Virgin and Graf v. Vyfhius

APPEALS from the circuit court of the United States for the district of Maryland.

The ship Virgin sailed in August 1822, from Baltimore to Amsterdam, where she arrived on the 12th of October of that year, under command of John Cunnyngham. By the plan of the voyage, she was to return from Amsterdam to Baltimore if she could procure a freight; otherwise, she was positively directed to proceed to New Orleans. She was owned, when she sailed, by John C. Delplat, who, during her passage to Amsterdam, became insolvent, and on the 4th of September sold one-third of her to Frederick C. Graf.

The vessel, on her way to Amsterdam, encountered severe weather, and arrived there in want of sails and a cable, and of various repairs. At her departure from Baltimore, her owner directed, that at Amsterdam, as the most economical place for the supply, she should be furnished with a mainsail and topsail and cable, of which it was foreseen she would then be in urgent need. The vessel had a cargo, of which, except twenty hogsheads of tobacco, all belonged to Delplat; and all of the cargo was consigned to N. and I. and R. Vanstaphorst, at Amsterdam, to whom Delplat also consigned the vessel. The twenty hogsheads of tobacco belonged to Frederick C. Graf. Agreeably to these consignments, the captain, on arrival at Amsterdam, delivered to the Vanstaphorsts the cargo, and committed to them all the concerns of the vessel; in consequence of which they collected and held in their hands all the freight that was actually payable upon any portion of the cargo, and all the proceeds of the tobacco belonging to Mr Graf.

The captain, desiring to refit the vessel and afford her all the necessaries for her return voyage, applied to the Vanstaphorsts for the requisite means, and ultimately even offered them a bottomry of the ship for the funds. After much delay, they refused all advances; intelligence of the failure of Delplat, asserted by them to be largely their debtor, having meanwhile reached them. To provide for the event of this refusal, the captain set on foot a negotiation through brokers, for raising the means by bottomry;-and the application to the Vanstaphorsts, and this provisional negotiation, were pending for about three weeks, the captain knowing no friends of the owner, except the Vanstaphorsts, to whom he could apply for the aid. During this period, the captain contracted, on his own responsibility, for various supplies, which he designates in his evidence, as all those that were furnished before the 1st of November. The payment for these and for the other necessaries of the ship, was made out of the moneys received from the appellee Vyfhius. On the 12th of November, after the Vanstaphorsts had finally declined making the advances, the captain contracted with Vyfhius for the loan upon bottomry of eight thousand guilders, at an interest of ten per cent; all which, he shows, was appropriated for the indispensable uses of the ship.

About the 3d of November, the captain received from Mr Graf, a letter dated in September 1822, announcing his purchase of one-third of the Virgin, and referring to a certificate of his purchase, as enclosed in the letter; which in fact appears not to have been enclosed. About the same time, by another letter from Mr Graf, and perhaps also from other quarters, information was given to the captain of Mr Delplat's failure; and, in consequence, the captain, on consultation, determined that it was his duty to proceed with the vessel home to Baltimore, and not to despatch her to New Orleans. After undergoing repairs, and receiving all her supplies paid for by the appellee Vyfhius, the Virgin sailed from Amsterdam to Baltimore, and arrived there in March 1823.

The owners refusing to pay the appellee his advances, the libel in this cause was filed, which prays citation against the owners by name as well as the captain, and condemnation of the vessel for paying the loan, and also further relief such as the court may deem adequate and just. The owners, Delplat and Graf, appeared and answered; their answers called into question the fact and the necessity of expenses at Amsterdam, insisting too, that the Vanstaphorsts had property enough of the owners, and which should have been applied for the wants of the ship, and charging that the bottomry was really taken by the Vanstaphorsts though colourably in Vyfhius's name, and maintaining, finally, that all requisite funds could have been raised on the credit of the owners, or of the captain.

A commission for evidence was sent to Holland, the chief object of which was to prove the Vanstaphorsts to be really the owners of the bottomy. The circuit court determined that the bottomry was invalid, but that the owners are personally liable for all the necessary supplies furnished by the means of Vyfhius for the vessel, and that, to that extent, he was entitled in this cause, to recover against them. The cause was then referred to the clerk of the court to ascertain, calling to his aid two merchants, the amount of the necessary supplies, referred to. The clerk and his assistants reported their ascertainment. Exceptions by Delplat and Graf were filed to it. The case was remanded to the clerk, who called two other merchants to co-operate with him, and they reported their statement of the necessary expenses, which the court confirmed. Thereupon, the court passed its final decree, awarding payment to Vyfhius by Delplat and Graf, of the sum of two thousand nine hundred dollars, with interest from the 26th of November 1830, the date of the decree; the principal of the ascertained expenses being two thousand nine hundred dollars.

