Watts v. Camors , 6 S. Ct. 91 ( 1885 )

115 U.S. 353 (1885)

WATTS
v.
CAMORS & Another. CAMORS & Another
v.
WATTS.

Supreme Court of United States.

Argued October 29, 1885. Decided November 16, 1885. APPEALS FROM THE CIRCUIT COURT OF THE UNITED STATES FOR THE EASTERN DISTRICT OF LOUISIANA.

Mr. J.R. Beckwith, for Watts.

Mr. J. Ward Gurley, Jr., for Camors & Another.

MR. JUSTICE GRAY delivered the opinion of the court. He stated the facts in the language reported above, and continued:

In this case, as brought before us by the appeal and the cross-appeal, three questions have been argued, which may naturally and conveniently be considered in the following order:

1st. Is the statement of the registered tonnage of the Highbury in the charter-party a warranty or condition precedent?

2d. If it is not, is the owner of the ship entitled to recover the estimated amount of freight, that is to say, the sum of $20,872.50, as liquidated damages?

3d. If both these questions are answered in the negative, have the charterers shown any error in law in the amount of damages for which a decree was rendered against them in the Circuit Court?

1. In the charter-party, the ship is described as the "Steamship Highbury, of the burthen of 1100 tons, or thereabouts, registered measurement;" and the owner agrees to receive on board, and the charterer engages to provide, "a full and complete cargo, say, about 11,500 quarters of wheat in bulk." In fact, her registered tonnage was 1203 tons, a little more than nine per cent. above that stated in the charter; but this was not known to either party at the time of entering into the contract, and her actual carrying capacity corresponded to the cargo which the charterers engaged to furnish, and the owner agreed to receive on board.

The statement in the charter-party, concerning the registered tonnage of the ship, clearly does not constitute a warranty or condition precedent that she is of 1100 tons registered measurement. The intention and the agreement of the parties, as apparent upon the face of their written contract, were that the steamship Highbury should receive and carry a full and complete cargo of about 11,500 quarters of wheat in bulk. There being no wilful or fraudulent misrepresentation, the description, "of the burthen of 1100 tons, or thereabouts, registered measurement" (if it could under other circumstances be held a warranty), is controlled by the designation of the ship by name, and by the unequivocal stipulations regarding the cargo to be carried. Brawlcy v. United States, 96 U.S. 168; Norrington v. Wright, 115 U.S. 188, 204; Barker v. Windle, 6 E. & B. 675; Ashburner v. Balchen, 7 N.Y. 262; Morris v. Levison, 1 C.P.D. 155. The refusal of the charterers to accept her cannot therefore be justified.

2. The concluding clause of the charter-party, by which "to the true and faithful performance of all and every of the foregoing agreements" the parties bind themselves, their heirs, executors, administrators and assigns, and also the vessel and freight, and the merchandise to be laden on board, each to the other, "in the penal sum of estimated amount of freight," is clearly not a stipulation for liquidated damages, but a penalty to secure the payment of the amount of damage that either party may actually suffer from any breach of the contract.

The principal object of this clause appears to be to pledge the ship and freight as security for the performance of the agreements of the owner, on the one hand; and the merchandise to be laden on board, as security for the performance of the agreements of the charterer, on the other. It is in the form of a penalty; it covers alike an entire refusal to perform the contract, and a failure to perform it in any particular, however slight; and for any breach, whether total or partial, a just compensation can be estimated in damages.

At the common law, indeed, before the statute of 8 & 9 W. III. ch. 11, § 8, judgment might have been rendered for the full amount of the penalty. But in a case like this, a court of equity would stay proceedings at law, upon payment of the damages actually suffered. Clark v. Barnard, 108 U.S. 436, 453 & seq.; Sloman v. Walter, 1 Bro. Ch. 418; In re Newman, 4 Ch. D. 724. And at the present day, even a court of law would regard such a clause in such a contract as a penalty only, and not as liquidating the damages. Tayloe v. Sandiford, 7 Wheat. 13; Van Buren v. Digges, 11 How. 461, 477; Higginson v. Weld, 14 Gray, 165; Harrison v. Wright, 13 East, 343.

