Hyperlawhypertext legal database Atlantic Mut. Ins. v. Bird & Neilson 15 N.Y. Super. Ct. 195

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Atlantic Mut. Ins. v. Bird & Neilson

15 N.Y. Super. Ct. 195 2 Bosw. 195 Court N.Y. Super. Ct. Decision date 1867-12-06 English

Contents

Majority

p. 195
The Atlantic Mut. Ins. Co. v. Bird & Neilson.

Headnote

A pro-rata freight is due, only, when the owner of the goods elects to receive them at an intermediate port, and this election can only be made, when the master is able and willing to transport them to their place of destination.
When the vessel is wholly disabled during the voyage, and no effort or offer is made by the master or shipowner to save the goods and forward them to their port of destination, their acceptance, by their owner, is compulsory, and no freight is demandable.
Freight cannot be recovered upon the original contract, because it has not been performed, nor upon an implied contract, if the goods are accepted from the necessity of the case, and because the master and shipowner have ceased to make any efforts for their preservation; because, under such circumstances, the owner only takes up his own goods on finding them abandoned.
p. 196
An insurance company that insured the goods, and that has paid a total loss, on an abandonment by the owner and assured, having contracted with a third person to forward the goods to the port «of destination, for fifty per cent, of their net proceeds, who did so forward them, is entitled to recover half of such net proceeds, notwithstanding the shipowner, after such contract is made, claims freight on the part so saved, and directs such third person to retain such freight, or pay it to the shipowner’s agent.
(Before Bosworth and Hoffman, J. J.)
Heard, November 6th, and
decided December 6th, 1857.
The Atlantic Mutual Insurance Company are the plaintiffs in this action, and William H. Bird and John Neilson.are the defendants. It comes before the Court at General Term, on a case agreed upon by the parties, under and pursuant to § 372 of the Code, which cáse reads-as follows, viz.:—■
“ Statement of Facts, on submission of controversy, pursuant to Section 372 of the Code of Procedure.
“ Giffard & Sambour, of Gondives, shipped on board the brig Emeline 404,000 pounds of logwood, and consigned same to Henry Delafield & Co., of -New York City, the owners thereof.
“bill of lading as follows:
“ Shipped in good order and condition by Giffard & Sambour, of Gondives, upon the good ship or vessel Emeline, whereof, Bradbury Farnham is master, for this present voyage, and now riding at anchor in the Port of Gondives, and bound for New York, U. S., four hundred and four thousand pounds of logwood numbered as per margin, and are to be delivered in like good order and condition at the aforesaid Port of New York, all and every the dangers and accidents of the seas and navigation of whatever nature and kind excepted, unto Messrs. Henry Delafield & Co., or their assigns, he or they paying freight for the said goods as per charter party.
“ In witness whereof, the master or purser of said ship or vessel hath affirmed five bills of lading, all of this tenor and date, one of which being accomplished, the other four to stand void.
“ Dated in Gondives, this twelfth day of December, 1856.
(Signed)
Bradbury Farnham.
“ The freight on said logwood was to be five and one-half
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dollars per ton, on its safe delivery in New York City, by said Earnham.
“Bradbury Earnham, the captain, was one of the principal owners of said brig, the other owners were unknown to the plaintiffs, although they made diligent inquiry for them.
“ Henry Delafield & Co. insured the logwood with the plaintiffs on the day of December, 1856, for the sum of $3494.
“ The brig Emeline was wrecked, on or about the 18th day of January, 1857, on Wardell’s Beach, about 35 miles from New York City, her port of destination, and part of her cargo cast ashore. She went entirely to pieces, so that she could not then be identified, and all hands on board were lost.
“ On the 27th day of January, 1857, the Sun Mutual Insurance Company, believing the logwood insured by them, entered into the following contract:
“New York, January 27th, 1857.
“ The undersigned hereby agree to deliver the cargo, that has been or will be saved from the brig Emeline, (lately wrecked on Wardell’s Beach, New Jersey,) in New York for fifty per cent, of the net proceeds of the said cargo, they (meaning Woolley) to bear all the expenses that have been or will be incurred in so doing.
“ Witness—John" Neilsoh.
(Signed,) . Jordan" Woolley.”
Before this contract was made, the logwood had been piled on the beach by the agent of the Board of Underwriters.
Under this contract, Woolley took possession of the logwood, sent it to New York, and consigned the same to the defendants, who received the same, by order of the Sun Mutual Insurance Company, the supposed owner. On its arrival, on or about March 21st, 1857, the said defendants took possession of, and sold the same, and received the money. Previously to this, and sometime during the month of February, 1857, the other owners of the brig, (Earnham being dead,) notified the defendants that the net freight-money on the logwood saved should be paid to Joseph Perkins, of New York, their agent; and that they were willing to pay fifty per cent, salvage on the same.
Nothing further was done by the owners of the brig.
p. 198
The defendants sold the logwood for $1841.90, and received the money.
On or about the 21st day of March, the plaintiffs ascertained that the logwood was insured by them. Henry Delafield & Co. duly abandoned the same to plaintiffs, who accepted the abandonment, and paid a total loss on the logwood.
The defendants, upon being apprised of the ownership of the plaintiffs, acknowledged the same, and stated to them the terms of the contract made with the Sun Mutual Insurance Company, to which contract the plaintiffs assented.
