Delano v. Wright — 24 N.Y. Super. Ct. 298

Majority

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Joseph W. Delano, plaintiff and respondent, vs. James Wright (who was impleaded with Amos Howes et al.) defendant and appellant.

Headnote

1. Although the mortgagee of a vessel, notwithstanding the bill of sale to him be absolute in its terms, and he is registered as a part owner, is not thereby made liable for supplies ordered by a person not authorized as his agent; yet he may be made so by adopting the risk and expenses of a voyage for which she had been chartered and is to be fitted out by the ship’s husbands, and refusing to allow it to be made at their expense and profit. So held where upon an offer to permit him to do so, by a letter of such ship’s husbands, informing him of the chartering and intended fitting out such vessel, and that he would be liable for the expenses and outfits, but requesting him to say if he desired it to be at their expense and risk, and offering to give bond if he would do so for her safe return; he made his election to do so by bringing an action against the ship’s husbands for a share of the profits, in the complaint "in which he stated under oath, that he had not elected to have such voyage at the risk and profit of such ship’s husbands, but had acquiesced in it as for his account in part—although he never had answered or otherwise taken notice of such letter.

2. It does not alter such liability that after the voyage the ship’s husbands disputed his right to share in the profits and his consequent liability for expenses, and litigated his action to recover his share of the profits; and therefore evidence of these facts is not admissible in defense of the action against him for the price of the supplies.

(Before Bosworth, Ch. J. and Mohcrief and White, J.J;)

Heard May 8,1863;

decided November 28, 1863.

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This was an appeal from a judgment entered on a verdict.

The 'action was brought against Amos and Mulford Howes, James A. Suydam and James Wright, to recover from them, as alleged owners of a .ship, (Neptune’s Oar,) for certain supplies furnished to the ship on the 1st of November, and the 3d of December, 1869, and various intermediate days.

The answer of Wright, the only one who interposed any defense, denied that he was an owner, and alleged that his only interest in the ship, at any of' the times involved in the action, was as mortgagee of one fourth part thereof. He further alleged that he had no actual possession of her, and whether he was constructively in possession as mortgagee of one-fourth, he submitted, as a doubtful question of law, to the court.

The cause was tried on the 13th of November, 1862, before Mr. Justice Babbode and a jury.

It appeared by the evidence, that in 1858, one Philips conveyed, by a bill of sale, one-fourth part of the ship, ■('Neptune’s Oar,) to the defendant Wright, which bill of sale was duly recorded at the collector’s office, and although absolute in terms, was in fact a mortgage.

The remaining three-fourths of the ship were owned by the other three defendants in this action. The firm .of Howes & Co., two of the defendants, were the ship’s husbands. After-wards, and on the 19th of November, 1859, Howes & Co. as such ship’s husbands, wrote to the defendant Wright in the following terms :

“We write to say that the ship Neptune’s Oar is chartered for a voyage from the port of New York to San Erancis.co, California, and will in due time he fitted out and sent on the same, and that you will be held liable for the expenses, bills and outfits attending such voyage. In case you desire to have the voyage performed at our expense, and for our profit, and to receive a bond for safe return, please to say so, and we will give it with pleasure; otherwise we shall consider that you acquiesce in the voyage, and intend to be responsible for your share in the expenses and losses.”

This letter was received by Wright, and he made no reply thereto. The vessel was accordingly fitted out for the voyage,

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and soon after sailed under the charter party referred to. Upon the voyage to San Francisco, the ship lost money. Upon the return voyage there were profits. Soon after her arrival at New York, the defendant .Wright commenced a suit against the other part owners of the ship, claiming his one fourth of the earnings of the voyage, setting forth that although his bill of sale was intended as a mortgage, yet that as he had acquiesced in, and consented to, the terms of the letter of November 19th, and had thus become liable to pay his proportion of the outfit of the vessel, he was entitled to share in her earnings on the return voyage, as the same was a part of the contemplated voyage referred to in the letter of November 19.

