The Eddy - 72 U.S. 481 (1866)
U.S. Supreme Court
The Eddy, 72 U.S. 5 Wall. 481 481 (1866)
72 U.S. (5 Wall.) 481
1. Contracts of affreightment are maritime contracts over which the courts of admiralty have jurisdiction. Either party may enforce his lien by a proceeding in rem in the district court.
2. In the absence of an agreement to the contrary, the shipowner has a lien upon the cargo for the freight, and may retain the goods after the arrival of the ship at the port of destination until the payment is made. The master cannot, however, detain the goods on board the vessel. He must deliver them.
3. An actual discharge of the goods at the warehouse of the consignee is not required to constitute delivery. It is enough that the master discharge the goods upon the wharf, giving due and reasonable notice to the consignee of the fact.
4. Where the goods, after being so discharged and separated into their different consignments, are not accepted by the consignee or owner, the carrier discharges himself from liability on his contract of affreightments by storing them in a place of safety and notifying to the consignee or owner that they are so stored, subject to the lien of the ship for the freight and charges.
5. A frequent and even general but not at all universal practice in a particular port of shipowners to allow goods brought on their vessels to be transported to the warehouse of the consignee and there inspected before freight is paid is not such a "custom" as will displace the ordinary maritime right to demand freight on the delivery of the goods on the wharf.
6. On a libel by the consignee of goods against a vessel for nondelivery of the same -- the defense being that the goods were subject to the lien of the vessel for freight and that the libellants improperly refused to pay it -- any supposed misconduct of a bailee of the goods, not before the court, with whom the goods had been stored on the refusal of the consignee to pay freight and take them away is a question not involved in the pleadings. And if on such a state of pleadings the defendants prove their defense, they are entitled to a decree in their favor irrespective of any such supposed misconduct of the bailee.
On the 25th March, 1854, the master of the schooner Mary Eddy, then at New Orleans, received on board his vessel 102 hogsheads of sugar and 21 of syrup, to be carried by sea to Charleston, South Carolina and there delivered to Mordecai & Co., merchants of that place. The bill of lading contained the usual clause as to the payment of freight. The vessel reached Charleston safely on the 31st of March, and the master gave notice to Mordecai & Co. of her arrival and of the sugar and syrup on board for them, offering to deliver them on the payment of the freight.
Owing to some misunderstanding between the parties on the occasion of a former shipment where, after payment of the freight, a part of the cargo had been discovered to be damaged, Mordecai & Co. were not willing to pay the freight unless the sugars and syrups were all delivered and in their store, and after inspection by them there, were found not to have suffered injury in the voyage. They alleged that by the usage of the port of Charleston they had a right to have them so stored and so to examine them before they could be called on to pay the freight. The master did not agree with them in this view of their rights, conceiving that he had a right to be paid his freight "on the wharf" when the sugars were put there and to retain possession until he was paid. Conference and some partial understandings were had between the parties, and under these all the syrup, with three hogsheads of the sugar, were taken to the storehouse of Mordecai & Co. They declining, however, to pay freight on the parts as thus distributively in
their possession, but insisting upon having the whole in their storehouse first, the master, who was now unlading the sugars and had a large part of it on the wharf -- after 2 o'clock on the afternoon of the 4th of April -- gave them notice that the sugars (some of the hogsheads containing which had been more or less compressed or staved in on the voyage and needed to be coopered) were now in good order, but that to avoid difficulty in collecting the freight he requested them to pay the amount as by the bill of lading, adding that the sugars "will not be delivered without settling the amount due." He concluded:
"Should you not accede to the above, and settle the matter, the sugars will remain on the wharf until sunset, and then be stored at your expense and risk."
Mordecai & Co. replied:
"We are prepared to give you satisfactory security for your freight money, to be paid to you in accordance with the usages of this port and upon your delivery of our property in compliance with your contract. If you refuse to do so, we shall hold you responsible for all damages. We would add that we are informed that there are a large number of hogsheads of sugar on the wharf. A notice of their being landed at this late hour will not give us time to dray them away and store them, and therefore we hold you responsible for any damage to those that are landed."