Both parties appealed to this court.

The case was argued by Mr Steuart, for the owners of the ship Virgin; and by Mr Mayer, for Mr Vyfhius.

For the owners of the Virgin, in was contended that the decree of the circuit court which made them personally liable for the claim of the libellant Vyfhius, was erroneous:

1. Where it is attempted to pursue the owner of a ship personally, for advances for which he may be made personally liable, the proper remedy (in the admiralty court) is by libel in personam, or at all events, the personal liability must be distinctly averred and charged in the libel.

2. When the proceeding is altogether in rem (for example against a ship on a bottomry bond), it presents no question but the validity of the hypothecation. The court is restricted to that question, and cannot decree in personam.

3. The circuit court acting in its appellate character, could do no more than the district court, that is to say affirm or reverse the decree of the district court (which simply held the bottomry good, on a libel exclusively in rem); and having by its interlocutory order of 1828, pronounced the bottomry invalid and thereby reversed the decree of the inferior court, it had no right to go farther and decree in personam against the owners.

4. Although owners, when pursued personally in an admiralty court, may be held personally liable for advances for the necessary repairs and supplies of their ships expressly made on the personal credit of the owners, or where it is fairly inferred that the personal credit was looked to; yet when it appears the personal credit of the owners was not looked to, they cannot be held personally liable.

5. There is no evidence that the advances were made on the credit of Delplat and Graf or either of them, but the contrary is alleged by libellant himself, and appears in all the proofs.

6. Some of the supplies for which the advances are alleged to have been made, were not necessary, and have been improperly charged and allowed, as appears in the report and exceptions.

7. Part owners of a ship are not liable beyond the extent of their respective interests, and the decree is erroneous in subjecting Graf to more than one-third, and Delplat to more than two-thirds, in which proportions they held the ship.

8. Evidence appears sufficient to warrant the belief that Vanstaphorsts were the real lenders of the money advanced to the captain, and Vyfhius only an agent of theirs. If so, they (Vanstaphorsts) cannot recover against the owners personally; because they had sufficient funds in the freight, which they were bound to apply to the uses of the ship.

9. Admitting, (which is not proved) that the Vanstaphorsts had a right to withhold Delplat's two-thirds of the freight on the ground of his indebtedness to them,-they had no right to withhold from Graf, as they have done, his one-third of the freight, amounting to one thousand nine hundred dollars, and they cannot now recover from him, personally, without accounting for that sum.

10. The evidence raises a strong presumption that Vanstaphorsts knew, and also that Vyfhius knew (or might and ought to have known), that the voyage to Baltimore was in direct violation of the orders of the owners, without nay necessity for such violation by the captain; and if so, Vyfhius is not entitled to recover against the owners, whether he be considered the real lender, or only as the agent of Vanstaphorsts.

11. All the evidence in the case taken together, raises a strong presumption, that there were fraud and collusion between Vyfhius and Vanstaphorsts, not to apply the freight or other funds of Graf, in Vanstaphorsts' hands to the uses of the ship, but to subject her unnecessarily to a bottomry, and her owners to loss; wherefore neither Vyfhius nor Vanstaphorsts are entitled to recover against the owners.

Mr Steuart argued, that the original advances by Vyfhius were illegal, as there was no survey showing the necessity for the repairs, and the outfit of the Virgin. To show that this was necessary, he cited, Abbot on Shipping 124, note 2, last edition; 1 Wheat. 96, 3 Cond. Rep. 501. He contended, that the disbursements were paid for on the personal responsibility of the captain, as the evidence showed they were made before the bottomry was executed. The freight was an ample fund for the repairs and disbursements, and was properly applicable to pay for the same. Abbot 107, 114; Marshall on Insurance 741; 1 Wheat. 96, 3 Cond. Rep. 501.

The money was advanced by Mr Vyfhius to fit out the Virgin for a voyage in direct opposition to the orders of the owners. She was to proceed to New Orleans, if no freight could be obtained to Baltimore; yet she returned to Baltimore subjected to the heavy claims of Mr Vyfhius, and without any freight. Advances are only legal when they are made to effectuate the proper voyage of the vessel. Abbot on Shipping 124; 1 Wheat 96, 3 Cond. Rep. 501; 2 Marsh. on Ins. 741; 1 Marsh. on Ins. 96; 3 Wash. C. C. R. 494. Some of the articles furnished were not necessary. Abbot 106.