The complaint of Wright in that suit, which was sworn to by him, .alleged, after setting forth the letter above mentioned, “ That the plaintiff .did not elect to have such voyage performed at the expense or for the profit of said Howes & Co., nor to demand or receive a bond for the said safe return of said ship, but that he acquiesced in such voyage- of said vessel from New York to Ban Francisco, and her return via Callao and the Chincha Islands, with a cargo of gitano as aforesaid, as for his account and risk as to the one fourth interest corresponding with the share of said vessel so conveyed to him as aforesaid.” Arid further, stated the amount of earnings, and that Howes & Co. had not accounted to' hirri for his share thereof. These allegations, and others to the same effect from, an affidavit made by Wright in that action, were read in évidence by the plaintiff, upon the-trial of the present action.

The plaintiff "being called as a witness in-his own behalf, was asked on-whose credit the goods were furnished.

This question was admitted, against the objection and ex- . ception of the defendant.

A. “I was informed at the timé that Mr.-Wright was part owner ; the other part owners were Howes & Co.

Q. Had you any knowledge, from any source, that Wright claimed that the bill of sale w$s simply intended to be a mortgage ? : ,

A. No, sir.”

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On cross-examination, he stated that the goods were ordered at his office; but he could not say who gave the orders ; he supposed the masters, ship-keepers or captain. The goods were delivered on board. He further stated :

“I never saw Mr. Wright; I was informed that Mr. Wright was part owner at the time; it was shortly after the arrival of the ship here, that I was informed that Mr. Wright was part owner ; I think Howes & Go. informed me; I think that I also saw it on the register at the custom house ; I examined the books; 1 had occasion to go there to examine about the ownership of other vessels ; I examined it in the summer of 1859 ; after the ship arrived here, and before I furnished the goods. * * * I did not know Mr. Wright’s agent here.” The plaintiff having rested, the defendants’ counsel, among other things, offered in evidence an affidavit made by James A. Suydam, one of the firm of Howes & Go., in the former suit by Wright against them, in which Suydam alleges that neither Philips nor Wright ever had any possession ; and further, that on the 19th of November, .1859, deponent’s firm of Howes & Go., as owners, agents and ship’s husbands of said ship, not knowing who were the real owners of said one-fourth of said ship, which the plaintiff now claims to represent, with a view to ascertain if possible whether said Wright or said Phillips claimed to be owners of any portion of said ship, informed each of them by letter that they, said Howes & Go., had chartered said ship for a voyage from New York to San Francisco, and informing each of them that he would be held liable for the expenses attending said voyage, and that unless he should desire to have that voyage performed at the expense of deponent’s said firm, Howes & Co., and for their profit, he would be considered as acquiescing in the voyage, and intending to be responsible for his share in the expenses and losses, but deponent's said firm did not thereby say or admit that either said Phillips or said Wright, or both of them, were actually owners of any share of said ship, nor in any manner to change the actual relations of said Phillips or said Wright to said ship, or to deponent’s said firm.

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The defendants’ counsel also offered in evidence the answer of the defendants in such former suit, in which they alleged that neither Phillips nor the plaintiff ever had any possession, and had not before claimed to share the earnings, and had never paid, but always declined to pay any expenses; and that Howes & Oo. wrote the letters referred to, to both Phillips and Wright, for the purpose of ascertaining who was the owner if either claimed to be so; and that neither ever replied to the letter to him, or in any manner acquiesced in or acknowledged his liability for expenses, and they denied that either was liable to pay any of the debts of the ship.

Both of these offers of evidence were excluded on the plaintiff ’s objection, and the defendant excepted.

The defendant then proved by Phillips, as a witness, that Howes & Go. sent to him a letter in the same terms as that sent to Wright, and that he made no reply.

At the close of the trial the judge ordered a verdict for the plaintiff for the full amount claimed, and judment having been entered the defendant appealed.

Joseph H. Choate, for the defendant, appellant.

I. The action being for goods sold and delivered, can only be sustained against the defendant Wright by showing a sale and "delivery to him, or for his account, or to his agent, or by his request or authority. The question of the nature and extent of his interest in the vessel is only material, as bearing upon that issue.

