Kimball v. The Anna Kimball

14 F. Cas. 481, 2 Cliff. 4

• Court: U.S. Circuit Court for the District of Massachusetts
• Decided: October 15, 1861
• Status: Published

Opinion

CLIFFORD, Circuit Justice.

The charter-party shows that the ship was chartered as alleged in the libel. By the terms of the charter-party the owner was to make the necessary repairs and provide the vessel with every requisite, and with men and provisions necessary for the voyage, and also to ballast the ship at the outward port. He agreed that the whole vessel, with the usual exception of the cabin or roam in the cabin for the master and other officers, and room also for the accommodation of the crew and the storage of the sails, cables, and provisions, should be at the sole use and disposal of the charterers, and he also engaged to take and receive on board the vessel during the voyage all such lawful goods as they might think proper to ship.

Performance of the voyage as described in the libel is admitted, and it is also admitted that the charterers have failed • to pay the balance of the charter-money. On that state of the case the owner of the ship seeks, in this suit, to recover the amount of the unpaid balance from the cargo of the homeward voyage, upon the ground that he has a maritime lien on the same for the payment of the charter-money. As the consignees of the cargo sought to be charged, the claimants resist the claim and insist that the terms of the charter-party in this case created no lien in favor of the owner of the ship; and if it did. that the lien has been displaced by his own acts, at least to the amount of the notes specified in the receipt. They do not controvert the position assumed by the libellant, that in general the owner, in such cases, has a lien on the cargo for the freight, and they admit that the lien is one that is favored by the courts, and will be enforced unless clearly displaced by the acts or agreements of the parties. Conceding all that, still they insist that the clause of the charter-party providing that the “balance of charter should be payable, one half in five days and one half in ten days after discharge of homeward cargo” is inconsistent with the retention of the lien upon the cargo for the payment of that balance. Charter-parties may. doubtless, be framed with provisions so entirely inconsistent with a lien on the cargo for the freight as to defeat the implication to that effect, which would otherwise arise in favor of the owner. Whenever that suggestion is made, however, it then becomes necessary to examine the whole instrument to ascertain its true meaning, and test the suggestion by comparing the parts invoked to defeat the lien with all the other parts of the instrument. Suppose the clause in question, if standing alone, might have the effect assumed by the claimants, which is utterly denied, still the suggestion could not prevail in this case, because upon an examination of the last clause of the instrument it will be seen that the parties in legal effect have stipulated that the ship shall be bound to the merchandise and the merchandise to the ship; so that the contract itself is opposed to the theory of the claimants. Abb. Shipp. 360; Vandewater v. Mills, 19 How. [60 U. S.] 90.

But the charter-party is clearly of the class in which the owner has a lien on the cargo under the maritime law, whether it be so stipulated or not in the charter-party, provided it contains no provisions inconsistent with that implication in favor of the owner. Undoubtedly the ship-owners, says Taney. C. J., in the Case of Bags of Linseed, 1 Black [06 U. S.] 112, has a right to retain the goods until the freight is paid, and has, therefore, a lien upon them for the amount, and as contracts of affreightment are regarded by the courts of the United States as maritime contracts, over which the admiralty has jurisdiction, the ship-owner may enforce his lien by a proceeding in rem in the proper court. Delivery, without any conumon or qualification annexed, is a waiver of the lien, because the lien is but an incident to the possession, with the right to retain the thing until the interest in it or the claim upon it is discharged. Where delivery is made, however, upon an understanding between the parties that the transferring the goods from the ship to the warehouse shall not be regarded as a waiver of the lien, no such consequences will follow; büt a court of admiralty will regard the transaction as a deposit of the goods for the time, and not as an absolute delivery. Many other cases are cited by the libellant to show that the charter is of the class in which the owner retains a lien on the cargo, but it is not necessary to refer to more than one or two of them, as the recent decision of the supreme court recognizes the general principle for which the libellant contends, and, to that extent, is decisive of the point. The Volunteer [Case No. 16.991]; Gracie v. Palmer, 8 Wheat. [21 U. S.] 601.

Assuming that proposition, however, to be correct, still it does not fully meet the difficulty suggested by the claimants. They do not controvert the position that in general a lien arises in cases of this description in favor of the ship-owner, but they insist that the clause giving the five and ten days’ credit. after discharge of the homeward cargo is inconsistent with the retention of the lien, and in fact displaces it. If the question were ? new one, it would deserve more consideration than under existing circumstances it is entitled to receive. Judge Story had the same question before him in the Case of Certain Logs of Mahogany [Case No. 2,559), and as usual he exhausted the argument upon the subject. He held that the clause was not a waiver or displacement of the lien, because the word “discharge” refers merely to the unlading, and not to the delivery of the cargo. That rule was rightly established at the time, has been constantly followed ever since, and at the close of a quarter of a een-tury ought not to be changed. Five and ten days “after the discharge” are the words of the charter-party; and both the pleadings and evidence show that no part of the goods were delivered. Possession, therefore, is still in the libellant, and where that is so, the authorities are unanimous that the lien is not displaced.

