The opinion of the court was delivered by: BYERS
The libelant's barge "Francis Killian, Jr.", sustained damage while in tow, west-bound, to the claimant's tug "Chippewa", on June 11, 1936, at or near lock 6 in the New York State Barge Canal.
That the tug caused the damage is not in dispute. Whether she should be held liable depends upon the contract between the claimant, which was operating the tug, and the libelant.
The latter had sought an engagement of his vessel at the claimant's office during April of 1936, and his inquiry was, in effect: "Will you be able to use my boat this year?"
It is undisputed that libelant's barge had been operated by claimant during the seasons of 1933, 1934 and 1935, which explains the call and the inquiry.
No immediate arrangement was made, but the claimant's vice-president, who talked to libelant at this time, says that he pointed out that several barge owners preferred a 60%-40% basis of compensation rather than a per-diem rate for charter-hire, and that he delivered to libelant a copy of the former form of agreement for his information.
Such was the contract for the season of 1933, while in 1934 and 1935 payment was made at the daily rate.
The reason why the libelant was asked to think over the desired basis of charter-hire was that, while in April there was no immediate requirement for his vessel, the probability was that there would be soon, and in the meantime he was asked to decide which form of compensation would be preferred by him.
He denies that he received such a contract form, but for reasons presently to be stated, his testimony on that subject is not convincing.
On the morning of June 1, 1936, Cowan, the claimant's vice-president, got Killiam on the telephone at a pier at the foot of Columbia Street, Brooklyn, where his barge was lying, and offered to hire the barge, loading to start that day. This was agreeable to Killian, who was asked to call at claimant's office to sign a contract; due to the presence of inspectors on the barge at the time, Killian said he could not come at once, and suggested that his signature to a contract was not necessary at once, and that he could be relied upon to sign at an early date, in view of the past relations of the parties. Under this assurance, the loading proceeded; the voyage was begun, and the damage inflicted -- all without any written contract between the parties.
If a contract had been entered into in the form said to have been presented to Killian in April, calling for a 60%-40% division of the net voyage revenue, it would have contained the following under the head of "Barge Owner warrants to":
"(g) Provide own insurance on hulls, if any.
"(h) Hold the W.E. Hedger Transportation Corporation and/or any tug or vessel owned and/or operated and/or employed by said Company, entirely free and harmless from all liability for damage, loss or expense to the barges named herein, irrespective of how said damage or loss occurs or whether or not it is due to the negligence of the Company and/or any tug or vessel owned, operated or employed by the Company."
If it had been according to the daily hire form employed in 1934 and 1935, the following paragraph ...