Court Opinion

ID: 8857017
Source: CourtListenerOpinion
Date Created: 2022-11-26 17:33:48.444398+00
Date Added: 2024-06-11T17:05:41.786247
License: Public Domain

PARDEE, Circuit Judge
(dissenting). I do not discover that the nature and origin of the admiralty jurisdiction in salvage cases, or the general principles upon which admiralty courts make salvage awards, are involved in this cause. The question is in regard to the enforcement of an admitted salvage contract, and, as declared by the supreme court in Post v. Jones, 19 How. 150, 160, the law in that behalf undoubtedly is:
“Courts of admiralty will enforce contracts made for salvage service and salvage compensation, where the salvor has not taken advantage of liis power to make an unreasonable bargain; but they will not tolerate the doctrino that a salvor can take the advantage of his situation, and avail himself of the calamities of others to drive a bargain; nor will they permit the performance of a public duty to be turned into a traffic of profit.”
Our inquiry should be, to wit: As the circumstances were at the time the contract was entered into between the owners and salvors of the Elfrida, did the salvors take advantage of their power to make an unreasonable bargain, or, in other words, was the amount of salvage contracted for excessive, in proportion to the value of the property salved, to such an extent as to be unreasonable? The Agnes I. Grace, 2 U. S. App. 317, 2 C. C. A. 581, 51 Fed. 958. The Elfrida was aground within the limits of the port of Galveston and off the harbor of Velasco, upon a sandy beach, in water from 6 to 8 feet in depth, according to the tides, 1,000 feet distant from water of sufficient depth to float her, imbedded in sand about 2 feet, with a draft of 11 feet 10 inches, which could not be reduced by discharge of ballast or otherwise so as to get her off. The master has ineffectually attempted to pull the ship off with the aid of her own anchors, cable, gear, and a tugboat, but had lost an anchor and a cable, and had strained the ship’s appliances; and the ship was practically helpless for 10 days before the contract for salvage was entered into. From the time the ship went ashore, the master was in communication with the agents of the ship and Lloyd’s agent in the interest of the underwriters in Galveston, — all practically on the ground, — and by cable with the ship’s owners. Before the contract for salvage was entered into, the master had opportunities to acquaint himself with the nature of the shore upon which he was stranded, and the surroundings find conditions, as well as the likelihood of the ship’s being damaged or lost; and, besides the agents and owners above mentioned, the master had information and advices from pilots and masters of other vessels at Velasco in no wise concerned with or for the contracting salvors. During this time the libelants in the court below and thé appellees in this court offered to the captain to undertake the floating of the Elfrida for such salvage compensation as the United States court would award if *765tliey were successful. This proposition the master refused, and, instead, under the advice of his agents, called for tenders, as follows:
“Please tender for to float and place in a place of safety, say Galveston, where her bottom can be examined; furnishing diver and his apparatus; also to furnish all the material and labor In floating said S. S. Elfrida; also time required. Reply at your earliest convenience, under seal, t'o .Tames Horley, IJoyd’s agent, or myself. No cure, no pay.
“Yours, truly, B. Burgess, Master.
“P. S. A convenient, time to be allowed to get the ship off, and if, at the expiration of ihe time, the vessel is still aground, all claims of this contract to cease, and to be null & void. B. Burgess, Master.”
How many of these tenders were sent out does not appear, but the master, in response, received two propositions; one for the sum ot $24,000, and one for $22,000. He cabled the lower proposition to his owners, and received instructions as follows:
“To Burgess, Steamer Blfrida, Velasco: Accept tender forty-five eighty if lower impossible. No cure, no pay. Try include in agreement, if steamer, after coming off, not worth amount salvage, steamer in damaged state to be taken in payment salvage. Pyman.”