The plaintiffs were entirely ignorant, at that time, of any claim for freight, or any arrangement concerning it.
The defendants received, from sale of the logwood, $1841 ■3%°ír; they paid for Custom House fees and ordinary charges $110 X%1,; leaving a balance in their hands of $1731.27.
The plaintiffs demanded from defendants fifty per cent, of this last sum, or $865.64.
The defendants alleged, that freight was due on 120 tons, 17 cwt., 2 qrs., 12 lbs., at the rate of five and a half dollars per ton, amounting to $664.85.
The defendants deduct this sum from . . $1731.27
Deduct........ 664.85
Leaving a balance of ... 1066.42
The defendants offer to pay the plaintiffs fifty per cent, of this sum, or $533.21.
The plaintiffs deny that any freight money was earned, under the facts, and demand, from the defendants, $865.64.
The question for the Court is, whether any freight was earned, and what judgment must be given on the facts.
T. Scudder, for plaintiffs.
I.—1. The contract between the shipper of the goods and shipowner was, that the latter should receive his freight money, on the safe delivery of the goods, in like good order and condition, at the port of New York. Such delivery, therefore, was a condition on which depended the right of the shipowner to the payment of his freight, and means the delivery of the entire cargo. (Davidson v.
p. 199
Guynne, 12 East. 881; Edwards v. Todd, 1 Scammon, 463; Dun nett v. Tomhagan, 3 Johns. 154 ; Phelps v. Williamson, 5 Sanf. 578.) 2. The goods were never delivered by the shipowner, but the contract was broken by his default. Freight money was thereby forfeited.
IT.—1. The vessel was totally lost, so that the owners thereof could only earn their freight money by hiring another vessel, and sending the goods to their port of destination. (Kimbal v. Tucker, 10 Mass. 195 .) 2. It nowhere appears that any other vessel was hired, or any act done, by the shipowners, toward sending the goods to their port of destination.
m.—1. The contract, entered into with the Sun Mutual Insurance Co., and under which the defendants received the logwood and sold it, was not a contract for salvage; it was a simple contract, to bring goods,, then safe, (for they had been piled on the beach,) from one place to another. (Abbott on Shipping, p. 659.) 2. The defendants are liable to the plaintiffs, having received the money for goods acknowledged by them to belong to the plaintiffs. (Bates v. Stanton, 1 Duer, 79 .) The defendants have no lien on the goods.
IV. —1. Where goods are, compulsorily, thrown upon the owner, short of the port of destination, no freight is earned. (Smith v. Wilson, 8 East. 437; Hustin v. Union Ins. Co., 1 Wash Cir. R. 530; Callendar v. Ins. Co. of N. A., 5 Binn. 525 ; Abbott on Shipping, p. 525, n. 1.) If, within a reasonable time, the shipowner fail to come forward and send the goods to their port of destination, this should be evidence of his intention to abandon his freight money.
V. —1. If goods are brought to their port of destination safely, by agency other than that of the shipowner, after they have been abandoned by him, no freight money is earned. (Dunnett v. Tomhagen, 3 Johns. 154 .) 2. There was no voluntary acceptance of the goods by the plaintiffs short of the port of destination, and no freight money was earned. (Barker v. Cheviot, 2 Johns. 352 ; Scott v. Libby, 2 Johns. 336 ; Phelps v. Williamson, 5 Sandf. 578 ; Marine Insurance Co. v. Mutual Insurance Co., 9 Johns. 186 .) The plaintiffs should have judgment for $865 64/100 with interest and cost.
James C. Carter, for the defendants.
p. 200
Before proceeding to a statement of the particular questions which arise upon the agreed case, and of the defendants’ view of the law thereon, it is deemed important to lay down some of the well-established principles of commercial law respecting freight, and when, and to what extent, it is earned.
If the contract of the shipowner be discharged by the carriage of the goods to the port of destination, whether this be done by the shipowner or his agent, full freight is earned.
If the vessel be wrecked or disabled at a place short of the port of destination, it is the right and duty of the shipowner, and of the captain as his agent, either to repair and refit the same ship, or to procure a new one, and thus to forward the goods to the port of destination. And for these purposes, of course, the-shipowner has the right to retain the goods in his custody for a reasonable time.
If the owner of the goods, therefore, insist upon taking possession of them at a place short of the port of destination without the assent of the shipowner, or of the master as his agent, who insists upon performing the contract, the owner of the goods must pay full freight.
But if the owner of the goods desires to receive them at a place short of the port of destination, and the shipowner or master assent to it, then a pro-rata freight only is earned.
It is believed, that thus much is so well settled to be the law, as scarcely to require a citation of authorities. The following, however, may be consulted. (Luke v. Lyde, 2 Burr, 882; Williams v. Smith, 2. Caines’, 21, per Thompson, J.; Robinson v. Marine Insurance Co., 2 John. 323 ; Smith v. Wright, 15 Barb. 51 .)
I. In bringing the logwood from the place of shipwreck to the City of New York, the port of destination, Jordan Woolley acted in one of four capacities. First. As the agent of the owners of the brig; or, secondly, as the agent of the owners of the cargo; or, thirdly, as the agent of both these parties; or, fourthly, as a salvor, under a contract with one or both the interests (those of freight and cargo) to receive a certain compensation in place of what the maritime law would have allowed to him.
II. If he acted in the first capacity, it follows that the shipowner brought the cargo to the port of destination, and full freight is earned. That he did act in this capacity, is evidenced
p. 201
