The master of a vessel has power to create a lien upon it for
repairs and supplies obtained in a foreign port in a case of
necessity, and he does so without a bottomry bond, when he obtains
them, in a case of necessity, on the credit of the vessel.
It is not material whether the implied hypothecation is made
directly to the furnishers of repairs and supplies or to one who
lends money, on the credit of the vessel, in a case of necessity,
to pay such furnishers.
This power of the master extends to a case where he is charterer
and special owner
pro hac vice.
But this authority only exists in cases of necessity, and it is
the duty of the lender to see that a case of apparent necessity for
a loan exists.
Hence, where the master had received freight money and, with the
assistance of the libellants, invested it in a series of adventures
as a merchant, partly carried on by means of the vessel, the
command of which he had deserted for the purpose of conducting
these adventures, and money was advanced by the libellants to
enable the master to repair and supply the vessel and purchase a
cargo to be transported and sold in the course of such private
adventures, and the freight money earned by the vessel was
sufficient to pay for the repairs and supplies, and might have been
commanded for that use if it had not been wrongfully diverted from
it by the master, with the assistance of the libellants, it was
held that the latter had no lien on the vessel for their
advances.
This was a libel filed in the district court by James W. Osborn,
of the City of Baltimore, against the barque
Laura, her
tackle, apparel, and furniture, Osborn being the assignee of Loring
& Co., merchants in Valparaiso. The barque
Laura
belonged to Plymouth, in Massachusetts, and the lien claimed was
for supplies and repairs furnished to the vessel at Valparaiso. The
district court decreed that there was due to the libellant the sum
of $2,910.23, with interest from the 1st of April, 1852, which
decree was affirmed in the circuit court.
The case was argued at the preceding term, and held under a
curia advisare vult until the present.
The circumstances of the case are set forth with great
particularity in the opinion of the Court, and need not be
repeated.
Page 60 U. S. 25
MR. JUSTICE CURTIS delivered the opinion of the Court.
This is an appeal from a decree of the Circuit Court of the
United States for the District of Maryland, sitting in admiralty. A
libel was filed in the district court by the appellee, as assignee
of Loring & Co., merchants in Valparaiso, asserting a lien on
the barque
Laura, of Plymouth, in the State of
Massachusetts, for the cost of repairs and supplies furnished to
that vessel at Valparaiso. The district court decreed for the lien,
the circuit court affirmed that decree, and the claimants have
brought the cause here by appeal.
It appears that in January, 1849, Phineas Leach, who had
previously been in command of the barque, contracted with her
owners to take her on what is termed "a lay." There does not appear
to have been any written contract of affreightment
Page 60 U. S. 26
between them, nor are the terms of their agreement fully
described by any witness. But this mode of employing vessels is so
common, and its terms and legal effect so well settled by long
usage, it has been so often before the courts and the subject of
adjudication, that no embarrassment is felt by us concerning the
terms and conditions on which Leach took the vessel.
We understand from his testimony, as well as from known usage,
ascertained and adjudicated on in the courts, that the master had
the entire possession, command, and navigation of the vessel; that
he was to employ her in such freighting voyages as he saw fit; that
he was to victual and man the vessel at his own expense; that the
owners were to keep the vessel in repair; that from the gross
earnings were to be deducted all port charges, and the residue was
to be divided into two equal parts, one of which was to belong to
the owners, the other to the master; and that this agreement could
be terminated by the restoration of the vessel to owners by the
master, or by their intervention to displace him, at the end of any
voyage, but not while conducting anyone which he had
undertaken.
Having possession and command of the vessel under such a
contract, Leach sailed from New Orleans in January, 1849, and after
making a voyage to Rio de Janeiro, he sailed for and arrived at
Valparaiso in November, 1849.
It is necessary to state with some particularity the voyages
made after his arrival at Valparaiso. He sailed thence in December,
1849, with a cargo of Chili produce, on a freight amounting to
about $7,000, for San Francisco, where he arrived and delivered the
cargo. He went thence to Talcuhana in ballast; and, having an
intention to by a cargo there on his own account, he wrote to
Loring & Co., from San Francisco, to obtain from them a credit,
on which to raise money to pay for the balance of the cost of this
cargo, after appropriating towards it the freight money in his
hands. Loring & Co. granted him a credit for $3,000, to be
reimbursed by Leach's draft on himself at San Francisco, at five
percent premium. At Talcuhana, Leach drew on Loring & Co. for
$7,000, and bought doubloons, but, not being able to procure a
cargo there or at Maule, he sailed to Valparaiso, where he arrived
in July, 1850. He handed over to Loring & Co. the doubloons and
the proceeds of his freight money, which was in gold dust, and they
supplied the vessel and purchased a cargo for Leach's account,
charging a guaranty commission of five percent on their advances
and also a commission of two and a half percent on their purchases.
They rendered Leach
Page 60 U. S. 27
an account, in which he is charged with the supplies of the
barque and the cost of the cargo, and their commissions, and
credited with the moneys received from him.
Leach carried this cargo to San Francisco and, having sold it,
made an arrangement with the mercantile house of Flint, Peabody
& Co., established at San Francisco, that he would go to
Valparaiso and ship cargoes thence to them on their and his joint
account, drawing on them for the cost. This arrangement was not
limited to cargoes by the
Laura, but was to extend to such
other vessels as Leach might take up for the purpose.
From San Francisco, Leach sailed in the
Laura to
Talcuhana, where he saw one of the firm of Loring & Co., who
gave him a credit for $10,000 to buy a cargo there. He purchased
part of a cargo, but, not being able to complete it, went to
Valparaiso, where he arrived in May, 1851. He then informed Loring
& Co. of his arrangement with Flint, Peabody & Co., and
they agreed to advance him funds to enable him to carry the
arrangement into effect -- to be reimbursed by remittances from San
Francisco, with five percent commission and one percent a month for
interest. He accordingly left the vessel, putting Easton, his mate,
in command, and Loring & Co. purchased the residue of the cargo
for the
Laura, charging its cost to the joint account of
Leach, and Flint, Peabody & Co., and the
Laura sailed
in May, 1851, for San Francisco. She returned in ballast to
Valparaiso in March, 1852, and at that time the principal bills for
repairs and supplies, claimed in this case, were incurred. In
March, 1852, the
Laura again sailed, under Easton's
command, for San Francisco via Peyta, where she touched to complete
her cargo, and Easton there drew a bill on Loring & Co. to
reimburse advances made to him in that port -- partly to pay for
cargo purchased there and partly to pay for supplies and port
charges.
The
Laura returned to San Francisco in September, 1852,
where she was taken possession of by Captain Weston, who had been
sent there by the owners to bring her home. The owners gave no
consent to the above-described proceedings of Leach in respect to
the use and employment of the barque. From the time when Leach left
the command of the
Laura in May, 1851, he remained in
Valparaiso, and by means of funds furnished by Loring & Co.,
and with their assistance, he purchased and made six shipments of
cargoes by vessels other than the
Laura under his
arrangement with Flint, Peabody & Co., and Loring & Co. He
had a desk in the counting house of Loring & Co., and there
transacted his business.
Setting aside all the special facts of this case and viewing
it
Page 60 U. S. 28
only as an ordinary transaction by which the master of an
American vessel procured repairs and supplies and advances of money
to pay for repairs and supplies in a foreign port, the first
question which arises is whether he had power to hypothecate the
vessel as a security for their payment otherwise than by a bottomry
bond, which must make the payment dependent on the arrival of the
vessel and creates no personal liability of the owners.
We understand it to be definitely settled by the cases of
Stainbank v. Fleming, 6 Eng.L. & Eq. 412, decided by
the Court of Common Pleas in 1851, and
Stainbank v.
Shephard, 20 Eng.L. & Eq. 547, on writ of error in the
Exchequer Chamber, so late as 1853, that by the law of England the
master of a ship has not power to create a lien on the vessel as
security for the payment for repairs and supplies obtained in a
foreign port, save by a bottomry bond; that he can only pledge his
own credit and that of his owners, but cannot, by any act of his,
give the creditor security on the vessel, while at the same time
the personal liability of the owners continues. Neither of those
learned courts considered -- perhaps there was no occasion for them
to consider (
Pope v. Nickerson, 3 Story 465) -- what
should be the effect in an English tribunal of the law of the place
where the repairs and supplies were obtained if that law tacitly
created a lien on the vessel.
