23 F. 350 | U.S. Circuit Court for the District of Southern New York | 1885
In October, 1877, the bark Archer sailed from Bremerhaven, bound for New York, but met with disaster and put back to Bremerhaven for repairs, reaching that port November 1st. Cross-man, the master of the bark, applied to Meiners, who represented the late firm of F. Boters & Co., for assistance. Boters & Co. had been the consignees of the ship on former occasions. Crossman told Meiners that he could draw on New York for the disbursements, and Meiners told him that would be satisfactory, and to go on with the repairs. Crossman had surveys made and the repairs were proceeded with, and bills were sent to Meiners, who paid them, but after having paid some of the bills Meiners insisted upon a bottomry bond as a security for the advances made and to be made. Crossman demurred, but finally consented, and the bottomry bond on which the suit is brought was executed. The bond was given to one Addicks, but, in-fact, Meiners was jointly interested in it with Addicks. It was conditioned for the payment of 21,371 marks, with 20 per cent, premium.
The important question in the ease is whether Meiners and Addicks relied upon the authority of Crossman, as owner, in executing the bond, or whether they dealt with him as master only. Crossman had no beneficial interest in the ship. He had executed two mortgages: one covering three-fourths of the ship, which became due July 1, 1877, for $3,000, and had not been paid, and another not then due, covering the whole ship, for $7,000. These mortgages were held by the claimant, Harrison, and exceeded in amount the value of the ship. Harrison, however, had allowed Crossman to continue in possession after default in the $3,000 mortgage under a register and ship’s pa
The proofs warrant the conclusion that Crossman, after putting back to Bremerliaven, put himself in communication by mail with Harrison, and informed Meiners of the fact, and when he received a cablegram from Harrison authorizing him to draw on New York, at 60 days, for necessary funds, handed it to Meiners; that Meiners satisfied himself by telegram of Harrison’s responsibility, and was aware that-he was the person whom Crossman assumed to represent in ordering the repairs; that Meiners intended,until about the seventeenth of December, to make the advances necessary on the credit of Cross-man’s drafts on Harrison, but then conceived the scheme of making a profit out of tho transaction by means of bottomry. Influenced by this motive he insisted upon a bottomry bond, and induced Addicks to co-operate, concealing from Crossman the fact that he had any interest in tho bottomry except to the amount of his advances. Ad-dicks offered to advance the necessary funds, and to overcome Cross-man’s objections to giving a bond with 20 per cent, premium, proposed to make the interest 25 oi 30 per cent., and give tho difference to Grossman. After the bond was executed, Meiners gave Grossman 400 marks as coming from Addicks as a commission or gratuity. The district judge, in his opinion, states that he could not doubt that Harrison “was known to Meiners and Addicks, at the time of tho negotiation for the bond, to bo in tho position of beneficial owner, though not tho legal owner.” It seems equally clear that neither of them supposed that Grossman intended to contract as an owner, pledging his own ship, but understood that he was acting as a master who was obliged to mako the host terms he could under the circumstances, and who could be induced to consent to bottomry by the payment of a commission. Quito conclusive evidence of this is found in the circumstance that in the recitals of the bond Grossman is represented as the master of the ship, and not as tlie owner.
It was held by the learned district judge that Grossman, as master, had no authority to execute tho bottomry bond, but that the bond was valid because he was the legal owner at the time of executing it. The master can make a bottomry bond only abroad and from necessity. He lias no power to do so if the owner can be consulted, or if he can borrow tho money on the personal credit of tho owner. Communication was practicable here, both by mail and by telegraph; yet Gross-man did not consult with Harrison further than to ascertain that the latter was willing to provide the necessary funds. The court below
The learned district judge seems to have considered Crossman to be the owner because he appeared to be such on the ship’s register, and Harrison was only a mortgagee. But Crossman had the title to but one-fourth of the vessel after default had been made in the $3,000 mortgage (Brown v. Bement, 8 Johns. 76; Butler v. Miller, 1 N. Y. 496; Burdick v. McVanner, 2 Denio, 170,) and the ship’s register was at best but prima facie evidence of Crossman’s title as owner. Myers v. Willis, 17 C. B. 77; S. C. 18 C. B. 886; Hibbs v. Boss, L. R. 1 Q. B. 534; Morgan’s Assignees v. Shinn, 15 Wall. 105; Blanchard v. Fearing, 1 Allen, 118.
Undoubtedly, by allowing Crossman to remain in possession of the ship and proceed on a voyage with his name in her register as owner, after Harrison’s title to three-fourths had accrued, the latter authorized third parties to rely upon Crossman’s apparent title as owner, and would be estopped from asserting his own rights as owner against any persons who might contract upon the faith of Crossman’s title. But Meiners and Addicts had full notice that Harrison was the beneficial and therefore the equitable owner, and they understood that Cross-man was not assuming to act in behalf of any interest or title of his own, but only as master; or, in other words, as an agent for an owner. No estoppel can arise in their favor. Their position is no different than it would be if they were asserting their bond against an ordinary owner, who had the legal title to the ship at the time of the bottomry. If the bottomry would not have been good against an ordinary owner, it is not good against one who occupied the relation of owner in the transaction within the contemplation of all the parties. Upon the equitable principles which prevail in courts of admiralty, the lion of the bond must be deemed subordinate to the rights of Harrison.
To the extent that Crossman, as master, had authority to represent Harrison as owner, and subject the ship to liens for necessary repairs and supplies, the bond should be sustained, and the libelants be deemed subrogated to the liens. In the language of Story, J., in The Packet, 3 Mason, 255, 260, “it is not here, as in courts of common law, that the bond must be good in whole or not at all. So far as the money was properly advanced, it may be held to give a valid lien, and be dismissed as to the rest. ” The district, court disallowed the premium upon the bond, but decreed for the principal, with ordinary interest. It appears that the repairs, to a considerable extent, were in excess of the necessities of the ship, one item being the entire new .coppering of the ship. The bond can only be allowed to stand for such supplies and repairs as a master could properly order.
The decree of the district court must be reversed, with costs of the appeal, and a decree is ordered for the libelant for such sum as may be found due by. a commissioner to whom it is referred to ascertain and report the amount due.
