The George W. Anderson

E.D. Virginia

The George W. Anderson

161 F. 760, 1908 U.S. Dist. LEXIS 399

DecidedApril 22, 1908

StatusPublished

This text of 161 F. 760 (The George W. Anderson) is published on Counsel Stack Legal Research, covering District Court, E.D. Virginia primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook

The George W. Anderson, 161 F. 760, 1908 U.S. Dist. LEXIS 399 (E.D. Va. 1908).

Pincite

Opinion

WADDILL, District Judge.

The law governing this case is aptly stated by the Supreme Court of the United States to be that, in case of a lien asserted against a vessel for advances made the master for supplies or repairs in a foreign port, necessity for credit must be presumed, where it appears that the same were ordered by the master, and that they were necessary for the ship when lying in port, unless it be shown that the master had funds, or that the owners had sufficient credit, and that the lender knew those facts, or one of them, or that such fads and circumstances were known to the lender as were sufficient to put him on inquiry, and to show that if he had used due diligence he would have ascertained that the master was not authorized to obtain any such relief on the credit of the vessel. The Lulu, 10 Wall. 192, 19 L. Ed. 906. “The power of the master to raise money while abroad for the necessities of his ship is the most dangerous form in which his authority can be exercised.” Henry’s Adm. 137, note 1. “The master does not have the power of binding the ship to the payment of maritime interest, if the owner can be consulted, whether he be in the same or a neighboring state, or in another country.” 1 Pars, on Ship. & Adm. 142. “The master, for the same reason, has no such power, if he have funds of the owner within his reach, or if he can borrow the money on the personal credit of the owner, or if a consignee be there with funds of the owner, or any agent of the owner.” 1 Pars, on Ship. & Adm. 143, 141. “As to domestic vessels, the general rule as to the master’s power to hind domestic vessels under state statutes is based on and assimilated to his powers in relation to foreign vessels, although a lesser necessity for credit exists. If the owner is not' in the port where the vessel is at the time, his powers arc about as discussed above in relation to foreign vessels.” Hughes on Maritime Liens; 26 Cyc. 776.

This authority of a master to secure money upon the faith and credit of his vessel is an important one, full of danger, however, to the shipowner, and in the exercise of which, as well on the part of the master as those making the advance to him, good faith and diligence is required. It is easy for a master to perpetrate fraud on his owner, and the facts and ¡circumstances of this case strikingly illustrate the necessity for those doing business with him to show the utmost diligence on their own part, with a view of protecting the rights of the owners and others to be thereby affected. It is true the inference is that credit given to a master is on the faith of the vessel; but if it can be inferred that the master had funds, or the owner had credit, or that those advancing know of these, or knew such facts as should have put them upon inquiry, then such inference does not exist, and the vessel will not be liable for the advance. Here there was the greater reason for the libelants to make full inquiry, the Anderson being a domestic vessel, and in a nearby port to that of [762]*762her home, and that of her owners, in the same state. The owners resided at the city of Richmond, were well known and entirely responsible, with a local agent or broker at Norfolk, all of which was known to the libelants; and the libelants, having made the advance in question without proper inquiry, should not be allowed, some two years afterwards, to hold the .respondent ship therefor, notwithstanding the fact that they notified the owners of the advance some three months after making the same, after it was discovered that the captain of the schooner had defaulted largely to his owners, not only collecting the freight due on the particular trip to Norfolk, when the advance was made, which to a considerable extent showed there was no necessity for this advance, but also a large amount of freight money for a return voyage to New York, which would have been ample to pay all of the ship’s liabilities, if any.

A decree may therefore be entered dismissing the libel.

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WADDILL, District Judge.

The law governing this case is aptly stated by the Supreme Court of the United States to be that, in case of a lien asserted against a vessel for advances made the master for supplies or repairs in a foreign port, necessity for credit must be presumed, where it appears that the same were ordered by the master, and that they were necessary for the ship when lying in port, unless it be shown that the master had funds, or that the owners had sufficient credit, and that the lender knew those facts, or one of them, or that such fads and circumstances were known to the lender as were sufficient to put him on inquiry, and to show that if he had used due diligence he would have ascertained that the master was not authorized to obtain any such relief on the credit of the vessel. The Lulu, 10 Wall. 192, 19 L. Ed. 906. “The power of the master to raise money while abroad for the necessities of his ship is the most dangerous form in which his authority can be exercised.” Henry’s Adm. 137, note 1. “The master does not have the power of binding the ship to the payment of maritime interest, if the owner can be consulted, whether he be in the same or a neighboring state, or in another country.” 1 Pars, on Ship. & Adm. 142. “The master, for the same reason, has no such power, if he have funds of the owner within his reach, or if he can borrow the money on the personal credit of the owner, or if a consignee be there with funds of the owner, or any agent of the owner.” 1 Pars, on Ship. & Adm. 143, 141. “As to domestic vessels, the general rule as to the master’s power to hind domestic vessels under state statutes is based on and assimilated to his powers in relation to foreign vessels, although a lesser necessity for credit exists. If the owner is not' in the port where the vessel is at the time, his powers arc about as discussed above in relation to foreign vessels.” Hughes on Maritime Liens; 26 Cyc. 776.

This authority of a master to secure money upon the faith and credit of his vessel is an important one, full of danger, however, to the shipowner, and in the exercise of which, as well on the part of the master as those making the advance to him, good faith and diligence is required. It is easy for a master to perpetrate fraud on his owner, and the facts and ¡circumstances of this case strikingly illustrate the necessity for those doing business with him to show the utmost diligence on their own part, with a view of protecting the rights of the owners and others to be thereby affected. It is true the inference is that credit given to a master is on the faith of the vessel; but if it can be inferred that the master had funds, or the owner had credit, or that those advancing know of these, or knew such facts as should have put them upon inquiry, then such inference does not exist, and the vessel will not be liable for the advance. Here there was the greater reason for the libelants to make full inquiry, the Anderson being a domestic vessel, and in a nearby port to that of [762]*762her home, and that of her owners, in the same state. The owners resided at the city of Richmond, were well known and entirely responsible, with a local agent or broker at Norfolk, all of which was known to the libelants; and the libelants, having made the advance in question without proper inquiry, should not be allowed, some two years afterwards, to hold the .respondent ship therefor, notwithstanding the fact that they notified the owners of the advance some three months after making the same, after it was discovered that the captain of the schooner had defaulted largely to his owners, not only collecting the freight due on the particular trip to Norfolk, when the advance was made, which to a considerable extent showed there was no necessity for this advance, but also a large amount of freight money for a return voyage to New York, which would have been ample to pay all of the ship’s liabilities, if any.

A decree may therefore be entered dismissing the libel.

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161 F. 760, 1908 U.S. Dist. LEXIS 399, Counsel Stack Legal Research, https://law.counselstack.com/opinion/the-george-w-anderson-vaed-1908.

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