The larger part of the 99 hogsheads of sugar remained on the wharf until sundown, and were then stored by the master in the storehouse of one Brown. A few yet in the ship were landed and stored on the next day. No agreement as to the rate of storage was made. On the evening of this same day (4 April), Messrs. Brown & Porter, the attorneys-at-law of Mordecai & Co., sent a note as follows to the master:
"We are instructed by Messrs. Mordecai & Co. to inform you that they consider their whole consignment of sugar -- that on
the wharf as well as that in the ship -- at the risk of the schooner Mary Eddy and her owners, and that they are ready to pay you the freight upon your delivery to them of the entire consignment in accordance with the bill of lading; that from your own admission and conduct, they have reason to believe that part of the consignment is not in the condition you received it, and they have further reason to believe that this damage is not included within the dangers and accidents of the seas and navigation; that they are willing to give any security for the freight, but will not consent to pay the freight as you have demanded in your letter when a larger portion of the consignment is in your possession under circumstances which authorize them to believe that they may sustain considerable damage. We are also instructed to inform you that unless this matter is adjusted to their satisfaction by 10 o'clock tomorrow, they will proceed to libel the vessel."
The master did nothing more in the way of delivery of the hogsheads. He himself averred, in an answer subsequently made in the case, "that the sugars were examined next day in store and on the wharf by the agents of Mordecai & Co., but that no demand was made nor any freight tendered."
At the time the sugars were thus stored -- 4th of April, 1854 -- they were worth $6,901. The claim for freight was $641. On the 21st November, 1855, Brown, the storehouse-keeper, without the assent of Mordecai & Co., sold, to satisfy his account of storage, 51 hogsheads of the 99 stored. From the proceeds, $2,314, he deducted his claim, $1,919, for storage at the rate of 25 cents a hogshead per week, and paid the balance to the schooner's agent. The remaining hogsheads were detained till January, 1856, when they likewise were sold by order of the schooner's agent, who paid $204 out of the proceeds for storage at the former rate, reserved $759 for freight and interest, and tendered $2,400 for the consignment of the sugars.
When Brown, in whose stores the sugars had been placed, was about to sell to pay his storage, Mordecai & Co. applied to him to permit them, with some two gentlemen, to examine
into their condition. Brown acceded to their wish, but subsequently informed Mordecai & Co. that the agents of the schooner objected to an ex parte survey and directed him to refer Mordecai & Co. to them or their counsel. Mordecai & Co. then addressed, through their proctors, the same request to the proctor of the master of the vessel, and reply was made that before it could be consented to, it was but fair that they should be advised of its purpose and of the use that might be intended to be made of it hereafter. The terms were not acceded to, and the inspection was not allowed.
Soon after the sugars were stored, Mordecai & Co. informed the agents of the master that storage could be procured by them at the rate of 25 cents per hogshead per month, and they replied that the owner of the store in which it was would make the rate agreeable to Mordecai & Co. Subsequently, when the owner of the store demanded storage at the rate of 25 cents per week for each hogshead, instead of 25 cents per month, there was no objection on the part of the agents. Witnesses testified that 25 cents per week was an excessive charge, though the "wharf rates" allowed 23 cents where there was no agreement.
A libel having been filed on the 5th of March, testimony was taken as to the custom of the port of Charleston as to place of payment of the freight.
