Case ID: ny-st-rep_8/html/0589-01.html
Source: Caselaw Access Project
Author: {"author": "Ruger, Ch. J.", "license": "Public Domain", "url": "https://static.case.law/"}
Date Created: 2024-08-24T03:29:51.129683

William B. Holdsworth, as Master of the Bark “Bessie,” App’lt, v. P. A. De Belamzaran and Raphael De Florez, Resp’t.
    
    
      (Court of Appeals,
    
    
      Filed June 7, 1887.)
    
    -Charter party—Principal and agent.
    Defendant chartered a vessel from New York to Gibraltar and Cadiz, and to return to New York or some other port to be named at Cadiz. Plaintiff was to be paid £620 at Cadiz, and bore a letter of instruction to Poggio Hermanos at that place, who had “full instructions to serve the master in any matter concerning his vessel.” Poggio asked him if he wished to remit a portion of his charter money to his principals, and on his assenting offered to purchase a bill of exchange and remit it to Baring Bros., but, instead, he made his own draft on defendants, which was after-wards dishonored, and in settling with plaintiff he deducted the amount which he represented he had sent to Baring Bros. Held, that plaintiff was not in a position to dispute the assertion of the agent, to whose kind offices defendants had commended him, and when plaintiff has shown that he afforded defendant’s agent at Cadiz an opportunity to pay the £620 and they declined to do so, it constituted a breach of the contract by defendants, rendering them liable for the sum unpaid.
    
      Appeal from judgment of supreme court, general term, first department, reversing judgment in favor of plaintiff-
    
      Joseph A. Shoudy, for app’lt; George L. Rives, for resp’t.
    
      
       Reversing 34 Hun, 382.
    
   Ruger, Ch. J.

In November, 1881, the defendants chartered the British bark Bessie for a voyage from New York to Gibraltar and Cadiz, and for its return to New York, or some other port in the United States, to be named by the charterers at Cadiz. The charter party provided that the defendants should pay the plaintiff £1,100' for the round trip, of which sum £620 were made due and payable upon proper delivery of the cargo at Cadiz ‘£ in Spanish gold coin at the rate of $4.80 to the pound sterling;” “allpayments to be made in cash, without credit, discount or commission.” Other portions of the stipulated sum of £1,100 were made payable at Gibraltar and the home port, but no question arises in the case over the performance by the defendants, in that respect, of their contract obligations. The defendants loaded the bark at the port of New York with a general cargo, consigned to various persons at Gibraltar and Cadiz, under bills of lading in the usual form, specifying the amount of freight payable by the consignees on each parcel of goods. The full performance by the plaintiff of the obligations of the charter party is admitted by the defendants; and their liability for the payment of the full amount stipulated according to the provisions of the charter party follows as the necessary consequence of this performance by the plaintiff.

The only question in the case is, therefore, whether the defendants have performed their obligation by causing payment of the sum of £620 to the plaintiff at Cadiz, according to the terms of the charter party. Before leaving New York, the defendants handed to the plaintiff a letter of instruction by which he was directed to proceed directly to Gibraltar, consigning himself to one Gomez, and, after discharging the consignments at that place, to proceed to Cadiz, consigning himself to Poggio Hermanos, who, it was stated, had full instructions to serve the master in any matter concerning his vessel. It was shown by the evidence that Poggio Hermanos paid to the plaintiff at Cadiz the sum of $528.40 of the sum of £620, leaving apparently unpaid thereon £509 18s. 4-d., or $2,441.60, and this is the sum in dispute in this action.

As to the transactions at Cadiz between the plaintiff and Poggio, the referee has found as follows: “That, while discharging the cargo of said vessel at the port of Cadiz, the said Salvador Poggio inquired of the plaintiff whether he wished to remit any portion of his charter money to his principals, and the master rephed that he did wish to remit to his principals through the firm of Baring Brothers, of London: that thereupon the said Poggio said to the plaintiff that he would purchase a bill of exchange, and remit the same to the said firm of Baring Brothers; and a few days thereafter when the cargo was about half unloaded, he represented to the plaintiff that he had purchased a bill for £509 18s. 4d. at 47d. to the dollar, and had remitted the same to Baring Brothers for the account of the master and agent of the said vessel; that said master believed the said statement and representation of said Poggio, and relied thereon, and had the accounting hereinafter referred to, and settled with the said Poggio upon the faith of said representation being true; that the statement and representation of the said Poggio that he had made such remittance to Baring Brothers, was false and untrue, but, on the contrary, the said Poggio, on or about the sixteenth day of February, 1882, drew his draft in the firm name of Poggio Hermanos upon the defendants by their firm name for the sum of £509 18s. 4d., payable at sixty days after sight to the order of Baring Brothers, and transmitted the same to Baring Brothers; that Baring Brothers received the same, and presented it to the defendants on or about the first day of March, 1882, for acceptance, and thereafter, when the same became due, presented it for payment, and the said bill was neither accepted nor paid, but was protested for non-payment, and has never been paid;” that the firm of Poggio Hermanos had no funds with the defendants, and had no authority to draw upon them; “that the master of said vessel received no more than $2,833.40 on account of said charter party, leaving a balance of $2,447.60, which was due and payable at Cadiz (aforesaid, according to the terms of the charter-party; no part of this sum has been paid;” that “the plaintiff never agreed to receive the said draft in payment thereof, and did not know that the same had been drawn until long after he left the port of Cadiz, but supposed that a remittance had been made as agreed by the said agent.”

