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Wood v. United States (107 U.S. 414)/Opinion of the Court

This is an appeal from the court of claims. The claimant, Thomas J. Wood, was appointed to the office of colonel of the second regiment of cavalry, in the army of the United States, in November, 1861, having been commissioned as a brigadier-general of volunteers in October, 1861. In December, 1862, while in command of the first division, left wing, of the Fourteenth army corps, he was wounded at the battle of Stone river. In September, 1864, while in command of the third division of the Fourth army corps, he was wounded at the battle of Lovejoy's Station, Georgia. These divisional commands were the commands of an officer of the rank of major-general, but he was not commissioned as a majorgeneral of volunteers until January, 1865, nor breveted as a major-general in the army until March, 1865.

On the twenty-eighth of July, 1866, an act was passed by congress (chapter 299, 14 St. at Large, 337) which provided as follows, (section 32:)

'Officers of the regular army, entitled to be retired on     account of disability occasioned by wounds received in      battle, may be retired upon the full rank of the command held      by them, whether in the regular or volunteer service, at the      time such wounds were received.'

In January, 1868, Gen. Wood was ordered, at his own request, to appear before a retiring board. In February, 1868, the board made the following finding:

'The board is of the opinion that Brevet Major-Gen. Thomas J.     Wood colonel Second United States cavalry, is incapacitated      for active service, and that said incapacity is the result of      three wounds received in battle in the line of his duty, while commanding a division of troops in the service of the      United States.'

This finding was approved by the president, and by his authority and direction this order was issued from the adjutant-general's office, June 9, 1868:

'Brevet Major-Gen. Thomas J. Wood, colonel Second United     States cavalry, having, at his own request, been ordered      before a board of examination, and having been found by the      board to be physically incompetent to discharge the duties of      his office on account of wounds received in battle, and the      finding having been approved by the president, his name will      be placed upon the list of retired officers of that class in      which the disability results from long and faithful service,      or some injury incident thereto. In accordance with section     32 of the act approved July 28, 1866, Gen. Wood is, by      direction of the president, retired with the full rank of      major-general.'

Gen. Wood accepted the rank of major-general on the retired list, as contained in said order, and received the pay of that rank from June 10, 1868, to March 3, 1875.

On the third of March, 1875, congress passed an act, (chapter 178, 18 St. at Large, 512) entitled 'An act for the relief of Gen. Samuel W. Crawford, and to fix the rank and pay of retired officers of the army.' The first section of this act provided that the retirement of Gen. Crawford, as a colonel, for disability on account of a wound received in battle, should be amended so that he should be retired and be borne on the retired list of the army as a brigadier-general, 'he having held the rank of a brigadier-general at the time he was wounded;' his retired pay as brigadier-general to commence from the passage of the act. The second section of the act provided as follows:

'All officers of the army who have been heretofore retired by     reason of disability arising from wounds received in action      shall be considered as retired upon the actual rank held by      them, whether in the regular or volunteer service, at the      time when such wound was received, and shall be borne on the      retired list and receive pay hereafter accordingly; and this      section shall be taken and construed to include those now      borne on the retired list, placed upon it on account of      wounds received in action.'

The section contains some exceptions, which it is not contended apply to the case of Gen. Wood.

On the twenty-third of March, 1875, an order was issued from the adjutant-general's office, providing that, by direction of the president, and conformably to said act of March 3, 1875, the retired list of the army, under the heading, 'Officers retired with the full rank of the command held by them when wounded, in conformity with sections 16 and 17 of the act of August 3, 1861, and section 32 of the act of July 28, 1866,' is amended to fix the rank of the following-named officers, from March 3, 1875, as below enumerated:

'Brigadier-generals, Thomas J. Wood (heretofore     major-general,) and two other major-generals; colonels, three      brigadier-generals; lieutenant-colonels, two colonels; major,      one colonel; mounted captain, one lieutenant-colonel;      captains, two colonels; mounted first lieutenants, two      mounted captains; first lieutenants, three captains and one      mounted first lieutenant; second lieutenant, one mounted      second lieutenant.'

There were 73 officers retired on the rank of the command held by them when wounded, under section 32 of the act of 1866. Of these, all but 19 fell within the exceptions named in section 2 of the act of 1875. Of these 19, eight were restored to the rank on which they were originally retired, after the promulgation of the order of March 23, 1875. After March 3, 1875, Gen. Wood received only the pay of a brigadier-general retired, $4,125 per year; the pay of a major-general retired during the same time having been $5,625 per year. In September, 1879, Gen. Wood brought suit against the United States in the court of claims to recover the sum of $1,500 a year for four and a half years, as such difference in pay, claiming that he held the office of major-general on the retired list of the army be appointment of the president, by said order of June 9, 1868, and that congress had no power to remove him from that office and appoint him to the office of brigadier-general on the retired list. The court of claims dismissed the petition on the merits. The view of that court was that, under the statutes of the United States in reference to the army, the office of an officer of the army and his rank are not necessarily identical; that the office has a rank attached to it, expressed by its title, when no other rank is conferred on the officer; that, the office remaining the same, the officer may have a different rank conferred on him, as a title of distinction, to fix his relative position with reference to other officers as to privilege, precedence, or command, or to determine his pay; that by section 1274 of the Revised Statutes, the pay of officers on the retired list of the army is determined by the rank upon which they are retired; that by section 1094, the officers of the army on the retired list are a part of the army of the United States, and therefore no one can be upon that list who is not an officer appointed in the manner required by section 2 of article 2 of the constitution; that an officer of any grade, on the active list, thus appointed, may be retired with a different rank from that which belongs to his office, when congress so provides; that this is not to appoint him to a new and different office, but is to transfer him to the retired list, and to change his rank, while he holds the same office; and that in connection with this change of rank his pay may be changed. These views appear to us to be sound. Gen. Wood, holding the office of a colonel of cavalry in the army, his retirement with the rank of major-general, under the act of 1868, did not confer on him the office of major-general. He remained in the office of colonel of cavalry, and acquired a higher rank, and higher pay, as a retired officer. Such rank not being an office, congress could change his rank, and with it his pay, as it did by the act of 1875. His actual rank when he was wounded was that of brigadier-general of volunteers, although the rank of the command which he then held was that of a major-general. The rank of his command when wounded was the test of rank and pay under the act of 1866, while his actual rank when wounded, whether in the regular or volunteer service, was the test of rank and pay under the act of 1875. Congress had the same right to change the claimant's rank and pay, by reducing them, that it had to change the rank and pay of Gen. Crawford, by section 1 of the act of 1875, by increasing them, the standard in both cases being the actual rank held by the officer at the time he was wounded. The offices of both were left untouched. The pay of retired officers is a matter entirely within the control of congress, and so is their rank.

The judgment of the court of claims is affirmed.


text: Talk:Wood v. United States (107 U.S. 414)/Opinion of the Court

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Bank of St. Thomas v. The Julia Blake

G. De Forest Lord, for appellant.

E. P. Wheeler, for appellee.

WAITE, C. J.

title: Bank of St. Thomas v. The Julia Blake


text: Talk:Bank of St. Thomas v. The Julia Blake


text:
Bank of St. Thomas v. The Julia Blake/Opinion of the Court

This is a suit instituted by the Bank of St. Thomas, as the holder of a bottomry bond, against the British brigantine Julia Blake, her cargo and freight. The decree of the district court condemned the vessel and freight, but acquitted the cargo and its claimants. No appeal was taken on behalf of the vessel and freight, but the libelant carried the case to the circuit court for a review of the decree as to the cargo. The bond was for $11,600, with 14 per cent. marine premium, and the net proceeds of the vessel and freight were about $3,500. On the hearing in the circuit court the libel was again dismissed as to the cargo, and from a decree to that effect this appeal was taken. The facts found by the circuit court, on which, in our opinion, the rights of the parties depend, may be stated as follows:

The Julia Blake, a British vessel, owned by Peter Blake, of     Nova Scotia, left Rio de Janeiro on or about the thirty-first      of March, 1876, for New York, having on board a cargo      consisting of 582 logs of rosewood. The bills of lading were     three in number, and were drawn to the order of James Philip      Mee, of Rio de Janeiro, the shipper, for 253, 139, and 190      logs, respectively. About 200 of the logs belonged to Mee,     but the claimants had made advances on them to him. All the     rest belonged to the claimants. The charter-party was dated     March 16, 1876, and named Mee as the charterer. The     stipulated freight was  220, of which  110 was paid in      advance.

