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The Camanche/Opinion of the Court

2. If this libellant can be a salvor, it is not the sole salvor; and payment to it would be no protection to the claimants against its employees.

In The Britain an agreement was entered into between the masters of the salving vessel and the vessel salved:

'That it shall be left to the decision of arbitrators, to be named by each party, to fix the amount of remuneration that is due Sulling, the master of the Fortitude, as well for his vessel as for himself and his crew, for the services rendered and loss of time, and likewise what shall be due them in indemnification of the expenses incurred by having put into the harbor of New Deep; and both parties renounce the right of any higher appeal.'

The arbitrators awarded 420, which was paid by the owners of the salved ship. Yet upon a libel by the crew of the salving vessel, setting forth that they had not been paid for their services, Dr. Lushington awarded 383, 11s. 6d. (upon the basis of the arbitrator's award), to be paid by the owners of the Britain; and he said that 'they must recover from the owner of the Fortitude the sum which has already been paid by them into his hands.'

So in The Sarah Jane, where salvage of 800 was paid to the master of the salving vessel, under an agreement between the owners and masters of such vessel and the owner of the vessel salved, action was successfully sustained by some of the crew of the salving vessel, dissatified with the distribution of the  800 so paid; Dr. Lushington concluding his judgment in these words:

'I regret much the hardship that will be experienced by the owners of the Sarah Jane, in thus being called upon a second time to pay a salvage remuneration. At the same time, I hope it will be a warning in future cases, that owners cannot safely enter into a compromise of this description, which includes the interests of all persons that have rendered service to their vessel, without procuring a release from all parties interested, or incurring a risk of the consequences. In the present instance the owners of the Sarah Jane have chosen to encounter the risk of these consequences, and these consequences they must bear, for I cannot, as a matter of indulgence to them, inflict legal hardship upon others.'

3. ''This is not a case of salvage service. A contract was made for a sum certain, in consideration of which the service was to be performed''. Salvage means a compensation earned by persons who voluntarily assist in saving a ship or her cargo from peril. In The Calypso, Sir Christopher Robinson said:

'All salvage is founded on the equity of remunerating spontaneous services.'

'Considering all salvage to be so founded on the equity of remunerating private and individual services, a court of justice should be cautious not to treat it on any other principle.'

In the case of The Neptune, Lord Stowell defines a salvor to be 'a person who, without any particular relation to a ship in distress, proffers useful service, and gives it as a volunteer adventurer, without any pre-existing covenant connecting him with the duty of employing himself for the preservation of that ship.'

And in The Mulgrave, he held that an agreement for a sum certain vitiates any claim for salvage; and would not consider the question where a contract existed.

In The Helen and George, Dr. Lushington, in rendering the decision of the court, said:

'The principle on which the court acts is, that if satisfied that any agreement has been made, it will carry it into effect, inless totally contrary to justice and the equity of the case.'

In The Firefly, upon a defence before the same judge, to a claim for salvage, a parol agreement was alleged to have been made by the master of a stranded vessel with the salvors, during a raging storm, and whilst both parties were on board their respective crafts. There was a total denial of such an agreement on the part of the alleged salvors, and the testimony pro et contra, was evenly balanced. Yet the agreement was sustained.

These doctrines of the English courts were adopted in the first circuit, where, in The Independence, Curtis, J., said:

'In my judgment, a contract, to be paid at all events, either a sum certain or a reasonable sum, for work, labor, and the hire of a steamer or other vessel, in attempting to relieve a ship in distress without regard to the success or failure of the efforts thus procured, is inconsistent with a claim for salvage; and when such a contract has been failry made, it must be held binding by a court of admiralty, and any claim for salvage disallowed.'

4. The amount allowed in this case violates the established principles of law and justice regulating compensation for salvage.

The arrangement made in this case was made with the owners of the cargo, to get a large salvage at the sacrifice of the ship. Such agreements tend to fraudulent bargains, and are not allowed.

It is no answer to say that appellate courts do not encourage appeals from matters of discretion. Of course they do not. At the same time, this court and all courts will admit the perfect truth of what was said by Grier, J., delivering the opinion of this court in Post v. Jones:

'Where the law gives a party an appeal, he has a right to demand the conscientious judgment of the appellate court on every question arising in the cause.'

But in the present case we come with an objection founded on the violation of a salutary principle of law.

I. Is the Wrecking Company by the fact of its being incorporated, rendered incapable of being in law a salvor, and of receiving pay as such?

We submit that it is not.

An enlightened public policy strongly demands that the means of salvage service should be the most efficient possible, and to that end should be always prepared, prompt, powerful, and reliable. Hence the court of admiralty has not hesitated to accept all beneficial modes and instruments of salvage service, which from time to time are developed by the progressive forces of society, even though it may depart from a settled rule of decision.

Thus the old rule, that none can claim salvage reward who did not directly take part in person in the salvage service has been so often broken down, that it is now an exception, rather than the rule. As where a ship sends part of her crew on salvage service, the crew who remain on board are entitled to share in the salvage earned.

A still stronger departure, made after considerable opposition, at least in the English admiralty, was, when salvage was allowed to the owner of the ship engaged in the salvage service, though he may have been absent and ignorant of the transaction. The same equity is extended even to the owner of the cargo where he has authorized the service; and probably also where he has not.

This departure, in favor of the owner of the vessel, was pushed still farther in the case of steamers. The greatly increased power and efficiency of these vessels, then a new force in the maritime world, were cordially recognized and welcomed in admiralty, in the first case that arose there, and because it was the first. This precedent has since been followed out and developed in numerous cases.

Less than fifty years ago in admiralty, the claim of the salvor vessel was of but little worth, as compared with that of men salvors. Now keeping pace with the times, and their changed modes of salvage, the steamer is the real salvor, and has the lion's share of the reward. And the larger, stauncher and more powerful the steamer, the more liberal the reward; though the danger to such a vessel is reduced by her superior qualities to a minimum. The reason is, that society may be encouraged to give its best resources to the succor of life and property in distress at sea.

A leading consideration as to steamers is, that besides the value of the property which is generally at risk, they render salvage service with greater expedition, and often under circumstances where no other assistance could possibly avail.

All the reasons for encouraging steamers, apply with equal force in favor of a powerful organization, such as the libellants.

So where the first set of salvors while prosecuting their operations are tortiously ousted by another set who complete the service; but the law ascribes to the first set the whole merit of the services of the second set, and awards to them the entire compensation.

These are all cases in which salvage rewards are allowed as of course, to those who have had no personal part in the salvage service. They are all cases of a substituted service, in which persons removed from the field of operations may claim as salvors, on the strength of the actual service rendered by some person or property, which stands in their place, and is their substitute for the time being.

Should the powerful steamer of the libellants perform in the best manner a great salvage service, for which she had been at large cost expressly built and equipped, and at all times maintained in a state of the highest efficiency, could it be said, that because she was the property of a corporation, she must be denied a salvage compensation, or cut down to one which is no better than pay for work and labor?

If in the case of a salvage service by their steamer, the libellants here stand as favorably before the court as if they were natural persons, and not a corporation, why should they not stand equally well in the case of services performed by their agents and servants? Either way, it is a case of substituted service, as sanctioned and rewarded in admiralty in numerous instances.

The well-considered decision on the circuit of the late Chief Justice in the case of Virden v. The Caroline, asserts fully the doctrine of substituted service.

The corporation aggregate, which is but a mode of substituted service, is one of the great forces of civilization. It is the prevailing form of the associated energies, the money, enterprise, and intelligence of society. It is particularly adapted to those branches of business like salvage and wrecking, which require a permanent organization, costly appliances, trained services, and considerable capital, which is content with slow or uncertain returns.

For the carrying on of a salvage or wrecking business on a large and effective scale, there is really no comparison between the efforts of individuals casually employed for the occasion, often but poorly provided with vessels or other appliances, and under any circumstances unprepared for any long, remote, or costly enterprises, on the one hand, and on the other, a powerful company like the libellants, established expressly for the business; provided with capital, trained men, vessels, apparatus, machinery, a thorough organization, which enable it at any time to undertake and carry through the most arduous and protracted salvage services, in the face of great risks, anywhere on American waters, however remote, and at whatever expense.

Had the agents and servants sent out by the Coast Wrecking Company to save the monitor, conducted that important service as badly as they conducted it admirably, and thereby ruined or lost the cargo, the company would justly be made responsible before the law. Since it may be charged for the demerits of its servants, upon what principle is it denied credit for their meritorious services? If the company is capable in law of performing a salvage service at all, upon what principle can we distinguish against it, as compared with other salvors who are natural persons, in respect of the liabilities, which are the same undoubtedly, or of the rewards of the service?

The question to be now determined is, shall these powerful corporate organizations be recognized in admiralty on the same footing with individual salvors, and like them be rewarded according to the merit of the service performed? Or, shall they be put under a sort of outlawry, as unworthy of protection, and thus be hunted out of existence? They cannot exist if shut down to the pay of mere work and labor. Shall life and property on the navigable waters be deprived of their best reliance, and be cast back for succor on the old inefficient resource of casual help from individuals?

The fundamental public policy which is the supreme law of the subject, demands that every new efficient means or instrument of salvage service shall be recognized, accepted, and encouraged in admiralty. We offer here, what is proved to be the most efficient instrument yet produced by the forces of American society. Shall it be accepted or rejected?

