Liotard v. Graves

Thé second question, I understand to be substantially this. Whether the charges in England, in prosecuting the claim for a restitution of the brig and her cargo, are to fall on the plaintiffs, or the defendants t This is dependant on the fourth question. For, if the plaintiffs have rendered themselves liable for the capture, then they ought to bear the espences as an item of damage ; otherwise, not.

The third question too, rests on the same” result. The goods were acknowledgedly insured by the plaintiffs, for the concerned in that brig. If the plaintiffs are not answerable to the defendant for the whole amount of the property, on the ground of mismanagement, then the defendant becomes entitled to the one half of what has been recovered from the underwriters in Holland, with an allowance to the plaintiffs, for their commissions.

The fourth point embraces the great object of the controversy.

If the position laid down hy Sir William Scott, in eon-demning this vessel and her cargo, were to be regarded as law here, I should consider the plaintiffs liable for the injury sustained by the defendant, because they directed • the captain, who was consigned to them, and bound to obey their orders, to do an act imminently endangering the property intrusted to their management, and this, obviously contrary to the defendant’s intention, manifested by his sending the vessel to Hamburgh, a neutral port, to await orders, and be governed by circumstances, rather than to Amsterdam, a port of one of the belligerents. There would have existed a want of skill, or actual infidelity to the interests of the principal, amounting to gross negligence or fraud, in either of which cases, a liability to the constituent would be created.

The judge I have mentioned, considered, 1 Rob. Ad. Rep. 156, that the sailing from Cruxhaven, with an intention of evading the blockade of the Texet, was a beginning to execute that intention, therefore an overt act constituting the offence, and that, from that moment a the blockade was fraudulently invaded.”

, The court for the correction of errors, in a question between the now defendant, and Gravess and the United Insu-

ranee Company, held the Insurers liable for the .capture and condemnation of the same vessel, and decided, that the brig Columbia, having only an intention of entering the Texel if the investing squadron .should be blown off, and having been captured before she arrived at the mouth of the river, and had attempted to enter, was not liable to ron-damnation ; on the principle, that intention is not a ground of judicial animadversion, and that nothing short of an ac* tual attempt' would warrant a forfeiture.

I hold myself bound by the latter decision ; it then necessarily follows, that the sailing of the Columbia, from Cru.xhavenj with an intention to enter the Texel, was ap. innócent act, and if it was, the plaintiffs cannot be consul, ered as responsible for any injury in the prosecution of such act. I cannot,proceed on any speculative reasoning, as to what might have happened, in consequence of the' plaintiffs5 orders, had. not the vessel been captured as she was. The gravamen is this seizure and condemnation, which has been pronounced in the last resort, as illegal and unjust. It manifestly appears by the case, that the plaintiffs acted in good faith, and under an idea that the Columbia having sailed before the blockade was known, was entitled to notice, and to be turned.away. They also conceived, that if the investing squadron was blown off, she might lawfully enter; they cannot, therefore, on any principle, be liable to this claim.

This cause involving the examination of long accounts between the parties, has been referred to referees, but as the result, with respect to some of the items, depends on questions of law, those questions are submitted to the determination of this court, that the examination of the referees may be regulated thereby.

The principal question relates to the conduct of .the "plaintiffs as' agents for ’ the defendant, respecting the brig Columbia and her cargo, of which the defendant is to be considered as owner.

Under the circumstances of the case, it is made a question, whether the consignees acted with that reasonable caution and prudence, which they ought to have done. It

is not pretended but that they knew of the blockade, and they might have been chargeable with gross abuse of their trust, if there had not been reasonable grounds to calculate, that the vessel might have entered, notwithstanding the blockade. They knew that had been the case with respect to other American vessels, and from the state of the winds, they expected, the blockading squadron might be drove off the coast, so that no blockade in fact would exist, so as to expose the vessel to capture and condemnation, within the rules adopted by our courts, until she had proceeded so far as to find an actual existing blockade. The consignees knew the vessel was bound to Amsterdam, the cargo intended for that place, and insurance made to that port. Under such circumstances, I cannot think the plaintiffs chargeable with gross inattention to the interest of their principals.

