Ring v. Franklin — 2 N.Y. Super. Ct. 1

Majority

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Zebede Ring and Peter McNamarra versus Thomas Franklin.

Headnote

The registry of a Vessel at the Custom House, although accompanied by the oath required by law of the person in whose name the registration is made, is not conclusive evidence that the ownership of such vessel is in him. The registry does not determine the ownership of the vessel, its object being merely to show her national character, and to secure the advantages belonging to vessels of the United States.

The mortgagee of a vessel out of possession, is not liable for repairs, unless they are made upon his credit, or by a special contract with him: and parole evidence is admissible to show, that the bill of sale whereby the vessel is conveyed, although absolute upon its face, was, nevertheless, intended as a mortgage. The agreement which operates as a defeasance, need not be under seal; nor is it necessary that it should he .made or executed simultaneously with the deed, in order to give it validity.

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The mortgagor of a vessel is a competent witness for the mortgagee, who is sued as owner, to show the nature of the transfer, and to prove that a conveyance, apparently absolute, was in fact conditional. His interest in the suit is balanced, and as the mortgagee, if , liable at all, is liable, either as owner, or as mortgagee in possession, the mortgagor would not be responsible to him for costs, it being the duty of the mortgagee, under such circumstances, to pay for the repairs in the first instance, without suit.

Assumpsit to recover the amount of a bill of repairs upon the ship Concordia. The declaration contained the usual counts for work, labour, and materials; a count for goods sold and delivered ; the money counts; and a count upon an account stated. Plea, the general issue.

The cause was tried before Mr. Justice Oakley. At the trial, it appeared, that the repairs, for which the action was brought, were made between the 10th day of September, 1827, and the 5th of June, 1828; and no objection was made as to the items of the plaintiffs’ account. The charges in the books of the plaintiffs, were against the “ ship Concordia and owners,” and the work and materials were furnished by the order of Samuel G, Bailey, the captain of tha t ship. While the vessel was receiving her repairs, one Nathaniel G. Minturn, (who it afterwards appeared was the owner of the ship, but bad'mortgaged her to the defendant,) was occasionally at the yard of the plaintiffs, and a bill of the repairs was rendered to him in the month of December, 1827, or in January, 1828. No bill was ever presented to the defendant; but Minturn had given his note to' the plaintiffs for the amount of the repairs, and had become insolvent before the commencement of this action. The note, however, had never been paid by Minturn, and was produced in Court by the plaintiffs. The defendant, it also appeared, was never present while the repairs were in progress, nor was payment ever demanded of him ; but Minturn had a general account with the plaintiffs for the repairs of the vessel. It further appeared from the plaintiffs’ evidence, that the ship was registered on the 15th day of October, 1824, and that at the time of such registration, the defendant had made “ affirmation,” according to the act of Congress, that he was the “ true and only oimer” of said ship. It also appeared that

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no change had taken place in the ship’s papers at the Customhouse, after the registry, although the act requires an oath or affirmation, similar to the above, upon every entry of the vessel, The ship had been conveyed to the defendant by Minturn, in the month of October, 1834, and had performed at least two voyages., a year, ever since ; but Minturn had received her freight money, and she had sailed at bis sole expense. It also appeared that the defendant had once offered to sell the vessel, and that in the month of August, 1838, he had refused to permit her to go upon a certain voyage.

The defendant, on his part, produced the bill of sale whereby the vessel was transferred to him by Minturn, and then called Minturn himself as a witness. He was objected to by the counsel for the plaintiffs, as interested and incompetent; but the objection was overruled by the Judge. Being sworn on his voir dire, he testified that he had no interest in the cause; and being then sworn in chief, he testified, that on the 15th day of October, 1824, he was, and for a long time before, had been, the owner of said ship. On that day, he borrowed of Franklin and Minturn, (a firm of which the defendant was a partner,) the sum of $6000, in their endorsements, and gave to the defendant the bill of sale in question, as collateral security for the loan. Afterwards, in the month of Martih, 1825, the defendant gave to Minturn a memorandum in writing, in which he acknowledged that he held the vessel as collateral security for said endorsements. This paper was produced at the trial by the witness, and the counsel for the plaintiffs objected to its being read. The objection was overruled, however, and the memorandum submitted to the jury.

The witness then further testified, that the defendant had never been in possession of the ship, and had never exercised any control over her in any way, except in the month of August, 1828, when he refused to permit her to go to sea until his claim was satisfied. The witness himself had alone exercised all the acts of ownership over the vessel, and it was at his request that the repairs were made, he having directed Bailey (the master) to cause them to be made. Jonas Minturn, the partner of the defendant,

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died in 1827, and aftér his death, the defendant paid the notes endorsed by their firm for the witness.

