Court Opinion

ID: 8637701
Source: CourtListenerOpinion
Date Created: 2022-11-24 19:47:59.630189+00
Date Added: 2024-06-11T16:55:59.151272
License: Public Domain

SPRAGUE, District Judge,
in delivering his opinion, said, in substance, that he was satisfied, upon the evidence, that the following was the true state of the facts: The Messrs. Swasey were the originators of this enterprise, for the purpose of being made agents, and for the commissions and' other profits of doing the business. They advertised for persons to join the company, prepared a constitution, which gave them the office of agent and treasurer, and fixed the capital stock at $13,000, in fifty shares of $300 each. They gave strong assurances to inquiries,that they had made careful estimates, and that this sum was ample to buy, fit out, and provision the vessel for two years. These assurances were not fulfilled, and were made without sufficient foundation. On the faith of them,, however, the requisite number of persons joined the company, a meeting was called, and the constitution adopted. ' As prepared by the-Messrs. Swasey, this constitution gave no security to the company for the fidelity of the agents, but an amendment was made, requiring of them a bond in $20,000 for the faithful discharge of their duties. This bond was given, with proper sureties. The Swaseys then announced to the company, that it would require $3000 more to pay all expenses; and gave the strongest assurances that this would be sufficient, and leave a handsome balance: for contingencies; and said that they had then obtained all their bills of any consequence,, and knew what the expenses would be. On the faith of these assurances, the company enlarged their number, by creating ten new shares, which were subscribed for and chiefly paid in. The bill of sale of the vessel was permitted, by a vote of the company, to stand in the name of Messrs. Swasey, and of Captain Merrill. On this point the evidence is complete and uncontradicted, — that the bill of sale was so left, merely as matter of convenience, and in reliance upon the bond which had been given, and without any view to its being security to the agents or master. At the time of this vote, there was no idea that the company would, or could, be in debt to the Messrs. Swasey. Indeed, the Swaseys had no authority to spend anything, beyond the amount of the capital stock. Between themselves and the association, they were merely disbursing agents.
About the middle of February, the Swaseys summoned the members to the city, and on the 21st, with the knowledge of the Swaseys,; it was voted to sail on the 24th. ' The vessel was now loaded, the hatches on, the boats stowed, and everything ready for sea. On the afternoon of the 22d, the Swaseys, for the first time, announced to the company, that it was in debt to them about $4000. I have no doubt, from the evidence, that they knew the state of the accounts long before this, and delayed the announcement -intentionally, until the company was placed under the disadvantage of being all assembled, most of them at a distance from their homes, and in the expectation of going immediately to sea. The company was dissatisfied, the more so on inquiry into the purchases made by the Swaseys and, on looking for the bond, it was ascertained that Mr. T. H. Swasey had obtained it, in some manner unknown to the company, and *699destroyed It. This aet, his counsel very properly has not attempted to defend.
On inquiry, it appeared that the Swaseys had charged the company with the face of the hills of goods purchased by them, of Thayer & Merrill, when in fact there had been, (as to a part of the bill,) a discount of three per cent.; and $100 was discounted from the price of the vessel, which was not communicated to the company.
1 am satisfied that there was no contract between the Swaseys and the association, by which they have any lien upon the ship or her stores. As to a right in general equity, which an agent has to retain property against his principal, on which he has made advances, it is enough to say, that the conduct of the Swa-seys has not been such as to entitle them to enforce any such equities, in this court, against the association. As against these respondents, therefore, the decree must be for the libellants.
As to the claim of Captain Merrill, he has no lien by contract, nor by the general maritime law, and there is no evidence that he has incurred any liabilities, nor had he authority from the company to do so.
