Brien v. Miller, 40

• Decision Date: 29 November 1897
• Docket Number: No. 40,40
• Citation: 42 L.Ed. 469,168 U.S. 287,18 S.Ct. 140
• Parties: O'BRIEN v. MILLER et al
• Court: U.S. Supreme Court

168 U.S. 287

18 S.Ct. 140

42 L.Ed. 469

O'BRIEN

v MILLER et al.

No. 40.

November 29, 1897.

George A. Black and Sidney Chubb, for appellant.

Wilhelmus Mynderse, for appellees.

Mr. Justice WHITE delivered the opinion of the court.

By a charter party executed at Valparaiso, Chili, on April 5, 1884, Gibbs & Co., of the place named, chartered the ship Andrew Johnson to carry a cargo of nitrate of soda from Iquique and Caleta 'to any safe port in the United Kingdom or on the continent between Havre and Hamburg, both included, as ordered.' After loading at the places named, the Andrew Johnson, pursuant to orders, sailed on July 15, 1884, for Hamburg, the cargo on board being consigned to the order of Antony Gibbs & Sons, a firm doing business in London. On the 4th of August following, the vessel, being in distress, put into Callao. Certain mecessary repairs, which were advised by a duly-appointed board of survey, were made, and, upon the recommendation of the board, 8,449 bags, or about 1,200 tons, of the nitrate of soda were transhipped to the British bark Mary J. Leslie, to be conveyed, by that vessel, to Hamburg.

To defray the expenses incurred in the port of refuge, the master of the Andrew Johnson executed a bottomry and respondentia bond to the firm of Grace Bros. & Co. This bond not only bound the ship Andrew Johnson and her cargo and freight, but also, in express terms, hypothecated the cargo transhipped to the Mary J. Leslie. Although both cargoes were thus bound, the bond, in its defeasance clause, provided that it should be void 'if, during the said voyage, an utter loss of the said vessel by fire, enemies, pirates, the perils of the sea or navigation, or any other casualty, shall unavoidably happen.' A copy of the bond is found in the margin.¹ The two vessels sailed for Hamburg. The Leslie arrived but the Johnson perished at sea, as the result of a collision with the British hip Thirlmere. After the arrival of the Leslie at Hamburg, demand was made upon the representatives of Antony Gibbs & Sons, the consignees of the nitrate of soda which had been shipped on the Leslie, for payment in full of the amount of the bond, and, in order to obtain possession of the cargo, the consignees entered into an agreement by which the question of the liability of the nitrate of soda on the Leslie for the entire amount of the bond was to be determined by arbitration, the arbitrators to be selected by, and their decision to be binding upon, the respective parties. It is to be inferred that the only question controverted before the arbitrators was whether the use of the words 'said vessel' in the defeasance clause of the bond operated to avoid the bond in consequence of the wreck of the Andrew Johnson and the loss of her cargo. The German lawyers who were selected as arbitrators found that the nitrate of soda on board the Leslie was bound for the whole amount of the bond, and that, therefore, the consignees were not entitled to the cargo unless they paid the bond. Their award was as follows:

'We formulate the question which you, in the names of Messrs. Antony Gibbs & Sons and Messrs. Baring Brothers & Co., have submitted to our judgment as follows:

'Whether the portion of the cargo of nitrate of soda of the Andrew Johnson, brought home per Mary J. Leslie, is liable for the whole amount of the bottomry bond, which was signed in Callao, and whether, consequently, the receiver of this portion of the cargo has to pay the whole of the bottomry bond, provided the value of this portion of the cargo is not less than the amount of the bottomry debt.

'This question we must answer in the affirmative, because, according to the law here, ship, freight, and cargo of the Andrew Johnson, as well as the portion of the cargo which was transhipped into the Mary J. Leslie, are jointly liable for the whole amount raised on bottomry at Callao, and therefore the Andrew Johnson and her cargo having become a total loss, the holder of the bottomry bond can come upon that portion of the cargo which was shipped by the Mary J. Leslie for the whole amount of his claim.

