The Saturnus

• Decision Date: 10 April 1918
• Docket Number: 177.
• Citation: 250 F. 407
• Parties: THE SATURNUS.
• Court: U.S. Court of Appeals — Second Circuit

250 F. 407

THE SATURNUS.

No. 177.

United States Court of Appeals, Second Circuit.

April 10, 1918

Everett Clarke & Benedict and Herman S. Hertwig, all of New York City, for appellant.

Burlingham Veeder, Masten & Fearey, of New York City (Chauncey I. Clark of New York City, of counsel), for appellee.

For opinion below, see 242 F. 173.

The libel alleges that the Midland Company sold to certain persons a large quantity of oil cake, deliveries to extend over several months. The cake was to be put on shipboard at New York, and the purchasers agreed in writing to pay for it against bills of lading, to give three weeks' notice of readiness of steamers, and that the Dutch government would 'tender you (Midland Company) steamers to load full cargoes according to the terms of the Baltimore charter party Form C., with the exception of demurrage,' which was to be much higher than the rate of the printed form. While not so pleaded, it is admitted that the cake was bought for and belonged to the government of Holland.

The libel alleges that libelants were 'advised by the agents of S. S. Saturnus' that that steamer 'was tendered * * * under the contract of sale' for loading a full cargo of cake. Thereupon libelants ordered her to a certain pier to load, but she wrongfully refused to go there, although by the custom of the port of New York 'and under said Baltimore charter party Form C' she was bound so to do. The steamer's agents then notified libelant that she would receive cargo at another pier several miles distant from the one chosen by Midland Company, and to that pier libelants under protest transported the cake, incurring therefor an expense of $1,287. These charges were for lighters and tugs and arose necessarily before any cake went aboard the Saturnus, or came into the possession, custody, or control of any agent of the vessel.

No charter party of Saturnus, either in the Baltimore form or otherwise was ever made to libelant; that form relates solely to 'heavy grain' cargoes, and is in many respects wholly unsuited to the present venture. It does contain provisions as to loading, and expressly provides for demurrage for delay in loading, but neither expressly nor by implication of words requires steamer to go to such safe pier at the loading port as might be chosen

by shipper or charterer. The plain inference from the exhibits attached to the libel is that the Saturnus was under the complete control of the Dutch government, and, whether formally chartered or not, looked for remuneration to that sovereign. The bills of lading specifically called only for freight 'according to agreement' between that government and owners of ship.

Before ROGERS and HOUGH, Circuit Judges, and LEARNED HAND, District judge.

HOUGH Circuit Judge (after stating the facts as above).

This is not an action for breach of charter, nor to enforce a maritime lien arising upon such breach, for these libelants never chartered. Benevolently reading the libel and exhibits, the most favorable statement of libelant's legal position is that the Saturnus was offered in fulfillment of a nonmaritime contract for the sale of oil cake, of which her owners presumptively had knowledge. By that contract Midland Company had agreed to furnish a cargo for a ship which turned out to be the Saturnus and to furnish a cargo within the time limited in a well-known printed charter form, or pay demurrage after the there stipulated lay days, which would begin on tender of vessel for loading. Therefore both ship and consignor had agreed to manage the lading according to the custom of the port unless varied by the charter form. That form contains no special provisions as to loading pier, but, by the custom, a ship at New York must go where ordered by shipper if the place is safe. Libelant-shipper named such a place, shipmaster or agent refused to go; therefore there was a breach-- not of a charter but of what in effect was a contract of affreightment, and for a full cargo, which is maritime in its nature. On exception we must assume it as true that the custom of the port is as pleaded, and is to be read into the contract, and was violated to libelant's damage; and (since no argument has been based thereon) we pay no attention to any matters suggested by the obvious truth that most if not all libelant's dealings were with the sovereign of Holland as a disclosed principal.

