Clarkson v. Stevens

delivered "the opinion of the court.

The controversy in this case arises between the plaintiffs in error, who are, with others, heirs-at-law of Robert L. Stevens,

The claim of the plaintiffs in error is founded on a resolution. of Congress approved July 17, 1862, 12 Stat. 628 , as follows: —

“ A resolution releasing to the heirs-at-law of Robert L. Stevens, deceased, all the right, title, and interest of the United States in and to ‘ Stevens' Battery.'

“ Resolved .by the Senate and House of Representatives of the United States of America in Congress assembled, That all the right, title, and interest of the United States in and to ‘ Stevens’ Battery ’ be, and the same hereby are, released and conveyed to the heirs-at-law, of the said Robert L. Stevens, or their legal representatives.”

Robert L. Stevens died in 1856, having his domicile in New Jersey, and by-his will constituted his brother, Edwin A. Stevens, who was one of his heirs-at-law, and whom he appointed one of his executors, his sole residuary devisee and legatee.

Conceiving himself to be the owner of the unfinished vessel, of , which he had been in possession since the death of his brother* and claiming as his residuary legatee, Edwin A. -;Stevens, who died Aug. 7,1868, directed, by his will, his executors to complete it on his general plan, at a cost not exceeding $1,000,000, and then to offer it to the State of New Jersey as a present. The executors, after having expended $919,915.49 upon' the vessel, found that they could not finish it- for the amount of money to which they were limited, and discontinued' the work. In the mean time the State of New Jersey had accepted the bequest, and the consent of Congress thereto was given in the following resolution;'approved July 1,1870 : —

“ A resolution giving the consent of Congress to the reception of a certain bequest by the State of New Jersey under the will of the . late Edwin A. Stevens.

“ Whereas Edwin A. Stevens, who was in his lifetime thé owner of the ship known as the ‘ Stevens Battery,’ originally commenced under contract for the United States government, and upon the building of which large sums of money were spent by his brother and himself, did, by his last, will and testament (the United States having previously relinquished all claims to said ship), leave the

same to be finished by his executors, at an expense not exceeding the sum of one-million of dollars, and when finished to be offered to the State of New Jersey as a present, to be by her received and disposed of as the said State shall deem proper; and

“ Whereas doubts have been suggested as to the right of the said State to accept the said bequest without the consent of Congress, under the prohibition of the tenth section of the first article of the Constitution of the United States: Therefore,

“ Resolved by the Senate and Souse of Representatives of the United States of America in Congress assembled, That the consent of Congress is hereby 'given that the State of New Jersey shall receive and dispose of the said ship according to the terms and conditions of said bequest.”

A bill .in equity was filed in the Chancery Court of New Jersey, by the executors of Edwin A. Stevens, asking for a construction of the will, in certain particulars, including the ■questions arising upon this bequest to the State. The attorney-general appeared on behalf of the State, and filed an information, by way of cross-bill, to which the heirs-at-law of Robert L. Stevens were made parties, as claiming an adverse title. A final decree was made, establishing the title of the State, which was affirmed on appeal by the Court of Errors and Appeals. To reverse that decree the present writ of error was brought, the question presented being one which, .as it arises under a law of -the United States, and the decision thereon of the State court being in denial of the title claimed under the authority thereof, falls within the jurisdiction of this court.

To determine the proper construction and legal effect of the resolution, of Congress of July 17, 1862, it becomes necessary to trace from its origin the history of the “ Stevens Battery.”

By the act of Congress of April 14, 1842, c. 22, “ authorizing the construction of a war-steamer for harbor defence,” it is enacted , that the Secretary of the Navy be and he is hereby authorized to enter into contract with Robert L. Stevens for the construction of a war-steamer, shot and shell proof, to be built principally of iron, upon the plan of the said Stevens: Provided, the whole cost, including the hull, armament, engines, boiler, and equipment, in all respects complete for service, shall not exceed the average cost of the steamers ‘ Missouri’ and ‘Mis

In pursuance of this law, the Secretary of the Navy entered, Feb. 10, 1843, into a contract with Robert L. Stevens for the construction of a war-steamer for harbor defence, which recited his proposal, describing the vessel, and containing certain spécifications as to its construction, with a covenant on his part that he would faithfully build and construct the steamer conformably to the plan submitted, and complete the same within two years, provided Congress 'should make the further appropriations necessary for the purpose within a reasonable period.