The defendant (the witness also testified) always held the bill of sale as collateral security, and the vessel had been sold by the witness to pay the demand of the defendant, who gave a bill of sale of her to the purchaser. The witness himself had always acted as the owner of said vessel, and he did not inform the plaintiffs, during the progress of the repairs, that she was held by the defendant as mortgagee.

The defendant also called Benjamin G. Minturn, as a witness, who testified that he was privy to the arrangement between the defendant and Nathaniel G. Minturn; that the vessel had always been held by the defendant as collateral security for said loan, and that the defendant had never been inpossession of her, nor acted as owner. The vessel had always been in the possession of Nathaniel G. Minturn, and he had constantly acted as her owner. This evidence was also objected to by the plaintiffs’ counsel.

The plaintiffs then proved, that it was not their practice always to make inquiries after the owners of a ship sent to them for repairs, but the bills were most frequently paid by the captains, who ordered the work to be done.

Upon this evidence, the Judge charged the jury, that if they believed the defendant was the absolute owner of the vessel, or the mortgagee thereof in possession, they ought to find a verdict for the plaintiffs ; but if they believed that the defendant was a mortgagee merely, and out of possession, then their verdict should be for the defendant.

The jury returned a verdict for the defendant; and the counsel for the plaintiffs having excepted to the charge, moved for a new trial.

The cause was now argued by Mr. P. W. Radcliffe, for the plaintiffs, and by Mr. J. Anthon and Mr. D. B. Ogden, for the defendant.

For the plaintiffs, it was contended,

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I. That the bill of sale from Nathaniel G. Minturn to the defendant, being absolute, upon its face,- parol proof ought not to have been admitted to explain, vary, or contradict it.

II. The defendant having sworn at the Custom-house, that he was the owner of the vessel, and having taken the requisite oath each time when the vessel was cleared out and entered, and the register of the vessel being in his name, no evidence ought to have been admitted to explain, vary, or contradict the same.

III. That the bill of sale and oath taken by the defendant at the Custom-house, at the time of the transfer of the vessel to him, and the oaths taken by the defendant at the Custom-house, at each time of clearing out and entering the vessel, together with the register of the vessel in the name of the defendant, were conclusive evidence of the ownership of the defendant.

IV. That the memorandum given by the defendant to Nathaniel G. Minturn, ought not to have been read in evidence ; 1. because it was not under seal. 2. It was made subsequent to the bill of sale.

V. Nathaniel G. Minturn ought not to have been admitted as a witness. 1. Because the defendant could not show by him that the paper presented at the trial was intended and meant as a mortgage. 2. Because he was interested.

If the plaintiffs prevail, the witness will be compelled to pay a debt to the defendant, who is, according to his admission, a mere mortgagee. If that be so, then Franklin is a trustee for Minturn, and the latter will be liable to the former for all the consequences of this defence ; and if the plaintiffs recover, Minturn must pay the costs of this suit as well as the debt. If his interest in other respects is balanced, he is still interested as to the question of costs, and therefore incompetent. The competency or incompetency of a witness, does not depend on the amount of his interest in the event of the suit, but upon the fact, whether he is interested at all. Perhaps it may be said, that the facts sworn to by Minturn, were proved by the testimony of other witnesses. But

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this will not excuse the admission of an incompetent witness ; for the rule is settled, that if one incompetent witness be permitted to testify, there must be a new trial, extan although fifty other witnesses may have sworn to the same" facts. [Marquand v. Webb, 16 Johns. R. 93. Hubly v. Brown, Ibid. 70. Phil. on Ev. vol. I. 48, 54, 56. 2 Day's Rep. 399.]

VI. The defendant (even admitting that the paper, claimed to be a mortgage, was admissible, as exddence) had a right to the possession of said x^essel at any time, the papers not prohibiting such possession. The evidence shows that the defendant had possession of the vessel, and did control her. When Min turn was about to despatch her upon a voyage which he had projected, the defendant asserted his rights as owner, and refused to permit the vessel to go to sea. He took actual and potential possession of her, and maintained it until the ship-was sold. He became oxvner in possession in fact, as well as in law, and is subject to all the obligations of an owner.

The possession of the vessel by Nathaniel G. Minturn, if he could be deemed to he in possession, was inconsistent with the bill of sale, and the paper claimed tobe a mortgage or defeasance of said bill of sale. The bill of sale xvas absolute upon its face, and it could not be known to the xvorld, that any other person, except the defendant, had any claim of oxvnérship upon the vessel, Minium’s possession, therefore, is to be deemed to have been the possession of Franklin by his agent, and the plaintiffs’ rights cannot be prejudiced by any secret arrangements between those parties.