II. Wright was a mortgagee out of possession, claiming no interest or doncern in the ship until the writing of the letter •of: November 19th, 1859. Therefore, for the goods which, by the stipulation and the bill of particulars, appear to have been sold and delivered to the ship prior to the 19th of November, 1859, and which, in the aggregate, amount to §168.27, the defendant James Wright is in no way chargeable, and the direction of the. court to the jury to find a verdict for that part of the hill was clearly erroneous.

1. As a mortgagee • out of possession, he was not liable,.

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although his name may have appeared in the register. Those goods were not • bought at his request or in his name, and whatever view the court may take of the letter of November 19th, as affecting Iris liabilities subsequently, it can have no reflexive force as between Wright and the plaintiff, to make him liable for goods sold to other parties before that letter was written.

2. The sales prior to the 19th of November were made to the ship’s keeper, the ship’s husbands or the master, all of whom were total strangers to Wright. They did not buy in his name, or for his account, or by his authority. It was not communicated to him in the letter of the 19th that any such purchases had been made.

3. As between Wright and the - owners of the other three quarters, it may be that they may be entitled to bring into their account all expenses incurred by them in outfit for that voyage, before as well as after the letter was written. But the plaintiff has nothing to do with that; he sold his goods to other parties, not to Wright, and he must look to them, and not to him, for the price.

4. Whatever effect may be given to the letter,. it can have no greater force than an absolute transfer of one quarter on that day to a stranger would have. Such a transfer could not subject the purchaser-, even if he subsequently participated in the voyage, to any liability to the sellers for goods before the transfer sold and delivered to the ship.

III. The letter of November 19th, and the failure 'of the defendant Wright to reply to it, did not alter his legal relation to the ship. He still remained a mortgagee but of possession, and as such not liable for her supplies, nor entitled to, her' earnings.

1. The only test of liability for repairs and supplies furnished to a ship is whether" the contract was made, or the supplies procured by the authority, express or implied, of the person sought to be charged. If he is in fact a mortgagee and has not taken possesion, he is not liable. (Mitcheson v. Oliver, 1 Jurist, 900, Excheq. C. C. 5 Ellis & Black. 419. Myers v.

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Willis, 17 C. B. 77 , 92. S. C. on appeal in Excheq. 18 id. 886. Hackwood v. Lyall, 17 id. 124. Brodie v. Howard, Id. 109. 2 Parsons on Marit. Law, pp. 113, 120, and cases there cited.)

2. The defendant Wright never did take possession, nor do any thing which in view of his status as mortgagee of one quarter, was in law equivalent to taking possession.

3. When the letter of November 19th was written by the other owners to Wright, he did not occupy such a relation to the ship as that his silent receipt of it could become an acceptance of the proposition made in it, or equivalent to a contract upon the terms proposed.

(a.) There was no relation of partnership, part ownership, or of "agency existing which would give the effect to the letter and its silent receipt, which the plaintiff attempts in this case to give to such silent receipt, and the defendant’s failure to call for the security offered. A part owner’s relation to the other part owners may be such that no other construction could be put upon such conduct on his part, than that he assented to the joint enterprise. But a mortgagee of one part, until possession taken, stands in no relation whatever to the owners of the other part, and can not call upon them for security, nor they upon him, to take part in the business.

(b.) As between the plaintiff and the defendant the latter is not by the fact of his failing to dissent from the letter of November 19th, estopped to deny the authority of persons in charge of the ship to order supplies on his account, because that fact was not communicated to the plaintiff, nor did he act or rely upon it, or part with his goods upon the faith of it.

(c.) Phillips himself never had possession, and Wright was only a mortgagee under him.

IY. Whatever acts on the part of a mortgagee of a minor portion of a vessel'may be tantamount to taking possession, since his right as against his mortgagor, to have the possession and enjoyment of the interest mortgaged, may conflict with the right of the majority owners to keep exclusive possession of the whole vessel, he can not be subrogated to all the rights of his

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mortgagor, and clothed with all the rights and consequent liabilities of absolute owner of a part unless he either takes actual possession, or is permitted by his mortgagor to receive his share of the earnings, or some transaction takes place between the mortgagor and mortgagee by which the latter supplants the former in the enjoyment of the mortgaged property. But the mortgagee of one quarter, and the owners of the other three quarters, could not by a private arrangement between themselves, not made known to the mortgagor, foreclose his rights.

