Ward v. Ruckman — 36 N.Y. 26

Majority

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Henry W. Ward, Appellant, v. Elisha Ruckman, Respondent.

Headnote

•Stock purchased, by the master of a vessel with a view of securing what is sometimes denominated a master's interest, has no privilege attached to it other than attaches to stock purchased or owned by any other party.

There is, in law, no such privilege attaching to stock in a vessel owned by the captain or master thereof. 'I

A captain of a vessel having an interest therein is liable to be removed by a majority in interest of the owners of such vessel.

I. T. Williams, for the appellant.

G. Dean, for the respondent.

This action is brought to recover damages against the defendant for depriving the plaintiff of the right claimed by him, to sail and navigate, as captain, the schooner Rey. It appeared, upon the trial, that in January, 1856, the defendant and one William De Groot were the owners of said schooner, the defendant owning three-fourths parts thereof, and said De Groot owning the remaining fourth part thereof; that De Groot at that time ivas the captain of said schooner, and had sailed her as such; that the defendant applied to the plaintiff to take charge of the schooner as such captain, to which the plaintiff replied that he would not sail the vessel without having an interest in her, for the reason that he should be liable to be turned out at any moment. Thé defendant then informed him that he could purchase Captain De Groot’s interest; and, on application to De Groot, he agreed to take $2,500 for his one-quarter. The plaintiff testified that when he bought this quarter, in January, 1856, the vessel was worth $10,000, exclusive of the master’s interest. He also testified that there was nothing said between the defendant and himself as to how long he was to sail the vessel on shares, nor when the contract was to terminate; but witness supposed as long as they both kept her. The plaintiff put in evidence the bill of sale from De Groot to himself, from which it appeared

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that De Groot sold to him “ one-quarter of said schooner or vessel, together with one-quarter of the masts, bowsprit, sails, boat, anchors, cables, and all other necessaries thereunto appertaining or belonging.” The enrollment of the vessel, set out in the bill of sale, recited the facts, that the defendant owned three-fourths of the schooner, and that De Groot owned one-fourth, and that they were the sole owners of said vessel, and that De Groot was then the master thereof. It appeared upon the trial that various- witnesses testified that when a master owned an interest in a sailing vessel, it was known and called the sailing interest. It was generally understood that when a captain buys a master’s interest in a vessel, it is worth more than without such interest. That a master’s or sailing interest is sometimes worth fifty per cent more than a citizen’s interest; sometimes not worth more than from twenty-five to thirty per cent. The witnesses meant by this that the privilege of being captain of the vessel, which privilege they supposed inhered or attached to any share of a vessel, when owned by a captain, was worth a third more than a mere citizen’s interest. Upon the plaintiff’s resting his case the defendant moved to dismiss the complaint, on the ground that the action would not lie, it not appearing that the vessel had been sold or destroyed by the defendant. The plaintiff’s counsel asked the court to submit the case to the jury, upon the question of damages, insisting:

1. That the plaintiff owned a sailing or master’s interest in the vessel, and that the defendant had wrongfully deprived him thereof.

2. That the plaintiff’s interest in the vessel under the proof was an entirety, and that the defendant had no joint or interest in common with him in his quarter of the vessel, that being the sailing or master’s interest, that the defendant owning no such interest in the remaining three-quarters of the vessel.

. 3. That the plaintiff had owned the privilege of sailing the vessel as captain and master thereof, and that having been deprived of the exercise of such privilege by the

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wrongful act of the defendant j he was entitled to damages or indemnity therefor.

4. That in any view of the case the plaintiff was entitled to recover a sum equal to the difference between the value of a sailing or master’s interest in one-fourth of said vessel and the value of a citizen’s interest in such one-fourth, if the jury should be of opinion upon the proof that any difference existed in the value of such respective interests. The court overruled said questions and nonsuited the plaintiff, and' gave judgment for the defendant, which, on appeal, was affirmed at the General Term.

The foundation of the plaintiff’s right of recovery depends upon his establishing his first proposition, viz.: that the plaintiff owned a sailing or master’s interest in the vessel. There are several conclusive reasons which forbid our assenting to the soundness of this claim.