II. The objection that the owners of the property salved may have to pay the crew of the Wrecking Company. Certainly they will not have to do so if the company is competent to act as a salvor. The company's men are well paid, and have made no such claim, nor is there any allegation of fear that they will. There is no tender of money in court, and because it is alleged that the owners may have to pay the crew, not one of whom asks to be paid by it, it will pay nobody.

Moreover, the objection is not made on the answer. It cannot be first made here.

III. The service, in this case, was eminently a salvage service. It presents, in a very high degree, all the ingredients of a salvage service, which are as follows: 1. The danger from which the property was rescued. 2. The value of the property. 3. The risk incurred in the salvage. 4. The value of the property employed in the service, and the risk to it. 5. The skill and knowledge shown in rendering the services. 6. The time and labor expended.

Indeed, that the service was a salvage service is everywhere, in substance, admitted by the answer. The only issue really made, and this is made by implication, is as to the extent of the merit and the amount due.

If the service was thus a salvage service of vast merit, what force is there in the objection that the insurers agreed to pay for it? They agreed only to do that which the law would have made them do without agreement; that which exists impliedly in every case of salvage. For the compensation here was to be purely contingent.

Moreover, no such defence is taken in the answer. And all that is said under the second head about want of tender applies equally here.

The only remaining question is,

IV. As to the amount allowed. The law of salvage services to property in admiralty, as distinguished from the law of similar services on land, is founded on a great public policy, established in the general interests of the commerce and navigation of the country. This public policy requires, for the protection of those interests, that such salvage services should be sedulously fostered; and, hence, that they should receive compensation, not as mere pay for work and labor, nor even as limited to the precise quantum of benefit in the particular case; but on a scale so liberal as best to encourage such services. With this principle borne in mind-and with it the further and perfectly settled one that appellate courts will not disturb the allowances made by inferior ones for salvage unless in cases of clear mistake, or gross overallowance-we need not discuss the matter largely. The Aquila was a vessel of no value compared with the cargo.

Mr. Justice CLIFFORD delivered the opinion of the court.

Compensation, as salvage, is claimed by the libellants for services rendered by them in saving the cargo of the ship Aquila, which was wrecked in a storm, and sunk in the harbor of the port of San Francisco, to which she was bound, with all her cargo on board.

Such portion of the cargo as constitutes the basis of the investigation in this case consisted of certain materials manufactured for the construction of an iron-clad monitor, and the armament for the same, which was to be constructed at San Francisco by the claimants, under a contract with the government. They manufactured the materials and armament in New York, and the ship, with the same on board, sailed from that port on the twenty-ninth of May, 1863, and arrived and came to anchor in perfect safety, on the tenth of November following, off North Point dock, in the harbor of her port of destination, where she remained until the fourteenth of the same month.

Aided by a steamtug she attempted, on that day, to proceed to the wharf where she was to unload, but was obliged, by the state of the wind and tide, to come to anchor before she accomplished that object, and at midnight she encountered a heavy squall, which caused her to drag her anchors, and forced her into a more unfavorable position. Preparations were made on the following morning to get up to the wharf, and the wind having abated, the ship weighed anchor, and being again assisted by the steamtug, proceeded to the southern side of the wharf, where she was directed to discharge her cargo, and was there moored with her stem to the eastward and her stern towards the shore.

When she was moored the weather was good, but at ten o'clock in the evening the wind increased, and soon rose to a gale, from the southeast, which caused the ship to strike with such violence that she made a breach in her aft-port quarter to such an extent that in spite of any use which could be made of the pumps she filled with water, and at three o'clock on the following morning sunk in the dock, her stem lying in forty or fifty feet of water, and her stern in twenty feet, and she lay with a list to the starboard at an angle of thirty-five or forty degrees.

Both the ship and the cargo belonged to the claimants, and they immediately abandoned the whole adventure to the underwriters, and the agent of the underwriters, though he declined to accept the offer of abandonment, commenced without delay to employ the best means in his power to raise the vessel and save the cargo, calling into requisition for that purpose all the nautical experience and mechanical skill at his command, but his efforts were fruitless, except that he succeeded in dismantling the ship, and in saving a small portion of the cargo.

Apprised of the failure of the measures adopted by their agent to raise the ship and save the cargo, the underwriters at that juncture employed the libellants to undertake what their agent, with all the assistance he could command in the port of the disaster, was unable to accomplish.

Pursuant to their engagement, the libellants instructed their general agent to proceed to that port and take possession of the wreck, and they also dispatched with him a party of men, selected for the occasion and having experience as divers and wreckers, and provided them with the most approved machinery and apparatus to promote the success of the enterprise.

Chosen and qualified as described, the party, under the superintendence of the general agent of the corporation, sailed from the port of New York on the twenty-fourth of December, 1863, and took possession of the wreck, in the port of the disaster, on the twenty-third of January following. Although the undertaking was beset with difficulties and dangers on all sides, they made no objection on that account, but proceeded at once to the examination of the wreck, and the plan which they adopted and executed was to get out the cargo by divers, as far as was necessary to prevent it from being injured, and to lighten the ship, so that she could be raised and secured, and then to hoist but the remainder of the cargo by the apparatus and machinery prepared for the purpose.

They completed the work of securing the cargo, so far as it was necessary to lighten the ship, in less than three months, and when that was accomplished they were able to raise the ship, stopped the leaks, removed the mud (estimated at six hundred tons), pumped out the ship by means of steam pumps, and finally hoisted out the residue of the cargo and restored it to the owners in an undamaged condition, and the proofs show that the whole was accomplished with success in less than seven months from the time they were employed by the insurance companies.

Payment of their claim being refused, they filed their libel against that portion of the cargo which consisted of the materials for the construction of the iron-clad monitor, and the armament for the same, as set forth in the record, and the District Court entered a decree in their favor for the sum of $28,428.44 as compensation for the salvage services rendered by them in raising the ship and saving the cargo. Appeal was taken by the claimants to the Circuit Court, where the decree of the District Court was affirmed; whereupon the claimants appealed to this court.

Argument to show that the libellants were entitled to compensation for the services which they rendered is hardly necessary, as the proposition is several times impliedly admitted by the claimants in their answer. They were the owners of the ship as well as of the cargo, and they admit that she sunk near the wharf where she was to unload, at the time and by the means and substantially in the manner alleged in the libel, and they also admit that the efforts made by the agent of the underwriters to raise the ship and save the cargo were wholly unsuccessful, except as to a small portion of the cargo taken out while the men employed were engaged in dismantling the ship.

Implied admissions to the effect that important services were rendered by the libellants are contained in every article of the answer, but it is unnecessary to refer to those passages with more particularity, as the claimants expressly admit in the fourth article of the answer that the libellants secured and saved all the cargo which was on board the ship when their general agent took possession of the wreck, and they also admit that the libellants raised the ship, but they deny that any of the services rendered were attended with much difficulty or danger, and they allege that the employees of the libellants, in accomplishing the work, unnecessarily damaged the ship, her tackle, apparel, and furniture, and insist that the salvage compensation to be allowed in the case ought to be greatly diminished on that account.

Apart from these disparaging allegations, the claimants do not set up in the answer any defence to the merits of the claim made by the libellants, except that they allege that the insurance companies have paid the libellants for all the services which they rendered as to thirteen-sixteenths of that part of the cargo described in the first article of the libel.

Most of the discussion at the bar has been addressed to topics other than those here enumerated, and much of it to questions not directly presented in the pleadings. Questions not raised by the pleadings, strictly speaking, are not before the court, but inasmuch as no objection on that ground was made by the libellants to any of the propositions submitted by the claimants, they will all be considered in the order adopted at the argument. Briefly stated, they are as follows:

1. That the corporation libellants cannot maintain a salvage suit, because they are incapable as a corporation of rendering any personal services, and they insist that no party can be regarded as a salvor unless personally engaged in the service of saving the salved property.

2. That even if the corporation libellants may be regarded as salvors, still they were not the sole salvors in this case, and consequently that the decree rendered in the Circuit Court would not be a bar to a subsequent suit for the same services if instituted by their employees.

3. That the services rendered by the libellants were not salvage services, because they were rendered under and in pursuance of a contract with the underwriters.

4. That the amount allowed in the court below was excessive, and that the decree in that respect violates the established principles of admiralty law regulating compensation for salvage.

I. Objection cannot be taken to the first proposition submitted by the claimants, that the question is not presented in the pleadings, as it necessarily arises upon the face of the record, and therefore if it is sustained, the decree must be reversed, as the compensation allowed is for salvage service, and not merely compensation pro opere et labore, as it should have been if the theory of the claimants is correct.

Decided cases are referred to in which it is said 'that a party not actually occupied in effecting a salvage service is not entitled to a share in a salvage remuneration,' but the learned judge who is represented as having expressed that opinion, admitted in the same case that the owners of vessels, who rarely navigate their own ships, constituted an exception to that general rule. Similar remarks were also made in the case of The Charlotte, and it is supposed by the claimants that the case of The Lively is an authority to the same effect; but the question whether the owners of a vessel, when not personally engaged in a salvage service, were entitled to a salvage compensation for assistance rendered in the case by their vessel was not in any way involved in that record.

Examples where the suit for salvage was promoted by the owners of the salving vessel are quite numerous, in cases where the decisions were made before our judicial system was organized; and it was expressly determined in the case of The Haidee, that owners were by no means unfit persons to originate suits to recover compensation for salvage services. Strong doubts are entertained whether the court, in any of the cases before referred to, intended to decide otherwise, but the inquiry is of no importance, as all of the modern decisions in that country affirm the right and support it by reasons both satisfactory and conclusive.

