Pacific Coast Co. v. Anderson

GILBERT, Circuit Judge, after staling the case as above, delivered the opinion of the court. The question presented in this case is whether the facts pleaded in the libel vested in the libelants a right of suit for the freights earned under the subcharter. It is not disputed that freight to he earned is assignable either absolutely or as security, and it is admitted that the form of assignment is immaterial, that uo particular form is required, and that any agreement which shows the intention of one party thereto to make a present: irrevocable transfer and the assent of (lie oilier to receive it will operate in equity as an assignment if supported by a sufficient consideration. By its terms the agreement in this case was a power authorizing Eschen, as the agent of the owners, to collect the freights; and it was intended as security for the hire of the ship and protection against liens thereon. Relying upon its protection, the appellees paid certain claims against the vessel. But it is said that the power to collect the freights was revocable by the grantor thereof, for the reason that it was uncoupled with interest. It: is argued that the power did not operate as an assignment, and did not accompany an assignment of the freights or of an interest therein, and that the only interest which (he grantee of the power had therein was in the proceeds to be realized by its execution. What constitutes a power coupled with an interest was clearly defined by Chief Justice Marshall in the leading case of Hunt v. Rousmanier’s Adm’rs, 8 Wheat. 171. 201, 5 L. Ed. 589, a case in which the owner of an interest in a vessel had upon procuring a loan (hereon executed to the lender a power of attorney to sell the interest and apply the proceeds to the repayment of the loan, and had provided that upon such payment the power should end. The grantor of the power died before the power was executed. It was held that his death revoked it. This conclusion was reached upon consideration of the fact that the power of attorney contained no words of conveyance or assignment, but was a simple power to sell and convey, and would, therefore, not survive the death of him who made it. The learned chief justice proceeded to discuss the exceptions to the rule in cases of power coupled with an interest, and to define the nature of the interest which would render such a power irrevocable. But he did not assert that no powers were irrevocable by the act of the principal save those which were thus coupled with an interest. On the contrary, he clearly recognized another class of exceptions, concerning which he said: “Where a loiter of attorney forms a part of a contract, and is a security for money, or for the performance of any act which is doomed valuable, it is generally made irrevocable in terms, or. if not so, is deemed irrevocable in law. 2 Esp. N. P. 565. Although a letter of attorney depends, from its nature, on the will of the person making it, and may, in general, be recalled at his will, yet if he binds himself for a consideration in terms, or by the nature of his contract, not to change his will, the law will not permit him to change it. liousmanier, therefore, could not, during his life, by any act of [976] his own, have revoked this letter of attorney. But does it retain its efficacy after death'/ We think it does not” The court there distinctly announced the doctrine that a power of attorney executed upon a valuable consideration, and given as security for the performance of any act, is irrevocable, at least during the lifetime of the grantor. In 2 Kent, Comm. 644, it is said of such a power: “But where it constitutes part of the security for money, or is necessary to give effect to such security, or where it is given for a valuable consideration, it is not revocable by the party himself, though it is necessarily revoked by his death.” Of similar import is Story, Bailm. § 209. In Walsh v. Whitcomb, 2 Esp. 565, Lord Kenyon said: “There is a difference in eases of powers of attorney. In general, they are revocable from their nature; hut there are these executions. Where a power of attorney is part of a security for money, there it is not revocable.” These remarks were made in a case in which a deed of assignment accompanied the power of attorney, but the principle there announced has been applied in cases where the power of attorney was unaided by assignment or conveyance, as in Bromley v. Holland, 7 Ves. Jr. 3,—a case in which a power of attorney to receive rents was the original security for a valid annuity. In that case Lord Eldon, speaking of the pow,er, said: “But, where it is executed for valuable consideration, this court would not permit it to he revoked.” So in Smart v. Sandars, 5 C. B. 895, 917, Wilde, C. J., drew this conclusion from the authorities: “The result appears to he that, where an agreement is entered into on a sufficient consideration, whereby an authority is given for the purpose of securing some benefit to the donee of the authority, such an authority is irrevocable.” In Gaussen v. Morton, 10 Barn. & C. 731, where one, who was indebted to another, in order to discharge the debt executed a power of attorney to his creditor