Murray v. Lazarus.

JOHN B. MURRay et al. v. LaZARUS & WHITMARSH.

The master may hypothecate vessel and freight, in a foreign port, for advances necessary for repairing and provisioning the vessel, if such advances cannot be procured on the credit of the owner.

Whether, by the maritime law, the contracts of the master, under such circumstances, for necessaries, create a lien without an express hypothecation? Quere.

But if they were admitted to have such effect, an express contract for payment would be a waiver of the implied lien.

As where a vessel bound from New-Orleans to New-York, put into Wilmington in a damaged state, where the master, having no other means, obtained advances from the libellants for the necessary repairs, and gave them a draft for the amount on his consignees, which was afterwards protested for nonacceptance. On a libel against the freight, in the hands of the consignees, heid, that the taking of the draft was a waiver of the lien if any existed. The draft was expressed to be "for value received in disbursements, and repairs of the brig Hannah," with directions to charge the same to her account, and signed by the drawer as master: Held, that the draft was not an hypothecation of the freight, as it wanted all the requisites, such as an express pledge, maritime interest, risk of the lender, of an instrument of hypothecation.

Nor has such draft the effect of an equitable assignment of the freight, as a draft on a specific fund.

THIS was an appeal from a decree of the District Court of the Southern District of New-York, establishing a lien on freight and general average, for necessary repairs and supplies for the vessel, furnished in a foreign port.

'The libel stated, that the brig Hannah, Thomas Hillyer, master, of Eastport, in Maine, owned by Jonathan Bartlett, of that place, sailed from New-Orleans for New-York, on the 4th of March, 1826, consigned to John B. Murray & Son, of New-York, having on board a cargo consigned to different merchants in New-York: That she was obliged, on account of damages occurring on her passage in her spars and rigging, to put into Wilmington, North Carolina, in distress: That

Murray r. Lazarus.

the master or owners had no funds, nor correspondents at Wilmington, and the vessel requiring repairs and provisions for the voyage, the libellants, at the request of the master, expended on her, and to enable her to prosecute her voyage, 536 dollars 30 cents, whereby she was enabled to complete her voyage, and arrive at New-York.

That the libellants, as a voucher for their expenditures, and as a mere mode of obtaining payment, took from the master a draft upon the said John B. Murray & Son, the consignees of the vessel, and agents of the owner, for payment to them, or their order, of the amount due them, which payment was expected and intended to be made out of the freight of the vessel, and the contributions for a general average on account of the said damages.

That John B. Murray & Son, on the arrival of the vessel at New-York, exacted from the consignees of the cargo an obligation for the payment of their respective shares of the general average which they still held, and claimed or had received the payment of the freight.

The libel also stated, that payment of the draft was refused on presentment; that the master was unable to pay the debt, and that neither he nor the owner could be arrested on process; that the vessel had been transferred to Israel Foot, who had not yet paid the whole price, and that all the parties had received notice of the libellant's claim.

Process of attachment was prayed against the monies and credits belonging to the master or owner, in the hands of any of the parties.

The answer of John B. Murray & Son set forth the following facts as matters of defence:-That the libellants, while the vessel was at Wilmington, wrote to them, informing them that she required repairs, and desiring to know if the master's bill on them for 300 or 400 dollars, for advances to him for

Murray v. Lazarus.

that object, would be accepted: That they replied, through their agent, that it would not be accepted; which reply, they believed, was duly received by the libellants, who, however, made the advances and permitted the brig to depart without waiting for it: That John B. Murray & Son had long done the business of the said owner, Bartlett, and that a balance of 17,000 dollars was now due them from him: That they had received nothing on account of the general average, and only 579 dollars 37 cents of the freight, of which they had paid 122 dollars 38 cents for expenses of the vessel before notice of the libellants' claim, and 337 dollars 32 cents to the master before notice of the attachment, and that a balance of 108 dollars 19 cents, after deducting their commissions, remained in their hands. The balance of freight, in their hands, they insisted on retaining for their general balance against Bartlett.

