Oakland Cotton Manufacturing Co. v. Jennings

By the Court, Crockett, J.: The defendant being the owner of the American schooner Greenfield, caused her to be duly enrolled at the port of San Francisco, with one Enos as master. Subsequently he appointed Horton as master in place of Enos; but whether the change of masters was reported at the Custom House and noted or recorded, does not appear. Some time after Horton took command of the schooner the defendant entered into an agreement with him to the effect that Horton was to have the entire control and mangement of her; was to make whatever contracts of affreightment he saw fit; to employ her in any business he desired, within the inland waters of the State; to victual, man, and navigate her at his own expense, and to collect all her earnings; and to pay to the defendant one third of her gross earnings, at the end of each month, or as often as a settlement was had between them— the defendant to keep the schooner seaworthy and in repair. Subsequently Horton entered into an agreement with one Finney, to the effect that the schooner was to be run for their joint benefit, under the contract with the defendant, and thereafter she was controlled and managed by the two jointly. The plaintiff contracted with Finney, acting on behalf of himself and Horton, to transport certain machinery, on the schooner, from San Francisco to Clinton, on the opposite side of the bay. But owing to negligent stowage, the schooner capsized during the voyage, and the machinery was partially lost, and the remainder damaged. The action is to recover damages for a breach of the contract of affreightment. On these facts, the defendant insists that he is not liable, for the reason that the schooner was not under his control or man — 183 — agement, or navigated by his servant or agents, but by Horton & Finney, under the contract, they having the exclusive control and possession of her, with a right to make such contracts of affreightment as they saw proper; that Horton was in no sense the agent of the owner, with authority to bind him in maritime contracts, without his consent. On the other hand, the plaintiff claims that, by the maritime law, the master appointed by the owner is his agent to make contracts of affreightment, and that no secret agreement between the master and owner, of which the shipper had no notice, can exempt the owner from liability. It appears to be well settled, that if a vessel be chartered in the usual manner, either for a particular voyage or for a period of time, the charterer having the authority to appoint the master, and undertaking to victual, man, and navigate her at his own expense, Tie will be deemed the owner pro hac vice, and the general owner will not be personally liable for supplies, or under contracts of affreightment. This proceeds upon the ground, that as the charterer appoints the master and has the exclusive control of the vessel, the master is his agent and not the agent of the general owner, who does not, therefore, hold himself out to the world as the principal for whom the master is authorized to act. In respect to a contract of affreightment, the general owner in such a case would not be liable, for the further reason, that inasmuch, as the vessel was not navigated by him, or at his expense, or by his agents or servants, or for his benefit, he was not a.common carrier, and was, therefore, not amenable as such. I do not understand the counsel for the plaintiff to controvert these propositions; but, at all events, they are abundantly supported by authorityin this country and in England. It is equally clear that if the owner let out to charter the hold of~the vessel, appointing his own master, and sailing her at Ms expense, he will be responsible on contracts of affreightment made by the master with the shippers, hav — 184 — ing no notice of the charter party. (Sandemann v. Scurrer, 2 Law Reports, 86; In Re St. Cloud, Browning & Lushington R. 15.) In the first of these cases, Cockburn, C. J., bases his conclusion on the ground “that the plaintiffs having delivered their goods to be carried, in ignorance of the vessel being chartered, and having dealt with the master as clothed with the ordinary authority of a master, to receive goods and give bills of lading on behalf of his owners, are entitled to look to the owners as responsible for the safe carrying of the goods. We think that so long as the relation of owner and master continues, the latter as regards parties who ship goods in ignorance of any arrangement whereby the authority ordinarily incidental to that relation is affected, must be taken to have authority to bind his owner by giving bills of lading. We proceed on the well known principle that where a party allows another to appear before the world as his agent in any given capacity, he must be liable to any party who contracts with such apparent agent in a matter within the scope of such agency. The master of a vessel has, by law, authority to sign bills of lading on behalf of his owners. A person shipping goods on board of a vessel, unaware that the vessel has been chartered to another, is warranted in assuming that the master is acting by virtue of his ordinary authority, and therefore acting for his owner in signing bills of lading. It may be that as between the owner, the master and the charterer, the authority of the master is to sign bills of lading on behalf of the charterer only, and not of the owner. But in our judgment this altered state of the master’s authority will not affect the liability of the owner, whose servant the master still remains, clothed with a character to which the authority to bind his owners by signing bills of lading attaches by virtue of his office. We think that until the fact that the master’s authority has been put an end to is brought to the knowledge of a shipper of goods, — 185 — the latter has a right to look to the owner as the principal with whom his contract has been made.” This reasoning commends itself strongly to our judgment, and appears to be unanswerable. In the case at bar, the master was appointed by the defendant, who was the registered owner; and whatever may have been the secret understanding between them, in respect to the management, employment, and sailing of the vessel, or the appropriation of the earnings, persons dealing with the master in ignorance of this understanding, were warranted, in the language of Chief Justice Cockburn, “in assuming that the master was acting by virtue of his ordinary authority and therefore acting for his owners in signing bills of lading.” When Horton was appointed and entered upon his duties as master, the law conferred upon him authority to bind the owner in contracts of affreightment. By the act of appointing him, the defendant notified the public that Horton was his agent for this purpose. After thus openly proclaiming the agency, he is not at liberty secretly to revoke it whilst it ostensibly continues, in so far as persons are affected by it who dealt with the master within the scope of the agency in ignorance of the revocation. It is a familiar principle governing all agencies that so long as the principal permits the agency ostensibly to continue, even though it has been secretly revoked, the principal is bound by the acts of his apparent agent within the scope of the agency, in respect to persons dealing with the agent without notice of the revocation. In Story’s Agency, section four hundred and seventy, it is said that “ the revocation, as between the principal and agent, takes effect from the time when the revocation is made known to the agent, and as to third parties, when it is made known to them and not before. Until, therefore, the revocation is so made known it is inoperative. If known to — 186 — the agent, as against his principal, his rights are gone, but as to third persons who are ignorant of the revocation, his acts bind both himself and his principal.” It must be conceded, I think, on all sides, that by appointing the master, the owner, by a notorious act, constitutes him his agent to enter into contracts of affreightment, and if he can secretly revoke the agency, so as to affect third persons who are ignorant of the revocation, without revoking the appointment of the master, it must be because agencies of this description stand upon a different footing from other agencies and are excepted from the operation of the general rule. But there is no sound reason for the exception. On the contrary, considerations of public policy and fair dealing appear to me to require a strict application of the rule to this class of agencies. Otherwise the general owner who appoints the master, and permits him, under the appointment, to continue in command of the vessel, thereby inviting the public to deal with him as the agent of the owner, may wholly escape responsibility for the acts of his ostensible and accredited agent by entering into a secret agreement with the master, of the terms of which the public are not informed. If he could thus escape responsibility it would impose upon shippers the necessity of inquiring, at their peril, not only who was the owner, and by whom the master was appointed, but also what secret understanding or agreement existed between them in respect to the management and sailing of the vessel. In my opinion the interests of commerce demand that this onerous duty should not be imposed upon shippers, and that the owners of vessels navigated by masters appointed by them should be subject to the responsibilities which usually pertain to the relation of owner and master in dealing with those who are ignorant that those relations are diferent from what they prima facie are. I am aware that there is apparently a considerable conflict in the authorities — 187 — on this point, but, in my opinion, those which hold the views above stated are supported by the better reasoning. Judgment affirmed. Neither Mr. Chief Justice Wallace nor Mr. Justice Niles expressed an opinion.