Mee gave the master of the vessel on sailing a letter of     instructions, directing him to proceed to New York and there      consign his vessel and cargo to Winthrop, Cunningham & Sons,      Philadelphia, the claimants, or their agents, and if      compelled, by stress of weather or other accident, to put      into St. Thomas, to consign the vessel to Lamb & Co. The      voyage was prosecuted with safety until the third or fourth      of May, on one of which days the rigging of the vessel      parted, and her masts fell, the mainmast breaking at the      saddle, about six feet above the deck, the foremast at the      head. The fallen spars and wreck remained for some time     along-side and thumping before they could be cleared away. This rendered it imprudent to prosecute the voyage and the     master properly made for St. Thomas, as a port of distress,      where he arrived on the twenty-seventh of May. On his arrival     he applied to the acting British consul, who appointed a      survey, consisting of the harbor-master, the principal      shipwright at the port, and the master of a vessel. The     survey properly recommended a discharge of the cargo, and it was necessary to strip the vessel of her copper to stop the      leak. The cargo was discharged, and on the eighth of June a     second survey ordered by the consul on the application of the      master. A copy of the second survey, although in evidence, is     not incorporated into the findings, nor are its contents      stated, further than that the vessel was making as much water      as at the time of the first survey, and that her metal had      been much broken, and was torn away and ragged.

When the master arrived at St. Thomas he went to several     mercantile houses, and seemed to be seeking a proper party to      whom to consign the vessel. He finally went to Lamb & Co. and     engaged them to attend to the business of the vessel and the      repairs. He did not show them his charter-party or letter of     instructions, but told them he had lost those papers.

Upon the arrival of the vessel at St. Thomas the master wrote     his owner as follows:

'S. S. Beta, via Halifax.

'SAINT THOMAS, 27th May, 1876.

'Peter Blake, Esq., Parsboro, Nova Scotia-DEAR SIR: I regret     to have to report that the brigantine Julia Blake, on her      voyage from Rio de Janeiro, encountered heavy weather on the      fourth instant, and for the safety of lives, vessel, and      cargo I was compelled to cut away to righten the vessel, and      to put into this port, as we were in a too-disabled condition      to go north. A survey will be held on Monday, and I will     supplement this letter by a telegram acquainting you what the      surveyors recommend to be done in her present leaky and      damaged state; it will likely be necessary to discharge to      ascertain damage, and for new masts, etc. This mail closes at      once, so I must defer giving you full particulars until next      steamer.

'I remain, sir, your obedient servant,

[Signed]

'ABRAM KNOWLTON.'

On the twenty-ninth of May he sent the following telegram to the owner:

'Julia Blake, St. Thomas, dismasted, leaky; consigned Lamb; sending survey by mail.' Afterwards, Lamb & Co., on the thirteenth of June and the twenty-second of June, wrote the owner. Copies of their letters are as follows:

'French frigate Minerve, via Philadelphia.

'ST. THOMAS, 13 June, 1876.

'Peter Blake, Esq., Parsboro, Nova Scotia-SIR: We have to     confirm Captain Knowlton's letter to you, dated      twenty-seventh ult., acquainting you that the dismasted brig      Julia Blake had put in here in a leaky and disabled      condition.

'By surveyors' recommendation the vessel has been discharged,     and is today on the marine repairing slip, for shipping and      caulking, etc.; masts, sails, etc., are being made, and in      the course of another month the Julia Blake will probably be      ready for sea in a seaworthy state.

'Captain Knowlton dispatched you a telegram thus—

"Julia Blake, St. Thomas, dismasted, leaky; consigned Lamb;     sending survey by mail,' -on the twenty-ninth ult., which no      doubt reached you promptly and correctly. From his not      receiving any reply from you, he concluded that you wished      him to follow the customary routine with documents, etc.      Meantime we hand, herein, certified copy of extended protest      from the 'British consulate,' which may interest you. No      doubt your letters will state in what manner accounts here      are to be paid.

'We remain, sir, yours, faithfully,

[Signed]

'LAMB & CO.'

'Alpha, via Halifax.

'ST. THOMAS, 22 June, 1876.

'Peter Blake, Esq., Parsboro, Nova Scotia

SIR: We last wrote you on the thirteenth instant, via     Philadelphia, with certified copy of extended protest per      Julia Blake, which we trust has reached you safely.

'The S. S. Alpha arrived here to-day from Halifax without     bringing us any letter from you, but Captain Knowlton tells      us that he had a communication, and we, therefore, refer you      to him or his advices for particulars, in connection with the      repairing and refitting of the brigantine Julia Blake.

'We suppose that your next will furnish instructions     regarding funds for expenses here; if you don't provide the      needful, same will likely be raised by bottomry and respondentia loan,      payable on arrival at New York.

'The Julia Blake should be ready for sea about fifteenth     proximo, and

'We remain, sir, your obedient servants,

[Signed]

'LAMB & CO.'

To these letters of Lamb & Co., Blake, the owner, replied thus:

'PARSBORO, July 4, 1876.

'James Donald Lamb & Co., Esqrs., St. Thomas-DEAR SIR: I     received your favor yesterday, as likewise of the thirteenth      June, by way of Philadelphia, on the twenty-ninth day of      June. My dear sirs, I did not know who to wright to until     lately, as Mr. J. F. Whitney was righting and getting me to      right to G. R. Smith, Saint Thomas. I don't know any person     there. Please excuse me, as I could not answer your letter     before this time. As for the Julia Blake and the funds for     repairing, I think it will be all right. I hope it won't be     too much. I think J. F. Whitney will see it all paid after     she comes to N. York. Please give all the time you can, and I     garantee you will have the pay, as I pay every one. My dear     sirs, this is a thing I never had to do before. You or any     person acting for the Julia Blake will be sure of your pay. The vessel is worth all expenses. I depend on you to do what     is right and just. After a justment and everything, the whole     of the repairs won't come out of me. I think I will be able     to pay my share, as the Captain Noltin will tell you. I want     you to make sure of yourself by bottomry until you see how      this will gow in N. York. You will please let me know by     return of steamer from St. Thomas all the particulars, as      also the amount of repairs, and by so doing you will much      oblige your humble servant,

[Signed]

'PETER BLAKE.'

On receipt of this Lamb & Co. wrote the following letter:

'Copy pr. S. S. Alpha.

'ST. THOMAS, 20 July, 1876.

'Peter Blake, Esq., Parsboro, N. S.-DEAR SIR: We have to     acknowledge the receipt of your valued favor of fourth      instant, the contents of which claim our best attention.

'The Julia Blake is progressing, with her repairs, and will     soon be ready to take in cargo; we cannot, at present, give      you any precise estimate of the expenses, as a good deal      remains to be done yet, but Captain Knowlton is putting the vessel in first-rate      order, having at the same time regard to every practicable      economy.

'The case being one of 'general average,' the cargo will, of     course, contribute its proper proportion towards expenses,      and we think the documents which Captain Knowlton will take      with him will render the adjustment speedy and satisfactory      to all the interests and parties concerned.

'We are, dear sir, yours, faithfully,

[Signed]

'LAMB & CO.'

Under date of June 1, 1876, Lamb & Co. wrote the shipper of the cargo at Rio de Janeiro as follows:

'Star Ball steamer from Porto Rico.

'RIO JANEIRO.

ST. THOMAS, 1st June, 1876.

'DEAR SIR: We have to advise that the brigantine Julia Blake     put in here on the twenty-seventh ult., dismasted and leaky. A survey has been held, and for effecting repairs, etc., the     cargo is being discharged.

'Captain Knowlton tells us that he has cabled the 'casualty'     to the United States. As the cargo is consigned 'to order,'     we have been unable to acquaint the New York consignees of      the misfortune.

'We remain, yours, faithfully,

[Signed]

'LAMB & CO.'

During all the time the vessel was at St. Thomas there was facility for telegraphic communication with New York, and until the twenty-first of July with Rio de Janeiro, by way of New York, London, Lisbon, and Perambuco. On this last date a break occurred in the cable between Bahia and Rio de Janeiro, but the Western Union Telegraph Company continued to transmit telegrams to Bahia, from whence they were forwarded to Rio de Janeiro, the time required for transmission from New York to Rio de Janeiro being about five days. These lines of telegraph were often employed by merchants and men of business at St. Thomas, and that from St. Thomas to New York was known to and used by the claimants. From the findings it does not appear that the telegraph was used by any of the parties after the telegram was sent the owner of the vessel on the twenty-ninth of May, and no other letters appear to have passed between the parties until after the vessel had completed her repairs and sailed with her cargo for New York.

Immediately after the second survey was completed the repairs on the vessel were commenced. The bills for the repairs and supplies were paid by Lamb & Co., after the master had certified to their correctness. The repairs were completed on the twenty-second of July, and thereupon the master advertised for a loan on bottomry and respondentia of ship, freight, and cargo, to the amount of $7,500, or thereabouts. The Bank of St. Thomas alone made a proposal, and for the whole amount, at a maritime interest of 14 per cent. Lamb & Co. made no inquiries as to the necessity of the repairs and supplies, but relied wholly on the statement of the master. The only inquiry made by the bank was as to the sufficiency of the security and the regularity of the papers in their form of execution.

The discharge of the cargo was necessary in order to stop the leaks and make the vessel seaworthy. The repairs and supplies furnished, as well as the remetaling, were necessary to put the vessel in a seaworthy condition for a voyage to New York.