The subsequent orders contained in the letter of the SOth of June, cannot affect the question, not having been received at Amsterdam, until the 20th of August, which was the very day the brig was captured, as appears by Robinson's report of the case. Had this letter arrived in due season, it would have been the duty of the agents, at all events to have stopped the vessel, and unloaded her at Hamburgh. The orders are positive to unload there, if Amsterdam should be blockaded. This letter also contains the first information the plaintiffs had, that permission was given, by the policy, to touch at Hamburgh. The next day after the receipt of this letter, containing, what they deercij a modification of their orders, they wrote Bouc &? Co. countermanding those previously given, and directing diem not to send the brig to Amsterdam, unless she could come through the Wadden, where, it appears, she 4wouId have been out of the reach of any British armed vessels. But this letter arrived too late, for captain Weeks had actually sailed, and was captured before this time. The plaintiffs are not chargeable with want of due diligence, in countermanding their first orders given to Roue £s? Co. It was done the very next day, after receiving instructions from their principals, which made it proper so to do. The letter of the 30th of June, then, and all subsequent correspondence, ought to be gut out of view, and the whole merits

of the question will .depend on the instructions contained iu the letter of the 3d of June, and the orders given by the plaintiffs to Boué fe? Co. in consequence thereof, on-the 4th of August. I .consider the plaintiffs, therefore, a3 agents vested with general, and discretionary powers, and, as such, cannot be said to have violated their order& If made liable at all, it must be either for gross negligence, or fraudulent conduct. I see nothing whereby to- charge them on the latter ground; and if they, rather unadvisedly ordered the vessel to. Amsterdam, when it was blockaded, it would not, under all the circumstances, be deemed any thing worse than an error of judgment.

, I think, therefore, that the plaintiffs- are not chargeable with the loss of the vessel and cargo ; and they acting, in the capacity of agents, in the advances- made to captain Weeks, the defendant is bound to reimburse them. Theré can be no doubt,- but that the defendant is entitled to the benefit of the insurance made in Amsterdam, upon the cargo in question. With respect to interest on the plaintiffs* account,, it appears to me, they had a right to. chargeit oh the money advanced. The account cannot be considered as settled, and on that ground carrying' interest. It is merely an account current between the parties," and unless some usage, or practice is shewn, to warrant the allowance, I should think interest ought not to be calculated, except on the money advanced. • •

This is a case of importance, and has been argued with much ability and zeal.' The question of greatest difficulty, is that, which regards the plaintiffs’ lia.bility. An .agent, who acts under positive orders, must, at his. peril, pursue them literally. It is not less’ evident, • that a factor, .who is not particularly instructed,’ but ⅛ whom a discretion is vested, is entitled to protection, bo long as he acts according to the best of his judgment, arid is innocent of fraud and gross abuse of the confidénce placed in him. If a loss ensue from mistake of error of ■ judgment, where there is no lata culpa or crassa negligenúa, his principal, and not he must bear it : were it otherwise, no prudent man would accept a trust of the kind ; and a ’ merchant, however distant from the «cene óf action, v/ou^d

be obliged, at a great hazard, to give positive directions, instead of reposing on the intelligence of a correspondent, who might take advantage of circumstances, which were-neither contemplated nor foreseen by himself. The same rule must govern where language, equivocal or doubtful be used ; for nothing can be more absurd or unjust than that a man, whom an accident befalls, in consequence of a loose or ambiguous phraseology, should resort to an agent for indemnification, when by a moderate portion of care, he might have rendered himself intelligible, and prevented a loss.

The defendant’s letter of the 14th of June-, 1798; provided only against an “ open rupture between Holland, “ France, and the United States.” ■ It did not embrace the case of a blockade, and was inexplicit or silent on «very other point. In what respect then, were the plaintiffs’ orders of the 4th of August, which arose-out of this letter, and which, as is alledged, occasioned the disaster, a violation of any instruction which it contained ? No other meaning can be extracted from it, than- that the plaintiffs, if the vessel touched at Hamburgh, were to order her to Amsterdam, if peace continued ■ between the Batavian republic and this country. - If they had a right to direct her to stop at Hamburgh, in case of. blockade, which may admit of doubt, they were sole judges, being uninstructed on this point, of the degree of danger which would render such measure proper. If they had undertaken to arrest the Columbia in her voyage, but in th.c event of a war, and a loss had followed, might they not have been called on for their authority, and found it difficult to defend their conduct ? But admitting, that, as general agents, if such they were, they had this right, they were not bound to exert it, unless in their opinion, the defendant’s interest would be promoted by the adventure’s terminating at Hamburgh. The reason they assign for a different conduct, would probably have influenced the defendant himself. They were encouraged to this step, because several other American vessels had arrived, and they might have supposed, as it appears they did by one of their letters to Bov.é Sk Co. that the worst that could happen from the blockade, was the Columbia's being sent

