in possession that he is the owner. If such a statement wore held always to take the place of inquiry from accessible sources, the statute would afford no protection to persons having the light to contract that their vessels should be kept free from liens. The affidavits of the officers of the libelant show that they knew the ships had been built by the Shipping Board and possession acquired from it by the States Steamship Corporation. The absence of any authority of the States Steamship Corporation to place a lien on the vessels would have appeared by any inquiry either of the officers of the States Steamship Corporation or of the Shipping Board, or by inspection of the ships’ documents; but no inquiry was made. The cases fail clearly within United States v. Carver, 260 U. S. 482, 43 S. Ct. 181, 67 L. Ed. 361, and Colonial Beach Company, Owner and Claimant of the Steamer St. Johns, v. Quemahoning Coal Co., 260 U. S. 707, 43 S. Ct. 246, 67 L. Ed. 474; Deibert Barge-Building Co. v. United States (C. C. A. 4th Circuit) 289 F. 805; Morse Dry Dock & Repair Co. v. United States (C. C. A. 2d Circuit) 1 F. (2d) 233; Standard Oil Co. v. United States (C. C. A. 4th Circuit) 1 F. (2d) 961 (opinion this day filed); Frey & Son, Inc., v. United States (C. C. A. 4th Circuit) 1 F. (2d) 963 (opinion this day filed). Affirmed.