According to the plan proposed the war-steamer was to be shot and shell proof against the artillery then in use on board vessels-of-war, viz. from 18-pounders to' 64-pounders; to be propelled by submerged machinery, called Stevens’s circular shells; to have greater speed than any of our steam vessels-of-war then built; the whole engine to be out of the way of shot from any vessel of an enemy; and with other specifications as to the character of the material and the dimensions and relations of the parts, which are important to be noticed only so far as to show that the proposed vessel was to be constructed upon a plan original and novel, and with the expectation of results not previously obtained in any naval construction.

The Secretary of the Navy and Stevens entered, Nov. 14, 1844, into an explanatory contract, which recited that the stipulations of the former had been found to be too loose and indefinite' as to the details of its execution, and that the parties, considering themselves bound by so much thereof as related to the dimensions, power, ability to resist shot and shell, and other qualities and arrangements of the vessel, and the amount to be paid therefor, entered into further stipulations modifying and explaining the same. The time for the completion and delivery of the vessel was extended two years from the date of the new contract. Many additional specifications as to the details of construction. were inserted. It was agreed that, if the cost of making any models or patterns used in the construction should be included in bills paid by the United States in the course of the work or at its completion, they should become the property of the'United States.

. It was thereupon further stipulated, that before the final payment for the said war-steamer should be made a certificate should be rendered to the Navy Department, that, in her construction, armament, and equipment, all the provisions of the contract had been fully performed by Stevens, which certificate should be given and signed by persons appointed to examine the vessel, one by. Stevens, one by the Secretary of the Navy, ■and, in case of disagreement, a third by the other two, the decision of the majority to be conclusive. It was also agreed that Stevens, in lieu of other security for the faithful performance of the contract on his part, should make to the United States a mortgage, which should be a first lien on all the land, docks, wharves, slips, and all their appurtenances belonging to and embraced within the establishment at Hoboken, New Jersey, at which the war-steamer was tó be constructed, with ample power to enter upon and sell the same in case of failure on his part to fulfil the contract, or so much thereof as should be necessary to complete any deficiencies on his part.

The Secretary of the Navy agreed to pay, as the price of the said war-steamer, when fully completed and delivered at the navy-yard- at Brooklyn, in conformity with the contract,

Payments were to be made, from time to time, upon bills certified by Stevens and the agent of the United States,'for not less than $5,000 each, and approved by the Navy Department, until the sum of $500,000 should have been paid; at which-time, it was stipulated, that an examination should be had of the war-steamer, by persons' to be appointed, as before agreed, for final examination, and if a majority of them should certify their opinion that the vessel could be fully completed according to contract for the remaining balance which might then be due, then payments of further bills in full should continue, not exceeding the full amount of the whole agreed price; but otherwise the examiners' were required to certify the amount which, in their opinion, would be required to complete the steamer, when the Secretary of the Navy was authorized to withhold from future payments such deductions as might be necessary to meet the probable excess of cost. It was further provided, that when Stevens should have fully completed the said war-steamer, and she should have been duly delivered to and received by the agent of the United States, according to the terms of the contract, the full amount of the price remaining unpaid and to become due when she should be fully completed and accepted was required to be paid and the mortgage security cancelled and returned.

In pursuance of his contract to that effect, Stevens executed and delivered a- mortgage on the premises therein described, being the basin, dock, shops, &c., wherein the war-steamer was to be Constructed, conditioned to be void, in case he fully performed his contract in relation thereto, with a power of entry and sale, on the part of the mortgagee, in case default should be made in the completion and delivery of the said war-steamer at the expiration of four years, from that date, according to the conditions and stipulations of the contract, and out of the proceeds of such sale to retain any dues that might have accrued

The time for the performance of the contract was by a subsequent agreement extended for four years from Sept. 9,' 1848.

From Jan. 6, 1845, to Dec. 14, 1855, there was paid out by the Navy Department on account of the vessel $500,000.

Robert L. Stevens had, in addition, expended in its construction, of hi& owii means, $113,579.

The act of Aúg. 16, 1856, c. 128, contains an appropriation “ for Stevens war-steamer, eighty-six thousand, seven hundred and seventeen dollars and eighty-five cents,” being the remainder of the contract price; but no portion of this was. ever paid.

In the mean time, Edwin A. Stevens took possession of the work upon the death of his brother, as executor and residuary legatee, and expended thereon, prior -to Sept. 5, 1857, of his own money, the sum of $89,185.37.

