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tion as to why these abnormal charges were incurred, and we wish to have a
letter from you, addressed to ourselves, embodying the phraseology of the
pro forma letter which we enclose. Kindly write this at your earliest con-
venience, and send it to us, and oblige. Monday if possible.
Yours very truly,

Munson Steamship Line
A. H. Bromell

Secretary."

"New York, December 8, 1906. Munson Steamship Line

82 Beaver Street, New York Dear Sirs:

In connection with the expenses of fitting up your steamers 'Cubana,' 'Bergen,' 'Laupar' and 'Jacob Bright for the carriage of animals for the Quartermaster's Department, we desire to say that the conditions prevailing at the time this work was done were such that the fitting up of the ships could only be done with the greatest difficulty, owing to the fact that some 17 to 18 boats were being equipped at the same time, and the services of competent carpenters was almost impossible to obtain. We were compelled to utilize any character of carpenters which we could obtain, and work them day and night, naturally getting but very poor results and entailing a vastly increased outlay of money for a minimum amount of return. You no doubt are aware of the fact that we are compelled to pay carpenters three and one quarter days for each night worked and on this basis for each part thereof. The men, naturally, being worked continuously, could perform very inadequate service. We regret that these conditions should have prevailed, but we assure you that the very utmost was done under these very disadvantageous conditions.

Yours very truly," The words "You no doubt are aware of the fact that we are compelled to pay carpenters three and one quarter days for each night worked and on that basis for each part thereof” were added to the draft suggested to Mr. Bromell by Mr. Morse.

A letter dated December 28, 1906, from the libellant to the respondent was also produced.

“Dec. 28, 1906. The Munson Steamship Line, 82 Beaver Street,

New York City. Gentlemen:

Referring to Mr. Bromell's conversation, yesterday, with our Mr. Morse, we cannot afford to allow you more than two per cent discount on the bills S. S. 'Cubana', 'Laupar', 'Bergen' and 'Jacob Bright. Considering the extraordinarily long delay in payment of these bills by you and the necessity we were thereby placed under of borrowing funds, and payment of interest thereon, properly we should not now be asked to allow any discount whatever, but, in order to preserve our excellent friendly relations also to get the full balance of money now due us from you promptly, we will allow you two per cent on the face of the bill, providing, however, we have check for balance in full not later than noon Dec. 31st, 1906. Should we not receive a check by that time, we shall be obliged to refuse any discount whatever on said bill. In order that there shall be no misunderstanding about the amount of our account, the four vessels' bills make a total of $75,978.40; decreasing it by 2 per cent, viz., $1,519.57, and by the $35,000 previously paid on account, leaves a net balance due us of $39,458.83.

We sincerely trust that this disposition of the matter will be entirely sat-
isfactory to you, upon reflection as to our limited profits, as explained by Mr.
Morse to you, as well as our loss of use of these funds for so long
Yours very truly,

Morse Dry Dock & Repair Co.
D. J. Leary

Pres."

The witness further testified that no reply was received to this last letter and the discussion throughout was on the basis of a commission, the amount of which was left with his company.

The libellant next produced as a witness a Mr. Nye, who said that he was Marine Superintendent of the United States Íransport Service and had general supervision of fixing up vessels. As the witness was proceeding to testify, objection was made on behalf of the respondent that he could not be a witness to the correctness of the bills which was the subject of the controversy. The witness was allowed to testify, however, and the question was reserved as to the admissibility of his testimony. Even as an admission, it would have been competent. The fact that the admission was made to a third party seems immaterial. It is said in 1 Amer. & Eng. Enc. of Law, 675: “Admissions may be made to the adverse party, or his agent, or to a third person.” It was not necessary for the libellant to prove an express consent by the respondent to the correctness of the account, such consent could be implied from the surrounding circumstances. Spellman v. Muehlfeld, 166 N. Y. 245, 59 N. E. 317. The admission of the testimony seems to have been correct.

Mr. Nye testified that he had general supervision of the vessels on the part of the Government and all bills were handed to him to examine; that the bills were the subject of discussion between Colonel Miller, of the Quartermaster's Department, Mr. Frank Munson, of the respondent company and himself; that he had previously gone over them with Mr. Munson who said that the bills were excessive and gave the reasons therefor; that the bills were returned to Mr. Munson, after the witness had checked them off and found there were certain charges there which rightfully belonged to the owner and not to the Government; that he had several subsequent interviews with Mr. Munson in order that the bills should be rendered in such a way as to show why the extraordinary charges were made; that the amount of the bills was finally settled at something over $75,000 and paid by the Government; that Mr. Munson did not continue to say that the bills were excessive; that he came to the conclusion that the bills were correct when he rendered them and they had all been straightened out; that he would not be positive that Mr. Munson signed the bills finally as correct but he thought he did so, as all bills have to be signed by the ship owner. The witness subsequently corrected his testimony with reference to Mr. Munson stating that the bills were excessive and said it was Colonel Miller and not Mr. Munson who considered the bills excessive; that Mr. Munson said he understood the bills to be correct, and the charges high because of night work and the labor strike; that Mr. Munson stated the reasons for the excess were “owing to night work, strikes which were on at that time, labor strikes, and working men three or four days; that is, I mean by that working day and night, and the men being pretty well fagged out, which they were”; that Mr. Munson gave these reasons why the bills were larger than was originally contemplated and put in the charter party.

