# The Oceana

> District Court, E.D. New York · April 21, 1916 · 233 F. 139

URL: https://www.frixlaw.com/law-library/cases/8799634

## Case

- **Full name:** THE OCEANA
- **Court:** District Court, E.D. New York
- **Decided:** April 21, 1916
- **Citations:** 233 F. 139; 1916 U.S. Dist. LEXIS 1543
- **Precedential status:** Published
- **Opinion:** Opinion of the court by Vender
- **Judges:** Vender
- **Cited by:** 11 later opinions in the Frix Law Library

## Citator (automated)

- No negative treatment found by the automated citator. That is not the same as a confirmation that the case is good law; read the citing cases.
- Full citator and citing cases: https://www.frixlaw.com/law-library/cases/8799634

## Opinion text

VENDER, District Judge.
This is a consolidated action embracing 69 libels asserting maritime liens aggregating $43,289.93 against the steamship Oceana, of which the Morse Dry Dock & Repair Company appears as claimant. For convenience of reference the number given each lien claim in the special commissioner’s report is added to the lienor’s name in the list of appearances of counsel, and the various lienors are hereafter referred to by number. All the claims are for repairs, supplies, or other necessaries, within the meaning of the Act of June 23, 1910 ( 36 Stat. 604 ), relating to liens on vessels, save (3), which is in part for two booms and for repairing and carting a coal chute; (25), which is for towage; (27), which is for brokerage and tonnage dues and fees; (32), which is for stevedoring; and (38 to 49), inclusive, which are for pilotage. The consolidated action was referred to James K. Symmers, Esq., as special commissioner. , His report was duly filed, and now comes before the court upon exceptions filed by the claimant and by various libelants. The issues with respect to the claims for repairs, supplies, or other necessaries are confined substantially to the construction and application of the act of Congress of June 23, 1910. The special commissioner allows in full 21 of the claims for repairs, supplies, or other necessaries, aggregating $11,698.36, viz., Nos. (1), (4), 69), (11), (12), (16), (18), (19), (20), (21), (28), (29), (30), (31), (33), (34), (55), (57), (58), (64), and (69). He allows in part 25 of such claims aggregating 821,459.12, to the extent of $10,681.46, viz., Nos. (2), (3), (5), (6), (8), (10), (13), (14), (15), (17), (22), (23), (24), (37), (50), (51), (52), (53), (54), (59), (60), (62), (63), (65), and (66). That is to say, he disallows all repairs and supplies ordered or delivered to the vessel prior to the *142 date upon which he finds that the vessel was formally delivered to the purchaser under an agreement theretofore executed. He disallows in full eight of such claims, aggregating $6,934.28, viz., Nos. (7), (26), (35), (36), (56), (61), (67), and (68), on the ground either that the supplies were ordered or delivered prior to the date of formal delivery of the vessel, or that the libelants were put upon inquiry concerning the authority of the agreed purchaser to bind the vessel. With respect to the claims for liens other than for repairs and supplies he disallows all, that is, (3 in part), (25), .(27), and (32), save the claims for pilotage, (38 — 49) which are allowed. The commissioner also found, at the claimant’s request, that the Oceana had her port of registry, New York, painted on her stern; that inquiry, even by telephone, of the proper officials of the New York Custom House, would have disclosed that the Morse Company was the registered owner of the- Oceana; that such inquiry of the Morse Company, at .either its Brooklyn or Manhattan office, would have elicited correct information concerning the title to the vessel and the provisions of the 'conditional bill of sale relating to liens; and that inquiry of the master of the vessel would have resulted in the ascertainment of the situation, or at least enough to necessitate further inquiry. The claimant has filed exceptions to every allowance made by the special commissioner, save only in the case of pilotage (38-49). Of the eight libelants whose claims for repairs, supplies, or other necessaries were disallowed in full, only five have filed exceptions, viz.-, (7), (36), (56), (61), and (67). Of the twenty-five libelants whose claims for repairs or supplies were disallowed in part, only sixteen have filed exceptions, viz., (2), (3), (5), (8), (14), (15), (17), (22), (37), (52); (54), (59), (60), (63), (65), and (66). All the íibelants asserting liens other than for repairs and supplies have filed exceptions.
As appears by a bill of sale filed in the office of the collector of customs at the port of New York the Oceana was purchased at marshal’s sale March 13, 1914, by the Morse Dry Dock & Repair Company, a New York corporation having its principal place of business in the borough of Brooklyn. On December 5, 1914, while the vessel was lying at its yard at the foot of Fifty-Sixth street, Brooklyn, the Morse Company contracted with the Bermuda-American Steamship Company, Limited, a Bermuda corporation, for her sale for $255,000 upon conditions set forth in the contract. The purchase price was to be paid, $30,000 on account on the date of execution of the contract, the balance in monthly installments of $25,000 each on February 1st, March 1st, and thereafter as specified. Title to the vessel was to remain in the Morse Company until the entire purchase price was paid. The contract further provided that before delivery the purchaser should deliver to the seller certain insurance policies; also, that at the time of delivery the steamer should hold British Lloyds A-l classification and inspection required- for United States registry. The seller was required to provide before delivery certain specified equipment. It was further stipulated that the vessel should be delivered to and accepted by the purchaser not later than December 19th; that in the event of any contingency arising, not with *143 in the control of the seller, which should prevent delivery of the vessel on that date, the seller should not be liable for damages for such delay, but in case of delay for more than 14 days thereafter the purchaser should have the option to cancel the contract, and the bill of sale (which the contract provided should meanwhile be executed contemporaneously therewith and delivered to the Columbia Trust Company in escrow) was, in the event that the purchaser exercised such option, to be returned to the seller, and the installment paid on the purchase price was to be repaid to the purchaser. Upon compliance with the terms of the contract, the bill of sale was to. be delivered to the purchaser or its assigns. The purchaser was given the right to organize an American corporation to take title to the vessel, and in that event, at the purchaser’s option, the bill of sale was to be made to the American corporation, which should, however, be equally bound with' the purchaser by all the terms_ and conditions of the contract. Until the ship should be fully paid for the purchaser covenanted, among other things:
“(a) To keep said ship clear of any lions from any cause, and. If any lien or libel is filed or asserted the same shall be immediately bonded by the purchaser. The purchaser agrees to promptly pay current bills, for supplies and repairs to said ship and exhibit at reasonable times the ship’s accounts and bills to seller’s representatives.
“(b) To keep said ship and equipment in good repair.”
Pursuant to this agreement, the purchaser paid $30,000 down, and the seller executed an absolute bill of sale of the vessel, which, together with a duplicate copy of the agreement, was deposited in escrow with the Columbia Trust Company. On December 9th the contract was filed in the office of the register of the county of Kings. At the same time it was offered for filing in the register’s office of the county of New York, but was rejected because the vessel was not in that county. Counsel for the Morse Company at the same time sought to file the contract, or a copy thereof, for record in the office of the collector of customs of the port of New York, but it was refused for record on the alleged ground no law authorized the filing there of sucli an instrument.
In order to operate the Oceana under American registry, the Bermuda Company caused to be organized a New York corporation called the Bermuda-American Steamship Company of New York. C. V. Frith, who was a director in both companies, was president of the Bermuda Company. C. W. Morse was president of the New York Company. Crosby, one of the directors of the company, then or formerly purchasing agent of the Hudson Navigation Company, in which C. W. Morse was also interested, was employed as purchasing agent, and the purchaser went forward with its preparations to operate the Oceana in the Bermuda trade. Almost all the repairs and supplies thereafter furnished and here involved were ordered for the Oceana by Crosby, with whom many of the libelants had dealt as purchasing agent under his former employment. In most instances the libelants made no further inquiries; those who did were assured by Crosby that the ship was responsible. Most of the bills for supplies were made to the Oceana, either alone or with the addition of *144 “pwners” or “Bermuda-American Steamship Company”; in a few instances they were directed to the company alone. The Bermuda-American Company began at once to advertise extensively its. operation of the Oceana in the Bermuda trade. About December 10th, Saunders, the chief steward and commissary, went aboard and took charge. He gives the date variously as the 8th, 10th, 14th, and 15th. But he does say unequivocally that he “was there all the time from the 10th,” “fitting out the whole ship.” He made up a list of supplies required and discussed it with Crosby and the Morses. He had 35 men at work on board. Coal had been ordered almost immediately upon the execution of the contract. Soap was ordered on December 9th, and paint and varnish at about tire same time. On December 14th requisition blanks, order books, etc., were purchased. Arrangements were made on December 15th for supplying the crew with linen coats, and other supplies were ordered on the same day. Certain fittings of the vessel were removed by the purchaser on December 16th for replating. The captain, engaged by the purchaser, went aboard early in December. The crew were aboard and were measured for uniforms between December 15th and 20th. Capt. Pendlebury signed a receipt for a delivery on the 16th, and all were delivered on board before .the vessel left the claimant’s ^yard. Cleaners removed blankets and returned them on December 18th.' An order was given to the ship chandler on the 19th. Wanamaker’s representative went aboard and measured for bed spreads on December 20th. Certain steam packing, which had been ordered theretofore by the chief engineer, was put aboard on December 22d. Various other supplies were ordered and delivered to the vessel between the 22d and the 24th. The Oceana left the claimant’s yard on December 25th for Pier 32, North River, from which she was to sail. She sailed on her first voyage on the 26th.
E. P. Morse, treasurer and. general manager of the claimant company, was often aboard the Oceana while she was in the claimant’s yard, and saw deliveries made on board, and was fully informed. He says he asked to see the purchaser’s accounts within a week after the vessel began to run. He knew early in January that the purchaser owed $10,000 in bills; the latter part of the month he was told by C. W. Morse that the amount was $25,000. About the middle of January (or on January 24th), knowing that liens were being created, he sent auditors to examine the purchaser’s books. The auditors were told that the books had not been written up, and access to tire purchaser’s accounts was only obtained upon threats to seize the vessel. The auditors reported informally on January 30th that there were bills against the ship of $30,000. The auditors’ formal report, dated January 26th, and received by the claimant on February 1st, disclosed bills payable by the purchaser amounting to more than $38,000. The claimant, through E. P. Morse, at once began negotiations with C. WFor 'other cases see same topic & KEY-NUMBER in all Key-Numbered Digests & Indexes

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Source: Frix Law Library, https://www.frixlaw.com/law-library/cases/8799634. Public record. Not legal advice.