When the loan came to be closed the master told Lamb & Co. that a large amount of expenses had been incurred of which they had no previous information, and that the amount required to defray the expenses and pay their commissions and charges was $11,600. This amount the bank advanced and took the bond. The vessel left St. Thomas on the fifth of August. On her arrival in New York the payment of the bond was refused, and she, with her freight and cargo, was libeled.

The cargo was not perishable and would not have been injured by being stored under cover at St. Thomas for three or four months, and was worth in New York about $18,000. St. Thomas is a central port, where vessels go seeking business, and to which parties requiring vessels also go. Vessels for the shipment of merchandise are always available there. The cargo could have been forwarded from there by vessels other than the Julia Blake for from $1,000 to $1,500, and it was for the interest of the owners that it should be so forwarded, rather than hypothecated to pay for repairs to the Julia Blake.

On the twenty-eighth of September, after the vessel had sailed for New York, Lamb & Co. wrote the shipper of the cargo as follows:

'Per S. S. Nile, via Southampton.

'RIO DE JANEIRO,

ST. THOMAS, 28th September, 1876.

'DEAR SIR: Your favor of the thirteenth July last reached us     recently via Porto Rico, and only after the Julia Blake had      sailed from this port. The letter of instructions which you     mention having given to Captain Knowlton on sailing from Rio      has never been laid before us, nor did he produce the      charter-party, although we repeatedly asked for it; he      alleged that it had been mislaid or lost at the time of the      disaster at sea, and on being questioned denied having any      instructions from you as to the consignment of vessel in case      of average. The bills of lading being 'to order,' left us no     clue as to the consignees of cargo. The casualty was,     however, at once cabled to the New York Board of      Underwriters.

'While we regret that you should have felt any doubt as to     our compliance with your wishes, it will now be clear to you      how blameless we are in the matter.

'Whether Captain Knowlton purposely withheld information from     us, or if he actually did lose the documents referred to,      remains at present open for conjecture only; but the control      intended to have been placed with us remained, in part at      least, in hands of the captain, as master of the vessel.

'We would suggest that you advise us by mail of the dispatch     of all vessels conveying instructions from you to our firm,      in the event of their putting into this port in distress      would thus, if necessary, be able at once to take up a      position with the master, and the protection of your      interests at out hands can thus not be disputed or ignored.

'The adoption of such a course on your part is, we think,     more advisable under present circumstantial means of mail      communication between Rio and St. Thomas.

'We are, dear sir, yours, very truly,

'LAMB & CO.'

The letter from the shipper referred to is not included in the findings, and it nowhere appears that it was in evidence.

The case depends entirely on the authority of the master of the vessel to give the bottomry bond on the cargo. It is now the settled law of the English courts that a master 'cannot bottomry a ship without communication with his owner, if communication be practicable, and, a fortiori, cannot hypothecate the cargo without communicating with the owner of it, if communication with such owner be practicable.' The Cassa Marittima, 2 App. Cas. 157. This doctrine was first announced in The Bonaparte, 8 Moore, P. C. 459, decided in 1853, and has been steadily adhered to since; not, however, without decided opposition by Dr. Lushington. The Hamburg, 2 Moore P. C. (N. S.) 319; The Cargo ex Sultan, 1 Swab. 511. Whether the rule, to the extent it has been carried in England, is in accordance with the general maritime law, as understood in this country and the maritime nations of Europe, other than Great Britain, or whether, since the Julia Blake was a British vessel, the authority of her master in a Danish port is to be determined by the English law, instead of the general maritime law, or the law of Denmark, are questions we deem it unnecessary to consider, for, in our opinion, even under the most liberal construction of any recognized rule which can be invoked for the authority of the master over the cargo, this bond cannot be sustained.

The master can neither sell nor hypothecate the cargo, except in case of urgent necessity, and his authority for that purpose is no more than may reasonably be implied from the circumstances in which he is placed. He acts for the owner of the cargo because there is a necessity for some one to do so, and, like every agent whose authority arises by implication of law, he can only do what the owner, if present, ought to do. Necessity develops his authority and limits his powers. What he does must be directly or indirectly for the benefit of the cargo, considering the situation in which it has been placed by the accidents of the voyage. As was said by Sir William SCOTT, in The Gratitudine, 3 C. Rob. 261, by which the power of the master, under proper circumstances, to hypothecate the cargo to pay the expenses of repairs on the ship was incontrovertibly established:

'In all cases it is the prospect of the benefit to the     proprietor that is at the foundation of the authority of the      master. It is, therefore, true that if the repairs of the     ship produce no benefit or prospect of benefit to the cargo,      the master cannot bind the cargo for such repairs; but it      appears to me that the fallacy of the argument that the master cannot bind the cargo for the repairs of the ship,      lies in supposing that whatever is done for the repairs of      the ship is in no degree and under no circumstances done for      the benefit, or with the prospect of benefit, to the cargo;      whereas, the fact is that though the prospect of benefit may      be more direct and more immediate to the ship, it may still      be for the preservation and conveyance of the cargo, and is      justly to be considered as done for the common benefit of      both ship and cargo.'

To the same effect is what was said by Chief Baron POLLOCK, in Duncan v. Benson, 1 Exch. 557:

'But this agency for the freighter is confined to cases     affecting his interest, and where the sale or pledge is      directly or indirectly for his benefit. It is directly     beneficial where goods are damaged by perils of the sea, and      sold; it is indirectly so where there is damage to the ship,      and the repairs become necessary for the benefit of the whole      adventure.'

Sir Robert PHILLIMORE was even more explicit in the case of The Onward, L. R. 4 Adm. & Ecc. 57, where he used this language:

'The next consequence from the doctrine of agency is that the     master must sustain, to the best of his power, the interest      of the absent owner. This is a principle of general maritime     law, and not *  *  * of English law only. Boulay Paty observes,     *  *  * he must do that which there is fair reason to suppose      the owner, if present, would do. * *  * The master is to      remember the foundation of his authority to give a bottomry      bond on cargo is the prospect to benefit, direct or indirect,      to the proprietor of it. This principle limits the authority     of the master in this matter.'

So, in this country, Mr. Justice WASHINGTON said, in Ross v. The Active, 2 Wash. C. C. 237:

'But at all events the necessity must be such as to connect     the act with the success of the voyage, and not for the      exclusive interest of the ship-owner.'

Undoubtedly, in all such cases, much is left to the master's discretion, but, to use the language of Mr. Justice STORY in The Packet, 3 Mason, 259, 'he must exercise it conscientiously for the general interest.' This court said, in ''New England Ins. Co. v. The Sarah Ann'', 13 Pet. 400, speaking of the analogous authority of the master to sell the ship:

'All will agree that the master must act in good faith,     exercise his best discretion for the benefit of all      concerned, and that it can only be done upon the compulsion of necessity, to be determined in      each case by the actual and impending peril to which the      vessel is exposed.'

And in The Amelie, 6 Wall. 27, it was said:

'Ann this necessity is a question of fact, to be determined     in each case by the circumstances in which the master is      placed and the perils to which the property is exposed. If     the master can within a reasonable time consult the owners,      he is required to do it, because they should have an      opportunity to decide whether, in their judgment, a sale is      necessary.'

When the master is dealing with the cargo for the benefit of the voyage, he 'must endeavor to hold the balance evenly between his two principals; he must not sacrifice the ship to the cargo or the cargo to the ship.' The Onward, supra, 58.

It is equally well settled that a lender, upon the hypothecation of the cargo by a master of the vessel under his implied authority, is chargeable with notice of the facts on which the master appears to rely as a justification of what he is doing. Such a lender is presumed to know that the power of the master is to be determined by the necessities of the case in their legal operation on the owner of the cargo. As necessity creates the agency, and that only can be authorized which, under the circumstances, is reasonable and just, he must make his own inquiries and judge for himself, and at his own risk, whether, if the owner were present, he would do or ought to do that, or something equivalent, which the master is undertaking to do for him in his absence. A lender cannot shut his eyes to existing facts as they appear, or by reasonable inquiry could be made to appear, and treat with the master as a general agent, having authority to do, not only what the owner ought to do, but what he might do if he chose. Before there can be a recovery against the owner it must be shown that the circumstances were such as to make it apparently proper for the master to do what he has done. To this extent, the burden of proof is clearly on the lender. The Aurora, 1 Wheat. 102; Thomas v. Osborn, 19 How. 30; The Amelie, 6 Wall. 27; The Grapeshot, 9 Wall. 141; The Lulu, 10 Wall. 203. In these cases the rule was applied to the hypothecation of the ship by the master, where less strictness will ordinarily be required than in the hypothecation of the cargo, because the master is the appointed agent of the owner of the ship, but the involuntary agent of the owner of the cargo.

It remains only to apply these well-settled rules to the facts of the present case.