Colonel Miller, whose official title was Lieutenant Colonel and Deputy Quartermaster General in the United States Army, Depot Quartermaster in New York, testified that when Mr. Munson first

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brought the bills to him, he, Colonel Miller, in the presence of Captain Nye, looked them over and expressed the opinion that they were excessive; that Captain Nye and Mr. Munson were present at the time. The witness further testified:

"Q. What did Mr. Munson say as to that? A. Mr. Munson went into an explanation of the amount of the bills and the character of the bills, and gave as the reasons the condition of affairs in the ship yards in the Port of New York, consequent on the great number of chartered transports that were being fitted up, the labor troubles, strikes and night work, and because they worked twenty and forty hours without stopping; all tending to show that the bills would naturally run very high.

Q. Did he say anything as to whether they were right or wrong? A. It was to the effect that they were correct under the circumstances.

Q. After that, what did you do with the bills? A. I examined them over carefully in connection with Captain Nye. There were some items that were irregularly placed, different from that stated in the bills—charged against one ship that should be to another, my recollection is; certain expenses that were included in the charter party had been charged as extras, certain extras had been charged as extraordinary, and vice versa.

4 * Q. Did you ever have any conversation with any of the officers of the Munson Steamship Line in regard to the payment by you on behalf of the Government of a commission for supervising this work? If so, state that to the Court. A. The Munson Company, through Mr. Frank Munson, rendered a bill of something over $6,000, for ten per cent of the Morse bills, for the supervision of the work.

Q. Did they ask you to pay it? A. Yes sir.
Q. What did you do about that? A. I refused to pay it.

Q. They wanted ten per cent. from the Government for their supervision ? A. About that.

Q. It is stated in the answer to this libel, that at the time of the chartering of these four ships, the Government, through you, asked the Munson Steamship Company to undertake the supervision of these repairs, to see that they were properly carried out. Is that correct? A. Yes.

By Mr. Cortis. Q. Was that after the charter? A. At the time of the charter.

By Mr. Brown. Q. It is alleged that there was an agreement made between you and the Munson Steamship Company, that they should be paid for that supervision? A. Included in

A. Included in the extra charter money for the first fifteen days; the estimate by the Munson Company of the amount necessary to put the ships in shape.

Q. It is also asserted that there was an understanding or agreement between the Munson Steamship Company and you as the representative of the Government, that the amount of these bills as rendered by the Morse Company should be paid by the Government, and that then the Munson Company should obtain from the Morse Company a reduction of these bills to a figure which should be fair and reasonable, and that the Morse Company should only receive the reduced amount. Was there any such agreement made with you? A. None whatever."

* "Cross examined by counsel for respondent.

By Mr. Cortis. Q. Do I understand you to say that in the conversation you had with Mr. Munson it was understood between Mr. Munson and you that the compensation of the Munsons for their services in overlooking these repairs to the ships should be included in their figures, when they estimated the expense of these repairs? A. That is right. That is at the time the charter party was made.

Q. And that they should get their compensation by increasing the estimate

Mr. Brown. We object, upon the ground that any contract between the Government and the Munson Steamship Company as to compensation to them. for services we are not parties to.

The Court. I allow the question.

Ans. If I may take time enough to say what I mean: at the time the charter party was made, Mr. Munson at my request undertook to fit up certain ships, and in order to make the payment for the fitting up of the ships the ordinary charter party—the amount of it was increased by so much over as to include the cost of the fitting up, in the first fifteen days of the charter party, and in fact the ten per cent, or whatever profit was coming to the Munson Company for fitting up the ships as estimated, was included.

Re-direct examination by counsel for libellant.

By Mr. Brown. Q. It turned out afterwards that the cost of fitting up was very much greater? A. Very much greater.

Q. And the difference was paid to them by these bills? A. Exactly.

Q. Was this compensation for the supervision of the work that they were to get- A. Under the charter party as estimated.

Q. Did they supervise this work? A. Not altogether, no sir.

Was the subject of this compensation brought up to you after the repairs were done, and they made the claim for supervision? A. At the time these bills were first presented.

