134 F. 727 | 2d Cir. | 1904
The decree appealed from dismissed the libel. The facts of the case are succinctly stated in the opinion of the court below:
“This is a libel against tbe cargo of the steamship Afton, and the freight moneys arising therefrom, to recover the sum of $8,737.55. In December, 1900, the firm of McLaren & McLaren, of Glasgow, owners of the steamship Afton, executed a mortgage on the steamer to the libelant, the Merchants’ Banking Company, Limited, of London, to secure a running account and advances to be made thereafter. The mortgage was duly recorded at Glasgow, but the mortgagee did not go into possession of the steamer at that time; the mortgagors continuing in possession, in July, 1902, McLaren & McLaren chartered the steamer, which was then on a voyage to Shanghai, to Shewan, Tomes & Co., the claimants in this suit, for the return voyage from China to New York. The charter party provided that the steamer should have a lien on the cargo for freight, that a lump sum freight of £7,750 was to be paid on delivery of the cargo, and that sufficient cash, not exceeding £1,500, was to be advanced to the master, if required, at the loading ports, on account of freight; the same to be deducted on final settlement of freight. During the voyage, at different ports in China, the master called for and received from Shewan, Tomes & Go. the agreed sum of £1,500, and also additional advances, amounting to £1,803 8/4, the equivalent in American currency of $8,737.55. For these additional advances, receipts, signed by the master, were indorsed on the charter party; stating that the money was received as advance freight, or, in some of the receipts, as advance against freight, to be collected from the first payment of the charter money. When the steamer reached New York, the libelant, the Merchants’ Banking Company, Limited, took formal possession of the steamer under the mortgage, on which there was then due about £110,000, and which was then in default. Subsequently the cargo was delivered, and the freights collected by Shewan, Tomes & Co. under an arrangement which preserved to the Merchants’ Banking Company, Limited, its rights as mortgagee in the possession of the balance of the charter freight. On the final settlement between the Merchants’ Banking Company, Limited, and Shewan, Tomes & Co., Shewan, Tomes & Co. retained for their own reimbursement said sum of $8,737.55, which they had advanced to the master of the steamer, and paid over the balance to the bank. This action is brought to recover the amount so retained.”
The case presents the questions of law whether upon these facts the mortgagee was entitled to all the freight money due from the charterers to the shipowners at the time the libelant took possession under its mortgage; and (2) whether the advances made by the charterers to the master in excess of those stipulated for in the charter are to be considered as a prepayment of freight. If the advances in question had been to the shipowners, we should entertain no doubt that the charterers would be protected, and the mortgagee would have no lien to that extent. It is undoubtedly the law that the owners and mortgagors of a ship who are allowed to remain in possession by the mortgagee are at liberty in the meantime to make contracts for her employment like the present charter; but, when the mortgagee takes possession, he takes the right to all the freight which is then accruing. “And if he finds any cargo on board in respect to which the freight has accrued, and on which the mortgagor has a lien for the freight, the. mortgagee succeeds to that lien, and can enforce it in a court of law.” Mellish, L. J., in Keith v. Burrows, 2 C. P. D. 165. Neither is there any doubt that the mortgagee does not acquire the right to freights which have become payable and have been received by the mortgagor before possession is taken, although for the voyage then current. Willis v. Palmer,
We are constrained to hold that the charterers have not shown any defense to the claim of the mortgagee. The mortgagee was entitled to recover the whole freight payable by the terms of the charter, unless the charterers established the defense of payment to the vessel owners before the mortgagee took possession. This defense is not established by proving payment to the master, without proving that the master had authority to receive it. There is no evidence in the case from which it can be inferred that the owners ever received the advances in question, or ratified the act of the master in any way. If they received the advances, but not until the libelant had taken possession as mortgagee, any ratification by that act would be unavailing. The act of ratification must take place at a time and under circumstances when the ratifying party might himself have lawfully done the act which he ratifies. Bird v. Brown, 4 Ex. Ch. 786, 789; Parmelee v. Simpson, 5 Wall. 81, 18 L. Ed. 542.
The decree is reversed, with costs, and with instructions to the court below to decree for the libelant for the unpaid balance of freight, with interest.
On Application for Rehearing.
The appellees have applied for a rehearing of this cause, and for leave to take further proofs. The cause was decided against them, reversing the decree of the court below in their favor, upon the ground that, to entitle them to retain the sum of money advanced by them to the master of the Afton, it was incumbent upon them to show that it had been advanced to him as a prepayment of freight to the owners of the Afton under the existing charter of the vessel, and that there was no evidence in the record to establish that fact. The object of the present application is to enable them to introduce further proofs which will establish this controlling fact. The cause was heard in the court below and in this court upon an agreed statement of facts stipulated by the proctors for the respective parties. It now appears that there is no doubt about the particular fact, and that in settling the agreed statement of facts the proctors for the appellant repeatedly offered to have it incorporated into the agreed statement of facts, on condition that the proctors for the claimants-would stipulate that the advances were not required' by or applied to the uses of the steamship, but were applied to the personal needs of the owners, in no way connected with the steamer. It further appears that upon the hearing in the court below the
“I apprehend that no court of equity has ever felt itself at liberty to grant an application of this sort upon the suggestion of an error of judgment or a mistake of law by counsel as to the pertinency or force of evidence to be used in a cause.”
The rule is inflexible that leave is never given to admit new evidence after a decree where the party might by due diligence have introduced it originally in the cause, or had full and ample means of knowledge of it within his reach. As is said in the opinion in Norris v. Le Neve, 3 Atk. Rep. 36, the rule is one “which cannot be broken in upon without manifest danger to the interests of all the parties in controverted suits, and it certainly will not do to lay down a new rule for this cause only.”
We regret exceedingly the hardship which has been brought upon the appellees by the action of their proctors, but cannot remedy it by an abuse of judicial discretion. In denying the application, it is due to the proctors to state that in electing to stand on a record which contains no legal proof of a material fact, and declining to avail themselves of an admission which they might have secured, they are entitled to the benefit of the excuse that they acted upon the advice of their counsel in the cause — one of the leading practitioners of the admiralty bar of this circuit.
Application denied.