When the loan was advertised for and put on the market the cargo was out of the vessel and in store. It was not perishable, and could be sent forward to its place of destination in another vessel, without any considerable delay, at a cost of from $1,000 to $1,500. The vessel had been two months in port. Her cargo was consigned to New York. The bills of lading were drawn to the order of the shipper, but accompanying them was a letter to the master instructing him to whom to report at the end of his voyage. If this letter had been lost, as the master claimed it was, the fact that it had been given was not forgotten by him, for when he first went to Lamb & Co. he told them of its loss. From that time for nearly two months, and until the day before the loan was advertised for, telegraphic communication between St. Thomas and Rio de Janeiro was practicable and reasonably direct. The necessity for unloading the cargo, and making extensive and costly repairs on the vessel to fit her for the further prosecution of the voyage, was known as soon as the surveys were completed, and yet neither the master nor Lamb & Co. made any attempt to ascertain from the shipper, by telegraph, his wishes about the disposition to be made of the cargo under the circumstances, or even to get information as to the names of the consignees in New York, with whom there could be communication, both by mail and telegraph. Lamb & Co. did, indeed, on the first of June, write the shipper by mail that the vessel had put into St. Thomas dismasted and leaky; that a survey had been held, and that, for affecting repairs, the cargo was being discharged; but even this meager information did not probably reach its destination until about the thirteenth of July, only a few days before the loan was advertised for.

Although Lamb & Co. were engaged by the master to attend to the business of the vessel and her repairs, they made no inquiry as to the propriety of what was done, but relied entirely on the statements of the master, and apparently allowed him to do what he pleased, for it was not until a loan of $7,500 had been applied for and taken that they knew it would require $11,600 'to defray expenses and their charges and commissions,' and then only when it was told them by the master.

The findings show that when the vessel had been out from Rio de Janeiro a little more then 30 days, 'her rigging parted and her masts fell, the mainmast breaking at the saddle and her foremast at the head.' On her arrival at St. Thomas her cargo had to be discharged to stop the leaks; her metal was 'much broken and torn away and ragged,' and had to be replaced with new to make her seaworthy for a voyage to New York, and although she sold when she got to New York for but $4,500, leaving only $3,500 produced from the vessel and freight to apply on the loan, the aggregate of her expenditures in St. Thomas was $11,600.

From these facts it is, to our minds, apparent that when the vessel arrived at St. Thomas she ought not to have been repaired at the risk of expense to the owner of the cargo without his consent, and that this could easily have been ascertained by an inquiry into the facts. She came in 'dismasted and leaky' 'for a general equipment and refit,' with a cargo substantially imperishable, which might be forwarded in another vessel at comparatively small expense, and it must have been easy to see that to repair the vessel at the risk of the owner of the cargo would be to place his interests in jeopardy without any urgent necessity on his account. No master, who 'held the balance evenly between his two principals,' could have believed himself justified, under the circumstances, in hypothecating the cargo for any such purpose, without notice to the owner. But when the repairs were completed, and the hypothecation was tendered, the impropriety of what the master proposed to do was even more apparent. Then the offer was to pledge vessel, freight, and cargo for $13,324, when the most casual observer must have seen that the vessel and freight would actually secure only a comparatively small part of the amount required. Of all this the lender, who made no inquiries whatever, is chargeable in law with notice. Had he inquired and been deceived through no fault of his own, the case might have been different. But having failed to inquire at all, he ispresumed to know all that the master knew. His case presents itself, therefore, as that of a lender upon the hypothecation of a cargo by the master, without communication with the consignee or owner, to pay the expenses of permanent repairs to the vessel, when it was manifest that the owner of the cargo could not be benefited by what was done to anything like the amount with which he was to be charged.

It is contended, however, that the owner of the cargo has no right to demand his property at an intermediate port unless the voyage has been actually abandoned or the necessary repairs on the vessel cannot be effected. The cargo owner is not bound to help the vessel through with her voyage under all circumstances. It is the duty of the vessel owner, and of the master as his appointed agent, to do all that in good faith ought to be done to carry the cargo to its place of destination, and for that purpose the cargo owner should contribute to the expense as far as his interests may apparently require, but he is under no obligation to sacrifice his cargo, or to allow it to be sacrificed, for the benefit of the vessel alone. He ought to do what good faith towards the vessel demands, but need not do more. If he would lose no more by helping the vessel in her distress than he would by taking his property and disposing of it in some other way, he should, if the vessel owner or the master requires it, furnish the help or allow the cargo to be used for that purpose. To that extent he is bound to the vessel in her distress, but no further. When, therefore, a cargo owner finds a vessel, with his cargo on board, at a port of refuge needing repairs which cannot be effected without a cost to him of more than he would lose by taking his property at that place and paying the vessel all her lawful charges against him, we do not doubt that he may pay the charges and reclaim the property. Otherwise he would be compelled to submit to a sacrifice of his own interests for the benefit of others, and that the law does not require. What charges must be paid will depend on the circumstances of the case. Sometimes they may include full freight, expenses at the port of refuge, general average charges, and possibly more and sometimes less; but upon full payment of such as are in law demandable, the cargo must be surrendered.

In the present case it is not only found as a fact that it was for the interest of the shipper that his property should be forwarded by some other vessel rather than that it should be hypothecated to pay for the repairs, but everything else in the findings points unmistakably to the conclusion that such repairs could not have been effected without an expense to him of very much more than it would cost to reclaim his property, pay all lawful charges upon it, and send it forward by some other conveyance. Under such circumstances, we have no hesitation in saying that the master had no authority to pledge the cargo as he did, without the consent of the shipper or consignees. The notice given the shipper was entirely insufficient, and furnished no such information as would require him to act otherwise than he appears to have done. He did not get the letter until nearly six weeks after it was written, and from its contents he was justified in supposing that before his property was encumbered to any considerable amount he would be notified by telegraph. Certainly, so long as the mail only was used to communicate with him, he need not have supposed it was necessary at the end of six weeks to employ the telegraph for a response to such information as he got. It must have been apparent from the outset, at St. Thomas, that it would be necessary to hypothecate the cargo to pay for the repairs if they were made, and there was no excuse for not communicating that fact either to the shipper or the consignees before it was too late for them to object or provide against it. All this the lender of the money could have known if inquiry had been made, and there was abundance of evidence in all directions to show that no prudent cargo owner would voluntarily do what the master was doing for him. Clearly, therefore, the hypothecation of the cargo was unauthorized and void.

It is insisted, however, that if the bottomry bond cannot be enforced, the cargo may be held in this suit for such charges as it was liable for to the vessel. No such claim is made in the libel. Full freight has been paid, and there is nothing in the case, as it comes to us, to show that anything more was demandable. If the vessel was unseaworthy when she left Rio de Janeiro, all the extraordinary expenses she incurred on the voyage were probably through her own fault, and not chargeable on the cargo. At any rate, there is nothing in the record as it now stands to make it proper for us to remand the cause for further proceedings under this new claim. Decree affirmed.


text: Talk:Bank of St. Thomas v. The Julia Blake/Opinion of the Court


text:
Allen v. McVeigh

H. O. Claughton, for plaintiff in error.

P. Phillips, W. A. Maury, and W. Hallet Phillips, for defendant in error.

WAITE, C. J.

title: Allen v. McVeigh


text: Talk:Allen v. McVeigh

title: Talk:Allen v. McVeigh


text:
Allen v. McVeigh/Opinion of the Court

This is a suit against William N. McVeigh, as indorser of two promissory notes, and the matter in dispute is as to the sufficiency of the notices of dishonor. The notes fell due, one on the second, and the other on the twenty-third of August, 1861, at the Exchange Bank of Virginia, in Alexandria. The notary, in his certificate of protest, stated that he had delivered 'a notice of protest to William N. McVeigh by leaving it at his dwelling in the hands of his white servant,' and the issue on the trial was as to whether the house at which the notice was left was in fact the dwelling of McVeigh at the time. Upon this point McVeigh testified, in substance, that at some time previous to the twenty-fourth of May, 1861, he sent his family to his farm in Culpeper county, Virginia; that he remained at his home in Alexandria until after the military forces of the United States took possession of the city, which was the twenty-fourth of May; that on the thirtieth of May, under a pass from the United States authorities, he left his home and went within the confederate lines to join his family, with the intention of not returning so long as the city remained in the possession of the United States, which he supposed would be but a short time; that he left in his house a white woman about 70 years of age, who had been for many years his servant, and three colored servants, who were slaves; that he did not discharge his white servant, but advised her to go to the country; that on leaving he had great doubts whether he would ever see his property in Alexandria again; that he remained with his family in Culpeper until the fall of 1861, when he removed to Richmond and engaged in business there, and that he remained in Richmond until 1874, when he returned with his family to Alexandria.