When steamers render salvage service the court held, in the case of The Kingalock, that they are entitled to a greater award than any other set of salvors rendering the same service, because they can perform such services, owing to the power they possess, with much greater celerity than other vessels, and with much greater safety to the vessel in danger, and frequently under circumstances in which no other assistance could be effectual. Consequently the court having cognizance of such cases looks with favor on the exertions of steamers in assisting vessels in peril, as they can render such assistance with greater promptitude and with much more effect than vessels propelled in any other way.

Reported cases where the suits for salvage were promoted by the owners of steam vessels, and in many cases by the owners of steamers built for the special purpose of rendering such services, and devoted exclusively to that particular employment, are very numerous in the reports of decisions in admiralty published within the last twenty years. Indeed they have been multiplied to such an extent within that period that it would be a useless task to attempt to do more than to refer to one or two of a class as examples to illustrate the course of modern decisions upon the subject, but it may not be out of place to remark that many others to the same effect will be found in the very volumes from which the citations here made have been selected.

Take, for example, the case of The Albion, in which the sum of 350 was awarded to the owners. The Saratoga, in which the sum of 600 was awarded, and it was wholly given to the steamtug. The True Blue, in which the suit was promoted by the owners, master, and crew of a steamship, and the sum of 500 was awarded to the libellants.

Some discussion took place at the bar, in the case of The Abercrombie, as to the relative claims of the owners of ships, and of the masters and crews of the same, but the court said that the discussion was unnecessary, because the rights of such parties were so constantly under consideration that the principles regulating the distribution of salvage in such cases were so well understood, that the only difficulty that ever arises is in ascertaining the facts so as to be able to apply the principles to the particular case.

Services were rendered to a sailing vessel in the case of The White Star, and suitable remuneration for the services having been refused, the owners, master, and crew, instituted a salvage suit against the salved vessel and her cargo, whereupon the owners of the salved property appeared and pleaded that the services had been rendered under an agreement, but it appearing that the undertaking was attended with greater difficulty and danger than the parties supposed at the time the agreement was made, the court held that the libellants were entitled to recover a certain sum beyond that tendered under the agreement.

So where salvage compensation was claimed by the master, owners, and crews of six luggers, a cutter, and a lifeboat, the court sustained the libel and awarded a sum equal to one-third of the salved property, including the ship as well as the cargo.

Proceedings in salvage were instituted in the case of The Canova, by the owners and crew of a steamtug, for services rendered in towing the vessel from a place of danger to her dock in her port of destination, but it appearing that there was an agreement to do the work for an agreed price, the court declined to allow any salvage compensation.

Modern text-writers, without an exception, uphold the right of the owners of ships and vessels, whether propelled by steam or otherwise, to claim salvage compensation when such services are rendered by their vessels, whether they are present or absent at the time the service is performed; and the author of the latest work published upon the subject states that one-tenth of all the salvage awards collated in the Digest of the Decisions in Admiralty by the English courts are to owners and vessels, boats, tugs, and steamers. Assuming his estimate to be correct, it appears that thirty-five cases collated in that work recognize owners as salvors, and twenty-five the vessels themselves as entitled to such compensation.

Owners of the salving vessel, says MacLachlan, are entitled to remuneration, in the nature of salvage, in addition to expenses, when they show actual loss suffered, or risk in respect to their property encountered in the service, but charterers are not in the same position unless there is a stipulation giving them the control and benefit of the salvage, or unless the vessel is chartered and sailed on their responsibility.

Under ordinary circumstances the owners of the ship which rendered the service are allowed one-third of the amount awarded as salvage compensation, but they are sometimes allowed much more where the salvage service was of a character to expose the ship to peculiar danger, especially if she was a steamer of large size and of great value.

Suppose it be conceded that the owners of a vessel may promote a suit for salvage and that they may be entitled to a salvage compensation, still the claimants insist that the libel in this case does not come within the operation of that rule of pleading, as the libellants are a corporation, but they assign no reasons in support of the proposition, which, if adopted and held to be sound, would not also require the court to hold that the owners of vessels are not entitled to salvage compensation, and are not competent to promote a salvage suit, which cannot be admitted.

Corporations, it is said, are not entitled to salvage remuneration, because no party, as the argument is, can be so entitled except such as actually engages in rendering the salvage service; but if that is the reason for denying such compensation to corporations, then it is clear that the owners of vessels must also be excluded from participating in any such reward, as they seldom or never navigate their own ships.

Remuneration for salvage service is awarded to the owners of vessels, not because they are present, or supposed to be present when the service is rendered, but on account of the danger to which the service exposes their property and the risk which they run of loss in suffering their vessels to engage in such perilous undertakings; and if that is the legal foundation of their claim it is difficult to perceive any reason why the same rule should not be applied to corporations as the owners of ships and vessels similarly employed and exposed.

No satisfactory reason for such a discrimination can be given, because it is believed that the two cases are precisely analogous. But the question is hardly an open one in this court, as will appear by an attentive examination of the case of The Island City, which was elaborately argued by able counsel, and very carefully considered by the court.

Three libels were filed against the bark in that case in the District Court, but the district judge being concerned in interest, the three records were removed into the Circuit Court. By the original record it appears that one of the libels was filed by the owners of the steamer Western Port; another in behalf of the steamtug R. B. Forbes, which was owned by an incorporated company, and the third by persons on board the schooner Kensington.

Sole salvage was claimed by the owners of the Western Port, and they denied that anything should be awarded to the steamtug, but the circuit judge held otherwise; and having determined that the property saved ought justly to pay the sum of $13,000 to all concerned, awarded $5200 of that amount to the owners of the steamtug.

Dissatisfied with the decree of distribution, the owners of the Western Port appealed to this court. Even a slight examination of the decree in the case will show that the appeal involved the whole question under consideration, but this court affirmed the decree of the Circuit Court, which in effect established the rule that the owners of ships, whether individuals or corporations, may promote a salvage suit, and are entitled, in a proper case, to salvage remuneration.

Prior to that time the same point had been decided by the late chief justice and two of the associate justices of this court as then constituted.

Certain unreported decisions of the district judges are referred to where a contrary doctrine is held, but they appear to overlook the fact that vessels disabled, or otherwise in need of assistance from the shore, depend, everywhere at this time on our coast, almost entirely upon steamtugs, constructed and equipped for the purpose, and whose business it is to be always ready and at command whenever assistance is required. Such steamers are generally owned by incorporated companies, and having been built and equipped for the purpose, and being manned with officers and seamen having the requisite experience and skill, the interests of commerce cannot safely dispense with their services.

Considerations of the character suggested seem also to have induced the admiralty courts of England to adopt principles of adjudication and rules of practice consistent with the employment of these comparatively new and effective instruments of relief in cases of disasters upon the seas. Reference is made to a few cases as establishing that proposition, and to show that the course of decision in the two countries is entirely coincident in every particular involved in this record.

Claim in that case was made for a salvage compensation, and the suit was instituted by the Liverpool Steamtug Company. Assistance in the case of The Paul was rendered to a ship and her cargo, and the salvage suit was commenced and prosecuted by the Anglo-Egyptian Steam Navigation Company. Libellants in the case of The Collier were the Brighton Railway Company as owners of the steamship Lyons, and the master and crew, and the libel was sustained.

II. Next proposition of the claimants is that the libellants, even if they may be regarded as salvors, were not the sole salvors, and consequently that the decree of the Circuit Court ought not to be affirmed, as it would not be a bar to a subsequent suit for the same services if instituted by their employees.

Evidently the objection is in the nature of a plea in abatement, and should have been taken in the answer, or by a proper exception in the court below. Monition, in due form, was issued at the commencement of the proceedings, which was a notice to every one interested to appear and show cause, if any, why the prayer of the libel should not be granted.

Adjudged cases, besides those already cited, are quite numerous, where salvage suits have been instituted in the name of the ship or of the owners, without any allegation that the suit was prosecuted for the benefit of the master and crew, and no case is referred to where it has been held that the claimants, even in the court of original jurisdiction, can abate the suit on that account. All persons interested may appear, on the return of the monition, and become parties to the suit, or, by some proper proceeding, have their rights adjudicated; and in many cases, even after the decree upon the merits is pronounced, they may appear at any time before the fund is distributed and claim any interest they may have in the proceeds of the property libelled, if any, in the registry of the court, but it is quite clear that the claimants in this record are in no condition to present for decision any such question as that involved in the proposition under consideration.

III. If the defence is not sustained on that ground, then the claimants contend that the services rendered were not salvage services, because, as they allege, they were rendered under an agreement for a fixed sum.

Three answers may be given to that proposition, each of which is sufficient to show that it cannot be sustained. (1.) No such defence is set up in the answer. (2.) Nothing was ever paid or tendered to the libellants for that part of their claim now in controversy, and it is well settled law that an agreement of the kind suggested is no defence to a meritorious claim for salvage, unless it is set up in the answer with an averment of tender or payment. Such an agreement does not alter the character of the service rendered, so that if it was in fact a salvage service, it is none the less so because the compensation to be received is regulated by the terms of an agreement between the master of the ship or the owners of the salved property.

