The Tornado/Opinion of the Court

This is a libel in admiralty against the cargo of the ship Tornado, brought by the master and owners of that vessel, to recover freight money. The district court and, on appeal, the circuit court, dismissed the libel. The libelants have appealed to this court. The material facts found by the circuit court are these:

On the twenty-fourth of February, 1878, the ship, while     moored at the wharf in New Orleans, and bound on a voyage to      Liverpool, England, and before she had broken ground for said      voyage, was discovered to be on fire in her hold. Her master     had given bills of lading for the transportation from New      Orleans to Liverpool, with the exceptions usual in bills of      lading, of 5,195 bales of cotton, of which 5,008 had been put      on board, 164 were on the levee, and 23 had not reached the      levee. Water was pumped into the ship to extinguish the fire,     and on the 26th, near 6 o'clock P. M., being filled with      water, she sank to the bottom of the river along-side of the      wharf, a part of her bulwarks remaining above water. While so     resting upon the bottom of the river, the ship, cargo, and      freight were, on the 27th, libeled in the district court, for      salvage, by the New Harbor Protection Company, and about 2      o'clock P. M. of that day the marshal, by virtue of a warrant      of seizure issued by said court on said lible, took      possession of the ship and cargo. On the 28th, about noon,     the ship was pumped out and raised along-side of the wharf,      and the discharge of the cargo on board was commenced, all of      it being damaged by water, and some of it by fire, 336 bales      having been removed by the salvors in an undamaged condition      before the ship sank, but after the fire was discovered; but      salvage was claimed and allowed on the entire cargo. On the     same day, the proctor for the salvors filed in the district      court a motion in writing, suggesting that the whole cargo      then being discharged from the ship was greatly damaged by      water, and some of it by fire and water, and would in all      probability have ultimately to be sold, being in an unfit      condition to be sent to its destination; and an order of the      court was thereupon made directing a sale of the cargo by the      marshal upon the levee as it came out of the ship, on two      days' advertisement, in such lots as might accumulate from day to day. On the same day an application     was made to the court by the master of the ship, in which he      represented that he was desirous and entitled to bond the      ship and cargo, and asked for a rule upon the libelant to      show cause on the next day, March 1st, why the order to sell      the cargo should not be rescinded, and the master be allowed      to bond the cargo.

On March 1st the rule came on for hearing. The proctor for     the salvors, and counsel representing the insurers of the      cargo, appeared and resisted the rescinding of the order of      sale, and counsel appeared for the master, who filed a formal      claim to the ship and cargo. On the trial of the rule     witnesses were examined orally before the judge, among them      various representatives of the underwriters on the cargo, who      were called as witnesses by the proctor for the salvors, and      who testified that if their interest were to be consulted      they preferred that the cotton should be sold by the marshal      as it came out of the ship, and that the master should not be      permitted to bond the cotton. The counsel for the insurers of     the cargo then asked leave to be heard on their behalf. To     this the counsel for the master and claimant objected, and      insisted that counsel for the underwriters on the cargo could      not be heard until after the proof of abandonment to them by      the owners of the cargo and acceptance of the abandonment. Thereupon, Mr. Palfrey, president of the Factors' & Traders'     Insurance Company of New Orleans, which was one of the      companies represented by said counsel, and one of the      witnesses who had been called to the stand as above stated,      was recalled by said counsel, and testified that so far as      his company was concerned the loss on the cargo had been paid      or ordered to be paid, and said company had become the owner      of the cotton insured by it, and abandonment thereof had been      made and accepted by his company. After this, said counsel     was allowed to and did make an oral argument in behalf of the      underwriters, in opposition to the motion to rescind the      order to sell, which had been obtained by the salvors, but no      pleadings were filed in behalf of the underwriters. Upon the     trial of the rule evidence was also taken, by order of the      court, in relation to the condition of the cargo, and whether      the same was or was not a total loss.