At the close of the testimony, the court, at the request of McVeigh, charged the jury that 'if, on or about the thirtieth of May, 1861, and prior to the maturity of the notes sued on, William N. McVeigh, having previously sent his family, went himself within the confederate military lines with the intention of not returning to Alexandria during its occupation by the United States forces, and accordingly remained with his family continuously within the confederate military lines throughout the whole period of the war, and did not return to Alexandria with his family until the year 1874; that such absence at the maturity of said notes, respectively, was known, or, by the exercise of reasonable diligence, must have been known, to the Exchange Bank of Virginia at Alexandria; that at the time of said maturity the armed forces of the United States and of the confederate states confronted each other on lines immediately intervening between the city of Alexandria and the said William N. McVeigh, so as to cut off and prevent actual intercourse between the two, and such intervention continued down to the end of the war,-the notice of dishonor shown by the notarial certificates of protest is not sufficient to fix the liability of William N. McVeigh as indorser, and the jury must find for him.'

This instruction is substantially the same as that considered in the Bank of the Old Dominion v. McVeigh, 98 U.S. 332, and which we held did not present a federal question. The only difference, even in language, between the instructions in the two cases consists in what is said in this about the establishment and maintenance of the opposing lines of military forces and the prevention of actual intercourse, which was not in the other. No importance was given in the argument, however, to this difference, and it may as well be said now, as it was before, that 'all the court below decided was that, by the general principles of commercial law, if, during the late civil war, an indorser of a promissory note abandoned his residence in loyal territory, and went to reside permanently within the confederate lines before the note matured, a notice of protest left at his former residence in the loyal territory was not sufficient to charge him, if his change of residence was known, or by the exercise of reasonable diligence might have been known, to the holder of the note when it matured.' Under the question raised by the charge as given, therefore, we have no jurisdiction. But the plaintiff asked of the court certain instructions, which were not given, and error is assigned for this. The fourth of these requests presents all the questions relied on, and was as follows:

'If the jury believe from the evidence that the notes sued on     were discounted by the Exchange Bank of Virginia at      Alexandria before their maturity, or that they were renewals      of notes theretofore discounted; that at the time of discount      the makers, indorser, and indorsee were residents of said      city; that before the maturity of the said notes the federal      forces had taken permanent possession of said city; that      after such possession the indorser, William N. McVeigh, left      his residence in said city, with the intention of returning      thereto, and went within the confederate lines to join his      family, at the time visiting in the county of Culpeper; that the said indorser, at the      time the said notes respectively became due, was within the      confederate lines in adherence of the southern confederacy in      obedience to the Virginia ordinance of secession,-the court      instructs the jury that the said ordinance of secession was      of no binding force or obligation; that neither the      proclamations of the president of the United States, issued      in April, 1861, and August 16, 1861, nor the existence of the      war, nor the ordinance of secession of the state of Virginia,      obliged the said indorser to be absent from his residence in      Alexandria, nor relieved the holder of said notes from giving      him notice of the dishonor and protest thereof; that such      absence was voluntary, and did not affect the rights and      duties of the parties to said notes. And if the jury believe     from the evidence that at the time the said notes      respectively fell due the said indorser had not abandoned his      intention to return to Alexandria, and had not acquired a      domicile elsewhere, and that the notes sued on were duly      dishonored and protested, and on the day thereof notice of      such dishonor and protest was left at the residence of the      indorser in Alexandria with his white servant in charge of      the same, such notice was sufficient to bind the indorser,      and the jury must find for the plaintiff, if they further      believe from the evidence that he is the bona fide holder of      said notes.'

The only point presented by this request, not disposed of by the charge as actually given, is that which relates to the ordinance of secession and the proclamations of the president. The plaintiff claimed no 'title, right, privilege, or immunity,' either under the ordinance or the proclamations. Neither did the defendant. The issue in the case was as to the fact of a change of residence by the defendant, not as to his power to make a change. The plaintiff did not claim that by reason of the ordinance or the proclamation, or even the existence of actual war, the defendant was prevented from abandoning his home in Alexandria and taking up another inside the confederate lines. Neither did the defendant claim that the ordinance, the proclamation, or the war, of themselves made the notice left at his former home insufficient. The ultimate fact to be determined was whether, when the notice was left at the house formerly occupied by the defendant, it was left at his place of residence. As the case stood upon the evidence, the ordinance of secession and the proclamations were in no way involved. The plaintiff claimed nothing under them, neither did the defendant. The charge in respect to them, as requested, was therefore immaterial, and was properly refused. As this presented the only federal question in the case, and it was correctly disposed of, we cannot consider the other errors assigned. Murdock v. Memphis, 20 Wall. 590.

The judgment of the supreme court of appeals of Virginia is affirmed.

title: Allen v. McVeigh/Opinion of the Court


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


text:
Merriam v. United States

The appellant brought suit in the court of claims against the United States to recover damages for the breach by the United States of a contract by which the appellant agreed to sell and deliver and the United States to receive and pay for a quantity of oats. The court of claims, after hearing the case, dismissed the claimant's petition, and from its judgment this appeal was taken by him.

The court of claims found the following facts:

The chief quartermaster of the military department of Dakota published an advertisement, the parts of which and of the circular therein referred to material to this case were as follows:

'CHIEF QUARTERMASTER'S OFFICE.

'ST. PAUL, MINN., March 1, 1877.

'Sealed proposals in triplicate, subject to the usual conditions, will be received at this office * * * until 12 o'clock noon, on the twenty-sixth day of April, at which time they will be opened in the presence of bidders, * * * for furnishing and delivering of wood, coal, grain, hay, and straw, required during the fiscal year commencing July 1, 1877, and ending June 30, 1878, at the following posts and stations, viz.: (Here follows a list of the posts and stations for which the supplies were required.)

'Separate bids should be made for each post and for each class of supplies. * * * The government reserves the right to reject any and all bids. In bidding for grain, bidders will state the rate per 100 pounds and not per bushel.

'Blank proposals and printed circulars stating the kind and estimated quantities required at each post, and giving full instructions as to the manner of bidding, conditions to be observed by bidders, and terms of contract and payment, will be furnished on application,' etc.

The circular referred to contained these clauses:

'The following are the estimated quantities of supplies that will be required at each post, but the government reserves the right to increase or diminish the same at any time during the continuance of the contract, and to require deliveries to be made at such times and in such quantities as the public service may demand: Fort Abraham Lincoln, D. T., 2,404,000 pounds oats; Fort Buford, D. T., 256,000 pounds oats; Cheyenne Agency, D. T., 131,000 pounds oats; Camp Hancock, D. T., 5,400 pounds oats; Lower Brule Agency, D. T., 34,300 pounds oats; Fort Randall, D. T., 233,000 pounds oats; Fort Rice, D. T., 1,000,000 pounds oats; Standing Rock Agency, D. T., 255,000 pounds oats; Fort Stevenson, D. T., 96,000 pounds oats; Fort Sully, D. T., 50,000 pounds oats.

'Proposals are invited for the furnishing and delivering' of 'grain for Forts Abraham Lincoln, Buford, Randall, Rice, etc., etc., either at Sioux City, Yankton, Bismarck, or Fort Abraham Lincoln.'

In accordance with the advertisement one Hall proposed to furnish 4,000,000 pounds of oats, to be delivered at Bismarck, for $2.25 cents per 100 pounds; and the appellant proposed to furnish, at the same place, 1,600,000 pounds of oats at $2.23 7-16 cents per 100 pounds, a like quantity at $2.28 1/8, another like quantity at $2.31, and another like quantity at $2.37, making the entire quantity which he bid to furnish and deliver 6,400,000.

On May 18, 1877, an award was made to the appellant for furnishing and delivering at Bismarck 1,000,000 pounds of oats at $2.23 7-16 per 100 pounds. On June 27th an award was made to Hall for furnishing and delivering at Bismarck 2,620,000 pounds of oats at $2.25 per 100 pounds, and on the same day a further award was made to the appellant for furnishing and delivering, at the same place 600,000 pounds of oats at $2.23 7-16 per 100 pounds.

On June 29, 1877, the contract on which the action was brought was executed by the appellant and by the quartermaster in behalf of the United States. It was made on a printed blank furnished by the quartermaster. The first article of agreement was as follows:

'Art. 1. That the said John L. Merriam, his heirs, assigns, administrators, and executors, shall supply, or cause to be supplied and delivered to the quartermaster's department at the military station of Bismarck, D. T., 600,000 pounds, more or less, of oats, at two dollars and twenty-three and seven-sixteenths cents ($2.23 7-16) per 100 pounds; the oats to be of good merchantable quality, free from dirt or other foreign matter, and to be delivered in good, new burlap sacks, each sack to contain no greater quantity than 128 pounds, or such other quantity, more or less, as may be required from time to time for the wants of said station, between the first day of July, 1877, and the thirty-first day of December, 1877, in such quantities and at such times as the receiving officer may require: provided, that this contract is approved by the commanding generals of the department of Dakota, and of the military division of the Missouri; otherwise not until such approval is obtained.'