Q. Then they made the claim for supervision? A. Yes.

Q. What did you tell them about it? A. That the estimate included the ten per cent-or whatever it was understood to be of the amount, and that the supervision of the Morse ships was not coming to them in the extraordinary expenses.

Q. What did you mean? That they were not entitled to supervision of the Morse ships? A. Yes.

Q. Why? did you tell them? A. I think so, as I stated before.
Q. Why was it? A. On account of the estimate including that.
Recross by counsel for respondent.

By Mr. Cortis. Q. Is it your idea, was it your intention that they should pay themselves out of that money which they had charged? A. Out of that money?

Q. Out of the money which was paid over to meet the estimate they had originally made, that that estimate was supposed to be sufficiently greater than that of the Morse Company to pay them? A. Say that again, please.

Q. Was it your idea after this conversation, that they should make their estimate for the cost of the repairs sufficiently in excess of what the Morse Company would charge, to pay them for their services? A. No, that is not the way I put it. Munson and Company made the estimate to put the ships in shape, and as with all estimates it included the cost of the man that does the work.

Q. Of the Munsons ? A. Yes.

Q. In other words, the cost of the Munsons would make for their servicesA. Was included. That estimate was included in the increased charter money.

Q. And it was in that way they were to be paid for their services? A. Yes sir.

By Mr. Brown. Q. That was an understanding between you and the Munson Steamship Company? Mr. Morse was not there, was he? A. I did not know him at all."

Mr. Bromell was then called and testified that he had charge of fitting up the vessels; that he first knew that the charge therefor approximated $75,000 when he received the bills from the libellant; that Mr. Morse called upon him at his request and he told Mr. Morse that the bills were exorbitant and that Mr. Morse had better take them back and put them down to a proper basis before they were submitted to the Quartermaster's Department; that Mr. Morse took the matter under consideration and a day or two afterwards telephoned he could make no changes; that the witness then said all that could be done was to submit the bills as they were if no changes could be made; that he never said to Mr. Morse or to any one of his concern that he thought the bills reasonable; that all he said to Mr. Morse's book

keeper was that the bills required some alteration in form, but nothing about the reasonableness of the bills. On cross examination he said that the alterations were made on Captain Nye's instructions; that he paid something on account but all the time maintained the bills were excessive down to the time the money was received from the Government; that he did not collect the money, the settlement with the government having been made with Mr. Frank Munson; that what he picked out to be wrong was the number of men employed on a certain vessel at a certain time and the price he charged for materials, which he figured were 50 or 60 per cent higher than they should be; that when Colonel Miller thought the bills were excessive, he wanted to set before the Government certain statements that they were right; that he drafted the letter of December 8th and thought the facts there stated to be true to a very large extent; that he did not know how to explain wherein they were not true; that there may be degrees of truth; that the conditions expressed in the letter to be written by Mr. Morse, under request of December 8th, were true all through; (By Mr. Cortis) that it was merely an explanation of the conditions under which the work was done and to give some satisfactory reason for the bills being as they were; (By Mr. Brown) that to a certain extent he believed that what he said was true, the conditions as expressed in the letter there; that the bills which were on the bill heads of the Morse Company were copied on their own bills to the Government, that the Government demanded vouchers for everything and the Morse bills were sent with their own.

Frank C. Munson was then called upon to testify for the respondent and he said that he handled the matter entirely with Colonel Miller; that a couple of days after the bills came in Mr. Bromell advised him what the total amount was; that he never had any conversation, as he remembered, with the Morse Company; that he never stated to any one that he thought the bills reasonable.

On cross examination he testified as follows:

“By Mr. Brown. Q. You didn't think they were reasonable did you? A. I didn't think they were reasonable, no sir.

Q. And you never tried to explain to anybody that they were reasonable, did you? A. I talked with Colonel Miller about the bills, and told him what the circumstances were surrounding the work and so forth, which I had received from Mr. Bromell and the superintendent.

Q. What you told Colonel Miller was the truth, wasn't it? A. Yes sir.

Q. And it was because it was suggested by Colonel Miller that the bills were excessive, that you made this explanation, wasn't it? A. Yes.

Q. Col. Miller said they were excessive? A. I agreed with Col. Miller that the bills were excessive, and I told him that we had protested to Mr. Morse that the bills were excessive, but that Mr. Morse said that he couldn't reduce them.

Q. What were you trying to convince Col. Miller of? A. I was trying to convince Col. Miller that the bills could not be materially reduced, because Mr. Morse had taken the stand that they must be paid on or about the basis on which they were rendered.

Q. Then you deny that you told Col. Miller the bills were right, do you? A. I told Col. Miller

Q. Just answer that question. Col. Miller has testified that you told him tht the bills were correct. Is that true? A. I told Col. Miller the bills as rendered would have to be paid.

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