The republic. [volume] (Washington [D.C.]) 1849-1853, 1849-11-27
united States circuit Court.
thhteu states S'
BEFORE JUDGES NELSON AND BELTS.
IMPORTANT DECISION


Nelson delivered the following decision This is a
motion for a receiver, and injunction on bill Med
by the complainant against the defendants, Tor the
nI,rnose of resembling a contract entered into be-
tween the parties on the 18th OF August, lS47, by
which the defendants agreed TO build the steam
ships provided for in the fourth section OF the act OF
Congress, entitled "An act providing for the build
ing and equipment of four naval steamships
passed March 3, lS47, (Sess. Laws, lS47, p. ll3,)
or in case the court should refuse TO decree
scindment of the contract that then specific per-
Torrance be decreed according to the terms and
conditions therein stipulated, praying an account
between the parties, &c. The fourth section OF the
act authorizes the Secretary of the Navy, on behalf
of the Government, to contract with the complain;
for the transportation of the United States nall
from New York to New Orleans bi-monthly, and
back, touching at Havana and other intermediate
ports, and from Havana TO Chagres and back twice
month, the mail TO be transported IN at least hVe
steamships of not less than fifteen hundred tons bur-
den, and propelled by engines OF not less than one
the superintcndence and direction OF a naval con-
ractorin the employ of the Navy Department, and to
be constructed as TO render them convertible at
the least possible expense, into steamers of the
first class. The section contained provlso that the
Secretary, his discretion might permit steamer
Of not less than six hundred tons burden, and en-
gines in proportion, TO be employed IN the mail
service between Havana and Chagres. 1t also pro-
yided that the compensation for the service should
not exceed the sum of $500, 900 annually.
The complainant entered into a contract with the
Secretary of the Navy, under this act, the Doth
of April, lSi7, for the construction of these ships
by which he bound himself TO construct and com
Plete them, upon plan and after model particg-
larly set forth and described in the agreement. 1t
provided that, if the Secretary should determine
10 employ steamer of not less than six hundred
tons burden, for the service between Havana and
Chagres in lieu of of the five ships OF fifteen
hundred tons burden, the complainant should build
one of that description. The two first ships were
to be completed and in readiness for the service
before the LIST of October, lS4s, and the remain
ing two of fifteen hundred tons burden, on or be-
fore the lst of October, ls49 with such improve
ments in model, engines, boilers and finish, as
should be agreed upon by the parties to the con-
tract There is no limita ton as the time within
which the fifth steamship, in respect to which the
Secretary reserved the right to reduce the size
should be completed and ready for service. The
Secretary on behalf of the Government, in consid-
Grafton of the promises, agreed to pay to the com
plainant, compensation for the full perform
ance of the service IN carrying the mail, S2eoooo
per annum, yable quarterly. Ii was further pro-
yided, inasmuch the ships would be completed
at different periods within the time limited, that
each of them should commence the service as soon
she would be, In all respects, ready therefor ac-
cording to the terms Of the contract; and that
proportionate part of the compensation, stipulated
for the whole service should be paid for the partial
service thus rendered. And, finally, that the con-
tract should continue in force for the period OF ten
ycars-the term to commence from the actual com
menccment Of the service as specified On the 18th
of August, of the same year, the complainant en-
tered into an agreement with the defendants, Law,
Roberts, Wetmore and Croswell, by which, in con-
sideraton of assignment Of the contract with
the Government TO three trustees, OF Wnlcn Law
and Roberts were two, they covenanted and agreed
10 construct, finish, and completely equip the hive
steamships in such manner and at such times as
were or mi ght be required by the Navy Depart
Inent, and to provide for and pay all moneys ne
cessary therefor; the ships and their hinery to
be built and the vessels equipped under the super
intendence and control of George Law, one of the
parties and that they would, in all things, fulfil
and perform all the duties and services which the
complainant had agreed 10 be done and performed
in his contract with the Government. 1t also cove
nanted and agreed that the assignment Of the com
painants contract to the three trustees should be
upon the following trusts:
First. That the trustees should cause the steam
ships, they shall, from time to time, be built, TO be
registered in their names; and that they should have
the sole management and direction of the ships,
and each of them, and of their employment; APP
point and pay all sub-offcers, agents, and other
persons deemed necessary and proper, either Tor
the sailing or navigating of the vessels for the
mana cement of the business thereof at the various
ports and places at which they may trade or stop;
On such terms, for such times, and with such pow
ers and duties as TO them may seem ut and proper
They TO make all necessary contracts and
agreements for the employment Of the vessels, and
20 exercise and perform all such powers and duties
in the steamers as may be necessary for performing
the duties and services required by the Navy De
partment, for the advantage and proht oil the
parties concerned. And, second 10 collect ana
receive all the frcights and earnings OF the vessels
and all sums to be paid by the Government, for
transporting the mail, or which may become due
or payable on account thereof; and make all DIS
g.
ment Of the vessels. And third: To render to the
complainant and the defendants, respectively,
quarter yearly, account in writing Of all their
receipts and expenditures in the discharge OF their
trust the first account be rendered at the expi-
ration Of three months from the commencement OF
the service, by all the steamships, any OF them;
and apply the nett earnings, which shall remain al
the expiration Of every quarter, alter paying all
disbursements Of the vessels charges and expenses
Of every kind to which the trustees may be sub
jected, in the first place to the payment OF Sl25OO
rlr- half 10 ia
other half the defendants, and the residue 10 the
repayment Of all advances made by the Depart
ment, rateably, IN proportion 70 the amounts ad
yanced 10y them, respectively, in building, equip
ping and finishing these ships, together with Iega
interest and a commission of ten per cent on al
sums 80 advanced. And fourth; That when all the
moneys advanced by the defendants, pursuant &c
the agreement, in building and completing the
ships, with interest and commissions, and all ex-
penses and responsibilities incurred by them, or by
the trustees should be satisfied and paid, that then
the trustees divide the nett earnings including tn,
mail services quarterly, into two equal parts
whereof one part should be paid 20 the complainant
and the other TO the defendants; and then the yes
ses be held by the trustees, IN trust, Tor the com
painant and the Defendants IN equal shares. j
IL further provided, that the trustees may con
TO any modification Of the contract which th'
Navy Department shall require and which, il
their opinion, may be for the advantage Of the par
ties; and also that any modification, renewal OF
continuance Of the mail contract, any time Oh
tanned from Congress or the Navy Department, by
either of the parties, should cnure 20 their join
benefit. The bill Of complaint which u founded
upon these several agreements, particularly upoi
that Of the 18th Of August, charges, that the de
PENDANTS undertook the construction OF two steam
ships in pursuance Of their contract, 10 be callc'
the Ohio and Georgia; but that in the summer o
IsIs they became unable W proceed to the compile
ton Of the same for Of funds; and that there
upon the trustees 20 prevent the entire suspension
OF the work and the forfeiture Of the complainant
contract with the Government, assumed upon them
selves the building and completion OF the two ships
in their characters trustees and for that purpos
procured modification Of the contract, and an ad
vance Of money from the Government, IN pursu
ance Of act Of Congress, Of the 81 August, lS4s
20 wit the sum Of S29O,OOO; and that, IN order Z
secure the repayment Of the moneys 20 advanced
and in conformity with the provisions OF the act
they executed mortgage of the two ships 10 =. VI
WeunOrc a. trustee for the Government on th
9Th September Of the same year The bui iurthe
charges that the trustees procured further mod
fcation, whereby il was agreed that the steaInsln
Falcon should be received in lieu Of the smalle
ship contracted TO be built; and which said ship hs