Court Opinion

ID: 8801568
Source: CourtListenerOpinion
Date Created: 2022-11-26 14:34:23.969638+00
Date Added: 2024-06-11T17:03:55.485563
License: Public Domain

PUTNAM, Circuit Judge
(dissenting). These proceedings originated in several libels in the District Court, in each of which the decree of the District Court was in favor of the steamship Kronprinzes-sin Cecilie. Several appeals have been taken, which appear in this court as Nos. 1196, 1197, 1198, and 1199, but they all involve the same main question, and can be conveniently disposed of by a single opinion. The facts herein stated cover all the cases, except as we may otherwise explain.
The learned judge of the District Court said:
“In the first case, the Guaranty Trust Company of New York seeks to recover damages for breach of contract, by the steamship, in failing to carry a consignment of gold from the port of New York to the port of Plymouth, England. The libel alleges that on July 27, 1914, the steamship was lying in the port of New York, boun’d for Bremerhaven, Germany, by way of Plymouth, England; that on that date the libelant delivered to, the steamship in good order and condition ninety-three kegs of gold bullion, of the agreed and declared value of $4,942,936.64, to be carried to Plymouth, England; thence to be forwarded to London; to he there delivered in like good order and condition to the order of the libelant, in consideration of $9,268 prepaid freight; that the steamship delivered to the libelant a bill of lading therefor; that, in violation of her contract, the steamship, when about 900 miles from Plymouth, abandoned her voyage and put back to Bar Harbor, He., where, on or about August 8, 1914, the libelant accepted redelivery of the 93 kegs of gold from the steamship, under an agreement that such redelivery should not constitute a waiver of_ libelant’s claim for breach of contract. By reason of such failure of the'steamship to deliver the gold at Plymouth, the libelant says, it has suffered damage exceeding the sum of $1,104,467.43. The libel was subsequently amended, increasing the amount claimed as damages to $1,793,278.22; and the libelant says that no part of this sum has been paid.
“The answer admits the receipt of the 93 kegs of gold bullion, and alleges that the carriage of the same was undertaken by the claimant, subject to the conditions and exceptions contained in the bill of lading, which is made a part of the answer; subject also to the possibility of the ship being prevented from concluding her voyage and being forced to put back into a port of refuge, in case of outbreak, or threatened outbreak, of the European war. It ad*686mits that the steamship "turned bach on her course, and says that at the time of turning hack she was about 1,070 miles from Plymouth. It alleges that the decision of the master- to return to a port in the United States was based upon credible information received by him from the North German Lloyd office at Bremen, by wireless message, that war had broken out, involving Germany and Russia, France, and England, and that this message, considered in conjunction with the information with respect to the European crisis received by him prior to sailing, furnished reasonable ground for him to apprehend that the steamship and cargo would be captured if she continued on her voyage, and required him, in the exercise of sound judgment and discretion, to put back to a port of refuge; that, though war had not actually broken out at the time of the receipt of this wireless message, still the master, in anticipation of an outbreak of hostilities, and the consequent danger of arrest of the members -of his crew, the arrest or probable detention and discomfort of his passengers, and the capture of his ship and cargo, was fully justified in adopting the course which he did adopt.
“The answer further alleges that the course followed by the captain was successful; that his return to a port of refuge, and the delivery of the specie, to the parties entitled to it, were accomplished without the capture or detention of a single passenger or member of the crew, and without loss or damage to any of the specie, or to any other part of the cargo.
“As a third defense, the answer asserts the exception in the bill of lading against liability for the loss or damage ‘occasioned by arrest and restraint of princes, rulers, or people.’
“Certain facts are stipulated: The libelant is a corporation organized under the laws of the state of New York, having its office in New York and a branch office in London. The claimant, North German Lloyd, is a corporation organized under the laws of Bremen, existing under said laws and the laws of the German Empire, and is the owner of the Kronprinzessin Cecilie. The steamship was built in 1907, at a cost of about $4,500,000. On July 27,1914, the libelant shipped on board the steamer 93 kegs containing gold bars, owned by the shipper, of the value, at the time and place, as set forth in the libel. By the terms of the contract, the gold was to be carried by the steamer from New York to Plymouth, England; thence to be forwarded, at the steamer’s expense, but at the owner’s risk, to London, unto the Guaranty Trust Company, of New York, or its assigns, subject to the provisions and exceptions of the bill of lading. The steamer was fully manned, outfitted, and equipped, and sailed on- the voyage from New York on July 28,1914, about 1 o’clock in the morning. She continued on the voyage until the night of July 31st, at about 9 minutes past 10 o’clock in the evening, ship’s time, when she turned back towards New York. At the time of turning back the steamer was a distance of about 1,070 nautical miles from Plymouth. Just before turning back, about 10 o’clock in the evening a wireless message was received on board of the steamer from the' directors of the North German Lloyd at Bremerhaven, in private code. The translation of the message reads as follows: ‘War has broken out with England, France, and Russia. Return to New York.’ It was signed by the managing directors of the claimant company, after having been informed of the intention of the government to dispatch on that day the notes to Russia and France which are referred to in the German White Paper, and after a general warning by the admiralty to the German merchant marine, and after the directors had received information that a declaration of a state of war had been perfected and would shortly be proclaimed.
