Case Name: NEW BEDFORD PROPELLER COMPANY'S CASE. New Bedford and New York Steam Propeller Company v. The United States
Court: United States Court of Claims
Jurisdiction: United States
Decision Date: 1869-12
Citations: 5 Ct. Cl. 270
Docket Number: 
Parties: NEW BEDFORD PROPELLER COMPANY’S CASE. New Bedford and New York Steam Propeller Company v. The United States.
Judges: Peck, J., dissented.
Reporter: United States Court of Claims Reports
Volume: 5
Pages: 270–277

Head Matter:
NEW BEDFORD PROPELLER COMPANY’S CASE. New Bedford and New York Steam Propeller Company v. The United States.
On the Proofs.
The claimants executed a charter-party to the United States for the hire of the steamer Thorn, similar in Us provisions to that in the ease of Charles Spear el al. v. The United States) (ante, j>. 166;) the defendants to hear the toar risk. The vessel is destroyed in Cape Fear River hy a torpedo placed there hy the insurgents.
Tile same question as to the construction of the charter-party arose in this case that was discussed and decided in the ease of Spear ei al. v. The United Slates, above referred to; which see, ante, p. 106.
Mr. N. P. (jldpman for tbe claimants:
The petitioner, an incorporated company under the laws of the State of Massachusetts, claims $11,397 64, a .balance due by the terms of a certain charter-party made by petitioner with the United States for the service of the steamer Thorn, April 5,1864.
By the terms of the charter the United States assumed the war risk. It is alleged that the steamer was lost by war risk. and that in payment for the value of the vessel the petitioner was not fully paid in the amount above stated.
1. The first rule to be applied in the interpretation of contracts is that the contract shall be so interpreted as to give effect to the intention of the parties as far as it is legal and mutually understood, and this rule governs all others. (Story on Cont., § 634, and cases cited; 2 Parsons, 494.)
In this case there can be no question that the parties understood the charter to mean simply this: That if the vessel was lost by a wrar risk, the government was to pay for her; if she was lost by a marine risk, the owners were to assume the loss; if she was not lost at all, the government might, upon compliance with certain conditions, purchase her. The idea of purchase after total loss never could have entered into the minds of either party.
If the intention is to govern, the right tó purchase or sell after total loss must be utterly repudiated.
2. The construction of a contract should be favorable and liberal. If words, therefore, be susceptible of two different senses, thej- are to be so understood as to have a legal and actual operation. (Story on Cont-., § 640, and cases cited.)
3. The exposition is to be upon the whole contract, and not upon disjointed parts, taken separately. (Story on Cont., § 657, 65Sa.)
4. If a person having the election of one or two alternatives, and by his wrong or default lose his election, the other party may elect which he will demand. (Story on Cont., § 666, and cases cited.)
5. The right to purchase continued only u during the continuance of the charter.” Let ns inquire more particularly as to the time the charter ended in law.
Mr. Parsons says: “A cliarter-partj' would be dissolved by anything which would make the execution of the instrument impossible.” (2 Parsons on Cont., p. 305.)
If the blowing up of the Thorn did not make the execution of charter impossible, what would 1
The Assistant Attorney General for the defendants :
Messrs. T..J. Durant and G. F. Fecit, in reply:
By the clause No. 1 it is agreed that, when the net earnings of the vessel reacli her appraised value, viz., $40,000, “ then the said vessel shall become the property of the United States, without further payment.”
The clause in question is a contract whose execution depends on the happening of a future event, the obligation of the contract therefore is conditional, depending on that event, which is the earning net by the steamer of $40,000. No obligation operates before the occurrence of that event. When that event happens, is the mutual obligation of the parties fixed ? Is the proprietary interest of the owner then divested from, him, purely and simply, and at the same moment vested in the defendant? Or is there still some action of the mind of either or both necessary to the transfer of the title? *
There can be no doubt such a choice exists, and that the contract does not transfer the property, but only gives the defendants the right to acquire it should they deem it advantageous to do so.
This clause does not form a reciprocal but merely a unilateral contract; the defendants are not specially bound to'do anything; the petitioner is bound to convey? at defendants’' option, on demand. The petitioner, on the happening of the event, could not claim damages at law, or a specific performance in chancery from the defendant; but the defendant might exercise either remedy against him.
In the contract stipulated by this clause, the happening of an event, future and uncertain, is the condition of the fulfillment of the obligation. It is a conditional contract; the happening-of the event is a condition precedent, and until the happening of the event, no proprietary right was vested in the defendants.
The obligation of this covenant is indivisible; the vessel is one thing and not to be divided; and the fact- which was to determine the transfer, viz., the happening of the event of the net earnings being equal to $40,000, is indivisible, for the equality of the two amounts is the essence of the agreement, and this equality cannot be divided in fact or in theory, for if divided, it ceases to be equality.
The covenant makes no meution of fractions of price or thing, but says only “transfer of title on reaching $40,000 earnings;” hence the very light in which the parties have placed the execution shows it to be indivisible. See Evans’s Translation of Potbier on Obligations, vol. 1, (edition Phil., 1839,) p. 96, (216,) p. 135, (293.)*
As in all other cases, we consult, in interpreting' this covenant, the intention of the parties, and as to this their language leaves no doubt; there is not a word or an intimation that property should vest before the happening of the event. (See 2 Parsons on Contracts, Boston, 1866, p. 517, sec. IY.) “ When the parties enter into a contract by which the amount to be performed by the one and the consideration to be paid by the other are made certain and fixed, such a contract cannot be apportioned,” (P. 520.)