Shortly before leaving Cadiz, the master applied to Poggio for a final settlement of the money payable to him at that place, and Poggio rendered an account in which he charged the master with the sum of £509 18s. 4d. sent to Baring Brothers, February 14, 1882, and various other items of account, together with a sum paid in cash, February 28, 1882, sufficient to make up the whole amount of £620. The plaintiff first learned of the mode of remittance attempted by Poggio when he was at Gloucester, after his voyage was completed, and never, at Cadiz or elsewhere, approved of or accepted the method of remittance adopted by Poggio.

We have also carefully read the evidence upon which the findings were based, and are of the opinion that they were quite as favorable to the defendants as the proof would warrant. Upon these facts the referee made a report in favor of the plaintiff, upon which judgment was entered. The general term, upon appeal to that court, reversed the judgment, and ordered a new trial. From that order the plaintiff appealed to this court upon the usual stipulation .for judgment absolute in case of an affirmance here. The ground upon which the defense to the action was based, is stated in the answer to be as follows: “The said firm of Poggio Brothers offered to give the plaintiff, instead of cash, their draft or bill of exchange for the said last-mentioned amount ($2,447.60), to which the plaintiff assented, and requested the said Poggio Brothers to' draw the said bill of exchange to the order of Baring Brothers & Co., of .London; that the plaintiff accepted the said draft voluntarily, and for his own convenience, and did not insist upon payment in cash of the said balance of $2,447.60.”

_ It is quite unnecessary to discuss the question of the validity of such a defense if it had been established by proof, because in all of its material allegations it was in direct conflict with the findings of the referee, and the fair and reasonable deductions to be made therefrom. The general term, however, seems to have become impressed with the idea,* notwithstanding the express findings of the referee, and the positive character of the testimony of the plaintiff, that the personal draft of the Poggios, payable sixty days after sight by the defendants in New York, had in some manner been accepted by the plaintiff in satisfaction of the sum payable by the terms of the charter-party at Cadiz.

■■ The discussion of the case in the courts below has elicited, not only an able opinion from the referee, but also one from each of the judges of the general term of the supreme court, in which a radical difference of views, as to the merits of the case, has been shown to exist; two of the judges favoring a reversal of the judgment for the plaintff ordered by the referee, and one favoring an affirmance. The theory upon which the majority of that court proceeded will best be presented by brief extracts from their respective opinions.

Judge Brady says: “According to the charter-party, payment was to be made at Cadiz by the agent of the defendants, and the draft, which was taken by the plaintiff in lieu of money, was drawn at his request, that he might make remittances, and of course without the knowledge of the defendants; and it is to be further noted that the plaintiff, relying upon the statement of the agent that the bill was drawn upon Baring Bros., made no personal inspection of it, and thus enabled the defendant’s agent to practice what appears to have been a fraud.”

Judge Davis, also writing for reversal, says: “The freight, to an amount exceeding the sum due to the plaintiff, was collected by Poggio Brothers, and was known to the plaintiff to be in their hands. The plaintiff had only to demand and receive them. He did receive a portion of them, but the residue he desired, for his own purposes, to remit to Baring Brothers as soon as possible.” “ The defendants were under no obligation to do that for him, and Poggio Brothers were not their agents to make such remission. The act of leaving the money due him in the hands of Poggio Brothers to purchase such draft was solely that of the plaintiff.”