See Story's Con. of laws, ยง
322 b, 401-403. These decisions rest merely upon the want of
authority in the master, according to the law of England, to create
by his own act an absolute hypothecation of the vessel as security
for a loan. But the maritime law of the United States is settled
otherwise -- in harmony with the ancient and general maritime law
of the commercial world. The master of a vessel of the United
States, being in a foreign port, has power, in a case of necessity,
to hypothecate the vessel and also to bind himself and the owners
personally for repairs and supplies, and he does so without any
express hypothecation when, in a case of necessity, he obtains them
on the credit of the vessel without a bottomry bond.
The Ship General
Smith, 4 Wheat. 488;
Peyroux v.
Howard, 7 Pet. 324,
32 U. S. 341;
The Virgin, 8
Pet. 538;
The Nestor, 1 Story 73;
The Chusan, 2
Story 455;
The Phoebe, Ware 263;
Davis v. Child,
Daveis 12, 71;
The William and Emeline, 1 Blatch. &
How. 66;
Davis v. A New Brig, Gilpin's 487;
Sarchet v.
Davis, Carabbe 185.
It is not material whether the hypothecation is made directly to
the furnishers of repairs and supplies or to one who lends money on
the credit of the vessel, in a case of necessity, to pay such
furnishers. "Through all time," says Valin,
"by the
Page 60 U. S. 29
use and custom of the seas it has been allowable for the master
to borrow money, on bottomry or otherwise, upon the hull and keel
of the vessel for repairs, provisions, and other necessaries, to
enable him to continue the voyage,"
Com. on Art. 19, Ord. of 1681, and this assertion rests upon
sufficient authority. The Roman law,
de exercitoria
actione, D. 14, 1, authorized a simple loan, and does not
confine the master to borrow on bottomry. The Consulat del Mare,
ch. 104, 105, 236, the laws of Wisby, art. 13, the laws of Oleron,
art. 1, Le Guidon, ch. v, art. 33, the French ordinance of 1681,
art. 19, as well as the present French code de commerce, art. 234,
concur in allowing the master to contract a simple loan, in a case
of necessity, binding on the vessel. A difference of opinion exists
between Valin and Emerigon concerning the power of the master also
to bind the owner to accept bills of exchange for the sum borrowed,
but they concur in opinion that the master has power to contract a
loan to pay for repairs and supplies, and to give what we term a
lien on the ship as security in a case of necessity.
See
Valin's Com., art. 19; Emerigon's Con. a la Grope, ch. 4, sec. 11;
vol. 2, 484 &c. In another place, ch. 12, sec. 4, Emerigon
observes, "It matters little whether one has lent money or
furnished materials." The older as well as the more recent
commentators are of the same opinion. Kuricke 765; Loccenius, lib.
3, ch. 7, n. 6; Stypmannus, 417, n. 107; Boulay Paty Cours de
Droit, Com. tit. 1, sec. 2, vol. 1, 39, and tit. 4, sec. 14, vol.
1, 151-153; Pardessus Droit Com., vol. 3, n. 631, 644, 660;
Pardessus Col., vol. 2, 225, note. The subject has been elaborately
examined by Judge Ware in
Davis v. Child, Daveis 75, and
we are satisfied he arrived at the correct result.
Nor do we think the fact that the master was charterer and owner
pro hac vice necessarily deprived him of this power. It is
true it does not exist in a place where the owner is present.
The St. Jago de
Cuba, 9 Wheat. 409. But this doctrine cannot be
safely extended to the case of an owner
pro hac vice in
command of the vessel. Practically this special ownership leaves
the enterprise subject to the same necessities as if the master
were master merely, and not charterer, and the maritime law gives
him the same power to borrow to meet that necessity as if he were
not charterer. The Consulat de la Mer, ch. 289, 2 Par. Col., 337,
has provided for the very case, for it makes the interest of the
general owner responsible for the contracts of the master who has
received the vessel
"en commande," and one species of this
contract was what we should term "a lay" -- that is, a
participation in profits.
Vide
Page 60 U. S. 30
2 Par.Col., 186, note 3; 52, note 1; 49, note 4, and the
chapters there referred to.
It is true the master cannot bind the general owners personally
for supplies which he, as charterer, was to furnish.
Webb v.
Pierce, 1 Curtis 110. Neither could he bind them beyond the
value of their shares in the vessel under the ancient maritime law.
Consulat, ch. 34, 239, and Pardessus' note, vol. 2, 225. Emerigon
is of opinion that the effect of the French ordinance is the same.
Con. a la Grope, ch. 4, sec. 11. In our law, if the master is the
agent of the owners, his contracts are obligatory on them
personally. When he acts on his own account, he does not create any
obligation on them. But it does not follow that he may not bind the
vessel. In
Hickox v.
Buckingham, 18 How. 182, it was held that contracts
of affreightment entered into by the master within the scope of his
apparent authority as master bind the vessel to the merchandise for
the performance of such contracts wholly irrespective of the
ownership of the vessel, and whether the master be the agent of the
general or special owner -- and this upon the principle that the
general owner must be presumed to consent, when he lets the vessel,
that the master may make such contracts, which operate as a tacit
hypothecation of the vessel. And so in this case, we think, the
general owners must be taken to have consented that if a case of
necessity should arise in the course of any voyages which the
master was carrying on for the joint benefit of themselves and
himself, he might obtain on the credit of the vessel such supplies
and repairs as should be needful to enable him to continue the
joint adventure. This presumption of consent by the general owner
is entertained by the law from the actual circumstances of the case
and from considerations of the convenience and necessities of the
commercial world.
But the limitation of the authority of the master to cases of
necessity, not only of repairs and supplies but of credit to obtain
them, and the requirement that the lender or furnisher should see
to it, that apparently such a case of necessity exists are as
ancient and well established as the authority itself.
In some of the old sea laws, they are declared in express terms,
as they were in the Roman law:
aliquam diligentiam in ea re
creditorem debere preaestare, D. 14, 1, 7;
navis in ea
causa fuisset ut refici deberet, D. 14, 1, 7. And in the
Consulat del Mare, ch. 107, "But the merchant should assure himself
that what he lends is destined for the use of the ship, and that it
is necessary for that object."
A reference to the other codes cited above will show that a case
of necessity was uniformly required, and the commentators
Page 60 U. S. 31
all agree that if one lend money to a master knowing he has not
need to borrow, he does not act in good faith, and the loan does
not oblige the owner. Valin, art. 19; Emerigon, Con. a la Grope,
ch. 4, sec. 8; and the older commentators cited by him. Boulay Paty
Cours de Droit Com., tit. I, sec. 2, tit. IV, sec. 14;
and
see the authorities cited by him in note 1, 153.
To constitute a case of apparent necessity, not only must the
repairs and supplies be needful, but it must be apparently
necessary for the master to have a credit, to procure them. If the
master has funds of his own which he ought to apply to purchase the
supplies which he is bound by the contract of hiring to furnish
himself, and if he has funds of the owners which he ought to apply
to pay for the repairs, then no case of actual necessity to have a
credit exists. And if the lender known these facts or has the means
by the use of due diligence to ascertain them, then no case of
apparent necessity exists to have a credit, and the act of the
master in procuring a credit does not bind the interest of the
general owners in the vessel.
We now come to the application of these principles to the case
at bar.
The freight money earned by the
Laura was applicable
and ought to have been applied by the master to the necessities of
the vessel, the one-half, after deducting port charges, which
belonged to himself should have been applied to pay the wages of
the crew and obtain supplies for the vessel -- the other half,
which belonged to the owners, to paying for necessary repairs.
The amount of this freight money actually earned and received
was about $12,000. Besides this, the
Laura had made two
voyages to San Francisco, with cargoes belonging to Leach and to
him and Flint, Peabody & Co., before the bills now in question
were incurred. We hesitate to declare that a master who takes a
vessel on "a lay" can use it to carry cargoes of his own. The
practical difference to the owners is that there can be no agreed
rates of freight and no such security on the cargo for its payment
as the marine law ordinarily provides and as the owners may be
reasonably considered to contemplate when they let the vessel.
Gracie v.
Palmer, 8 Wheat. 605. But this point has not been
adjudicated on by the courts, nor does this case furnish any
evidence of what the usage is in this particular. Waiving a
decision of this question, it is at all events clear the vessel
earns for the owners a reasonable freight by carrying cargo of the
master, and, according to the evidence in this case, that
reasonable freight must have been
Page 60 U. S. 32
set down for each of the two voyages on which the cargo of the
master was carried, at the sum of $7,000, that being the sum earned
on the preceding voyage between the same ports and there being no
evidence before us of a change in the price of freights in the
intermediate periods, so that when these expenses now in question
were incurred, the master had received in money, as freight,
$12,000, and must be taken to have received, in the enhanced value
of his own merchandise, through its carriage to San Francisco,
$14,000 more. The amount previously expended by him for repairs and
supplies at Valparaiso does not appear to have exceeded $3,000. The
amount expended at San Francisco does not appear, but there is no
reason to suppose it was considerable.