In Abbott on Shipping (Shee's ed.) pt. 4, ch. 2, § 2, speaking of charter-parties, it is said that "it is usual for each of the parties to these contracts to bind himself, his heirs, executors and administrators, and the owner or master to bind the ship and her freight, and the merchant the cargo to be laden, in a pecuniary penalty for the true performance of their respective covenants; this is commonly done by a clause at the end of the instrument. Such a clause is not the absolute limit of damages on either side; the party may, if he thinks fit, ground his action upon the other clauses or covenants, and may in such action recover damages beyond the amount of the penalty, if in justice they shall be found to exceed it. On the other hand, if the party sue on such a penal clause, he cannot in effect recover more than the damage actually sustained."

In such cases, accordingly, the courts of the United States, sitting in admiralty, award the damages actually suffered, whether they exceed or fall short of the amount of the penalty. The Salem's Cargo, 1 Sprague, 389; The Marcella, 1 Woods, 302. In England and in this country, 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. The Juliana, 2 Dodson, 504, 521; The Harriett, 1 W. Rob. 182, 192; The Virgin, 8 Pet. 538, 550; Brown v. Lull, 2 Sumner, 443; Hall v. Hurlbert, Taney, 589, 600; Richmond v. New Bedford Cordage Co., 2 Lowell, 315.

The provisions of the Civil Code of Louisiana, and the decisions of her Supreme Court, tend to show that in the courts of that State, in case of a total breach of the contract by one party, the other might have judgment for the full amount of the penalty stipulated by the parties, although for a partial breach he could only recover his actual damages. Louisiana Civil Code of 1870, Arts. 1945, 2117, 2124, 2125, 2127; M'Nair v. Thompson, 5 Martin La. 525, 563, 564; English v. Latham, 3 Martin La. (N.S.) 88; Welsh v. Thorn, 16 Louisiana, 188, 196; Barrow v. Bloom, 18 La. Ann. 276.

But the law of Louisiana does not govern this question, whether it is treated as a question of construction of the contract of the parties or as a question of judicial remedy.

If it is considered as depending upon the intent of the parties as manifested by their written contract, the performance of that contract is to be regulated by the law which they must be presumed to have had in view when they executed it. Wayman v. Southard, 10 Wheat. 1, 48; Pritchard v. Norton, 106 U.S. 124. Americans and Englishmen, entering into a charter-party of an English ship for an ocean voyage, must be presumed to look to the general maritime law of the two countries, and not to the local law of the State in which the contract is signed.

If it is considered as a question of the remedy and relief to be judicially administered, the equity and admiralty jurisdiction of the courts of the United States, under the national Constitution and laws, is uniform throughout the Union, and cannot be limited in its extent, or controlled in its exercise, by the laws of the several States. United States v. Howland, 4 Wheat. 108; Livingston v. Story, 9 Pet. 632; Russell v. Southard, 12 How. 139; Neves v. Scott, 13 How. 268; The Chusan, 2 Story, 455; The St. Lawrence, 1 Black, 522; The Lottawanna, 21 Wall. 558; Rev. Stat. §§ 913, 914.

The Circuit Court, therefore, rightly held that the charterers were liable only for the amount of damages which their breach of the contract had actually caused to the owner of the ship.

3. It is contended, in behalf of the charterers, that as the ship was tendered on September 11, and refused in writing on the next day, it was the duty of the master and the owner at once to seek another cargo, and thus prevent any damage that might follow, instead of lying idle until the lay days had expired; and therefore, within the rule laid down in Warren v. Stoddard, 105 U.S. 224, no damages should have been decreed.

But the Circuit Court having found, as facts, that various negotiations were pending between the parties after the first refusal until September 30, and that it was by reason of the failure of the charterers to accept the ship, furnish a cargo, and comply with their contract, that the owner suffered damages to the amount decreed, no error in law is shown in the decree; and it is not open to revision by this court in matter of fact. Act of February 16, 1875, ch. 77, § 1, 18 Stat. 315; The Abbotsford, 98 U.S. 440; The Francis Wright, 105 U.S. 381; The Connemara, 108 U.S. 352.

Decree affirmed.