8 F. Cas. 334 | S.D.N.Y. | 1879
This is a suit by Joseph Grady, upon a bottomry bond executed at Cape Town, South Africa, by the master of the British bark Edward Albro, on the 10th day of July, 1877, for £687 16s lid. The bond is upon the vessel and her freight for the voyage from Cape Town to New York. Soon after her arrival in'this port and on the 14th of September, 1877, this libel was filed. The bark belongs to Pictou, Nova Scotia, but her equitable or real owner is a resident of New York. The vessel being attached on process, the registered owner appeared as claimant and has answered. Besides some defences on the merits, the claimant makes by exception and answer certain objections to the libel and to the bond, which will be first disposed of.
It is objected that the instrument sued on is not a bottomry bond but a mortgage. Undoubtedly, this court has no jurisdiction to enforce a mortgage, and if such is the real nature of this instrument the libel must be dismissed. Bogert v. The John Jay, 17 How. [58 U. S.] 402; Maitland v. Atlantic [Case No. 8,980]; The Emancipation, 1 W. Rob. Adm. 124. The distinguishing characteristic of a bottomry bond is that the payment of the sum secured thereby is conditioned upon the safe arrival of' the vessel, the lender taking all the risk of her loss upon the voyage, and this is the consideration that justifies the extraordinary or maritime interest reserved on such contracts. Same cases; also, The Atlas, 2 Hagg. Adm. 57. And whether or not an instrument is a mortgage or a bot-tomry bond must be determined, as in case of all other written instruments, by the terms of the agreement itself, without regard to extrinsic proof of the intention of the parties. Cases last cited. It is enough, however, that upon the entire instrument the intention of the parties appears that the lender shall take the risk of the safe arrival of the vessel. There is no prescribed form of a bottomry bond and the courts of admiralty, recognizing the fact that the forms •of these instruments used in different countries differ, have given to them a liberal •construction to effect the intention of the parties. The Nelson, 1 Hagg. Adm. 176. See, also, Simonds v. Hodgson, 3 Barn. & Adol. 50; The Tartar, 1 Hagg. Adm. 14. So, too, it is no objection to a bottomry bond that a draft or bill of exchange is also given for the amount. It is in some countries usual for the master to draw for the amount, and the drawing of such a bill as collateral security does not vitiate the bond. The Nelson, ut supra; The Jane, 1 Dod. 466; The Emancipation, ut supra.
Applying these well-settled rules to the present case, the instrument here sued on is undoubtedly a bottomry bond. It commences as follows: “Know all men by these presents, that I,- William Iieimer, master of the barque or vessel called the Edward Al-bro, of the burden of 394 tons or thereabouts, now lying in Table Bay, am held and firmly bound unto and on behalf of Joseph Grady, of Cape Town, merchant, etc., carrying on business under the style of Jos. Grady & Company, in the penal sum of nine hundred pounds sterling of lawful money, to be paid to the said Joseph Grady & Company, their certain attorney, order or endorser of this bond, for which payment to be well and truly made I, the said William Beimer, do hereby specially bind, mortgage, pledge and hypothecate the said ship, Edward Albro, her tackle, apparel, furniture and appurtenances, together with the freight to become due and payable in respect of the cargo laden on board during the voyage of the said vessel from this port bound to New York, firmly by these presents. Sealed with my seal, dated at Cape Town,” etc. The bond then recites that the vessel, on her voyage from Geffle to Cape Town, met with very severe and boisterous weather and sustained considerable damage, and was compelled in consequence to expend a considerable sum of money in repairs and necessary supplies to enable her to leave Cape Town and continue her voyage to New York, the port of her owners; that the master, not having sufficient funds for defraying the expenses of repairs, stores and supplies and other necessary expenses at that port, advertised for tenders for the sum required “on bottomry of the said vessel, cargo and freight;” that Joseph Grady & Co. agreed to advance the sum required on more satisfactory terms than any tender put in; that the master had received from them the full amount of £687 16s lid, to defray the expenses of the ship, and enabled her to proceed to sea, “on bot-tomry of the said ship, her tackle, apparel, furniture and appurtenances, together with the freight to become due and payable, during the hereinafter mentioned voyage in respect thereof.” The bond then contains the following clause: “In consideration whereof, the usual risks of the seas, enemies, pirates, utter loss from fire and all other casualties of navigation, are to be for and on account and risk of the said Joseph Grady and Company.” The bond then further recites that the master has signed and delivered a set of bills of exchange for the sum of £6S7 16s lid, dated at Cape Town the 9th day of July, 1S77, drawn and signed by him upon A. Speirs Brown, of New York (the equitable owner of the vessel), payable at seven days after sight to the order of Jos. Grady & Co.