On March 5th, and before the district court had made any     decision or order on the rule to rescind the order for the      sale of the cotton, a proctor representing underwriters at      Lloyds, by leave of the court, filed an intervention for the      interest of the insurers of the freight on the cargo, in      which it was prayed that the order for the sale of the cargo      be rescinded. This intervention was supported by affidavits     filed by the intervenors and by a brief of the proctor. Afterwards, on March 6th, after consideration of the rule     taken by the master of the ship to rescind the order of sale,      and of the evidence and arguments thereon, and of the      last-named intervention, and of the affidavits and brief      submitted therewith, the court ordered that the master be      allowed to bond the ship and such of the cotton then stored      in the levee steam cotton-press as was in good order,      amounting to 523 bales, and that the remainder of the cargo      on board the ship or upon the levee, which was more or less      damaged, be sold by the marshal after three days' notice, and      all questions of freight were reserved by the court, and the      court appointed a trinity master to advise and assist in      making sale of the cotton. On the nineteenth of March the     underwriters filed their claim, claiming all of the cargo,      and procured an order from the judge of the district court to      be entered on their claim, suspending the right given to the      master on the sixth of March, to bond such of the cotton as      was stored in the levee cotton-press, to-wit, about 500      bales, until the further order of the court. On March 26th,     the master not having bonded the cotton a rule was taken and      duly served on him to show cause why the order of March 6th,      so far as it allowed him to bond a portion of the cotton,      should not be rescinded, and the movers of the rule, the      insurers of the cargo, be allowed to bond the same. The rule     was heard on March 27th, the movers of the rule and the      master being represented by their respective counsel, and was      by the court made absolute, without opposition, and the order      allowing the master to bond said portion of the cargo was      rescinded, and the movers of the rule were allowed to bond      the same.

On the thirtieth of March the present libel was filed. The     unsold cargo and the proceeds of that which had been sold were then in the custody of the marshal, in the suit for      salvage. The libel recites the proceedings above mentioned,     and alleges that the cotton might have been picked, dried,      and rebaled, and sent to its destination, and freight have      been earned thereon, but that the application of the master      to bond the cargo was refused, owing to the opposition of the      libelant for salvage, and especially to the opposition of the      underwriters on the cargo; and that, under the contract of      carriage, it was the right as well as the duty and the desire      of the libelants to pick, dry, and rebale so much of the      cotton as might require it, and which could easily have been      done, and to carry it to its destination and earn the freight      money for carrying it, which they had been unable to do      because they had been denied the right to bond it, owing to      the opposition of the libelant for salvage and of the      underwriters on the cargo, resulting in the taking away of      the cargo entirely from the master; in consequence of which      the entire freight money agreed on became due, as well as      money paid by the libelants for compressing and stowing the      cargo in the vessel, and other expenses incident thereto, and      for railroad charges; for all of which the libel claims a      lien on the cargo and on the proceeds of sale.

The circuit court found the following further facts:

The libelants paid for compressing the cargo before it was     put on board, and for stowing it on board, and other expenses      incident thereto, $14,278.26. The gross freight on the cargo,     had it been delivered at its destination in Liverpool, as      required by the bills of lading, would have been £4,169 13s. 1d. Of the cotton, 523 bales were in an undamaged and sound     condition, being the 23, the 164, and the 336 before      mentioned. In consequence of the fire, and as a result     thereof, the ship was so badly damaged that the cost of her      repairs would exceed her value when repaired, and she was      unseaworthy and incapable of carrying freight. The 523 bales     were bonded by the underwriters, and were appraised at the      sum of $19,100. The gross proceeds of the sale of the damaged     cotton amounted to $116,000. The purchaser at the marshal's     sale shipped to northern states, in the condition in which it      came from the ship, 1,185 bales of the damaged cotton; and      2,896 bales more were picked, dried, rebaled, and shipped, part to Liverpool      and the rest to Philadelphia. All the damaged cotton taken     from the ship was unmerchantable cotton, even after it had      been picked, dried, and rebaled; that is, it could not be      used for making cotton cloth, but could only be used for      making felt hats, paper, wadding, and such like articles,      having lost, by the submersion and drying, a large part of      its natural oil, its fiber being injured and its weight      reduced.

On the facts so found the circuit court held that the libelants had no lien on the cargo or its proceeds for freight, or for money paid by them for compressing and stowing the cargo, and dismissed the libel.

The libelants seek to apply to the present case the principle applied where a voyage partly performed is interrupted by a disaster to the ship, namely, that the ship-owner has a lien on the cargo for the earning of the freight, and so has a right to carry the cargo forward by his vessel or some other conveyance, and deliver it and receive his full freight. As in the case of a disaster to the ship in the course of a voyage the whole freight is payable if, by the fault of the owner of the cargo, the master is prevented from forwarding the cargo from an intermediate port to its destination, it is contended in the present case that the libelants have a right to recover the whole agreed freight, because they had a right to send the cargo to Liverpool and earn full freight, and were prevented from doing so by the action of the underwriters, who became, by abandonment, the owners of the cargo. It is also contended that the owners had a right to repair the ship, even though the cost of repairing would exceed her value when repaired.