Two witnesses were examined in behalf of Mordecai & Co.. One of them, a merchant in the habit of receiving consignments, stated that with his house it had always been customary to deliver the goods on the wharf and then to call for the payment of the freight at a reasonable time after; that this was the general practice with merchants; that Mordecai & Co. were merchants of very good reputation; that he himself had never paid freight on the wharf, and if any man were to ask him to do so he would take it as an insult. On cross-examination he added that he thought that by commercial law the master would have a right to demand freight on the wharf if the party were doubtful as regarded their ability to pay or if he expected to receive any trouble in the collection of the freight; that as to the right to demand
freight on the wharf, he thought it a question of law; that as to the fact, he had never heard of a case in which it was done. The other witness stated that he thought it was the prevailing practice to discharge and collect freight afterwards, but that though such was his practice, he would, if he ever anticipated difficulty in the collection of freight, have stored the cargo in the name of the consignee, subject to his order and the payment of freight. In opposition to this testimony, four witnesses were examined in behalf of the shipowners. One stated that he had known instances where refusals were made to deliver the cargo without payment of freight. Another, that he knew of instances where consignments were not delivered without payment of freight on the wharf; that it was his custom so to collect it if he doubted the solvency of the house or feared difficulty in the collection of it. A third that in the case of small bills, to save the trouble of collecting the freight, he had ordered it to be paid on the wharf before delivering the cargo, and the fourth that in one instance, he was refused a consignment unless he paid freight on the wharf, but that the general usage was otherwise -- the practice being to call for the freight at any time before the vessel was ready for sea.
Upon this case, the District Judge in whose court the libel was filed -- considering that no sufficient custom had been proved -- concluded his opinion as follows:
"It is evident that on both sides there was a proclivity to an extreme estimate of their rights from the occurrence previously of some matter between them which was unpleasant. In the detention of the cargo to secure the lien of his freight the master exercised a lawful right. In continuing the exercise of that detention upon property's undergoing deterioration, without submitting the property to such control as could rightfully dispose of it, if he was not satisfied that under the circumstances he could not do so himself, he acted wrongfully, and is liable to the consequences. And all the evidence which is before me in relation to the conduct of the master while detaining the property supports me in the conclusion that the respondent should be made liable. I pass over the fact that with property capable
of division, and of which he had the right to retain a part for the freight of the whole, he insisted on retaining the whole, and that in so doing he retained an amount ten times greater than his claim, and subjected the owner to ten times the expense that was necessary. I pass this over because in speaking of the power to retain, the language is general. But when the master in the exercise of his right did detain, it was nevertheless the property of another which he had in his possession. That possession he transfers to another -- the owner of the store in which he placed the property. And it was there placed subject to the order of the master or his agent. There was no recognition of any other owner, nor discretion allowed the storekeeper to deliver the property to any person but the master of his agent. Now it is quite clear that the right which the carrier was entitled to was simply that of detention until freight was paid. And the importance of the mode in which the goods were stored is only made to appear from subsequent events."
"It is obvious that it was forgotten that when the master retains the control of the cargo to secure his lien for freight, he is regarded as the agent of the owners of the cargo. And the conduct of the master in the management of the property in this case was inconsistent with the duties which the law in such cases devolves upon him."
"Let a report set out the value of the property at the port of delivery; from this amount let the freight be deducted and let a farther deduction he made for the storage of the goods for sixty days, which, under the circumstances of the case, I consider a reasonable time for the master to make application for the aid of the court in making his lien available; the balance then remaining, with interest from that date, will be the amount due the libellants. As to the costs, I will divide them in the following manner. I do not sustain the libellants in what they did previous to the storage of the goods and the filing of their libel. I do not sustain what the respondents have subsequently done."
A decree, after a report made by a master on this basis, was entered accordingly.
On appeal to the circuit court, this decree was reversed and it was ordered that there be allowed to Brown, for the storage of the merchandise, compensation according to a report
of a master, which had been made under a reference of the circuit court, and which allowed 40 cents a hogshead per month. That the residue of the fund in the hands of Brown should be paid into court. That the libellants should be at liberty at any time to apply to take it out, and that, subject to such leave, after the fund was paid into court, the libel should be dismissed with costs.
It appearing afterwards, however, on a return to this rule that the sugars never were in the custody of the circuit court, the decree of the district court was in all things reversed and the libel dismissed with costs.