Boutin v. Rudd

82 F. 685, 27 C.C.A. 526, 1897 U.S. App. LEXIS 1995

• Court: Court of Appeals for the Seventh Circuit
• Decided: October 14, 1897
• Docket: No. 398
• Status: Published

Opinion

JERKINS, Circuit Judge,

after stating the -facts, delivered the opinion of the court.

It is objected to this decree that the contract in question, being executory, and having never been performed, does not come within .the admiralty jurisdiction. After 55 years of contention touching the correctness of the doctrine declared by Mr. Justice Story in the celebrated case of De Lovio v. Boit, 2 Gall. 398, Fed. Cas. No. 3,776, in which that distinguished jurist repudiated the limitation upon the admiralty jurisdiction declared by the courts of England that it related only to “things done upon the sea,” and asserted that its jurisdiction extended to “things pertaining to the sea,” the supreme court, in Insurance Co. v. Dunham, 11 Wall. 1, 26, ruled that the true criterion of admiralty jurisdiction with respect to contracts “is the nature and subject-matter of the contract, as whether it was a maritime contract having reference to maritime service or maritime transactions,” and that the maritime nature of the contract is not dependent upon locality, but upon subject-matter. If the contract contemplate maritime service, and have reference to maritime transactions, it is within the jurisdiction of the admirality. This doctrine is no longer subject to contention. Since that decision, and within the principle declared, it has been held, and, we think, without dissent, that executory contracts of a maritime character are within the jurisdiction of the admiralty, and that damages for breach of such a contract may be awarded bv the courts of admiralty. The James McMahon, 10 Ben. 103, Fed. Cas. No. 7,197; The Williams, Brown, Adm. 208, Fed. Cas. No. 17,710; Maury v. Culliford, 10 Fed. 388; The Monte A., 12 Fed. 331; The J. F. Warner, 22 Fed. 345; The Alberto, 24 Fed. 381; The Calabria, Id. 607; The Gilbert Knapp, 37 Fed. 215; The Electron, 48 Fed. 689; Haller v. Fox, 51 Fed. 298. In some of the reported cases prior to the decision of the supreme court referred to, there were shadowy and overnice distinctions with regard to the maxi time nature of contracts, and with respect to proceedings in a court of admiralty for their enforcement; some of them asserting that there could he no proceeding in personam unless a proceeding in rem could also be sustained. This distinction cannot be upheld upon principle, nor, since the decision in Insurance Co. v. Dunham, upon authority. The jurisdiction of the admiralty is not dependent upon the existence of a maritime lien. It is rested upon the subject-matter of the contract. A proceeding in personam is not ancillary to a proceeding in rem. The one is to enforce a right growing out of a maritime transaction; the other, to assert a right against the vessel as a jus in re, — a proprietary right, claim, or privilege in the thing itself. But, as Mr. Benedict observes, tills distinction between proceedings in rem and in personam has no proper relation to the question of jurisdiction (Ben. Adm. § 204); and, as Mr. Henry states the proposition, the maritime lien is said to arise from the jurisdiction of the court, not the. jurisdiction from the lien (Henry, Adm. § 15). We have, no occasion here to determine whether, for breach of an executory contract, a maritime lien is allowed upon the contracting vessel, and express no opinion upon that subject. The contract here alleged was to render towage service to a vessel in distress, and, beyond question, was maritime in its character. The admiralty, therefore, has jurisdiction, at least in per-sonam, to pi'onounce for a breach of it.

With respect to the facts of the ease, we cannot differ from the conclusion to which the court below arrived. It is undoubted that the appellants agreed to go to the assistance of the vessel in distress. We cannot credit the statement that the engagement so to do was dependent upon the appellants' securing the services of an engineer. It is not credible that the agent of the libelant would have rested upon any such contingency when he could have procured other tugs for the service; and it is clear that his subsequent inaction was because, as he thought, he could rest securely at his home at Bass Island in the belief that the appellants had performed their contract, and secured the vessel in the harbor at Bayfield. A review of the evidence, to state which would serve no good purpose, satisfies us that the claim with respect to the engineei* is a mere subterfuge to avoid responsibility for a broken contract.

Tiie last objection raised to the decree has respect to the measure of damages for the breach of the contract. . It is claimed that the damages are remote, and that the breach of the contract was not the proximate cause of the loss of the vessel. The rule with respect to damages arising from breach of contract is thus stated and settled: The damages which one ought to recover in respect to a breach of contract should he such as may fairly and reasonably be considered either aris: ing naturally — that is, according to the usual course of things — from such breach of contract itself, or such as may reasonably be supposed to have been in the contemplation of both parties at the time they made the contract as the probable result of the breach of it; and, if the special circumstances under which the contract was made were communicated and known to both parties, the damages resulting from the breach of such a contract which they would reasonably contemplate would be the amount of injury which would ordinarily follow from a breach of the contract under the special circumstances so known and communicated,- — that is, that both the consequences naturally following from the breach and such consequences as seem natural only in the light of special circumstances communicated to the defendant at the time of the contract can be recovered. It would be otherwise, however, if the special circumstances were unknown to the party breaking the contract. Hadley v. Baxendale, 9 Exch. 347; Hobbs v. Railway Co., L. R. 10 Q. B. 111; Hamlin v. Railway Co., 1 Hurl. & N. 408; Cory v. Ship-Building Co., L. R, 3 Q. B. 181; Hammond v. Bussey, 20 Q. B. Div. 79; Griffin v. Colver, 16 N. Y. 489; Baldwin v. Telegraph Co., 45 N. Y. 744; Booth v. Mill Co., 60 N. Y. 487. Here the special circumstances were fully disclosed. The appellants, at the time of entering into the contract, were inforn .1 that this vessel was adrift or ashore at Oak Island. The next day they were informed that she had been moored at the dock at Presque Isle. They knew that the vessel was leaking, and had water in her hold. They knew that she was in distress. They knew that she was moored at a dangerous place, and at a season of the year when gales are usual, and should reasonably have been anticipated. They had no right to suppose that the vessel had a crew. She was used to carry wood, and was not in commission, and had drifted from her moorings in a gale without a crew. She was rescued, for the time being, from her dangerous position on the rocks, and moored at Presque Isle, at the only available, but yet an unsafe, place. The circumstances demanded immediate and diligent action, not laggard performance nor shuffling effort to evade. All necessary facts were communicated to the appellants, which disclosed the emergency; and advised them of the need of immediate action. That the vessel might be lost through delay was apparent, and was, manifestly, we think, a result to be reasonably contemplated from failure of performance of the contract, and one which would ordinarily and naturally flow from such failure to perform. The exposed location of the vessel, the time of yeai’, the customary season of storms, her leaky condition, all demanded promptness in discharge of the duty assumed. Under such circumstances the owners of the tug must be held responsible for the loss of the vessel. The W. E. Cheney, 6 Ben. 178, Fed. Cas. No. 17,344; The Elmira, Fed. Cas. No. 4,417; Connolly v. Ross, 11 Fed. 342; The Snap, 24 Fed. 504; Wilson v. Sibley, 36 Fed. 379; The Sarah and The Tucker, 38 Fed. 252; The A. M. Ball, 43 Fed. 170; The American Eagle, 54 Fed. 1010; The Charles Runyon, 5 C. C. A. 514, 56 Fed. 312; Phœnix Towing & Transp. Co. v. Mayor, etc., 60 Fed. 1019. The decree is affirmed.