The bill of exchange drawn in favour of the libellants, as mentioned in the libel, was as follows:-" Wilmington, 25th April, 1826. Exch. $531 55 cts. Five days after sight of this first of exchange, (second unpaid,) pay to the order of Lazarus & Whitmarsh, five hundred and thirty-one dollars, fifty-five cents, for value received in disbursements and repairs of brig Hannah, and charge the same to her account. Your obedient, Thomas Hellyer, master of brig Hannah. Messrs. John B. Murray & Son, New-York."

The consignees of the cargo not having appeared, their default was entered.

The Court decreed that the libellants were entitled to a specific lien on the contributions for general average; and to such lien on the freight received by John B. Murray & Son, for the amount of said bill of exchange; and that the general averages, and the freight after deducting therefrom 122 dol

Murray v. Lazarus.

lars 38 cents, being expenses paid at New-York, incurred after the arrival of the vessel, and as payment before notice of the libellants' claim, should be paid into Court to satisfy the demand of the libellants.

From this decree John B. Murray & Son appealed. The consignees of the cargo submitted, and paid the general average into Court.

R. SEDGWICK for the appellants, insisted,

1. That Wilmington was not a foreign port within the rule. of law, as to maritime liens."

2. That by taking the bill, the lien, if any had existed, was lost.b

3. That by the payment over before the attachment was laid, the defendants were protected; and that they had a right to retain the balance on their general account with the owner.

D. LORD for the respondents, contended,

1. That by the maritime law, the claim of the libellants formed a lien on the vessel and her freight.

2. That the bill in question was an instrument, on its face importing payment to be made out of the earnings of the vessel, and was therefore to be considered either an assignment or hypothecation of the freight.

a Abbot on Ship. 136. part ii. chap. 2. passim.

b Yates v. Groves, 1 Ves. jr. 280.; Roe v. Dawson, 1 Ves. 331.; M'Mennomy v. Townsend, 3 John. Rep. 71.; 1 Pet. Adm. 238.; Mandeville v. Welsh, 5 Wheat. Rep. 277.

c The Jerusalem, 2 Gallison, 347.; Watkinson v. Barnardiston, 3 P. Wms. 367.; Hussey v. Chrystie, 13 Ves. jr. 599.; ex parte Shauk, 1 Atk. Rep. 434. ; the Jacob, 4 Rob. Adm. 202., Am. edit.

d Ex parte Halkett, 3 Ves. & B. 135.; Peyton v. Hallet, 1 Cain. Rep. 364.; the Rebecca, 5 Rob. 102, 12.

Murray v. Lazarus.

THOMPSON, J. THE only inquiry arising upon the appeal in this case, is, whether the respondents have a specific lien upon the freight monies, (received by the appellants,) for the advances made by them for the repairs of the brig Hannah, at Wilmington in North Carolina.

That these expenses were properly and necessarily incurred, is not denied; nor can the authority of the master, to hypothecate the freight as well as the vessel for the payment of such expenses, be questioned. He is the agent of the owners, and they are bound by all lawful contracts made by him. It is indispensable that he should have a right to contract for all necessary repairs and supplies for the vessel on the voyage, and may, therefore, indirectly bind the owners to the value of the vessel and freight. It is therefore well settled, that he may for like purposes, expressly pledge and hypothecate the vessel and freight, and thereby create a direct lien upon the same for the security of the creditor. But this being a high and important trust reposed in the master, the authority is to be exercised cautiously, and he is not at liberty to subject the ship or freight to this expensive and disadvantageous lien, if such repairs and supplies can be procured upon the credit of the owner independent of such hypothecation.

The case is not open for the inquiry, whether, by the general maritime law, every contract made by the master for repairs and supplies for his ship whilst on a foreign voyage, does not import an hypothecation. When an express contract has been entered into for the payment of such expenses, that must be resorted to, and will be considered a waiver of such implied lien if any existed. And a party who has waived his right in this respect cannot be permitted, at a subsequent time, and under a change of circumstances to reinstate himself in his former condition to the injury of others.

€ 1 Wheat. 102.: Abbot, 134.