Opinion of the Court.

It does not appear that the company, at any time before the commencement of the action, made any protest against or objection to the readjustments of its compensation made by the Postmaster General.

Mr. A. J. Willard for appellant. Mr. William E. Earle and Mr. James L. Pugh, Jr., filed a brief for same.

Mr. Attorney General and Mr. Assistant Attorney General Howard for appellees.

MR. JUSTICE HARLAN delivered the opinion of the court. After stating the case he continued.

After the first of July, 1877, the company was under no legal obligation to carry the mails. It carried them after that date under an implied contract that it should receive such compensation as was reasonable, not exceeding the maximum rates prescribed by Congress, and subject to a readjustment of rates as required by the act of 1876. Such readjustment took place on the 20th of December, 1877. If the order made by the Postmaster General on that day, fixing certain rates, upon the basis of a reduction of ten per cent, for carrying the mails, from July 1, 1877, to June 30, 1881, and its acceptance by the railroad company, constituted an express contract, in respect to the compensation to be paid to it, still, as, by the terms of both the order and the notice, those rates were to govern, "unless otherwise ordered," there is no ground for the company to complain of the subsequent reduction of five per cent. This reservation of power in the Postmaster General opened the way for him to exercise the authority conferred, and to conform to the direction given, by the act of 1878. It cannot be said that the reduction of five per cent was a violation of that contract; for, according to its terms, the parties agreed that the rates fixed at the latter date were subject to such future orders as the Postmaster General might make. We do not mean that the railroad company was bound to continue the carrying of the mails, if subsequent changes in the rates were

Opinion of the Court.

unreasonable or did not meet with its assent. On the contrary, it was at liberty, when the five per cent reduction was made, to discontinue their transportation on its cars.

Chief Justice Richardson, speaking for the Court of Claims, properly said that the order for the reduction under the act of 1878, and the notice thereof to the company, "constituted an offer on the part of the Postmaster General which the claimant might decline or accept at his pleasure." Having received the reduced compensation without protest or objection, it may be justly held to have accepted that offer.

It is a mistake to suppose that these views are inconsistent with the decision in Chicago &c. Railway Co. v. United States, 104 U. S. 680, 684. It was there held that the act of 1876 should not be construed as affecting the rights of a railroad company under a contract for transporting the mail which was in all respects valid under the laws in force when it was made; that the language of the acts of 1875 and 1876 "may well be satisfied by confining them to cases where no time contracts for service were then in existence, and to contracts thereafter to be entered into;" and that this did not legitimately apply to contracts then existing, whose terms had not expired. That case differs from the present one in the important particular, that in the former the company bound itself to carry the mails during a certain period, and, consequently its acceptance from time to time, during that period, of less than it was entitled to demand did not prejudice its right to claim what was legally due under its contract; whereas, in the present case, the company could have declined to accede to the readjustments of rates when they were made.

We perceive no error in the judgment, and it is therefore

Affirmed.

Syllabus.

LIVERPOOL AND GREAT WESTERN STEAM COMPANY v. PHENIX INSURANCE COMPANY.

APPEAL FROM THE CIRCUIT COURT OF THE UNITED STATES FOR THE EASTERN DISTRICT OF NEW YORK.

Argued November 8, 9, 1887. -Decided March 5, 1889.

A decree of the Circuit Court in admiralty on the instance side, finding negligence in the stranding of a ship, can be reviewed by this court so far only as it involves a question of law.

The owner of a general ship, carrying goods for hire on an ocean voyage, is a common carrier.

A common carrier by sea cannot, by any stipulation with a shipper of goods, exempt himself from all responsibility for loss or damage by perils of the sea, arising from negligence of the officers or crew. Upon a question of the effect of a stipulation exempting a common carrier from responsibility for negligence of his servants, the courts of the United States are not bound by decisions of the courts of the State in which the contract is made.

The general maritime law is in force in this country so far only as it has been adopted by the laws or usages thereof.

The law of Great Britain since the Declaration of Independence is a foreign law, of which a court of the United States cannot take notice, unless it is pleaded and proved.

