THIS was an appeal from the circuit court of the United States for the northern district of New York. The case is stated in the opinion of the court. would be estopped, in favor of a bon a fide for the appellant, and Mr. Ganson, for the appellee.
The opinion of the court was delivered by: He cites Strong v. Taylor, 2 Hill, 326, which is in point, and was decided by Justice Nelson.
Mr. Haven made the following points:––
1. Hickox, the claimant, was the owner of the schooner Freeman. He agreed to sell her to John Holmes for $4,500, payable in five instalments, at various times from June, 1851, to December, 1853. And on such payments being made, and other conditions complied with, he agreed to give John Holmes a good and sufficient bill of sale of her, &c. By this agreement, the property of the claimant in the schooner was not devested. Hilliard on Sales, title 'Conditional Sales,' pp. 18-23; Barrett v. Pritchard, 2 Pick. 512; Ayer v. Bartlett, 9 Pick. 156; West v. Bolton, 4 Verm. Rep. 558; Herring v. Willard, 2 Sandf. Sup. Ct. Rep. 418.
Mem.–Kent, in his Commentaries, (vol. ii. p. 497,) says: 'When there is a condition precedent attached to a contract of sale and delivery, the property does not vest in the vendee on delivery, until the performance of the condition, or the seller waives it; and the right continues in the vendor, even against the creditors of the vendee.'
2. (Second point omitted.)
3. If Hickox, the owner, had directed the master to sign the bills of lading, or given him authority to do so, without having the flour on board, the schooner would have been bound, or the owner would have been estopped from denying the shipment had been made; but in a case where there is no fraud, and the master has only general authority as such, he cannot sign a bill of lading for goods not delivered so as to charge the owner or vessel, even when the bill of lading has been assigned or indorsed for value. Grant and others v. Norway and others, 70 Eng. Com. Law Rep. 664, fully in point.
4. The signatures of Ramsdell, the master, to the bills of lading, were procured by S. Holmes by fruad, by false representations, and by substitution of false papers, amounting to a felony, or were forged. And as between Holmes and Hickox, the bills were void and of no validity. This being so, the libellants, if they had been indorsees of the bills for value, would take nothing under them, as they make title to the pretended flour only by showing Holmes shipped it; and bills of lading procured by a felony, by fraud, or forgery, are no evidence of that fact, nor do they estop any one. And this case must stand as though S. Holmes forged the bills. King v. Richards, 6 Whart. Penn. Rep. 418; Berkley v. Wattling, &c., 7 Ad. & El. 29, and 34 Eng. Com. Law Rep. 22; Bates v. Todd, 1 Moody & Robinson, 106; Angell on Carriers, §§ 231-337; Abbott on Shipping, 324, 325, original paging; Bates v. Stanton, 1 Duer Sup. Ct. Rep. 79, and cases cited.
5. But the pretended flour was consigned to the libellants as factors of S. Holmes & Co., and not as owners. By the bills, they were not interested in it; the consignment was 'for account of S. Holmes & Co.' This would have given the libellants no right or title to the flour had it been on board the schooner, and Holmes could have sold it or given a good title to a stranger at any time before it actually reached the libellants. Patten v. Thompson, 5 Maule & Selw. 350; Russell on Factors and Brokers, 202, 203, republished in Law Library, vol. 48; Grove v. Brien, 8 How. 429, 438; Conrad v. Atlantic Ins. Co. 1 Pet. 345, 386; Kinloch v. Craig, 3 Term Rep. 119.
Mr. Ganson made the following points:––
1. The appellees were the consignees of the property, acknowledged in the contracts of affreightment to have been shipped on the schooner, and, as such, had advanced money upon the faith of the shipment therein declared, and the contract therein contained.
2. By such consignment and advance, the appellees acquired a property in the flour mentioned and referred to in those contracts. The delivery of the bills of lading to the appellees, by which the flour was to be delivered to them, and the advancement of money upon the faith thereof, was equivalent to an actual delivery of the property to them, as a security for the advance. Gibson v. Stevens, 8 How. 384; Conard v. Atlantic Insurance Co. 1 Pet. 445; Bank of Rochester v. Jones, 4 Comstock, 497.
3. It is a well-established rule of the maritime law of this country, that the ship is bound to the merchandise, and the wellestablished practice of our admiralty courts to entertain proceedings in rem for the non-performance of contracts of affreightment. The Rebecca, Ware's Rep. 188; New Jersey Steam Navigation Co. v. Merchants' Bank, 6 How. 344; The Volunteer, 1 Sumn. R. 551.
4. If the two contracts in question were made under such circumstances as to bind the vessel, it must answer for their non-performance. The question then arises, were they so made?
5. Had the master of The Freeman any authority to sign these bills of lading? He was acting under the employment of Sylvanus Holmes. The vessel was in the possession of Holmes. He was running her at his own expense and risk, and for his own benefit. The appellant had not any interest in her earnings, and was not liable for her debts. Sylvanus Holmes, therefore, and not the appellant, was the owner of the vessel, within the signification of that term as used by the maritime law, with reference to determining who is responsible personally for the master's contracts. Reynolds v. Toppan, 15 Mass. 370; Hallet v. Columbian Insurance Co. 8 John. 272; The Phebe, Ware's R. 263; Cutler v. Windsor, 6 Pick. 335.
A person in possession of a vessel, under a conditional contract of purchase, is the owner within the rule referred to. Leonard v. Huntington, 15 John. 298; Hinton v. Hogeboon, 7 John. 308; Thorn v. Hicks, 7 Cowen, 797.
It is upon this rule that the courts hold that a mortgagee out of possession is not liable for supplies; but, if in possession, is liable. McIntyre v. Scott, 8 John. 159; Phillips v. Ledley, 1 W. C. C. R. 226; Miln v. ...