Johnson & Higgins v. Charles F. Garrigues Co.

• Decision Date: 07 January 1929
• Docket Number: No. 72.,72.
• Citation: 30 F.2d 251
• Parties: JOHNSON & HIGGINS v. CHARLES F. GARRIGUES CO. et al.
• Court: U.S. Court of Appeals — Second Circuit

30 F.2d 251 (1929)

JOHNSON & HIGGINS v. CHARLES F. GARRIGUES CO. et al.

No. 72.

Circuit Court of Appeals, Second Circuit.

January 7, 1929.

Rumsey & Morgan, of New York City (Mark W. Maclay and John Tilney Carpenter, both of New York City, and John A. Graves, of Wilmington, Del., of counsel), for appellants.

Bigham, Englar & Jones, of New York City (T. Catesby Jones and James W. Ryan, both of New York City, of counsel), for appellee.

Before MANTON, L. HAND, and AUGUSTUS N. HAND, Circuit Judges.

MANTON, Circuit Judge.

The steamship Hallfried, in from Norway, on April 18, 1920, carried 8,460 casks of nitrate of ammonia, under a contract by which the Hercules Powder Company agreed to purchase from the Norwegian Nitrogen Products Company, Inc., 4,000 net tons, "c. i. f. New York," "net cash against Norwegian shipping documents in New York on arrival of goods." The materials were shipped, consigned to Charles F. Garrigues Company. On April 19, 1920, a fire and explosion occurred, damaging some of the cargo.

On April 21st, shipping documents consisting of invoice, weight sheets, insurance certificate, and bill of lading for 8,460 casks of nitrate of ammonia, were first tendered to the appellant Hercules Powder Company by Charles F. Garrigues Company, agent for the seller. A certificate of insurance and not a policy was furnished. The appellant Norwegian Nitrogen Products Company, Inc., refused to accept the documents or pay for the goods, because the certificate of insurance was said not to be the equivalent of the policy, and it asserted that it was purchasing documents, and not nitrate of ammonia. The fire destroyed a portion of the material prior to the tender of the documents, but delivery was made to Charles F. Garrigues Company of the goods here involved, and it signed a general average agreement on April 28, 1920. On May 7, 1920, appellants agreed that delivery might be made of the saved and sound goods, and deposited the purchase money of the entire shipment in escrow, to be released to the seller upon satisfactory proof that the goods were fully covered by insurance at the time of the loss. Subsequently, on May 8, 1920, Charles F. Garrigues Company delivered the cargo to the appellant Hercules Powder Company. On January 15, 1921, the seller and the appellant Hercules Powder Company entered into a further agreement in writing, assigning the claim which it, the appellant, had against the insurance company, and the money, held in escrow, was released.

This suit is by the average adjusters appointed by the master, as trustees for whom it may concern, to recover the contribution in general average due from that part of the cargo which was delivered in sound condition to the appellants. The appellees had a possessory lien on this nitrate of ammonia for the contribution due; by delivery of the cargo, without requiring cash payment, the lien was lost. But this suit will lie in personam, resting upon proof that delivery was accepted by appellants May 7, 1920, of such part of the nitrate as was in sound condition, and, having accepted the benefits, with knowledge that the fire had occurred and that salvage claims and other general average expenses were incurred, there is an implied agreement to pay in contribution. United States v. Cornell Steamboat Co., 202 U. S. 184, 26 S. Ct. 648, 50 L. Ed. 987; The Davis, 10 Wall. 15, 19 L. Ed. 875; Maru Navigation Co. v. Societa Com., etc. (D. C.) 271 F. 97; Dupont de Nemours v. Vance, 19 How. 162, 15 L. Ed. 584.

Moreover, the appellants here must be held to have ratified the action of their agent, Charles F. Garrigues Company, in executing a general average agreement which was incident and necessary to a delivery being obtained by the appellants. They, by accepting delivery of the sound cargo on May 7, 1920, impliedly agreed that they would pay the contribution due on such sound cargo as was delivered. This would be true, irrespective of when title passed under the sales contract. The Hercules Powder Company had delivered to it on May 7, 1920, 2,077 casks of nitrate of ammonia, and the Norwegian Nitrogen Products Company, Inc., 17 casks of nitrate of soda.

Contribution in general average is required, where the ownership of the goods is established in a respondent, and, on tender at destination of the sound goods which have been saved, delivery is accepted. The claim advanced, that in place of the policy of insurance there was tendered only a certificate, is of no importance. The appellants never questioned the fact that the documents had been tendered. They doubted whether they were in proper form, so as to extend the insurance coverage.

The c. i. f. contract is one for the sale of goods by the delivery of documents, and if this contract be not a c. i. f. contract, it differs only in that, in addition to the delivery of documents, a condition required performance of actually having the vessel with the goods on board arrive at the port of New York. The seller was not obliged to discharge the cargo from the vessel at New York. If tender be made of the documents, and the goods are known to the parties to have been lost or damaged in transit, it is settled that this makes no difference, for both risks are on the buyer. But we need not concern ourselves with the question of when title passed, since there was a subsequent delivery and acceptance of the goods by the appellants.

Both appellants argue that the appellee has elected to hold the agent, and hence has lost all rights it might have against them. The argument is that, if Charles F. Garrigues Company was the agent for the appellants, appellee knew, when it sued Charles F. Garrigues Company and the latter filed its impleading petition on January 11, 1923, that the appellants had contracted to purchase the goods, and that it knew subsequently all the terms of the contract when...