The law of the place where a contract is made governs its nature, obligation and interpretation, unless it appears that the parties, when entering into the contract, intended to be bound by the law of some other country. A contract of affreightment, made in an American port by an American shipper with an English steamship company doing business there, for the shipment of goods there and their carriage to and delivery in England, where the freight is payable in English currency is an American contract, and governed by American law, so far as regards the effect of a stipulation exempting the company from responsibility for the negligence of its servants in the course of the voyage.

An insurer of goods, upon paying to the assured the amount of a loss, total or partial, becomes, without any formal assignment, or any express stipulation to that effect in the policy, subrogated in a corresponding amount to the assured's right of action against the carrier, and may assert that right in his own name in a court of admiralty.

In a through bill of lading for carriage from an inland city in the United States, by a railroad company and its connections, and a steamship company, to an English port, signed by an agent of the companies, "severally, but not jointly," and containing two separate and distinct sets of

Statement of the Case.

terms and conditions, the one relating to the land carriage, and the other to the ocean transportation, a stipulation, inserted in the first set only, that in case of loss that company alone shall be answerable in whose actual custody the goods are at the time, and the carrier so liable shall have the full benefit of any insurance effected upon the goods,” gives the steamship company no right to the benefit of any insurance.

THIS was a libel in admiralty in personam “in a cause of action arising from breach of contract," filed January 27, 1881, in the District Court, against the Liverpool and Great Western Steam Company (Limited) by the Phenix Insurance Company, claiming to have been subrogated to the rights of the owners of goods shipped on board the respondent's steamer, the Montana, at New York, to be delivered at Liverpool, and lost or damaged by her stranding in the course of her voyage, through the negligence of those in charge of her navigation. The libel contained the following allegations:

First. The libellant was a corporation duly organized under the laws of the State of New York for transacting business as insurer, among other things, of maritime risks and adventures; and the respondent was a corporation duly organized under the laws of Great Britain and Ireland for the purpose of owning and navigating steamships and carrying passengers and cargo.

Second. The respondent maintained a line of steamers running between New York and Liverpool, and was a common carrier of passengers and cargo between those ports. TheMontana was a steamer owned and navigated by the respondent as one of that line, and on March 2, 1880, left the port of New York with a cargo of merchandise and a large number of passengers received on board by the respondent as a common carrier, to be landed and delivered at Liverpool.

Third. Among such cargo were a lot of bales of cotton, variously marked, all shipped by or on account of Swanson, Porteous & Co., to their own order, and a lot of bales of cotton, variously marked, all shipped by or on account of Hobart, Smith & Co., to their own order, and 22 boxes of bacon and 4 tierces of hams, shipped by or on account of A. Baxter, agent, to his own order; all of which goods were shipped on board

Statement of the Case.

the Montana in good order and condition; and the respondent agreed to deliver the same in like good order and condition at Liverpool.

Fourth. The Montana failed to deliver her cargo or any portion of the same as agreed, but, during the prosecution of her voyage from New York to Liverpool, stranded on the west coast of Great Britain, at or near Clegyr Point, in Holyhead Bay, and thereby these goods became in large measure lost or destroyed and the remainder greatly damaged.

Fifth. This article set forth particularly the circumstances preceding and attending the stranding.

Sixth. The libellant charges that the stranding of the steamer and the consequent loss and damage of the cargo were due to the negligence of those navigating the steamer, in proceeding at too high a rate of speed, in not having a sufficient lookout, in going upon an improper and dangerous course, in not making due allowance for the influence of the ebb tide, in not having, or in not using and properly using, the outfit and appurtenances-among other things, the lead and compass-and in not so heeding the shore lights and signals, as would have indicated to them her dangerous position, and would have enabled them to regain and keep in a position of safety.

Seventh. The libellant, before the stranding, had made insurances on the goods in sums equal to or less than their value, to persons having an interest in them respectively equal to or greater than the sums insured, and under such insurances had paid, or become liable to pay, to the assured, for the loss or damage of the goods, sums amounting to more than $15,000. The damages of the assured or their assigns for the loss of the goods were greater than the amount of the insurances. And the libellant was subrogated to all their rights against the respondent for its failure to carry and deliver the goods.

The respondent filed an answer, alleging that it had duly appeared in the cause; admitting the jurisdiction of the court, as well as that the respondent was a British corporation for the purpose of owning and navigating steamers, and of carrying passengers and cargo, and since 1866 had been the owner