VII. Under the circumstances of this case, the defendant is liable for the debt, even if.he were but a mortgagee, whether he was in possession or not. [15 Johns. R. 298. 15 Mass. R. 477 . 2 Con. Rep. 215, 222, 224. Abbot on Ship. 18.].

It may be said, that the plaintiffs are precluded from any right to pursue the defendant, because they took the note of Mintum for a sum of money due from him, including these repairs. There is no force in that objection, for the note was never paid ; it was

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brought into Court at the trial, ready to be cancelled, and the plaintiffs may waive the note, and proceed upon the original cause of action. This is well settled. [7 Johns. R. 311. Toby v. Barber, 5 Ibid. 68. Whitbeck v. Van Ness, 11 Ibid. 409.]

But the defendant was liable for these repairs, at all events, whether in actual possession or not; and the law will not permit an individual to screen himself from a responsibility of this nature, by ail assertion, that his real rights are not, in truth, what they purport to be. The defendant received from Miuturn an absolute, and not a qualified title to the vessel. If he were mortgagee merely, and if he took the title as collateral security for a pre-existing debt, why did he not state that fact upon his bill of sale ? Why did he not, like other mortgagees, state upon the face of his conveyance the real interest received by him, that the rights of Minium to the property might be known to creditors? This loose mode of conducting business of an important nature, ought to be corrected, and the defendant had no right, legal or moral, to assume an appearance before the world, which had a tendency to deceive the plaintiffs.

The defendant in this case, however, went yet' farther than his mere paper title ; he pursued all the steps necessary to perfect his title under the laws of the United States. The acts of Congress relative to the registration of vessels, (Graydon’s Dig. 396,) make no reference to the rights of a mortgagee, and his title need not appear at the Custom-house. But when the title to a vessel is changed, the law imperatively requires the person who becomes the purchaser to make solemn oath, that he is the sole owner of the vessel; and if a foreigner be a part owner, that fact must also appear. In short, the truth of the case must be disclosed at the Custom-house under oath, and this Court is now to decide whether there is any meaning in those oaths.

Again: whenever a vessel is cleared out for a foreign voyage, and whenever she returns, other oaths are required of the owner„ These were all freely taken by the defendant, who on all those occasions asserted his own absolute title to the vessel. He is therefore precluded from presenting himself before the Court in any other character than that in which he has constantly maintained

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under the laws of. his country. His oaths are conclusive against him, and he is estopped from denying that ownership which he has so solemnly claimed.

We contend, that the owner of a vessel is liable to shipwrights _ for repairs, whosoever that owner may be ; and the only fact to be ascertained is, whether the defendant was the owner. The jury, it is true, have passed upon a part of the facts; but the plaintiffs are not prejudiced thereby, because they objected to all the testimony which was laid before them.

Questions relating to the obligations of mortgagees of vessels, for repairs, have been frequently before our Courts, but this precise case has never been presented nor decided in this state. In Connecticut and Massachusetts, however, their Courts have passed upon the liability of the mortgagee under like circumstances, and have held him responsible. [Starr et al v. Knox, 2 Con. R. 222, 224, 215. Tucker v. Buffington, 15 Mass. R. 477 .] And we contend that the principles established by our own Courts, fully support the claims of the plaintiffs. [Leonard v. Huntington, 15th John. R. 298. Marquand v. Webb, 16 Johns. R. 92.]

The case of Champlin v. Butler, [18 Johns. R. 169.] cannot strengthen the defence, for it has no reference to the rights of innocent third persons. That was an action for master’s wages ; this is for repairs entering into the value of the vessel, whereby the defendant gains an immediate an,d direct advantage. The proceeds of the plaintiffs’ labour passed directly into the pocket of Franklin when he sold the vessel, and he is under every moral obligation, to hold the plaintiffs harmless. In the case of Champlin v. Butler, there was a covered, collusive voyage, well known to the master, and he contracted with the very parties who kept themselves from public view.

Mr. Anthon and Mr. Ogden, for the defendant, contra, contended,

I. That the mortgagee of a vessel, out of possession, is not responsible for repairs. Whatever may be the speculations upon this point in other states or countries, the law here is settled.

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[ 8 Johns. Rep. 159 . 18 Ibid. 169 .] The case of McIntyre v. Scott, [8 Johns. R. 159,] is in every respect like this, except in one unimportant particular. In that case, the party who received the bill of sale did not take out a register in his own name, until towards the close of the transaction. But that is not a matter of any consequence, because the register has nothing to do with the evidence of title. It has reference merely to the revenue laws, and the national character of the vessel. [Leonard v. Huntington, 15 Johns. R. 298. Sharp v. The United Ins. Co., 14 Johns. R. 201.]