• 1. It is not apparent that De Groot had any such interest himself. He did not claim any such interest, and did not assume to sell and convey any such interest to this plaintiff. The bill of sale, to which we .must resort to ascertain what De Groot sold and- what the plaintiff purchased, makes' no mention or reference to. any such interest. It conveys only the one-quarter part of the schooner, her tackle and apparel, and the plaintiff himself says he only paid the value of one-quarter part of the schooner, viz.: $2,500, the whole being worth $10,000. He neither then paid anything for any such interest, and if De Groot possessed or owned any such interest, he did not assume to sell any' such interest, and no such interest was sold and conveyed to this, plaintiff. The plaintiff claims such interest by virtue of his purchase from De Groot, but the muniments of his title show that no such interest was sold or assumed to be sold to him.

2. I have looked in vain, at all the authorities referred to, and text books accessible to me, and in none do I find ' any such interest mentioned or referred to. I find no allusion to any such interest, or that a master, who is' a part owner of a vessel, has any such interest which he can sell and dispose of. If a master has' such an interest attached to his share in the

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vessel, then, if it he capable of sale and disposition by him, and goes with his. share as appurtenant thereto, it follows that he can by a sale of his share, however small soever it be, appoint a master of the vessel, in hostility to the wishes of all the other owners, and greatly to their detriment. If the doctrine contended for be true, that a majority of the owners cannot change the captain or master at their pleasure, it would necessarily follow, that a perpetual captain or master, might have the control of the vessel, in hostility to them. But another serious difficulty will arise from the maintenance of this principle. If the share of one captain or master has attached to it, or inhering in it, this sailing interest, how will it be if several captains or masters become the owners of shares in the same vessel? Which, having this interest, is to take command to the exclusion of the others ? If it inheres or attaches to one, it must to all. And, again, suppose that, in the present case, Be Groot had subdivided his quarter into four parts, and sold a quarter part 'to four different captains or masters, which or would .all have had a sailing interest, or would each have had a quarter part of a sailing interest? In either event, which would have been entitled to the command of the vessel, and which to have maintained an action against the other owners for not having the command awarded to them ? These considerations would appear to demonstrate that no such intangible interests can exist in the ownership of a part or share of a vessel, and that the owners must necessarily own parts or shares of equal value, and with equal rights and privileges, and that it is utterly impracticable that a permanent right to command the ship should be attached to any particular share. This right certainly cannot spring from the circumstance that, at some point of time, a share in the vessel was owned by one who' at the same time was, the captain or master. It would not be competent for the owners of the other shares to consent or agree that a particular share should forever have the right to command the vessel, much less can that right arise when such owners do not consent. Card v. Hope (2 Barn. & Cres., 661), is a strong case in affirmance

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of this doctrine. Card and Carman being the owners of nine-sixteenth parts of the ship Herefordshire, entered into a * covenant with one Hope, whereby they agreed to sell him two-sixteenth parts of said ship, and that Hope should be appointed to the command of the ship, and that Card and Carman should continue to be the managing owners. It was _ further agreed that in case Hope, from ill-health or other cause, should retire from the command, Card should be at liberty to appoint his successor upon such terms as should be approved of by Hope or his executors, and in case Card should decline to appoint such successor, then Hope or his executors should be permitted to appoint in his stead a fit and proper person to command the ship, and that the person so appointed should be entitled to all the privileges which Hope, by said covenant, was entitled to in right of such command. Lord Tenterden, in delivering the opinion of the court, said: “ It is impossible to read this deed without seeing that it is a bargain for a profit to be devised to the plaintiffs from the appointment of the defendant or his nominee to the command, the profit being either a greater price for the shares sold, or-the continuance of the management or other powers and authorities in themselves, or partaking probably of both. And we are of the opinion that such a contract is void, as being contrary to the interests of the charterers and of the other owners.” He further observed: “ It is a part of our national policy to give every encouragement to the equipment and employment of ships. Hpon this consideration the law enables a majority of the part owners (under guards, indeed, to the interest of the minority peculiar to itself) to employ their ships even against the will of the minority, that the ship may not remain unemployed. A power of employment vested in the majority seems to import a power of appointing officers, and in practice the majority certainly exercise that power. But such a power carries with it a duty, the duty ot exercising a free and impartial judgment in the choice of every person who is intrusted with the management of the outfit and with the navigation of the ship, ut dentur digniori, and any contract which is calculated to have the effect

