Grace v. The Mauna Loa

76 F. 829, 1896 U.S. Dist. LEXIS 131
CourtDistrict Court, S.D. New York
DecidedJuly 1, 1896
StatusPublished
Cited by3 cases

This text of 76 F. 829 (Grace v. The Mauna Loa) is published on Counsel Stack Legal Research, covering District Court, S.D. New York primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Grace v. The Mauna Loa, 76 F. 829, 1896 U.S. Dist. LEXIS 131 (S.D.N.Y. 1896).

Opinion

BROWN, District Judge.

The above libel was filed by William R. Grace & Co., of New York, the charterers of the British bark Mauna Loa, and owners of a cargo of nitrates shipped at Caleta Buena, to recover for a certain loss of nitrates in unloading and reloading at Valparaiso, a port of refuge, and also to recover, as assignees of a bottomry and respondentia bond for £2422.6.2, executed by the master to Grace & Co., of Valparaiso, in 1893, under the following circumstances:

The cargo being loaded pursuant to charter at Caleta Buena, the ship, on July 26, 1893, sailed for New York. On the 13th of August, when about 600 miles to the southwest of Valparaiso, the ship was found to be leaking so badly that after consultation between the master, officers and crew, she put back to Valparaiso for repairs, and reached that port on August 24th. The unshipping and reloading of cargo was attended by some loss of nitrates, and this loss is one of the subjects of claim in the libel. For the repairs to the hull, the owners after repeated consultation with the libellants in New York made remittances to the master amounting to £1,600, as the estimated cost of repair, and £200 for the ship’s estimated share of the general average expenses at the port of refuge; the libellants, after consultation between them and the respondents, being expected to supply the residue of the general average expenses as the cargo’s proper share. The libellants at New York instructed Grace & Co., their representatives in Valparaiso, to provide this balance by loan on respondentia bond, i. e. on the cargo only. But Grace & Co. procured the master to advertise for a loan on bottomry and respondentia, and they themselves, made the loan on this double security. The master had never executed a bottomry bond before. Grace & Co. were the ship’s agents at Valparaiso, as well as the libellant’s agents, and they represented to the master that it was the proper course for the master to raise the rest of the money by bottomry and re-spondentia. This bond was afterwards assigned to the libellants at New York, who held it at the time of the ship’s arrival; and this is the second subject of the libellant’s demand. After delivery of part of the cargo, the master, learning that the libellants claimed to offset the amount of the bottomry bond against the unpaid freight, refused to deliver the rest of the cargo, until security was furnished for the balance of the freight. The above libel was thereupon filed. A deposit was afterwards made in the registry of the court to cover the claim for freight, and the cargo was delivered.

The defendants aver that the bond, so far as it affects the vessel by bottomry, was unnecessary, unauthorized, and void, and [831]*831contrary to the master’s instructions; that the bark was staunch and seaworthy at the commencement of the voyage, but was obliged to put back to Valparaiso through sea perils; that the expenses there, except repairs, were a general average charge; that upon conference with the libellants, the claimants put the master in funds for all general and particular average chargeable against the ship; and that since arrival here, a general average adjustment had been made by which less than $800 is found due to the cargo account, and that the balance of freight money due from the cargo to the vessel is $5,004.26.

The libellants contend that no part of the port of refuge expenses are a general average charge, for the reason that, as the libellants claim, the ship sprung a leak in consequence of her insufficiency and unseaworthiness at the time of starting on her voyage from Caleta Buena, through lack of proper caulking and metalling; that the port of refuge expenses arose through the fault of the ship, and must, therefore, be borne by her alone.

The correspondence and telegrams between Grace & Co. of Valparaiso, the libellants in New York, and the agent of the claimants here, leaves no doubt that at the lime the repairs were made the expenses at Valparaiso, aside from repairs to the ship, were understood to be a general average charge; that the claimants transmitted to Valparaiso all their estimated share, and understood that the libellants would supply their share, and that the libellants intended to do so by means of a respondentia bond upon their cargo, and so directed. This sufficiently appears from the following brief summary, supported by the oral testimony.

On the 4th of November, 1893, the libellants cabled from New York to Grace & Co. at Valparaiso, between which ports there was daily cable communication, asking what the expenses would be “exclusive of repairs (i. e. to the ship), and inclusive of re-shipment” (i. e. of cargo); and at the same time they transmitted a message from the owner to the captain to proceed with the repairs. On the 6th of November, the owners mailed to Captain Douglass a letter of credit for £1,800 to cover repairs to the ship, and £200 for the ship’s estimated share of general average. On the 8th of November the libellants received from Grace & Co. a cable that “expenses would be about £1,600; and added, “May we take captain’s drafts for disbursements, including cost of repairs.” On November 9, the libellants replied: “Manna Loa owners will mail to-day on Baring Bros. & Co., London, £1,800. Will let you know later about advancing balance.” On the 23d the libellants directed Grace & Co. to advertise for Mauna Loa balance against respondentia bond, and in their letter of November 29 to Grace & Co. they referred to the cable last named, and to advance “if you thought well of it against respondentia bonds any balance which the vessel might need for transshipment needs and disbursements.” This was evidently in conformity with the arrangement tes lifted to by the respondents, that the libellants would provide for the estimated expenses chargeable in general average against the cargo.

On December 15th Grace & Co. at Valparaiso advertised for a [832]*832loan on bottomry and respondentia, and on January 4,‘ 1894,' explained to the libellants that their deviation in making the advance upon bottomry as well as respondentia was “owing to the fact that the £1,800 supplied by the owner did not, in our estimation, cover the ship’s liability to general average”; which I understand to mean that they considered the £1,800 already supplied by the owners to the master to be somewhat less than would be chargeable against the ship, because her share of general average was thought to have been estimated too low.

The evidence leaves no doubt that the owners of the bark were at that time in good credit, and had no difficulty in supplying such funds as were needed, -without incurring the extra charges incident to bottomry. In this bond a charge was made for maritime premiums at the rate of 15$, with other incidental expenses, amounting in all to about $3,000, above the actual advances. .

Upon the circumstances proved in this case, the bottomry bond cannot be upheld as an express contract, nor any lien recognized for the extra expenses attending it. There was no need of resorting to a bottomry bond, or of these extraordinary expenses. The bond was taken without notice thereof to the owners, or communication with them on the subject, although means of daily communication with them existed; it was taken without their knowledge, contrary to their intent, and without necessity; since they were able to supply all the funds required, as both the master and Grace 6 Go. had sufficient reason to know. On this ground alone it would be invalid. ' 1 Pars. Shipp. & Adm. 143; Wallace v. Fielden, 7 Moore, P. C. 398; The Circassian, 3 Ben.

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Bluebook (online)
76 F. 829, 1896 U.S. Dist. LEXIS 131, Counsel Stack Legal Research, https://law.counselstack.com/opinion/grace-v-the-mauna-loa-nysd-1896.