Case Name: Commercial National Bank of Chicago, Respondent, v. Carl Broedermann Sloman and Robert Edward Loesener, Appellants
Court: New York Supreme Court, Appellate Division
Jurisdiction: New York
Decision Date: 1907-11-08
Citations: 121 A.D. 874
Docket Number: 
Parties: Commercial National Bank of Chicago, Respondent, v. Carl Broedermann Sloman and Robert Edward Loesener, Appellants.
Judges: 
Reporter: Appellate Division Reports
Volume: 121
Pages: 874–878

Head Matter:
Commercial National Bank of Chicago, Respondent, v. Carl Broedermann Sloman and Robert Edward Loesener, Appellants.
First Department,
November 8, 1907.
Shipping — agency of master — when action for money had and received lies against owners.
The master of a ship has authority to bind the owners for necessary port charges and outfitting the vessel in a foreign port, and while he may not delegate all his authority, he may make shipbrokers to whom the vessel is consigned for cargo sub-agents to make bargains for outfitting tile vessel" and to incur obligations on his behalf.
- When the master of a vessel has authorized shipbrokers to outfit the vessel in foreign port, and in order to release the ship from a lien for the repairs has drawn a' draft to" his own order on the owners and transferred it to the ship-brokers to negotiate and pay the charges due,, parties discounting the draft and advancing the money to the brokers,-on failing to recover on the instrument against the owners in a foreign court, may sue them for money had and received, for the owners have had the benefit of the supplies furnished although the draft was void for lack of authority in the master.
Shipbrokers to whom a vessel is consigned for cargo in a foreign port have implied authority from the owners to do all that is figédásary to prepare the vessel for sailing, and in purchasing necessary supplies for that purpose are agents of the owners.
The party who discounted said draft is not compelled to seek restitution from the shipbrokers alone, but can recover‘from the owners whose debt was paid from the proceeds.
An action for money had and received or paid out for the benefit of another is founded upon equitable principles, and no privity of contract between the parties is required except that which results from circumstances showing an equitable obligation.
But in such action for money had and received the plaintiff is not entitled to recover for items paid not necessary to discharge the lien so as to permit the vessel to leave port. ' ■
Appeal by tlie defendants, Carl Broederrnann Sloman and another, from a judgment of the Supreme Court in favor of the plaintiff, entered ■ in the office of the clerk of the county of New York on the 13th day of.February, 1907, upon the verdict of a. jury rendered by direction of the court after a trial at the New York Trial Term, and also from an order entered in said clerk’s office .on the 13th day of February, 1907, denying the defendants’; motion to set aside the verdict.-
Everett Masten, for the appellants.
A. Henry Mosle, for the respondent.

Opinion:
Houghton, J.:
The defendants consigned for cargo from Hamburg, Germany, to shipbrokers at New Orleans, a vessel owned by them.' Upon arriving at that port, upon authority' of the master, certain outfit-tings and port charges, including inland freight charges upon the cargo, were incurred in behalf .of the vessel through the ship: brokers to whom it was consigned.- Upon the vessel being loaded and ready for. sailing, the items of these charges were submitted to the master, who -marked them correct, and to provide for their' payment he drew to his own order and indorsed in blank a draft or note for the amount, payable five days after arrival, of the vessel at Antwerp, Belgium, signing it in his ,own name as master. In -the body of this instrument it was stated that it was givenLfor necessary .disbursemenfs owed by the Vessel, and the vessel and freight wei'e pledged for its' payment. This instrument was delivered by the master to the.brokers, who, through an agent, obtained the money from plaintiff .to pay, and which they used for paying the obligations which had been so incurred. Upon this draft being presented, to tlio defendants for payment, they refused to honor it and repudiated the authority of the master to give.'it. Action' was- brought thereon against defendants in Belgium, and they successfully defended on the ground that by tlie German law the master of a vessel without express authority could not so bind his principal.. Thereupon this action was instituted for money had and received and paid for the use and benefit of defendants, and has resulted in a judgment against them, from which they appeal. .