[NOTE. Mr. Justice Field, who delivered the opinion of the supreme court affirming this case, in speaking as to whether or not the lien of the owner of the ship upon the cargo for the freight was waived or displaced by the stipulations of the charter party, says: “Two clauses are mentioned in support of this position, — the clause requiring the delivery of the cargo within reach of the ship's tackle, and the clause providing that the balance of the charter money remaining unpaid on the termination of the homeward voyage shall be ‘payable, one-half in five, and one-half in ten. days after discharge’ of the cargo. There is nothing in these provisions inconsistent with the right of the owner to retain the cargo for the preservation of his lien. The first clause only designates the place where the delivery must be had. The second clause only prescribes the period in which payment must be made after the discharge of the cargo. The discharge mentioned does not import a delivery of the cargo; it only imports its unlading from the ship. * * * The clause was intended for the benefit of the charterers. It gives them ample time to examine the goods and ascertain their condition.” Upon the second point considered by the circuit court the learned justice is no less clear: “The rule in Massachusetts is an exception to the general law. but even then the presumption that the note was given in satisfaction of the debt may be repelled and controlled by evidence that such was not the intention of the parties, and this evidence may arise from the general nature of the transaction, as well as from direct testimony to the fact.” The notes were given before the termination of the voyage. and consequently before the balance of the charter money became due. "Freight being the. compensation for the carriage of goods, if paid in advance, is, in all cases, unless there is special agreement to the contrary, to be refunded, if for any ■ cause not attributable to the shipper the goods be not carried. There was no such special agreement in this case. * * * According to the 'statement of the broker who made the arrangement, the notes were given for the accommodation of the ship owner, and 'were to be held over or removed in case they fell due before the arrival.” These considerations are, in the opinion of the learned justice, ample to repel the presumption that the notes were given as payment 3 Wall. (70 U. S.) 37.]

It is insisted by the claimants, in the second place, that the notes of 31st August, 1857, were received by the libellants as an advance, and as payment of the amount for which they were given. Payment undoubtedly discharges the lien of the ship-owner, and promissory notes, accepted as payment, will have the same effect as payment in money. At common law, a promissory note given for a simple contract debt does not operate as discharge of the .original obligation, or constitute a payment of the original debt, unless it affirmatively appears that such was the intention of the parties at the time it was given. Clark v. Mundal, 1 Salk. 124; Downey v. Hicks, 14 How. [55 U. S.) 249; Lyman v. Bank of U. S., 12 How. [53 U. S.) 225. But the courts in this state have adopted a different rule, and the question in this case must be governed by the rules of law which prevail in the jurisdiction where the transaction took place. Whenever a party bound to a simple contract debt, in this state, gives his own negotiable security for it, the presumption is, as matter of fact, in the absence of any circumstances to indicate a contrary intention of the parties, that the bill or note was given and received in satisfaction and discharge of the pre-existing debt. Such presumption, however, is not a conclusive one, but may be controverted by any circumstances which show that such was not the intention of the parties. Fowler v. Bush, 21 Pick. 230; Melledge v. Boston Iron Co., 5 Cush. 170; Fowler v. Ludwig, 34 Me. 461; Baker v. Draper [Case No. 766).

Applying these principles to the present case, it is dear that the question preseúted is purely one of fact, to be determined from the nature of the transaction and all the evidence in the case. Brief references only will be made to the testimony, as it is not the intention of the court to enter into extended argument upon matters of fact, except in cases of real difficulty or doubt. Strong doubts arise, from the very nature of the transaction, whether parties, under the cir- I cumstances and at the date of the receipt, would give and receive notes in actual payment. The liability was certainly contingent, and. It is more reasonable to suppose that if they had intended an actual payment, the language of the receipt would have been1 different. Claimants insist that the parties treated the notes as payment, but one of tne charterers expressly states that the notes were given as an accommodation to the li-bellant, and that the agreement was, if the notes fell due before the ship returned, then the libellant was to take them up or renew them, and if the ship got in before the notes fell due, he was to return them or deduct the amount from the charter-money. Full confirmation of his statement is found in the testimony of the ship-broker who made the arrangement. On the .other hand, the ' other charterer states that the notes were given without conditions, except that the libellant was to insure the amount, and have the loss payable to their firms, but he does not affirm that the notes were given or received in payment, nor does he deny the agreement stated by the other charterer. These brief references will be sufficient to show the leading features of the testimony upon which the question depends.

After careful examination of the whole evidence, I am of the opinion that the notes were not given or received in payment, but as an accommodation to the libellant, and, having been tendered at the trial, the libellant is entitled to recover the whole balance of the' charter-money, after deducting the other payments. The decree of the district court [Case No. 404) is, therefore, reversed, and the cause must be sent to an assessor to ascertain the amount.'