The Eliza Lines/Dissent Brown

by Oliver Wendell Holmes, Jr.

United States Supreme Court

199 U.S. 119

The Eliza Lines

 Argued: April 11, 12, 13, 1905. --- Decided: October 30, 1905

Mr. Justice Brown, with whom were Mr. Justice Harlan, Mr. Justice McKenna, and Mr. Justice Day, dissenting:

Underlying all the questions connected with the libel of Ward & Company for the possession of the cargo, and that of Andreasen, in the nature of a cross libel against the cargo in rem, and against Ward & Company in personam, for freight, is the proposition that the abandonment of the vessel by the master and crew operated as a dissolution of the contract of affreightment, and authorized Ward & Company to reclaim possession of the cargo, either freed altogether from any claim for freight, or upon the payment of a pro rata freight to Boston.

The general principles applicable to a contract of affreightment are entirely well settled; but it may not be amiss to restate such of them as bear upon the effect of an abandonment at sea, and subsequent rescue of the vessel. The contract is an entire one, and cannot be apportioned, unless by consent of the parties. The Nathaniel Hooper, 3 Sumn. 542, 554, Fed. Cas. No. 10,032; Hunter v. Prinsep, 10 East. 378, 394; post v. Robertson, 1 Johns. 24, 26. From the moment the cargo is delivered to the vessel, each is bound to the other for the performance of the contract. The shipper cannot recover his cargo except upon the payment of full freight. Tindall v. Taylor, 4 El. & Bl. 219. Neither can the vessel demand any portion of the freight until the cargo is delivered at the port of destination. If the vessel meet with disaster at sea, and put into a port of refuge, she is entitled to retain the cargo for a reasonable time for repairs, or to tranship it to another vessel, in order that her freight may be earned. The Soblomsten, L. R. 1 Adm. & Eccl. 293; 1 Parsons, Shipping, 175, 231; Cargo v. Galam, Brown. & L. 167, 178. If, however, the master of the vessel is willing to surrender the cargo at an intermediate port, and the shipper is willing to receive it, he may do so upon payment of a pro rata freight. In other words, the parties may substitute a new contract for the original one. Neither party, however, can be compelled to this course. Post v. Robertson, 1 Johns. 24, 27.

If it be once granted that, in case of shipwreck or other disaster, the contract of affreightment is not dissolved, and the authorities on this question, both in this country and in England, settle this beyond controversy (Cargo v. Galam, Brown. & L. 167; Shipton v. Thornton, 9 Ad. & El. 314, 335), it is difficult to see why, on principle, a compulsory abandonment at sea should work a different result, provided the vessel be ultimately rescued and taken into port. The abandonment is but a feature of the disaster, and is no abandonment at all of the ship and cargo in the sense in which that word is used in the law of marine insurance, where a vessel, after such disaster, is abandoned to the underwriters. Thornely v. Hebson, 2 Barn. & Ald. 513, 519. In such case the abandonment is a voluntary and complete surrender of the ship and cargo, and of all right, title, and interest thereto, and the underwriter becomes the owner, with all the rights and liabilities incident to such ownership. It is true it has been held that the underwriter may decline to accept such abandonment, and may repair the vessel and return it to the owner, but that does not change the character of the abandonment.

The same may be said of the throwing overboard of portions of a cargo of perishable articles, on account of rottenness, putrescence, or threatened danger to the rest of the cargo. But the case under consideration is more nearly analogous to the jettison of valuable cargo for the purpose of relieving the ship or preventing her from drifting ashore. This has never been supposed to work any change in the ownership or an abandonment of the property, although it may subject it to the claim of salvors, who may subsequently rescue it. The Kathleen, L. R. 4 Adm. & Eccl. 269, 278. The abandonment of the ship and cargo in this case did not operate as a transfer of the property to anyone who should rescue it, but was an involuntary abandonment of the voyage, a relinquishment of any present intention to continue it, and a flight from the vessel to save the lives of the crew, and for the purpose of obtaining a supply of fresh water. If the abandonment have the effect claimed for it, of dissolving the contract of affreightment, logically it would have that effect from the moment the master and crew were transferred to the schooner which took them off; but it will not be doubted that if, within an hour, a steam tug had hove in sight and offered to take the abandoned vessel in tow, the rights of the master and owner would have remained unimpaired, except for the claim for salvage. In our view it would make no difference whether the master had hired a steam tug to tow her to a place of safety, or whether, after the master and crew had left her, a vessel had come along, picked her up, and towed or navigated her to a harbor of refuge. Granting that the master and crew left her with no intention of returning, such intention was caused by the belief on his part that she was a total loss. But if the circumstances were so changed that she did not become such, we see no reason why he was not entitled to change his mind in that particular, provided that he acted with sufficient promptness, and intervening rights had not accrued.