away for an attempt to enter, and a small delay in' her return to Hamburgh. That the British had no right to capture, without a previous warning, has been settled by our court for the correction of errors, in an action against the ■ assurers of this very vessel, who contended that their responsibility was at an end, by this breach of blockade. Sir William Scott had • condemned the Columbia, although she had not been turned away, deeming such ceremony unnecessary, where the merchant or his agents had acquired notice in fact, even during the voyage, of án existing blockade. On the ground however of this judgment^ (which was not regarded as conclusive between the assured and the assurer) being-contrary to treaty, it was detdr-mined, that sailing for a blockaded port, with knowledge of the fact, was no waiver of the right of being notified,' and once turned away. When at the bar, I had occasion to examine the grounds of this sentence, and although, no one holds in higher estimation, the talents and integrity of the eminent character who pronounced it: my conviction has ever been, that it was not warranted by the treaty of London, or the law of nations. Admitting the blockade known in America, it did not follow, that sailing for Amsterdam, indicated an intention to break it. It might be raised before the Columbia arrived in the Texel, or if not7 the master might be instructed to go elsewhere. If such intention existed, why shall mere intent in this case, more than in any other, amount, as SirJVilliam terms it, “ to an u overt act constituting the offence ?” As well might a design to poison, .be called an overt act of murder. But when it be recollected, that the owners were ignorant of the blockade, and their intentions of course innocent, this-confiscation cannot but be viewed, as a very heavy penalty for the mistake of a master or agent. Nor did the notice received in the Elbe, justify the proceeding ; for, the investment of Amsterdam not being known in New-Tork, when the vessel sailed, it was a case within the letter of the treaty, She might proceed, notwithstanding any intelligence obtained on the way, which might be incorrect, until wapnecj. away by one of the blockading squadron, and

nothing short of a second attempt, should have been deemed a violation of the belligerent rights.

■ As this judgment is made part of the case, with a view to the plaintiffs’ prejudice, these remarks on it will not be thought impertinent, especially if they assist in forming a proper estimate of the risk of a voyage from Hamburgh to Amsterdam, or tend to shew that, in giving the orders in question,, they did nothing illegal or which justly exposed the property to forfeiture. This must have been their understanding at the time, and probably the same opinion prevailed in Amsterdam, or insurance would not have been effected there at so moderate a premium. This ground too, was taken by the defendant and his partners in the actions which were brought to recover the insurance on this voyage, and they ought not now to be permitted to abandon it.

. Some stress was laic! on the letter of the 50th June, 1798, which contains a direction to unload at Hamburgh, if a blockade actually existed” — -but not being received, until after all the mischief had happened, by what rule of right is the plaintiffs’ conduct to be judged by it ? Does it not rather prove, that the owners of the Columbia, thought a positive instruction on this point necessary, to justify the plaintiffs in adopting this measure ?

Bui admitting a discretion in the plaintiffs, it is contended they acted wantonly, or with gross inattention to the owners’ interest, and that they had nothing in view but their own advantage, being determined, at all hazards, to obtain possession of the property.. In support of this alie-gation we are referred to their letter of the 25th August, to Bout & Co. directing the cargo to be sent on through the Wadden, contrary to their instructions, which were to sell it at Hamburgh. If In consequence of this letter, a loss had occurred, the plaintiffs would have been responsible, but that not being the case, and as it might, for ought that appears, have been greatly for the defendant’s benefit; to have the cargo sent on to Amsterdam by the interior navigation, and one in return provided there (for'we are in the dark as to the then state of the márkéts at Amsterdam and Hamburgh) we cannot say this step was ■not' intended for