In July, 1850, Loring & Co. received from Leach his funds,
supplied him with credit and purchased a cargo for him. In May,
1851, they made themselves parties to an arrangement under which
Leach was to quit the command of the vessel and become a merchant
resident at Valparaiso. Whether they did or did not know Leach had
the vessel on a lay, this was obviously wrong as respected the
owners, for though, under a lay, the master is owner
pro hac
vice, yet there is a personal confidence reposed in him as
master which he cannot delegate to another except in case of
necessity. Before the credit now in question was given by Loring
& Co., they not only had notice that Leach had wrongfully
deserted the command of the vessel, and had diverted the freight
which the vessel had earned and ought to have earned into his
business as a merchant, but they had actually assisted him to do so
by receiving freight money and mingling it with other funds in
their hands, out of which and their own funds they made advances to
enable him to pay for cargoes, and they acted as his agents in
their purchase, and they had, moreover, profited largely by so
doing, charging high rates of interest as well as commissions.
It should be added that the owners have received nothing for
their part of the earnings of their vessel during all these
voyages, for though, since his return to this country, Leach has
rendered his accounts to the owners, they refused to settle them as
rendered, and Leach testifies he has not the means to pay any
balance due to them.
In such a state of facts, we are of opinion Loring & Co. had
no right to lend Leach money or furnish him with supplies on the
credit of the ship, and cannot be taken to have done so.
Our opinion is that inasmuch as the freight money earned by the
vessel was sufficient to pay for all the needful repairs and
supplies, and might have been commanded for that use if they had
not been wrongfully diverted, no case of actual
Page 60 U. S. 33
necessity to encumber the vessel existed, and as Loring &
Co. not only knew this, but aided Leach to divert the freight money
to other objects, they obtained no lien on the vessel for their
advances.
The cause must be remanded with directions to dismiss the
libel with costs.
MR. CHIEF JUSTICE TANEY, MR. JUSTICE McLEAN, and MR. JUSTICE
WAYNE dissented, and MR. JUSTICE McLEAN and Mr. MR. JUSTICE WAYNE
concurred with THE CHIEF JUSTICE in the following dissenting
opinion.
MR. CHIEF JUSTICE TANEY dissenting.
I dissent from the judgment of the Court in this case, and
adhere to the opinion I gave at the circuit.
The principal question is whether certain repairs and supplies
furnished to the barque
Laura, of Plymouth, in the State
of Massachusetts, while she was in the port of Valparaiso, in
Chili, in February and March, 1852, are a lien upon the vessel.
The appellants are citizens of Massachusetts, and at the time of
making and furnishing these repairs and supplies and until and
after this libel was filed, were the owners of the barque. She was
built for them at Newburyport, under the superintendence of a
certain Phineas Leach, who was by profession a mariner. After the
vessel was completed, she was placed under his command as master,
and in the year 1847 he and the appellants agreed that he should
sail the vessel on what, in the New England ship-owning states, is
familiarly called "a lay" -- that is to say, he was to victual and
man her, pay one-half the port charges, and be entitled to one-half
of the freights or earnings. This is the contract, as stated by
Leach in his testimony. No written contract is produced. Indeed,
contracts of this description, it would seem, are so well known and
understood in the states above mentioned that they are often made
orally, and not in writing. And when the owners agree with a
mariner that he shall sail the vessel on "a lay," both parties
understand that the mariner is to take the command of her as
master, to victual and man her and pay half the port charges, the
owner to keep the vessel in repair and the freight and earnings to
be equally divided between them. Upon a contract of this kind, the
vessel, during its continuance, is under the exclusive control of
the master as respects her voyages and employment. He alone has the
right to determine what voyages he will undertake, what cargo he
will carry, upon what terms, and to
Page 60 U. S. 34
what ports he will sail in search of freight. His share of the
earnings of the vessel are his wages, and he receives no other
compensation for his services as master.
Before I proceed to state the facts out of which this
controversy has arisen, it is proper to say that Leach states in
his testimony that, in addition to the contract above mentioned, it
was agreed between the appellants and himself that he should have
the right to become a part owner of the vessel to the amount of
one-eighth whenever he paid for it. But he never paid anything on
this account, and never, therefore, had any interest as part owner,
and, upon his return to Plymouth in 1852, as hereinafter mentioned,
when his connection with the
Laura ceased, this contract
was cancelled. It was a written contract, but whether it was a part
of his contract to sail the vessel upon "a lay" is not stated in
the testimony.
As Leach never became part owner, his authority over the vessel
was derived altogether from his contract to sail her upon the terms
above mentioned. That contract, as stated by him, was indefinite as
to its duration. No particular time was fixed for its termination,
nor the happening of any particular event. And it was during the
continuance of this contract that the voyages were made and the
acts done which have given rise to this controversy.
The material facts in the case are derived mainly from the
testimony of Leach, who was produced as a witness by the owners,
who are the appellants, and it requires a close and careful
scrutiny to understand the bearing of different portions of his
testimony upon the different points raised in the argument. The
examination itself, under the commission to take testimony, which
was executed at Boston, is singularly involved and confused, and
the answers, I regret to say, often showing a disposition to
prevaricate and a desire to make the best case the witness could
for the owners, and against the libellants.
His testimony begins by describing several voyages which he made
in the year 1849, which are not material to the matter in issue,
until he comes to the one from Rio to Valparaiso. This was his
first voyage to the Pacific, and he arrived at Valparaiso in
November, 1849, with a cargo consigned to Loring & Co., the
libellants. This company was composed of citizens of Massachusetts,
domiciled at Valparaiso for the purposes of commerce. In December,
1849, he sailed from Valparaiso to San Francisco with a cargo on
freight, the freight amounting to about seven thousand dollars.
Being unable to procure a cargo on freight at San Francisco, he
sailed for Talcahuana
Page 60 U. S. 35
in ballast and, no freight offering at that place, he sailed for
Maule in ballast, but was prevented from entering the port by bad
weather and a bad bar, and proceeded to Valparaiso. He arrived
there early in July, 1850. While there, he obtained advances from
Loring & Co. which enabled him to purchase a cargo for the
Laura on his own account, with which he sailed for San
Francisco, where he arrived in November, 1850.
While he was in San Francisco, he made an arrangement with
Flint, Peabody & Co., of that place, by which, upon his return
to Chili, he was to purchase cargoes on joint account, and ship or
consign them to that house at San Francisco. He was to purchase
cargoes by means of bills drawn on them, and they were to honor his
drafts. There was no limit as to the time, but this agreement was
conditional, and was to depend upon the ability of Leach to make
arrangements in Chili by which he could raise money on those drafts
to purchase the cargoes, and if he succeeded in making those
arrangements, he was to remain in Chili to make the purchases. The
arrangement was not confined to cargoes by the
Laura, but
he was to buy and ship according to his judgment.
When he left San Francisco, he again proceeded to Talcahuana in
ballast, where he arrived in February, 1851. He met there Mr.
Bowen, one of the firm of Loring & Co., and told him that he
wanted another cargo but had not money to buy it, and Bowen
thereupon gave him a letter of credit upon his house at Valparaiso
by which he was authorized to draw on them for ten thousand dollars
payable eight days after sight. Being unable to complete his cargo
at Talcahuana, he proceeded to Valparaiso, where he arrived in the
month of April or May following, and obtained the balance of his
cargo by the aid of further advances from Loring & Co. He then
mentioned to them his arrangement with Flint, Peabody & Co.,
and asked if Loring & Co. would give him facilities in the way
of funds to carry out this arrangement. They agreed to advance the
funds upon an interest account with him, charging five percent for
advances and one percent a month for interest, and they were to be
paid by remittances from San Francisco without drawing bills. Leach
acceded to this arrangement and directed them to charge the cargo
then on board the
Laura at Valparaiso to the joint account
of Flint, Peabody & Co., and himself, Leach. He then, as he
says, "put the mate, Reuben S. Easton, in as master" and sent him
to San Francisco, Leach remaining at Valparaiso. This was in May,
1851, and he remained there until March, 1852, carrying on and
superintending those transactions.
Page 60 U. S. 36
During this period he engaged extensively in mercantile
business, shipping cargoes by other vessels as well as the one by
the
Laura and obtaining the means of purchasing them by
the arrangements he had made with Loring & Co., as hereinbefore
stated, and he had a desk in their counting house at which he
transacted his business.