authorizing him to sell certain lands and retain the proceeds, it was held that the power was irrevocable. In Watson v. King', 4 Camp. 272, it was held that a power of attorney given by the owner of a vessel to- one to whom he was indebted authorizing him to sell such interest was a power coupled with an interest, which could not be revoked by the grantor, but which was necessarily revoked by his death. This case is not wholly in harmony with Hunt v. Rousmanier’s Adm’rs, but the difference is in words, rather than in principle; the English court adopting a broader definition of a power coupled with an interest, but coinciding in the rule that such a power, while not revocable by the grantor in person, would not survive his death. American decisions sustain this doctrine, and some of them apply it to facts analogous to those in the case at bar. Hutchins v. Hebbard, 34 N. Y. 24; Farmers’ & Drovers’ Sav. Bank v. Kansas City Pub. Co., 3 Dill. 287, Fed. Cas. No. 4,652; Clark v. Iron Co., 26 C. C. A. 423, 81 Fed. 310; Hurley v. Bendel (Minn.) 69 N. W. 477; In re Keys’ Estate, 137 Pa. 565, 20 Atl. 710; Montague v. McCarroll (Utah) 49 Pac. [977] 418; Manufacturing Co. v. Marsh, 91 Pa. 96; Stover v. Eycleshimer, 46 Barb. 84. It is conceded by all the authorities that in construing such an instrument as that which is involved in the present case the principal question is, what was the intention of the'parties? • Was if intended to transfer the title or the right of possession of the subject-matter of the power, or was it the intention that the grantor should retain them? The intention, however imperfectly expressed, if ascertainable, will be controlling. To ascertain the intention, the court will consider not only the words used, but the purpose of the instrument, and the circumstances surrounding its execution. In the case at bar the purpose of the power is clearly expressed. It was to protect the shipowners, and to furnish a substitute for the $10,000 bond, which, under the charter party, was to be given to secure to them the fulfillment of its conditions. It was pronounced by the parties “adequate means” to that end. The consideration upon which it was executed was declared to be the execution of the charter party, and its delivery, and the payment of one dollar. It stands for the security upon which the owners parted with the possession of their vessel. The freights which they were authorized to receive under its provisions were the earnings of their own property. In short, it was a power based upon a good and valuable consideration. If was intended as security, and it comes within the definition of powers not revocable during the lifetime of the grantor, which is found in the opinion in Hunt v. Rousmanier’s Adm’rs, and in the other authorities above cited. To- hold such an instrument revocable by the act of the grantor thereof, would" be to destroy its value as security, and to defeat the plain intention which the parties thereto had in making it. It follows from the foregoing view of the nature of the instrument which is here sued upon that the suit was properly brought in the name of the donees of the power. The absolute power to collect, receipt for, and appropriate the freights having been executed for the consideration, and under the circumstances detailed, and by a corporation for and during its lifetime, was equivalent to an equitable assignment of the freights, and it carried with it the right to sue for their recovery. The appellees are the persons who are entitled to the benefit of the suit. They are subsi antially and actually interested in the subject-matter of the controversy. They are the real parties in interest. The donor of the power has made no claim adverse to that of the appellees. It has not interfered in this proceeding. In Richmond v. New Bedford Copper Co., 2 Low. 315, Fed. Cas. No. 11,800, it was held that a. court of admiralty resembles a court of equity, but is even more free from technical rules, and that in some respects “it has more than all the powers of a court of equity.” In Watts v. Cainors, 115 U. S. 353, 361, 6 Sup. Ct. 91, 94, 29 L. Ed. 406, 408, it was said that “a court of admiralty, within the scope of its powers, acts upon equitable principles; and when the facts before it in a matter within its jurisdiction are such that a court of equity would relieve and a court of law could not, it is the duty of the court of admiralty to grant relief.” Courts of equity have always given effect to instruments [978] such as that under consideration, with a view to carrying out the actual intention of the parties thereto. If there he sufficient in the instrument to show that it. was the intention to devote the fund referred to in the power to a specific purpose, and the donor of the power retained no control over it, the court will give effect to the intention thus expressed. As was said in Spain v. Hamilton’s Adm’rs, 1 Wall. 604, 624, 17 L. Ed. 619, 625: “To constitute an assignment of a debt or other chose in action, no particular form is necessary. * * * Any order, writing, or act which make’s an appropriation of a fund, amounts to an equitable assignment of the fund.” The decree of the district court will he affirmed.