1. In June, 1865, the American steamer
Emily Souder,
owned by residents in New York, whilst on a voyage to that port
from Rio Janeiro, lost her propelling screw and put into the port
of Maranham, on the coast of Brazil, in distress. She was towed
into that port by another steamer for which she had signaled. The
captain was without adequate funds to make the repairs required and
furnish the vessel with the supplies necessary to enable her to
proceed on her voyage, or to pay the expenses of her towage into
port, and of pilotage, custom house dues, fees of the consul in the
port, and expenses of medical attendance upon the sailors. Both he
and the owners of the vessel were unknown in Maranham and without
credit there. Under these circumstances, the captain borrowed of
the libellants the necessary funds to enable him to pay these
several expenses and gave them drafts on the owners of the vessel
in New York for the amount, payable thirty days after sight, which
drafts were accepted on presentation, but were protested for
nonpayment.
Held, 1st, that the items of expense for towage,
pilotage, custom house dues, consular fees, and medical attendance
upon the sailors stood in the same rank with the repairs and
supplies to the vessel, and that the libellants advancing funds for
their payment were equally entitled as security to a lien upon the
vessel; 2d, that the drafts were only conditional payment, and did
not discharge and satisfy the original debt.
2. After the libellants in one of the cases had agreed with the
captain to advance all the funds required by him, the libellant in
the other case, who had been first applied to by the captain,
agreed to advance a portion of the funds, and did so;
held
that this subsequent agreement did not affect the implied
hypothecation of the vessel for the whole, the advances by both
libellants having been made on the credit of the vessel, and not
solely on the personal credit of the captain or owners.
3. The presumption of law is, in the absence of fraud or
collusion, that where advances are made to a captain in a foreign
port, upon his request, to pay for necessary repairs or supplies to
enable his vessel to prosecute her voyage, or to pay harbor dues,
or for pilotage, towage, and like services rendered to the vessel,
that they are made upon the credit of the vessel as well as upon
that of her owners. It is not necessary to the existence of the
hypothecation that there should be in terms any express pledge of
the vessel, or any stipulation that the credit shall be given on
her account.
4. The presumption in such cases can be repelled only by clear
and satisfactory proof that the master was in possession of funds
applicable to the expenses, or of a credit of his own or of the
owners of his vessel, upon which funds could be raised by the
exercise of reasonable diligence, and that the possession of such
funds or credit was known to the party making the advances or could
readily have been ascertained by proper inquiry.
Page 84 U. S. 667
5. Liens for advances of funds for the necessities of vessels in
a foreign port have priority over existing mortgages to creditors
at home.
6. Where advances in a foreign port are made in gold, and drafts
for the amount on the owners show that the payment to the parties
making the advances is to be also in gold, the court may direct
that its decrees be entered for the amount in like currency.
The firm of Packenham Beatty & Co., and also a certain
Pritchard, filed separate libels in the district court of the
district just mentioned, against the steamer
Emily Souder,
an American vessel owned in New York. The case was thus:
The steamer, while on a voyage to that port from Rio Janeiro in
June, 1865, lost her screw and was compelled to put into the port
of Maranham, on the coast of Brazil, for repairs. Her captain was
without funds sufficient to meet the expenses for these repairs and
other expenses incurred and to be incurred to enable the vessel to
proceed on her voyage. The funds in his possession did not amount
to $600, and both he and the owners of the vessel were unknown in
the port of Maranham and without credit. He accordingly applied to
the consul of the United States there to find him a consignee who
would advance the necessary funds and attend to the business of the
vessel. The consul applied in company with the captain to several
persons without success, but finally an arrangement was made which
was satisfactory, with the firm of Packenham Beatty & Co.,
merchants at that port; they to receive five percent commission on
the amount advanced, and five percent commission for attending to
the business of the vessel.
The steamer was repaired, and supplies furnished to enable the
vessel to proceed on her voyage, and the funds for these items, and
also to pay the charges for towing the vessel when disabled into
port by another steamer which had been signaled for, and for
pilotage, and for the dues at the custom house, fees of the consul,
and charges for medical attendance upon the sailors in port, were
furnished by
Page 84 U. S. 668
the libellants. The different items were all submitted to the
captain, and were approved by him before they were paid.
