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period. It may be said, generally, of all this class of objections that, in such circumstances, it is hardly to be supposed that the parties would deem it necessary to have a formal contract drawn up by a lawyer. If their intention can be ascertained from the testimony it is the duty of a court of equity to vitalize such intention and enforce it.
Regarding the Moreland sale the point is made that the entire transaction was fraudulent because the parties were acting for both Moreland and Morgan & Co., taking compensation from both. The defendant testifies that he told Moreland that he was being taken care of by the purchaser and that there were no commissions for him (Moreland) to pay. The complainant did not know of the payment of the $88,400 by Morgan & Co., or the agreement by them to compensate Hilands until long afterwards. Assuming, however, the existence of the double agency the answer to the defendant's proposition is found in the language of the court in Pennington v. Todd, 47 N. J. Eq. 569, 21 Atl. 297, 11 L. R. A. 589, 24 Am. St. Rep. 419.
"When an innocent member of a firm, established for the conduct of a lawful and moral business, calls upon his partner for a share of profits made in partnership transactions, is the partner absolved from the duty of dividing, if he shows that he realized the profits by cheating the customers of the firm? ** ** When the plaintiff is blameless, and the contract on which he stands is legal and moral, no court has ever permitted a defendant to escape responsibility because of his own misconduct."
Numerous criticisms are made of complainant's testimony and many mistakes of time and place are pointed out. For instance, the complainant testified that he met and talked with the defendant on the veranda of the Manhattan Hotel. The hotel has no veranda. Complainant testified that he first saw Hilands on Saturday morning, February 9th. It is now quite clearly established that the defendant did not reach the hotel, from Montreal, until Sunday morning, February 10th, and saw the defendant first on that day for a few moments. In view of the undisputed facts that the parties met at the hotel and negotiated there, the foregoing and all similar mistakes are deemed to be immaterial.
Without adverting further to the evidence the court cannot resist the conclusion that an agreement existed between the parties substantially as alleged in the complaint, that the complainant rendered valuable services in the common venture and is entitled to share in the profits.
The facts regarding the sale of the Curry stock are somewhat obscure. The actual transfer seems to have been negotiated through Col. McCook, but the inference is strong that $18,160 placed to the credit of the defendant was on account of services rendered by him and complainant in the Curry transaction. The exact nature of this transfer to Hilands can be shown on the accounting and if the said sum, or any part thereof, is shown to be in the nature of "commissions on the sale of Curry estate stock" the complainant is entitled to half thereof.
It follows that the complainant is entitled to the relief demanded in the bill. Unless the parties can agree upon the amount a reference will be ordered to take and state the account.
BETHEL V. MELLOR & RITTENHOUSE CO.
(District Court, E. D. Pennsylvania. May 27, 1904.)
1. SHIPPING-DAMAGE TO CARGO-LIABILITY FOR IMPROPER STOWAGE. A provision of a charter party that the master shall employ the charterers' stevedores at ports of loading, and discharge and pay them stated compensation, "the stevedores to be wholly under the direction and control of the master," does not affect the liability of the ship or owners for improper stowage.
2. SHIPPING-LIMITATION BY BILL OF LADING-HARTER ACT.
A cargo of licorice root was damaged in shipment, because, in loading, the stevedores, who were under the direction and control of the master, broke open a large number of the bales and stored the root in unusual places, where it received injury. Held, that the ship was liable for the damage, and could not avoid such liability by a notation, placed on the bill of lading at the insistence of the master, stating that the ship was not responsible for broken or cut bales; such notation being void under section 1 of the Harter act (Act Feb. 13, 1893, 27 Stat. 445, c. 105 [U. S. Comp. St. 1901, p. 2946]), which makes it unlawful to insert in a bill of lading any clause relieving the ship from liability for damages "arising from negligence, fault, or failure in proper loading stowage," etc.
In Admiralty. Action to recover freight.
Convers & Kirlin and Charles R. Hickox, for libelant.
