of the value of the plan. Assuming that Chamberlin and Linton, the defendant's representatives, had opportunity to examine it to their satisfaction on October 4, 1920, and that Taylor did not misstate its contents, their acceptance was final, and forbids a court to appraise its value by any standards of its own. These men were not children, but seasoned in their business, and, if they chose to enter into an improvident contract, any resulting loss is as much to the account of their principal as in any other case. If they allowed themse'ves to be beguiled by Taylor's praise of his work and his salesman's talk, they have only themselves to thank for their failure to use more circumspection in important affairs. It is no excuse, either that they were inattentive to the terms of the contract, or that they did not properly examine what they bought.

[2] However, if to their carelessness the plaintiff added misrepresentation, the result is, of course, quite different. The District Judge has found that Taylor falsely represented that he was still the publisher of the Telegraph, and from this, of course, it follows that it was still being published. While this finding is upon disputed facts, we should have no warrant to disturb it upon a record like that before us. Unless the card was stolen (and, indeed, Taylor did not hesitate to charge that it was), it gave the strongest corroboration to the defendant's version and almost demonstrated its truth. It is quite true that, taken alone, it would not be enough to upset the contract that Taylor had had recourse to such a deceit only to gain an interview with Chamberlin and Linton. The ruse by which he effected an entrance, if it stopped when he got in, was not important; it must have been an inducement to the acceptance of the bargain. But it did not stop there; at least, Chamberlin and Linton said that it did not; and there is no reason to question their word after the judge has accepted it. His talk was throughout based upon the assumption that he was then the publisher, and that the plan was still in operation. This was inevitably so, for otherwise his initial trick would have been exposed. Even if all he said about the success of the plan had been true, it was a material deceit to put it in the present, rather than in the past, where it belonged. Had he told the truth, some inquiry would almost certainly have been made as to why it had not been continued, which would have forced him either into further falsehood, or would have disclosed a situation that might have failed his purposes. At any rate, having undertaken to speak at

all, he was bound to give his hearers the facts as they were and to leave it to them to determine whether an experiment then three years old, terminating in the extinction of the paper, would be a satisfactory demonstration of the merit of his wares. He might not deprive them of that opportunity, and insist that it could have made no difference in their ultimate decision; they had the right to the truth, if he meant to use the incident at all. [3] This, therefore, was a relevant misstatement of existing fact, which, when discovered, justified the defendant's timely repudiation of the contract. The point is raised that the defendant did not return the copy received, but it can hardly be supposed that this particular paper was of any importance to the plaintiff. It was not a unique document, without which he could make no other sales. All that he may at most demand is that the defendant should not pass it on to others, or disclose its contents, and that, if it be still in existence, it be delivered over as a condition of annulment. The judge's first finding alone is therefore enough to sustain the decree below, and we might rest upon it; but we think that the second is an equally good ground for the same result.

