McLoon's Administrator v. Cummings

The opinion of the court was delivered, March 17th 1873, by Agnew, J. — On the trial of this case at Nisi Prius three points were reserved. The first was: “ Whether, when a ship has been disabled by the perils of the sea, puts into an intermediate port to repair, and the vessel is then condemned and sold, and the voyage broken up, the expenses so incurred are the subject of general average ?” Henry K. Cummings chartered the ship “Juliette Trundy” of the owner, William McLoon, for a cargo of coal from Baltimore, Maryland, to San Francisco, California. Storm and stress of weather injured the vessel, caused her to leak badly, and drove her for safety into the port of Rio de Janeiro, where, after the proper protests and necessary surveys, she was condemned as unseaworthy and sold, and the cargo was forwarded by her captain to San Francisco in the “ Shatemuc,” under a charter-party. It is evident that the vessel was disabled' by the perils of the sea and her voyage broken up; and the deviation into a port of distress was voluntary, in order to save the vessel and cargo as far as possible, and the lives of those on board. The expenses which followed were necessarily incurred to ascertain the ability of the vessel to proceed on her voyage and to save the cargo from loss, and the cargo as thus saved was forwarded to the port of destination. The expenses incurred at Rio de Janeiro were extraordinary, and were necessarily incurred by the captain as the common agent for all interested, and therefore including the shipper. General average has been defined to be a “a contribution by all the parties in a sea adventure, to make good the loss sustained by one of their number on account of sacrifices voluntarily made of part of the ship or cargo, to save the residue and the lives of those on board from an impending peril, or for extraordinary expenses necessarily incurred by one or more of the parties for the general benefit of all the interests embarked in the enterprise:” Star of Hope, 9 Wallace 228; McAndrews v. Thacker, 3 Id. 365; Nelson v. Belmont, 21 New York 38. The right to general average extends to the loss of the ship when the cargo is saved in whole or in part, as well as to the loss of the cargo, when the ship is saved: Gray v. Waln, 2 S. & R. 229 ; Lage v. Richards, Id. 137; Bernard v. Adams, 10 Howard 270; 3 Wallace 365-6; 9 Id. 204. We see no reason to doubt, therefore, that the cargo in this case would be subject to general average if-it had any value left when it arrived at San Francisco, and the cargo was sold for the charges. The third point reserved was: “ When the cargo is so sent to — 105 — the port of destination, whether the parties are bound by an adjustment fairly made by a despaoheur at such port, according to the rules and usages there established?” We are inclined to affirm this as a general principle of maritime law. There are many reasons for this rule, some of which arise in the fact that this port is that of the intended market upon which the calculation of the shipper is founded, and is also the end of the ship’s voyage as contemplated by the owners. Besides, the want of uniformity in the customs and rules of ports of different countries renders it essential that a certain port should be adopted as the place of adjustment, and the only practicable rule which can be followed in the midst of variety is to take that port for which the cargo is destined, and where the voyage is terminated. The circumstances and customs of this port, it is to be presumed, were in the minds of the parties in entering into the charter-party, while the market for the cargo there is to be presumed to be the best. Yet, conceding this to be a general rule, we must except the cases of fraud or gross mistake, and of a voyage broken up and ended, where, from the facts in the case, or the mutual acts of the parties or their agents, a final separation between the vessel and cargo has taken place, and the relations of the parties have actually terminated. In the last ease the port of disaster would, generally speaking, become the place of adjustment. Such we think is the result of the authorities referred to. This leads us to consider the second reserved point, which becomes the hinge of the case, viz.: “ Whether the rate of contribution is to be adjusted upon the basis of the value of the cargo at the place of repairs, or at the port of destination, if the cargo is to be sent on by another vessel at a rate of freight exceeding that stipulated to be paid under the original contract of affreightment.” It is contended on behalf of the plaintiff that the voyage was broken up at Rio de Janeiro, the vessel and cargo actually separated, and that the relations of the parties finally terminated there. Is this so ? McLoon, the owner of the vessel and plaintiff, seems not to have thought so in the first instance. He had the first adjustment made at Boston, February 1st 1868, and the second at San Francisco, September 17th 1868. None seems to have been made, or thought of, according to the rules of the port of Rio de Janeiro. We must, therefore, examine the facts to determine