HOLLAND, District Judge. This suit is for a balance of freight, amounting to $838.21, claimed by the libelant to be due on a cargo of licorice root, shipped from Alexandretta to Philadelphia on the ship Cilurnum, under a charter party. When the cargo arrived here on the 16th day of April, 1901, it was found that more than three times the usual number of bales had been broken, and the root stowed away in every available space in the ship, even between the battens. The respondent avers:
"That the said cutting and breaking was due to a want of proper care, or rough handling in stowage, and to the lack of proper care. That by reason of the cutting and breaking of said bales said cargo was damaged to the amount of five hundred and twenty-five and fifty-two hundredths dollars ($525.52), which the respondent now claims to recover by way of set-off against the freight due said steamship."
This averment is sustained by the evidence, except as to the amount of damage. The libelant seeks to avoid this liability because (1) the loading was under the direction of the shippers at Alexandretta; (2) the loading was done in accordance with the custom at that port; (3) the stevedores were appointed by the charterers; and (4) there was found on the bills of lading a written notation by the consignee that the libelant is "not responsible for broken or cut bales."
The testimony of the master as to who was in charge of the licorice root as it was brought alongside of his ship on lighters at the port of lading is entirely too vague to show whether or not there was a representative of the shippers or the charterers directing the loading. Some person was giving orders, but his identity is not disclosed, nor
is his name given, and the evidence of the method of loading, being in accordance with the custom at that port, is still more vague, and not sufficient to establish that fact. The charter party provides that: "The master shall employ charterers' stevedores at loading ports, paying one franc per ton on the guarantied dead weight capacity, and to employ charterers' stevedores at discharging ports, paying usual charge, not exceeding forty cents per ton discharged. The stevedores to be wholly under the direction and control of the master."
The master testified that he objected a number of times to the bales being broken, but that the stevedores followed his direction for a while, and then would continue in their own way to break bales and stow licorice root as found in the vessel when she arrived at Philadelphia. It was his duty to see that the cargo was loaded properly, and prevent the stevedores from breaking the bales and stowing it in unusual places in the ship, which resulted in this damage.
The provisions in a charter party that charterers' stevedores be employed by the master and paid by him does not affect the liability of the ship, or the owners, for improper stowage, since the stevedores in such case are held to be in the employ of the captain, and under his direction and control as the representative of the owners. Richardson v. Winsor, 3 Cliff. 405, Fed. Cas. No. 11,795; The T. A. Goddard (D. C.) 12 Fed. 184. The ship is liable for damage resulting from improper stowage and for the breaking of these bales and stowing the licorice root in unusual places in the ship, no matter by whom the stevedores are employed, or whosoever may have been liable personally, especially when he permitted this to be done by the stevedores wholly under his own direction and control. The Boskenna Bay (D. C.) 22 Fed. 662, The Keystone (D. C.) 31 Fed. 412, and Robinson v. Sugar Refining Company (D. C.) 70 Fed. 792.
The last matter set up by the libelant as a defense against this claim is the fact that, when these consignees obtained the bills of lading, they found upon them a notation that the ship was "not responsible for broken or cut bales." The captain testified that he insisted upon this qualification of the bills of lading before he would sign them at the port of lading. The bills of lading state, in the usual printed form, that the cargo was shipped in good order and condition. This notation upon the bills of lading cannot protect the ship from the responsibility for negligent loading and stowage. The first section of the act of February 13, 1893 (27 Stat. 445, c. 105), provides as follows:
"That it shall not be lawful for the manager, agent, master or owner of any vessel transporting merchandise or property from or between ports of the United States and foreign ports to insert in any bill of lading or shipping document any clause, covenant or agreement whereby it, he, or they shall be relieved from liability for loss or damage arising from negligence, fault or failure in proper loading, stowage, custody, care, or proper delivery of any and all lawful merchandise or property committed to its or their charge. Any and all words or clauses of such import inserted in bills of lading or shipping receipts shall be null and void and of no effect." Section 4289, Rev. St.; U. S. Comp. St. 1901, p. 2946.
It will be noted that the prohibition is aimed at an attempt of a master to relieve himself from liability "arising from negligence, fault or failure in proper loading, stowage, custody," etc. In the case at bar,
the captain, with the stevedores wholly under his control and management, noticed they were loading and stowing the root in an improper manner, they were breaking the bales against his protest, and he should have insisted upon their performing their duty in a proper and careful manner. Their actions in this particular were his, for which he is responsible in case damage resulted; and an attempt to escape this responsibility by a notation such as we find upon these bills of lading, in the judgment of the court, is an attempt to do what the provisions of this act aimed to prevent.