II. The true question to be determined is, whether the defendant was absolute owner, or mortgagee ; and upon this point the testimony was conclusive to show that the defendant was a mere mortgagee out of possession, to whom no credit was given by the plaintiffs, The evidence upon this question was submitted fairly to the jury, and they found for the defendant. This makes the distinction between the case under consideration and that of Tucker v. Buffington, [ 15 Mass. R. 477 ,] cited by the opposite side. In that case, the mortgagee was in possession; if so, he was entitled to the freight, and would be liable for repairs ; but being out of possession, the mortgagee receives none of the vessel’s earnings, and is not bound for her repairs.

Much stress is laid upon the fact, that the defendant took the usual Custom-house oaths; and it is contended that he is concluded by them. The defendant was bound to make those oaths, else the vessel would have lost her national character; and besides that, the legal title was in him. There is ho mode by which a mortgagee’s interest can be made safe, except by an absolute bill of sale, for his rights as such are not known or regarded at the Custom-house. But this point has also been before a most intelligent and learned Judge, and has been decided upon principle. It may therefore be considered as settled in favour of the defendant. [1 Mason’s Rep. 306, Weston v. Penniman.]

If the defendant had held himself out as owner, for the purpose of procuring credit for the vessel, or even if the plaintiffs, before they made the repairs, had ascertained by the register at the

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Custom-house, who the owner was, for the purpose of giving ¡dm credit, then the question might have been different. But the proof conclusive, that the only person trusted was Nathaniel G. Minturn, and that the defendant’s claim upon the vessel was not known until after the repairs were made. Upon every point, therefore, of law and fact, the case is with the defendant.

III. N. G. Minturn was a competent witness, his testimony having the effect of charging himself. His interest is balanced; he must pay one party or the other, and it is a matter of indifference to him which he pays. How can Minturn be liable for costs 1 If the defendant was the absolute owner of the vessel, or if he was a mortgagee in possession, he is bound to pay for the repairs without suit, and cannot cast the costs of the defence on Minturn. If the defendant was a mortgagee out of possession, he cannot be compelled to pay, and of course no costs can fall upon him. Min-turn never directly or by implication undertook to hold the defendant free from every attack which third persons might choose to make upon his rights. If the title were impeached, it would be another matter.

IV. The defeasance being prior in date to the plaintiffs’ claim a, it was correctly received in evidence as part of the res gestee. The defeasance existed in parol long before it was reduced to writing, and was even then good. But if the sale in the first instance had been absolute, the defeasance would have converted it into a mortgage. The plaintiffs were not prejudiced by this, the repairs being put upon the vessel by order of Minturn, who exercised all the acts of ownership. The essence of the contract between the defendant and Minturn, in relation to the ship, was that Franklin should be secured for his loan by a mortgage. If the defendant had done any act inconsistent with Minium’s rights as mortgagor, it would have been not only a violation of his contract, but of good faith. It is not essential that the defeasance should be executed at the time of the conveyance, or that it should be under seal. There is no objection, therefore, to the proof upon this point, as offered at the trial.

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V. Benjamin G. Minium’s testimony xvas unobjectionable, he being privy to the transaction from the beginning, and testifying to facts within his own knowledge.

VI. The Judge submitted the whole case correctly to the jury, and their finding was consistent with the evidence.

This was an action by the plaintiffs in this suit against the defendant, for work, and labour, and materials found, &c., in repairing the ship Concordia, when she stood in the name of the defendant as ostensible owner, and the defence was, that the defendant was mortgagee out of possession, and therefore not answerable to the plaintiffs for the repairs done by them to her. The question of absolute or qualified ownership, and the fact of possession, were the chief points of litigation at the trial, and to which the testimony was exclusively pointed. The Judge charged the jury, that if they were satisfied that the defendant was the owner of the ship, or mortgagee in possession, at the time the work was done, the plaintiffs were entitled to recover; but if the jury, from the evidence, believed that the defendant was not owner, but was a mortgagee, and out of possession, then they ought to find for the defendant; and under this charge, the jury gave their verdict for the defendant.

The plaintiffs now move to set that verdict aside, and for a new trial, insisting that the admissible evidence showed the ownership of the Concordia to have been in the defendant, and that the evidence which went to disprove his title as owner, and to show his interest to have been that of a mortgagee, xvas inadmissible; and also insisting further, that if he was in fact clothed with a mortgage interest solely, he appeared by the evidence to have been in the possession of the vessel, and to have exercised acts of ownership and a control over her, or to have possessed the undisputed right to the possession and control of her, and was, on either ground, chargeable xviththe repairs; and moreover contending broadly, that even if the defendant was a mortgagee out of possession, he was still responsible as the legal owner; or if the general rule were otherxvise, that this case would form an exception, and the

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defendant would be liable upon the special ground, that the repairs in question had'enured to his benefit, by enhancing the value of his security.

