The Vaughan and Telegraph,
81 U.S. 258 (1871)

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U.S. Supreme Court

The Vaughan and Telegraph, 81 U.S. 14 Wall. 258 258 (1871)

The Vaughan and Telegraph

81 U.S. (14 Wall.) 258


1. Where exceptions of form are taken on a libel in admiralty in the district court, but are not found in the record of the appeals from the district to the circuit court or from the circuit court to this one, and do not appear to have been brought to the attention of the circuit court or acted on in any manner by it, they must be held in this Court to have been waived.

2. A bill of lading endorsed and sent to the consignees who make, on the receipt of it, advances on the cargo gives the consignees sufficient title to maintain a libel in admiralty against a vessel by whose tortious collision with the vessel in which the cargo consigned to them was coming, the cargo has been wrecked and lost.

3. A cargo was shipped from Canada to New York October 7, 1864, when gold was 101 percent above legal tender notes of the United States. The cargo was wrecked soon after on the Hudson. On libel in the admiralty at New York and on appeal from the district court, the circuit court, on the 26th of March, 1870, when $100 gold was only 12 percent above notes, gave the libellants a decree for the value in gold of the cargo on the day and at the place of shipment, converting that value, at the same time, into legal tender notes at the rate at which such notes stood as compared with gold on the day of shipment -- that is to say when gold was 101 percent above legal tender notes, or in other words when it required $201 legal tender notes to buy $100 of gold. On appeal to this Court (the difference between gold and notes having now sunk to about 9 percent), held that this decree was right.

On the 7th of October, 1864, O. & J. Lynch, of St. Timothy, a place (near Montreal) in Canada East shipped a cargo of barley on board a canal boat which was about to sail through different canals and waters into the upper part of the Hudson and go thence to New York. The Lynches were correspondents of Gordon, Bruce & McAuliffe, commission merchants of New York, and this barley was in fact consigned to them.

The cargo was worth on that day, at St. Timothy's, $2,436 in gold, or at the then rate of depreciation, about $4,896.30 in legal tender notes of the United States, at that time so much below the value of gold as that it required $2.01 of them to buy $1 of gold. The Lynches received a bill of lading

Page 81 U. S. 259

making the barley deliverable "on the order of O. & J. Lynch, or to their assigns," which bills they thus endorsed:

"Deliver to the order of Gordon, Bruce & McAuliffe."

"O. & J. LYNCH"

Thus endorsed, the bills were forwarded to Gordon, Bruce & McAuliffe, at New York, who on receipt of them advanced the premium for insurance, the consignors being then indebted to G., B. & McA. for some advances previously made.

The canal boat arrived safely at Troy, on the Hudson, where she was taken in tow with other boats -- she on the port side -- by the steamer Mary Vaughan. The steamer went down the river with her tow, and on the night of the 26th October, a clear, starlight night, in calm weather, the tide near its change, and therefore feeble -- when in that broad, straight, deep reach of the Hudson, where Butter Hill announces the presence of the Highlands -- she saw another steamer, the Telegraph, coming up the river, she also with a tow, and the lights of the two steamers being visible to each other for more than a mile. No intervening objects interfering with the safe and easy transit, nothing but the grossest negligence, or, what would seem more probable, a determination by each boat that the other should give way to her, could have brought them together; nevertheless they did come together, and with such force that the canal boat was wrecked, her cargo sunk mid-river, the crew just escaping with their lives.

Hereupon Gordon, Bruce & McAuliffe, alleging themselves to be the consignees of the barley, libeled in one libel both the steamers in the district court at New York. The libel alleged that the Mary Vaughan moving down the River Hudson with her tow (describing it), the canal boat being securely fastened on the port side of the steamer, and propelled, governed, and controlled in all respects by her movements, on the morning of the 26th October, 1864, encountered in the Highlands the Telegraph, moving up with her tow (also described); that a barge on the port side of the Telegraph, in all respects propelled, governed, and controlled

Page 81 U. S. 260

by the Telegraph,

"came in collision with and struck the canal boat near her bow with great violence, parting the fasts that held her to the Vaughan, staving in her bow, and causing so much damage and injury to her that in about fifteen minutes she went down in water from 100 to 200 feet deep, . . . and that the loss was caused by the negligence, want of skill, and improper conduct of the persons navigating the Mary Vaughan, or by the negligence, want of skill, and improper conduct of the persons navigating the Telegraph, or by their joint negligence, fault, and improper conduct, and not by the fault, negligence, or improper conduct, of the persons on board the canal boat."