We think the conclusions were not warranted by the findings of the referee; and, as the reversal must be deemed by us to have been based altogether upon questions of law and not upon the facts, we conclude that the order of reversal was erroneous. The argument of the learned judge writing for reversal ignores the referee’s finding that the plaintiff never agreed to accept the draft of Poggio, and seems to us to have proceeded upon a misapprehension of the facts of the case, and the nature of the relations existing between the defendants and Poggio Hermanos. It should be borne in mind that the Poggios were, for all purposes, connected with the vessel and its cargo, the agents of the defendants, and, as is now claimed by the defendants, were also agents to make payment to the plaintiff of the sum due him upon the charter-party at Cadiz. The provision of the charter-party for partial payment at Cadiz was for the benefit of the plaintiff, and he could waive performance of that stipulation, or any of its conditions, without injury to the defendants. Thus he could receive payment in other funds than Spanish gold coin, or could allow discount or commission, or extend credit to the agent without prejudicing the interests of the defendants. If, however, he dealt with the agent, and accepted payment in any other form that provided by the charter-party, he would act on his own responsibility, and would thereby take the risk of any loss arising out of the change in the mode of performing the contract. By the performance of the stipulations of the charter-party by the plaintiff, the defendants became indebted to him in the full sum of the compensation earned by the vessel. They then rested under an active obligation to make this payment, and could be relieved from it only by showing payment, or a readiness and ability to pay by themselves or their agents at the time and place of performance. By consigning the.vessel and cargo to Poggio Hermanos, with authority to collect the freight payable at Cadiz, they had, indeed, placed their agents in funds to meet their obligations, but it was also their duty to pay, or offer to pay, the stipulated sum when opportunity offered to the plaintiff. The charter-money was not payable to the plaintiff until after delivery of the-cargo, and he had no control over the collections for freight made by Poggio, or the defendants’ funds in their hands. Although the defendants consigned the bark and its cargo to the Poggios, and authorized them to collect the freight-payable by its different consignees at that place, there is no express language, either in the charter-party or the defendants’ letter of instructions to plaintiff, making them his-agents to pay the plaintiff, or requiring him to call upon Poggio Hermanos, or any other person for the amount due him at Cadiz, or directing him to make demand of that-sum of any person. If there was any duty resting upon the plaintiff to make demand from any one, it arises from the fact that Poggios Hermanos were the defendants’ agents and consignees at Cadiz, and the usual course of trade pointed to them as, the persons through whom the defendants had elected to perform their obligation of making payment at that place. The plaintiff had no lien upon the cargo for his charter-money, and no means of compelling payment of the amount due him at Cadiz, for it was payable only after delivery of the cargo, and in the natural course of things there would be no one in funds to make payment until the defendants’ agents had collected freight from the various consignees of the cargo. This could take place only by the delivery of the cargo, from time to time, to its consignees, and the collection of the freight money due thereon by defendants’ agents. The plaintiff had no control over the collection of this freight, or the defendants’ money, in the hands of Poggio Plermanos. He had no other means of obtaining money of the Poggios except by asking for it; and when he had done this, and had been refused, or his request had been ignored or evaded, he had done all that was required of him to fix the defendants’ liability. The defendants’ contract was that the agents at Cadiz would pay the plaintiff £620.

The plaintiff frequently made .application for payment of the charter money to the Poggios; and, when he asked for a final settlement, the agent’s reply was substantially an allegation that they had already paid such moneys to the plaintiff’s principals. It is true that the plaintiff might have denied this statement, or still insisted upon receiving his freight money, but there is no reason to suppose that the Poggios would have retracted their statement, or have repaid money which they falsely, but yet deliberately, asserted they had already paid. It would have been quite ungenerous in the plaintiff to have disputed the assertion of the agents, to whose kind offices the defendants had commended him, and it would have been quite ineffectual if he had done so. He had no power to make them pay money, payment of which they had avoided by falsehood, and no means, except persuasion, to induce them to fulfill the obligations they owed to the defendants.

It was impossible for plaintiff then to determine whether Poggio’s statement was true or not. He never had an opportunity to inspect the bill said to have been remitted,:, or to elect between the reception of the gold coin by himself, or the remittance of the bill. The allegation that they had remitted was the excuse given by defendants’ agents for not making payment according to the terms of the charter-party, and, therefore, he had no alternative except to rely upon it, and, in case it proved untrue, to look to his charter-party for indemnity. The plaintiff had no legal, enforceable demand or claim against the Poggios, and to require him now to accept them as his debtors, and to prosecute the Poggios upon their draft, would make a contract for him to which he has never assented. The defendants’ contract was to pay the plaintiff at Cadiz £620 ; and when the plaintiff has shown that he afforded the defendants’ agents at that place an opportunity to make such payment, and they declined to do so, it constitutes a breach of the contract by the defendants, rendering them liable for the sum unpaid.

The case is simply that the defendants’ agents converted the money intrusted to them by their principal to their own use; and, when called upon to discharge their principal’s obligation, falsely alleged that they had applied it to that purpose. The plaintiff had no power to prevent the fraudulent conversion of the money by the agents, or to compel its lawful application. All that he did was to acquiesce in its remittance to the ship’s owners after it was claimed that that had been done; and, if it had actually been remitted, it would have discharged the charterer’s debt. Tile plaintiff simply assented to a mode of payment which was not pursued, and the condition upon which this assent ■was given was never performed. This did not constitute in any sense a payment of the principal’s debt. It cannot be disputed that if the plaintiff had, at Cadiz, accepted the personal draft of the Poggios for the amount due to him, or had extended a credit to them for such sum in satisfaction of the defendants’ obligation, it would have operated as a discharge to the defendants; but it is indisputable that the plaintiff never did so, and in fact never knew the mode of the pretended payment until after such knowledge was of no benefit to him. The legal principles applicable to this case are so elementary and familiar that it needs no citation to illustrate them. In truth, the main cause of difference in this- case arises over the different views of the facts taken by the learned judges writing in the court below, and not over any question of law.

The order of the general term should be reversed, and the ■judgment entered on the report of the referee affirmed.

All concur, except Earl and Peckham, JJ.. dissenting.