The real lenders of the money were the consignees, the Vanstaphorsts, and they could not as consignees become creditors by a bottomry contract. Bee's Rep. 339, 344; Abbot 126, note 1; 1 Dodson 207.

Upon the second point, Mr Steuart cited, 1 Peters's Adm. Rep. 94, 98; 2 Peters's Adm. Rep. 295.

Upon the seventh point were cited, Abbot 84; 1 Johns. Rep. 106; 2 Vern. 643.

Upon the eighth point cited, Bee's Adm. Rep. 339, 344; Abbot 126, note 1; 1 Dod. 207; 2 Dod. 143, 144.

Upon the eleventh point cited, 1 Hag. Adm. Rep. 14, 69 to 76; Bee's Rep. 120.

Mr Mayer, for the libellants, Vyfhius & Co., contended for the following positions.

1. The prayer for general relief in the libel warrants the decree in personam, though the special relief prayed is in rem. 1 Johns. C. R. 111; 6 Har. and Johns. 29; 2 Atk. 2; 4 Mad. R. 468; 6 Mad. R. 218; 1 Cox's R. 58.

2. Where a bottomry is declared ineffectual, the person who has supplied the necessaries for the ship for which the bottomry is given, is remitted to his original right in personam, against the owners, who are bound for all supplies to the ship; which is also impliedly hypothecated for them. In personam, the libellant here waives marine interest, and claims only principal and legal interest. To that extent the bottomry binds personally, where the res is, after the bottomry, accepted. This personal liability exists, whether the bottomry be good or unavailing. Bee's Adm. R. 252; 2 Peters's Adm. 295; 2 Brown's Adm. 407; Emer. Mar. Laws 101, 104. The penal obligation at least goes to the value of the res. 1 Hag. 13, 14. Or at all events, the lender, as to it, is only involved in any equities that may subsist between master and owners, when the supplies are furnished to the master, Emerig. p. 82, so as so far to limit the personal responsibility; and the lender is then substituted for the captain's lien for supplies, which is here conceded to him. The accepted definition of bottomry, implies a personal responsibility of the owners, for at least principal and legal interest, under the bottomry itself. The only aspect in which the remedy is exclusively in rem under a bottomry bond, is as to the marine interest. 2 Bl. Com. 457, 458; 1 Paine's C. C. R. 671; 1 Wash. C. C. R. 293; 3 Wash. C. C. R. 294; 2 Peters's Adm. R. 295.

The question of personal liability under a bottomry, is only a point of jurisdiction. And in England only, a court of equity can give the relief personally under the limited scope there of the admiralty remedies. 6 Mad. 11, 79; 2 Lord Raym. 931, 981; 3 T. R. 269. (Yates v. Hall, 1 T. R. 71, is erroneous as to the grounds of these decisions.) 1 Ves. Sen. 443; 1 Bro. P. C. 288; Emerigon, Mar. Laws 71 to 104. Our admiralty courts give a remedy in personam where there is a remedy in rem for supplies, and even where the latter does not exist; and a vessel is impliedly hypothecated for repairs in a foreign port. Abbot 125; Bee's Adm. R. 169; 2 Gall. 345; 1 Paine 620; The General Smith, 4 Wheat. Rep. 438. Our admiralty courts, within the sphere of their jurisdiction, act as courts of equity. 2 Gall. 526; 3 Mason 255, 334; 4 Mason 250. Where, as here, all parties are before the court, it may decree as equity requires; 1 Wheat. 197; and avoid circuity of remedy. The court may moderate interest on bottomries. Abbot 127. Owners are liable, and in solido, without regard to their respective portions of interest in the ship, for masters' contracts for the ship. Abbot 100, 106, 76; 11 Mass. R. 34; 2 Rose 91; 1 Stark. R. 23; 2 Stark. R. 377; Cowp. 639; 1 Dall. 129; 10 Mass. Rep. 47; 7 Johns. Rep. 311; 1 Cowen 290; Emerg. 101.

The lender may claim to be substituted to the master's remedies in personam and in rem in admiralty, for disbursements for supplies. Abbot 107, 115, 248; 2 Paine's C. C. R. 73; 1 Peters's Adm. 223.

