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TEXAS COMPANY v. HOGARTH SHIPPING COMPANY

June 6, 1921

THE TEXAS COMPANY
v.
HOGARTH SHIPPING COMPANY, LTD., OWNER OF THE STEAMSHIP BARON OGILVY, ET AL.



CERTIORARI TO THE CIRCUIT COURT OF APPEALS FOR THE SECOND CIRCUIT

McKenna, Holmes, Day, Van Devanter, Pitney, McReynolds, Brandeis, Clarke

Author: Van Devanter

[ 256 U.S. Page 625]

 MR. JUSTICE VAN DEVANTER delivered the opinion of the court.

This is a suit in admiralty to recover damages for an alleged breach of a voyage charter party entered into in New York, February 6, 1915, between a British corporation, which owned the Baron Ogilvy and other freight ships, and a Texas corporation, which was engaged in shipping and marketing petroleum products. The charter party did not name a particular ship as the subject of the hiring, but required that one of a certain type be designated from among the ships of the British company, on or before March 15. In due time that company named the Baron Ogilvy and the Texas company assented. The intended voyage was from a port in Texas to another in South Africa with a full cargo of refined petroleum in cases. The ship was to be tendered at the initial port ready to load between April 15 and May 15, 1915, and in case of

[ 256 U.S. Page 626]

     default the Texas company was given the option of canceling or maintaining the charter party. If the vessel was then at that port, the option was to be exercised at once and if she was not then there, it was to be exercised within twenty-four hours after her arrival. There was no clause expressly excepting restraints of princes, etc. April 10, 1915, the Baron Ogilvy, while in British waters and being provisioned for the intended voyage, was requisitioned by the British Government and pressed into its war service, in which she continuously was retained until October 20, following. On April 12 the British company notified the Texas company that the vessel had been requisitioned and therefore would not be available to carry out the charter party. The Texas company thereupon procured another vessel to make the voyage at the time intended, but at an increased freight rate, and subsequently brought this suit against the British company on the theory that the latter had broken the charter party and was liable in damages for the difference between the rate which it was to receive and that actually paid to the other vessel. On the final hearing the District Court rendered a decree for the respondent, the principal grounds of the decision being (a) that when in accordance with the terms of the charter party the Baron Ogilvy was named as the ship to make the voyage the contract became an ordinary voyage charter party for that ship, and none other, and (b) that that ship, before the time for the voyage, was taken in invitum by the owner's government for war use for a period likely to extend beyond the time for the intended voyage and that this dissolved the charter party and excused the owner from furnishing the ship. 256 Fed. Rep. 375. The decree was affirmed by the Circuit Court of Appeals, 267 Fed. Rep. 1023; and a writ of certiorari brings the case here. 254 U.S. 625.

We agree that after the designation of the Baron Ogilvy,

[ 256 U.S. Page 627]

     conformably to a provision in the charter party, every element of an ordinary voyage charter party for a particular ship was present. It was then as if that vessel had been named at the outset. And, as there was no provision for substituting another ship, there was no obligation on the part of the owner to furnish, nor on the part of the charterer to accept, another. Nickoll & Knight v. Ashton, Edridge & Co., [1901] 2 K.B. 126, 131. The contract related to a particular ship just as it related to a particular voyage. Neither could be changed without departing from the contract, which could not be done without the consent of both parties.

The libelant challenges the good faith of the owner and seeks by taking mere fragments of the evidence here and there to show that the owner invited the requisition, welcomed it as promising a better return than the charter party, and in effect voluntarily turned the vessel over to the government. But the fragments to which attention is invited must be read with the context and all evidence must be considered. When this is done it becomes very plain that here is no basis for the challenge. The owner made the usual preparations for complying with the charter party, earnestly sought to prevent the requisitioning of the vessel, urged the existence of the charter party as a reason for leaving her free, and respected the requisition, when made, because no other course was reasonably open. It may not be material, but in fact the charter party gave promise of a better return and called for a service which would be less hazardous. The vessel was taken by the government for the use to which she was subjected and after the taking the owner agreed to furnish certain additional facilities by reason of which a higher compensation was obtained than otherwise would have been allowed. Beyond this the owner was accorded no voice in the matter.

As the ship was British and in British waters and the

[ 256 U.S. Page 628]

     owner was a British corporation the power of the British Government to requisition the ship is beyond question. But the libelant insists that those who assumed to exert this power did not proceed in the mode prescribed and therefore that the requisition was invalid. The facts adequately proved are as follows: A Royal Proclamation of August 3, 1914, authorized and empowered the Lords Commissioners of the Admiralty "by warrant under the hand of their Secretary" "to requisition and take up" British vessels within British waters for use as transports and auxiliaries. The Baron Ogilvy was requisitioned by an order of the Lords Commissioners and the order was communicated to the owner by a telegram signed "Transports" and saying: "SS. Baron Ogilvy is requisitioned under Royal Proclamation for government service." The telegram was sent by the Assistant Director of Military Sea Transports, the officer through whom requisitioning orders were executed. This was the usual mode of communicating such orders. Formal warrants never were issued. Generally, the telegraphic communication was followed, after a time, by a letter of like import bearing a block (printed) signature of the Secretary; but in this instance, through an error in office routine, no letter was sent. These letters were intended to be corroborative, but were not deemed essential; and in actual practice the Lords Commissioners and those who executed their orders proceeded on the theory that the ship was taken when the order was received by the owner, however the order was communicated, and that a telegraphic ...


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