Williams v. Johnson , 11 Barb. 501 ( 1851 )

By the Court,

Watson, J.

The referee in this cáse placed his decision upon the right ground; for if by the instrument executed between Lincoln and the plaintiffs the ownership of the boat was in the plaintiffs, from the opening to the close of canal navigation, then Lincoln had no right to sell to the defendant, and of consequence the defendant had no claim for freight, against the plaintiffs. The question then is, what is the true construction of that instrument ? Did it transfer to the plaintiffs the ownership of the boat, during the season of canal navigation ? This may be tested in this way: suppose the plaintiffs and Lincoln had each laid claim to the freight of a voyage where the cargo was consigned to a third person. The case then would be precisely similar to that of Clarkson v. Edes, (4 Cowen's Rep. 470.) There the words of the charter-party were still stronger than those of the instrument under consideration, though many of the covenants strongly resemble those in this one. The owners, in that case, agreed to freight and to let to the other party the whole of the schooner Thetis, for a particular voyage. The owners engaged that the schooner should be tight, strong, well manned, victualed and appareled, and to be kept so during the voyage. The charterers were to pay to the owners at the rate of $325 per month, at the expiration of each month, together with all port charges; and also to advance moneys as they should be required for the necessary expenses and disbursements of the vessel; and if they should request the commander of the schooner to return to New-York from Havana, without going to other ports mentioned in the charter party, the owners covenanted to do so. In that case a contest arose between the owners and the charterers, as to which was entitled to the freight. The court, in giving their decision, say it depends wholly upon who was the owner of the schooner during the voyage ; the right to collect being exclusive in one of the parties. They then give their construction of the contract, and without stating their reasoning upon that subject. I shall content myself with giving the general rule laid down by them, which I consider the well settled rule at this time. “ Where the general owner retains the possession, command and navigation of the vessel, and contracts to carry a cargo on freight for the voyage, the charter party is considered a mere affreightment, sounding in covenant; and the freighter is not clothed with the character or legal responsibility of ownership.” The court cite in support of this doctrine Marcadier v. The Chesapeake Insurance Co. (8 Cranch, 49.) Hoe v. Groveman, (1 Id. 237.)

In the case of McIntyre v. Bowne, (1 John. 229,) Justice Thompson says that where by the terms of the charter the shipowner appoints the master and mariners, and retains the management and control of the vessel, the charter is rather to be considered as a covenant to carry goods. And be held that in such a case the charterer is not the owner. That was a case of barratry, but the decision depended wholly upon the question who was owner of the vessel. In these cases, where the words of the charter-party were somewhat different in each instance, the courts, in putting their construction upon the different contracts, have elaborately examined each clause within them, and all for the purpose of determining from them who was the owner of the vessel. And the result of their deliberations has been the establishing of the general rule laid down in the 4th of Cowen’s Reports, 481. These cases decide not only that the shipowner, under these circumstances, remains the owner, notwithstanding the charter-party, but that he is entitled to the freight, which he may enforce by lien, or by action. (4 Cowen, 481, and the other cases cited.) If Lincoln remained the owner of the boat, notwithstanding his contract with the plaintiffs, then, were there no recognition in that instrument of a right in him to sell, I can see no reason why he could not sell and convey a good title to a third person. True he would be answerable to the plaintiffs, by virtue of his contract with them, for all damages they had sustained, from the time he sold it until the close of navigation, because he had put it out of his power to perform his contract, unless he transferred the charter to another vessel which he had obtained. For I hold, with the referee, that there is no limitation in that contract as to the time of his selling the boat. But that contract expressly recognizes the right of Lincoln to sell, and that, too, without any conditions. If so, then a sale by him is good. The position taken by the plaintiffs’ counsel, that if Lincoln sold the boat the vendee would have to take her subject to the contract made with the plaintiffs, can not be well founded; for that depends entirely upon the ownership of the boat. If the plaintiffs were the owners pro hac vice, for the season of canal navigation, then a sale of her, by Lincoln, would be subject to such a condition; not being the absolute owners, but only having a contract with Lincoln by which he covenanted to carry goods for them, if he failed to perform it their remedy was on the contract. Nor can the allegation of the plaintiffs’ counsel, that Lincoln and the defendant conspired together to defraud the plaintiffs out of the profits of their contract, by the sale of the boat to the defendant, if true, alter the case in any respect. If by this allegation the plaintiffs mean that the boat, as well as all that she carried, still belonged to Lincoln, and that the sale was a sham, then the finding of the referee is conclusive against them; for this point was raised before him. It is true the case states that the referee held that by the true construction of the instrument, the plaintiffs acquired a right, not to the boat, but only to the use thereof for the time mentioned in the contract, and that, therefore, the defendant was entitled to a report in his favor, and that this was the sole ground for his report. But this covers the whole ground; for it finds that Lincoln was the owner of the boat, as against the plaintiffs, with a right to sell. And he having, without fraud, sold it to the defendant, the defendant was entitled to recover for the freight. The report of the referee, which was before us on the argument, goes more into detail, and notices more minutely all the positions taken by the plaintiffs’ counsel, before him; and though he does not notice the fraud alledged as in any way affecting the rights of the parties, I take it for granted that so able and shrewd a lawyer did not omit it by mistake, and that he either came to the conclusion that there was no fraud, or that if Lincoln designed by this sale not to perform his contract, the only remedy of the plaintiffs was on the instrument. Suppose Lincoln had locked up the boat, discharged the hands, and refused to run her any longer, when the season of navigation was not half ended, would the plaintiffs be in any different situation than they would be if he sold the boat to another person, and put it out of his power to perform ? They would have no right to seize the boat, man her, and run her for the remainder of the season. That right remained in Lincoln according to the contract. Although in this case I have no doubt Lincoln, finding that freights were higher than when he made the contract, determined not to perform it, and therefore sold out, and in consequence of his so doing the plaintiffs lost the profits they might otherwise have derived from the contract, unless Lincoln is able to respond in damages; still, the case is one of every day occurrence, where the party making a contract does not sufficiently guard against contingencies of this kind, and must therefore abide by the consequences. The referee, after a careful examination, came to a conclusion in favor of the defendant, and I am satisfied that the case was decided upon a sound and salutary principle, though it may in some instances work injustice. Unless the owner of the vessel, or the master who sails her, and who represents the owner, should alone be entitled to recover for the freight, how numerous would be the contests as to who were entitled to it, and who would be safe in paying such freight ; unless these open, notorious acts, those of commanding and having possession of the ship, should characterize them as the owner, so far as their right to recover for freight is concerned.

[Albany General Term, Sept. 1, 1851.

Harris, Watson and Wright, Justices.]

The motion to set aside the report must be denied.