Defences in salvage suits, as well as in other suits in admiralty, must be set up in the answer, and if not, and the services proved were salvage services, the libellants must prevail. Agreements of the kind suggested ought certainly to be set up in the answer, as it is not every agreement which will have the effect to diminish a claim for salvage compensation. On the contrary, the rule is that nothing short of a contract to pay a given sum for the services to be rendered, or a binding engagement to pay at all events, whether successful or unsuccessful in the enterprise, will operate as a bar to a meritorious claim for salvage.

(3.) But if the agreement had been set up in the answer, it would constitute no defence, as by the terms of the instrument the libellants were not to receive any compensation whatever, or be entitled to any lien upon the property, unless the materials and machinery were substantially saved, so that it is clear that the compensation was not to be paid at all events.

IV. Discussion as to the amount allowed in the decree is hardly necessary, as it is clear that it does not much exceed the amount the claimants agreed to pay for the services, in case the libellants were successful in raising the ship and in saving the materials intended for the construction of the monitor and her armament.

Attempt was made by the agent of the underwriters, at great expense, to pump out the ship, as before explained, but the record shows that he was unsuccessful, although the men engaged in the attempt were under the superintendence of one of the claimants. Expensive preparations became necessary before they could commence pumping, and in the course of those arrangements they were obliged to cut openings in the decks and through those openings they took out sixty or seventy tons of the cargo, but the attempt to pump out the ship proved an utter failure, from the intrinsic impracticability of raising the vessel by that plan.

Next attempt by that party was to lift the vessel, with the cargo on board, by means of chains, but the scheme as projected proved to be impracticable, as the bottom of the dock where the ship sunk was solid rock, and the divers found it impossible to get the chains under the vessel. Efforts of a similar character were continued by the agent of the underwriters until he expended $38,000 in gold, but all his efforts to raise the ship or save the cargo, except the fractional part before mentioned, were wholly unsuccessful.

Complete success attended the efforts of the libellants, as is admitted by the claimants in their answer.

When the property in question was insured, it was valued at $400,000, for which policies were granted by the underwriters for the sum of $340,000; and under the contract between the claimants and the libellants they adopted the same valuation. Of that sum $60,000 was uninsured, and $15,000 of the amount insured was never paid, and the record shows that the whole of the property on board when the agent of the libellants took possession of the wreck was rescued from imminent peril and was delivered to the claimants or their order.

Difficulties almost unexampled attended the undertaking, and the divers, in taking out the cargo to lighten the ship so that she could be raised and secured, were exposed to great danger. Expenses were incurred by the libellants exceeding $60,000 in rescuing and saving the property, including moneys paid out and loss of apparatus and machinery. Considering the skill required to perform the work, and the expense incurred, and the time and labor spent in completing the enterprise, the court is not satisfied that the amount awarded is excessive.

Appellate courts are reluctant to disturb an award for salvage, on the ground that the subordinate court gave too large a sum to the salvors, unless they are clearly satisfied that the court below made an exorbitant estimate of their services.

Judge Story said, in the case of Hobart v. Drogan, that the 'court is not in the habit of reversing such decrees as to the amount of salvage, unless upon some clear and palpable mistake or gross over-allowance of the court below.

Evidence to show any such errors in the case is entirely wanting, and in view of the whole record the court is of the opinion that the decree of the Circuit Court is correct.

DECREE AFFIRMED WITH COSTS.

title: The Camanche/Opinion of the Court


text: Talk:The Camanche/Opinion of the Court

license: Creative Commons - Attribution Share-Alike - https://creativecommons.org/licenses/by-sa/4.0/

title: Talk:The Camanche/Opinion of the Court


text:
Allen v. Killinger

ERROR to the Circuit Court for the Northern District of Illinois. The case was this:

There were two firms of both which a certain B. F. Murphy was a member; the one was at Des Moines, and consisted of this B. F. Murphy and a certain Allen. This firm was under the title of Murphy & Allen. The other was at Chicago, and consisted of this same B. F. Murphy and one Miles Murphy. This firm was under the title of Miles Murphy & Co. The former was engaged in the business of packing pork; the latter in that of buying and selling the 'hog product' on commission.

In this state of things, one Killinger, passing through Des Moines with a drove of hogs, and meeting with Allen, whom he had known before, entered into a contract of some sort about them with him, and the hogs, instead of being driven further, were killed and packed by the firm at Des Moines, and forwarded to the firm at Chicago, by whom they were sold. The Chicago firm, however, failed, soon after, and never paid the money, either to Killinger or to the Des Moines firm. Allen, however, still remained solvent. In this state of facts, Killinger alleging that Allen was a member of the Chicago firm, and responsible for their acts, or, if he was not, that the firm of Murphy & Allen, at Des Moines, undertook, not only to slaughter and pack his hogs, but to sell them at Chicago, and account to him for the proceeds, now sued B. F. Murphy & Allen, as partners in trade, alleging, that he delivered to them at Des Moines, the hogs, which they agreed to slaughter and pack at that place, and forward to Chicago, and sell, on his account, and to pay to him the proceeds of the sale. To this B. F. Murphy & Allen pleaded separately. In one of his pleas, Allen said that he did not make the said promises, in partnership with said B. F. Murphy, but that, if any such were made, they were made by B. F. Murphy and others, composing the firm of Miles Murphy & Co., of which he was not a member.

B. F. Murphy filed a similar plea, saying, that if the promises were made by him at all, they were made as a member of the firm of Miles Murphy & Co., of which Allen was not a partner.

Upon the trial, the plaintiff, Killinger, Miles Murphy, who had failed, and Allen, who remained solvent, were all examined as witnesses. On the examination of Miles Murphy-that witness having stated that he remembered the fact of the plaintiff, Killinger's, coming to him with reference to the hog product, when he was in Indiana, and their having a talk-the bill of exceptions disclosed, that the following questions, objections, promises, and proceedings took place:

Question. State what conversation you had, and what you said to him.

(Question objection to by the defendant's counsel, on the ground that the conversation inquired about was incompetent as evidence, neither of the defendants being present.)

Plaintiff's counsel then stated as follows:

I shall expect to prove, by another witness, that Killinger was sent by B. F. Murphy to Miles Murphy, with reference to these hogs, and, therefore, I suppose the conversation is competent.

And, thereupon, the objection was overruled by the court, and the defendant excepted.

Answer. I will state the substance. He said he had come down to hunt his money; that he was out of money, and that he had placed some hogs in Allen's hands in Des Moines.

(Defendant here again objected to any conversation between plaintiff and witnesses, relating to defendant, Allen's, agreement or arrangement with the plaintiff, as incompetent evidence, being but hearsay; but the objection was overruled, and defendant excepted.)

Question. Did he say anything about B. F. Murphy's sending him?

Answer. I think B. F. Murphy, he said, had sent him down there.

Question. State what was said between you and him substantially.

(Defendants again objected, &c., but the objection was overruled by the court, and the defendants excepted.)

Answer. He said he had come from Des Moines, and saw B. F. Murphy there, and that B. F. Murphy refused to pay him or give him any satisfaction, and he had sent him down to me, to see if he couldn't get his money out of me. I told him he had come to a bad place; the house had failed, and I didn't know anything about his matters. I knew he had some pork here; there had been some shipped in Des Moines. He went on to tell me he had placed it in Mr. Allen's hands, and it was sent here, and he was out $8000 or $10,000; I forget the amount. I told him he couldn't get it out of me; I didn't know anything about it; didn't know anything about the details of the business, whether B. F. Murphy had sold the meat, or anything about it.

Killinger, being subsequently examined, testified, that he urged B. F. Murphy, in Chicago, for money; that Murphy, apparently aiding his object, took him to Mr. Jewett, Allen's agent, saying, that some might be had of him; that going to Mr. Jewett's, Mr. Jewett, on hearing the purpose of the visit, said to Killinger, 'Did you not ask me, when you were here in the winter, to deposit your money in the Fifth National Bank?' To this Killinger answered: 'Yes, I did.' Jewett then said, 'That would leave Allen out.' To which Killinger replied: 'Mr. Murphy, if that's all you wanted me to come here to answer, you need not have brought me here to commit myself. I don't deny, that if you let Allen out, the hogs are all gone up.' The witness went on to state, that after this, B. F. Murphy urged him to go and see Miles Murphy, then in Indiana, and try and get money from him. The witness stated that he was very reluctant to go, not regarding Miles Murphy as having anything to do with the business, and who would say, at once, that he owed him, Killinger, nothing; but, still, on the urgency of B. F. Murphy, who told him that there was 'nothing like trying,' and who, finally, went to his hotel, and took him in his own carriage to the railway station, he did go.

This testimony of Killinger was the testimony relied on by the plaintiff's counsel to redeem his pledge to the court.

Verdict and judgment having been given for the plaintiff, the case was now here on error, the errors relied on being all presented by the bill of exceptions. Some objections were made to the charge, but this court having been of opinion that they were not tenable, and the judgment, as it will be seen in the sequel, having been reversed on another ground, for which reason the court thought it unnecessary to examine them, it is needless to present them.