Pritchard, one of the libellants, was applied to by the captain
to advance the funds before the arrangement was made with Packenham
Beatty & Co., the other libellants. He then said that he would
see what he could do. Afterwards he consented to advance a portion
of the funds. Accordingly, two drafts were drawn by the captain on
the owners of the vessel in New York, for the amounts advanced, and
one of them was given to Pritchard, and the other to Packenham
Beatty & Co. The drafts were payable thirty days after sight in
gold; the currency in which the advances were made. The drafts were
presented and accepted, but on their maturity were protested for
nonpayment. The holders thereupon filed libels against the vessel,
producing the drafts in court on the trial, and surrendering them
for cancellation. Beatty, of the firm of Packenham Beatty &
Co., and Pritchard, both testified that the advances in Maranham
were made on the credit of the vessel, and would not have been made
on any other condition; but that the drafts were taken only as
conditional payment, and not in satisfaction of the sums advanced.
The testimony of the captain was somewhat in conflict with this, he
stating that the advances were made on the credit of the owners of
the vessel and upon drafts on them, nothing being said at the time
about bottomry of the vessel or raising money on her credit.
The vessel was at the time the advances were made under mortgage
to the former owners for the purchase money. They were obliged to
take back the vessel before the libels were filed, and they were
the claimants here.
The district court rendered a decree in favor of the libellants
in both cases, for the amounts advanced by them respectively, with
interest, and directed that the amounts should be paid in gold coin
of the United States. The circuit court affirmed the decrees and
the claimants appealed to this Court.
Page 84 U. S. 669
MR. JUSTICE FIELD delivered the opinion of the Court.
The rule announced in
The Grapeshot, [
Footnote 1] and there relieved from the
supposed embarrassment of some previous decisions of this Court,
and repeated and affirmed in
The Lulu, [
Footnote 2] and
The Kalorama,
[
Footnote 3] and followed in
The Patapsco, [
Footnote
4] disposes of the main question in these cases. The steamer
here had entered the port of Maranham, on the coast of Brazil, in
distress; she had lost her propelling screw, and was towed into
port by another steamer, for which she had signaled. The repairs
there made to the vessel, and the supplies furnished to her, and
the expenses incurred on her account, were necessary to render her
seaworthy and enable her to leave the port and prosecute her voyage
to New York. The captain was without adequate funds for these
purposes, the whole amount in his possession being under $600, and
that sum being insufficient to meet the contingent expenses of the
vessel. Both he and the owners of the vessel were unknown in
Maranham, and without credit there. It was under these
circumstances that he requested the consul of the United States in
that port to obtain for him a consignee who would attend to the
business of the vessel and advance the requisite funds. And it was
only after applying without success to several parties, that he
succeeded in inducing the firm of Packenham Beatty & Co., the
libellants in one of these cases, to make the arrangement desired
with the captain. The stipulation in the arrangement for five
percent commission on the funds advanced, and five percent
commission for attending to the business of the vessel was not
unreasonable nor unusual. The steamer was detained at Maranham
nearly five weeks, and the moneys advanced by the libellants, it is
true, were not entirely for the repairs to the vessel and the
supplies needed for the voyage; they were intended and applied in
part to meet the expenses of
Page 84 U. S. 670
her towage into port and of pilotage, and to pay the custom
house dues, consular fees, and charges for medical attendance upon
the sailors. These various items, however, stood in the same rank,
with necessary repairs and supplies to the vessel, and the
libellants advancing funds for their payment, were equally entitled
as security to a lien upon the vessel. The items were all submitted
to the examination of the captain, and were approved by him before
they were paid.