Nothing further appears to have been done until the passage of the act of April 17, 1862, c. 57, making an additional appropriation for the naval service for the year ending June 30,1862. The second section is as follows : —

“ And be it further enacted, That the sum of $783,294, being the amount necessary to be provided, as estimated by a, board appointed for that purpose, to pay for and finish the ‘ Stevens Battery ’ now partially constructed at Hoboken, New Jersey, be and the same is hereby appropriated out of any money not otherwise appropriated for the immediate construction of said battery: Provided, that in the contract for the completion of said vessel it shall be stipulated that no part of the money claimed by Edwin A. Stevens to have been heretofore expended by him upon said vessel shall be refunded until the amount of said claim shall be established to, the satisfaction of the Secretary of the Navy, and the payment of the said sum' shall be contingent upon the success of said vessel as an ironclad, sea-going war-steamer, to be determined by the President, and such contract, shall stipulate the time within which "the vessel shall be completed: Provided, nevertheless, that said money shall not be expended unless the Secretary of the Navy is of opinion that the same will secure to the public service an efBcient steam battery.”

No part of the sum appropriated by the act of April 17, 1862, was applied to the purpose of completing the battery. The Secretary of the Navy declined to do so, in the exercise of the. discretion confided to him in the last clause of the section, for reasons set forth in his letter to the Speaker of the House of Representatives, dated May 27, 1862, in which he states that he had taken the opinion of a commission of experts, who had reported that “ the vessel, if completed on the plans of Mr. Stevens,' will not make an efficient steam battery,” and, therefore, that he did not feel authorized to make the expenditure unless Congress should so direct.

Congress thereupon passed the joint resolution, approved July 17, 1862, on which the plaintiff's in error found their claim.

Nothing appears to have been done towards resuming work on the vessel from the date of the last previous expenditure in 1857, until the death of Edwin A. Stevens, on Aug. 7, 1868, during Avliich time it remained in his possesion and control. His. will contained the following provision: “ I empower my executors to apply not exceeding the sum of one million dollars

In execution of this authority the executors, prior to Feb. 27, 1873, expended -$919,915.49, of which $27,309.79 was received from the sale of old material.

The legislature of New Jersey, on March 21, 1871, had authorized the appointment of commissioners with power to sell the battery, and, in pursuance of that authority,-the vessel, never having been finished, was sold for the sum of $75,000.

The contention of the plaintiffs in error is that the title to the unfinished vessel passed, as the work progressed, to the United States, and became vested, together with the right to enforce the contract for its completion, and the security of the mortgage, as against the estate of Robert L. Stevens, in his heirs-at-law, by force of the' joint resolution of July 17, 1862.

In support -of the proposition that by the building contract the title to the unfinished ship vested, as the work progressed, in the United States, counsel rely upon the rule of construction announced by Lord Tenterden in Woods v. Russell, 5 Barn. & Ald. 942, and followed by the English cases of Clarke v. Spence, 4 Ad. & E. 448; Carruthers v. Paine, 5 Bing. 270; Laidler v. Burlinson, 2 Mee. & W. 602; Wood v. Bell, 5 El. & Bl. 772, affirmed in the Exchequer Chamber, 6 id. 355; McBain v. Wallace, 6 App. Cas. 588; and by the American cases of Moody v. Brown, 34 Me. 107 ; Butterworth v. McKinly, 11 Humph. (Tenn.) 206; Sandford v. Wiggins Ferry Co., 27 Ind. 522 ; Scudder v. Calais Steamboat Co., 1 Cliff. 370 .

This conclusion was assented to in the present case by the Chancellor, who proceeded to a final decree, however, against the plaintiffs in' error, on the ground that the -title of the

The rule first introduced in Woods v. Russell, 5 Barn. & Ald. 942, as .interpreted by the English courts, according to Clarke v. Spence, 4 Ad. & E. 448, is “ founded on the notion that provision for the payment, regulated by particular stages of the work, is made in the contract with a view to give the purchaser the security of certain portions of the.work for the money he is to pay, and is equivalent to an express provision that, on payment of the first -instalment, the general property in so much of the vessel as is then constructed shall vest in the purchaser.” This dictum from Woods v. Russell, according to • Benjamin on Sales, 246, 2d ed., was deliberately adopted as a rule of construction by' which, in similar ship-building contracts, the parties are held to have, by implication, evinced an intention that the property shall pass, notwithstanding the general rule to the contrary, and adds: “ The law thus established has remained unshaken to the present time.”

Nevertheless, in Wood v. Bell, 5 El. & Bl. 772, Lord Campbell, C. J., said: “When a man contracts with another to make any article for him for a given price, the general rule is, in the absence of all circumstances. from which a contrary conclusion may be inferred, that no property passes in the chattel until it be completed and ready for delivery; on the other hand, where a bargain is made for the purchase of an existing

It is, perhaps, worthy of remark, that this passage from the judgment of Lord Campbell has, by the editors of Abbott on Merchant Ships and Seamen, been incorporated into the text of that treatise.