Mr. J. M. Jewett, for the plaintiff in error:

No doubt the rule laid down by Greenleaf is a settled rule, that 'the admissions of a third person are also receivable in evidence against the party, who has expressly referred another to him for information in regard to an uncertain or disputed matter, and that in such cases, the party is bound by the declarations of the person referred to, in the same manner and to the same extent as if they were made by himself.' But being an exception to a general rule, the party seeking to avail himself of it must bring himself strictly within its provisions, and, therefore, before the conversations referred to could be admissible, as an admission of Miles Murphy, it should have been shown, that the parties against whom the admission was offered had expressly referred the party offering the evidence, to Miles Murphy for information. The evidence was offered generally, and against both defendants, who had pleaded separately. It was not preceded by any proof that the defendants had expressly referred Killinger to Miles Murphy for information upon any subject; but instead of such proof, the plaintiff's counsel stated, 'that he expected to prove by another witness that Killinger was sent by B. F. Murphy to Miles Murphy, with reference to them hogs.'

The promise of the counsel here made was insufficient for two reasons:

1st. It does not contain any statement of an expectation to prove that Killinger was sent to the witness 'for information.'

2d. It does not connect the defendant Allen, in any way, with the sending of Killinger to the witness.

Messrs. Gookins and Roberts, contra:

In answer to the objections raised, we say:

1. The testimony elicited amounts to nothing, and could have had no influence upon the verdict. Killinger told Miles Murphy 'he had come to hunt his money.' Murphy replied that 'he had none for him.' What does that amount to?

The principle of the rule on which we rely is this: when one refers to another for information, he accredits that other to speak for him, and in effect makes the information given his own. He speaks himself through the mouth of the person referred to. But this is an act. It is part of the res gestae. Killinger was sent for money. What was said in doing the errand was part of the act itself. It characterizes the act, and this was very important. Killinger all the time insisted that Murphy & Allen, and not Miles Murphy & Co., were liable to him, and he for a long time refused to go to Miles Muphy, but consenting, if not willing, to try all expedients, however unpromising, to get his money, he finally went. This act might have been turned against him, as Murphy & Allen were endeavoring to do, by showing that he had recognized Miles Murphy & Co. as his debtors instead of themselves, if he was not allowed to show what really did take place; and the language used was much the most important part of the whole transaction, for the purpose of showing its true character.

The objection seems to be a criticism upon the statement of the plaintiff's counsel, as to how he would make the defendants answerable for this errand. He did not say he expected to prove Killinger was sent to the witness 'for information.'

2. It is objected that Allen is not shown to have had any hand in sending Killinger to the witness. It was not our expectation to make out our whole case by proof of this interview. It is unusual for all the partners of a firm to participate in every transaction which affects the firm, particularly when they reside in different States. No doubt there must be evidence enough in the case to show the joint liability, as one cannot make another his partner by his own statement. But suppose they both, at different times, make statements or do acts that show them to be partners, then all the acts and declarations of both are admissible.

It is true that Allen's connection with the business had not been shown when the witness testified. But when several distinct acts and declarations are relied on to show a partnership, all cannot be first in the order of proof; and if the party offering the evidence fails to adduce enough to submit the question to the jury, the opposing counsel may ask to have the evidence stricken out, which the counsel did not do, for he plainly saw that the evidence was abundant for this purpose.

Mr. Justice MILLER delivered the opinion of the court.

title: Allen v. Killinger


text: Talk:Allen v. Killinger

title: Talk:Allen v. Killinger


text:
Allen v. Killinger/Opinion of the Court

We are of opinion that the court erred in admitting, against the objection of the defendants, the conversation between Miles Murphy and the plaintiff, in which the plaintiff gives his version of his contract with defendant, Allen.

The plaintiff Killinger had an opportunity to give his version of the contract made by Allen with him on behalf of Murphy & Allen, and he did so under oath, and subject to cross-examination. Miles Murphy was the plaintiff's witness, and under oath testified to what he knew. But in the examination of Miles Murphy by the plaintiff's counsel he was asked to detail a conversation which took place between himself and the plaintiff in Indiana, when neither of the defendants were present.

The witness stated, among other things, in answer to this request, that he (the witness) knew that the plaintiff had some pork in Chicago, that it had been shipped from Des Moines, and that the plaintiff went on to tell him that he had placed it in Mr. Allen's hands, and that it was sent to Chicago, and that he (the plaintiff) was out $8000 or $10,000.

When it is remembered that the only important issue before the jury was, whether Allen's contract with the plaintiff was merely to slaughter and pack for the plaintiff the seven hundred hogs, or whether he had undertaken to forward and sell at Chicago the product of the hogs after they had become converted into pork, the importance of this statement by the plaintiff is obvious. Slaughtering and packing hogs at Des Moines is one business, and buying and selling pork at Chicago, whether on commission or otherwise, is a very different business; and the plaintiff is here permitted to prove what he had told Mr. Murphy about that matter after the controversy had arisen, and when neither of the defendants were present to deny it, or to explain the matter.

It does not seem to us that the pledge made here by the plaintiff's counsel (who, when the testimony was objected to, apparently conceded that the question was improper as matters stood), was what was required to admit such testimony, if we suppose the pledge to have been fully redeemed. The rule invoked by the counsel is, that where one person is sent by another to a third party for information in reference to an uncertain or disputed matter, the person sending is bound by the declarations of the party to whom he was referred, as if they were made by himself.

But, there is here no statement that the counsel expected to show that Killinger had been sent to Miles Murphy for information as to the extent of Killinger's contract with Allen, or even with Allen and B. F. Murphy, or with any reference to that contract. Such a supposition is absurd, as the plaintiff must have known all about that, while Miles Murphy could know very little. And so the declarations brought out by the conversation that are important are not the declarations of Miles Murphy in answer to a request for information, but they are the declarations of the plaintiff made to Murphy.

When the counsel came to fulfil this promise, it is equally clear that B. F. Murphy did not send the plaintiff to Miles Murphy for information, but for money. Killinger was urging B. F. Murphy, in Chicago, to pay him. The firm of Miles Murphy & Co. had failed, and to get rid of Killinger's personal importunities, B. F. Murphy urged him to go and see Miles Murphy, who was then in Indiana, and see if he would not pay him something. This is very clear from Killinger's own statement, being the one relied on by counsel to redeem the pledge to the court.

It seems to us that Killinger's statement to Miles Murphy was mere hearsay, made by the plaintiff in his own favor after the controversy had arisen, in the absence of defendants, and its introduction cannot be justified under the settled rules of evidence.

But if there ever could have been a justification for such testimony, there can surely be none now. For the plaintiff is permitted now to tell his own story to the jury directly, but under the sanction of an oath, and subject to the test of cross-examination. Shall he also be permitted to prove what he said to a third party about the same matter when he was under no oath, and in no danger of cross-question or contradiction?

REVERSED AND A NEW TRIAL AWARDED.

Mr. Justice NELSON, with whom concurred Mr. Justice DAVIS, dissenting.

title: Allen v. Killinger/Opinion of the Court


text: Talk:Allen v. Killinger/Opinion of the Court


text:
Allen v. Killinger/Dissent Nelson

Mr. Justice NELSON, with whom concurred Mr. Justice DAVIS, dissenting.

The question is, whether the statement of the plaintiff, in his conversation with Miles Murphy, that he had placed the pork in the hands of Allen, that it was sent to Chicago, and that he was out of pocket some $8000 or $10,000, under the circumstances mentioned, was admissible?

It occurred in a conversation with a person to whom B. F. Murphy, one of the defendants, had sent the plaintiff to endeavor to obtain from him the proceeds of the pork. Now, this conversation was competent evidence as against B. F. Murphy as it respects the business upon which the plaintiff had been sent; he, B. F. Murphy, had accredited Miles Murphy to speak for him in respect to the transaction, and so far as it might tend to prove the partnership of B. F. Murphy with Allen, competent and pertinent. We agree it was no evidence against Allen, nor does it appear that the court gave it any effect as to him. It is not required that, in proving a partnership, the evidence must be competent as it respects each member of the firm. The proof can be given as bearing separately against each of the parties. Miles Murphy, in response to the mission of the plaintiff, stated that B. F. Murphy was a partner of Allen, and that the firm had received and sold the pork. As this response was competent testimony against B. F. Murphy, it was properly admitted. The whole conversation that occurred, or which related to the business about which the plaintiff was sent, was properly allowed. It was no evidence as against Allen, as we have already said, but was as it respected the other defendant. On this ground we cannot agree to the opinion of the court.

title: Allen v. Killinger/Dissent Nelson


text: Talk:Allen v. Killinger/Dissent Nelson

title: Talk:Allen v. Killinger/Dissent Nelson


text:
Parish v. United States (75 U.S. 489)

APPEAL from the Court of Claims. The case was thus:

On the 4th of December, 1863, D. L. Magruder, the surgeon and medical purveyor of the military department of the West, acting under instructions of the Surgeon-General of the United States, gave notice that proposals would be received at his office in Louisville, Kentucky, until the 20th of that month, for furnishing ice to all the general hospitals of the United States at the West, including the division of the Mississippi and the Department of the Gulf, in such quantities as might be required, for the use of the sick and wounded, during the year 1864. Under this notice, Parish & Co., the claimants, submitted proposals which were accepted, and, on the 13th of the same month, a contract was prepared and signed by them and Magruder, by which they were to furnish ice for twenty different places, one of which was New Orleans. It was understood between the parties that this contract was not to be binding until it should receive the approval of the Surgeon-General, to whom it was forwarded. It received such approval, and was then despatched by mail to Magruder; but, before reaching him, the approval was reconsidered, and the contract, by order of the Secretary of War, was recalled, and the draft of another contract prepared in its place. After this draft had reached Magruder, he was directed by the secretary to erase from it the name of New Orleans, as one of the places to be supplied with ice, and have it executed in lieu of the contract originally proposed, and this was done. The claimants then executed the instrument, but, in doing so, they protested against the alteration, stating, however, that they would lay all the facts before the officials at Washington, and seek from them redress. But, notwithstanding this protest, they treated the contract thus made as the only one binding upon them, and carried out their obligations under it. They did not deliver, or offer to deliver, any ice at New Orleans.