The first question then is, whether the defendant, was, in judgment of law, the absolute owner of the ship, or mortgagee, or trustee only, at the time the work was done.

The plaintiffs, to establish the ownership of the defendant, produced and proved the Custom-house register of the ship, with the affirmation of the defendant, that he was sole owner, by which document so produced, it appeared that a new register had been issued for her, on the 15th of October, 1824, her previous register, issued on the 27th of August next preceding, being then surrendered, in consequence of a change of property. The new register was issued at the request of the defendant, and upon his affirmation that he was the sole owner of the ship, and she vvas thereby registered in the usual form, as the sole property of the defendant. The affirmation of the defendant, when he applied for and obtained the register, was also produced, by which it appeared that he, on the same 15tli of October,1824, affirmed, in the usual form, that he then was the true and only owner of the ship, and that there was no subject or citizen of any foreign prince or state, directly or indirectly, by way of trust, confidence, or otherwise interested therein, or in the profits or issues thereof. And it was proved that mo change had taken place in the registry, intermediate the date, and issuing of the same, and the time the work was done.

To refute this documentary proof of ownership, the defendant produced and read in evidence a bill of sale of the ship from Nathaniel G. Minturn to him, the defendant, bearing date the same 15th of October, 1824, and being on the face of it an absolute transfer of the ship to him. He then called Minturn, the apparent vendor, to prove that the bill of sale, though absolute in its terms, was given to him, the defendant, and taken by him as collateral security for a loan of six thousand dollars made by Franklin and Minturn to Nathaniel G. Minturn, the owner oí the ship. The witness was objected to, as incompetent to testify to that point, and as being interested. He testified on his voir dire that he had no interest in the event of this suit; and not being deemed by the

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Court, to be otherwise incompetent, he was admitted to testify in chief.

He proved that he was the owner of the Concordia on the 15th of October, 1824, and on that day borrowed of Franklin & Min-turn, of which co-partnership the defendant was a member, the sum of $6000, in the endorsements of their house, and gave the bill of sale of the ship to the defendant, as collateral security for the loan ; and that the defendant, afterwards,.on the 29th March following, to manifest the trust, gave a written acknowledgement as evidence of the contract. The instrument was produced, and being proved by the witness, was offered in evidence. The counsel for the plaintiffs opposed its reception, on the general ground, that the bill of sale being absolute in its terms, evidence was not admittable to contradict, vary, or explain its import, by showing it to be defeasible; and upon the special grounds, also, that it was not under seal, and was not executed simultaneously with the bill of sale, but after an interval of upwards of five months. It was, however, allowed to be read to the jury, subject to the objections to its competency. We are now to decide upon its title to admission in evidence.

First, then, could it be received to show that the bill of sale which professed and purported to be evidence of absolute ownership in the defendant, was in reality a security only for a loan from his house to Minturn 1 The general rule is, that a deed must be construed by itself, and that extrinsic evidence cannot be received to explain, vary, or contradict its sense or import, as collected from the terms it employs.

But the case of a mortgage or trust interest has long been an established exception to the rule; and the competency of extrinsic proof, to show that an absolute deed is to operate as a security for a loan, and not as an absolute conveyance, has been so often and so universally admitted, both in courts of law and equity, that it has grown up into an elementary principle of the law of mortgage. It is a principle peculiar to mortgages and trusts. Courts consider it as a necessary safeguard to borrowers, and a rule of evidence which policy and a sense of justice require them to apply, and to which even the solemn and conclusive nature of deeds

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must bend. The deed is treated with all the respect and deference which can consist with a just regard to the protection of the borrower, and the extrinsic evidence is not received to qualify the deed, but to establish the fact of the loan; and it is the proof of the loan, on the security of the property vested by the deed in the vendee, that renders the deed thus given to secure it, a defeasible conveyance. The decisions of our own Courts are decisive on the point. In Marks v. Pell, [1 Johns. Ch. R. 594,] and in Strong v. Stewart, [4 Johns. Ch. R. 167,] it was ruled that parol evidence is admissible to show that a mortgage only, and not an absolute deed was intended. And in Henry v. Davis,[J. C. R. 90,] it was held, that a conveyance of real estate intended merely as a security for a debt, though absolute on the face of it,is a mortgage. The same principle was established in the Court for the Correction of Errors, in the case of Dey v. Dunham, [15 Johns. R. 555.]