The
Laura did not return again to Valparaiso until
February, 1852. It was then found that she needed repairs and
supplies to a large amount to fit her for another voyage, and Leach
also wanted funds to purchase another cargo for her. He had at that
time, it seems, determined to return to Plymouth, but before he did
so he wished to dispatch the
Laura, under the command of
Easton, on a voyage to Peyta and Panama with a cargo purchased on
his own account. He had no funds for either purpose. He states that
he had but $500, and this, it appears, he needed for his personal
expenses, and the repairs were made and the supplies furnished for
the vessel by Loring & Co. at his request to the amount of
$2,707.69. Leach states that they were necessary, and made and
furnished with economy; that he was himself on board,
superintending and directing them; that Easton was also on board
assisting him, but had nothing to do with ordering or directing
them. He merely executed Leach's orders. The cargo was likewise
purchased and paid for by Loring & Co. for Leach and at his
request.
The repairs were made and the supplies furnished in the latter
part of February and early part of March, 1852, and the cargo put
on board immediately afterwards. The invoice is dated Valparaiso,
March 18, and is headed
"Invoice of sundries purchased and shipped by Loring & Co.,
on board the barque
Laura, for Peyta and Panama, on
account and risk of Capt. Phineas Leach, consigned to his order,
for sales and returns to Loring & Co.,"
the aggregate amount being $5,779.81. The vessel sailed, as soon
as the cargo was on board, under the command of Easton. And on the
20th of March two accounts were stated by Loring & Co. -- one
for the repairs and supplies to the
Laura and the other
their private or personal account against Leach, both of which were
signed by Leach on that day with a written admission that they were
correct.
The first mentioned of these accounts is headed, "Barque
Laura and owners to Loring & Co., Dr.," and states the
particular items of repairs and supplies, amounting, as before
mentioned, in the aggregate, to $2,707.69. This account is the
matter now in dispute. The other is headed, "Dr., Capt. P. Leach in
account with Loring & Co. to 20th of March, 1852," showing a
balance due from Leach of $8,527.69. Among other
Page 60 U. S. 37
items, he is charged in this account with the amount of the
account for repairs and supplies, and this item is charged thus --
"
our ac. with barque Laura" -- and he is also charged with
the amount of the invoice above mentioned thus -- "our invoice
sundries for
Laura due April 12, 1852" -- showing that the
charge for the repairs and supplies was always kept separate and
distinct from Leach's personal account.
On the day these two separate accounts were adjusted and signed
by the parties or in a day or two afterwards, Leach left Valparaiso
for Panama, and from thence proceeded home. He states that he
arrived at Boston on the 20th of April following, and it appears by
the documents in evidence that on the 9th of July next after his
return, the appellants agreed with Francis H. Weston that he should
proceed to Panama, or wherever the vessel was lying, and assume the
command of her as master, and after fulfilling any engagement she
might be under, should proceed with her for a load of guano on
freight, or any other freight that could be obtained, to an
Atlantic port. Weston proceeded accordingly, and arrived at
Valparaiso in September. The
Laura arrived there about a
fortnight afterwards, when he assumed the command and Easton left
her.
In the execution of his orders from the owners, Weston proceeded
on the voyage directed by them, and then brought the vessel and
cargo to Baltimore, where he arrived in June, 1853, and immediately
after his arrival she was arrested upon the libel now under
consideration.
This narrative of the facts in the case is necessary in order to
understand how the questions discussed at the bar have arisen.
There are other circumstances in evidence relating to different
points which it will be material to advert to more particularly
hereafter.
As I have already said, the principal matter is dispute is
whether the repairs and supplies furnished to the barque in the
port of Valparaiso, as hereinbefore mentioned, in February and
March, 1852, were a lien upon the vessel at the time this libel was
filed.
In deciding this question, the first point to be considered is
in what relation did Leach stand to the vessel while he was sailing
her under this contract? Was he the owner for the time? And in
determining the legal effect and operation of contracts made by
him, are they to be regarded as the contracts of the owner or the
contracts of the master?
This is a question of the highest importance to the commercial
interests of this country. It is well known that almost the whole
of our immense coasting trade is carried on by vessels owned in the
northeastern states of the Union, and the far
Page 60 U. S. 38
greater part of them are sailing under contracts like this. And
upon our coast, stormy and dangerous as it is at certain seasons of
the year, very serious damage is often sustained by these vessels,
and heavy amounts frequently required and obtained in the ports of
other states for repairs and supplies to enable them to proceed on
their voyages.
Now if Leach is to be regarded as owner for the time when he was
sailing the
Laura under the agreement, then by the
maritime law the repairs and supplies furnished at his request are
presumed to have been furnished upon his personal credit, unless
the contrary appears; and in that view of the subject, Loring &
Co. have not, and never had, any lien upon the vessel; and the
libel against her cannot be maintained. But if, on the contrary,
Leach is to be regarded as master and as making the contract by
virtue of his authority over the barque in that character, then
these repairs and supplies in a foreign port, if necessary to
enable the vessel to proceed, are presumed to have been made on the
credit of the vessel, unless the contrary appears, as well as on
the credit of the owners and Leach, and in this aspect of the case,
Loring & Co. had a lien upon her which they may enforce in this
proceeding unless it has been waived or discharged.
These are the established principles of maritime law in this
country, as heretofore recognized and administered in the courts of
the United States. And I do not deem it necessary to refer to
English cases or to the decrees or doctrines in the different
nations on the continent of Europe which have been cited in the
argument, because I consider the rule as I have stated it to be
conclusively settled in this country by an unbroken series of
decisions in this Court and at the circuits. The case of
The General
Smith, 4 Wheat. 443;
The
St. Jago de Cuba, 9 Wheat. 416, and the case of
Ramsey v.
Allegre, 12 Wheat. 611, explained and commented on
in the case of
Andrews v.
Wall, 3 How. 573, may be regarded as the leading
cases on this subject.
The case before us is one of the more interest, because it is
the first in which the construction and legal effect of these
contracts for sailing on a "lay" has come up for decision in this
Court. They are, as I have said, peculiar to a particular portion
of the Union, and are scarcely ever to be found in the maritime
contracts of any other part of the commercial world. They are also
comparatively modern in their use. And if it is held that a person
furnishing necessary repairs and supplies in a foreign port to a
vessel sailing under a contract of this kind has not a remedy
against the owner, and also a lien on the vessel for such
provisions and supplies, as well as for repairs
Page 60 U. S. 39
to the vessel -- although they are both furnished at the request
of a master who is without funds, and has no other means of
obtaining them -- then this class of cases will form an exception
to the general maritime code of the United States, to which vessels
belonging to the ports of other states, and sailing under the usual
contract with the master, for certain wages, are subjected, and the
parties making the repairs or furnishing the supplies will be
deprived of the securities to which they have heretofore supposed
themselves entitled and upon which they have mainly relied, for the
personal responsibility of the master, after he is suffered to
leave the port, is most commonly of very little value. And it would
exempt the shipowners in one portion of the United States from the
liabilities and burdens imposed upon those of other states merely
upon the ground that in the one, the owner compensates his captain
by allowing him a share of the net amount of the freight earned by
the vessel, and in the other by fixed and certain wages. For this,
in truth, is the only difference between vessels sailing under a
"lay" and those sailing under the usual and customary contract
between the owner and master.
In making the inquiry whether Leach was owner while sailing
under this contract, we shall find few if any cases in the English
decisions to assist us. For contracts of this kind, as I have
already said, are hardly if ever used there. And I can find no case
where the question arose as to who was owner for voyage in which
the contract is not clearly distinguishable from the one before us.
And in all of the cases in which it has been held that the general
owners were not responsible it will be found that, by the terms of
the contract, the entire and exclusive possession and control of
the vessel was transferred for a certain time, or a particular
voyage or voyages, and where the general owner, during the time
stipulated, had no right to exercise any act of ownership over her.
In other words, they are cases in which the court held that the
vessel was let or demised to the party for the time, so as to vest
the right of property in the charterer, leaving in the general
owners a reversionary interest, subject to the particular interest
so let or demised. And whether this is the case or not, and whether
there is a special and exclusive property in the charterer, does
not depend upon any particular form of words or any particular
facts. The general rule in relation to the construction of such
contracts is laid down in Abb. on Ship. 61, 7th Am. Ed., in the
following words, as the result of the various decisions to which he
refers:
"From these cases he says it appears that the question whether
or not the possession of a vessel passes out of the owner or
charterer depends upon no single fact or
Page 60 U. S. 40
expression, but upon the whole of the language of the contract,
as applicable to its attendant circumstances."