Under this instruction he entered into a contract with the appellees by which they bound themselves to float and place in a safe anchorage, — Quintana or Galveston, — as directed, the steamship Elfrida, furnish all labor and material at their own cost, furnish diver and necessary apparatus to survey and examine the bottom of said steamship,' and complete the same within 21 days; otherwise no compensation for work performed, labor, tools, or appliances furnished. The master agreed to. pay for such services the sum of $22,000, but reserved the right to abandon the ship in favor of the salvors in lieu of the said $22,000. At. that time, according to the evidence, all parties thought the matter of floating the Elfrida would be a difficult aud tedious work, necessarily taking time, and accompanied with great risk of success. That the master and owners so believed is shown by the fact, that they required the salvors to do the work in 21 days, aud stipulated for the option to abandon jhe ship in. lieu of paying the salvage agreed upon; and that the contractors so believed is shown by the extensive preparation made to carry out their contract. The contracting salvors prepared a month’s supply for their force, procured cables, gear, chains, anchors, two tugboats, two lighters, and two schooners, fully manned and equipped, aud hired a, large force of men. Some of the anchors and chains and the tugboats were the property of the contractors, but the schooners and lighters and other anchors and chains were hired. As to one lighter, at least, the contractors specially assumed the responsibility of all loss. The property thus prepared was worth about $50,000, was exposed to risk of loss or damage in the Gulf and by contact with the jetties and with and near the Elfrida among the breakers. About 5% days were consumed in preparations and actual work. By means of the skill aud experience of the salvors, with favoring weather, the Elfrida was floated. When afloat, she was worth, according to the evidence, from ninety to one hundred and ten thousand dollars. The only possible ground upon which *766the amount of the salvage contracted for can be claimed to be excessive is because of the signal success of the salvors within the short time employed. The charges so recklessly made by the claimants in the court below at the collusion, fraud, overreaching, bad faith, and misrepresentation generally, are wholly unsupported by proof. The pretense that the master or owners were coerced into making the contract is absurd in view of the fact that Clarke & Co. offered to undertake the salvage without any contract, and for such award as the United States court might make. The amount agreed upon was not excessive; on the contrary, was low from the outlook before and at the time the contract was made. Since the successful rendition of the salvage services, in view of the preparations to that end, the extraordinary risks the contracting salvors’ were compelled to assume, the skill and experience employed, and the very important fact that the amount agreed upon does not exceed 20 or 25 per cent, of the salved property, I am clearly of opinion that the amount agreed uponisnotexcessive to any such extent as to be unreasonable. The judge of the district court found “from the evidence that said contract was a lawful contract, and that the same was entered into by the said master of said steamship with full knowledge or means of knowledge of the said master and of the owners of said steamship of all the conditions then existing, and that the amount named in said contract was not unreasonable under the said conditions.” The judge evidently had read with appreciation The Agnes X. Grace, 49 Fed. 662, decided in the United States district court at Savannah, and he evidently attempted to follow the opinion of this court in the same case on appeal. The Agnes I. Grace, supra. In my opinion, he decided the case correctly.
How the discretion vested in ¡he courts in matters of salvage contracts has heretofore been exercised by distinguished admiralty judges appears from the following extracts:
Mr. Justice Story, in Bearse v. Pigs of Copper, 1 Story, 323, Fed. Cas. No. 1,193, says:
“The situation of the parties, the nature of the service, and the absence of all controlling necessities, requiring immediate relief, on one side, at any expense and hazard, in order to escape from impending perils and calamities; and, on the other side, the absence of any duty to lend the required assistance, or any motive to take advantage of the necessities and urgencies of those perils and calamities, to drive a hard and unconscionable bargain, — these circumstances make it a case where the.court not only looks with indulgence upon such a contract, but endeavors to fortify itself against the exercise of mere discretion by adopting and enforcing such a contract as equally just, moral, and conscientious.”
Judge Brown, of the Southern District of New York, in The Alert, 56 Fed. 721, 724, says:
“In such contracts, so far as the element of a reward enters into the compensation allowed, — that is, an allowance wholly beyond the mere quantum meruit for the work and labor performed, as a reward given as a premium, on grounds of public policy, to encourage the maintenance of salvage equipments, and to induce speedy and heroic efforts for the safety of life and property, — this element cannot logically become a subject of barter, or of any irreviewable contract between the parties: since that would permit the parties to usurp pro tanto the functions of the court, but these considerations are applicable but slightly, if at all, to contracts which, *767like the present, are made upon land, between parties dealing upon equal terms, with full opportunity for deliberation, with equal knowledge to the facts, and under the ordinary conditions of nonmaritime contracts. Such contracts should be treated like other voluntary, deliberate contracts for specific service. Bondies v. Sherwood, 22 How. 214; The Agnes I. Grace, 2 C. C. A. 581, 51 Fed. 959, and 2 U. S. App. 317.”
Judge Longyear, oí the district of Michigan, in The Silver Spray, 1 Brown, Adm. 354, Fed. Cas. No. 12,857, says:
“As the matter turned out, it was no doubt a hard bargain for the libelants. But I do not understand that a court of admiralty will set aside a contract for that canse alone, where it is' free from all fraud, deception, mistake, or circumstances of controlling necessity. McArthur had ample time for consideration, and there is no pretense of any fraud or deception on the part of Moore or his agent, Reilly, or that McArtirar did not know all about the situation, and the difficulties in the way of getting the boilers out; and there was no controlling neeossity, of duty or otherwise, to undertake the job. The contract appears to have been entered into openly and fairly in all respects, and there is no principle or authority upon which the court can disregard it, or make a new contract for the parties.”