The rule obtains equally at law as in equity, and both in England and in this country, it is an axiom that it is always competent to show that a transaction, appearing on the face of it to be a sale, was in fact a loan, and that the proof of the loan gives to the deed which is intended to secure it, the character of a mortgage. It is not essential that the defeasance should be by deed to produce that effect upon the absolute conveyance. The cases already cited conclusively show that the agreement which operates as a defeasance, or which, in other words, establishes the loan that produces that effect, may be without seal, or even by parol. Nor is it necessary that the declaration or defeasance, if in writing, should be executed simultaneously with the deed. In the case of Dey v. Dunham, the written defeasance was not given until six months after the deed was executed, and it embraced a subsequent loan and security, but the parol agreement for the loan on the security of the deed, was contemporaneous with the deed ; and that agreement operated to qualify the deed, and characterize it as a conditional and defeasible conveyance.

So in the case at bar : the agreement by parol for the loan upon the security of the ship, which preceded the bill of sale, impressed indelibly upon that instrument the character of a trust, or collateral security for the debt, and the subsequent declaration in

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writing merely manifested the prior agreements, and preserved the evidence of it, by reducing it to writing. In strictness, however, the parol agreement for the loan, and the subsequent writing, did not create a mortgage-interest: for the condition must be in- ° corporated m the conveyance, or a written defeasance must be executed simultaneously with it, to constitute a technical mortgage; but that agreement created a trust which attached to the title vested by the bill of sale in the lender of the money, and which bound his conscience to hold the ship as a collateral security for the debt, and not as absolute owner of the property. This trust was in substance a mortgage-interest, though the conveyance was not in form a mortgage, and equity would enforce it, if sufficiently established by proof, notwithstanding that it was by parol ; or if any question could be made of the legal obligation of the lenders, on the ground of trust from the application of the statute provisions to the case, the subsequent declaration of the trust in writing, was sufficient to satisfy the terms of the act, and to establish the trust. The statute only requires that the trust shall be manifested by a declaration in writing, not that it shall be created by deed ; and it is well settled, that any writing expressing and declaring the trust, whether it be made at the time of the execution of the deed, or after it, will be sufficient evidence of the trust to entitle the cestui que trust to the aid of the Court in enforcing its performance, and that it is not necessary that the trust should be declared at the time it is created.

The case of Steere v. Steere, [5 Johns. Ch. R. 1,] is in point to show, that a trust need not be created by writing, and that when by parol it is sufficient to take it out of the statute, that it be manifested and proved by writing, under the hand of the party to be charged as the trustee. The solemnity of a seal to the declaration of trust, is not required to impress an absolute deed with the trust which that declaration manifests, and it is sufficient that the written declaration is made before the trust is sought to be enforced. The writing, therefore, which the defendant in this case gave to Minium in March, was a sufficient manifestation and proof of the trust of the bill of sale executed by him in the preceding October, and it was competent evidence to show that the bill of sale.

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under the previous proof of the fact of the loan on the credit of the vessel, though absolute in terms, was merely a collateral security for the loan made by Franklin & Min turn upon the credit of it. If that evidence was admissible; it must surely be conclusive, for it is clear and positive.

But it was intimated that this evidence was only admissible to qualify the deed as between the parties, and could not affect the right of strangers. I can discover no line of distinction between parties and strangers, in the application of the rule. The question is, whether extrinsic evidence can be received to show that the transaction was a loan on the credit of the ship, as collateral security, and not a purchase of the vessel, and if the terms of the deed do not estop the party who receives it from showing that it was not a sale, but a pledge for a loan, he cannot be precluded from the benefit of that proof in a controversy with a party who seeks to charge him as absolute owner. If indeed, a stranger should be deluded or misled by this ostensible ownership of the vendee, and actually supply the ship on the credit of his responsibility, a question of some delicacy would be presented, which, however, would involve considerations beyond the mere fact of apparent title in the party. But it is not pretended that the plaintiff in this case has any such ground .of complaint, for it does not appear that he had any knowledge of the bill of sale, or gave any credit to the defendant. His right of recourse to the defendant, if he has any, results from the legal obligation of the defendant as owner of the vessel, or must rest upon the other grounds of liability imputed to him in his character of trustee or mortgagee. If he was, in judgment of law, the absolute owner, his obligation would be perfect, whether his ownership was known to the plaintiffs or not; but if he has disproved the charge of ownership, he has excused himself from the obligation which that relation would have imposed upon him.

