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United States Supreme Court

72 U.S. 545

The Bird of Paradise

APPEAL from the Circuit Court for the Northern District of California, decreeing against a lien set up by ship-owners for freight, on libel filed against a cargo. The case was thus:

On the 16th March, 1863, Eccles, of Liverpool, chartered at that place from Taylor & Co., owners of the ship Bird of Paradise, that vessel, to carry a cargo of coal, of which Eccles was the owner, to San Francisco, California, at a rate agreed on per ton.

'The freight to be paid in Liverpool, on unloading and right delivery of the cargo, one-fourth in cash, one-fourth by the acceptance of Eccles, the charterer, at six months from the final sailing of the vessel, and the remainder by like bill, at three months from delivery, at charterer's office in Liverpool, of certificate of right delivery of cargo agreeably to bills of lading, or in cash, less five per cent., at freighter's option. The vessel to be addressed to the freighter's agent abroad. £500 to be advanced in cash at the port of discharge on account of the freight. The ship and her freight are bound to this venture. The penalty for non-performance of this agreement is to be the chartered freight in pounds sterling.'

The master signed, and the freighter, Eccles, accepted, a bill of lading, in the usual form, for the cargo deliverable 'to order or assigns, he or they paying freight at the rate of _____, as per charter-party.'

The vessel sailed from Liverpool April 16, 1863, and arrived at San Francisco on the 26th December, 1863, a voyage of eight months and ten days.

The charterer, Eccles, paid the promised one-fourth of the freight before sailing, and gave his acceptance for the second fourth, at six months, falling due October 19, 1863, more than two months before the vessel arrived, but it was never paid, Eccles having failed in business, and remaining insolvent and a bankrupt. On the arrival at San Francisco, the £500 agreed to be advanced in cash at the port of discharge, was also paid; but the second acceptance, the one, to wit, for the residue of the freight, was not given, nor the amount paid in money.

The amount due for unpaid freight, regarding the first or dishonored acceptance as a nullity, was thus $7050.

The captain refused to deliver the cargo to the agents of Eccles, but kept control of it himself.

These agents accordingly filed their libel in the District Court for the Northern District of California against the cargo, to recover possession of it; the delivery being resisted under a claim of lien for freight.

That court considered that the claim was unfounded, and decreed accordingly, and the decree being affirmed by the Circuit Court, the correctness of such a view was now the question here on appeal.

Mr. Benedict, for the appellants, owners of the vessel:

I. This is an unconscionable action. The court will make all reasonable presumptions against the libellants.

Eccles chartered the vessel to carry a cargo of coal from Liverpool to San Francisco, a voyage of more than eight months. The vessel performed the voyage in safety, at the expense of the owners, and then finding the charterer bankrupt, refused to deliver the cargo to his agents, unless the freight was paid. The agents refused to pay the freight, and they brought this extraordinary action. Having had the use of the entire ship, without expense, for more than nine months, this bankrupt charterer demands the cargo free of freight, on the sole ground that he had given a written promise to pay the freight, which he neither had performed, nor, being as he was, a bankrupt, ever would or could perform.

A court of admiralty is a court of equity to the extent of doing justice and requiring justice; and it will, in a cause of possession, compel the libellants to do equity before it will transfer to him the possession. Freight is a most just demand. [1]

Charter-parties are to be liberally construed. [2]

II. The whole sum due-the entire balance of $7050-should have been paid before a delivery. The freight is a lien upon the cargo by the maritime law, and all presumptions are in favor of the lien. The ship is bound to the merchandise and the merchandise to the ship. This lien is not created by the act of the parties, but by the general maritime law, and is founded in public policy and the interest of commerce. The Kimball, [3] in this court, is full to this effect. It gives to the owner and the shipper a responsible indorser and a responsible defendant in every port of the sea. And this rule-an elementary and cardinal one-is to prevail, unless the parties have intentionally excluded it-a thing to be inferred from plain language alone. Nothing can be inferred from silence. The burden is on the shipper to prove an absolute waiver of the lien. He has given no such evidence here.

Now, in this case, the freighter having failed-having become wholly bankrupt-there was no obligation to deliver, unless the whole amount due-we mean both that sum due on the protested draft, and that balance due after the £500 cash were paid at San Francisco-were paid in cash. There is in every contract for a payment by acceptances, when made in a case like this, a condition not the less fundamental because but implied-that the acceptor shall be solvent. This condition the law adds to the contract.

1. By the terms of the agreement, the giving an acceptance was 'non-performance' if it were not paid. It fell due before the end of the voyage, and not being paid at maturity, Eccles failed to perform his part of the contract. Moreover his bankruptcy demonstrated that he never could perform it.

2. So, too, the charter-party declares in substance, 'We have received your cargo, and it will be delivered to you if you pay as agreed in the charter-party. If you do not 'pay' it will not be delivered. We shall not deliver on dishonored acceptances-they are not payment.'

3. So, finally, by the now prevailing rules of commercial law, the rule at this day being, that a mere note or draft does not amount to a payment of a debt. [4] Certainly, in cases of sales of goods conditionally, as for cash or indorsed paper, and the cash not paid or the notes not given and the property delivered the delivery is conditional, if the intent of either party that it should be so can be at all inferred from their acts and the circumstances of the case. [5]

In a case very similar to this in New York, Comstock, J., said:


^1  Minerva, 1 Haggard, 357; The Trident, 1 W. Robinson, 35; Id. 192.

^2  Raymond v. Tyson, 17 Howard, 59.

^3  3 Wallace, 42.

^4  Sutton v. The Albatross, 2 Wallace, Jr., 327.

^5  Benedict v. Field, 16 New York, 598.

This work is in the public domain in the United States because it is a work of the United States federal government (see 17 U.S.C. 105).