A further exception is taken that the rate-of interest reserved was usurious. This objection necessarily falls with the other. An exception is. also taken that it does not appear on the libel that the master made any efforts to procure advances on the credit of' the owner, or that he communicated with the owner that such advances were needed and that he had made efforts without success to procure the same on the credit of the vessel before the execution of the bond. The libel does allege the need of funds and that the master “having no other means, of procuring the same, after duly and publicly advertising therefor, borrowed the aforesaid sum of the libellant on bottomry,” etc. Correct pleading requires that the material facts should be stated, not by way of 'recital merely, but positively, and if this exception had been brought on before the trial of the cause, it would be proper to-have sustained it, in order to compel the libellant to state the fact that there were, no other means within the control of the master positively; but by going to trial on the merits, it seems to me that the claimant has waived this merely technical objection, and if he has not, that the libel should now be allowed to be amended to conform the pleadings to the facts, without imposing any terms. I think a distinct and positive averment that the master had no other means of procuring the money except by bottomry, is a sufficient averment of the necessity for giving the bond, and that the libellant need not allege that the master communicated with the owner. Whether the master is bound to communicate with the owners, or not, before executing a bot-tomry bond, depends upon circumstances, and It seems more proper, if the claimant insists that the circumstances require it, that this should be set up by way of de-fence. The Olivier, Lush. 481. In the first instance, it is enough for the libellant to allege the necessity for repairs and supplies, and that the master was without means of procuring them. The Eureka [Case No. 4,-547]- The exceptions to the libel are therefore overruled.
Upon the merits, several defences are attempted which may -be reduced to these: (1) that the bond is void because of fraud on the part of the libellant; (2) that it is void for want of a communication with the owner; (3) that the master had other means to meet all the proper expenses of the ship; (4) that, as to some part of the expenses included in the bond, they were not incurred on the credit of the vessel, and as to some that they are exorbitant.
As to the defence of fraud, there is, I think, no sufficient evidence to impeach the good faith of the libellant. He has indeed acted very incautiously in advancing his money to pay some charges which are clearly improper to be included in a bottomry bond, but his acts show a want of prudence and of
In respect to the defence of want of communication with the owner, it is necessary to consider the circumstances under which the bond was given. The master, as agent of the owner of the ship, is bound to act with a prudent regard to the owner’s interests, and before hypothecating the ship, where other means of raising the necessary funds fail, he is bound to communicate with the owner, if such communication is practicable under the circumstances, without unduly delaying the ship, before he can execute a bottomry bond. The Oriental, 7 Moore, P. C. 398. See, also, The Bonaparte, 8 Moore, P. C. 459; The Onward. L. R. 4 Adm. & Ecc. 57; The Julia Blake [Case No. 7,578]. It has been suggested that this objection goes only to invalidating the stipulation of the bond for payment of maritime interest on the ground that the failure to communicate has only subjected the owner to this extraordinary expense. The Eureka [Id. 4,547]. But, as I understand the cases, it has been held that the communication with the owner, where practicable and prudent under the circumstances, is one of the modes of obtaining funds to which the master must resort and which he is bound to exhaust before that necessity can be said to exist which clothes him with authority as agent of the owner of the ship to make an express hypothecation of the ship by a bottomry bond. This being so, the objection, if well taken in the particular case, must make the contract as a bond invalid for want of authority to execute it. The same principle has been held to apply to a bond hypothe-cating the cargo, and in respect to the cargo upon a ground which does not apply to the case of the ship, namely; that the owner of the cargo may have the opportunity to exercise his option to take the cargo at the intermediate port upon payment of full freight and indemnifying the ship against expense and loss arising from his retaking it. The Julia Blake, ut supra; The Onward, ut supra; The Lizzie, L. R. 2 Adm. & Ecc. 254. But it is entirely clear as to the cargo and a fortiori as to the ship, that the master is not bound to wait to communicate with the owner, if it is impracticable under the circumstances, or will seriously delay the vessel, having regard to all the circumstances. Perhaps no better test can be applied than this, that in the matter of communicating the master must do what a prudent owner, if personally present, would do under the same circumstances. The Lizzie, ut supra. The failure of the bond for want of communication would not, however, necessarily lead to the dismissal of the libel, since the court may, if it appears that through a mis-take and without fraud, an attempt to convert a tacit hypothecation under the general maritime law into an express hypothecation by the bond has failed, allow an amendment of the pleadings and enforce the maritime lien. And such practice would especially he proper where the parties, without fault, have, as in this case, been delayed two years in the trial of their case, and have really tried the questions that arise in respect to the maritime lien. The William and Emmeline [Case No. 17,687]; The Eureka, ut supra; Carrington v. Pratt, 18 How. [59 U. S.] 66. Of course this would be impossible if the prior claim did not constitute a maritime lien, as in the case of The Circassian [Case No. 2,724], or in case of an attempted hypoth: ecation of the cargo, where no prior lien exists.