But although we find no case in the English reports that can be
regarded as in point, contracts like the one before us, and indeed
in the same words, have on several occasions been brought before
the Circuit Court of the United States in the First Circuit, where
they have been carefully and deliberately considered by the learned
judge who recently presided in that circuit. And it has been
uniformly held in that court by Mr. Justice Story that the master
sailing a vessel under such a contract as this is not the exclusive
owner for the voyage, and if regarded as owner at all, is a
qualified and limited one; and his character and authority, and
duty as master, is not merged in it, and that his contracts for
repairs and supplies in a foreign port are made in that character,
and are a lien upon the vessel.
One of these contracts came before him in the case of
The
Nestor, reported in 1 Sum. 73, and was decided in 1831. The
claim was for a cable furnished to the vessel at Alexandria, in the
District of Columbia, at the request of the master. The vessel
belonged to Portland, in the State of Maine. And the court held
that the vessel was liable unless it was shown that the credit was
exclusively given to the master. It is true that the article
furnished in that case was for the use of the brig, which the owner
was bound to keep in repair. But the principle decided applies
directly to the case before us -- that is, that the master, under
one of these contracts, is not owner for the voyage so far as to
exclude his character and authority as captain. And that his
contracts for repairs and supplies are presumed to be made in the
latter character and to create the usual maritime lien upon the
vessel, and the usual liability of the owner, unless the
presumption is repelled by proof that the credit was given to him.
The whole subject is fully discussed in this case, and such will be
found upon a careful examination the result of the opinion.
The case of
The Cassius, 2 Story's 81, was a contract
of the same description, between the master and owners, and in that
case the rights of the master and the responsibility of the owners
for his acts in a foreign port were fully considered, and the
decision turned upon the question whether, under one of these
contracts, the master was the owner for the time. And the learned
judge, speaking of the case of
Taggart v. Loring, 16 Mass.
336, says:
"That case is distinguishable in its actual circumstances from
the present. The argument in that case does not appear from the
statements of the report to have been identical with the present.
And if it were, I must say that I should have some difficulty in
acceding to the authority of that
Page 60 U. S. 41
case, if it meant to establish that the master had an exclusive
special ownership in the ship for the voyage. I should rather
incline to the opinion that if he had any ownership at all for the
voyage, it was in common with the general owners."
The contract in that case, upon which the libel was filed, was
executed by him as master, and the court held that it bound the
vessel.
Indeed, I do not see how, upon any fair interpretation of the
terms of these contracts, a different construction could be given
to them. There are no words in them which import that it is the
intention of the owners to transfer the exclusive right of property
in the vessel to the master for the time, nor anything in the
character of the contract from which it can be implied -- on the
contrary, the right of possession remains necessarily in the
owners. For they are to keep the ship in repair, and the master is
only to man and victual her. The owners have therefore the right,
while the contract continues, to take exclusive possession of her,
from time to time, for the purpose of putting her in proper repair
and to have her properly equipped so that she may always be
seaworthy and their property not be imprudently exposed to danger.
And whatever Leach did or was authorized to do in this respect was
necessarily done as master, holding the possession for the time the
repairs were making -- not as owner of the vessel but as agent for
the owners by virtue of his authority as master. And the owners, in
a case like this, may, as in the case of an ordinary captain upon
certain wages, displace him from the command whenever they think
proper -- being bound, however, in like manner to fulfill the
engagements into which he had lawfully entered.
Moreover he had no connection with the vessel except under his
contract to sail her in the character of captain or master. He had
no authority over her, nor any right of possession, nor any power
to direct her voyages or movements, except in this character. All
of his rights were inseparably connected with his official relation
to the vessel and depended upon it. The inducement to the contract
was the confidence which the owners reposed in his seamanship,
integrity, and capacity for business. It was a personal trust,
which he could not delegate or assign to another. It was to be
executed by himself, and the moment he ceased to be master, all
right of possession and all right to control her voyages and
movements ceased also. And if his right to the possession of the
barque, and to man and victual her, and contract for freights, and
to receive half her earnings, were all inseparably connected with
his official relation to the vessel as master and dependent upon
it, I cannot understand
Page 60 U. S. 42
how his contract for repairs and supplies can be said to be made
in any other character.
His relation to the vessel and his rights in and over her differ
in no material respect, in a contract of this kind, from that of a
master sailing in the ordinary mode upon fixed and certain wages
from one port to another, under the direction of the owner, to
carry or seek for freight. The only difference is that a larger
discretion as to the voyages to be undertaken is given to the
master, and he receives half the earnings instead of certain and
fixed wages. And I cannot perceive how these two circumstances can
give him any ownership of the vessel, or why the master's contracts
for repairs and supplies in a foreign port shall be a lien upon the
vessel in one case and not in the other. The fact that he is to
victual and man the vessel cannot of itself give a right of
property in her. It is undoubtedly a circumstance to be considered
in expounding these contracts, but nothing more. For the exclusive
right for the voyage may as well and legally be transferred where
the owners man and victual her as where it is done by the
charterer, provided the contract taken altogether shows that such
was the intention of the parties. It does not, as I have already
shown, depend upon any particular fact, but upon the entire
agreement. And I can see nothing in agreements of this kind, as was
said by Mr. Justice Story in the case of
The Cassius,
which indicates an intention to make the master the exclusive owner
during the voyages he might make, or that would justify the court
in giving it such a construction.
I am aware that in some or all of the states where these
contracts are usually made there are cases in the state courts in
which it has been held that in these contracts, the master is the
owner, and that his contracts made in the port of another state are
made in the character of owner, and not of master, and that an
action cannot be maintained upon them against the general
owners.
I shall not stop to examine these cases, because the question
here is not whether an action can be maintained against the owners
for these repairs and supplies, but whether they were a lien upon
the barque. I admit that I can perceive no distinction in principle
between the personal liability of the general owners and the
liability of the vessel. For whatever may be the rights and
liabilities of the master and owners as between themselves upon
their private contract, they cannot affect the rights of third
parties dealing with him in his character of master and furnishing
necessary repairs and supplies in a foreign port at his request.
They know him only as master and deal with him in that character.
And it is the rule of the
Page 60 U. S. 43
maritime law, as settled in my judgment by the decisions in the
courts of this country, that in a case of that kind, the owners
personally, as well as the vessel, are liable for the amount. But
if the owner is present and they are furnished to him, it is
equally well established that the credit is presumed to have been
given to him personally, and no lien on the vessel is implied. The
decisions in the state courts cannot, therefore, it would seem, be
reconciled to the decisions of the circuit court of the United
States hereinbefore referred to.
But however this may be, the implied lien on the vessel in cases
like the one before us has been maintained in the circuit court.
And as the question of maritime lien, with which we are now
dealing, belongs peculiarly to the admiralty courts, and the
paramount jurisdiction in such cases is vested in them by the
Constitution of the United States, it necessarily follows that it
must rest with them to interpret the contract and to determine
whether it created a lien or not, and how, and when, and against
whom, it can be enforced.
In the case of the barque
Chusan, 2 Story 462, he
says:
"The Constitution of the United States has declared that the
judicial power of the national government shall extend to all cases
of admiralty and maritime jurisdiction, and it is not competent for
the states, by local legislation, to enlarge or limit or narrow it.
In the exercise of this admiralty and maritime jurisdiction, the
courts of the United States are exclusively governed by the
legislation of Congress, and in the absence thereof by the general
principles of maritime law. The states have no right to prescribe
the rules by which the courts of the United States shall act, nor
the jurisprudence which they shall administer."
The opinions of the state tribunals to which I have referred are
certainly entitled to very high respect upon any question of law
that may come before them; yet the question before us is not one of
state law. It is a contract for maritime service, and belongs to
the admiralty courts of the United States. And the state decisions,
therefore, however highly we respect them, carry with them no
binding judicial authority when in conflict with the decisions of
the courts of the United States upon questions belonging to the
federal courts. And I the more firmly adhere to the doctrines of
the circuit court hereinbefore stated because, as I have already
said, I can see nothing in the terms of the contract or in its
character and objects that would justify a different construction.
In my opinion, therefore, Leach had no ownership in the
Laura, and in the contract in question exercised the
powers of master, and nothing more.
Such being, in my judgment, the meaning and legal effect
Page 60 U. S. 44
of the contract between the owners and Leach, the next question
to be considered is was he still master when these repairs and
supplies were furnished?
The appellants contend that if he was not owner, but only
master, while he was sailing the barque, he yet ceased to be master
when he remained at Valparaiso and placed the vessel under the
command of Easton, and that from that time Easton was the master,
and the contract of Leach for repairs and supplies would therefore
create no lien. Undoubtedly the conduct of Leach in this respect
was a violation of his duty to the owners if he acted without their
consent. He was to sail the vessel himself, and this personal trust
and confidence could not be transferred by him to another. Such a
transfer would be a breach of his contract and of his duty under
it. But that is a question between him and owners, and they might
displace him or not as they saw proper. The point here is did his
official relation as master cease when he engaged in commercial
pursuits and remained on shore at Valparaiso?