The appellant had previously, in accordance with the award to him, dated May 18, 1877, entered into another contract with the quartermaster acting on behalf of the United States, bearing date May 15, 1877, for the delivery of 1,000,000 pounds of oats, which was identical in terms with the above-mentioned contract of June, 29, 1877, except that the words 'or such other quantity, more or less, as may be required from time to time for the wants of said station, between the first day of July, 1877, and the thirty-first day of December, 1877, in such quantities and at such times as the receiving officer may require,' found in article 1, were omitted.

Two other contracts, dated June 29, 1877, were made between said quartermaster and said Hall, in accordance with his said bid,-one for the delivery of 665,000 pounds of oats, and the other for the delivery of 1,955,000 pounds. each at $2.25 per one hundred pounds; and in other respects the two contracts were identical in form with those of the appellant, the one first above mentioned having the same words omitted which were omitted from the appellant's contract of May 15, 1877, and the other containing them.

There were delivered at Bismarck, as under the two contracts of Hall, by parties other than the appellant, 3,116,616 pounds of oats, between July 1, 1877, and December 31, 1877.

The claimant, after the execution of his said contracts respectively, commenced delivering oats thereunder, and by July 12, 1877, had delivered more than 1,600,000 pounds specifically mentioned in the two contracts, the excess having been received by the acting assistant quartermaster at Bismarck by mistake, and he was paid in full for all that he had delivered.

Subsequently he offered to deliver nine car-loads of oats, but they were refused.

Neither the receiving officer nor any other officer of the defendants required the appellant to supply for the wants of said station any other quantity of oats than that specifically mentioned in the contract sued on; and the appellant did not ask to be informed whether or not any other quantity would be required, and although he repeatedly offered the several car-loads of oats above mentioned to the acting assistant quartermaster, and requested him to take them in order to clear up all he had at Bismarck, and get the railroad company's cars unloaded, he never demanded it as a right under his contract.

The appellant had the means to deliver oats within the time mentioned in his contract to the full extent of the quantity delivered under Hall's contract his contract to the full extent of the quantity delivered under Hall's contract by other parties, in addition to that which was received from him, had he been required and permitted so to do, and was ready and willing to make such delivery, although he gave the defendant's officers no notice to that effect, and made no other offers than that above set forth.

The appellant suffered some loss by reason of the non-receipt by the defendants of the several car-loads of oats above mentioned, and by being obliged to sell the same to other parties; and some loss of profits which he would have made if he had delivered at the contract price oats to the extent of the quantity received by the defendants under said Hall's contracts, in addition to the quantity which he did deliver, and for which he was paid.

J. B. Sanborn and ''Geo. A. King'', for appellant.

''Sol. Gen. Phillips'', for appellee.

WOODS, J.

title: Merriam v. United States


text: Talk:Merriam v. United States

title: Talk:Merriam v. United States


text:
Merriam v. United States/Opinion of the Court

The contention of the appellant is that under that clause of the contract sued on which provided as follows: 'said Merriam shall supply 600,000 pounds, more or less, of oats, * *  * or such other quantity, more or less, as may be required from time to time for the wants of such station between the first day of July, 1877, and the thirty-first day of December, 1877, in such quantities and at such times as the receiving officer may require,'-he was bound to deliver, and the United States to receive, in addition to the 1,600,000 for which his bid was accepted, all the oats needed for the wants of the station between the dates mentioned. And as it appears from the finding of the court of claims that a large quantity of oats over and above that received from the appellant was received at Bismarck between the dates mentioned, under the contract made with Hall, and that appellant's offer to furnish a quantity of oats in addition to the amount specifically mentioned in his contract was declined, that a breach of his contract is shown, for which he is entitled to damages. It is contended on behalf of the United States that under the contract sued on the appellant was bound to deliver, and the United States to receive, 1,600,000 pounds of oats, and no more, unless required to do so by the quartermaster. The only question presented by the record is which of these two constructions of the contract is the true one.

It is a fundamental rule that in the construction of contracts the courts may look not only to the language employed, but to the subject-matter and the surrounding circumstances, and may avail themselves of the same light which the parties possessed when the contract was made. Nash v. Towne, 5 Wall. 689; Barreda v. Silsbee, 21 How. 146; Shore v. Wilson, 9 Clark & F. * 353, * 555; McDonald v. Longbottom, 1 El. & El. 987; Munford v. Gething, 29 Law J. C. P. 110; Carr v. Mantefiore, 5 B. & S. 408; Brawley v. U.S. 96 U.S. 168.

Thus, in the case of Doe v. Burt, 1 Term R. 701, where a lease had been made by the plaintiff to the defendant of part of a messuage, together with a piece of ground thereunto adjoining, which piece of ground was used as a yard, and beneath the yard was a cellar occupied by a third party under a lease previously granted to him by the plaintiff, and the occupant of the celler continued to reside in it and to pay rent to the plaintiff for three or four years after the latter had demised the yard to the defendant, but his lease having expired, and he having quitted the cellar, the defendant took possession of it, contending that the cellar had passed to him by the demise of the yard, the court held that parol evidence of the surrounding circumstances was admissible to show that it did not pass.

Availing ourselves of the light thrown on the contract in this case by the circumstances under which it was made, we are of opinion that the construction claimed for it by the appellant cannot be sustained.

The specific quantity of oats to be delivered at Bismarck, for which the circular for the information of bidders invited proposals, was 4,464,700 pounds. The appellant made bids for 6,400,000 pounds; 1,600,000 pounds of which were at the price of $2.23 7-16 per hundred pounds, 1,600,000 at $2.28 1/8 per hundred pounds, and the residue at still higher prices. His bid for 1,600,000 pounds at $2.23 7-16 per hundred pounds was the only bid made by him which was accepted. The bid of Hall was at the same time accepted for 2,620,000 pounds at $2.25 per hundred pounds, and contracts were made with him for the delivery of that amount. It thus appears that the lowest bids were accepted and contracts made in accordance therewith. The contracts made with both the appellant and Hall were identical in form. The bids accepted fell a little short of the entire quantity for which bids were asked. The appellant now insists that by reason of the clause in his second contract, by which, in addition to the specific quantity of oats therein mentioned, he agreed to supply such other quantity, more or less, as might be required for the wants of said station, and which also was found in the second contract made with Hall, the United States were bound to receive from him oats for which his bid was not accepted, and for the delivery of which the bid of Hall, lower than his own, was accepted. It is perfectly clear, from these circumstances, that the officers of the United States who had this matter in charge did not understand the contract with appellant as he now claims to construe it. In other words, they did not intend to contract with two different persons for twice the quantity of oats needed for the wants of the station. Nor did they intend, after making awards to two different bidders for specific quantities of oats, to disregard the awards and enter into contracts by which the higher bidder should supply all the oats.

We think the facts found by the court of claims show also that the construction now claimed by the appellant could not have been his understanding of the contract when it was made. The advertisement calling for bids announced that they would be opened in the presence of bidders. The appellant bid to furnish 6,400,000 pounds of oats. His bid was accepted for only 1,600,000 pounds out of the 4,464,700 pounds for which bids were specifically invited. On the same day on which the contract sued on was executed, the same quartermaster executed two contracts with Hall for the oats, the furnishing of which had been awarded to him.

It is not specifically found by the court of claims that the appellant knew that the bids of Hall for nearly all the oats needed at the station, not awarded the appellant, had been accepted, nor that he knew that contracts had been made with Hall for the delivery of the oats in accordance with the awards made to him. But he knew that his own bid was accepted for less than half the quantity for which bids were invited. He must have known, therefore, that he had a successful competitor in the biddings, and he must have known that a contract had been made with his successful competitor for the delivery of the oats, for which the bid of the latter was accepted; for the printed circular informed him that the bidder whose proposal was accepted would be required to enter into a contract to perform his bid, and he himself had been required to execute a contract to deliver the oats which it was awarded to him to furnish.

These facts being known to appellant, he could not have understood the contract sued on, which was made on the same day as the contract with Hall, as he now contends it should be interpreted. If, therefore, the circumstances surrounding the making of the contract were such that neither party to it could have construed it as the appellant now claims it should have been construed, we must reject that construction and seek one fairly justified by the language of the contract, more consistent with the circumstances of the case. Under the light of these circumstances it is clear that the contract bound the appellant to deliver, in addition to the specific quantity named, such other quantity, more or less, of oats as might be needed from time to time for the wants of the station, and as he might be required to deliver. That such was the appellant's understanding of the contract is evident from the further fact found by the court of claims, that the appellant never asked to be informed whether or not any other oats above the quantity specifically mentioned in his contract would be required; and when he offered the nine car-loads of oats to the receiving officer he requested him to take them in order to clear up all he had at Bismarck and get the railroad company's cars unloaded, but never claimed that he had the right to deliver the oats under his contract. It is, therefore, plain that the interpretation he now puts on his contract is an after-thought, and is not the interpretation put upon it by the parties when it was executed.

The construction we have put upon the contract does no violence to its language. The provision that the oats required for the wants of the station, over and above the quantity specifically mentioned in the contract, were to be delivered in such quantities and at such times as the receiving officer might require, may well be construed to leave with that officer a discretion to call for the additional oats or not, as in his judgment they were or were not necessary for the wants of the station; and if he required none the appellant was bound to deliver and the United States to receive none.

