Ross v. The Active , 2 Wash. C. C. 226 ( 1808 )

' WASHINGTON, Circuit Justice.

The agreement of the parties has left but two questions for the court to decide. First; whether the libellant was or was not bound, under all the circumstances of this case, to endorse the bills of Captain Morris, for securing which, the hypothecation was given, without compensation, and thereby render a service to the respondent; and if not so obliged, the amount of compensation to which he is entitled. Second; whether the expenses incurred by the vessel at the Isle of France, must be borne by the vessel, or are to be considered as a subject of general average. This agreement will render it unnecessary for the court to consider the objections made to the form of the hypothecation, and the right of the libellant to recover maritime interest, in virtue of that instrument. Regularly, the master is the agent of the ship owner only, and has nothing to do with the cargo, but in relation to its safe custody and transportation. The supra-cargo, qn the other hand, if there be one on board, represents exclusively the owner of the cargo, acts under his authority, and is a stranger, as to what concerns the ship or its owner. The powers of the master, in relation to his employer, are always considerable; and in no instance more important, than in that of binding his owners, and their property, by his Contracts for money borrowed in foreign parts, for the necessary purposes of the voyage. To prevent, as much as possible, the injuries -which may result to the owners, by the improvident exercise of this power, the ordinances of foreign countries, and the rules of our own courts, have imposed.every restraint upon the master, which the reason and nature of the case demand. The contract must not only be fair in itself, but it must be made in a foreign country, where there is no owner, and -under such circumstances of necessity, as show that it was entered into with a view to the interest of the owner. The master is bound to raise the money by means the least injurious to those he represents. If his owners are known, and have cr'edit in the place where the money is wanted, he should, in the first place, endeavour to raise it by drawing bills upon them, which they are bound to accept and pay. If the money cannot be obtained in this way, his next recourse is to the property of his owner, which he may pledge for the security of the lender; and, by way of inducement to the person disposed to assist him, he may bind the property7, upon its safe arrival, to compensate the loan by the payment of an extraordinary premium, beyond the legal rate of interest. If the owner of the ship be also owner or part owner ot the cargo, the master may, in his discretion, sell a part of the cargo, in preference to borrowing at an exorbitant rate of premium; and, in his choice of means, his judgment fairly exercised, must govern him. If, in none of these ways he can supply his wants, he may then go beyond the general scope ot his authority as master, and may sell a par) of the cargo, or hypothecate the whole. This extraordinary power, in relation to those whose interest he does not represent, is cast or forced upon him, in the language of Sir William Scott, by the extreme necessity of his situation. It may, we think, be derived from a tacit agreement of the owner of the cargo, to prevent the voyage, in which he is equally interested with the owner of the ship, from being broken up, or unreasonably delayed. But, at all events, the necessity must be such as to connect the act with the success of the voyage; and not for the exclusive interest of the ship owner. Thus far, with respect to the powers of the master.

It is said, that by an article of the Conso-lato del Mare, the merchant, if he be present, and has money, is obliged to advance it for the necessities of the voyage; and hence it is inferred, that if he has credit instead of money, he is bound to use the former for procuring the latter. We do not know that this provision is to be met with in the Laws of Oleron, or in any other foreign ordinance; and it is to be observed, that the above article is silent as to the terms and conditions upon which the advance is to be made. There can be very little doubt, upon the reason of the case, as to the occasion when this obligation upon the merchant arises. If the master is unable to raise the money by any of the means before mentioned, and without it is unable to prosecute the voyage the obligation of the merchant to advance becomes imperious. But this duty results from a circumstance which is intimately connected with his own interest, as well as with the interest of the ship owner. Even then he may refuse to lend, and leave the master to his extraordinary power of selling a part of the cargo; because it may be his interest that this latter course should be pursued. But, if the question merely be, which mode is most for the interest of the ship owner, we must hesitate in yielding our assent to the proposition, that the merchant is under any obligation to act in the way which is best calculated to promote exclusively the interest of the ship owner. Suppose, for example, it should be in the power of the master to borrow money upon the security of the vessel, but at a high premium; and that by selling part of the cargo, a loss would result to the ship owner, equal to such extraordinary premium; will it be contended, that in such cases, the merchant, or his representative on board, would be obliged to advance his money or credit, to relieve the owner of the ship from this loss? What reason or justice is there in imposing such a duty upon him? He is under no other obligations to the ship owner, than such as the contract between them imposes. The one engages to carry the goods of the other safely to their destined port, for which he is to receive a stipulated compensation. There are no intermediate duties created, but such as are occasioned by a common danger and a common interest, resulting from the perils of the voyage.