It was strenuously urged that the register of the ship in his name, and his affirmation of the sole ownership of her, estop him from disclaiming his title as owner, and some irregularity of conduct seems also to be imputed to him in assuming that character. I see no just ground for reprehension in the change of the papers

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at the Custom-house, nor any sufficient reason for the estoppel which is supposed to conclude him. The transfer of the register to himself might be necessary to his security, and the affirmation he made of sole ownership, indispensable to that transfer. That affirmation was true, for he was the sole owner in whom the whole legal title was vested by the bill of sale. His title was affected by the trust for Miuturn, but that trust was a beneficial interest, and not a legal title; and it was strictly true that no alien was interested directly or indirectly in her, and his affirmation goes no farther than to deny the interest of aliens. I discover nothing in the affirmation, or the register inconsistent with the defence he now makes. He was the true and sole owner of the ship; but he held her in trust for Miuturn, and every trustee is equally the owner of the trust estate which is vested in him.

Neither the terms of the registry act or of the revenue laws, nor the policy of the system, appear to me either expressly or by implication to exclude trusts of vessels for citizens, or to require the disclosure of such trust by the trustee. It was the secret interest of foreigners in American vessels, that Congress meant to prohibit, and against which the provisions of the act are intended to guard,—and in that spirit the oath plainly draws the distinction between the citizen and the foreigner. It prescribes a searching form of denial of all possible interest of aliens; but it confines that denial to aliens, and thereby impliedly allows the subsistence of such interests in citizens. The other provisions of the acts to which we are referred obviously contemplate the case of part owners in whom the legal title to the ship is partly vested, or whose names appear upon the bill of sale or the registry, and not to mere cestui que trusts whose title or interest the statutes disregard.

I am satisfied therefore, that the defendant was not incorrect in his acts at the Custom-house, and ought not to be estopped by those acts, or his affirmation of title in himself, from shewing the truth of the transaction. And the disclosures he has made appear conclusively to shew that he was not the absolute owner of the ship, but held her in trust, as security for the loan made by his house on the credit of her.

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The next enquiry is, whether he was in possession of her during the time that the repairs were put upon her by the Plaintiff: and the testimony appears to me equally clear and decisive against the fact of possession, as against the absolute ownership of the defendant. Minturn, who best knew the facts, testifies positively that he had himself the exclusive posssession and sole charge and management of the ship, during the whole period in question, and that the defendant never took possession of her or had any charge or agency concerning her, or exercised any control or ownership over her, until the interference to prevent the the voyage to Turks Island, about a month before the commencement of this suit. B. G. Minturn and the master confirm and corroborate his statement, and the testimony of the plaintiff conduces to the same result.

In opposition to this strong current of oral testimony, the acts of the defendant in taking the title and changing the register, and the part he took in clearing out the ship for her voyages, with his interdiction of the projected voyage to Turks Island, and his subsequent sale of the vessel, are the only proofs of possession relied on. What do they weigh? The change of papers was important to his security ; and the clearance of the vessel was necessary to her. employment—they were mere formal acts entirely consistent with his character as Trustee, and were no evidence of actual possession in him, not inconsistent with the possession of the cestui que trust. The interdiction of the voyage to Turks Island and the sale of the ship, were acts of possession as well as as ownership, but they were long subsequent to the repairs for which the plaintiff sues, and were acts done with intent to wind up the concerns of the trust,, and were the necessary means for enforcing his security and realizing his debt. He did not take possession of the ship for the purpose of employing her, but for the purpose of sale, and he cannot be charged by that possession with the debts antecedently contracted. ’

Upon the whole I see no reason for setting aside the verdict..—. The charge of the Judge was strictly correct in point of law, and the jury have found a verdict which is fully supported by the evidence. The motion for a new trial must therefore be denied.

This was an action for repairs done to the ship Concordia, between the 10th day of September, 1827, and month of June following. The repairs were ordered by the captain of the vessel, but the evidence clearly shows that they were in fact made on the credit of Minturn. A bill of the repairs was rendered to him, and his notes taken for the amount, which were partly paid. There is no proof, that the plaintiffs, at the time of making the repairs, knew that the defendant had any interest in the vessel; no account was ever rendered to him, nor was any demand ever made on him for payment. After the failure of Minturn, this action was brought with the view to charge the defendant, as owner of the ship.

It appeared in evidence, that for a long time previous to the 15th of October, Minturn was the owner of the ship. On that day he executed to the defendant an absolute bill of sale of the vessel, and the ship’s papers were changed at the custom-house. The defendant made the usual oath of ownership, and the vessel was registered in his name, and continued to be registered in his name until after the commencement of this suit. It was clearly proved, however, that the bill of sale was given as a mortgage, to secure to the defendant a large sum actually loaned to Minturn on that day ; and was so understood and agreed to be, by the parties at the time it was executed. That the defendant, on the 29th of March, 1825, signed a written agreement, and delivered it to Minturn, setting forth that the transfer of the ship to him, was as security for the said loan, and engaging to reconvey the same on payment of the money. It also clearly appeared that the defendant never had possession of the ship, and never received any of her earnings, and never in any manner interfered with the control of the vessel by Minturn, until long after the repairs in question were made. The vessel was always cleared out at the custom-house by Minturn, the defendant making on those occasions the necessary oaths as registered owner.