'Some doubt might be raised as to whether, according to the wording of the bottomry bond, the money was not lent or appear to be lent contingent upon the safety of the Andrew Johnson, and becoming due only after her arrival at her port of destination, but becoming null and void in the event of her nonarrival. We are of opinion, however, that this interpretation is not consistent with the real intention of the contracting parties, and that the wording referred to has originated in the not sufficiently careful use and employment of a form of bond which happened to be at hand. This seems the less doubtful to us for this reason: that, if the bottomry bond were interpreted in this manner, the cargo of the Mary J. Leslie would be entirely liberated, after the loss of the Andrew Johnson occurred, and would not even bear a portion of the bottomry debt, which nevertheless has arisen out of a case of general average. Manifestly, this cannot have been the intention of the parties interested.'

Antony Gibbs & Sons paid the amount of the bond for account of Gibbs & Co., the consignors. Subsequently, the owners of the Andrew Johnson commenced legal proceedings against the Thirlmere to hold that vessel responsible for the collision by which the Johnson and her cargo were lost. The Thirlmere availed herself of the statute of Great Britain limiting the liability of shipowners, and the result was an award finding the Thirlmere to be wholly at fault, and condemning her to pay the loss caused by the sinking of the Johnson. As their proportion of the ascertained value of the Thirlmere, the owners of the Johnson, for ship and freight, were allowed the sum of 6,557 9s. 6d., but from this amount there was deducted about 1,500 for certain expenses. In the proceedings in question the owners of the nitrate of soda which was on the Johnson also recovered their proportion of the value of the Thirlmere. On account of the loss of the Andrew Johnson, the Boston Marine Insurance Company paid to her owner the sum of $30,000, less $2,825.49, the amount of a premium note, with interest; and out of the sum received by the owner of the Andrew Johnson for the ship and freight from the value of the Thirlmere, the owner of the Andrew Johnson, in April, 1896, remitted to the insurance company, as its share thereof, the sum of $11,456.05, and to correct some mistake in calculation the sum of $35.60 was also subsequently paid by the shipowner to the insurance company.

The present suit was commenced on July 20, 1887, by a libel in personam against the owner of the Andrew Johnson to recover the due proportion of the sum paid on the bond. Those joined as libelants were 11 in number; that is, all the members composing the firm of Gibbs & Co., the consignors of the nitrate of soda, and the members of the firm of Antony Gibbs & Sons, the consignees. The original libel is not in the record. Exceptions to it were filed on the ground that it did not state the nature of the action, and that it did not state a cause of action. On June 6, 1888, the district judge overruled the exception to the want of clearness in the averments of the libel, but maintained the exception of no cause of action. Although the learned judge found that the bottomry bond had not been avoided by the loss of the Andrew Johnson and her cargo, and therefore that the payment made at Hamburg was necessary, he yet concluded that, as the Andrew Johnson and her cargo had proven a total loss, nothing having been alleged in the libel as to a recovery by reason of such loss, the libelants were precluded from enforcing their claims in personam against the owner of the Johnson in consequence of the provision of the acts of congress limiting a shipowner's liability for the acts and contracts of the master to the value of the ship and freight. 35 Fed. 779. As a result, on the 27th of June, 1888, an order was entered sustaining the exception of no cause of action, and directing that, unless the libel were amended, it be dismissed, with costs. An amended libel was filed in July, 1888, to which an exception of no cause of action was again sustained, with leave further to amend. On January 4, 1889, the libel was for the second time amended, and this was also excepted to, on the ground of ambiguity, and that it did not state a cause of action. On the 24th of October, 1890, the libel was again amended by averring the loss of the Johnson, the fact that it had occurred by collision with the Thirlmere, the institution of proceedings against the Thirlmere by the owner of the Johnson, and the recovery in those proceedings on the ground that the collision had been caused solely by the fault of the former vessel. In June, 1891, respondent filed exceptions and an answer to this amended libel. The answer, among other things, averred as follows:

'This respondent admits that the owners of the ship Thirlmere, having taken appropriate proceedings under the statutes of the United Kingdom of Great Britain and Ireland, obtained a decree limiting their liability for said collision to a certain sum, which they thereupon paid into the court, and which said sum was distributed between the libelants and the respondent herein, and other parties and their attorneys, in part satisfaction of the damages by each of them sustained by reason of said collision; but this respondent denies that he received the said sum of 6,557 9s. 6d., and avers that the amount received by him was much less than said sum.'

No allusion was made in the pleadings of the respective parties to the fact that the owner of the Andrew Johnson had received the benefit of any insurance upon the vessel.

After the taking of proof, the cause was heard on the exceptions and merits on November 23, 1893. At the outset of the hearing the trial court overruled all th exceptions to the third amended libel but that of no cause of...