We think this form of-action lies against the defendants. Ooncededly,the master had authority to incur obligations for the neces-. sary port charges of the vessel and its outfitting for the. voyage. This is so not. only by our law but, as appears in the case, by the German law. The obligations which were incurred were necessary to the vessel, and it could not have sailed from the port without their being paid or assumed by some responsible person. If the master had personally incurred the obligations, and the plaintiff, at his request, had furnished the money to pay them, the liability of the defendants for reimbursement could, hardly be questioned: While the master, of the vessel, as agent for the defendants,- could not delegate all of his authority, ye.t he could request, as he manifestly did, that the shipbrokers bargain for the outfitting of the vessel and incur obligations in. his behalf as agent therefor. The obligations incurred for the outfitting of the vessel were thus incurred by the master himself, notwithstanding the fact that he was aided in obtaining delivery by the pledging of the credit of the shipbrokers, who-bargained, however, in behalf of the vessel and its master as appears from the evidence. Whatever was done, therefore, with respect to preparing the vessel for sailing was, in effect, done through the' master. - -
If it is necessary to go further, it can well be said that the ship-brokers, being consignées of the vessel, for the purpose of furnish- , ing cargo for it, liad implied -authority from the defendants to do what was necessary to prepare the vessel for sailing, and hence that they were agents of the defendants in purchasing the necessary supplies for that purpose. *
In either aspect, therefore, the obligations that were incurred for .the necessities of the vessel were incurred by the agents of defendants under express or implied authority. For the purposes of obtaining money to meet these obligations, and as an inducement for its advancement, and knowing that the charges remained unpaid and that his vessel could not leave port • until payment had been arranged forj the master of' the vessel issued his draft and delivered it to the shipbrokers. The plaintiff, believing .that it was binding upon the owners of the vessel, cashed it, delivering the money to the shipbrokers, who satisfied the obligations.
The result of the transaction was that plaintiff furnished the jnoney to. pay defendants' debts contracted by their vessel. That plaintiff was induced so.to do by a false token does not deprive it of all remedy. The defendants have had the benefit - of the supplies furnished to their vessel, but have repudiated the authority of the agent to give an obligation to pay for them. They cannot retain the fruit of an unauthorized act and deny responsibility. While in form the transaction of plaintiff, was the discounting of the draft, it transpired that it was mistaken in supposing that it was discounting a valid obligation. The defendants' have succeeded in establishing that it was no draft at all. The plaintiff, therefore, paid its money under a mistake, and it having gone to the benefit of defendants under color of authority they are. responsible for its return. (Hathaway v. County of Delaware, 185 N. Y. 368.)
The plaintiff was not- compelled to seek restitution of the money which it advanced from the shipbrokers alone.. It could follow it and recover it from the defendants, whose debts it paid. An action for money had and received, or paid put for the benefit of another, is founded upon equitable principles. Ho privity of contract between the parties is required except that which results from circumstances showing an equitable obligation. (Roberts v. Ely, 113 N. Y. 128.)
At the time plaintiff advanced the money various obligations of the vessel, amounting to $205.43, had been paid by the shipbrokers. They also had a claim for commissions and services amounting to $704.71. Payment of these two items was not necessary to permit the vessel to leave port, for the brokers had no lien upon the vessel for them. (The Larch, 14 Fed. Cas. No. 8,085; The Joseph Cunard, 13 Fed. Cas. No. 7,535.) These items, amounting to $910.14, shdiild be deducted fromdhe réfcoyéTy^ and as so modified the. judgment and order should be affirmed, without costs of this appeal.
Patterson, P. J., Laughlin, Scott, and Lambert, JJ., concurred.
Judgment modified' as directed in opinion, and as. so modified judgment and order affirmed, Without costs. ; Settle order on notice.