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of fettering the judgment and of binding the party to concur in his nomination of particular persons, at the peril of an action, is a violation of duty. The violation of duty becomes greater and more odious if the contract be founded on motives of peculiar gain and advantage . to the contractors; all the part owners ought to share ratably in every profit that may be made of the ship, and if such contracts could be allowed by law, they must operate as a discouragement to persons to become owners of ships. The' duty, however, is owing not only to the charterers and other part owners of a ship, but also to all whose life or property may be embarked by her. And consequently a violation of the duty is not only to the charterers and part owners, but also to another most important object, namely, the protection and safety of the lives and property embarked on the sea.” These observations of this eminent judge are very pertinent to the case now under consideration, for a right is claimed here which it was in that case held unlawful should exist and be exercised by contract. It cannot be successfully contended, that this plaintiff possesses the right to command this schooner more securely than he would have done if it had been conferred by express contract. To illustrate, suppose all the owners of this schooner had entered into a covenant with De Grroot, that he, as owner of his quarter share, should have the command of the schooner, and that the same rights should be enjoyed by his assignee. This is certainly putting the plaintiff’s claim in the strongest and most favorable light for him. Yet we see such an arrangement must be condemned, for reasons and considerations which are unanswerable and imperative. I think the learned counsel is mistaken in the supposition that there is any interest known in the law, as a sailing interest, arising from the fact, that the ownership of a share in a vessel, and the command thereof, are united in the same person. My researches have not enabled me to find a case where any such interest has been recognized, and protected and enforced. Much less can I find, that in any instance, has such interest been the subject of sale and transfer, and the vendee. held, by virtue of such

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purchase, entitled to the command of the vessel, in opposition to the wishes of a majority in interest of the owners. If this claim be sound, then it follows logically that any one purchasing a master’s sailing interest (if such a thing has an existence) becomes thereby ipso facto master of the ship or vessel, and has a vested right to take the command of lier and this result would obtain, how small soever be the share to which this right inhered or attached. Such a right necessarily deprives all the other owners of any voice or control in the management of their property, and subjects it to the casualty of falling into the hands of the most untrustworthy and irresponsible. A person might, by the purchase of an insignificant share or interest in a vessel, assume the command thereof, in hostility to the wishes of all the other owners. If the purchase of a share in a vessel possessing this ■right vests in the vendee the right to command the.ship, as is contended in the case at bar, then, as the master cannot be divested of that right, and deprived of the command by a majority of the owners, as is also contended for, and cannot be removed by a court of admiralty, except on payment to him of the value thereof, or the damages which he may sustain by deprivation of the command, — it is easy to see, that few, if any, will be tempted to embark their property in enterprises over which they can have no control, and which will be subject to such grave embarrassments.

The theory of the learned counsel for the plaintiff takes its origin in an assumption not. warranted by the text writers, and the authorities, viz.: that as a master who is part owner of a vessel cannot be deprived of the command by a majority in interest of the owners, he has a sailing or master’s interest, arising from such ownership, of value, and of which he cannot. be divested without his consent. It is seen that if the majority of owners can change the command of thé vessel at their pleasure, then such an interest is a myth. A very careful examination of all the authorities within my reach, has satisfied me that the true rule is, that in all cases the majority in interest of the owners have the right to control the vessel in every particular. And if so, it conclusively follows that

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no such interest exists as a master’s or sailing interest. Story on Part., § 432, says: “The common law not only thus gives to the majority in interest of the part owners the right and authority to employ the ship upon any proper voyage or adventure, but it also confers upon the majority the right and authority in all cases to appoint the master and officers, and crew of the ships, and to displace them at their pleasure, even although the master should be a part owner,” and such, he says, is also the rule of the French law, citing Boulay-Paty, Droit Comm., Tom. 1, tit. 3, § 5, p. 340. He proceeds to say, that this authority must be exercised by a free and impartial judgment in the choice of the master, and officers and crew, and especially in the choice of the master, and adds: “ that any contract therefore, made by some of the part owner's only, which is calculated to have the effect of fettering their judgment, and of binding them to appoint or to concur in the appointment of particular persons as masters and officers, is a violation of that duty.” He refers with decided approbation to the opinion of Lord Tenteeden, in Card v. Hope (ubi supra), and says: “ Such a contract is therefore utterly void, as against public policy, and the true interest of commerce and navigation.” Again, in section 445, Judge Story says: .“We have already had occasion to state, that the majority in interest ot the part owners have a right to appoint the master and officers of the ship. This right necessarily carries with it the right to displace and dispossess the master and other officers, when in authority or possession of the ship; and it will make no difference in this respect whether the master or other officer be a part owner or not.” And he adds: “However, when a court of admiralty is called upon to enforce this right, although it allows the authority to displace and dispossess to be exercised at the sole pleasure of the majority, if the master or other officer is a mere stranger, yet if he is a part owner, the court commonly requires some reasonable ground to be stated therefor,” citing the case of the New Draper, 4 Rob. Adm. Rep., p. 235, or 287, etc.