The barque arrived at Cape Town on the 15th of April, in command of Capt. Cummings, who had sailed in her from New York. She had sailed from New York with a cargo of petroleum for Stettin. Prom Stettin she proceeded to Geffle and from Geffle took a cargo of deals for Cape Town. She put into Madeira in distress and was there repaired, and incurred expense, for which a bottomry bond was executed. She was consigned at Cape Town to one Ardeme. The owner had, before her arrival, sent a power of attorney to a merchant at Cape Town, to attend to the business of the vessel, but for some reason he did not act. Soon after his arrival Capt Cummings got acquainted with this libellant, Joseph Gra: dy, who was doing business under the name of Joseph Grady & Co., as a ship chandler, and Grady solicited of the captain the business of the ship so far as related to the supplying of ship-chandler’s stores. The captain informed Grady that he would, have coming from his consignees three or four hundred pounds to spare, which he wished to put into old iron to bring to New York, and asked him to assist in procuring other freight. The vessel seems to have had no business at Cape Town except to deliver her inward cargo and to get such homeward cargo as she could obtain. Soon after his arrival, the master consulted with the libellant in respect to getting a homeward cargo, and by his advice, the ship was advertised in the newspapers for New York, for any freight that might offer. The libel-lant was then doing business with an American man-of-war, and secured for the barque the carriage of her guns to New York, the freight agreed upon being £100. Cargo did not offer in any large quantity, but some wool and other produce was secured. The libellant arranged with one Wainwright to sell to the master about two or three hundred tons of old iron and about twenty tons were actually delivered and shipped on the barque. This was soon after the delivery of her inward cargo, which took about ten days. But afterwards, upon.
The objection as to the bond, so far as it covers expenses which are properly nee-•essaries supplied to the ship, that they were not furnished on the credit of the ship nor in the expectation that a bottomry bond would be given for them, is not tenable. 'The principle is well established that a party who has supplied a vessel or advanced money upon the personal credit of the owner cannot afterwards turn it into a maritime lien against the vessel by taking a bottomry bond for it, but advances made and supplies furnished on the credit of the vessel may be turned into a subsequent bottomry. The Augusta, 1 Dods. 283; The Hebe, 2 W. Rob. Adm. 412; The Yuba [Case No. 18,193). As to all the bills paid by the libellant for such necessaries, there is no evidence to control the presumption which arises from the fact that they were furnished to the vessel in a foreign port with no apparent means on the master’s part to pay them except the vessel and her freight. Nor is there any evidence that any of these parties relied on any thing except the credit of the vessel, which, by the general maritime law, they were entitled to rely upon. As to the libellant, it is true, that during the first part of the time of his supplying the vessel, he may be held to have placed some confidence in the master’s statement to him that he had about £300 to £400 to invest in cargo. This plainly implied that he was in funds to disburse the ship, according to appearances at that time. When the libellant began to supply the ship, no agreement was made as to how he was to be paid. He testifies that he supplied her as he did any other vessel. It is uncertain at what time he discovered that the master was really without funds, but it may be assumed that, till this was discovered, he supposed that the master would pay him out of these funds which he represented were coming to him from the consignee of the inward cargo. This statement of the master was either a mistake or an intentional falsehood. Which it was, does not appear. It seems to me, however, that the owner cannot take advantage of this misstatement of the master made to the libellant on his behalf and as his agent, and that as to the supplies furnished while the effect of this misstatement continued, they are properly included in the bond. 'To hold otherwise would be to encourage fraud.