The law in regard to the respective rights and liabilities of shipper and ship-owner, where cargo has been carried for a part of a voyage, is nowhere better expressed than by Lord ELLENBOROUGH in Hunter v. Prinsep, 10 East, 378, 394:

'The ship-owners undertake that they will carry the goods to     the place of destination, unless prevented by the dangers of      the seas, or other unavoidable casualties; and the freighter      undertakes that if the goods be delivered at the place of      their destination he will pay the stipulated freight; but it was only in      that event, viz., of their delivery at the place of      destination, that he, the freighter, engages to pay anything. If the ship be disabled from completing her voyage, the     ship-owner may still entitle himself to the whole freight by      forwarding the goods by some other means to the place of      destination; but he has no right to any freight if they be      not so forwarded, unless the forwarding them be dispensed      with, or unless there be some new bargain upon this subject. If the ship-owner will not forward them, the freighter is     entitled to them without paying anything. One party,     therefore, if he forward them, or be prevented or discharged      from so doing, is entitled to his whole freight; and the      other, if there be a refusal to forward them, is entitled to      have them without paying any freight at all. The general     property in the goods is in the freighter; the ship-owner has      no right to withhold the possession from him, unless he has      either earned his freight or is going on to earn it. If no     freight be earned and he decline proceeding to earn any, the      freighter has a right to the possession.'

These remarks were made in regard to a voyage partly performed, and interrupted by a disaster, where freight money was claimed pro rata itineris peracti. But no case can be found in which freight money has been allowed, where the voyage was not commenced, and the ship was, by a disaster for which the shipper was not at all responsible, put into the situation of the vessel in this case after the contract of carriage was made.

In the present case the ship was rendered unseaworthy by the fire, and incapable of earning freight, and was so badly damaged that the cost of her repairs would exceed her value when repaired. There is no suggestion in the findings that there was any intention of repairing her, and on the facts found it must be presumed she would not have been repaired. All that could have been done, if the cargo had been bonded by the master or ship-owners, in regard to sending it forward, would have been to send it by another vessel. But, although the order of March 6th allowed the master to bond the 523 undamaged bales, and there was no suspension of that order until the nineteenth of March, they were not bonded.

We are of opinion that by the disaster which occurred before the ship had broken ground or commenced to earn freight, the circumstances with reference to which the contract of affreightment was entered into were so altered by the supervening of occurrences which it cannot be intended were within the contemplation of the parties in entering into the contract, that the shipper and the underwriters were absolved from all liability under the contract of affreightment. The contract had reference to a particular ship, to be in existence as a seaworthy vessel and capable of carrying cargo and earning freight and of entering on the voyage. All the fundamental conditions forming part of the contract of the ship-owner were wanting at the time when the earning of freight could commence. In addition, as the result of the fire, and by no fault of the shipper, all but 523 bales of the cotton was rendered unmerchantable, and put into such a condition that its owner might well hesitate to incur the expense of sending it to Liverpool. As to the undamaged cotton, the master had an opportunity for 13 days to bond it, and failed to do so.

The money paid by the ship-owners for compressing and stowing the cotton, and for other expenses incident thereto, must be understood as having been included in the freight money, and to be reimbursed out of that, and to be money for which, in any event, the shipper of the cotton would not have been liable in addition to the freight money. If the ship-owner was not entitled to the latter he was not entitled to anything. He took, as to the expenses, the risk of losing them if he lost the freight money. So, the two are bound up together.

It is an inherent element in a contract of affreightment under a bill of lading, that the vessel shall enter on the voyage named, and begin the carriage of the goods shipped, or, as it is technically called, break ground, before a claim to freight money can arise, unless the shipper of the goods, the vessel remaining ready to enter on the voyage, undertakes to reclaim the goods. In the latter case the circumstances under which the contract was entered into continuing substantially the same so far as respects the vessel, the shipper cannot reclaim the goods without paying at least full freight. But, subject to this qualification, it is a principle of the maritime law that if a ship does not begin her voyage at all, does not break ground, no freight can be payable. This was laid down and applied in the early case of Curling v. Long, 1 Bos. & P. 634. That case has never been overruled, and no case holding to the contrary is cited or has been found. It is a case directly in point in two particulars, and it will be useful, therefore, briefly to examine it. Some hogsheads of sugar were shipped, under bills of lading, on a vessel while lying in a port in Jamaica, bound for London. Before the vessel sailed she was cut out by privateers and carried to sea, but was recaptured and taken into another port. Under a libel for salvage in the admiralty court of Jamaica, the cargo was sold by order of the court, and the net proceeds were remitted to the defendants for the owners of the cargo. The ship-owners had expended money in lading the cargo, according to the usage of the Jamaica trade. They sued the defendants to recover the freight money or the expenses. It was held that they could not recover anything; that the inception of freight was breaking ground, and that the expenses incurred were to be reimbursed in the freight money or not at all.