Can a thing which does not and never can exist be the subject of a contract of sale ?
“Three particulars are included in a valid sale — namely, a thing which is the subject of it, a price, and a consent of parties. If the subject of the intended sale have no existence actually or potentially, there can be no valid sale.” (See Long on Sales of Personal Property, Boston, 1839, page 3. 2d Kent Com., 4th edition, p. 468. Story on Sales, Boston, 1847, p. 148, § 184.)
At the time of the alleged purchase, the steamer did not exist. In such a case, had the owner sold to a private person and received a price, it could be recovered back from him in an action for money had and received.
By the general principles of law applicable to’all contracts, the charter is at an end when the vessel is destroyed.
“ The extinction of the thing due extinguishes the debt, when the thing is wholly destroyed.” (See Evans’s Translation of Pothier on Obligations, Phil., 1839, p. 338, (624.) “ If the performance of a contract becomes impossible by the act of Cod, that is, by a cause which could not possibly be attributed to the promissor,” &c., &c. (See Parsons on Contracts, Boston, 1866, 2d vol., p. 672.)
In a case where, by the terms of the charter-party, the freighter was bound to pay an allowance for extra men, and part payment having been made, the remainder was not to be paid till the ship’s discharge or return from her voyage, and she was destroyed at sea, it was held that such loss was a discharge of her from the freighter’s employment, as if by the act of the freighter, and that, thereupon, the extra allowance became payable. ('Havelock v. Geddes, (5 East B., p. 514.)
It must lie remarked here that there is a typographical error which, changes the sense, hut which a perusal of the context merely would lead to a correction of; on the second line from the bottom of the page the word divisible is found in place of indivisible; and it should read “in short, an obligation indivisible natura at contractu.”
See Traite des Obligations, par M. Pothier, Paris, 1813, vol. 1, page 208, § 944, whore the French text is correct: “ En href, l’obligation indivisible natura et contractu,” &c.

Opinion:
Casey, Ch. J.,
delivered the opinion of the court:
On the 5th day of April, 1864, the corporation claimant entered into a charter-party with Captain F. J. Crilly, an assistant quartermaster of the army, on behalf of the United States, for the hire of their steamer, called the " Thorn," to the United States government. She was to be manned, victualed, and appareled by the owners; the United States to furnish fuel. The war risk was to be borne bytbe United States; tbe marine risk by the owners. The charter-party was for thirty days and as much longer as her services might be required. And she was to be employed in such service as the United States might direct.
The hire of the vessel was to be $150 per day for each and every day said vessel should be employed. It also contained the following clauses:
"The said vessel is valued and appraised at the sum of $40,000, and should she be retained so long in the service of the United States that the money paid and due on account of said charter (deducting therefrom the actual cost of running and keeping in repair the said vessel during the said time, together with a net profit of 33 per cent, per annum on said appraised value) shall be equal to said appraised value, then the said vessel shall become the property of the United States without further payment, except such sum as ma.y then be due on account of the services of the said vessel, rendered under the said vessel charter.
"And further, if at any time during the continuance of this charter, the United States shall elect to purchase the said vessel, then they shall have the right to take her at the appraised value at the date of charter, and all money then already paid and due on account' of said charter (deducting therefrom the actual cost of running and keeping in repair the said vessel during the said time, together with a net profit of 33 per cent, per annum on the original appraised value) shall apply on account of the said purchase."
The vessel entered upon the stipulated service at the date of the charter-party, and continued so employed until some day in March, 1865, when she was blown up and destroyed in Cape Fear River, North Carolina, by a torpedo placed there by the insurgent forces.
She having perished by a "war risk," within the meaning of the charter-party, the owners applied to the Quartermaster's Department for the appraised value of the vessel, and also to the Third Auditor. The latter made the following statement, and certified the balance due, and which was approved by the Second Comptroller:
" By valuation, as per charter.1.... $40, 000 00
By 33 per cent, per annum from 12 m. April 5, '64, to 4 p. m. March 4, '65,10 27-30 4-24 months.. 11,996 11
By running expenses 11 months, at $2,100 per month.. 23,100 00
75,096 11
To amount received from U. S. for services from 12 m. April 15, '64, to March 4, '65, 4 p. m., being 333 6-24 days, at $150. $49, 975 00
Less 23 5-24 days lost. 3,481 25
- 46,493 75
Balance due. 28, 602 36"
This sum of $28,602 36 was paid to the claimants, and the balance of their claim, amounting to $11,397 64, was rejected, and for which amount this suit is now prosecuted. No question was raised on the hearing as to the accuracy of the account as stated, but the questions turned entirely upon the construction to be given to the accruing clauses of the charter-party above set forth.
In the recent case of Spear & Lwng for the loss of the steamer Maple Leaf we gave a construction, to similar clauses contained in the charter-party under which that vessel was employed when lost. We there held that the United States, under such a charter-party, became the equitable owner of the vessel to the extent of the sum earned over and above the expenses and profits stipulated for; and that to the extent of such sum the owners had received so much payment on the price of the vessel; and that whether she was taken by the United States, under the option given to purehase at any time, or perished by one of the perils against which the United States engaged to insure, this accruing clause was equally operative. It was only the balance due on the price of the vessel which the original owner could claim, and not the amount of the valuation. And for our views more at length we refer to the opinion in that case. The claimants have received the balance. And as the view which we take of these clauses precludes them from any further recovery in the case, the judgment must be that the claimants take nothing by their petition, that the defendants go thereof without day, and the same be dismissed.