254 F. 411 | 5th Cir. | 1918
The Clinchfield Fuel Company filed a libel against Henderson Iron Works Company for injuries alleged to have been caused by the negligence of the master and crew of the tug Helen Henderson, owned by respondent. Upon denial of liability by respondent, a like libel was filed against Frank Henderson. The two cases were tried together, judgment being against libelant in each case.
At the time of the accident the Helen Henderson was being operated by the Steele Towing & Wrecking Company in the harbor at Galveston, Tex. The tug was towing a barge of the Clinchfield Fuel Company, and, according to the allegations of the bills, “the master and crew of the tug so negligently went about the performance of their duties” as to collide with a pier, and subsequently to ram a steamer; the collisions resulting in injuries to the barge.
“This contract, entered into and between T. J. Anderson, partner in the firm of Steele & Anderson, of Galveston, Texas, and Frank Henderson, of the firm of the Henderson Iron Works Company, of Mobile, Alabama, this first day of June, 1915, to wit:
“In consideration of the said Frank Henderson furnishing his tug Helen Henderson, her tackle, apparel, and machinery, for operation along the coast of the Gulf of Mexico, and particularly in the harbor of the port of Galveston, Texas, he agrees to divide the net profits and to assume all cost and liabilities of operation of the said tug to the extent of fifty per cent. (50%), both profit and expense.
“The said T. J. Anderson, as one of the principals of the firm of Steele & Anderson, agrees to keep the said tug Helen Henderson in operation, endeavoring to secure all the profitable employment that lie possibly can, both in the harbor and on the outside, maintaining thereon a single or double crew as the necessity might demand, and agrees on behalf of the firm of Steele & Anderson to be responsible for fifty per cent. (50%) of the costs and expenditures of operation in lieu of receiving fifty per cent. (50%) of the net profits of the tug.
“It is further mutually agreed by the parties signing this contract and constituting the principals of this con iract that the tug will be operated under the name of the Steele Tbwing & Wrecking Company, although the direct management shall be in the hands, and all transactions passed through the hands, of the said T. J. Anderson on behalf of the firm1 of Steele & Anderson.
“All fuel, provisions, wages and any disbursements whatsoever are to be paid for by the said firm, of Steeto & Anderson, and in the event of loss or profits the division to be made in accordance with that portion of agreement relating as above.
“Witness my hand this first day of June, 1915, at the city of Galveston, Texas, U. S. A.
“This contract can be broken by either party (60) days after written notice.
“T. J. Anderson. [Seal.]
“Signed in the presence of:
“Henry J. Schutte.
“Witness my hand this first day of June, 1915, at the city of Mobile, Alabama, U. S. A. Frank Henderson.
“Signed in the presence of:
“Adolph Danne.”
The contract is one difficult to construe. The intention of the parties is set forth in terms uncertain and ambiguous. It is provided that the tug would be “operated under the name of the Steele Towing & Wrecking Company, although the direct management shall be in the hands, and all transactions passed through the hands, of the said T. J. Anderson.” From this provision, from the correspondence, and from the testimony of Anderson, it sufficiently appears that the Henderson Iron Works Company, having peculiar confidence in Anderson, expected him to look after the interests of the Henderson Company, but that the actual operation was to be by the Steele Towing &
“The contract I contemplate writing up in connection with your good self and this office will he in such manner as will give the Steele Towing & Wrecking Company no hold on you whatever, thereby fully protecting you by dealing exclusively through my office.”
In another letter Henderson Iron Works Company suggest:
“I would prefer doing business through your office, whom X am well acquainted with, although I believe the Steele Towing & Wrecking Company are first-class, honorable people; but, as you are better acquainted with both sides, this is my reason for expecting you to protect us.”
■ Anderson testified that when the tug went to Galveston he turned her over to the Steele Towing & Wrecking Company to operate; that hé and Henderson “conferred and co-operated in suggestions for the betterment of the operations after the Steele Towing & Wrecking Company took charge of her”; that “the vessel was not chartered at so much a month,” but “on the mutual understanding that all profits were to be divided as between owners and Steele Towing & Wrecking Company.”
Whatever may have been the original understanding and the meaning of the' contract, it is quite certain that Mr. Henderson and the Henderson Iron Works Company knew of the actual operation of the tug by the Steele Towing & Wrecking Company, and looked to that company for its part of the profits. Among the letters introduced in evidence was one in which the Henderson Iron Works Company says:
“We have been trying bard to get a settlement with tbe Steele Towing & Wrecking Company for tbe tug Helen Henderson’s earnings from tbe last statement up to tbe time sbe sunk.”
The conclusion reached is that the Henderson Iron Works Company and the Steele Towing & Wrecking Company were, at the time of the accident, engaged in a joint venture, each party undertaking to become responsible for one-half the expenses and losses, and to equally share in the profits.
There is nothing to indicate that formal action had ever been taken by the board of directors in any matter pertaining to the conduct of the business of the corporation. In making the arrangement with reference to the operation of the tug, the corporation acted in the same way that it ordinarily did, through Frank Henderson alone. From die circumstance that the tug belonged to the Henderson Iron Works Company, that in the contract Henderson was spoken of as “of the Henderson Iron Works Company,” that the letters with reference to this transaction were signed “Henderson Iron Works Company, by Frank Henderson, President,” that there was no claim of ownership of the fug by Frank Henderson, and nothing to indicate that any arrangement had been made between him and the corporation by which the tug could be used for his sole benefit, it must be assumed that the contract was made for the corporation, and it must he held that it was so done as to bind the corporation.
The Henderson Iron Works Company was a corporation, the objects of which were set forth in the charter as follows:
“To conduct a general foundry, machine shop, boiler, and blacksmith business, or any one or more thereof; to buy, manufacture, and sell all kinds of material, marine and railway machinery and supplies; to buy, manufacture, and sell all kinds of iron and other metal goods; to build or repair engines, vessels, boilers, sawmill and other machinery, and generally to do any and all acts incident to the operation of a general foundry, machine, boiler, and blacksmith shops.”
The powers of the corporation were very broad, and the ownership of a vessel was a possibility contemplated. The tug was acquired in the discharge of a debt due the company. It could not be said 1hat the company was without authority to acquire a vessel under such circumstances, when it had power to build and repair vessels. The ownership of a vessel carries along with it the right to use it in a way that will make it a source of revenue, instead of loss. The vessel had brought expense and loss, and the arrangement made was the result of an effort to make it profitable.
The case against Frank Henderson is affirmed, and that against the Henderson Iron Works Company is reversed, for further action consistent with this opinion.