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A.remark by Sir William Scott in this case, to the effect quoted, is the foundation of the doctrine now maintained, that the master, when he is a part owner, cannot be dispossessed by a majority of the owners in interest. That case will be hereafter adverted to. Flanders on Shipping, § 164, says: “ The owners may dismiss the master at their pleasure,” and adds, “ upon a general retainer for no particular voyage, the master may be dismissed at any time without cause assigned, because the nature of his employment upon that condition is a mere agency, to be revoked at any time by the' principal.”

Hr. Curtis, in his valuable work on the Rights and Duties of Merchant Seamen, at page 164, cites this passage from the Code de Commerce : “ That if the master dismissed is a part owner of the ship, he may renounce his interest and require the reimbursement of the capital which represents it.” And Mr. Curtis adds: “ From these evidences of the maritime law, it would seem that the owners have the right to remove the master who is a part owner, at their own pleasure, paying him for his share of the vessel.” And at page 165, Mr. Curtis says: “If he (the master) be removed without good cause after an engagement for a particular voyage, I think they are bound to pay him damages for loss of employment as master, and for any loss or liabilities he may have incurred by reason of his employment.” This qualification of the removal, after an engagement for a particular voyage, is significant and shows that the breach of that engagement is the foundation of the claim for damages, not the fact of removal.

Boulay-Paty, in his work, “ Droit de Commerce ” (Tom. 1, p. 332), says : “ But as the majority (by art. 220 of the Commercial Code) is determined by a portion of interest in the ship exceeding the half of. its value, if the master is part owner of more than a half he cannot be dismissed, for if he was not the master he would have the sole right to name one. Indeed, the master may own in the ship either a part equal to, or a part which exceeds the half, or a portion less than one-half. In the first case, his position is

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irrevocable, because a majority cannot vote against him. In the second, no person is able to dispossess him, as no one other than" himself has a portion which exceeds one-half of his interest. In the third case, the will of the other part owners can exclude him. Finally, as, by the article 220, it is the will .of the greatest number in interest which can decide, it is not necessary that there should be a unanimous vote to dismiss the captain; it is sufficient that it is the will of the majority.”^[1]

In the Scottish Admiralty it is also held that ship owners may dismiss the master at any time, without a cause assigned, and the majority may dismiss him in his character of master even if he be a joint owner. (Bell’s Com., vol. 1, 506, 508.)

We will now proceed to the examination of the few cases where this question, as to the power of removal of a master who is part owner, has arisen and been adjudicated.

In the case of The Lee Reuter (1 Dod., 22) the Admiralty Court in England removed a master and part owner in compliance with the decree of the burgomasters and counselors of the city of Rostock, in senate assembled, and in whom the admiralty jurisdiction of that city was vested, and which had directed the master to deliver up the ship. Sir W. Scott said: “ In cases of ships belonging to British subjects the court has no hesitation in ordering possession to be delivered up on the application of a majority of the owners, without entering very minutely into the causes of dissatisfaction existing between them and the master.” It is to be observed

* Boulay-Paty says: “Mais.comme la majorite d’apres l'art. 220, se determine par une portion d’interet dans le navire exced'ant la moitie de sa valeur si le capitaine etait coproprietairé pour plus de moitie; il ne pourrait etre congedie, ear s’ il n' etait pas le capitaine, il aurait droit seul de le nommer. “ Bn effet, le capitaine a dans la propriete du navire, ou une partie egalo, ou une portion qui excede la moitie, ou une portion iuferieure. Dans le premiere cas, il devient de fait irrevocable parce qu' une majorite ne pent voter contra lue. Dans le second, personne ne peut le revoquer, puis qu' en lui seul, existe une portion excedant la moitie d' interests. Dans le troisieme, la volante de son coproprietaire, suffit pour 1’ exclure. Enfiu, comme par 1’ art. 220, c’ est 1’ avis dus plus nombre, qui doit decider, il n' est pas necessaire, qu’ il y ait concours unánime congedier le capitaineil suffit que la majorite soit de cct avis.”