We are of opinion that the court of claims was right in dismissing the petition of the appellant. Its judgment must, therefore, be affirmed.


text: Talk:Merriam v. United States/Opinion of the Court


text:
Cook Company National Bank v. United States

This is an appeal from a decree of the circuit court overruling a general demurrer to a bill filed by the United States against the Cook County National Bank of Chicago, Illinois, and Augustus H. Burley, its receiver. The facts, as stated in the bill, are briefly as follows:

Previously to 1872 the bank was formed under the acts of congress authorizing the organization of national banks, and was designated as a depository of moneys of the United States. In January, 1875, it became insolvent and suspended business. In February following, Burley was appointed, by the comptroller of the currency, its receiver, and he immediately entered upon the discharge of his duties. At the time of its suspension the bank had on deposit 'of postal funds,' $24,900, and 'of money-order funds,' $14,684, which are respectively designated on its books by those names. These moneys had been deposited with the bank by John McArthur, a deputy postmaster at Chicago. The treasury department at the time held United States bonds, placed with it by the bank, to the amount of $150,000 par value, as security for all public moneys which might be deposited with the bank. These bonds were afterwards sold for $174,544.52. Of the proceeds, $155,305.47 were appropriated to pay the amount then on deposit with the bank to the credit of tre treasurer of the United States. Of the balance remaining, $11,803.98 were applied on the 'postal funds,' and $7,435.07 on the 'money-order funds' deposited by the deputy postmaster at Chicago, leaving still due on account of those two funds $20,344.95. In addition to these bonds, there were at the time, in the treasury department, United States bonds to the amount of $100,000 par value, deposited by the bank to secure its notes issued for circulation. When, in 1875, the bank failed to pay these notes, the comptroller of the currency declared the bonds forfeited to the United States. A part of them have been sold, and it is the intention of the treasury department to sell the remainder, and apply the proceeds to pay the notes in circulation, and reimburse the United States for sums already advanced for that purpose. The proceeds of all the bonds, when sold, will be sufficient to redeem the notes, reimburse the United States in full for their advances, and leave a balance exceeding $30,000, more than sufficient to pay the debts due by the bank to the United States for postal funds and money-order funds deposited by the deputy postmaster at Chicago. The treasury department, in addition to the bonds to secure the circulation of the notes, has a sum exceeding $30,000 belonging to the bank, collected from bills receivable and debts due to it; but its liabilities notwithstanding greatly exceed its assets.

Under these facts the question arose whether the claim of the United States for moneys deposited by the deputy postmaster is a preferred debt or not; and the officers of the United States are in doubt as to their duty on the subject; that is, whether they should reserve from the funds in the treasury department belonging to the bank a sufficient amount to pay the debt for postal funds and money-order funds due to the United States, or whether they should distribute the said moneys pro rata to all the creditors of the bank, including the United States. The bill prays that an account be taken of the amount due to the United States by the bank for moneys so deposited with it by the deputy postmaster, and that a decree be entered directing the disposition of the funds belonging to the bank in the control of the treasury department. The defendants treated the bill as filed to obtain a decree adjudging to the United States a priority in the payment of their demand against the bank for the balance due on the postal and money-order funds, and interposed a general demurrer to it. The court, taking a similar view of the bill, overruled the demurrer. The defendants thereupon elected to stand by their demurrer, and as they at the same time admitted that the bank had a sufficient amount to pay the whole of the principal and interest due to the United States for the funds deposited by the deputy postmaster as postal funds, and as money-order funds, the court ordered that the amount thus due should be paid in full out of the assets of the bank. From this decree the appeal was taken.

H. S. Monroe and Roscoe Conkling, for appellant.

W. C. Goudy, for appellee.

FIELD, J.


text: Talk:Cook Company National Bank v. United States


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Cook Company National Bank v. United States/Opinion of the Court

The Revised Statutes, in section 3466, provide that—

'Whenever any person indebted to the United States is     insolvent, or whenever the estate of any deceased debtor, in      the hands of the executors or administrators, is insufficient      to pay all the debts due from the deceased, the debts due to      the United States shall be first satisfied; and the priority      hereby established shall extend as well to cases in which a      debtor, not having sufficient property to pay all his debts,      makes a voluntary assignment thereof, or in which the estate      and effects of an absconding, concealed, or absent debtor are      attached by process of law, as to cases in which an act of      bankruptcy is committed.'

This section is substantially a copy of section 5 of the act of March 3, 1797, entitled 'An act to provide more effectually for the settlement of accounts between the United States and receivers of public money.' Statutes passed before 1797 embodied similar provisions, and also declared that parties who are sureties of insolvents may pay to the United States any balance due to them, and have the same priority in the payment of their demands out of the estates of such insolvents as the United States would have if no such payment were made.

The language of the section in the Revised Statutes is general and comprehensive in its terms, and applies to demands of the United States against any insolvent person living, or the estate of any insolvent person dead; and also to demands against any person who, not having sufficient property to pay all his debts, makes a voluntary assignment thereof, and against any estate of an absconding, concealed, or absent debtor whose effects have been attached by process of law.

The question is whether, under this broad and general language, the United States, having demands against an insolvent national bank, are entitled to priority of payment out of its assets over other creditors. The appellants contend that the statute refers to such insolvency as is determined by judicial decree, as under a bankrupt act, or is manifested by the debtor's voluntary assignment of his property, or by its attachment under process against him, as an absconding, concealed, or absent debtor, and that within this meaning the Cook County National Bank never became insolvent, and that, therefore, the provisions giving priority of payment to demands of the United States against insolvents do not apply.

From the view we take of the act authorizing the formation of national banks, it is unnecessary to consider whether or not this position is tenable. We consider that act as constituting by itself a complete system for the establishment and government of national banks, prescribing the manner in which they may be formed, the amount of circulating notes they may issue, the security to be furnished for the redemption of those in circulation, their obligations as depositaries of public moneys, and as such to furnish security for the deposits, and designating the consequences of their failure to redeem their notes, their liability to be placed in the hands of a receiver, and the manner, in such event, in which their affairs shall be wound up, their circulating notes redeemed, and other debts paid, or their property applied toward such payment. Everything essential to the formation of the banks, the issue, security, and redemption of their notes, the winding up of the institutions, and the distribution of their effects, are fully provided for, as in a separate code by itself, neither limited nor enlarged by other statutory provisions with respect to the settlement of demands against insolvents or their estates.

In the first place, the banks are required to deposit with the treasurer bonds of the United States as security for any notes that may be issued, the amount of which cannot in any case exceed 90 per cent. of the par value of the bonds. Rev. St. § 5171. Should the market or the cash value of the bonds become reduced at any time below the amount of the notes issued, the comptroller of the currency may require that the amount of the depreciation be deposited with the treasurer IN OTHER UNITED STATES BONDS, OR IN MONEY, so long as such depreciation continues. Rev. St. § 5167. In case of the refusal of a bank to pay its notes, the bonds may be sold at public auction in the city of New York, and their proceeds applied to reimburse the United States the amount expended by them in paying the circulating notes; aND FOR ANY deficiency which may remain, the United States are entitled to a paramount lien upon all the assets of the bank, which is to be paid in preference to all other claims, except for costs and necessary expenses in administering the same. Rev. St. § 5230.

In the second place, when the banks are made depositaries of public moneys and employed as financial agents of the government, it is the duty of the secretary of the treasury to require them to give satisfactory security by the deposit of United States bonds, or otherwise, for the safe-keeping and prompt payment of the public money deposited, and for the faithful performance of their duties as financial agents. The amount of security which the secretary may thus require has no limit but his own judgment as to its necessity. Every officer of a bank which is not an authorized depositary, and which has not, therefore, given the required security, who knowingly receives any public money on deposit, is liable for embezzlement. Rev. St. § 5497. The government can thus always have security, limited in amount only by the judgment of the secretary of the treasury, for public moneys deposited with any national bank.

With these provisions for security against possible loss for moneys deposited, it would seem only equitable that the government should call for such security, and, if it prove insufficient, take the position of other creditors in the distribution of the assets of the bank in case of its failure. The framers of the banking law evidently so regarded the matter. After providing for the appointment of a receiver by the comptroller of the currency upon the suspension or failure of a bank, the law requires the receiver to take possession of its books and records, and assets of every description, and to collect all debts, dues, and claims belonging to it; and authorizes him, upon an order of a court of competent jurisdiction, to sell or compound bad or doubtful debts; to sell the real or personal property of the bank, and, if necessary, in order to pay his debts, to enforce the individual liability of its stockholders, and it directs him to pay over all moneys thus received to the treasurer of the United States, subject to the order of the comptroller of the currency. It also required the comptroller, upon appointing a receiver, to cause notice to be published, calling upon all persons having claims against the bank to present the same with legal proof thereof. It then declares as follows, in section 5236:

'From time to time, after full provision has been first made     for refunding to the United States any deficiency in      redeeming the notes of such association. the compTROLLER     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, as the proceeds of the assets of      such association are paid over to him, shall make further      dividends on all claims previously proved or adjudicated; and      the remainder of the 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.'