Judge Hughes of the Eastern district of Virginia, in The Sir William Armstrong, 53 Fed. 150, says:
“It is well settled text-book law that the master of a vessel in distress may bind the owner by a salvage agreement in the absence of the owner; that it is competent for salvors, instead of leaving the amount of their remuneration to be determined by a court, to agree with the master of a vessel in distress to render the required assistance for a specific sum; and that, if a salvage agreement be prove;d, the court will enforce it, unless it be clearly inequitable; it being no answer to an agreement to say, on one hand, that it is too hard upon the salvors, or, on the oilier, that the salvage sendees were attended by less difficulty than was anticipated.”
Judge Wells, of the district court of Missouri, in The H. D. Bacon, 1 Newb. Adm. 280, Fed. Cas. No. 4,232, says:
“The true principle by which such cases should be governed would appear to this court, with great respect for others, to be that established in like cases in courts of equity; that is, that a contract should be presumed prima facie to be fair, but, if proven to be unconscionable, tbe court of admiralty, like the court of equity, would refuse to enforce it.”
Judge Speer, of the Southern district of Georgia, in The Agnes I. Grace, 49 Fed. 664 (where five-twelfths of the salved property was awarded as salvage), says:
“It is true, as insisted by the respondent’s counsel, that a contract of this character is not binding upon the court, and that in all cases of salvage it is competent for the court to adjudge and assess the amount of the recovery in accordance with the equities of the case; and, if it should appear that a contract of this character was an inequitable one, the court would, of course, disregard it. But whenever a contract has been entered into after due deliberation by the parties, and has not been shown to be in any respect an inequitable one, it is exceedingly valuable as evidence to enable the court to arrive at a just determination. The court regards this contract as evidence in that light, and not as a conclusive contract; but it is a most significant and valuable indication of wbat should be the true amount of recovery.”
In Jones,. Salv. p. 99, the English rule is declared as follows:
“If a salvage agreement be proved, the court will uphold it, unless it be clearly inequitable; and it is no answer to the agreement to say that the bargain is a hard one upon the salvors, or that greater difficulties than were anticipated, in consequence of the change of weather, attended its performance; or that the weather became tempestuous; or the vessel was longer in arriving in port than *768might have reasonably been expected. Nor, on the other hand, can the owner of the vessel receiving assistance refuse to pay the amount stipulated for on the ground that the salvage services were attended with less difficulty than had been anticipated, unless, indeed, the sum happen to be so grossly exorbitant as to amount to evidence of bad faith or fraud, which of themselves would induce the court to set aside the agreement.”
In The Agnes I. Grace, supra, this court held that:
‘‘Courts of admiralty will enforce contracts for salvage services and salvage compensation where there has been a definite, distinct agreement, with ample time for the parties to consider what they were doing, where the contract was considered by all at the time it was made to be fair and reasonable, and where the salvor did not take advantage of his power to make an unreasonable bargain.”
If the rule unanimously declared by tliis court in tbe last-cited case is applied to the case in hand, the decree appealed from must be affirmed. A reversal of that decree, and a reduction of the amount of salvage stipulated in the contract, necessarily stamp the salvors with fraud and bad faith, and this, in my opinion, is wholly unwarranted by the evidence and circumstances of the case.
I have examined the adjudged cases cited in the opinion of the court as supporting the doctrine that a salvage contract may be disregarded under any and all circumstances when the court is inclined to think the amount of compensation agreed upon is too much or too little, to wit, The Phantom, L. R. 1 Adm. & Ecc. 58; The Emulous, 1 Sumn. 207, Fed. Cas. No. 4,480; The Ellen Holgate, 8 Fed. Cas. 509; The Rialto [1891] Prob. 175; Post v. Jones, supra, — and I find that, while detached expressions in the opinions rendered may apparently support the contention of my brethren, not one of the cases referred to warrants the abrogation of the salvage contract in the instant case unless had faith and undue advantage are imputed to the contracting salvors; and in Post v. Jones, supra, the supreme court of the United States, whose decisions ought to be of controlling influence in tbis court, expressly declared that “courts of admiralty will enforce contracts made for salvage service and salvage compensation where the salvor has not taken advantage of his power to make an unreasonable bargain.” In the present case it is undisputed that the contracting salvors offered to do the work, leaving the compensation to be settled by a court of admiralty, and that the master on shore, surrounded by Ms friends, and in full “communication with the world by rail and telegraph, in consultation with owners, and having every opportunity to inform himself as to the circumstances, called for competing bids, received more than one, and accepted the lowest in a contract which fully protected the owners, and threw all the risks on the salvors, with a time limit. It is an overdraft on my credulity to ask me to take the evidence in the record, and conclude that when the contract of salvage was entered into there was either undue advantage taken of power, collusion, or bad faith on the part of the salvor, or that the bargain made was unreasonable.