V. The plaintiff’s rights growing out of his sale of supplies to Howes & Co. or to the master or the ship keeper, for the ship, are not to be confounded with any rights which Howes & Co. may base upon the letter of November 19th, to hold the defendant as a partner in the enterprise to San Francisco. The writing and receipt of that letter created no privity of contract between the plaintiff and defendant. The owners can take no advantage of that transaction, because they subsequently ignored it, acted as if no arrangement for a joint enterprise had been made; received and appropriated to their own use the $25,000 accruing on the voyage to San Francisco ; refused to pay or account for any portion thereof to the defendant, and disposed of all the return charter money without consulting him, and uniformly refused to recognize him as having any interest in the earnings of the vessel. It will be grossly inequitable to treat the transaction of November 19th, as charging the defendant for supplies, when the other owners repudiated it, and monopolized the earnings, and the sole benefit of the supplies sold to them by the plaintiff.

VI. No new liability was assumed by the defendant Wright, by filing his complaint in this court, in February, 1861, which is set out in the printed case.

(a.) The sole object of that action was to ascertain, by a competent adjudication, his rights and liabilities in the premises, and in the event of establishing a right as part owner, to provide thereby for the liabilities of that relation, by impounding the return charter money.

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(5.) Eo fact is stated in that complaint different from or inconsistent with or in addition to the facts in evidence here. The legal conclusions stated in that bill must be construed in view of the facts in evidence. Wright’s allegation in the bill, that he did not elect to have the voyage performed at the expense of Howes & Co. and that he acquiesced in the voyage to San Francisco, mean simply, that he did not make the answer called for by the letter, which is the only fact upon which those allegations were predicated, because it is proved that after the receipt of the letter, Wright never made any communication whatever to the writers of it.

(c.) If the allegations of Wright’s complaint are to be taken as additional material evidence, it can only be as evidence of what his intentions were, and as going to show an understanding or agreement between him and Howes & Co. If his intentions were material evidence, then it should have' been left to the jury to find as matter of fact what that intention was, and the evidence offered as to what passed in the mind of the other contracting party, Suydam, should not have been excluded.

(d.) If the defendant was not, at the time of filing that complaint, a mortgagee in possession, and as such liable for' the supplies, and entitled to a share of the earnings, he did not make himself so by filing his bill and claiming that position. (Gardner v. Cazenove, 1 Hurlst. & N. 423. Willis v. Palmer, 7 C. B. N. S. 340.)

(e.) The filing of that complaint can not be regarded as an election on Wright’s part under the letter of November 19th, because it manifestly was not intended as such, and the'voyage to San FranciscOj to which alone that letter related, had then long since ended, and its earnings been received and appropriated by the other owners. '

VII. The following exceptions were well taken by the defendant, and upon either of them the judgment below should be reversed, viz :

1. To the ruling of the court,- refusing to compel the plain

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tiff to elect on which count he would proceed, he having confessedly hut one cause of action.

2. To the admission of the question, upon whose credit the goods were furnished—that being a mere question of law, and it being, upon the decisions, immaterial upon whose credit they were furnished.

3. To the exclusion of the affidavit of James A. Suydam, which was distinctly referred to in the complaint put in evidence on the other side, and which tended directly to disprove any agreement between the defendant and Howes & Co. that he should be concerned in the voyage.

4. To the exclusion of the answer put in by the defendants in the suit of Wright v. Howes et al.

5. To the exclusion of the evidence offered, to show the disposition made by Howes & Co. of the charter moneys on the return voyage, it being material to show that they refused to recognize the defendant as a part owner.

6. To the exclusion of the question as to what was in the mind of Suydam when he wrote the letters of November 19 ; for the reasons stated in point vi.

7. To the exclusion of the question as to what response the defendant made to the account rendered to him by Howes & Co.; because his response was part of the res gestee, and was material to the defendant to show that he refused to be recognized as part owner, and to rebut any presumption which might be raised against him by the rendering of an account without objection on his part.