This section provides for the distribution of the entire assets of the bank, giving no preference to any claim except for moneys to reimburse the United States for advances in redeeming the notes. When this reimbursement is fully provided for, the balance of the assets, as the proceeds are received, is subject to a ratable dividend on all claims proved to the satisfaction of the receiver, or adjudicated by a court of competent jurisdiction. Any sum remaining after the payment of all these claims is to be handed over to the stockholders in proportion to their respective shares. These provisions could not be carried out if the United States were entitled to priority in the payment of a demand not arising from advances to redeem the circulating notes. The balance, after reimbursement of the advances, could not be distributed, as directed, by a ratable dividend to all holders of claims; that is, to all creditors.

These provisions must be deemed, therefore, to withdraw national banks, which have failed, from the class of insolvent persons out of whose estates demands of the United States are to be paid in preference to the claims of other creditors. The law of 1797, RE-ENACTED IN THE REVISED STATUTES, Giving priority to the demands of the United States against insolvents, cannot be applied to demands against those institutions. The provisions of that law and of the national banking law being, as applied to demands against national banks, inconsistent and repugnant, the former law must yield to the latter, and is, to the extent of the repugnancy, superseded by it. The doctrine as to repugnant provisions of different laws is well settled, and has often been stated in decisions of this court. A law embracing an entire subject, dealing with it in all its phases, may thus withdraw the subject from the operation of a general law as effectually as though, as to such subject, the general law were in terms repealed. The question is one respecting the intention of the legislature. And although as a general rule the United States are not bound by the provisions of a law in which they are not expressly mentioned, yet if a particular statute is clearly designed to prescribe the only rules which should govern the subject to which it relates, it will repeal any former one as to that subject. Daviess v. Fairbairn, 3 How. 636; U.S. v. Tynen, 11 Wall. 88.

In addition to these conflicting provisions in the banking law, necessarily superseding those of the law of 1797, as to the priority of the United States in the payment of their demands out of the estates of insolvents, there is the significant declaration of the banking law that for any deficiency in the proceeds of the bonds deposited as security for the circulating notes of the bank, the United States shall have a paramount lien upon all its assets, which shall be made good in preference to all other claims, except for costs and expenses in administering the same. This declaration was unnecessary and quite superfluous, if for such deficiency the United States already possessed, under the act of 1797, the right to be paid out of the assets of the bank in preference to the claims of other creditors. The declaration, considered in connection with the ratable distribution of the assets, prescribed after such deficiency is provided for, is equivalent to a declaration that no other priority in the distribution of the proceeds of the assets is to be claimed.

This view of the banking law is not affected by the subsequent enactment, in 1867, of the bankrupt act, giving priority to the deMANDS OF THE UNITED States against the estates of bankrupts. That enactment was dealing with the estates of persons adjudged to be insolvent under that law, and covers only the distribution of their estates. It has no further reach.

It remains only to consider whether the United States have the right to claim the payment of this demand out of the surplus moneys remaining in the treasury of the proceeds of the bonds deposited as security for the circulating notes of the bank. The surplus is sufficient to pay the demand of the United States in full. Can the United States set off their demand against these proceeds? We have no hesitation in answering this question in the negative. The bonds were received in trust as a pledge for the payment of the circulating notes. The statute so declares in express terms. Rev. St. §§ 5162, 5167. They were to be returned to the bank when the notes were paid, if not sold to reimburse the United States for moneys advanced to redeem the notes. The bank could have claimed their return at any time upon a surrender of the notes. The surplus constituted the assets of the bank, and part of the fund appropriated by the statute for its creditors. It was charged with this liability, and was held subject to it after the purposes of the original trust were accomplished, although remaining in the treasury. It was then subject to a new trust. A trustee cannot set off against the funds held by him in that character his individual demand against the grantor of the trust. Courts of equity and courts of law will not allow such an application of the funds so long as they are affected by any trust. It would open the door to all sorts of chicanery and fraud. The fund must be relieved from its trust character before it can be treated in any other character.

This doctrine is well illustrated in the case of Sawyer v. Hoag, 17 Wall. 610, 622. There a stockholder indebted to an insolvent corporation for unpaid shares, undertook to set off against the claim upon him a debt due to him by the corporation. But it was held that this could not be done. Said the court, speaking by Mr. Justice MILLER:

'The debt which the appellant owed for his stock was a trust     fund devoted to the payment of all the creditors of the      company. As soon as the company became insolvent, and this     fact became known to the appellant, THE RIGHT OF set-off for an ordinary debt to its      full amount ceased. It became a fund belonging equally in     equity to all the creditors, and could not be appropriated by      the debtor to the exclusive payment of his own claim.'

Here the surplus, being a fund for all the creditors, was subject to be distributed to them immediately upon the reimbursement of the advances of the United States, and the right of the creditors to it was not affected by the fact that it was at the time in the actual possession of the treasury department.

Nor is the relation of the United States to this fund changed by the forfeiture of the bonds, which the comptroller of the currency was authorized upon the failure of the bank to declare. The forfeiture was not a confiscation of the bonds to the government. It amounted only to an appropriation of them, against any other claim, to the specific purposes for which they had been deposited, authorizing their cancellation at market value when not above par, or their sale, so far as necessary to redeem the circulation or reimburse the United States for moneys advanced for that purpose. When that purpose was accomplished, the bank had the right to any surplus of their proceeds, equally as though that right had been in express terms declared.

It follows from the views expressed that the decree of the court below must be reversed and the cause be remanded, with directions to sustain the demurrer and dismiss the bill. And it is so ordered.


text: Talk:Cook Company National Bank v. United States/Opinion of the Court


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Wabash Railway Company v. McDaniels

This was an action to recover damages for injuries sustained by the plaintiff, the defendant in error here, from a collision between two freight trains belonging to the Wabash Railway Company, a corporation engaged in the business of carrying freight and passengers for hire. The collision took place on the night of August 17, 1877, near Wabash, Indiana. The jury returned a verdict in favor of the plaintiff for $15,000. A motion for new trial having been made and overruled, the case has been brought to this court for review. The action proceeded mainly upon the ground that McHenry, a telegraphic operator in the service of the company, was incompetent for the work in which he was engaged, and that his incapacity to meet the responsibilities of his position could, by reasonable care, have been ascertained, and, in fact, was known to the company at, before, and during the time of his employment. The essential facts bearing upon the question of the company's negligence in employing McHenry are summarized in one of the paragraphs of the charge to the jury, to which, so far as the facts which the evidence tended to establish are stated, there seems to have been no exception. They are:

'The tenth night after McHenry went on duty as night operator he went to sleep at his post of duty, with the result already stated. He was 17 years old but a few weeks before his employment. In June, 1876, he went into the service of the defendant, at Wabash, as a messenger boy, and continued in that service some 12 months, during which time he was instructed by Waldo, the day operator, in the art of telegraphy. For this instructed Waldo exacted and received, as compensation, McHenry's wages, $10 per month. For a month or more before McHenry's employment as night operator he worked in the country, harvesting. The only knowledge that he had of telegraphy was what he acquired under Waldo, and before taking charge as night operator he had never been employed anywhere or in any capacity as operator. He was not competent, as he told you, to take press reports, but was competent, as he thought, and as Waldo and Wade (the latter his predecessor as night operator) thought, to do ordinary business, and to discharge the duty of night operator at Wabash; his habits were good, and he was bright and industrious. Waldo had recommended McHenry to Simpson, the chief train dispatcher at FT. Wayne, as capable and faithful, and without knowing McHenry personally, or even seeing him, and, on Waldo's recommendation and what Simpson knew of McHenry's skill from having occasionally noticed at Ft. Wayne his fingering the key at Wabash, Simpson directed Waldo to employ McHenry at $50 a month; or, according to Waldo's testimony, he was directed by Mr. Simpson to put McHenry in charge of the office. McHenry's father told Waldo, before the son entered on the discharge of his duties, that Waldo should have $10 a month of the son's wages if Waldo would continue to give the son attention, to which Waldo assented. This is the father's testimony. Waldo admits that the father made the proposition to him as stated, but says he replied that the son was competent to take charge of the office and run it without assistance. Boys no older than McHenry had successfully discharged the duties of day and night dispatcher on this and other roads, and it teems to have been the custom of the company to educate its telegraph operators while serving as messenger boys. Other railroad companies, it seems from the evidence have pursued the same course with satisfactory results.' Wager Swuyne and ''Chas. B. Stuart'', for plaintiff in error.

E. E. McKay and ''Wm. Stone Abert'', for defendant in error.

HARLAN, J.

title: Wabash Railway Company v. McDaniels


text: Talk:Wabash Railway Company v. McDaniels