The plaintiffs contend, in the first place, that parol evidence was inadmissible, to show that the bill of sale was intended as a mortgage. This point seems to be decided in the case of Champlin v.

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Butler, [18 J. R. 169.] In that case, as in the present, there was an absolute bill of sale, and parol evidence was admitted to show that it was intended as a mortgage. In the present instance, however, it would seem unnecessary to rely on the parol evidence of the understanding of the parties at the execution of the bill of sale. On the supposition that it was then an absolute sale, it was certainly competent for the parties, by a subsequent written agreement, to convert it into a mortgage. This was done by the instrument of the 29th of March, 1825, and long before the repairs in question were made upon the vessel.

It is in the next place contended by the plaintiffs, that the oath of the defendant, and the registry of the vessel at the customhouse, are conclusive evidence of ownership of the vessel in him. The law has been decided to be otherwise. It has been repeatedly held, that the registry at the Custom-house does not determine the ownership of a vessel, and that its object is merely to show her national character, and to entitle her to the advantages secured by the laws of the United States to vessels of our own country. [Sharp v. United Ins. Co. 14 J. R. 201. Leonard v. Huntington, 15 Ib. 302;] And in Weston v. Penniman, [1 Mason, 318,] it is considered by Judge Story, that a mortgagee of a vessel may declare himself the legal owner, for the purpose of the registry acts, without in any manner altering the relations existing between him and the mortgagor. The defendant, then, is not concluded by registering the vessel in his own name, because the act is consistent with his character as mortgagee, and is open to explanation, in the same manner as the bill of sale.

The defendant, then, being mortgagee of the ship out of possession, as found by the jury in this case, the law seems to be clear that he is not liable for repairs, unless they are made upon his credit, or by a special contract with him. It was so expressly held by the Supreme Court in McIntyre v. Scott, [8 J. R. 159,] the leading circumstances of which case were very similar to those of the present; and the doctrine of that case has been repeatedly recognized since. [Champlin v. Butler, 18 J. R. 169. Leonard v. Huntington, 15 J. R. 298. Thorn v. Hicks, 7 Cowen’s

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R. 697.] These cases settle the point too clearly to admit of doubt.

The plaintiffs have further insisted, that Minturn was an incompetent witness, on the ground of interest. The plaintiffs sought to charge the defendant as owner of the ship. After they had offered prima facie evidence of that fact, the defendant proved the sale of the ship by Minturn to him, which on its face was absolute, and then called Minturn as a witness. He was objected to as incompetent. As the case then stood, there was, clearly, no ground for the objection, and it was properly overruled. He was then sworn on his voir dire, and stated that he had no interest in the controversy, and was then sworn in chief.

When the witness was sworn in chief, there certainly was no ground for rejecting him as interested. His relation to the vessel had not appeared. Apparently he had parted with all right to her, and as he then stood, was manifestly interested to fix the expense of the repairs on the defendant, by which he might have discharged himself from the plaintiffs’ claim on him. On the supposition that his testimony shewed him interested, in any degree in favour of the defendant, I do not find that the Judge was requested to exclude it from the case, or to instruct the jury not to regard it. Under such circumstances, as the defendant’s whole case was clearly proved by other witnesses, I do not think that a new trial ought to be granted, though Minturn should be considered as an incompetent witness.

His incompetency, however, is supposed to consist in this. Showing himself to be the mortgagor of the ship, and in the exclusive possession of her, it is contended, that in case of a recovery by the plaintiffs, he would be liable to indemnify the defendant against the costs of this suit, and that such an interest excludes him as a'witness, on the authority of the case of Hubbly v. Brown. [16 J. R. 72.] I cannot perceive how the defendant in this case stands in the relation of surety for Minturn, for the repairs made to the vessel. The defendant, if liable at all, is so as owner, or mortgagee in possession. If liable in either character, he was bound to pay in the first instance, on the ground that the contract for the repairs, in judgment of law, was made directly between

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him and the plaintiffs. He could then have no pretence to call on Minturn to indemnify him against costs. He might charge him with the amount paid for repairs, as an expenditure on the vessel, while in his possession, but could not demand the costs of a suit, which was the consequence of his own default.

The witness, in my opinion, was equally liable to either party, for the amount of the plaintiffs’ demand, whatever may be the issue of this cause, and was therefore a competent witness for either.

Motion for a new trial denied.

[E. Anthon, Att'y for the deft.]