“Certain historical facts are agreed upon, as part of the proofs. Those stipulated as having happened before the ship sailed from New York are as follows:
On June 23, 1914, Archduke Francis Ferdinand, of Austria, and his wife, the Duchess of Hohenberg, were assassinated at Sarajevo, the capital of Bosnia; on July 23d, Austria sent an ultimatum to S'ervia; on July 24th Russia urged that. Austria abandon the time limit of her ultimatum “in order to prevent consequences equally incalculable and fatal to all the powers which might result from the course of action followed by the Austro-Hungarian government’ ; the Russian government informed the other powers that, if the Austro-Hungarian government should make war on Servia, Russia could not *687allow the conflict to be settled between those two countries alone; the French ambassador at St. Petersburg gave the English ambassador at St Petersburg to understand ‘that France would fulfill all the obligations entailed by her alliance with Russia, if necessity arose, besides supporting Russia strongly in all diplomatic negotiations’; on July 25th Austria declined the Russian request for extension of time limit in ultimatum to Servia; Austria advised Servia and the other powers that she considered Servia’s reply unsatisfactory; the Austrian minister left Belgrade at 6:30 p. m.; the Servian government moved from Belgrade to Nish the same evening; Germany confined her Alsace-Lorraine garrisons to barracks, and placed the frontier works of Alsace-Lorraine in a complete state of defense; Servia ordered mobilization; Russia began to take military precautions; martial law was proclaimed in Austria.
“On July 26th Austria severed diplomatic relations with Servia, and sent passports to the Servian minister; Austrian mobilization against Servia was decreed; Austria advised Russia that she sought no territory of Servia, and did not intend to impair the sovereignty of that country, but that, aside from that, she was prepared to go to the furthest extremes to obtain satisfaction of her demands; the Servian arm'y began mobilization.
“The history shows that all powers thereupon became promptly involved,' including Austria, Russia, Germany, France, and England. Thereupon, on July 30th, the German ambassador at St. Petersburg was directed to make the following declaration to the Russian government: ‘Preparatory military measures by Russia will force us to counter measures, which must consist in mobilizing the army. But mobilization means war. As we know the obligations of France towards Russia, this mobilization would be directed against both Russia and France. We cannot assume that Russia desires to unchain such a European war. Since Austria-Hungary will not touch the existence of the Servian kingdom, we are of the opinion that Russia can afford to assume an attitude of waiting. We can. all the more support the desire of Russia to protect the integrity of Servia, as Austro-Hungary does not intend to question ,the latter. It will be easy in the further development of the affair to find a basis for an understanding.’ ”
We will add that it is true that the Russian secretary at this time— that is, on July 30th — declared- that there had been no mobilization; but events came on so rapidly that, while it must be admitted that no flagrant war had broken out involving France, Russia, and England with Germany at the time the wireless message came to the captain of the Cecilie from the North German Lloyd office, yet the mobilization on the part of Russia was in hand, and that mobilization meant flagrant war within the meaning of the message of the North German Lloyd office by wireless, so that for all practical purposes, with reference to.this steamer, she was on mid-ocean, and at least a full day’s sail from Plymouth, and in the full hazard of that position in mid-ocean, bound for the port of a threatened enemy.
To test this, let us look at the actual position in which the shippers placed her. The war which ensued finally came quickly on, involving all the great powers of Europe, England, France, Germany, Austria, and Russia. The ship in this case was a German ship. She was chartered at New York for a voyage to Bremerhaven, touching first at Plymouth, where she was to deliver the most valuable part of her cargo at what might be a hostile port, and then again at Cherbourg she would deliver more of her gold, which might be another hostile port, and then proceed to her'own home port at Bremerhaven. She represented a value of more than $11,000,000, largely of what might be hostile gold, shipped for London and Paris, with a valuable general cargo of $139,-335.
*688The Cecilie had aboard 1,892 persons of mixed nationalities; 354 Americans, 667. Germans, 406 Austrians, 151 Russians, and other nationalities of minor amounts, involving nearly all the nationalities of Europe, including some nationalities that would have been hostile, if war had broken out, to any port she might touch, including her port of final destination.