by the fact that the shipowner gave notice to the defendants, (who were acting under Woolley and as his agent,) that he looked to them, for his freight. This was a direct interposition, on the part of the shipowner, while he had a right to interpose, and an authority to Woolley to carry the cargo to New York, on certain terms. The silence of the defendants implies and constitutes an assent to the terms. But for this assent, the shipowner might, and probably would have taken the cargo into his own hands. The reasonable time for his doing so had not elapsed.
III. If Woolley acted as the agent of the owners of the cargo, or of those to whom they had abandoned, which is the same thing, then the case stands thus: A vessel is shipwrecked, and the captain and all hands lost, leaving no agent of the shipowner present. The cargo is of such a nature, and in such a condition, as to be in no danger of loss or damage. Under these circumstances, the owner of the cargo takes possession of it, without giving notice to the shipowner, or calling upon him to complete his contract, by carrying the goods to the port of destination, and without even his knowledge. Such a taking, is clearly a taking of the cargo without the assent of the shipowner, short of the port of destination, and, of course, full freight is due. 1. Should it be deemed that the subsequent notice of the shipowner, to the defendants, to pay freight to him, was equivalent to an original assent on his part to the taking, the case then becomes one of a voluntary acceptance of the cargo, by the owner, at a place short of the port of destination, and a pro-rata freight is due. (See authorities above cited.) 2. It cannot be maintained that the acceptance of the cargo, under these circumstances, was involuntary. An acceptance cannot be involuntary, unless there is no alternative. To give it this character, it must appear, either that the carrier or his agent was present and declined to carry the cargo on, or that it was manifestly out of his power to do so; or that he was absent, and notice was given him to complete his contract, which he had failed to answer; or that he was absent, and the cargo was in such a perilous condition that no time for notice could be spared. Neither of these conditions existed in the present case.
IY. If Woolley acted in the third of the above-mentioned capacities, i. e., as the agent of both parties, full, or at all events,
p. 202
pro rata freight was earned. 1. This agency for the owners of the cargo was prior to his agency for the carrier, and, as has been shown under the third point, the shipowner’s right to freight, whether full or pro rata, had not been divested at the time when the agency for the shipowner commenced. Under these circumstances, the agreement, if such there was, of Woolley with the shipowner, in respect to the freight, could in no manner prejudice the owners of the cargo. 2. But as the shipowner interposed while he had a right to interpose, as has been shown under the second point, and brought the freight to the port of destination, through his agent Woolley, his right to full freight cannot be impaired by the fact that Woolley also acted as the agent of the owners of the cargo.
V. If Woolley acted in the last of the above mentioned capacities, i. e., as a salvor, under a special agreement with both parties in interest, full freight is earned. 1. It is entirely competent for a salvor to agree with one interest, that he will accept a specified compensation for his services. The effect would be, that the Court of Admiralty, instead of allowing him a compensation to be fixed by the Court, would award, as against the interest in question, the sum agreed upon; and if he can make this agreement with one interest, he may do the same thing with all. 2. We claim it as a principle of plain equity, that when a salvor brings cargo to the port of destination, freight is due to the shipowner from the owner of the cargo, if the owner accepts the goods. (Post v. Robertson, 1 John. 24 .) 3. In such a case the value of the goods is .increased by the amount of the freight, and it is utterly immaterial to the owner of the cargo by whom the contract of carriage is performed. 5. To permit the owner of the goods, under such circumstances, to obtain them, free from the payment of freight, would be to throw the entire burden of a peril of the sea, which ought to be shared in common, upon one of the parties. 6. This view of the case is supported by eminent authority. The case of Lulce v. Lyde, before cited, is directly in point, and has steadily been recognized as a reliable authority, notwithstanding what was said of it by Livingston, J., in Post v. Robertson, ( 1 John. 24 .) This latter case, nearly identical in its circumstances with the one at bar, in the aspect in which it is now being discussed, also contains a deliberate recognition of the principle now con
p. 203
tended for. Thompson, J., in delivering judgment in this case, and with whom Kent, C. J., Spencer and Tompkins J. J., concurred, said, “ I am inclined to think that the plaintiffs are entitled to recover some freight, and that this ought to be in proportion to the amount of goods received; because the right to freight arises altogether from the acceptance, which causes an implied promise to pay. This was the rule adopted in the case of Luke v. Lyde. Nor can any thing be more consonant to principles of justice and equity.” The action failed in this instance, as in Cook v. Jennings, (7 D & E. Rep., 381,) because it was covenant on the charter party. It should have been assumpsit, on the implied promise. 7. If any should claim that the general rule were otherwise, still no one could reasonably insist that an exception ought not to be raised in cases, like the present, where the goods have been delivered at the port of destination in an entirely unharmed condition.
VL Judgment should be for the plaintiffs for the sum of $533. 27 only; or, should the Court be of opinion that pro rata freight only was earned, then, for a small additional sum to be ascertained by reference, unless agreed upon.