The facts of this case show that, as soon as the master learned of the rescue of the vessel, he went to Boston, arriving September 21, two days after the bark, went aboard the vessel, announced his intention of completing the voyage, and, the day after the libel for salvage was filed, interposed a claim for ship and cargo, in which he alleged that he was entitled to the possession of the cargo of hard pine lumber then on board of her, having given bills of lading for it, and being obliged by the terms of such bills of lading to deliver said cargo at Montevideo, in the province of Uruguay. There was manifestly no lack of diligence here, although the agents of Ward & Company filed a claim to the cargo later on the same day, and on October 18 filed a libel for possession, and moved for a sale of the cargo. The question was thus squarely presented as to which of these parties was entitled to the cargo, which was manifestly dependent upon the other question, whether the contract of affreightment was still in existence. That there was no definite intention of abandoning the lien of the ship upon the cargo is shown by the fact that, as soon as the master was informed that the vessel had been rescued, he took immediate steps to recover possession of the cargo.

The American cases upon the effect of abandonment of a vessel at sea upon the contract of affreightment are not of any great value, as the subject is not fully discussed in any of them, and the question was not presented in the aspect in which it is before us in this case. In Lewis v. The Elizabeth & Jane, 1 Ware, 41, Fed. Cas. No. 8,321, the petition was for wages, which were denied upon the ground that the vessel had been abandoned and no freight had been earned. The case of The Nathaniel Hooper, 3 Sumn. 542, Fed. Cas. No. 10,032, is still more indefinite in its treatment of the subject herein involved. So, in the case of Dunnett v. Tomhagen, 3 Johns. 154, wages were denied to the seamen because no freight was earned on the homeward voyage, no part of the cargo being delivered by the ship.

In Post v. Robertson, 1 Johns. 24, the vessel was abandoned after performing three fourths of her homeward voyage, was rescued by salvors, and brought into port, where the cargo was sold, and the proceeds paid to the salvors and owners. It was held that this was not such a delivery of the cargo as would entitle the shipowners to maintain an action on the charter party for full freight. The case turned largely upon the form of action, covenant,-and the court was inclined to the opinion that an action might have lain for a quantum meruit.

In none of these cases was the question discussed as to the power of the master to reclaim possession of the cargo at the port of refuge in order to earn his freight, it being seemingly assumed that the wreck and abandonment of the vessel had dissolved all contracts, and especially that of the seamen, who attempted to enforce their lien upon the cargo before freight had been earned by its delivery at the port of destination.

It may be frankly admitted that the English cases lay down the rule that the abandonment of the vessel puts an end to the contract of affreightment, or, at least, it gives the owner of the cargo an option to do so. The case of The Kathleen, L. R. 4 Adm. & Eccl. 269, is the earliest upon the subject, and asserts a principle which has been followed in the subsequent English cases. The Kathleen had left Charleston with a cargo of cotton bound for Bremen, and when in the English channel suffered a collision with another vessel, for which the Kathleen was in nowise to blame. On the following day she was abandoned by her crew, and rescued by salvors, taken to Dover, and sued for salvage. The owners of the Kathleen applied for leave to bond the cargo in the salvage suits, in order that they might carry the same to its destination. The court ordered the cargo sold, on the ground that it was deteriorating fast through the damage sustained by salt water. A suit for freight was subsequently instituted by the owners of the vessel. Sir Robert Phillimore held that the original contract between the owners of the ship and cargo was at an end, and that no freight was due; and, in answer to the claim of pro rata freight, observed that the title to such pro rata freight must arise out of a new contract with the shipowner, to which both parties assent, and as neither party assented, pro rata freight was not due. In view of the fact that at least seven eighths of the voyage had been performed, that the collision which put an end to the voyage was not in anywise the fault of the Kathleen, that she was taken into a port in the immediate neighborhood, and that the vessel stood ready to take the cargo on to Bremen and earn her freight,-we are not favorably impressed with the natural justice of a decision which denied even pro rata freight to the master.