Mr. A. L. Merriman, for the appellant; Mr. T. L. Dickey, Assistant Attorney-General, contra.

Mr. Justice FIELD, after stating the facts, delivered the opinion of the court, as follows:

title: Parish v. United States (75 U.S. 489)


text: Talk:Parish v. United States (75 U.S. 489)


text:
Parish v. United States (75 U.S. 489)/Opinion of the Court

Upon the facts found by the Court of Claims, it is difficult to perceive upon what ground the contractors can urge any claim for damages against the government. The contract with New Orleans erased, superseded all other proposed contracts. No other had any validity. The action of Magruder, until the approval of the Secretary of War, was merely initiatory to a contract. He could not bind the United States in any way.

If the claimants had any objections to the provisions of the contract they signed, they should have refused to make it. Having made it, and executed it, their mouths are closed against any denial that it superseded all previous arrangements.

The case of Gilbert & Secor v. United States, is one much stronger than this. There it was insisted that the act of Congress, under which the secretary acted in making a contract with Gilbert & Secor, was itself an acceptance of certain proposals presented by them, and that, taken in connection with the proposals, it constituted a contract binding on the government. The secretary made with the parties a contract requiring, in one particular, different kind of materials from those originally proposed; but this court held that the parties were bound by the contract signed, and could not claim any compensation for the difference in value between the materials used and those proposed.

But, independent of any consideration respecting the character of the contract, it nowhere appears that the claimants suffered any damages from the supposed injury alleged. They did not offer to deliver any ice at New Orleans, and it is not shown that they secured any for such delivery, or, if they secured any, that they were unable to part with it at prices as remunerative as those they might have obtained at New Orleans.

The appeal is frivolous, and the decree of the court below is

AFFIRMED.


text: Talk:Parish v. United States (75 U.S. 489)/Opinion of the Court


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Aldrich v. Aetna Company

ERROR to the Court of Appeals of New York.

The code of procedure of the State of New York thus enacts: 'Parties to a question of difference, which might be the subject of a civil action, may, without action, agree upon a case containing the facts upon which the controversy depends, and present a submission of the same to any court which would have jurisdiction, if an action had been brought. But it must appear, by affidavit, that the controversy is real, and the proceeding in good faith to determine the rights of the parties. The court shall, thereupon, hear and determine the case, at a general term, and render judgment thereon, as if an action were depending.'

'The judgment may be enforced in the same manner, as if it had been rendered in an action, and shall be subject to an appeal in like manner.'

With these provisions of the code in force, the AEtna Insurance Company, as plaintiff, and one Aldrich and others, as defendants, agreed upon a case for the Superior Court of Buffalo as follows:

'Aldrich and the others sold and conveyed the schooner Stella, on the 4th of February, 1856, at Chicago, to one Jacobs, and on the same day, took a mortgage of the vessel back to secure the payment of $6000 of the purchase-money. The mortgage was in due form, and was recorded in the office of the collector, at the port of Chicago, where the vessel was permanently enrolled, and where one of her owners resided. The purchase-money was payable in sums of five hundred, and of ten hundred dollars, extending through the years 1856, 1857, and to March, 1858. Jacobs, the purchaser, who resided in Chicago, immediately took possession of the vessel, which was in port, and employed her on the lakes till attached in Buffalo by the insurance company, on the 11th December, 1856, for a debt against him.

'At the time of the execution of the mortgage, there was a statute of the State of Illinois, which enacted, that 'no mortgage on personal property shall be valid, as against the rights and interests of any third person or persons, unless possession of such personal property shall be delivered to and remain with the mortgagees, or the said mortgage be acknowledged and recorded, as hereinafter directed.' This mortgage had been neither acknowledged nor recorded, according to the requirements of this statute.'It was agreed by the parties, in settling their case, that if the decision should be in favor of the company (the plaintiffs), that judgment should be given against the defendants for $475 and interest, but if in favor of the defendants, then judgment against the plaintiff for costs.

The court at a general term at Buffalso rendered a judgment in favor of the plaintiff. The cause was removed to the Court of Appeals, the highest court of the State of New York, where the judgment was affirmed, and the proceedings remitted to the Superior Court at Buffalo, in which the judgment of affirmance was entered of record. The case was then brought before this court on writ of error; it being purported to be brought here under the 25th section of the Judiciary Act, which gives this court jurisdiction to review upon a writ of error judgments in the highest court of a State, where there has been drawn in question the validity of a statute of, or an authority exercised under the United States, and the decree is against their validity; or where there is drawn in question the construction of any statute of the United States, and the decree is against the title, right, or privilege, or exemption specially set up; or where there is drawn in question the validity of a statute of, or an authority exercised under any State on the ground of their being repugnant to the laws of the United States, and the decision is in favor of such their validity;-'the citation,' says this 25th section, 'being signed by the chief justice, or judge, or chancellor of the court rendering or passing the judgment or decree complained of, or by a justice of the Supreme Court of the United States.'

The writ in this case was allowed by Chief Justice Davies of the Court of Appeals of New York, and was addressed to the Superior Court of Buffalo. The citation was signed by Mr. Justice Miller of this court.

title: Aldrich v. Aetna Company


text: Talk:Aldrich v. Aetna Company

title: Talk:Aldrich v. Aetna Company


text:
Aldrich v. Aetna Company/Opinion of the Court

The case being here, the questions were,

I. As to jurisdiction.

II. As to merits.

I. On the point of jurisdiction objection was taken to the jurisdiction,1st. On the ground that the judgment, which the writ of error purported to bring here, had not been rendered in a suit within the words of the 25th section of the Judiciary Act, but was rendered on a voluntary submission without suit, containing a statement of facts agreed on by the parties, under the code of procedure in New York.

2d. That it did not appear on the face of the record that the validity of a statute or law of the United States, or of the statute of a State as repugnant to such law, or that the construction of any statute of the United States was drawn in question.

3d. That the writ of error was allowed by the chief judge of the Court of Appeals of the State of New York, the writ being addressed to the Superior Court of Buffalo, where the record was; and that the said chief judge was not authorized to allow the writ of error.

4th. That the citation was not signed by the judge who allowed the writ of error.

Assuming jurisdiction to exist, there remained

II. The question of merits; the insurance company contending, upon this question, that the mortgage could not be set up as against the attachment; that it was void as against it, and that the company was entitled to a judgment declaring the lien of the attachment paramount to that of the mortgage. The mortgagees, represented here by Mr. Robert Rae, maintaining on the other hand the converse of these propositions, Mr. Rae referring to White's Bank v. Smith #fn-s-s as conclusive of this part of the case.

Mr. Justice NELSON delivered the opinion of the court.

An objection is taken to the writ of error under the 25th section of the Judiciary Act, on the ground that the judgment is not rendered in a suit within the words of this section, but was rendered on a voluntary submission without suit, containing a statement of facts agreed on by the parties, under the code of procedure in New York.

We are of opinion that this objection is untenable. The code simply provides for the institution of the suit or action by the voluntary agreement of the parties, and without any compulsory process or compulsory proceeding of any kind against the defendant. The court are to hear and determine the case at a general term, and render judgment thereon as if an action were depending; and the submission can be made only to a court which would have had jurisdiction of the case if a suit had been brought. Cases from the State of Louisiana not unfrequently come up here from the State courts, where the proceedings have been instituted substantially as in the present case.

It is also objected that it does not appear on the face of the record the validity of a statute or law of the United States, or of the statute of a State as repugnant to such law, or that the construction of any statute of the United States was drawn in question.

This we think a clear misapprehension of the material question involved in the case. That question was, whether the mortgage of the vessel to the defendants, duly recorded under an act of Congress in the collector's office, gave a better lien upon it than the subsequent attachment issued out of the Superior Court of Buffalo in favor of the plaintiff. The construction of this act of Congress, and its force and effect, as it respected the mortgage security under which the defendants claimed a right or title paramount to that of the attachment creditor, was necessarily in question, and must have been passed upon by the court; and as its decision was against this right, the very case is made provided for in this section.

A further objection is taken that the writ of error was allowed by the chief judge of the Court of Appeals of the State of New York, which writ is addressed to the Superior Court of Buffalo, where the record is, and who was not authorized to allow it.

The answer to this objection is, that the allowance of the writ is well enough, as the judgment was in fact rendered in the Court of Appeals.

It is objected also that the citation was not signed by the judge who allowed the writ of error.

The answer is that the appearance by the defendant in error waived the irregularity.

As to the merits. We are of opinion the question involved was decided in the case of White's Bank v. Smith. That was a question between two mortgages on the vessel, duly recorded in the collector's office-the first on the 12th June, 1863, in the collector's office at the port of Buffalo; the second in the collector's office at the port of Sandusky, on the 17th June, 1865.

The law existing in New York at the time of the execution of the first mortgage was as stringent as that of the State of Illinois in the present case in respect to the filing of personal mortgages at a designated office, when the possession of the property does not accompany the mortgage. White's Bank, the first mortgagee, had complied with the law in New York, and filed his mortgage, but had omitted to refile it at the end of the year, which was required in order to preserve the lien.