8. To the evidence offered, to show that the claims of Wright, preferred in the suit of Wright v. Howes et al. had been resisted.

9. The exceptions taken to the judge’s charge, as involving the merits of the case.

J. T. Williams, for the plaintiff, respondent.

I. The question of the liability of Wright does not depend upon the question, whether or not he is entitled to recover his proportion of the earnings of the voyage of his co-owners.

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1. His co-owners may defeat his claim upon grounds other than that he did not consent to participate in the voyage. But as the plaintiff in this action is not a party to that, he can not be prejudiced by any thing that may be done in that.

2. We are entitled to'take the sworn statements of Wright to be true, and if, assuming them to be true, we are entitled, as a question of law, to recover, the verdict can not be disturbed.

3. There was no effort on the trial to' discredit Wright’s sworn statements made in the other suit. The facts stated hy him, and given in evidence by the plaintiff on the trial, were not disputed. In consenting that there was no question of fact for the jury, it was admitted that the allegations given in evidence :by the plaintiff were true. Indeed this is so, unless the defendants specially claim the right to go to the jury upon some question of fact.

4. But in fact the defendant’s right to participate in the voyage to San Francisco, under the letter of November 19, is not disputed by his co-owners, in that suit, or elsewhere. It is only his right to participate in the return voyage, that is in any wise disputed: The goods in question were furnished to fit out the vessel for the voyage to San Francisco.

II. - Even if the bill of sale was in fact intended as a mortgage, it is not in the mouth of Wright to allege it as against the plaintiff, .who parted with the goods upon the faith of his ownership.

III. None of the exceptions taken by the' defendant on the trial are weE taken.

The defendant Wright was, apparently, the owner, but in fact, the mortgagee of one quarter of the ship, and as such had the right to take such possession as an owner of one quarter lawfully might take.

When the letter of the 19th of November, 1859, was written, the goods in question to the amount of $168.27 had been furnished. The residue of them, amounting to $78.09, were furnished subsequently.

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The defendant is not. liable for the goods delivered prior to Hovember 19, 1859, by reason of any facts then existing. He is not liable merely because he was then a registered part owner. (Hackwood v. Lyall, 17 Com. B. 124.) The person ordering the supplies was not acting therein as his agent, nor had he been held out or recognized by the defendant as authorized to act for him. On such a state of facts, a mortgagee, though made such by a bill of sale absolute on its face, is not liable. (Brodie v. Howard, id. 109. Mitcheson v. Oliver, 5 Ellis & Bl. 419. McIntyre v. Scott, 8 John. 159 .)

If the defendant is liable for these supplies and for those subsequently furnished,„it is by force of the communication made to him of the date of Hovember 19, 1859, and proof of his assent to the voyage, and to be deemed liable “ for the expenses, bills and outfits attending such voyage,” and “to be responsible for his share in the expenses and loss.” There is no pretense that the plaintiffs knew this communication had been made, and of course they were not influenced by it in declining the supplies furnished subsequent to its date. But those facts do not determine the question of Wright’s liability.

If what is proved, in connection with the facts offered to be proved and excluded, entitles the defendant to share in the profits of the voyage, then I think he is liable for a fourth part of the outfit, as between himself and the other part owners, and for the whole to those persons who furnished necessary supplies for the voyage, in good faith. (Cutling v. Robertson, 7 Mann. & Gr. 336. Muldon v. Whitlock, 1 Cowen, 290. Stedman v. Feidler, 20 N. Y. Rep. 437 ; and see Provost v. Patchin, 5 Seld. 235.)

The letter of the 19 th of Hovember requests the defendant, if he desired to have the voyage performed at the expense and for the profit of Howes & Go., to please say so, and states that he should receive a bond for the safe return of the vessel, otherwise they should consider that he acquiesced in the voyage, and intended to be responsible for his share of the expenses and losses. The defendant Wright sent no reply. Hothing subsequently occurred, prior to the termination of the voyage, to

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affect the relations between him and Howes & Co. created by this communication and Wright’s omission to reply to it.