In the event of flagrant hostilities, the master of the ship would have represented the entire enterprise, and would have been quite certain to fall into hostile hands, wherever he might have been, unless in an American port; so that, in case of hostilities, the vessel would have been safe only in America, and by his turning bade he accomplished the safety of all concerned. It is true that when he sailed from New York the master was aware of the possibility of the ship being prevented from completing her voyage, and being forced to put back into a port of refuge. He protected himself by using in his bill of lading the usual exemptions from the hostile acts and purposes of princes and nationalities. So far as this ship is concerned, and these bills of lading were concerned, they were not hampered by any peculiar provision of any laws applicable to the ship; but the ship and cargo and passengers were protected to the full extent of the rules of the general international laws that are knowh to all the nations of the world.
When the ship sailed, and gave her bills of lading, the possibility of war was known; but the amount of freight charged was on the basis of only $9',268 for the gold belonging to the Guaranty Trust Company, and on a like basis for the rest of the gold, and it contemplated imposing no particular hazard on the ship, and the ship, ’ undoubtedly loaded her cargo on the 27th day of July apprehending that the war clouds were probably clearing. The record shows that as late as July 30th those trading with a hope of peace were justified in doing so, and the rates of freight charged for this ship were based on that hope. Instead of that, however, the clouds gathered with remarkable rapidity; so much so that within four days after sailing it became evident that they were about to break, and that for the protection of the entire enterprise the ship must return to a neutral port.
Captain Polack testified that meanwhile, by communicating with vessels by wireless and otherwise, he had received information during the intervening period in regard to the progress of events, ¿nd was waiting for further information by wireless, and that, when he turned back, he acted, not only in accordance with his instructions, but also on the idea of his own best judgment, in running no further danger.
It is unnecessary to cite authorities on this topic, because the law is too well settled, and the underlying principles are all too uniformly accepted, in the circumstances of this case, to the effect that it was not only the right, but the duty, for the master of this ship not to delay, and hazard running his vessel into a possible hostile port, but to use justifiable precautions and reasonable grounds for apprehension of capture, and to have due regard to the uncertainties of' the ocean, and leave reasonable margin for the state of weather and for accidental detentions; and under the circumstances of this case the decision to turn back was justifiable, whether it came from the master or owners.
*689It is also plain that the positions oí the libelants in these cases would reverse all these propositions, had they been accepted, and would have involved this ship and the entire enterprise in hazards which the master had no right to assume. On the broad ocean, with no pilot but his own foresight and ingenuity, it is the duty of a master under such circumstances, not only to use diligence in escaping actual danger, but to use it in avoiding what is threatened; and, considering the number of people and the value of the ship, and the property which she had aboard, and the complexities of the hostilities by which she was endangered, the exigencies cannot be too strongly described.
This ship lost nothing, and the holders of her bills of lading lost nothing; but in regard to this particular shipment by the Guaranty Trust Company, if this libel is sustained, the company would receive exchange to the amount of $1,793,278.23. This would be all profit, and an addition to the amount of gold shipped which represents no amount paid out by the shippers. The same would apply to the other libelants in proportion to the amounts involved. It would prove a profit for the ¿Guaranty Trust Company and to other shippers proportionately, and a corresponding loss to the ship, without any sum being paid therefor. Looking at the case from this point of view, it is incredible to suppose that, for the mere amount with reference to the Guaranty Trust Company, namely, the $9,268, damages or compensation in this large sum were ever contemplated. It is incredible to suppose that a profit and loss of such an amount was ever contemplated or agreed upon, and it cannot be recovered, of course, unless there were expressed or implied stipulations, agreed to by the parties, that it should be paid.
British & Foreign Insurance Co. v. Sanday & Co. [1916] Appeal Cases, 650, decided January 27, 1916, in our judgment disposes of any question which can be considered as left open in this case; and that is as to the effect of the usual exceptions contained in bills of lading. This case relates to this very war, and concerns what constitutes a deviation within the meaning of that exception. This case concerned two British vessels laden with merchandise for sale in Germany. While on the voyage from the Argentine to Hamburg, at the time of the declaration of war between Great Britain and Germany, the vessels shifted their courses. It was held that the voyages became illegal by force of the declaration of war, and the voyage could not lawfully be completed, and there was no-deviation in law. The court was a very full court, and there was no dissent, and there can be no- ' doubt that the position was in accordance with the law universally held. It is enough to quote Lord Lorebum (page 660) as follows:
“It was therefore a loss within, the clause which insures these goods at and from losses against restraints by kings, princes, or peoples.”
This case covers the only point which had not been precisely covered in the previous decisions, although they led directly up to it, namely,, that obedience to an obligation which was a direct result of a condition of law arising out of the existence of war operates as a restraint precisely within these provisions, without any physical act-on the part. *690of the legal authorities. The case at bar would have been precisely within this decision if war between Great Britain and Germany had broken out before the Cecilie reached Plymouth, so that it would have been a violation of the law of Germany for her to enter that port. With that single exception the cases are precisely alike, and it certainly cannot be said that the deviation of the Cecilie, accomplished for the purpose of preventing a pending breach, of German law, was not as efficient as it would have been if a deviation had occurred two or three days later. Taking the cases by and large, there cannot be said to be substantially any distinction between them.