The case of The Cito, L. R. 7 Prob. Div. 5, was much like that of the Kathleen, which was followed by the court of appeals in an opinion by Lord Justice Brett, subsequently Lord Esher. The Cito, on a voyage from Wilmington to Rotterdam, with a cargo of resin in barrels, was, owing to the peril of the sea, abandoned by her crew off the American coast. She was subsequently picked up and navigated to Plymouth, and there arrested for salvage. The court declined to hold that a mere abandonment at sea put an end to a contract of affreightment, since the abandonment might be wrongful, and in such a case the owner of the cargo might sue the ship upon its contract; but it held that the abandonment was so far binding upon the shipowner as to allow the cargo owner to treat such contract as abandoned. The court also held that the court below was right in ordering the cargo to be delivered to the owners upon their giving bail for salvage. Some stress was laid upon the fact that before the shipowners sought the possession of the cargo, the cargo owners had intervened and applied for it.

In the case of The Leptir, 5 Asp. Mar. L. Cas. 411, the salving vessel took off the crew of the vessel in distress, refused to allow her own crew to return, and the two vessels were navigated into a port of refuge. It was held that there was no abandonment, that the case of the Cito did not apply, and the court decreed for a pro rata freight.

In The Argonaut, unreported, but published in the Shipping Gazette of December 5, 1884, a vessel on a voyage from Halifax to Liverpool was abandoned by her crew, and picked up by salvors off the English coast. On being taken to Plymouth, the owners demanded the cargo, but the court ordered it carried to Liverpool, where it obtained a higher price than the owner could have gotten for it at Plymouth. It seems to have been carried in the ship by her own crew from Plymouth to Liverpool. The admiralty court allowed a quantum meruit freight, but its decree was reversed by the court of appeals, which held that the ship was entitled to nothing.

The prior cases were, however, pushed to their logical conclusion in that of The Arno, decided by the court of appeals, 8 Asp. Mar. L. Cas. 5. The vessel, while on a voyage from New York to Liverpool, was owing to stress of weather, abandoned at sea on March 31, and three days thereafter was picked up by a salvage crew, and taken to Liverpool, her port of destination. The admiralty court held that, although the cargo was delivered by the vessel on which it had been originally shipped, at the port of destination, the act of abandoning her so clearly indicated the intention of the master not to carry out the contract as to entitle the owners of the cargo to treat that act as putting an end to it. It was held that no freight was recoverable. It appeared that on April 11, as soon as the owner of the Arno heard of the abandonment, he made an arrangement with the salvors, sent a tug to meet the vessel, which returned with her to Liverpool on April 25. It was intimated that if, before notice to the shipowner of the election of the cargo owner to treat the contract as at an end, he had been able to resume possession of the ship and cargo, he might perhaps have been able to annul the abandonment; but not having done so, the cargo owner had a right to treat the abandonment as a dissolution of the contract. The judgment was affirmed by the court of appeals. It is true that, in this case, the cargo was not delivered at the port of destination by the crew of the ship, but by the salvor's crew. It was, however delivered by the ship herself, and we see no reason why the salvor's crew might not have been treated as the agent of the ship in that particular; but the court held to the hard and fast rule of the Cito, that the abandonment of a ship ipso facto put an end to the contract of affreightment, notwithstanding the fact that the cargo was delivered by the same ship and at the port of destination. Under such circumstances the denial of all freight seems to have worked a great hardship.

Although the House of Lords has not yet spoken upon the subject, these cases must be regarded as settling the English rule that a compulsory abandonment of a vessel at sea puts an end to the contract of affreightment, and disentitles her owners to recover any portion of her freight, notwithstanding that she and her cargo may be picked up by salvors, and taken into an intermediate port, or even to the port of discharge.