The plaintiff's declaration that the plan had made the Telegraph "supreme" in Philadelphia was amply disproved in fact by the testimony of Kirkman, Kelly, Nevin, and Johnson, all apparently disinterested witnesses, whom only the plaintiff and his son contradicted. These witnesses had had personal acquaintance with the Telegraph during the period in question, and said that, instead of being a source of strength to the paper, the plan had greatly embarrassed its affairs. While, when first put into use, it resulted in an enormous increase in advertisements of the kind in question, these soon ran beyond the period when they represented genuine offers and their continuance brought buyers when there was nothing to buy. The paper was thus stuffed with what amounted to false advertisements and lost caste with the public. We need not pass upon the truth of these conclusions; it is enough that the witnesses, who were adepts in the business, concluded that the plan was for these reasons an injury to the paper, and chose to abandon it and the plaintiff. So much was proved by a great preponderance of reliable evidence. (4) Whether the plaintiff's declaration to the contrary three years later was a fraud does indeed depend upon something more. Had this been a statement of some existing "fact," no scienter would have been necessary; this not being an action on the case for deceit, but a suit in equity to rescind. In spite of the dictum to the contrary in So. Development Co. v. Silva, 125 U. S. 247, 250, 8 S. Ct. 881, 31 L. Ed. 678, we think it settled law that when a seller makes such a declaration as an inducement to the buyer's acceptance, the buyer may rescind without proving the seller's guilty knowledge. Smith v. Richards, 13 Pet. 26, 10 L. Ed. 42; Turner v. Ward, 154 U. S. 618, 14 S. Ct. 1179, 23 L. Ed. 391; Independent Harvester v. Tinsman, 253 F. 935 (С. С. А. 7); In re American Knit Goods Mfg. Co., 173 F. 480 (C. C. A. 2); Williston, § 1500. In a sense any assertion is a statement of fact even though it be only an opinion. It involves at least, as has often been pointed out, the belief of the utterer in the truth of what he says, Vulcan Metals Co. v. Simmons, 248 F. 853 (C. C. A. 2); and, unless it be such as no one could suppose the hearer would act upon, it may give ground for relief. The distinction depends upon how far the utterance implicitly presupposes the use of some subjective standard by the utterer. Value, quality, fitness, success, are usually understood as meaning no more than that the objects conform with the declarant's individual yardstick in such matters. While he may make it clear that his reference is to some commonly accepted measure, ordinarily he does not, and his hearer takes it for more at his peril.

so charitable an interpretation. Moreover, in every case but one in which his earlier efforts with other papers have been disclosed, his plan was shown to have been a failure. That one, a paper in Springfield, Mo., was successful, if the single witness is to be believed; but in Providence, Atlanta, and Minneapolis those papers which tried the plan found it useless and threw it up. It is true that he had since then revised it, and had secured other purchasers in the summer of 1920; but these ventures had not yet been proved, and their success still rested in supposition.

At least we can say, and we hold, that, in the face of such experience as he had had up to that time, nothing but an utter indifference to truth could have warranted his saying that the plan had been a success in the Telegraph, or had made "supreme" a paper which was sold out for the value of its press franchise. Therefore we hold that the defendant has made out its case upon this misrepresentation, as well as upon the undoubted one that the paper still continued to use the plan with him as its publisher.

It results that the decree must be affirmed. If the plaintiff wishes, in order to protect his rights and to secure him his share in the rescission, the decree may perpetually enjoin the defendant from disclosing any part of the plan, and direct it to return the copy which it received, if still in existence, or to insure against its use by others. Decree, as so modified, affirmed.

plaintiff said. We do not forget that during the months of January and February, 1917, the paper for the first time had shown a profit, though this was in part accounted for by extraordinary payments made just then; nor do we underestimate the natural bias which an inventor has towards his discovery. Perhaps, if his conduct had been all aboveboard, we should feel bound to give him the benefit of the doubt, even though the sequence upon the successful months proved so disappointing, but his concealment of the full facts touching this very matter, when he did undertake to disclose, seems to us to forbid

In re O'DONNELL et al.

Appeal of SPENCER KELLOGG & SONS, Inc. Circuit Court of Appeals, Second Circuit. May 14, 1928.

No. 288.

tracted with barge owner to do towing, was relieved under Harter Act, as to damages resulting from collision, by terms of bill of lad*ing issued by barge owner, both being considered single vessel (Harter Act [46 USCA §§ 190-195])....

Where marine company, owning barge, hád contracted with petitioner, a tug owner, to do towing, earnings to be divided between them, and marine company issued bills of lading to respondents, containing exceptions for collision and dangers of navigation, petitioners were relieved from liability for collision with lock in canal, under Harter Act (46 USCA $8 190-195; Comp. St. §§ 8029-8033, 8035), as well as the marine company, since both tug and barges should be treated as single vessel.

2. Shipping 136-Both tug and barges, separately owned, must fulfill conditions of exemption from liability to shipper resulting

from collision, under Harter Act (46 USCA

§§ 190-195).

Both tug and barges, owned by different persons, must fulfill conditions of exemption for liability to shipper resulting from collision, under Harter Act (46 USCA §§ 190-195; Comp. St. §§ 8029-8033, 8035).