According to the facts stated in the case, the defendants had no agency in forwarding the log-wood to New York. That was done by Woolley, and the defendants were his consignees and agents to receive and sell it. There was no communication between Woolley and the owners of the brig. It cannot be said, therefore, that Woolley was in any respect their agent.

The case, then, is reduced to a narrow compass. A vessel is wrecked, within thirty-five miles of her port of destination, a part of her cargo is washed ashore and piled on the beach, and all hands on board are lost. The owner and consignee of the cargo abandon it to the underwriters. The latter, on diligent inquiry, cannot discover any owner of the brig, and no owner, or part owner, nor any one in their behalf, presents himself either to protect the cargo, or to forward it to its port of destination.

Under such circumstances, the underwriters take charge of it, by contracting with a third person to deliver the cargo saved, at its port of original destination, at a specific compensation agreed

p. 204
upon between them. Under that contract it is so forwarded and sold.

If the shipowner is entitled to freight in such a case, then he is entitled to' freight in all cases, in which his vessel is disabled during her voyage, by the perils of the seas, from completing it, provided the cargo, or any part of it, ultimately reaches its port of destination through the intervention of its owners, although the carriers, from the moment of the wreck, give no care, either to the preservation of the cargo, or to forwarding it to the place at which their contract, as a condition to the right to demand any freight, required them to deliver it.