But if the voyage may be prosecuted, the owner of the vessel cannot excuse himself for not doing so, because the merchant refuses him facilities within his power, and which he is at perfect liberty to grant or to withhold. Should a merchant be found so perversely blind to his own interest, and so churlishly disposed in relation to the carrier of his property, as to hazard the success of the voyage, by refusing his aid in a case of such extreme necessity, we will not say how this conduct might affect any claim which he might have against the carrier, upon the contract of af-freightment; neither will we say how it might affect his claim against the ship owner, for the value of the goods which the master had been obliged to sacrifice for the want of the money or credit, which it was in the power of the merchant to lend. These are extreme cases, which are not now to be considered. But it is decidedly the opinion of the court, that the merchant is under no obligation to advance his money or credit, with a view merely to benefit the ship owner; and in no instance is he bound so to do, but upon condition of receiving a reasonable compensation. If he may demand a compensation for the loan, he may, a fortiori, demand satisfactory security for repayment of his advances. But, whilst we admit the validity of these marine contracts, between the master and the merchant, or his representative, they will always be looked at with a greater degree of suspicion, than where the lender is a stranger to the parties. The merchant is better informed than a stranger, as to the personal responsibility of the ship owner, and the risk which he runs; the influence which he may possibly have over the other contracting party, will in general warrant the apprehension, that better terms have been obtained from the master than were strictly fair. In the particular case before us, every thing appears to be fair, and there is no cause to impeach the correctness of the libellant’s conduct in relation to this negotiation. But, in general, the court would feel itself called upon to hold a strict hand over contracts of this description, entered into with the owner of a cargo in a foreign country; and to scrutinize, with great exactness, the circumstances which led to the contract, and which ought to affect the stipulated compensation.

This leads to the consideration of the premium claimed by the libellant, for his endorsements of Captain Morris’s bills, and the compensation to which he is justly and equitably entitled. It is in full proof, that every effort was made by Captain Morris to obtain the money he wanted, previous to the contract entered into with the libellant. The respondents, being probably less known at this part of the Isle of France than they are in other parts of the world, and the difficulty of effecting an insurance on the risk which the lender was to run, rendered it impracticable to borrow money on almost any terms. Part of the cargo might have been sold, but upon the most ruinous terms for the owners of the ship. The plan ultimately adopted, was considered to be most to the advantage of the respondents, and in this opinion we concur. But it does not follow, from the admission of these facts, that the claim of the libellant to a compensation, equal or nearly equal to the sum which the respondents must have paid, by the adoption of other means of raising the money in the power of the master, is founded in equitable principles. The high premium claimed by persons residing in the island, arose from the scarcity of money, their ignorance of the solidity of the owners, and the hazards which attended any security which could be given. Whereas, the libellant was acquainted with the owners, resided in the same city with them, and besides, would, upon the safe arrival of the vessel, have in his hands a much larger amount than that for which he was to become responsible. Captain Waters lent this very money, at a premium of ten per cent, upon the security pf the libellant, and perhaps upon the additional security of the hypothecation. Did not the libellant lend his credit upon a security equally sufficient? As to Captain Waters, however, it is to be considered that he was under the pressure of a certain necessity to get this money to the United States; and, in addition to his ten per cent., he received, by means of this negotiation, a compensation in the saving of the freight of his specie, if indeed, on any terms, he could have got it away. Mr. Adgate proves, that he had received fourteen per cent, for approved bills with good endorsers. Mr. Ashmead mentioned, that he had received for money from twenty to fifty-five per cent., secured by bills on Philadelphia. Upon the whole, we are of opinion, that, under all the circumstances of this case, a premium of fifteen per cent, will be a liberal compensation to the libellant for his endorsement, exclusive of that which the master was compelled to pay to Captain Waters for the loan.

The next question is, are the expenses incurred at the Isle of Prance, to be considered as a subject of general or partial average? The great and leading rule, respecting .this subject, is, that all persons benefited by an act of the master, with a view to the general safety of all, in case of extraordinary necessity or peril, must contribute to the loss, in proportion to the property saved by the act. The act must not only be performed with this view, but it must be in a case of emergency, not produced by the misconduct or unskilfulness of the master, or commander, and not resulting from the ordinary circumstances of the voyage: as, if goods be thrown overboard in a storm, in order to lighten the vessel, and insure her safety; if injuries be done to the vessel for a similar purpose,*or expenses be incurred in repairing a damage done to the vessel, by the violence of the winds, to avoid the pursuit of enemies, or pirates, and in many Other cases of the like nature. But if the damages to the ship arise from the ordinary occurrences of the voyage, and not from some extraordinary violence or peril, to which she has been exposed, the loss must be borne by the owner of the vessel, who engages, by his contract with the freighter, that she shall be stout, staunch, and strong, and. properly equipped for the voyage, and whether it be • expressly stipulated or not, he is bound to keep the vessel in this condition, during the voyage, unless prevented by some extraordinary peril, for which he can, in no respect, be responsible.

In this case, the Active left Philadelphia on her outward voyage, well equipped, and, in our opinion, perfectly seaworthy. We think, also, that she was seaworthy at the time she left Wampoa on her return. Though a sound vessel at the time of her sailing from Philadelphia, she was, nevertheless, old, and upon so long a voyage as this generally is, rendered unusually so in this case by adverse winds, and the advanced season when she left Wam-poa, the injury sustained in her bends and the loss of her copper, appear to have resulted from a gradual and an ordinary decay, and not from any violent winds to which she was exposed on her outward or homeward voyage. That the owners have been subjected to a very heavy, and perhaps unnecessary expense, by the proceedings of the tribunal at the Isle of Prance, seems highly probable, and is much to be lamented. But surely this is not imputable to the libellant, who would have transgressed the limits of his duty by interfering, and who might have exposed himself to censure, if not to responsibility, had he interfered. and an accident had befallen the ship. Upon this point, therefore, we are of opinion, that the expenses incurred by the ship at the Isle of France, are not properly a subject of general average.