The question then is one of what items included in the bond should be allowed. The item of £48 2s Cd paid to Wainwright for the price of the iron and costs of suit, is not an expense for which the master could pledge the ship without express authority. It was for purchase of cargo. The master had no apparent authority to buy it, as Wainwright and the libellant must be held to have known. It is suggested that this iron served as ballast. But there is no proof that it was needed as ballast, nor what suitable ballast, if needed, would have cost. The items of cash furnished at various times to the master, £105 12s, must be disallowed. It appears that this money was largely for the master’s private use, and it is not proved to have been used for the ship or loaned for the ship’s use. The item of £0 9s Od for cash advanced by Makin, and £G by Nolan, must be disallowed for the same reasons. The items of “cab hire,” “barouche” and
Commissions of an agent properly employed by the master may be included in a bottomry as a necessary part of the expense incurred for the benefit of the ship. I think there was occasion for the master to employ the libellant to get in, settle and pay the bills of the vessel. The Tuba, ut supra. Therefore the libellant’s commissions may be allowed on bills properly included other than his own. But it must be . held that in supplying stores and provisions at prices charged he charged all that he was entitled to therefor and I see no propriety in his having a commission on his own bill The item of £4 10s for a set of scales, weights and measures, is not shown to be necessary for the ship and should be disallowed. So the item “rent on guns,” £2 15s, of which no explanation is given. Various items for luxuries in libellant’s bill, “potted” meats and fruit, also “postages,” “knife,” “currants,” “empty bags,” “2 bales oakum,” “tobacco,” “Shipley’s account, £6 6s,” “petty charges, £7 10s,” are not proved to have been necessary and must be excluded. The stevedore’s bill for taking cargo on board is properly included. The test of what may be secured in a bottomry bond is not whether the expense is one for which the creditor will have a maritime lien without any express agreement, but whether it was properly and necessarily incurred by the master in pursuance of his authority as agent of the owner for the prosecution of the voyage. The Tuba, ut supra. The funeral expenses of the master should, I think, be allowed. Where a master of a ship dies in a foreign port without means to defray his ^funeral expenses and the agent of the ship pays these expenses, humanity and the interests of commerce and the relation of the parties to the vessel justify the treating of the expense as a necessity of the vessel. The George [Case No. 5,329]; Winthrop v. Carleton, 12 Mass. 4. Advertising for a master, for tenders upon bottomry and for the bills against the ship, may be regarded as proper charges, but the expense incurred on this account was excessive. They advertised in all the newspapers in Cape Town. This was wholly unnecessary, and all these bills, except for one paper, must be disallowed. The expense of drawing the bottomry bond and stamps on the same is proper. The objection to the butcher’s bill from June 1st to July lOtn, £14, that the items are not given, is not well taken. Ordinarily, proper vouchers and bills of items must be furnished. Failure to do so is a suspicious circumstance. But, in this case, the proof is that this party supplied the ship during the period in question; that there was a pass-book in which all items were entered, which the captain held. The detailed account from April 15th to June 1st is produced and the amount of the gross charge from June 1st to July 10th is not out of proportion to the amount for the earlier period. The expenses of the survey which ordered repairs, and the cost of those repairs, are proper charges. The mate has testified that the repairs were unnecessary, but I think the proof is to the contrary. Capt. Cummings's board bills on shore must, of course, be disallowed. The doctor’s bills are not proved to have been necessary for the ship. It does not appear that they were for attendance upon the master in his last sickness. It does appear that he died suddenly of heart disease.
If the parties are unable to adjust the account in conformity with these views, the matter may be referred, or particular items may again be brought to the attention of the court, if questions of items have been overlooked. I think that the claimant’s point that the prices charged by the libel-lant are exorbitant is not sustained by the proof.
While I acquit the libellant of all bad faith, yet his careless allowance, as on ship’s account, of all sorts of bills, proper and improper, was inconsistent with the exact discharge of the duty he assumed towards the owner in accepting the position of agent of the vessel. The death of Capt. Cummings made it especially incumbent on him to see that the accounts of the ship were properly kept. Every such lender on bottomry, who is also the agent of the ship, must be prepared to justify the loan as to its several parts by proper vouchers and accounts. The Aurora, 1 Wheat. [14 U. S.] 107. In this case not only was the libellant thus negligent of his duty to the ship at Cape Town, but on the arrival of the ship here he demanded full payment of the bond and instantly sued, before the owner fairly had a reasonable opportunity to determine by examination what part of the bond was good and what part was bad. Such conduct, while not constituting bad faith, cannot but receive the disapprobation of a court of admiralty. It is injurious to the interests of trade, and in this case it has rendered litigation necessary to effect what it was the duty of the libellant himself to have done. Therefore, in the exercise of that discretion which is given to the court, the costs must be denied to the libellant.
Decree for libellant for amount to be adjusted under this opinion.
