Murray v. Lazarus

17 F. Cas. 1049 | U.S. Circuit Court for the District of Southern New York | 1826

THOMPSON, Circuit Justice.

The only inquiry arising upon the appeal in this case, is, whether the respondents have a specific lien upon the freight monies, (received by the appellants.) for the advances made by them for the repairs of the brig Hannah, at Wilmington in North Carolina. That these expenses were properly and necessarily incurred, is not denied; nor can the authority of the master, to hypothecate the freight as well as the vessel for the payment of such expenses, be questioned. He is the agent of the owners, and they are bound by all lawful contracts made by him. It is indispensable that he should have a right to contract for all necessary repairs and supplies for the vessel on the voyage, and may, therefore, indirectly bind, the owners to the value of the vessel and • freight. It is therefore well settled, that he may for like purposes, expressly pledge and hypothecate the vessel and freight, and thereby create a direct lien upon the same for the security of the creditor. [The Aurora] 1 Wheat. [14 U. S.] 102; Abb. 134. But this being a high and important trust repos'ed in the master, the authority is to be exercised cautiously, and he is not at liberty to subject the ship or freight to this expensive and disadvantageous lien, if such repairs and supplies can be procured upon the credit of the owner independent of such hypothecation.

The case is not open for the inquiry, whether, by the general maritime law, every contract made by the master for repairs and supplies for his ship whilst on a foreign voyage, does not import an hypothecation. When an • express contract has been entered into for the payment of such expenses, that must be resorted to, and will be considered a waiver. of such implied lien if any existed. And a party who has waived his right in this respect cannot be permitted, at a subsequent tíme, and under a change of circumstances to reinstate himself in his former condition to the injury of others.

In this case there was a special agreement between the master and_the respondents for the payment of their advances. They took from him a bill of exchange, drawn upon the appellants, for the amount of their advances and commissions. If this is to be considered a regular and ordinary bill of exchange, it was a substitution for any lien that might have existed, and must' be considered a relinquishment thereof.

But it is contended, that from the language of the bill, taken in connexion with the condition of the parties, it must be considered a lien on the freight in the hands of the appellants. If such is to be the effect and operation of this bill, it must be either as an hy-pothecation of the freight, or as a draft upon a specific fund amounting to an assignment of such fund.

The bill is drawn by Thomas Hillyer, as master of the brig Hannah, on the appellants, payable to the order of Lawrence & Whit-marsh, five days after sight, for 531 dollars 05 cents, for value received in disbursements and repairs of the brig Hannah, with directions to charge the same to her account. It is these latter words that are said to give to this bill the operation of an hypothecation. In all other respects it is in the usual form of bills of exchange drawn in sets.

I cannot think that the mere circumstance, of the nature of the consideration’s being expressed in the bill, with directions to charge it to the.account of the brig, should entirely change the character of the instrument. This was a very natural and proper course for the master, especially when drawing upon the consignees of the brig, that they might understand for what the bill was drawn, and that :it was- not a private transaction of the master.

It is laid down by Abbot in his Treatise on Shipping (page 143) that there is no settled form for the contract of hypothecation, “but that,. whatever be the form, the occasion of .borrowing, the sum, the premium, the ship, the voyage, the risk to be borne by the lender, ;and the subjection of the ship itself as security for the payment, all usually are; and properly ought to be expressed.” . The bill in this •case falls very far short of -containing some of the most essential requisites; it does not in terms or by implication pledge the freight for the payment; the freight; is not even named in the bill. There is no premium mentioned, nor any thing-either in the bill or any of the proceedings showing that maritime interest was allowed. And indeed the contrary is shown by the proofs; for the account annexed to the libel contains the items which made up the amount of the bill, in -which the usual commissions alone are charged upon the advances. But what is of still more importance, there is nothing showing what, or that any risk was to be borne by the respondents. The owners of the vessel are -still liable for these, advances.

The libel does not even contain-any allegation of an agreement in-any manner, that the freight should be pledged for the payment of the advances; it only alleges, that the bill was taken as a voucher for the expenditures, • and a mere mode of obtaining payment there-. of; which payment was expected and intend-: ed to be made out of the freight, '&c. This is no allegation of an agreement between the-master and the respondents, that it should be so paid; it is nothing more than the mere expectation and intention of the respondents.

And there is no proof, giving the least col-our to an inference, that there was any understanding between tbe parties that the freight should be pledged for payment of the bill. And the conduct of the respondents shows, that they did not so understand the transaction; for, on the 14th of April, they wrote to the appellants, that the vessel had put into Wilmington in distress, and that the master wanted advances for repairs, and proposed drawing in their favour on the appellants for the .amount that would be required, and requesting to know whether such bill would be honoured. If it had been understood that the freight was to be pledged for these advances, no such letter would have been written. The master having the right to hypothecate the freight, there could have been no necessity for writing at all to the appellants; but if any communication was made, it would have been to inform them of the hypothecation, if such had been the fact, and not an inquiry whether they would hon-our the master’s draft But before the answer of the appellants was received, the repairs were completed, and the brig had sailed, the master giving to the respondents the draft in question, dated the 25th of April. This draft was endorsed and sent on here, and dealt with as an ordinary bill of exchange, by presenting it for acceptance and payment, and on refusal, having it regularly protested. No part of the transaction will, therefore, warrant the conclusion, that any •express hypothecation was agreed upon or intended by the .parties.

Nor is there any more foundation for considering this bill of exchange as a draft on the freight as a specific fund, and amounting to an equitable assignment thereof. No fund whatever is mentioned or referred to in the draft And the direction to charge the amount of the bill to account of the brig, cannot certainly have the operation of an assignment of the freight.

'In whatever light, therefore, this case Is ■considered, it appears to me that there is no specific lien on the freight for the advances •for repairs. But that the respondents took the .draft on the appellants as an ordinary •bill of exchange, in payment for their advances;' and whatever remedy they may have against other parties for the payment thereof, the appellants cannot be made responsible.

' The decree of the district court, therefore, as to them, must be reversed with costs.