whether, in the contemplation of the parties, their relations finally terminated at Rio de Janeiro, and the separation of the cargo became so complete, that the port of destination ceased to be a common point for the adjustment under the charter-party, and that of distress became the end of their adventure. First it may be noticed that the charter-party contains no covenant or proviso, enabling the owner of the vessel to terminate his voyage at Rio de Janeiro or any intermediate port; it does not ' contain even the common exception of the perils of the sea. He — 106 — must stand, therefore, only upon the law as it would arise upon the facts of his deviation into the port of Rio de Janeiro. But conceding the deviation to be justified, it is a well-settled principle of maritime law that in the case of a disaster by a peril of the sea, rendering the vessel unable to proceed upon her voyage, the master or captain becomes the common agent of all the parties in interest; the subjects of these interests are the vessel, the cargo and the freight. It is, therefore, the duty of the master, if the vessel cannot proceed, to reship the cargo, if he can, to the port of destination, so as to protect all interests. For this purpose he must exercise a large discretion, according to the circumstances. For in the absence of owner and shipper, and alone, as he is usually in a distant port, he must do what he fairly and conscientiously believes is for the interest of all. These are general principles borne out by the authorities: 3 Kent Com. 219, 212; 2 Parsons on Ship. 234; Lamont v. Lord, 52 Maine 388, et seq.; Thwing v. Wash. Ins. Co., 10 Gray 457 to 460; Winter v. Del. Ins. Co., 6 Casey 335. In forwarding the cargo to the port of destination the master may act for both owner and shipper. If he can save part of the freight to the owner he will be considered as his agent as well as the agent of the shipper. But if he can save nothing for the owner of the vessel, he will not be the agent of the owner but of the shipper alone. The foundation of this exception is, that an authority arising from implication only will not be presumed where the act of the master is clearly injurious to the interests of the owner of the vessel. These being governing principles, a separation of the relations between the owner and the shipper would be deemed to have taken place in this instance, if the only facts to be considered were the condemnation and sale of the vessel at Rio de Janeiro and the forwarding of the cargo by the captain at a greater rate of freight from Rio de Janeiro to San Francisco than the freight agreed upon in the charter-party from Baltimore to San Francisco. The stress of the argument for the plaintiff rests upon this view of the case. ’ But these are not the only facts, while upon the whole evidence its weight carries the adjustment to the port of San Francisco. In addition to the fact already noticed, that the charter-party is without a saving covenant, leaving the question of deviation into Rio de Janeiro open to a controversy, which the owner of the vessel, or the captain as his agent, might prefer to avoid, the following elements are to be found in the evidence: Captain Perry, the master of the Juliette Trundy, entered into a charter-party with Captain Soule, master of the “ Shatemuc,” without disclosing a principal; the vessel was to be consigned to the charterer's agent at the port of discharge, and freight to be paid on unloading and right delivery of the cargo in cash. The bill of lading by the Shatemuc was signed by "Wright & Co., as agent for Captain Perry, cargo to be delivered at San — 107 — Francisco “unto order or to-, assignees,” he or they paying freight as per charter-party. Wright & Co.,’ for Captain Perry, endorsed this bill to the order of John S. Wright, Esq., agent at New York, and it was transmitted to New York, when John S. Wright, agent, endorsed it deliverable to William B. Cummings & Co. Captain Perry testifies that the bills of lading, charter-party per Shatemuc, and all the papers were forwarded to the plaintiff, McLoon; and in answer to a question why the bill of lading was not forwarded to San Francisco to await the arrival of the Shatemuc there, said he’ was told by Mr. Wright that the adjustment would be made in Boston, and the average would be forwarded to San Francisco. He also testifies, that in all he did he acted upon his own judgment for what he thought to be the best interests of all concerned. Now in all this it is clear he so acted to preserve to McLoon the power to control the cargo at the port of destination, so far as to protect any interest he deemed himself to possess there. In this his acts were met by McLoon and ratified. On the arrival of the Shatemuc at San Francisco, Wm. B. Cummings & Co., to whom Wright of New York finally endorsed the bill of lading, had no authority to receive the cargo. On the 14th of March, Captain Soule, after the arrival of the Shatemuc, notified Wm. B. Cummings & Co. of his readiness to deliver the coal on payment of the freight, delivery of the bill of lading, and bond for payment of the general average incurred for