That the soundness of this doctrine has not been accepted without challenge is evident, not only from certain expressions by some of the English writers, but notably by Dr. Wendt, in his work on Maritime Legislation, wherein he speaks of the Cito as having caused much surprise among those interested in maritime commerce, and comments upon it as follows (3d edition, page 629):

'So long as this Cito decision stands it gives the cargo owner the full option to take advantage of the common misfortune for the purpose of evading the contract entered into by him. This, I confidently assert, is opposed to every principle of law and justice. A contract, by the law of every civilized country, holds good until both parties to it, of their own free will, agree that it shall not be carried out. Now, how can the abandonment of a ship in such a case as the Cito be taken to be an expression of an agreement on the part of the owners of the vessel to cancel the contract? The action of the crew in leaving a vessel to save their lives is not an act of will at all; they have to desert their vessel under the pressure of a vis major. How can this be taken to show an agreement on the part of the shipowner to abandon his part of the contract? He has no power to exercise any option at all. If when the vessel is recovered and the owner again requires [acquires?] the power to exercise his will in the matter, he then elects not to carry out his contract, and the cargo owner agrees, well and good; the contract is put an end to by mutual consent. To assume, however, such consent on the part of one of the contracting parties from an action forced on his servants by a power which cannot be resisted, seems to me to be a doctrine utterly opposed to common sense.'

The ruling of the English courts that even a delivery of the cargo at the port of destination does not entitle the shipowners to any freight whatever seems a somewhat startling innovation upon the ancient rule of the admiralty, that a loss occasioned by a peril of the sea shall be borne as a common burden, and shared proportionately by the ship, cargo, and freight, as well as a departure from the general rule that neither party can put an end to a contract without the assent of the other.

We consider the sounder doctrine to be that the compulsory abandonment of a ship at sea should be treated merely as a relinquishment of the voyage and of any present intention to continue it; but that, if the vessel be subsequently rescued and taken into an intermediate port, the master retains the same right given to him by an ordinary disaster at sea, unattended by an abandonment, to resume possession of the ship and cargo, subject, of course, to the claim of salvors, and carry the latter forward to its destination, provided he act with promptness and before any intervening rights had accrued.

The opinion of the court assumes that the abandonment of the vessel was a repudiation and a rescission of the contract of affreightment, when in fact it was involuntary, designed only to save the lives of the crew, and had as little effect upon the contract as if the vessel had met with a disaster not involving an abandonment, and put into a port of safety for repairs. It apparently ignores the principle that, to constitute a rescission, there must be the same intent to rescind as there was originally to contract, and that the intent to rescind should not be inferred without some act which points unmistakably to that conclusion. There is no more reason for holding that the abandonment of the ship was a rescission of the contract of affreightment than that such abandonment was a renunciation of all the owner's title to the ship in case she were subsequently rescued. Whether, if Ward & Company had insisted upon the ship carrying out her contract, they might, in case of refusal, have had a cause of action, it is unnecessary to consider. In view of the severity of the storm, and of the danger of remaining on board, the effect of her abandonment on the contract probably never entered the mind of the master. Such abandonment was not a failure to perform the contract in any particular, since it was the result of an overwhelming necessity; and, if the vessel were rescued, the master might repair and continue the voyage, or tranship the cargo to another vessel after the extent of the damage had been ascertained. He might indeed have supposed that the ship was irretrievably lost; but both parties took the chance of its being rescued and taken to a port of safety, when the question would then arise whether prudence required her to be repaired, or the cargo transhipped.

In such case the same question arises as if the ship had met with a disaster, and been navigated into a port by her own crew. We think it makes no difference in principle whether a tug is hired by the master to take his ship into port, or a tug in the employment of another person comes along and picks her up. If the cargo owner had himself rescued the vessel, he might doubtless have declared the contract rescinded; but it is quite otherwise if the vessel be rescued by her own master and crew, or be taken in tow by a third party.

Applying the doctrine of the opinion, it would follow (and such are the English cases of The Kathleen and The Arno) that if the vessel be abandoned near her port of destination, and towed into such port by a salving tug, she loses her whole freight, and cannot even recover on a quantum meruit, though the whole voyage be performed.

This conclusion seems so irreconcilable with natural justice that we are constrained to dissent.

Notes