. G-ood faith requires that the defendant Wright should be deemed to have acquiesced in the voyage as one to be made for account of himself and Howes & Co., as part owners of the ship, and that he and they should be estopped to deny that such was their position and relation to each other.

The .defendant Wright, in a suit brought by him against Howes & Co. and others, in his verified complaint of the 30th of January, 1861, alleges that he received the notice or letter of the 19th of November, 1859, and avers that “he acquiesced in such voyage of said vessel * * ■ as for his account and risk as to the one fourth interest corresponding with the share of said vessel so conveyed to him as aforesaid.”

Assuming this fact to be so, then he assented to the voyage with all the incidents and liabilities attaching to a part owner, quoad hoc.

It' must be assumed, for all the purposes of this trial, that he so assented. He has deliberately made oath as a basis of judicial proceedings instituted by him, that he did so assent. Ho subsequent fact or circumstance occurring prior to the termination of the voyage has been proved, which tends to show that he did not then so assent, or that Howes & Co. did not consider that he so assented.

If Mr. Wright was unwilling to assent to the proposed use of the ship, he might, on taking possession under his bill of sale, have compelled Howes & Co. to give a stipulation for her safe return, upon a proper libel filed in the admiralty requiring it.1 (The New Orleans v. Phoebus, 11 Pet. 175 , 183.)

Such a stipulation having been required and given, if the ship had been lost, Howes & Co. would have been liable to Mr. Wright for the value of his interest; but not liable to account to him for any part of the profits. (Strelby v. Wilson, 1 Vern. 297.)

But no stipulation having been required or given, if the ship had been lost, Wright would have no claim upon Howes &

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Co. by reason of such loss. , (Strelby v. Wilson, supra. Moody v. Buck, 1 Sandf. 304 . Pars. Merc. L. 335, n 2.)

Such being the position of Mr. Wright and of Howes & Oo._ to each other, it would seem to follow that the letter of the 19th of Nov. 1861, related to a subject in respect to which it was his duty to speak, and contained direct declarations with respect to his rights, and that his silence in omitting to reply might properly be regarded as an acquiescence by him in the alternative, in which the letter stated he would be deemed to acquiesce if he omitted to reply, that he preferred and desired a bond for the safe return of the ship. (1 Cow. & Hill’s and Edw.’s Notes, p. 437, note 127.)

But this rule and its just application do not constitute the strength of. the plaintiff’s case. Mr. Wright has deliberately made oath, as a basis of judicial action, that he did, in fact, acquiesce in the voyage. And even if it were permissible for him to prove the contrary in this action, there is no evidence tending to show that he did not in truth assent.

If? as he has deposed, he did then assent, he is clearly liable for the supplies furnished subsequently. In equity and good conscience, he is equally liable for all proper supplies for the voyage furnished previously, to any one who furnished them, in good faith, on the credit of all the owners.

They were a necessary part of the expense of the voyage, in the profits of which he was to participate, and in which voyage he acquiesced, “ as for his account and risk as to the one fourth interest corresponding with the share of said vessel so conveyed to him as aforesaid.”

As to such voyage, and its appropriate outfits, he stood in the position of an actual part owner of the ship, assenting to and authorizing it; and the legal result is, that he is liable as a part owner, authorizing the fitting out and employment of the ship.

The refusal of Howes & Oo., after the voyage was concluded, to deal justly with him (and their attempt to defeat his claim to any profits to which he was entitled, if held to the promise contained in their letter of the 19th of Nov, 1859, if they

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hay e-so attempted,) can not affect Ms rights or their liaMlities, nor-the rights, of third persons.

■ .They should not now be permitted to allege that Mr. Wright did not make such an election as they in writing informed him he would be deemed to have made if he did .not reply to that letter, nor that Ms rights as between him and them are not the. same as.they would be if a formal written contract conforming to such election had been signed by them.

- If the views' already expressed as to the merits of the action are correct, the exceptions taken are untenable. .

- ■. The judgment should be affirmed. .

Cases cited

The Steamboat Orleans v. Phœbus 11 Pet. 175 SCOTUS at 183 p. 310