Such an intervention of the owners, at an intermediate point in the voyage, to secure so much of the cargo as they could save, cannot be said, justly, to be a voluntary acceptance of the cargo, at the place of the wreck.

There was no election to be made, except between the two alternatives of losing the whole, or saving, by their unaided efforts, such portion of the cargo as might be secured from the perils, to which the shipowner, for all practical purposes, had abandoned it.

There certainly was no acceptance, voluntary or otherwise, of the cargo, at the intermediate point, by the original consignees and owners. They abandoned to the plaintiffs, their insurers.

It would be a very forced construction to hold, that the efforts of the latter to save a part of the cargo, after they had paid, or had become liable to pay, a total loss, when it is considered that those efforts were made after a failure, upon diligent inquiry, to discover any owner of the vessel, and apparently after a total abandonment, by the shipowner, of the voyage, raise an implied promise to pay freight, because those efforts have resulted in conveying some of the cargo to the port of destination, and placing its proceeds in their possession.

Under such a state of facts, these proceeds belonged to them, as insurers of the cargo, after paying a total loss, and there was no lien for freight attached to that cargo. (Mar. Ins. Co. v. Unit. Ins. Co. 9 J. R. 186-191; Dunnett v. Tomhagen, 3 J. R. 154; Welch v. Hicks, 6 Cow. 504 .)

In Dunnett v. Tomhagen, the Court say: “no freight was earned on the homeward voyage, because no part of the cargo was delivered by the ship.” In the case before us, no part of the cargo

p. 205
was delivered by the ship, or by any one acting in behalf of the master or shipowner, but it was delivered through the efforts of the underwriters, to whom it had been abandoned, and who were compelled, by necessity, to save what they could, or submit to a total loss.

The leading cases on this subject are examined in Abbott on Shipping, 5 Amer. Edition, 547, note 1; and in Angell on the Law of Carriers, § 399 to 414 inclusive.)

If it must be admitted that the rule, to be deduced from the earlier cases, and from foreign ordinances, is that stated by Kent, Justice, in Robinson v. The Marine Insurance do., ( 2 John. 322 ,) namely, that a pro-rata freight is always due where the owner accepts the goods at an intermediate port of necessity, whether the acceptance be voluntary or compulsory; we, nevertheless, are of the opinion, that this doctrine is completely overruled by the more recent decisions, both in our own Courts and in the Supreme Court of the United States. We regard the law as now settled, that a pro-rata freight is only due where the owner of the goods elects to receive them at the intermediate port, and that this election can only be made when the master is able and willing to transport them to their port of destination. When the vessel is wholly disabled, and no effort or offer is made by the master or shipowner to transport the goods to their final port, by any other conveyance, their acceptance by their owner is compulsory, and no freight whatever is demandable. The right to freight pro-rata itineris must arise out of some new contract between the freighter and master, either expressly made, or to be inferred from their conduct.

That the master cannot recover, upon the original contract, which he has not performed, but must sue, if at all, upon some new contract, implied or expressed, will be found to pervade all the cases.

Such a contract cannot be implied, if the owner accepts them only from the necessity of the case, because under such circumstances, he will only take up his own goods; and the Court will not be able to imply, that, by such an acceptance, he had any intention to waive the completion of the whole agreement.

The shipowners cannot, on any principle, be entitled to freight on the portion of logwood which was sold to pay the necessary

p. 206
expenses of recovering and securing the part saved. That was lost, as absolutely, and totally, as the portion which was drifted to sea, and could not be reclaimed.

The logwood saved, has not been in the possession of the shipowners, or of their agents, at any time since the wreck of the Emeline, and whatever claims they have, if any, upon the present plaintiffs for freight, they have no lien upon the moneys in the defendants’ hands, which can operate as an answer to any part of the plaintiffs’ action to recover the one-half of the net proceeds of the logwood sold. (Caze & Richard v. Baltimore Insurance Co., 7 Cranch. 358 ; 9 J. R. 191.)

The plaintiffs must have judgment for $835.64, and interest.

Cases cited