Now the argument in the case was, that, inasmuch as the filing of the first mortgage according to the State law was essential to protect the lien as against subsequent purchasers or mortgagees, the omission to refile it left the vessel free and subject to the lien of the second mortgage. It was upon this idea the case was disposed of at the circuit, and the proceeds of the vessel, after discharging some prior liens for seamen's wages, decreed to Smith, the second mortgagee. And this was a proper disposition, upon the assumption that the State statute governed the lien; for, although Smith had not filed his mortgage according to the statute of Ohio, this omission did not affect the question between him and White's Bank, but only as it respected subsequent purchasers or mortgagees.

A different view was taken of the case when it came before this court. It was held that the recording of the first mortgage in the collector's office under the act of Congress protected the interest of the mortgagee against subsequent purchasers or mortgagees by its own force, irrespective of any State law on the subject, and hence the decree below was reversed, and the proceeds directed to be delivered over to the first mortgagee. The court regarded the law as a registration act, which excluded all State legislation in respect to the same subject; and, looking at the nature and character of the species of property Congress was dealing with, we entertained no doubt as to its power to pass this law. It was said in the opinion in that case, 'Congress having created, as it were, this species of property, and conferred upon it its chief value under the power given in the Constitution to regulate commerce, we perceive no reason for entertaining any serious doubts but that this power may be extended to the security and protection of the rights and title of all persons dealing therein. The judicial mind seems to have generally taken this direction.'

As a registry act there can be no doubt upon the recording of the mortgage, the fact that it is not accompanied by the possession of the vessel affords no ground of impeachment of the transaction, as the record is regarded as satisfactorily accounting for the non-delivery of the possession. This is the law at it respects the recording or filing of personal mortgages under State statutes. #fn-s-s-s

The protection, however, goes no further, as the consideration of the instrument may be impeached for fraud or for any other vice or infirmity in the original contract or transaction.

REVERSED AND THE CAUSE REMANDED TO IT, &c.


text: Talk:Aldrich v. Aetna Company/Opinion of the Court


text:
Kennedy v. Gibson

APPEAL from the Circuit Court for the District of Maryland; the case being thus:

The act of June 3d, 1864, 'to provide a National currency, &c.,' and which establishes those associations for carrying on the business of banking, now known as our 'National Banks,' provides, by its 12th section, that the shareholders

'Shall be held individually responsible, equally and ratably, and not one for another, for all contracts, debts, and engagements of such association, to the extent of their stock therein, at the par value thereof, in addition to the amount invested in such shares, except, &c.'Subsequent sections provide for the comptroller of the currency making examination into the truth of an allegation, that a banking association has made default in paying its circulating notes, and authorize him, upon being satisfied that the association has refused, and is in default, to sell its securities pledged to the United States, and to pay the notes from the proceeds.

The 50th section enacts:

'That on becoming satisfied, as specified in the act, that any association has refused to pay its circulating notes, and is in default, the comptroller of the currency may, forthwith, appoint a receiver, who, under direction of the comptroller, shall take possession of the books, records, and assets of every description of the association, collect all debts, dues, and claims belonging to such association, and upon the order of a court of record of competent jurisdiction, may sell or compound all bad or doubtful debts, and, on like order, sell the real and personal property of such association, on such terms as the court may direct, and may, if necessary to pay the debts of such association, enforce the individual liability provided for by the 12th section of this act, and such receiver shall pay over all money so made to the treasurer of the United States, subject to the order of the comptroller of the currency, and also make report to the comptroller of all his proceedings.'

The same section proceeds:

'The comptroller shall, thereupon, cause notice to be given by advertisement, in such newspapers as he may direct, for three consecutive months, calling on all persons who may have claims against such association, to present the same, and to make legal proof thereof. And, from time to time, the comptroller, after full provision shall have been first made for refunding to the United States any such deficiency, in redeeming the notes of such association, as is mentioned in this act, shall make a ratable dividend of the money so paid over to him by such receiver, on all such claims as may have been proved to his satisfaction, or adjudicated in a court of competent jurisdiction; and from time to time, as the proceeds of the assets of such association shall be paid over to him, he shall make further dividends as aforesaid, on all claims previously proved or adjudicated; and the remainder of such proceeds, if any, shall be paid over to the shareholders of such association, or their legal representatives, in proportion to the stock by them respectively held.'

The 56th and 57th sections enact:

'That all suits and proceedings, arising out of the provisions of this act, in which the United States, or its officers or agents, shall be parties, shall be conducted by the district attorneys of the severed districts, under the direction and supervision of the solicitor of the treasury.

'That suits, actions, and proceedings AGAINST any association under this act, may be had in any Circuit District, or Territorial court of the United States, held within the district in which such association may be established; or in any State, county, or municipal court, in the county or city in which said association is located, having jurisdiction in similar cases.'

The 59th section of a previous act of February 25th, 1863, on the same general subject, had provided, that

'All suits, actions, and proceedings BY OR AGAINST any association, under the act, may be had in any Circuit District, or Territorial court of the United States, held within the district where such association was established.'

With these different enactments upon the statute-book, Kennedy, of New York, filed a bill in the Circuit Court for Maryland, against Gibson, Barry, and several other persons, all citizens of Maryland, setting forth: That he, Kennedy, was receiver of the Merchants' National Bank of Washington (having a capital of $200,000), duly appointed and qualified under the already-quoted act of Congress of 1864; that the bank had failed to redeem its circulating notes; that the comptroller of the currency thereupon appointed him the said receiver, who then took possession of the books, papers, and assets of said bank, and was, at the time of filing the bill, engaged in collecting the debts due the bank, and in discharging the other duties devolved on him by law. The bill then stated that the receiver had already ascertained that the assets and credits of the said bank were wholly in sufficient to pay its debts and liabilities, and that it would be necessary, to the complete and entire administration of his trust, that recourse should be had to the personal liability imposed on the stockholders by the already-mentioned acts of 1863 and 1864.

The bill further stated that 2000 shares of stock were duly issued by said bank, and the complainant averred his belief, and on it charged, that it would be necessary for the payment of the liabilities of this bank, to obtain from its stockholders, an amount of money equal to the full amount of the stock so issued, according to its par value, that is, $200,000. He therefore insisted that he was entitled to have an account taken, as against the said stockholders, of the liabilities and available assets and credits of said bank, and to recover from each of them, individually, a proportionate contribution, for the purpose of making good any deficiency which might remain, after applying all the said assets and credits to the discharge of its liabilities; which deficiency, he charged, would largely exceed the said sum of $200,000, the par value of the whole capital stock.

The bill, after charging that at the failure of the bank, certain defendants, named in an exhibit to the bill, were shareholders of its stock to the amount stated in the exhibit, but, that other stockholders named in the exhibit, were citizens, some of New York, and some of the District of Columbia, and could not be made parties, because, being out of the jurisdiction of the court, being joined as defendants would oust the jurisdiction of the court, and it prayed that the cause might proceed without making them parties.

Then followed a prayer for an account, and for a decree, directing each of the defendants to pay their pro rata of such balance of debt of the bank as might remain, after the application of its assets, and for further relief.

The bill, it will be observed by the reader, while sufficiently setting forth the facts necessary to warrant the appointment of a receiver, contained no averment of any action by the comptroller, touching the personal liability of the stockholders.

In addition, was the independent fact, that the suit had not been conducted by the district attorney for Maryland, as the already quoted 56th section of the act of 1864 directs that suits like it should be; nor was the bill even signed by him. But with the approval of the Treasury Department, after the matter had been submitted to the solicitor, and 'under particular circumstances in the case,' Messrs. Brent and Merrick, private counsel, had been employed, and by one or both of these gentlemen, the suit had been brought and conducted.

The defendants demurred; and the demurrer being sustained and the case coming here, the following questions arose:

1. Whether the provision in the 56th section of the act of 1864, about suits being conducted by district attorneys of the United States, was of essential obligation in all cases, or whether it was directory rather.

2. Whether the omission of the bill, to aver action by the comptroller, touching the personal liability of the stockholders, precedently to suit being brought by the receiver, was fatal to the bill? This being the principal question in the case, and the affirmative resolution of which by the court below was apparently the chief ground on which the demurrer there was sustained.

3. Whether the stockholders, named in the bill, and therein alleged to be non-residents of the State of Maryland, were necessary parties to any suit brought against the other stockholders, touching the matters of equity charged in the bill?

4. Whether the alleged creditors of the bank were necessary parties to any suit brought against the stockholders, touching those matters last mentioned?

5. Whether, in view of the omission in the 57th section of the act of 1864 (literally read), of the word 'BY,' the bill could be sustained in the court where brought?

Messrs. Brent and Merrick, for the appellant; Mr. Steele, contra.

