267 U.S.

281
45 S.Ct. 239
69 L.Ed. 613

UNITED STATES
v.
CORNELL STEAMBOAT CO.
No. 265.
Argued Jan. 28, 29, 1925.
Decided March 2, 1925.

Mr. J. Frank Staley, of Washington, D. C., and the Attorney General, for
the United States.
[Argument of Counsel from page 282 intentionally omitted]
Mr. Robert S. Erskine, of New York City, for appellee.
[Argument of Counsel from pages 283-284 intentionally omitted]
Mr. Justice McREYNOLDS delivered the opinion of the Court.

This proceeding was instituted to recover the sum of deductions made by the
United States from monthly bills rendered by appellee for the hire of tugs.

During 1917 and 1918, under informal charters evidenced by letters, appellee
hired twelve tugs to the United States for use in and about New York Harbor.
The specified price was 'for each and every day of the charter period,' and the
owner agreed 'to furnish everything for these tugs with the exception of coal
and water which you are to furnish.'

The vessels reported for service in accordance with the several contracts and
the plaintiff rendered monthly bills at the per dim rate stated therein. Those for
December, 1917, were paid as rendered. Thereafter deductions were made
which amounted in all to $24,822.48. They were based upon the vessels' logs,
kept by their captains and engineers as directed by the Army Transport Service,
and were entered if a boat reported with a short crew, or not in condition to

perform the service required, or if too long a time was consumed in taking on
supplies. The owner saved its right through proper claims and protests.
4

While in the service of the United States the Ira M. Hedges sank. It was raised
and repaired by and at the expense of the owner, and was subsequently used by
them. One of the challenged deductions was for loss of time incident to this
accident.

'During the time when the tugs hereinbefore mentioned were in the service of
the government, the Army Transport Service had the entire use of the tugs and
they were subject at all times to the orders and directions of the officers of the
government, and at no time during the period did the plaintiff have the use of
and [it] did not in any way interfere with or direct the operations of the said
tugs.'

The United States maintain that the owner did not part with possession,
command and navigation during the charter periods; that the charter was for
service, and not a demise; and that consequently they rightly made deductions
for the time the vessels were not at their disposal.

Relying upon the doctrine approved in United States v. Shea, 152 U. S. 178, 14
S. Ct. 519, 38 L. Ed. 403, the Court of Claims concluded that the charter
amounted to a demise and that the deductions were not permissible. It
accordingly sustained the claim of the owner, appellee here. Accepting the
facts as found, we agree with that conclusion and affirm the judgment.