was maintained on the barge up to the very moment it was repossessed by Steel. The fact that the premium on the policy covering the barge remained unpaid and that it was canceled for this reason is not material so long as insurance was actually in force.
The third breach claimed by Steel is that Chesapeake failed to pay charter hire on the days specified in the agreement. The latter provided that the payments should be made on the 25th of each month in advance and the fact is that, except for the first installment, no payment was ever made on time, most of them being made toward the end of the month and some in the month following. There was, therefore, unquestionably delay in making the payments of charter hire. But was this such a material default on the part of Chesapeake as gave Steel the right to rescind the agreement? I think not. The Restatement of the Law of Contracts, § 276 (a) states the applicable rule thus: "Unless the nature of a contract is such as to make performance on the exact day agreed upon of vital importance, or the contract in terms provides that it shall be so, failure by a promisor to perform his promise on the day stated in the promise does not discharge the duty of the other party."
Here the agreement does not itself make the time of payment of the essence of the contract or give the owner the right to withdraw the barge if the charterer fails to pay on the day fixed. I am satisfied that in this case payment on the exact day cannot be said to be of vital importance. It is obvious that failure to pay is fully compensable in damages. I, therefore, conclude that the failure of Chesapeake to pay charter hire on the exact days fixed in the agreement was not such a material breach of the agreement as entitled Steel to rescind it. I further conclude that, even if it were held to be such a material breach, Steel waived its right of rescission by its conduct in continuosly accepting delinquent payments of charter hire for a period of more than six months before it attempted to rescind. Restatement of the Law of Contracts, § 300.
It follows that the agreement was in full force and effect on December 15th, and that Steel's attempted rescission of it on and after that day was of no effect. Consequently the exercise by Chesapeake on or about that date of its option to purchase the barge was effective and vested title to the barge in that company. I am, therefore, constrained to hold that Chesapeake was entitled as owner to the possession of the barge on January 2, 1937, and that the recapture of it by Steel on that day was wrongful. Certainly Steel had no legal right to take the law into its own hands and retake the barge by force. Nor had Steel a right in any case to withdraw the barge without permitting Chesapeake to unload her remaining cargo. Luckenbach v. Pierson (C.C.A.) 229 F. 130. Furthermore Steel's acceptance of overdue charter hire rendered its notice of cancellation ineffective. Poor on Charter Parties (2d Ed.) p. 24. Chesapeake is, therefore, entitled to have the barge returned to it.
At the time the barge was taken away by Steel there were carried away with it certain items of equipment belonging to Chesapeake as well as a substantial quantity of oil with which it was loaded. Chesapeake is, therefore, entitled to damages from Steel for the unlawful conversion of this property. The decree will accordingly provide for a reference to a commissioner to determine the amount of these damages.
Although Wheaton and Fisher were joined as defendants it is clear that they acted throughout only as officers of Steel and not on their own account. The libel should, therefore, be dismissed as to them.
What has been said disposes of the crosslibel filed by Steel for damages for detention of the barge in the hands of the marshall during the pendency of this suit and for the cost of reconditioning and repairs. Since Steel was not entitled to retake possession of the barge it is obvious that it is not entitled to damages for its loss of possession after she was seized by the marshal. The cross-libel must accordingly be dismissed.
Conclusions of Law.
Chesapeake was entitled to the possession of the oil barge U.S. 219 on January 2, 1937, and Steel was not entitled to the possession thereof on that day.
The recapture of the barge by Steel on that day was without right and unlawful.
Chesapeake is entitled to a decree directing that possession of the barge be restored to it.
Chesapeake is entitled to a decree against Steel for damages for the value of the equipment and cargo which were on the barge on January 2, 1937, when it was taken possession of by that corporation.
John M. Wheaton and John H. Fisher acted in the transaction solely as officers of Steel and the libel should be dismissed as against them individually.
The cross-libel filed by Steel should be dismissed.
A decree may be entered in accordance with this opinion.
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