Mr. Justice SWAYNE delivered the opinion of the court.

title: Kennedy v. Gibson


text: Talk:Kennedy v. Gibson

title: Talk:Kennedy v. Gibson


text:
Kennedy v. Gibson/Opinion of the Court

This is an appeal in equity, from the decree of the Circuit Court of the United States for the District of Maryland. The bill was filed by the appellant. For the purposes of the points necessary to be considered, the case may be briefly stated. The appellant has been duly appointed receiver of the Merchants' Bank of Washington City, under the 50th section of the act of June 3d, 1864, and brings this bill to charge the defendants, who are alleged to be stockholders of the bank, with the personal liability prescribed by the 12th section of the act. The facts necessary to warrant the appointment of a receiver are sufficient set forth. It is averred, that he 'has already ascertained that the assets and credits of the association are wholly insufficient to pay its debts and liabilities, and that it will be necessary to the complete and entire administration of the trust reposed in him, that recourse shall be had to the personal liability imposed upon the stockholders;' that two thousand shares of the capital stock, amounting to $200,000, were issued by the bank to its stockholders; that it will be necessary to collect from them this amount, to make good the deficiency in the means to meet the balance of the indebtedness of the bank, which will remain after the application of all the available assets, to the discharge of its liabilities, and, that 'after such application is made, a balance of indebtedness will remain due, largely exceeding the said sum of $200,000.' The stockholders, besides the defendants, are named, and it is alleged that a part of them reside in the District of Columbia, and one of them in the State of New York. The prayer of the bill is, that an account may be taken, and that each of the defendants shall be decreed to pay to the receiver his pro rata share of the indebtedness of the bank, which may remain, after applying to the liabilities all its effects, as required by the act before mentioned, and for general relief. The bill is signed by the special counsel of the receiver. The name of the attorney of the United States does not appear in the case. The defendants demurred. Our opinion will cover all the points brought to our attention by their counsel in the argument, without particularly stating them.

The receiver is the agent of the United States, and according to the 56th section of the act, this suit should have been conducted by their attorney. But this provision is merely directory. The question which arises is between the United States and its officer. The rights of the defendants are in no wise concerned, and they cannot be heard to make the objection, that this duty of the local law officer of the government has been devolved upon another. It is to be presumed there were sufficient reasons to warrant this departure from the letter of the law.

The 50th section of the act provides, that the receiver, under the direction of the comptroller of the currency, shall take possession of the books and assets of every description of the association, collect all the debts and claims belonging to it, and may-proceeding in the manner prescribed-sell, or compound bad and doubtful debts, and sell all its real and personal property; 'and may, if necessary to pay the debts of such association, enforce the individual liability of the stockholders.' He is required to pay all the moneys he may realize, to the Treasurer of the United States, subject to the order of the comptroller, and to report to the comptroller all his proceedings. The comptroller is required to give notice to all persons having claims against the association to present and prove them; and after making provision for refunding to the United States 'any deficiency in redeeming the notes of such association, as mentioned in this act,' to make a ratable dividend of the moneys paid over to him by the receiver, 'on all claims which have been proved to his satisfaction, or adjudicated in a court of competent jurisdiction.' He is to make further dividends, from time to time, as the means shall come into his hands, 'on all claims previously proved or adjudicated, and the remainder of the proceeds, if any, shall be paid over to the stockholders of such association, or their legal representatives.' The receiver is the instrument of the comptroller. He is appointed by the comptroller, and the power of appointment carries with it the power of removal. It is for the comptroller to decide when it is necessary to institute proceedings against the stockholders to enforce their personal liability, and whether the whole or a part, and if only a part, how much, shall be collected. These questions are referred to his judgment and discretion, and his determination is conclusive. The stockholders cannot controver it. It is not to be questioned in the litigation that may ensue. He may make it at such time as he may deem proper, and upon such data as shall be satisfaction to him. This action on his part is indispensable, whenever the personal liability of the stockholders is sought to be enforced, and must precede the institution of suit by the receiver. The fact must be distinctly averred in all such cases, and if put in issue must be proved.

The liability of the stockholders is several and not joint. The limit of their liability is the par of the stock held by each one. Where the whole amount is sought to be recovered the proceeding must be at law. Where less is required the proceeding may be in equity, and in such case an interlocutory decree may be taken for contribution, and the case may stand over for the further action of the court-if such action should subsequently prove to be necessary-until the full amount of the liability is exhausted. It would be attended with injurious consequences to forbid action against the stockholders until the precise amount necessary to be collected shall be formally ascertained. This would greatly protract the final settlement, and might be attended with large losses by insolvency and otherwise in the intervening time. The amount must depend in part upon the solvency of the debtors and the validity of the claims. Time will be consumed in the application of these tests, and the results in many cases cannot be foreseen. The same remarks apply to the enforced collections from the stockholders. A speedy adjustment is necessary to the efficiency and utility of the law; the interests of the creditors require it, and it was the obvious policy and purchase of Congress to give it. If too much be collected, it is provided by the statute, that any surplus which may remain after satisfying all demands against the association, shall be paid over to the stockholders. It is better they should pay more than may prove to be needed than that the evils of delay should be encountered. When contribution only is sought, all the stockholders who can be reached by the process of the court may be joined in the suit. It is no objection that there are others beyond the jurisdiction of the court who cannot for that reason be made codefendants.

The claims of creditors may be proved before the comptroller, or established by suit against the association. Creditors must seek their remedy through the comptroller in the mode prescribed by the statute; they cannot proceed directly in their own names against the stockholders or debtors of the bank. The receiver is the statutory assignee of the association, and is the proper party to institute all suits; they may be brought both at law and in equity, in his name, or in the name of the association for his use. He represents both the creditors and the association, and when he sues in his own name it is not necessary to make either a party to the suit.

The 59th section of the act of February 25th, 1863, provides that all suits by or against such associations may be brought in the proper courts of the United States or of the State. The 57th section of the act of 1864, relates to the same subject, and revises and enlarges the provisions of the 59th section of the preceding act. In the latter, the word by in respect to such suits is dropped. The omission was doubtless accidental. It is not be supposed that Congress intended to exclude the associations from suing in the courts where they can be sued. The difference in the language of the two sections is not such as to warrant the conclusion that it was intended to change the rule prescribed by the act of 1864. Such suits may still be brought by the associations in the courts of the United States. If this be not the proper construction, while there is provision for suits against the associations, there is none for suits by them, in any court.

The 59th section directs 'that all suits and proceedings arising out of the provisions of this act, in which the United States or its officers or agents shall be parties, shall be conducted by the district attorneys of the several districts, under the direction and supervision of the solicitor of the treasury.' Considering this section in connection with the succeeding section, the implication is clear that receivers also may sue in the courts of the United States by virtue of the act, without reference to the locality of their personal citizenship.

The bill in the case before us contains no averment of any action by the comptroller touching the personal liability of the stockholders. The demurrer of the defendants was therefore properly sustained, and the decree of the Circuit Court is

AFFIRMED.

title: Kennedy v. Gibson/Opinion of the Court


text: Talk:Kennedy v. Gibson/Opinion of the Court


text:
Morris's Cotton

APPEAL from the District Court for the Middle District of Alabama.

Three acts of Congress, one of July 13th, 1861, another of August 6th, 1861, and a third of July 17th, 1862, passed during the late rebellion, authorized the seizure and confiscation in the District or Circuit Courts of property used for insurrectionary purposes, and to a certain extent prescribed the mode of proceeding.

Under one of these acts it was decided, in the Union Insurance Company v. United States and in Armstrong's Foundry, that while proceedings for the condemnation of property or land might be shaped in the form and modes analogous to those used in admiralty, yet that issues of fact must, on the demand of either party, be tried by jury; and that while, where a proceeding under that act to enforce the forfeiture of real estate had been carried on in conformity with the practice of courts of admiralty, this court would take jurisdiction of the decree on appeal, yet that it would do so only for the purpose of reversing the decree and directing a new trial, with proceedings conformed in respect to trial by jury and exceptions to evidence to the course of proceeding by information on the common law side of the court in cases of seizure upon lands.

The three acts above mentioned being in force, and in an action purporting to be in conformity to them, the United States filed an information in rem against certain cotton (Morris claimant) alleged to have been seized on land and forfeited to the United States under the statutes above referred to. The information was tried in the District Court as a suit in admiralty. The claimant prayed for a jury, but his prayer was denied. A decree of forfeiture having passed against the cotton, the case was brought by the claimant before this court from the District Court by appeal, and not by writ of error.

Mr. P. Phillips, for the appellant (a brief of Mr. Chilton being filed), relying on certain testimony not given in the preceding statement to show that the seizure (if indeed any had been made, a fact which he denied) was wholly void, contended, on the authority of Morris & Johnson v. United States, that a valid and subsisting seizure, at the time of filing the information, was indispensable to give this court jurisdiction; and further, on the authority of the two cases mentioned above, in the statement of the case, that the refusal of a trial by jury was erroneous. He inferred accordingly that, as in the case of Morris & Johnson v. United States, this court would dismiss the proceeding and order restitution.

Mr. Hoar, Attorney-General, and Mr. Field, Assistant Attorney-General, contra, contended that no question of merits arose; and that if this court could do anything more than dismiss the appeal, it could only order the decree to be reversed as irregular, the pleadings reformed, and a new trial had according to the course of the common law; that this was what was in fact decided in the Union Insurance Company v. United States, and in the case of Armstrong's Foundry, exactly like which the present case plainly was; that it could not now be known what the issues would be when the pleadings were reformed; that Morris & Johnson v. United States, relied on to show that the proceeding should be dismissed and the property restored, differed from this one; that it was a suit of a species not authorized by the statutes, and not a suit in which a cause of action was defectively set forth, or one in which the trial was irregular and not according to law.

Mr. Justice CLIFFORD gave the details of the case, and delivered the opinion of the court.

title: Morris's Cotton


text: Talk:Morris's Cotton

title: Talk:Morris's Cotton