Case ID: mass_4/html/0589-01.html
Source: Caselaw Access Project
Author: {"author": "\n      Sedgwick, J.", "license": "Public Domain", "url": "https://static.case.law/"}
Date Created: 2024-08-24T03:29:51.129683

David Pearce versus William Phillips.
    Where goods are shipped for half the profits, in lieu of freight, — if, by reason of a loss of a part of the goods, there is no absolute profit on the whole adventure, the ship owner is not entitled to any part of the particular profits arising on that portion of the goods which are not lost.
    This was an action of assumpsit respecting a sum of money carried, as an adventure for the defendant, on board the plaintiff’s ship David, to the East Indies, under an agreement to allow half profits, in lieu of freight and commissions.
    The cause was tried on the general issue before Sewall, J., at the sittings after the last November term, and a verdict returned, by direction of the judge, for the defendant, subject to the opinion of the Court on the evidence to be reported by the judge.
    At the trial, a bill of lading was produced, and an agreement written on the back thereof, from which it appeared that the defendant shipped on board the David 8107 dollars 72 cents in specie, and that the owner of the vessel was to receive for the freight of the money out, and goods home, one half of the proceeds thereof, after deducting the sum shipped.
    It was also in evidence that the defendant’s said adventure, vested, at Java, in coffee, was on board the David, when, on her return voyage, she was wrecked and lost at the Isle of Bourbon. The salvage of her cargo was afterwards shipped to the United States, and of 535 bales of coffee, the proceeds of the defendant’s adventure, 366 bales, which * cost 5762 dollars 39 [ ® 673 ] cents, arrived in safety at Boston, where, at public sale, it produced the net sum of 7392 dollars, 47 cents, which the defendant received. The plaintiff demanded his half of the profits on the coffee which was saved, or of the difference in the costs and the proceeds of that part of the defendant’s adventure.
    The cause stood continued to this term, when it was briefly spoken to by Prescott and Story for the plaintiff, and Jackson for the defendant.
    
      For the plaintiff, it was said that the sole question in the cause arises on the construction of the agreement endorsed on the bill of lading; and it was contended that as the half profits, to be received by the plaintiff, were in the nature of freight, and in lieu of it, so they ought to be governed bv the same rules. The parties, it should seem, at the time of the shipment, had but one event in contemplation, viz., the safe return of the ship and cargo ; and the special contract provides only for that event. If there remained a profit, after deducting the whole sum shipped from the net proceeds thereof, that profit was to be divided. As the case which has happened was not considered, it is now open, and it is for the law to allow a reasonable freight on the property saved, after deducting from the proceeds a proportional part of the sum shipped. In case of a loss of a part of property carried on freight, a pro rata freight is due by law on that part which is saved ; and no reason appears why this rule of law should not be applied in the present case.
    
      For the defendant, the case of Putnam, vs. Wood 
       was relied upon as deciding this question. Putnam, had shipped specie on board Wood’s vessel to the East Indies, for a certain proportion, of the profits, in lieu of freight, &c. There was a loss on the goods. Two questions were made : the one was, whether the vessel was sea-worthy, and if she was so, the other question was, whether the property saved was to be considered as a new capital, and the share of the profits made on the capital be allowed. The principal argument was on the first question ; but the Court would [ * 674 ] not * hear an argument as to the rule estimating the profits. They said there was no doubt but that the original amount of the adventure was first to be deducted from the proceeds, and the remainder, if any, was to be divided.
    
      The Court said they could see no difference between the case at bar and the point settled in the case cited by the defendant’s counsel; that the decision in that case had been correctly stated, and unless a distinction could be shown between the two cases, it would be useless to hear any further argument; and they ordered judgment to be entered upon the verdict.
    Afterwards, while Sedgwick, J., was sitting over for the trial of issues, he stated that he had received a letter from Parker, J., informing him that he had since the decision, perceived a distinction between this cause and that of Putnam vs. Wood, and regretting that judgment had been entered. And Sedgwick, J., thereupon ordered the entry to be cancelled, and the action was continued nisi for advisement.
    
      
      
        Ante, vol. iii. 484
    
   And at the succeeding March term in Suffolk, the unanimous opinion of the Court [the Chief Justice not sitting in the cause] was delivered by

Sedgwick, J.

[After stating briefly the facts in the cause.] The plaintiff’s claim of a part of the profits on the coffee which was saved is, in our opinion, contrary to the manifest intention of the contract, by which the plaintiff was entitled only, in case there should be, in fact, a profit arising upon the whole adventure ; if there should be such a loss that no profit should accrue, the plaintiff would have no right to claim any thing. In this case, therefore, there being no profit, there is nothing to which the plaintiff can form a just claim. The same principle was assumed as correct in the case of Putnam vs. Wood, which was cited at the bar by the judgment of the whole Court.

We are all of opinion that judgment must be entered according to the verdict.