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that this was said in a case pending for the removal of a master, who was also a part owner.

The case of Johan and Siegmund (1 Ed. Adm., 242) was a suit in admiralty to change the possession of a foreign ship on the application of fifteen-sixteenths of the shares of the ship against the master and owner of the remaining one-sixteenth part. Sir W. Scott refused to interfere, on the ground that the court had no.jurisdiction in the case of a foreign ship. He observed: “If this were a British ship, there can be no doubt that by the practice of this court it would, upon the application of a majority of the parties interested, proceed to dispossess the master, though a part owner, without minutely considering the merits or demerits of his conduct.”

The case of The New Draper has already been referred to (ubi supra). The suit was brought by the owners of nine-sixteenths of a vessel against Walker, a part owner of seven-sixteenths, and also master of the vessel, for his removal and a change of the possession. Sir W. Scott, in giving judgment, said: “ The dispossession of a master is in its nature not an uncommon proceeding; all that the court requires in cases where the master is not a part owner is that the majority of the proprietors should declare their disinclination to continue him in possession. In the case of a master and part owner, something more is required before the court will proceed to dispossess a person who is also a proprietor of the vessel, and whose possession, therefore, the common law is, upon general principles, inclined to maintain.”

The court said the case was the common one of the majority ■ of owners proceeding against another, in which the common rule of this court must be pursued, and possession was decreed to the owners representing the seven-sixteenths parts.

This case cannot, therefore, be rightfully cited as an authority that the majority in interest have not the power to displace a master who is a part owner, nor for the position that a court of admiralty will not, on the application of such majority, remove a master who is a part - owner, and put Mm out of possession and place the possession with the

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other owners. On the contrary, it is believed that it is an authority for the affirmative of both these propositions.

Judge Hopkhísoit, in the case of Montgomery v. Wharton (2 Pet. Ad., 397), justly says: “And however hard it may seem that the master should be subject to the caprice of the owners as to his continuing in the command or not, he must consider it as one of the unavoidable inconveniences of his station, and in case of injury apply to the laws of his country for redress; but much greater would the danger be to owners and to commerce in general, if the appointment of a master should be irrevocable for the voyage. Whatever good opinion an owner may have of the master at the time of his appointment, he may find sufficient reason afterward to-change his mind and not be able to produce any legal proof of defection or inability, and it would be an unreasonable hardship to compel an owner to continue what was originally a voluntary trust in the hands of a person of whom he has found subsequent reasons to believe that he may prove unfaithful or unskillful.”

This same case is reported in 1 Dallas, 49, where the facts are stated to be that the libellant, Capt. Montgomery, was master and commander of the ship called the General Green, designed for a voyage to Martinico. Wliile the ship lay in the river, a severe frost happened, which occasioned a great delay, and the owners thought proper to change their plans. Differences then arose, and they dismissed Capt. Montgomery and took the ship from him. The court says: “As to the dismission of the captain, we are of the opinion that, upon a general retainer for no particular voyage, the captain may. be dismissed at any time without cause assigned.”

We deduce, from these writers, and these authorities, this doctrine, that in all cases the majority in interest in the ownership of a vessel have the absolute right to employ whom they will, as master, officers and crew of the ship, and, at their pleasure, to displace them, and employ others, whether the persons so displaced be part owners or not; that in the single instance of a master employed for a particular voyage, if the master be displaced without cause, he is entitled to

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recover the damages which he may sustain by reason of such wrongful dismissal and breach of contract; that a court of admiralty, in a case like that presented in the record, in this case would have decreed the dismissal of this plaintiff as master, and delivered the possession of the schooner to this defendant. It follows, from these considerations, that the plaintiff did not possess any interest called or known as a sailing or master’s interest, and cannot, therefore, recover damages for being deprived of what he did not possess, and, ■consequently, could not lose.

The complaint was properly dismissed, and the judgment thereon for defendant should be affirmed, with costs.

All concur.

Judgment affirmed.