charges at Rio de Janeiro. Captain Soule, on the 19th of March, telegraphed to McLoon : “ Where are the Shatemuc’s bills of lading to Trundy’s cargo?” McLoon replied by telegraph, March 21st: “Deliver your cargo to Wm. B. Cummings & Co. upon their giving bond to pay general average. Bill of lading on the way.” Wm. B. Cummings having telegraphed to Henry K. Cummings the arrival of the Shatemuc without papers or bill of lading, the latter, on the 19th of March, wrote to McLoon. McLoon replied March 24th, saying he had received a despatch from Captain Soule, and telegraphed him to deliver cargo to Wm. B. Cummings upon his giving general average bond ; also that he supposed H. K. Cummings would have paid the general average on cargo here (Boston), but if not should have to send the paper to San Francisco. The facts show plainly that none of the parties recognised the port of Rio de Janeiro as the place of final separation of interests; that Captain Perry considered himself as still acting for McLoon, to enable him to control the cargo, and that McLoon ratified his acts by assuming to control the delivery of the cargo on his own terms, and himself adopted San Francisco as the place of adjustment, failing to secure it at Boston. Under these circumstances the separation of interests was not complete at Rio de Janeiro, but they continued together until the arrival of the cargo at San Francisco, and its sale there to pay the freight and charges from Rio de Janeiro to San Francisco. — 108 — The reasons of McLoon for retaining control are not very apparent, but they may have arisen from a belief that San Francisco would be the best market for the cargo. It is certain, however, that he so acted as to control the cargo after it left Rio de Janeiro, and on its arrival at the port of destination. Having done so, the value of the coal at that port is the true criterion in the adjustment, and the evidence as, clearly shows that its entire value was consumed by the freight and charges. The proof is satisfactory that the adjustment at San Francisco was made “ in accordance with tjie usage and customs of that port,” and that the principle adopted there is, “that what is saved shall pay, and nothing remains where charges consume the whole value.” “ The custom at San Francisco is to deduct at San Francisco, from the value of the cargo at that place, the freight, special charges and commission of five per cent.” In this state of the ease, the entire cargo being lost to the shipper, there was nothing upon which general average could he charged. The judge at Nisi Prius was therefore right in confining the recovery to the special charges on the coal. The remaining question is, whether the plaintiff was entitled to a verdict for the difference between gold and the national currency in legal tender notes. The judge directed the verdict to be rendered for the sum recovered in gold. We think this was right,- in view of the nature of the transaction, and the contract to be implied from it. It is argued that there was no express contract, and therefore the judgment should have been for currency, adding the premium paid for gold as the actual expenditure of the plaintiff. But the expenses were incurred in á foreign country upon a gold standard, and the draft drawn by the master of the Juliette Trundy at Rio de Janeiro, on the plaintiff as her owner, was for gold. Gold, therefore, was the basis of the transaction and of the adjustment. The liability of the parties should be measured by that standard; gold coin also being one of the legal standards of money in the United States, and therefore directly applicable as a measure. The expenditure being founded on a gold basis, and being a foreign transaction, the contract to be implied from it must follow the same nature, especially in view of there being a legal national currency whereby it can be measured. The settlement of such a foreign transaction, on a uniform and proper basis, must result in due proportion of contribution among all interests. It is only in the payment in this country, in a currency of less value, the alleged loss arises, and that arises between the two species of legal currency, the result of local causes and not attributable in any way to the adjustment upon the foreign gold basis. The right of the party paying the draft seems to be that of receiving the proportion which others pay, and which he has advanced upon the basis of the transaction, which was gold and not legal tenders. The fluctua — 109 — tions between the two species of lawful money, in the interval between adjustment and payment, ought not to be permitted to prejudice the judgment which is founded on the gold basis, itself a uniform and unchanging standard. If gold was now at twice the premium paid by the plaintiff, he would be entitled to his judgment payable in gold, and the loss would then fall on the defendant. Gold being the measure of the debt, it seems to us should be the measure of the payment also. Where all interests are measured by a common legal standard, no injustice is done to any one. The payment, therefore, should follow the nature of the liability. Judgment affirmed.