Certainly the misconduct of a captain while on a voyage or in a
foreign port does not
ipso facto deprive him of his
office. It would be a sufficient reason for the owners to dismiss
him, but in this case it is not pretended that he was dismissed or
suspended by them. No other person was appointed to the command
until after he had voluntarily surrendered it to the owners after
his return to Massachusetts in the spring of 1852. And these
supplies had been furnished, at his request, months before the new
master was appointed.
Nor did he abandon his official relation to the vessel while he
remained at Valparaiso, but, on the contrary, continued to hold
possession in person or by his agent and to exercise the rights and
authority of master according to the terms of his contract with the
owners. He continued to man and victual her, direct her voyages,
and receive the freights. Easton was paid by him, and not by the
owners; he acted under the direction of Leach as his agent and
subordinate, and not under the direction of the owners. He was not
even allowed to receive the freight, and when the supplies in
question were furnished, Leach was actually on board, in actual
command and Easton acting as his subordinate, under his orders. And
as Leach had no ownership whatever in the vessel, all of this must
have been done by him as master, and could have been done in no
other character, for if he had abandoned that official position,
and Easton was master, he had no authority over Easton, nor any
more right to interfere with him on the vessel than any other
stranger.
Nor is his absence from the vessel by any means incompatible
Page 60 U. S. 45
with this official relation and authority. It is not necessary
for the existence of such a relation and the exercise of such an
authority that he should always be on her deck. He may be absent
for a longer or shorter time and at a greater or lesser distance
without forfeiting his authority, and when once appointed master by
the owners, he continues master until displaced by them or he
himself surrenders the office. As respects a dismissal by the
owners, Mr. Justice Story says in the case of
The Tribune,
3 Sum. 149,
"Being once master, he must be deemed still to continue to hold
that character until some overt act or declaration of the owners
displaced him from the station."
And certainly there was no such act or declaration while Leach
continued in the counting house of Loring & Co. And as to Leach
himself, it is obvious from the facts above stated that he had not
resigned or surrendered the command.
It is said that Easton was master. By what authority was he
master? He was not agent of the owners; he was not appointed by
them, nor authorized by them to exercise any control over the ship.
Nor would they have been bound by his contracts if he had made any,
nor responsible for his acts. There were none of the relations and
trusts which exist between owners and master, for they had not
confided the ship to him and were not even responsible for his
wages, and if Leach was not master and authorized to bind the
vessel and owners by his contract, the vessel was sailing without
one and without any lawful authority from those to whom she
belonged. It is true, Leach says he appointed him master, but that
does not clothe him with the authority which the maritime law
annexes to that character unless Leach had lawful power to appoint
him. He might, no doubt, have properly sent him on the voyage and
placed the vessel under his command while he remained on shore if
the interest of the owners required or would justify it. And he
might, if he pleased, call him master or captain; but by whatever
name he chose to call him, he would be nothing more than his
subordinate and agent. He would not, in respect to the owners or
third persons, possess the authority of master.
The cases of
L'Arina v. Brig Exchange, Bee's Reports
198, and
Same v. Manwaring, 199, are directly in point on
this head. There, the party was appointed by the master as captain
and cleared the vessel as such at Havana, yet this appointment was
held by the court not to give him the legal relation of captain to
the vessel, nor displace the master appointed by the owners, and it
was held that the contract of the latter, within the scope of his
authority as master, was still binding upon the owners. The fact,
therefore, that Leach remained
Page 60 U. S. 46
on shore and sent the vessel upon different voyages under the
command of an agent appointed by him did not of itself displace
him; he was still master of the barque, with all the powers and
responsibilities which are attached to that character. And if the
fact that he remained on shore did not deprive him of his official
character, the circumstance that he was engaged during that time in
commercial pursuits cannot alter the case. It cannot make any
difference in this respect whether he remained idle or employed
himself in any particular pursuit.
But it is said that Leach was not only absent from the barque,
but he was employing her in violation of the orders of the owners,
who disapproved of his conduct and had directed him to bring the
vessel home, and that Loring & Co. knew it, and yet encouraged
and enabled him to go on in the violation of his duty, by large
advances of money. And it is insisted that as Loring & Co. were
aiding and encouraging him in this breach of duty, and the supplies
in question were furnished to enable him to persevere in it, they
were furnished in bad faith to the owners, and in a court of
admiralty acting upon equitable principles can create no obligation
upon them, nor any lien upon their vessel.
If the facts assumed were established by the testimony, I should
not dispute the law as above stated. But I think the fact that the
owners disapproved of his remaining on shore and engaging in
mercantile pursuits is not only not established, but, on the
contrary, the weight of the testimony is on the other side, and
notwithstanding the evasive and ambiguous answers of Leach, tends
strongly to prove that his conduct in this respect met their
approbation.
In examining the testimony in relation to this question of fact,
it is necessary, in order to see the force to which it is entitled,
to state it more minutely than I have done in the preceding part of
this opinion, and to note particularly the dates as given by the
witness.
The disapproval of the appellants is brought out by the
following question, put by the appellants, the owners:
"Was your remaining in the Pacific and trading with the
Laura done with the consent and approval of the
owners?"
To this question Leach simply answers,
"No, sir."
Upon the cross-examination upon behalf of the libellants, the
following interrogatories were put to him, to which he gave the
following answers:
"Question. When was their (the owners') dissent made known to
you? "
Page 60 U. S. 47
"Answer. I think it was the second time I was at Valparaiso,
which, I think, was in the latter part of 1849."
"Question. At what period did the owners take efficient steps to
displace you? at any period before Captain Weston was sent
out?"
"Answer. They did not take any efficient steps, any further than
to request me to come home."
These answers constitute the entire proof of disapproval and
dissent of the owners, of which so much has been said in the
argument and which has been so confidently assumed as a fact
proved.
It will be observed that the question put by the owners does not
point, and clearly was not intended to point, to any disapproval on
their part of his remaining on shore or engaging in trade at
Valparaiso. It relates altogether to the employment of the barque
in the Pacific, instead of the Atlantic. In fact, it could not have
related to his remaining on shore or engaging in trade, because the
notice of disapproval appears to have been given but once, and was
given and received while Leach was still sailing the vessel under
the "lay," and seeking and carrying freights, and before he had
purchased a single cargo for himself or absented himself from her
for a single voyage. It was never repeated, although he remained
nearly two years afterwards, engaged in commerce, and on shore in
the counting house of the libellants nearly half the time.
The fact is clearly established by Leach's answers to the
cross-interrogatories above given. It will be observed that in
these answers he says he thinks their disapprobation was made known
to him the second time he was at Valparaiso, which he thinks was in
the latter part of 1849. Now in the preceding part of his
examination he had stated positively that he arrived at Valparaiso
from Rio with a cargo on freight, consigned to Loring & Co., in
November, 1849, and arrived there the second time in July, 1850.
Without stopping to comment upon the hesitating language and the
vagueness and uncertainty of his answer in relation to a fact which
it is obvious, from the preceding part of his testimony, was
perfectly in his recollection, it is sufficient to say that, give
him either date, it is evident that the disapproval of the owners
had no connection with his mercantile pursuits, and pointed merely
to the employment of the
Laura in freighting voyages on
the Pacific, instead of the Atlantic, for if the notice was
received by him in 1849, it was before he had engaged in that
coasting trade, and must have been written by the owners in
consequence of information given them by Leach from Rio concerning
the freight he had obtained there for Valparaiso, and of his
intention to seek
Page 60 U. S. 48
freights on that coast, for this was his first voyage in the
Laura to the Pacific. He had not then engaged in the
coasting trade on that ocean, and had done nothing in that respect
for the owners to disapprove of. And if he did receive the notice,
as he says, in 1849 upon his arrival at Valparaiso, it must have
been a disapproval of what he informed them he proposed to do, not
of what he was doing or had done. Certainly it had no relation to
his trading on his own account, for there is not the slightest
evidence that he had any such design at that time nor for nearly a
year afterwards.