The claim for personal liability need not be under the bond, as such. It may rest on the implied hypothecation, or on the general responsibility of the owners for supplies to their ship, or against the owners as holders of the res. 3 T. R. 340; 1 Gall. 75; 5 Peters 675. In all cases in admiralty, in rem, the respondent's fidejussory caution binds him personally even beyond the value of the res; unless, abandoning the res, he enters into a special fidejussory caution. 2 Brown's Adm. 406, 408 to 411; 3 T. R. 340; 1 Gall. 75; 3 Wheat. 58; 1 Gall. 503, 451; 2 Gall. 249. The stipulation here does not supersede this implied responsibility of the owners: though it is one more appropriate for a prize than an instance proceeding. 3 T. R. 340; 1 Gall. 148. A process in personam may begin by monition simply, as here. 3 Rob. Adm. 177; 3 T. R. 340; 1 Gall. 75. Admiralty, here, would, for such supplies, decree in personam. It does for pilotage, 1 Mason 108-for master's wages, 3 Mason 91-for respondentia claims, 4 Mason 250-for salvage, Abbot 399; 1 Pet. Adm. 94 (as in England, 1 Rob. Adm. 271; 3 Rob. Adm. 177)-for material men, 4 Wheat. 438. The remedy in rem implies remedy in personam on account of the res. 1 Peters's Adm. 238, note of Judge Winchester's decision.

The remedies in rem and personam may both be prayed for, or alternatively enforced under one libel, as a bill in equity may have two aspects of relief. 2 Lord Raym. 981; Bee's Adm. 252; 2 Peters's Adm. 295; 1 Peters's Adm. 94.

If necessary to the award of remedy in personam, the libel would be allowed by this court to be amended in the court below. 11 Wheat. 1; 12 Wheat. 1; 7 Cranch 570; 9 Cranch 244. This court may render such decree in rem as the court below should have rendered, if it deems a decree in personam improper. 3 Dall. 54.

It is maintained that the relief in personam may be decreed for principal and legal interest, although the bottomry bond be good in rem. The bottomry is good here, although taken where there were consignees of the vessel, and even admitting that they had funds; those funds being denied to the master if they existed. Although the master may have purchased the supplies, the lenders of the money to pay for them did not advance their means upon his personal credit. And if the advances had not been made, the vessel might, in the foreign port, have been proceeded against. Abbot 125, 126; 1 Wash. C. C. R. 52; 1 Dodson 276, 288, 464; 2 Dodson 147; 1 Hag. 13, 176, 326; 1 Wheat. 96. The lenders were not bound to see to the application of the money; nor implicated in any degree on account of the captain's violation of his instructions as to the voyage to be pursued. Abbot 126; Bee's Adm. R. 362, 363; 2 Dall. 194; 1 Dodson 465; 3 Wash. C. C. R. 495, 497. The payments for duties and port charges were proper to be secured by bottomry. 2 Caines's R. 77; 1 Hag. 176.

If the record be considered as presenting the question whether the seamen's wages are to be deducted from the bottomry, it is contended, that the owners being personally liable for them, they cannot make them a charge against the bottomry interest; the bottomry holder would be substituted for the seamen against the owners, if they (the bottomry holders) had paid the wages. Cited also, The Langdon Cheves, 2 Mason 58.

Mr Steuart, in reply.

It is contended on the part of the libellant, that the bottomry bond is good, so far as it covers advances strictly within the law of maritime loans; and for the residue, recourse must be had in personam. To show what circumstances are necessary to make a valid bottomry, he cited, The Aurora, 1 Wheat. Rep. 96; 2 Peters's Adm. Decisions 301, 302, 303; Abbot 125.

There is no precedent of a decree in the admiralty in personam, except The Fair American, 2 Peters's Adm. Rep.; and this was a case in the circuit court. The allegations in the libel in this case are not sufficient to maintain a claim in personam. The prayer for general relief is not enough for this purpose. The relief by a decree in personam is not consistent with the case made by the bill; and is not therefore within the rules of chancery proceedings.

If the claims of the libellant are in personam, he has his remedy at common law; and the admiralty will not convert a claim, originally against the ship, into one of a common law character exclusively. Cited, also, 2 Hag. 48, 66; 2 Peters's Adm. Rep. 295; Bee's Adm. Rep. 254; 1 Peters's Adm. Rep. 94; The Mary, Bee's Adm. Rep. 120.

Mr Justice STORY delivered the opinion of the Court.