The case of Jones v. Holm, L. R. 2 Exch. 335, was a different case. By a charter-party, a vessel was to go to a specified port and take a specified cargo and deliver it at Liverpool for a specified freight. She went to the port and was partly laden, when she was so damaged by fire that she was scuttled. The cargo was injured and sold, except a small part, not on board, which was forwarded to Liverpool by the master. The vessel was repaired and tendered to take the remainder of the cargo. The charterer refused to supply more cargo, and the vessel obtained a cargo carried it to England at a less freight than she would have earned for a full freight under the charter-party. In a suit to recover damages for a breach of the charter-party, it was held that the charterer was bound to complete the lading of the vessel.

The authority of the case of Curling v. Long is recognized in Bailey v. Damon, 3 Gray, 94; Burgess v. Gun, 3 Har. & J. 225; Clemson v. Davidson, 5 Bin. 392; and in various text-books. 3 Kent's Comm. 223; 1 Parsons, Shipp. & Adm. 220; Abb; Shipp. (11th Lond. Ed.) 407; Maclachlan, Shipp. (2d Ed.) 458; Smith, Merc. Law, (3d. Am. Ed.) 400.

On principle this case falls within the rule that where the stipulations of a contract are interdependent, a defendant cannot be sued for the non-performance of stipulations on his part which were dependent on conditions which the plaintiff has not performed. The ship-owner was entitled to freight only for carrying the cargo and delivering it at Liverpool, with the implied covenant that this particular vessel was to take it on board and enter on the voyage. Before that event occurred this vessel was substantially put out of existence by no fault of the shipper, and he had and could have no benefit from the contract. He had a right, therefore, to treat the contract as rescinded, so far as any liability for freight was concerned. In Taylor v. Coldwell, 3 Best & S. 826, it is laid down as a rule that 'in contracts in which the performance depends on the continued existence of a given person or thing, a condition is implied that the impossibility of performance arising from the perishing of the person or thing shall excuse the performance.' The reason given for the rule is that without 'any express stipulation that the destruction of the person or thing shall excuse the performance,' 'that excuse is by law implied, because from the nature of the contract it is apparent that the parties contracted on the basis of the continued existence of the particular person or chattel.' The rule was there applied to excuse the owner of a music hall which had been burned from fulfilling a contract to let the use of it. The principle was extended further in Appleby v. Myers, L. R. 2 C. P. 651. There the plaintiffs contracted to erect certain machinery on the defendant's premises at specific prices for particular portions, and to keep it in repair for two years, the price to be paid upon completion of the whole. After some portions of the work had been finished, and others were in the course of completion, the premises, with all the machinery and materials thereon, were destroyed by an accidental fire. It was held that both parties were excused from the further performance of the contract, and that the plaintiffs were not entitled to sue in respect to those portions of work which had been completed, whether the materials used had become the property of the defendant or not. See Benj. Sales, (3d Amer. Ed.) § 570; Wells v. Calnan, 107 Mass. 514, and cases there cited.

These principles are so well established that it is only necessary to refer to one case in this court, (Jones v. U.S. 96 U.S. 24,) which recognizes them, in which it is said:

'Where an act is to be performed by the plaintiff before the     accruing of the defendant's liability under his contract, the      plaintiff must prove either his performance of such condition      precedent, or an offer to perform it which the defendant      rejected, or his readiness to fulfill the condition until the      defendant discharged him from so doing, or prevented the      execution of the matter which the contract required him to      perform. * *  * A contract may be so framed that the promises      upon one side may be dependent on the promises upon the      other, so that no action can be maintained, founded on the      written contract, without showing that the plaintiff has      performed, or at least has been ready, if allowed by the      other party, to perform his own stipulations, which are a      condition precedent to his right of action.'

On a full consideration of the case, we are of opinion that the decree of the circuit court must be affirmed.