The courts of this country have not adopted any arbitrary rule of construction as controlling such agreements, but consider the question of intent, open in every case, to be determined upon -the terms of the contract, and the circumstances attending the transaction. 1 Parsons, Shipping and Admiralty, 63. And such seems to us to be the true principle.

Accordingly, we are of opinion,' that the fact that advances were made out of the purchase-money, according to the contract, for the cost of the work as it progressed, and that the government was authorized to require the presence of an agent to join in certifying to the accounts, are not conclusive evi

Much stress is laid, in argument, upon that provision of the contract which required all materials received at the yard for use in .constructing the steamer to be distinctly marked with the letters “ Ú. S.,” and declared that they should become the property of and belong to the United States. But it does not follow, because the materials provided for that, use were declared to be the property of the United States, it was intended that they should remain so after becoming part of the structure. Such a precaution might well have been suggested, as a security against a diversion of the materials to any unauthorized use, or to preserve them to the United States, in case, by reason of the failure of the work or from any other cause, they should not be used in the vessel. Indeed, as is remarked by the learned judge who delivered the opinion of the Court of Errors and Appeals in this case, the express declaration that defined tíre property in the unused materials seems to exclude the implication sought to be raised as to the property in the unfinished ship ; for the inference is obvious, from the particularity of such a provision, that the larger interest would not be left to mere intendment.

There are two other provisions of. the contract, which seem to us conclusive of the question, and, in a sense, adverse to the construction of the plaintiffs in error.'

■. The first of these is, that which required Stevens, in lieu of other security for his faithful performance of the contract, to execute and deliver a mortgage on all the land, docks, wharves, slips, and all their appurtenances belonging to and embraced within the establishment at Hoboken, N. J., at which the wai-steamer was to be constructed, with power to the

The taking of this security, as an indemnity to the United States, assumes the anticipated .possibility that the failure might be total, so that the vessel, when offered for delivery, might be altogether rejected. And it does not detract from the force of this conclusion, that the alternative provides for completing deficiencies, if they should prove to be remedial; for, in that case, the United States, at its option, .might accept the vessel, thus becoming invested with the title, and make good its deficiencies out of this security.

The other feature 'of the contract, which corroborates this view, is that which provides that final payment for the steamer shall be made only upon the certificate of examiners, to be appointed for that purpose, that in her construction, armament, and equipment all the provisions of the contract have been fully performed and completed, which requires that the steamer shall be fully completed and delivered' at the navy-yard at Brooklyn, and fixes the gross amount which is to be paid for it when fully completed, delivered, and accepted. The fact that advances are to be made in the mean time is expressly stated to be in consideration of the' security to be given by Stevens for the faithful performance of his contract, and that compensation for his time and services. must be wholly deferred until the final completing and delivery of the vessel.

It is thus apparent, as we think, from these stipulations that the vessel was in all respects to be at the risk of -the builder until, upon its completion, the United States should accept it, upon final examination and certificate, as conforming in every particular with the requirements of the contract, and answering the description and warranty of an efficient steam battery for harbor defence, shot and shell proof.

And looking at the situation of the parties, and the objects they must have had in view, all doubt is removed. as to their intention. Stevens was an ardent and sanguine inventor, who had convinced himself that his unique design of a naval structure was practicable and of great value, and that,' if adopted, it would prove to be of immense public utility. He succeeded

We find, therefore, that on July 17, 1862, the date of the joint resolution of Congress, under which the plaintiffs in error make their claim, the United States had no title to the “ Stevens Battery ; ” but that the property in it had continued in Robert L. Stevens until his death, and passed, by his will, to Edwin' A. Stevens, as residuary legatee. It follows that it did not pass to the heirs-at-law of Robert L. Stevens by virtue of the joint resolution.

It is urged,' in argument, that, if the right to the vessel itself did not pass, then the joint resolution must be construed as a transfer to the heirs of Robert L. Stevens of the right of action of the United States to recover against his estate damages for his non-performance of his contract, together with the securities, by way of mortgage and lien, it held as indemnity. We see no ground for á construction that leads to so remarkable a result. The plain meaning of the resolution is limited to a relinquishment on the part of the United States of any interest it might be supposed to have in the vessel, in which the heirs of Robert L. Stevens are mentioned, probably, be

We are of opinion, for the reasons stated, that there is no. error in the decree complained of, and it is accordingly

Affirmed.