It being agreed that no lien, and therefore no right in rem, exists for the breach of a contract, however maritime but remaining executory (The Ira Chaffee (D.C.) 2 F. 401, The Monte A. (D.C.) 12 F. 331, and cases cited), the libelant's case must rest on one thought which may be put in several ways: (1) Since a lien exists for breach of an executed affreightment contract, the time of breach is immaterial. (2) Lien arises out of performance or execution of contract, and therefore also time is immaterial. (3) The rights of carrier and shipper in respect of carriage of goods by water are mutual and reciprocal and so are their remedies; therefore, since the shipowner has a lien on cargo for unreasonable delays in loading, the rule of mutuality must include a lien on ship for unreasonable (i.e., unlawful) expenses inflicted upon the shipper in respect of the same matter; and the additional expense of delivering cargo to a vessel at a berth violative of contract is the correlative or reciprocal of loading delay.

Such arguments suggest that the more complicated the modern maritime contract, and the greater therefore the possibility of partial breaches, there must ensue, if this libel is sustainable, a multiplication or extension of liens not hitherto encountered in admiralty jurisprudence. This, as well as the admitted paucity of direct authority on the point presently urged, justifies some investigation of the American doctrine of maritime lien as a jus in re or proprietary interest in the thing proceeded against and deemed a sort of defendant, personification, whose cause may be presented by any claimant able to show therein a jus of his own.

Remembering that not all liens have the same history or reason for existence, that bottomry (e.g.) rests on an express hypothecation, while the lien for necessaries is justified by an implied pledge, plus the assumed desire of the ship to plough the seas, and also that not every maritime contract (e.g., insurance) creates or supports a lien, it is plain that this libel rests on the asserted American application of the maxim, 'Le batel est oblige a la merchandise et la merchandise au batel. ' ^[1] The Maggie Hammond, 9 Wall.at 449, 19 L.Ed. 772.

At this date it is idle to inquire whether it was with logical or historical accuracy that the freight lien which, as a growth of the custom evidenced by the quoted maxim, reciprocally bound ship and cargo to each other, was declared as at once established by general and ancient maritime law, and yet to be neither a hypothecation nor the privilege of the civil law (The Bird of Paradise, 5 Wall.at 555, 18 L.Ed. 662), but something 'dependent on possession and analogous to the common-law lien of a land carrier' (The Bags of Linseed, 1 Black, at 112, 17 L.Ed. 35), and not arising 'until some lawful contract of affreightment is made, and a cargo shipped under it' (The Freeman v. Buckingham, 18 How.at 188, 15 L.Ed. 341). We must now assume that the freight lien of American admiralty is less than a privilege because lost by unqualified delivery of possession, yet more than the possessory lien of common law because creative of jus in re rather than jus ad rem. Why this is so has long been no more than a curiosity of legal literature.

The affreightment contract before us presents more simply than would many modern charter parties with their numerous incidental and ancillary provisions this question: Is a maritime lien upon hull or cargo, as the case may be, the normal and lawful result of every legal claim of damage, due to any violation of the terms, express or implied, of a contract for carriage under which a carriage is ever actually begun? The inquiry must go this far, because no reason can be given for upholding the presently asserted lien that will not also support a multitude of other demands quite as close to the act of transport as is the one at bar, and all of them breaches of the maritime contract of affreightment.

It appears to us that: (1) The lien asserted is without historical basis in general maritime law; (2) it has been in substance rejected in America by a preponderance of authority; (3) is not in its nature beneficial to commerce, nor deserving of even statutory adoption-- the only way it can obtain.

1. English law may be disregarded; ^[3] if it had been followed a century ago, no question such as this could have arisen, as is abundantly shown by the opinions of Justice Story and sufficiently recognized in the Supreme Court decisions above named.

Having gone beyond the common-law lien of England, but not accepted the privilege of Continental Europe (as we assert), yet derived what we have rather from Europe than Britain, it may safely be said that, if no privilege arose from a given state of facts, no lien (in our sense) based on such facts, can be asserted to have historical foundation.

Before the codifications of the Empire, Pothier ^[4] set forth the accepted doctrine of privilege for freight, i.e., that cargo might be delivered and the privilege live for a fortnight unless during that time sale was made to a purchaser without notice. This passed into the Code de Commerce (section 191 et seq.) with the mutual privileges of carrier and shipper defined, i.e., the ship was privileged for freight and average (i.e., general) and the shipper for average and safe delivery-- above all creditors, ^[5] and this...