The case coming on to be heard in the district court exception was taken there by the Vaughan:

1st. That the statement of facts upon which the libellants relied was not sufficiently full, by reason of the omission of essential particulars, such as the courses of the respective steamers one to that of the other, their speed, the direction of the wind, the flow of the tide; and again, by the omission to state in what manner the Vaughan was in fault or improperly managed; that it did not state any fault or negligence on the part of the steamer, nor the acts of commission or omission, upon which the imputation of fault might be founded; all which were required by the practice in admiralty to be stated in plain allegations, to apprise the claimant of the ground of fact upon which relief was sought, that he might admit or take issue thereon, or allege matters in avoidance thereof.

2d. That the libellants could not join in the same libel both steamers, nor maintain a joint libel against them; this exception being taken by both steamers.

Both these exceptions of form were overruled and a decree entered against both steamers, charging each with the whole loss of the cargo; fixed at $2,924, this value in gold, as already stated, on the day and at the place of shipment. But though the value in gold of the cargo was thus plainly made the basis of the decree in the district court at New York, yet the decree was not by its terms made payable in

Page 81 U. S. 261

gold, thus apparently leaving it payable in legal tender notes, if they were constitutional. Appeals were taken to the circuit court, nothing being contained in the appeals about the exceptions of form taken in the district court, nor anything said in the arguments there on those points. The cases were considered on their merits, and on an objection that Gordon, Bruce & McAuliffe showed no sufficient interest in the cargo to sue, and especially on an objection to the entry of the judgment payable in legal tender notes instead of gold or its value in legal tenders.

The circuit court, equally with the district court, held both steamers liable, but reversed the decree because, as it held, the same ought, in order to give full indemnity to the libellants, to have been for the value in legal tender notes ($4,896.30), of the $2,436 gold, which in gold the cargo was worth. The decree of the circuit court was accordingly entered March 26, 1870, for the $4,896.30, with interest added to the date of its entry, in all $6,515.51, with costs. One dollar of gold was, at the date of this decree, worth $1.12 in legal tenders. [Footnote 1]

An appeal was now taken to this Court.

The case coming here, Mr. C. Van Santvoord, for the owners of the Vaughan, and Mr. F. J. Fithian, for the Telegraph, pressed, the one or the other, the objections of form which had been urged in the district court, though not put before the circuit court. They contended then, in opposition to each other, on the merits; the former that the fault had been with the Telegraph, the latter that it had been with the Vaughan. The point was raised and argued in the interest of both steamers, that Gordon, Bruce & McAuliffe had no sufficient interest to sue; that in legal effect the advance of the premium of insurance at the time of the delivery of the bill of lading with the direction endorsed, to be forwarded, and not

Page 81 U. S. 262

as security for the advance, was an advance on advice of the shipment, as in Sargent v. Morris, [Footnote 2] for which, as was held in that case, the libellants would have had a lien if the goods had been received by them, but which could have no effect to transfer the property; that the libellants not having the legal title or any property or right of possession at time of loss, and the suit being without the scope of their authority as consignees or agents, for the purpose of sale on arrival in New York, the case did not fall within the rule which allows a consignee or agent for an absent owner to institute a suit for a purpose within the scope of his authority.

But the point most pressed perhaps was the mode in which the circuit court had fixed the damages, in regard to which it was said by these counsel, that the circuit court should have affirmed the decree of the district court in its award of damages based upon the value of the barley lost, at the time and place of shipment, St. Timothy, Canada East in specie or Canadian currency, on a specie basis, in dollars and cents, equivalent to money of that denomination in gold or in the coinage of the United States, with interest from the date of the shipment, or at the most, that the circuit court should have decreed the payment in gold, or in the coinage of the United States, of the value at the time and place of shipment, in the currency prevalent there, specie or paper, on a specie basis, with interest. The damages decreed by the district court, it was said, if short of full indemnity, were so only for the reason that the claimants, under the Legal Tender Act, might pay the decree in legal tender notes. But that a decree for the payment in gold, or coin of the United States equivalent to the specie value at the time of shipment in Canada, with interest from the time of shipment, would be a full indemnity to the Canadian shipper, whose consignees the libellants claim to be. The cases in this Court recognizing the existence of two currencies, one specie or gold, and the other paper, and adjudging payment in gold or not, as the justice of the case demands,

Page 81 U. S. 263

were, it was said, authorities to the competency of the court to make such assessment and decree, [Footnote 3] the Legal Tender Acts not having been intended to change the legal standard or measure of value, or rule of damages in judicial proceedings.

Page 81 U. S. 264

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