the defendant’s benefit. It can hardly be supposed that a respectable house, for the paltry consideration of a commission, would sacrifice, or expose to unnecessary perils the property of their principals. Nor will it be charitable from an act, doubtful at most, to draw in question the integrity of their conduct prior to this time, particularly, when we perceive with what alacrity their orders were countermanded on receipt of the second letter. It was also stated, as further evidence of the plaintiffs’ misconduct', that if the Columbia had succeeded in reaching Amsterdam, she would have been good prize if captured in coming ou t. But if she had a right to,go. in, as I think she had, unless warned away, and she received no such intimation from the surrounding squadron, it is by no means clear, that the British could ■ rightfully have prevented her egress. Being then of opinion, that no.liability has been incurred-, it is unnecessary to settle a rule of damage, or to enquire how far the subsequent conduct of the defendant and his partners, amounted to a confirmation of the acts of their agents. On the latter point, however, it may be remarked, that they did not discover, that early disapprobation which agents, who have mistaken or exceeded their instructions, have a right to expect. A merchant should not be permitted to conceal his dissatisfaction, and thus retain .the power of taking advantage of events. On the 2?th October, 1798, when the blockade of the Texel, as well as the order now complained of were'known, Mr.Barne- zvall, in a letter addressed to the plaintiffs, expresses a “ hopé “ that they have received the cargo,” without intimating the smallest dissatisfaction At their conduct,- or any apprehensions on Account of the blockade. It is not until six months after this last'letter,:and as many as ten after the capture, and not until-thz'Columbia!s fate were known, that the concern complain-of the-plaintiffs, without even then giving any explicit intimation that they will be regarded as answerablfe for consequences. - On the same day, they write at some length to their correspondent in London, and although they review the conduct of all the parties in this transaction, they throw no blame on the plaintiffs; but, on the contrary, Attribute the misfortune to the captain, who refused to wait eight days in

tlie Elbe, “ within which time,” say they, “ positive instruc- “ tions arrived from Holland to unload at Hamburgh.” They also approve of the appeal, and beg to be made acquainted with the progress and probable amount of charges. The underwriters too are sued on their own account, and without consultation with the plaintiffs. From this conduct, the inference is fair, that if the parties did not approve of the plaintiffs’ proceedings, they did not think themselves entitled to look to them for an indemnity. They would otherwise have preferred an immediate recourse of that kind, to a tedious and expensive litigation in the British admiralty, or to the very uncertain issue of a controversy with the underwriters here.

With respect to the question of interest. If there be no special agreement between the parties, or usage of trade between Amsterdam and New-Torh to the contrary, it ought to be allowed on all monies advanced from their respective payments, and on the goods supplied, after such time as is conformable to the course of trade between the two countries. One account was rendered as early as in 1797, in which interest is calculated, and yet no objection was made to it in the succeeding correspondence, from which I conclude, such charge consisted with the understanding of the parties.

Upon the whole, my opinion is, that under the letter of the 14-th of June, which was silent as to the case of blockade, the plaintiffs had a discretion to act in such an event, as in their judgment they thought best for their employers’ interest. That if they acted fairly, and under a sincere belief, as I think they did, for there is no evidence to the contrary, that the Columbia would probably reach Amsterdam in safety, or only be sent away and return to Hamburgh, they are not answerable for her unjust condemnation, nor for any damages in consequence of their conduct in the premises — that they are entitled to interest as charged, unless it shall appear to the arbitrators, to be contrary'to agreement or to the known and established custom of merchants in Amsterdam, trading with this country. That the monies advanced to Capt. Weeks, not appearing to be extravagant, or to have been expended for his own use, form a proper item against the defendant, who in turn is entitled

honesty, and as they thought, for the interest of their principals, they are excused, and the defendant has only to blame himself for giving an indefinite discretion.

The determination of this question puts an end to two other points that were raised upon the argument.' The 'insurance effected by the plaintiffs in Holland, was for the account of Vos & Graves„• the defendant is entitled as of course to credit for one half of the amount of that insurance, and is liable to the charges for monies paid to Captain Weeks in London.

The only remaining question is, as to the legality of the . charge of interest in the plaintiffs’ account. The account', exhibited is not an account liquidated, but a nakéd account', current, and interest is allowable only on such items in it, as' are made for monies advanced, except the usage of the trade ) has provided some particular rules on the subject, and which : are to be submitted to the referees to determine.

I concur in the result of the opinions given, 1 and to detail my own reasons, would be only to repeat' what my brethren have said.