The respondents, Thayer & Merrill, claim a lien for their provisions and chandlery advanced, under the Massachusetts statute of 1848 (chapter 290). This statute creates a lien on a vessel, in the ports of the state, under certain limitations, in favor of parties who have furnished labor, materials, stores, or provisions. It provides no means of enforcing the lien by any process from the state courts, and the parties are left to pursue their remedy in admiralty. These respondents have not done so. It is not necessary to decide whether they had a lien, or whether it is waived; for they are not properly before the court, for the enforcement of a lien. They are not libellants; no notice is given to the world to show cause against their claim, and the libel to which they respond, is diverso intuitu. It would be unprecedented, in a petitory or possessory suit, to enforce a lien of a party who comes in merely as a respondent. If the libel itself were for the enforcement of a lien, the situation of these respondents might be different, as in the case of The. Robert Fulton [Case No. 11,890]. Neither is their lien, if any they have, an objection to the granting of the decree prayed for. The lien created by the state statute, is independent of the title or possession now in controversy, and cannot be affected by the decree.
But Messrs. Thayer & Merrill have attached the vessel, at common law,- in a suit against the Messrs. Swasey, and claim to have that attachment preserved. They have not proceeded in rem, and their attachment is valid only in case the property attached is the property of Messrs. Swasey. It is partly to determine this very question, whether the vessel is the property of the Messrs. Swasey, or of the libellants, that this suit is brought. We are liable to be misled, in the first view of this point, by an impression that their attachment is in the nature of a proceeding against certain specific property, on which they have a claim arising out of the nature and circumstances of their debt. But their attachment is no better, at the common law, than the attachment of any other creditor of the Messrs. Swasey, for a different cause of action, or than if laid upon any other property of the Messrs. Swasey.
Being satisfied that the ship and stores were not the property of the Messrs. Swasey, when the attachment was made, and that Thayer & Merrill knew, when the debt was contracted, that the property libelled was bought with the money of the company, and held by the Messrs. Swasey merely as agents, their attachment is no obstacle to the decree prayed for.
A portion of the stores have not been paid for. These, of course, the libellants cannot retain, without being bound for their value, though originally purchased without authority. The decree, as to the stores, must therefore be for those which have been paid for. In this view, my attention has been called by counsel to the commissions charged by the Messrs. Swasey. They were to have commissions for services rendered, but I do not think that they have rendered valuable services to the company, and their conduct has been such that they are not entitled to compensation. I shall therefore treat the libel-lants as entitled to the whole amount which they have paid to the Swaseys, except actual expenses.
After this opinion was pronounced, the li-bellants made an arrangement with Messrs. Thayer & Merrill, to return so much of the goods, as exceeded in value the amount which the libellants had paid to the Messrs. Swasey; and it was decreed that the libellants had a right to the possession of the ship, and of the stores on board of her. and that the title thereto should be vested in certain persons who had been named by the libellants, as their agents for that purpose, and that possession of the ship and stores should be delivered to the libellants, or to said persons, as their agents, and that the libellants recover costs.
[“And now after, &c. . . . the court doth order, adjudge, and decree that the libellants have a right to the title and possession of the brig Taranto, her tackle, apparel, and furniture, and of the sea-stores now on board said brig; also doth decree that the title to said brig, her tackle, apparel, and furniture, and to the sea stores now on board said brig, be vested in Nathaniel Adams, John T. Dingley, O. P. Danforth, C. G. Gill, and Marcus A. Thomas, for the use of the libellants; also doth order, adjudge, and decree that the possession of said brig, her tackle, apparel, and furniture, and of the sea stores now on board said brig be delivered to the libellants, or to the said Nathaniel Adams, John T. Dingley, C. P. Danforth, C. G. Gill, and Marcus A. Thomas, for the use of the libellants; also *700doth order, adjudge, and decree that the said Thomas H. Swasey, Edward Swasey and John M. Merrill, deliver the bill of sale of said brig Taranto, and the certificates of registry, en-rolment, and license, and all other documents in their possession, belonging to said brig, and required by the laws of the United States, to the libellants, or to the said Nathaniel Adams, John T. Dingley, C. P. Danforth, C. G. Gill, and M. A. Thomas, for the use of the libel-lants; also doth order, adjudge, and decree that the said Thomas H. Swasey, Edward Swasey, and John M. Merrill pay to the libel-lants costs taxed at-dollars.] 2

 [From 12 Law Rep. 5.]