And if we take the other date the argument is equally strong,
for if he received it on that occasion, it must have been written
sometime before. And it was on his second visit to Valparaiso, in
July, 1850, that he for the first time engaged in mercantile
pursuits on his own account and obtained advances for that purpose
from Loring & Co. If the notice reached him at that time, and
before he commenced his commercial speculations, the dissent must
have applied to the place at which he had been seeking freights,
and not to his private speculations. Indeed, taking this as the
date of the receipt of the notice, the inference is almost
irresistible that the owners must have been apprised of his
intention to purchase cargoes on his own account and approved of
it, for he had been engaged, when he received this notice, in
seeking freights in the Pacific for about nine months. He had not,
it appears, been successful, and after his first cargo from
Valparaiso to San Francisco, he sailed most commonly from port to
port in ballast, or with very inconsiderable cargoes, and as Leach
was in constant correspondence with the owners, they were of course
apprised of his want of success, and would very naturally
disapprove of his remaining in the Pacific, where the earnings of
the vessel would give them very little for their share of the
freights. But this notice, as I have said, does not appear to have
been repeated. Leach does not pretend that any complaints of his
conduct were subsequently made by the owners, and the natural
inference is that having confidence in Leach's prudence and
judgment, when in reply to this communication they were apprised by
him of his determination to purchase cargoes on his own account for
the
Laura, and thus insure constant employment for her and
full freights, they were willing he should remain and carry out his
plan. And this conclusion is strengthened by the circumstance that
no measures were afterwards taken by the owners to compel or induce
him to return, and that he remained without further complaint,
engaged in these pursuits until he himself found them unprofitable
and determined to return home.
Page 60 U. S. 49
He is asked in one of the interrogatories: "At what period did
the owners take efficient steps to displace you? at any period
before Captain Weston was sent out?" And he answers: "They did not
take any efficient steps, any further than to request me to come
home." And in answer to another interrogatory, he says he did not
yield to their wishes, because he thought he had a right to remain
there if he chose. There was no order, therefore; no charge of
misconduct; no notice that they would put an end to the contract;
nothing more than a request which Leach did not comply with,
because he thought that while the owners suffered the contract to
continue, he had a right to select the theater of his operations
and to act upon his own judgment. And undoubtedly he was right in
this respect, unless the owners put an end to the contract, which
they might have done at any moment if they supposed him to be no
longer acting in the line of his duty. But whatever might have been
their opinion as to the soundness of his judgment in selecting the
Pacific instead of the Atlantic for the employment of the vessel,
when they requested him to return, they undoubtedly acquiesced in
his opinion when they received his answer declining to return, and
continued for nearly two years afterwards to sanction his conduct
by suffering him to remain there, receiving remittances from him
and paying his drafts and settling his account without making the
slightest objection to allow him one-half the freights, according
to the contract, for his services as master. And the charge of
taking the vessel to the Pacific and illegally detaining her there
for his own benefit and advantage was never heard of until payment
for the repairs and supplies furnished to their barque was made by
the libellants. And if such a defense had been founded in fact, it
would have been easy for the owners to prove it conclusively by
producing the correspondence between them and Leach. But no part of
it has been offered in evidence. The fair inference from the
testimony, therefore, is that they assented to his proceedings and
approved of his remaining after receiving his answer to the request
for his return.
But if the case were otherwise in this particular, and it had
been proved that Leach illegally and against their orders detained
the
Laura in the Pacific, I do not see how that would
affect the claim of the libellants unless in furnishing those
supplies they knowingly aided and abetted him in his breach of duty
to the owners. The argument is that they did knowingly aid and abet
him. But it would be a sufficient answer to it to say that no such
charge is made against them in the answer. It is made against
Leach, but there is not the slightest intimation that Loring &
Co. had any knowledge of it.
Page 60 U. S. 50
And as this defense is not taken in the answer, it cannot be
relied on here, even if there was evidence in the record which
would justify it.
But there is not the slightest evidence to prove it. On the
contrary, it appears by Leach's testimony that when he arrived at
Valparaiso with the cargo consigned to Loring & Co., he told
them upon what terms he was sailing the vessel and the deep
interest he had in her earnings, and thinks it probable he
mentioned the contingent right he had of purchasing one-eighth of
the vessel, if he could raise the money to pay for it. The fact
that he had been trusted with so much power over such a vessel as
the
Laura, and would even be received as a partner if he
could raise the money, naturally induced Loring & Co. to think
him worthy of confidence. And they appear to have aided him in
procuring freights while he confined himself to that business. They
evidently had no knowledge of any dissatisfaction on the part of
the owners, for Leach states positively that nobody but himself
knew of it. And when, therefore, he proposed to purchase cargoes on
his own account, which would give the
Laura constant
employment and full freights, they could have had no reason to
suppose that his owners disapproved of it. And when these supplies
were furnished, they had strong grounds for believing that his
conduct in this respect was known to the owners and met their
approbation, for they had then seen him for nearly two years
engaged in this business, during all that time in correspondence
with his owners and occasionally making remittances to them, and
drawing bills on them, as Leach himself states, which appear to
have been duly honored, and without the slightest token of
disapproval as far as Loring & Co. had an opportunity of
seeing. There was nothing to create suspicion or put them on
inquiry. The advances made to him were made in the regular course
of their business and at the usual rates for interest and
commission in that quarter of the world, and they had every reason
to believe that they were promoting the objects and advancing the
interests of the owners, as the advances made to Leach enabled him
to keep the
Laura constantly employed with full cargoes,
thereby earning large freights, of which the owners were entitled
to the one-half. Loring & Co. had no knowledge of the state of
his accounts with the owners, and no reason even for suspecting
that he did not remit to them their share of the freights or that
he improperly used or withheld it.
The case then upon the points already examined may be summed up
as follows:
1st. At the time these repairs were made and supplies
furnished,
Page 60 U. S. 51
Leach was in full possession of the barque, exercising his
authority as master under his contract with the owners hereinbefore
stated. 2d. He was recognized and paid as such by the owners. 3d.
He was dealt with as such by Loring & Co. in good faith,
without the slightest grounds for suspecting that the owners
disapproved of his conduct or had requested him to bring the vessel
home. 4th. The repairs and supplies were necessary to enable her to
go to sea, and she must have remained idle in the port if they had
not been furnished, and they were made and furnished with prudence
and economy, under Leach's own direction. 5th. He had no money
except the five hundred dollars hereinbefore mentioned, which he
needed for his personal expenses, and had no funds either of his
own or the owners within his reach with which he could make these
repairs or obtain the necessary supplies.
These facts appear to me to be conclusively established by
Leach's own testimony. And as it is admitted on all hands that the
repairs were made and the supplies furnished at his request and by
his order, it follows, from the decisions in this Court and at the
circuits to which I have already referred, that by the maritime
code of the United States, Loring & Co. obtained an implied
lien on the vessel for the amount, unless it can be shown that they
were furnished on the personal credit of Leach or some other
person.
An attempt has been made to offer such proof and to show that
the supplies were furnished upon the personal credit of Leach. But
it is an obvious failure. He is asked by them whether the repairs
and supplies were furnished upon his responsibility or the credit
of the vessel, or how otherwise. He answers, "I presume they were
furnished on my responsibility." And this is the whole and only
evidence offered by the appellants to show that they were furnished
on the personal credit of Leach, and not on that of the vessel or
owners. Certainly such evidence can hardly be sufficient to remove
the implied lien given by law. Whether the credit was given to him
was a question of fact. If the fact was so, he must have known it,
and could have sworn to it in direct terms. But instead of this, he
merely expresses an opinion in general terms, and gives no reason
for that opinion, and states no fact from which it might be
inferred that this opinion was well founded. The answer is -- in
truth, no evidence; it is but the opinion or conjecture of the
witness, and even if there was no evidence in the record to
contradict it, would leave the case upon the implied lien which the
law creates.
But it is directly in conflict with the written instruments
signed by the witness himself at the time of the transaction.
Page 60 U. S. 52
The account for those repairs and supplies is headed, as I have
already said, "Barque
Laura and owners, to Loring &
Co., Dr." It is signed by Leach, and admitted by him, in writing,
to be correct. He of course read the account, and was undoubtedly a
man of sufficient intelligence to understand the meaning of words.
And how could the barque and owners be debtors for those supplies
if they were furnished exclusively on the credit of Leach? How
could they be debtors to Loring & Co., unless they were
furnished on their credit?
It is true, Leach says he signed the account only for the
purpose of verifying the items. But this is evidently an
afterthought, for he admits by his signature not only the
correctness of the items, but the account itself -- that is, the
charge against the barque and owners, as well as the things
charged.
