Salmon v. The Lykus

BeowN, J. This suit being in rem, the libel cannot bo sustained, unless a lien upon the ship is established. The case differs in some important respects from that of The Woodland, 104 U. S. 180, 7 Ben. 110, and 14 Blatchf. 499. In that case the drafts were drawn, “payable ten days after sight,” and contained the words, “recoverable against the vessel, freight, and cargo.” There was no express pledge of the vessel. The drafts were not bottomry drafts, but were designedly given in lieu of bottomry. 7 Ben. 113,115. In the present case the bill expressly pledges the vessel for payment, and is made payable only on condition of arrival at the port of destination. Such drafts constitute, in form, valid bottomry. Force v. Pride of the Ocean, 3 Fed. Rep. 162; Force v. Insurance Co., 35 Fed. Rep. 767. But the master had no authority in this case, under the general maritime law alone, to execute bottomry; for the vessel was under no such necessity as would authorize bottomry. The consideration of the draft was in part for “necessary last disbursements;” but these advances by the charterer -were not made as a loan to the ship, hut in part payment of the hire, pursuant to the-stipulations of the charter. No bottomry could be lawfully executed for such advances; nor docs the maritime law authorize bottomry in order to settle in advance differences of freight. The'draft, on its face, moreover, purports to be given merely in fulfillment of the obligations of the charter-party. The master’s authority, either to make this draft or to bind the ship for its payment, must therefore he sought in the charter-party alone. Two questions are presented. First, as to the right ofTassi, the payee and charterer, to enforce the draft; second, the rights of the libelant, as an alleged bona fide indorsee. 1. The libelant is, in this case, in no better position than the payee. Though this bill, being drawn to order, is doubtless transferable by in922 dorsement, it has not those qualities of negotiable paper under the law-merchant, that give superior rights to abona fide indorsee before maturity. This bill lacks the essential conditions of'such paper, since the obligation to pay is conditioned on the arrival of the vessel at her destination, and is not payable absolutely in money, but may be paid in demand bills on London. Coolidge v. Ruggles, 15 Mass. 387; Nunez v. Dautel, 19 Wall. 560; 2 Daniel, Neg. Inst. 43. In the ease of The Woodland, supra, the instrument was abill of exchange proper, payable “10 days after sight.” As the bill, moreover, on its face purports to be made under the charter alone, the indorsee had constructive notice of the contents of the 'charter, and of its limitations on the master’s authority. Again, there is not a word in this charter that authorizes the master to pledge the ship, or to create any express lien on her, for the payment .of the bill that he was thereby authorized to execute. If any lien, therefore,' attaches to the ship for the payment of such á draft, it cannot stand upon the master’s express contract alone, for the charter gave him no such authority; it can stand only upon the implication of the general maritime law, which might possibly attach a lien to the ship as an implied security to the charterer for the fulfillment of the ship’s obligations under the charter-party. See The Scotia, 35 Fed. Rep. 909, 917; Freeman v. Buckingham, 18 How. 182, 189. It is unnecessary to inquire here whether such an implied lien would arise for the payment of obligations like the present, properly given, because no such lien could in any event be upheld beyond what the ship actually owed on a fair settlement under the charter; and the indorsee of the draft would therefore take no greatei lien than Tassi, the payee. In this respect the' decision of the supreme court in the case of The Woodland, supra, upon this precise point, is strictly applicable. If it be said that the master’s representation on the face of the bill was that its amount was due “for advances and difference of freight, pursuant to the charter-party,” and that the indorsee was misled by that statement, this would not aid the libelant in any claim of a lien upon the ship. The situation is no better for a bona fide indorsee than that of a bona fide holder of a bill of lading, signed by the master, stating the shipment of goods not in fact put on board. It is well settled that no obligation on the ship or her owners in such a case arises, since the master has no authority to bind either in that way. Freeman v. Buckingham, 18 How. 182; Pollard v. Vinton, 105 U. S. 7; The Querini Stamphalia, 19 Fed. Rep. 123; 125; Sears v. Wingate, 3 Allen, 103. In every point of view, therefore, I must hold the rights of the indorsees of such drafts no better than those of the payee. The Italian authorities, cited by counsel, have reference, as I understand, solely to transactions within the scope of the master’s authority. This was in clear excess of authority. 2. As respects Tassi, the case seems clear. The advances made by him upon the fruit were plainly not “freight.” The master had no right to include such advances under the word “freight” in the bill of lading, nor to take them into account in settling “difference of freight” under the charter. If such advances might be .included under the term [923] “freight ” in the bill of lading, for the purposes of collection from the consignees on delivery, this did not give the charterer the slightest claim to have such advances included in the bill to be drawn in the settlement of differences. The charter expressly provides that the bills of lading, signed as presented, should be “without prejudice to the charter.” It is unnecessary to consider here whether any such settlement under clauses-of this character should be deemed other than provisional, as treated by the parties in .the cases of Eisenhauer v. De Belaunzaran, 26 Fed. Rep. 784, 790; Naval Reserve, 5 Fed. Rep. 209; for no fraudulent settlement can be upheld; and this whole transaction was plainly fraudulent as against the ship and her owners. Under the guise of a settlement of differences of freight, pursuant to the charter, the master was induced by Tassi to include under the name of “freight” alleged advances on the goods, exceeding their value; and the ship and owners, instead of being mere carriers, were thus sought to be turned into purchasers of the cargo. On arrival, no consignees appeared to claim the goods under the bills of lading. . The unavoidable inference is that Tassi did not expect that anybody would appear. No such “settlement” can stand. The goods having been entered and sold by the'collector in default of anyone appearing, to claim them, the vessel is entitled to be paid out of the net proceeds her full freight, according to the usual market rate. The libelant, as in-dorsee of the draft, is entitled only to the residue, and as this amount, $462.96, has been tendered and paid into court without objection, judgment may be entered for that sum less the defendant’s costs.