We think ’the following impressions are enough to dispose of all the cases: Of course, the telegrams which passed between the sovereign heads of Germany, Russia, and England are matters of common knowledge with reference to an investigation of this character; and they illustrate very clearly the fact that the question of peace and war was hanging by a single thread, and it was settled overnight, or in less time than overnight. When this ship was loaded at New York, it was known that the world was on the verge of war or on the verge of peace. The voyage involved three different ports, one of which was friendly, and two of which were liable to be hostile; and it also involved the four seas, with the certainty of capture in the case of hostilities. When the ship sailed it was, of course, not known whether war would break out, or when it would break out; but, as she progressed on her voyage of five or six days from New York, towards Plymouth, the master of the ship was in frequent communication, and getting frequent impressions, as to the probability of war or peace in various ways. As hé went on his voyage the clouds thickened, and whatever hopes there might have been of peace were disappearing; and, when he was within two or three days of Plymouth, he was within the almost immediate presence of war or peace, with the practical certainty of war. His voyage, moreover, was liable to be delayed by maritime misfortunes. The dangers of navigation, and the possibility of being delayed by those dangers around the British Isles, be,ing so considerable that it was impossible to say, except in absolutely clear weather, as to the time of arrival within one, two, pr three days, or within the period which intervened between the time when he turned the ship about and the time of the actual, outbreak of hostilities. All the time he was on dangerous ground,- with the danger at all times increasing as he proceeded on his voyage; so that, although he sailed with a reasonable probability of peace, instead of war, the probability of war, with enemies all about him, advanced almost to a certainty before he reached the point where he changed his course. In addition to this, the whole transaction must be looked upon together, and the orders which he received not to visit any hostile port, on the 1st of August, the day after he turned his ship, were sufficiently connected with what preceded to justify his continuing his purpose to return to a neutral port, which was still incomplete. This decision should not turn on a narrow rule, as it was still in abeyance. Therefore, from any point of view, the master was justified, on receiving the telegram, on the 1st day of August, in continuing on his return voyage to a neutral port.
*691Here was a ship whose cargo was, perhaps, neutral; but the ship was herself advancing into the danger zone with nearly 2,000 persons aboard, many of whom might have been liable, on arrival at the first port of discharge, to an indefinite detention if the ship had been accidentally arrested. By the laws of the sea the whole is to* be looked upon, ship, cargo, and passengers, as a single venture, and all resting upop the shoulders of one man — lie captain. Assuming that, when he left New York, he had the prospect of a clear voyage, under the original probability that, as he advanced upon it, he might find the clouds cleared away, the events worked otherwise. He was, he testified, in constant anxiety as he advanced on account of the information which he received, and he would have been justified, on finding the increased danger, to have returned to a neutral port independently of any advices from the ship’s owners.
There was no Moorish cruiser lying across his path, as there was in Driscol v. Bovil, 1 B. & P. 313 (1798), with the danger of slavery following capture, which caused the crew to refuse to sail;' but there was danger of a possible, and even probable, detention of all the German passengers aboard, and tire captain had as good reason for avoiding danger as there was in the case referred to-, in which it was held that there was no deviation which would affect the insurance policy.
The appeal of the National City Bank affords nothing'substantially different from the appeal of the Guaranty Trust Company, but it illustrates it forcibly. In the City Bank Case the amount involved was gold shipments; one of ,them, amounting to- $2,104,254.34, to be unladen at Cherbourg for land transportation from there to Paris. This, of course, was for French delivery at a French port. If the regular course of her voyage proved without incident, the libelant estimated that the ship would have reached Plymouth-before midnight on the 2d day of August, and Cherbourg early in the morning of the 3d day of August. It is maintained by the libelant that the precise time of arrival was not critical, for it says it is clear, in any event, the Cher-bourg shipment would have been landed in France at least 7 hours before Germany declared war, and before France declared war upon Germany, and that, if the libelant’s theory had been true, the shipment would1 have been landed at least 12 hours before then, and that there is, therefore, ample reason that, in either event, the Cherbourg shipment would have been landed, and the ship would have turned back, -either to America, or have gone on to Bremen, not less than 6, and probably at least 12, hours before the state of peace was changed into a state of belligerency. Upon this thé libelant claims that the court could assume that there would have been no act of hostility; but the question was not what the court would assume, but what hazard the master of the vessel might run. The whole of this hypothesis demonstrates to what extent the libelants were willing to drive the ship into a corner, and what computations they were making, which they were willing to impose upon her, as against the path of actual safety which she adopted.