The drafts given by the captain upon the owners of the vessel in
New York were not received by the libellants in discharge and
satisfaction of the sums advanced. They were received only as
conditional payment. Such would be the presumption of law in the
absence of any direct evidence on the point. For by the general
commercial law of the world, a promise to pay, whether in the form
of notes or bills, is not of itself the equivalent of payment; it
is treated everywhere, in the absence of express agreement or local
usage to the contrary, as conditional payment only. On principle,
nothing can be payment in fact except what is in truth such, unless
specially agreed to be taken as its equivalent. But here the
evidence of the libellants is direct and positive that the drafts
were only taken as conditional payment, and on the trial they were
produced and surrendered for cancellation. [
Footnote 5]
The consent of Pritchard, the libellant in one of the cases to
advance a portion of the funds after Packenham Beatty & Co. had
agreed to advance the whole does not in our judgment in any respect
affect the implied hypothecation of the vessel for the whole. The
whole sum advanced was required, and the question is not whether it
came from one or more parties or whether the advances were made at
one time or at different times, but whether they were made on the
personal credit of the captain or of the owners or were made on the
credit of the vessel also. And upon this question there can be in
this case no reasonable doubt. The presumption of law always is, in
the absence of fraud or
Page 84 U. S. 671
collusion, that where advances are made to a captain in a
foreign port, upon his request, to pay for necessary repairs or
supplies to enable his vessel to prosecute her voyage, or to pay
harbor dues, or for pilotage, towage, and like services rendered to
the vessel, that they are made upon the credit of the vessel as
well as upon that of her owners. It is not necessary to the
existence of the hypothecation that there should be in terms any
express pledge of the vessel or any stipulation that the credit
shall be given on her account. The presumption arises that such is
the fact from the necessities of the vessel, and the position of
the parties considered with reference to the motives which
generally govern the conduct of individuals. Moneys are not usually
loaned to strangers, residents of distant and foreign countries,
without security, and it would be a violent presumption to suppose
that any such course was adopted when ample security in the vessel
was lying before the parties. The presumption, therefore, that
advances in such cases are made upon the credit of the vessel is
not repelled by any loose and uncertain testimony as to the
suppositions or understandings of one of the parties. It can be
repelled only by clear and satisfactory proof that the master was
in possession of funds applicable to the expenses, or of a credit
of his own or of the owners of his vessel, upon which funds could
be raised by the exercise of reasonable diligence, and that the
possession of such funds or credit was known to the party making
the advances, or could readily have been ascertained by proper
inquiry.
In the cases at bar, the presumption is not only not repelled by
any satisfactory evidence, but is supported by the positive
testimony of the libellants. Beatty, who appears to have transacted
the business of Packenham Beatty & Co. with the captain, and
Pritchard, both declare in the most emphatic manner that they made
the advances on the credit of the vessel, and would not have made
them on any other condition.
The evidence of the captain, it is true, is to some extent in
conflict with their testimony, but considering the
circumstances
Page 84 U. S. 672
under which the advances were made, it is entitled, as against
their direct and positive declarations, to little weight. Perhaps,
as suggested by the circuit court in its opinion, the inferences of
the captain were not the result of any intended untruth on his
part, but were drawn from the fact that nothing was said during the
negotiation for advances intimating in terms that the libellants
were to have a lien upon the vessel.
The fact that the vessel was, at the time the advances were
made, under mortgage to the claimants, does not subordinate the
lien of the libellants to the claim of the mortgagees. Funds
furnished in a foreign port, under the circumstances and for the
purposes mentioned in this case, have priority as a lien upon the
vessel over existing mortgages. Advanced for the security and
protection of the vessel, they were for the benefit of the
mortgagees as well as of the owners. If liens created by the
necessities of vessels in a foreign port could be subordinated to
or displaced by mortgages to prior creditors at home, such liens
would soon cease to be regarded as having any certain value, or as
affording any reliable security.
As the advances were in gold, and the drafts on the owners in
New York show that the payment to the libellants was to be made
also in gold, the court below ruled rightly in directing its
decrees to be entered for the amount due them in like currency.
[
Footnote 6]
Decree affirmed in both cases, with interest and
costs.
[
Footnote 1]
76 U. S. 9 Wall.
129.
[
Footnote 2]
77 U. S. 10 Wall.
192.
[
Footnote 3]
77 U. S. 10 Wall.
204.
[
Footnote 4]
80 U. S. 13 Wall.
329.
[
Footnote 5]
The Kimball, 3
Wall. 37;
The Bark Chusan, 2 Story 456.
[
Footnote 6]
Bronson v.
Rodes, 7 Wall. 229;
Trebilcock
v. Wilson, 12 Wall. 687.
