Case Name: PENDLETON BROS., Inc., v. PEARCE et al.
Court: United States Court of Appeals for the Second Circuit
Jurisdiction: United States
Decision Date: 1926-03-01
Citations: 10 F.2d 692
Docket Number: No. 188
Parties: PENDLETON BROS., Inc., v. PEARCE et al.
Judges: Before MANTON, HAND, and MACK, Circuit Judges.
Reporter: Federal Reporter 2d Series
Volume: 10
Pages: 692–694

Head Matter:
PENDLETON BROS., Inc., v. PEARCE et al.
(Circuit Court of Appeals, Second Circuit.
March 1, 1926.)
No. 188.
Hunt, Hill & Betts, of New York City (John W. Crandall and Edna Rapallo, both of New York City, of counsel), for appellants.
Fitzgerald, Stapleton & Mahon, of New York City (Avery F. Cushman, of New York City, of counsel), for appellee.
Before MANTON, HAND, and MACK, Circuit Judges.

Opinion:
HAND, Circuit Judge
(after stating the facts as above). The motion to dismiss the appeal must be denied. Assuming that the original notice of appeal was insufficient, because of its failure to name Badcoek, his subsequent notice within season supplied the defect. The suggestion that Pearce could not ratify his proctors' appeal, even if originally unauthorized, is so far as we know quite without support in authority, as it is certainly contrary to principle. Why the retainer of an attorney should not be subject to the usual rules of agency we cannot conceive.
Again, we think the District Court was right in awarding damages to the libelants. The excuse now put forward is that the repairs which delayed the schooner's delivery arose from a "latent defect," which was excepted in the charter party. Nothing of 'the sort was apparently argued below, and the answer does not raise the defense. The eighth article alone approaches it in alleging that the repairs which caused the delay were necessary to make the schooner staunch and seaworthy, as required by the charter party and by the American Bureau of Shipping. There is, however, no hint in the article that the defects were latent, or that the charter party contained such an exception. Finally, the point is not assigned as error. Plainly, therefore, it is an afterthought, which we should be justified in ignoring.
But it is a bad afterthought in any ease, because the evidence does not show that the defects repaired were "latent." Proctor, the surveyor, was the most detailed and informed witness on the subject, and his evidence is most unsatisfactory. On his first examination he did not find the schooner in as bad condition as he expected. Later, on dry dock, he found her strained, a defect not observable by "casual inspection," and somewhat of a surprise to him. Whether he had to pull off the ceiling of the ship to find the strains, or whether merely a more thorough inspection was needed, we cannot tell. The issue being plainly not litigated, it would be unfair to upset the result on any such fragmentary showing.
We cannot, however, accept the damages as fixed in the District Court, even after confirmation of the commissioner's report. It is apparent that what has been somewhat euphemistically called a charter between the Pendletons was only made ad hoe, and was not seriously intended to be an obligation of the libelants. The hire was fixed for the purpose of recovery here, and fixed, in our judgment, beyond any fair measure. The only evidence as to going rates in November is that of McNamara and Carlson as to spe ciñe rates, and of E. S. Pendleton simply that the agreed hire of the Iron Queen was fair. We are unwilling to ignore the specific rates given by these apparently disinterested and certainly competent men. Taking the utmost rate to Boston, $2.25, and adding 50 per cent, for Bangor, we get a rate of $3.38 per ten, which in the interest of safety we may raise to $3.75, though that is probably too large an allowance. However, in such a case we prefer to err on the side of the libelants; the breach being unexcused. This figure must include towage, trimming, and other incidental charges, since that is the custom in such charters.
As to the remaining 700 tons, taken in the spring, we confess to more difficulty. The Iron Queen actually lifted her portion; she was available, and we have only to find her value, and, indeed, to find it in the absence of all satisfactory evidence, except that of McNamara and Carlson. To disturb the finding as to the last 700 tons of coal, we must hold that the libelants could in November have found a bottom to lift it, had they used more diligence. True, the same witnesses say that they could, on whom we have relied in fixing the hire for the Iron Queen. Still it remains true that the libelants did not deliver the coal that autumn, a fact we cannot quite ignore, since presumably they wanted to do so. Considering the way in which the case comes up, we are not disposed to disturb the allowance pro tanto. If it be asked how we can consistently refuse to accept the valuation of the Iron Queen's hire, while we accept the finding that no other bottoms were available, we answer that the supposititious charter party between tlje Pendletons, which is all the libelants present as to values, we regard as colorable, and the evidence that it represented the fair hire as put in to fortify the original effort.
We liquidate the damages, therefore, as follows: Allowance upon 1,800 tons shipped on the Iron Queen, $6,750; allowance for the spring shipment, 700 tons, $3,750 — total, $10,500. Hire of the Malcolm Baxter, Jr., $2.15 fon 2,5.00 tons, $5,375. Difference, $5,125. On this we allow interest from say January 1, 1917, to the entry of the decree in the District Court upon our mandate, excising therefrom a period of five years; that is, from February 15, 1918, to February 23,1923, during which the libelants needlessly allowed the suit to lag.
Of the transcript, over 80 pages are occupied in the cross-examination of E. S. Pendleton before the commissioner. Most of this was quite unnecessary; we decline to allow to the appellants the expense of any part of the cross-examination. The evidence in this court was also quite unnecessary, as the rates in October were irrelevant; this, too, we decline to allow. Otherwise, the appellants are allowed their costs and disbursements. A single question of law arises.
The libelants say that under the rule in The Oregon, 55 F. 666, 5 C. C. A. 229 (C. C. A. 6), Chief Justice Taft laid it down that in such eases it was what the disappointed charterer actually paid and not the market price of substitute tonnage which measures his damages. Nothing could be farther from the truth, or more entirely in' the face of the established rule. The court had there before it a ease where the charterer paid the going rate, and it was because of this that they allowed it as the measure of his damages. The ease itself is sufficient authority, if any be needed, for so well-settled a principle.
Decree reversed and cause remanded for further proceedings in conformity with the foregoing.