The evidence is not sufficiently clear as to the amount of damage. sustained by the respondent for the court to pass upon that question at this time. It is therefore referred to a commissioner, who, with the assistance of the parties, may pass on the question and report.
YORK CITY SCHOOL DIST. v. ÆTNA INDEMNITY CO.
1. SURETYSHIP-CONTRACTS-OMITTED PROVISIONS-REFORMATION OF INSTRU
Where, after a building contractor, who had agreed to erect a schoolhouse for plaintiff school district, had abandoned the contract, the school board and the contractor's surety entered into an agreement under which the board was entitled to finish the work at the expense of the surety, whatever its cost, the surety, in an action at law in the federal courts on such contract to recover the difference between the amount so expended and the contract price, was not entitled to have the contract reformed for the purpose of inserting an alleged omitted provision that, if the surety would waive a payment erroneously made by the school board to the contractor, and would agree to the payment of certain debts due to local materialmen and laborers, the district would finish the building within the contract price.
Rule for Judgment for Want of a Sufficient Affidavit of Defense. N. Sargent Ross, for the rule.
Henry P. Brown and Thomas W. Barlow, opposed.
ARCHBALD, District Judge. In January, 1902, one Harry Knerr entered into a contract with the York City school district by which he undertook to construct a certain school building for the sum of $38,300, giving a bond, with the Etna Indemnity Company as security, for the faithful performance of his undertaking. The building was to be completed by December 15th, and a penalty of $25 a day was to be paid for every day it was delayed beyond that. There was also a provision that, in case the contractor made default, the school district might go on and complete the work at his expense. He entered upon the construction of the building, but was not able to complete it, being compelled to make an assignment for the benefit of creditors in June following. The defendant company, as surety, was notified of the difficulty, and, the parties having got together, articles of agreement under seal were entered into between them by which it
was provided that the time limit being dispensed with-the school board should go on and complete the building with all reasonable dispatch under the direction of their building committee and the supervision of the architect previously selected, assuming the contracts for materials which had been entered into by the contractor, and taking care of the labor which had been performed, but not paid for. At the conclusion of the work a detailed statement of all materials bought and labor performed upon the building, approved by the school board, and verified by affidavit of the superintendent or architect, was to be furnished to the indemnity company, and, unless found incorrect, was to be assumed and paid. In pursuance of this agreement, and in compliance with its terms, the school district went on and completed the building at an expense of $48,634.54, which was $10,334.50 above the original contract price; but upon rendering an account of it to the defendant company and demanding payment, the latter, without calling in question the correctness of the expenditures, refused to pay, and thereupon the school district brought suit.
The defendant company, to meet this prima facie showing, rely on the following facts, which are set up in the affidavit: By the terms of the original contract, which was made a part of the bond in which the company joined, the contractor was to be paid in installments-$5,000 when the first-floor joists were laid, $5,000 when the second-floor joists were laid, and so on; a final payment of $3,300 being withheld until 30 days after the completion of the building and the return of the plans. A strict compliance with this provision, and the protection which it secured, was relied on by the defendant, as is alleged; but in disregard of it, and to the prejudice of its rights, the contractor-before anything was done was paid some $1,700, which he appropriated to his own In the negotiations leading up to the agreement in suit the defendant company, as it is said, was not willing to have this credited, and neither was it willing that materials and labor which had been furnished to the contractor by local dealers and workmen, and which the plaintiffs were anxious to have taken care of, should be paid, unless the amount in the hands of the plaintiffs was sufficient to do so, and still enable them to complete the building. In order to ascertain whether this was the case, the contracts for labor and material which had been made by the contractor were examined by a representative of the plaintiffs, who reported that provision had been made for all materials and labor necessary to finish the work, and that that which had been so far furnished, together with that which was still required, could all be met by the balance of the contract price in the hands of the school board, and leave a margin of $3,000. The defendant company, as surety, having the right, as it is asserted, to complete the building, and collect the full contract price without deduction or allowance for the $1,700 improperly paid to the contractor, and the plaintiffs being anxious to avoid this loss, and at the same time to have the local materialmen and workmen taken care of, it was proposed by the school board, as it is said, that they should be allowed to go on and finish the building, which they agreed to complete within the contract price, provided the defendant would waive any right with regard to the $1,700, and would allow the outstanding contracts for labor and ma