National Board of Marine Underwriters v. Melchers

"Butler, J. In disposing of this caso I will confine myself to the points urged at the hearing; and will do little more than state conclusions respecting these. Some of them involve doubt and difficulty. None of them, however, are new in their legal aspect, and, while the authorities are not harmonious, they have been so fully discussed that nothing additional can be advanced. The suit was brought against one of the ship’s owners, alone, and the property attached was released before the name of the other was introduced. Its introduction was, therefore, too late. The suit must be regarded as against the original respondent only. In my judgment, however, he is answerable for the entire liability'' of tho ship. As said in Parsons on Shipping, p. 89, all part owners are generally, liable, in solido for repairs and necessary supplies. The cases cited support the text. The court has jurisdiction. In the absence of Cutler v. Rae, 7 How. 729, this I believe would not be questioned. That case, however, cannot be regarded as authority. Its decision as respects the point, was unfortunate. The question was neither argued nor presented — as appears by an appendix to 8 How. p. 616 — and the decision (which did not pass without dissent in the court itself) was a surprise to tho profession. The later rulings of the same court show it to have been a mistake, (More646 wood, v. Enequist, 23 How. 491; Insurance Co. v. Dunham, 11 Wall. 1;) and these later cases have been followed in the circuit courts, (Belt v. Gumbel, 24 Fed. Rep. 383; Heye v. North German Lloyd, 33 Fed. Rep. 60; Olivari v. Insurance Co., 37 Fed. Rep. 894; Sweeney v. Thompson, 39 Fed Rep. 121; Wheaton v. Insurance Co., Id. 879.) Should the average adjustment be made in accordance with the rule prevailing at Fayal, or those in force at New York? This question involves difficulty. I think, however, the views expressed by Mr. Lowndes, in his work on General Average, p. 198, are sound and govern the subject. I therefore adopt them. As he says, where a vessel is wrecked, or so damaged by peril of the sea, that the voyage cannot be continued, and the master finds and substitutes another, whereby the cargo is carried to its destination, retaining his lien and earning freight, no separation of interests occurs until the destination is reached. Consequently the adjustment is to be made according to the rules prevailing there. Where the master forwards the cargo to its destination by another vessel in pursuance of his%gency for its owners, alone, without intention to retain his lien and earn freight, the adjustment is to be made according to the rules of the place of reshipment. The intent in such case, however, may be and sometimes is involved in doubt by taking a bill of lading in the master’s name, and consigning the goods to the ship’s agent. Where the cargo is furnished by or on behalf of its owners, without retention of the ship’s lien, the separation of interests occurs at the place of reshipment, and the adjustment must, consequently, be made according to the rules prevailing there. In view of this statement of the law my understanding of the facts in the case settles the question involved. The vessel was unable to proceed beyond Fayal. She. was so damaged as to render the cost of repair unjustifiable. The master sought a substitute but was unable to find one. He was not required to do more, and consequently abandoned the voyage. The libelants, who represent the underwriters directly, and the owners of the cargo indirectly, in view of these facts took charge of the cargo, chartered the vessel, advanced necessary supplies and carried the cargo to its destination. The libel substantially admits these facts: It says the “master abandoned the voyage, * * * and the libelants assumed the duty of master and owner of the vessel towards it, advanced the money required to pay all expenses incurred at Fayal * * * in order to obtain possession, and chartered the North German Geestemunde to carry it. to New York.” That the voyage was completely “abandoned” by the master, and that he intended to have no further connection with the cargo after its delivery to the libelants at Fayal, is I think made clear by his acts and declarations, and especially by his demand of pro rata freight. I do not attach importance to the fact that the bill of lading at Fayal was taken in the master’s name. This was done probably at the suggestion of others, and for the sake of convenience merely. He did not retain his hold on the cargo; but consigned it to the libel-ants’ agent. In my judgment the ship’s connection with it was completely severed at Fayal. Mr. Despard, an adjuster and the libelants’ [647] representativo, a gentleman of intelligence and experience, adopted this view, as appears by his testimony. It follows that the rights of the parties are to ho determined by the rules prevailing at Fayal. The respondent is not affected by the fact that he did not demand an adjustment there before parting with the cargo, as possibly he might be were he now suing for a balance on general average. He is here defending simply against a claim set up by others. In this view of the facts found, it follows also that the demand of pro rata freight was justifiable. It is unnecessary to inquire whether the latter subject was governed by the law of the ship’s flag, the place of contract or that where the voyage terminated. The laws of each in this case justify tho charge. An adjustment must therefore be made according to the foregoing opinion. If the parties do not agree upon such an adjustment, a commissioner will ho appointed.