3. Shipping137-Vessel must be shown seaworthy when breaking ground on voyage in question.

Vessel must be shown to be seaworthy when she breaks ground on voyage in question.

4. Shipping136-Where tug and barges are deemed one vessel, under Harter Act, they must be so considered under limitation statute (Harter Act [46 USCA §§ 190-195]; 46 USCA §§ 183, 189).

Where tug and barges are to be deemed one vessel, under Harter Act (46 USCA §§ 190195; Comp. St. §§ 8029-8033, 8035), they must be equally so considered under limitation statute (46 USCA §§ 183, 189).

5. Shipping209(13)-Limitation statute requires person liable for ship's tort to surrender only his own interest in her (46 USCA §§ 183, 189).

Limitation statute (46 USCA §§ 183, 189) requires person liable for ship's tort to surrender no interest in her beyond his own.

Appeal from the District Court of the United States for the Southern District of New York.

Petition by Spencer Kellogg & Sons, Inc., against Louis O'Donnell and others, to enjoin a libel and limit their liability as owners of the tug Hugh O'Donnell. From the decree (22 F.[2d] 410), respondents appeal. Affirmed conditionally.

The appellants were owners of two cargoes of flaxseed laden on the barges Brennan and Smith, for carriage from Buffalo to Edgewater, N. J., via the Erie Canal. The barges, while in tow of the appellees' tug, Hugh O'Donnell, were brought into collision with a lock in the canal, and both they and their cargo were damaged. Thereupon the appellants filed a libel in rem against the tug, and the appellees a petition to enjoin the libel and limit their liability to the value of the tug. In this proceeding the appellants filed a claim and answer, setting up the same facts as appeared in the libel. The cause came on for trial upon the petition and answer, where the following facts were disclosed:

A third party, the Marine Transit Corporation, owned certain barges and chartered others, which it used for the transport of grains through the Erie Canal. As it had no tugs of its own, it agreed with the appellees

that they should do all its towing, including the return trip eastward after the barges reached Buffalo. The agreement was for the Marine Company to solicit and procure such "freight" as was "agreeable to both the owner of the tug and the carrier or owner of the barge," and to deduct from the gross freights collected "all charges, other than towing, incidental to the earning of that freight," dividing the remainder into equal parts between itself and the appellees. The Marine Company issued bills of lading to the appellants after this agreement had been reached with the appellees. These contained exceptions for collision and the dangers of navigation, and relieved the Marine Company, under the Harter Act (46 USCA §§ 190195; Comp. St. §§ 8029-8033, 8035), if the barges were seaworthy, and they alone were the vessels transporting the cargoes. The ap, pellees claimed that they also relieved the tug, because by the contract between the Marine Company and themselves both the tug and the barges were to be considered as the transporting vessel.

The appellees at the trial showed that the tug was seaworthy at the end of her westbound trip at Buffalo, just previous to the trip in question, but proved nothing as to the condition of the barges. The District Judge held that the flotilla was to be treated as a single vessel, and that the tug as a part of it was exonerated under the Harter Act. So holding, he dismissed the appellants' claim.

Single & Single and Forrest E. Single, all of New York City (Carroll Single, W. J. Mahar, and Northcutt Ely, all of New York City, of counsel), for appellant.

William F. Purdy, of New York City (George V. A. McCloskey, of New York City, of counsel), for appellees.

Before MANTON, L. HAND, and SWAN, Circuit Judges.

L. HAND, Circuit Judge (after stating the facts as above). The case confessedly turns upon the doctrine laid down in Sacramento Nav. Co. v. Salz, 273 U. S. 326, 47 S. Ct. 368, 71 L. Ed. 663, and followed in The Bathgate, 25 F. (2d) 103, 1928 A. M. С. 233 (C. C. A. 3). In those cases the tug and barge were owned in common and the appellants insist that the doctrine is confined to that situation. Yet it is apparent, we think, that ownership cannot in all cases be the decisive fact; for example, it can hardly be argued that, if the tug had been demised on a bare-boat charter, so as to be in the carrier's possession, it would have made any difference. Nor should we suppose, though the question ory that the contracts had there been held to be for towage. Since both vessels were own

ed. The reasoning of the decision was that the contract of carriage necessarily included some motive power, the barge being inert, and that the tug was therefore a necessary adjunct to its performance. As such it was a part of the "vessel," in the sense that the contract presupposed more than a mere hulk to lift the goods.