Besides, if his signature was intended merely to verify the
items, there was no necessity for this account. The items ought to
have been inserted in the other account, signed by him at the same
time, which contains the charges for which he was personally
liable, and his admission of that account would have been quite
sufficient to verify these items. And the fact that two accounts
were stated, and signed and admitted by him on the same day, the
one charging the repairs and supplies to the barque and owners and
the other charging him, as "Captain Phineas Leach," for other
articles properly chargeable to himself, shows that both parties
understood what they were about, and, to avoid future cavil, stated
their accounts against the respective debtors, according to their
mutual understanding at the time. And the insertion of the
aggregate amount for repairs and supplies in the account against
Leach, coupled with the account against the barque and owners,
proves conclusively that the parties intended to make no special
contract with Leach for those repairs and supplies, nor to take any
special hypothecation or bottomry on the vessel, but dealt with one
another upon the established rules of maritime law, which, in the
absence of any special contract, made the barque and owners, and
Leach himself, responsible for the amount.
In order to give some color to his statement that he presumes
they were furnished on his credit, he says that his credit was at
that time good. If he had shown that it was in fact good, it would
be no reason for presuming that Loring & Co. relied upon it and
waived the other securities to which they were entitled. But the
record shows that it was not good, and that Loring & Co., in
the advances they made to him at the same time for the purchase of
cargo on his private individual account, did not think it prudent
to rely altogether upon
Page 60 U. S. 53
his credit. For the heading of the invoice of the cargo
purchased upon that occasion, which I have already set forth in
full, expressly required that the sales and returns should be made
by the consignee to Loring & Co. And Leach admits that the
cargo was to be insured, and the loss, if any, to be paid to Loring
& Co. And from his own testimony, as well as the invoice, it is
evident that it was understood by the parties that the proceeds of
the cargo were to be remitted from Panama by the consignees to
Loring & Co. For he is asked by the libellants, "Was there not
an understanding that the proceeds should be remitted by your
consignees to Loring & Co.?", and he answers, "I don't know
that there was." But he is again pressed by the inquiry, "Will you
reflect and see if you cannot answer that question directly that
there was?", and he then answers, "There was no such understanding;
it might be understood; there was nothing promised." I give the
words of the witness, but I cannot be convinced by this nice
casuistry of Captain Leach, in distinguishing an understanding
between the parties from a promise, that his credit was still good
with Loring & Co., notwithstanding the evidence to the contrary
in the agreement in the heading of the invoice, and in the admitted
agreement in relation to the insurance. It certainly does not prove
it so high as to create a presumption that all other securities
were waived, from their confidence in the personal responsibility
of Leach; nor did his subsequent conduct show that he merited even
the confidence they did repose in him. For he went to Panama and
procured advances to himself, on account of the cargo, to the
amount of $2,100, and authorized large disbursements to be made by
his consignee to his agent, Easton, for the use of the
Laura, and proceeds to Massachusetts without returning to
Valparaiso, and after he came home, he drew on his consignees for
$375 more to pay Weston's expenses, who was sent out by the owners,
and during all that time rendered no account to Loring & Co.,
and left them under the impression that the proceeds would in good
time be remitted to them. It seems they were not aware of the
distinction which Leach took between the mutual understanding
between them and an actual and formal promise.
The point, therefore, taken by the owners that the repairs and
supplies were furnished on the personal credit of Leach cannot, in
my judgment, be maintained. And undoubtedly the justice of the case
is clearly with the libellants. The captain was without funds, and
his owners had none in Valparaiso, and the barque must have
remained in port a wasting hulk if the means had not been furnished
by Loring & Co. which enabled
Page 60 U. S. 54
her to sail. The owners have since received her, and now hold
her in their possession, increased in value by those repairs, which
enabled her to come home and which were made by the money of Loring
& Co. And they have also received the freights which those
repairs enabled her afterwards to earn under the command of Weston.
Justice as well as the principles of the law would seem to require
that those who have reaped the profit of the advances should repay
the party to whom they are indebted for their gains.
It remains to inquire whether the lien has been waived by the
delay in prosecuting it or the debt been satisfied in any other
way.
I shall dispose of those questions very briefly. For I am
sensible that the great importance and delicacy of the points
hereinbefore discussed have compelled me to extend this discussion
beyond the limits of an ordinary opinion in this Court.
In relation to the alleged waiver by the delay, the mere
statement of the evidence is an answer to the objection, and the
evidence is this: the repairs were made and the supplies furnished
in the spring of 1852. The barque returned to Valparaiso in the
November following, when Weston immediately assumed the command. He
was ordered by the owners to procure, if he could, a cargo of guano
and to bring the vessel to an Atlantic port. He did so, and he
arrived in Baltimore in the June following, and the vessel was
arrested on this libel a few days after her arrival.
The barque still belongs to the same owners. When Weston arrived
at Valparaiso to take the command, he had no money, and was obliged
to raise what he needed by a bill on his owners. At that time,
Loring & Co. had no reason to suppose that the owners would
refuse to pay this claim, and if they had then arrested the vessel,
it would have broken up the voyage upon which she was destined and
subjected the owners to heavy losses by her detention. And it
certainly ought not to be a matter of complaint on their part that
under such circumstances he did not arrest her, and took no
measures to enforce his claim, until he found that payment was
refused, and it is unnecessary to cite cases to prove that the
omission to arrest her at Valparaiso under such circumstances
cannot be regarded as a waiver of their lien upon any principle of
law. There was no unreasonable delay in notifying the owners of the
claim nor in filing the libel when they disputed it. The
Laura in the intervening time remained in the possession
and employment of the owners; no third party had become interested,
and the owners were greatly benefited
Page 60 U. S. 55
by the omission to arrest her until she arrived in the United
States.
It is said that Weston proves that nothing was said to him about
their account, and hence it is inferred that nothing was due on it,
or that it was not supposed by Loring & Co. to be a charge on
the
Laura. But it must be remembered that the house of
Loring & Co., with whom Leach dealt, had dissolved partnership
in the June preceding Weston's arrival, and a new one, with new
partners in it, established under the same name. It is true that
Mr. Atherton, a partner in the first firm, remained there and was
attending to their business. But the transactions of Weston were
with the new firm, and it would have been useless for Atherton to
present this claim to Weston unless he had determined to libel the
vessel. For as I have said, Weston had no money but what he
obtained from the new house of Loring & Co. for his bill on his
owners, and this Atherton knew. Besides, the proceeds of her cargo
shipped to Peyta and Panama, as hereinbefore mentioned, at the time
these repairs and supplies were furnished, were to be paid to
Loring & Co., and when Weston was at Valparaiso, the account of
these proceeds had not been received. It was most probably supposed
by Loring & Co. that they might prove sufficient to pay their
claim against Leach, including these supplies. And this, it
appears, would have been the case if Leach had not improperly
converted a large portion of them to his own use and to satisfy the
claims of his owners against him. Justice therefore required Loring
& Co. to await the result. They did wait, and did receive some
money from this source, but not enough to pay even the advances for
the cargo itself.
This is admitted in the argument. But it is said the money
received should be first applied to extinguish the lien, first
because there was a security bound for that item -- that is, the
vessel -- and secondly because it is the first item in the
account.
Now the conclusive answer to this objection is that if no
specific application was made by either party at the time of
payment, the law appropriates it according to the principles of
equity. And as the money received from Panama was the proceeds of
goods purchased with the money advanced by Loring & Co. for
that purpose, equity will apply it in the first place to the
payment of that debt.
Indeed there is enough in the invoice and the testimony of Leach
to show that the proceeds were to be so applied by the agreement
between Leach and Loring & Co., when the advances were made.
And they were accordingly so applied, as
Page 60 U. S. 56
far as they would go, when the money was received by them. The
fact that the claim now in question was secured by a lien on the
Laura, can surely be no reason for applying the money in
the first place to discharge it. On the contrary, it would be a
sufficient reason against such an application, and would be a good
ground for postponing it until all the claims for which the
creditor had no security were first satisfied.
I do not comprehend how the argument that it is the first item
in the account can apply. In point of fact, however, it is not the
first or oldest item in the account as I understand the
transaction. And if the lien on the vessel was originally valid, it
is evident that it had never been discharged or waived or forfeited
by unreasonable delay.
Some other items for necessaries furnished at Peyta, on the last
voyage of the
Laura to that port, and also a small charge
for bread at Valparaiso, and which are not included in the account
signed by Leach, were allowed by the circuit court, and are
included in the amount decreed. These items, the counsel for the
respondents insist, ought not to be allowed even if those in the
account are sustained. I think when the whole testimony is examined
it will be evident that these charges stand on the same principles
with those of which I have already spoken. But I forbear to extend
this opinion by discussing that question because, as the Court has
determined that the repairs and supplies furnished at the request
of Leach are not a lien on the vessel, it is useless to examine
particular items when the opinion of the Court goes to the
whole.
From that opinion I respectfully dissent. And after carefully
reviewing the case in all of its bearings and scrutinizing the
evidence, I adhere to the opinion I held in the circuit court.