[1] Perhaps the court did not mean to press this argument to the extreme of saying that a mere towage contract would similarly exonerate the tug; at any rate, we may so assume in the case at bar, because the contract here was very different. The cargoes were to be acceptable to the appellees before they were fixed by the Marine Company, though whether that company submitted each one in advance, or was expected to use some latitude of choice, does not appear. All expenses and profits were shared, except the cost of operation of each vessel. Contracts of affreightment made by the Marine Company with the shipper under such an arrangement appear to us to have been made on behalf of both, and both to have been the principals, although one was undisclosed. Whether a partnership resulted is no doubt a nice question, on which we need not pass. When the tug was paid by a proportion of the gross freights, it was held that no partnership arose in The J. P. Donaldson, 167 U. S. 599, 605, 606, 17 S. Ct. 951 (42 L. Ed. 292), and perhaps not even this agreement went so far. Even if it were necessary to pass on that question here, it must be noted that in The J. P. Donaldson, so far as appears, the barge only picked up the tug after lifting the cargo and making the contract of carriage. We hold, however, that a partnership stricti juris is not essential, and that it is enough if the two owners make a joint contract of carriage with the shipper, to the performance of which each lends a necessary vessel. Whatever may be said of situations where the parties less completely unite, this appears to us to be equivalent to a joint ownership in both vessels pro hac vice.

Sacramento Nav. Co. v. Salz, if not a departure from the earlier doctrine, at least settled the law against some earlier decisions. In spite of the guarded language used, it is impossible to suppose that it did not overrule The Murrell (Baltimore & Boston Barge Co. v. Eastern Coal Co.) 195 F. 483 (C. C. A. 1), and The Coastwise, 233 F.1 (C. C. A. 1). It is true that the opinion formally left these untouched, but only on the the

can no longer stand on their facts, and were not meant to be approved, as we understand it. Just where the line is to be drawn between the hiring of a tug after the barge has contracted to carry the goods, and a common ownership of both, will probably always remain a matter of degree. At any rate we are not disposed at present to try to fix any general rule. It is enough that the facts here at bar bring this case within what must in any event be the determining considerations. [2,3] However, it is plain that both vessels must fulfill the conditions of the exemption. In the case at bar the tug proved that she was seaworthy at the outset of the voyage. The appellants do indeed argue that the proof only extends to the completion of the westbound trip, which ended at Buffalo, just before the voyage began on which the loss occurred. We of course recognize that the vessel must be shown to be seaworthy when she breaks ground on the voyage in question, but we think the record sufficient as respects the tug. It was apparent from the evidence that the purpose of the appellees was to prove that she was seaworthy at the only moment when seaworthiness counted, and if the appellants, who did not even cross-examine the single witness, had meant to raise the question that they had not accounted for the trifling period between the end of one voyage and the beginning of the next, good faith required them to raise the question while there was opportunity to remedy what was at best a formal defect. The same is not true as to the seaworthiness of the barges, as to which no proof whatever was attempted. The record as it stands is defective in this respect, and that proof must be supplied. [4,5] Finally, it is argued that the appellees, to limit their liability, must surrender, not only the tug, but the barges, each being by hypothesis a constituent part of the "vessel" exonerated. We agree that, if the tug and barges are to be deemed one vessel under the Harter Act, they must be equally so considered under the limitation statute. The last was decided in The Columbia, 73 F. 226 (C. C. A. 9), a case expressly approved in Sacramento Nav. Co. v. Salz, and indeed used as a basis for the result there reached. There car be no question that, if both vessels had been owned in common, both would have had to be surrendered here. But the limitation statute requires a person liable for a ship's tort to surrender no interest in her beyond his own. On the contrary, it expressly provides