THE SAPPHO.
545
decree, and the decree on both appeals was affiMlled. Id., 28 Fed. 881; Id., 131 U. So 1, 11 Sup. Ct. 29. The same disposition of costs was made in the case of The Non Pareille, 33 Fed. 524. In the present case each side will be aUowed one-half its tanble costs. THE SAPPHO. (Circuit Court of Appeals, Fourth Circuit. No. 29l.
May 2, 1899.)
1.
ApPEAL IN AmURAI,TY-RmVIEW OF QUESTfONS OF FACT.
'Where the evidence in a suit in admiralty is taken before an examiner, the decision of the trial court on questions of fact is not entitled to the same controlling weight as where the judge saw and heard the witnesses testify, and will be more readily reviewed by an appellate court. REPAIR OF VESSEL-EXTRA WORK-WAIVER OF WRIT'fEN
2.
CONTRACT FOR CONTRACT.
A provision of a written contract for the repair of a vessel, that no extra work should be done unless an estimate in writing was first made and submitted to and signed by an officer of the company owning the vessel, may be waived; and where, after the vessel was stripped to begin the work, it was found to be impossible to make the repairs specified in the contract without to a large extent rebuilding the hull, and after consultation with the officers of the company the contractor was told by the president to go on with thl! work, which he did, and under the direction of a superintendent employed by the company, and with the lmowledge of its officers and directors, replaced all the rotten parts of the hull, and made the vessel sound and seaworthy, the company, having accepted the vessel, must be considered as having waived the written contract, and cannot invoke its provisions to defeat recovery for all work done not specified therein. The fact that the owner of the vessel was a corporation, and took no formal action in the matter by its board of directors, would not prevent its being bound by the action of its officers, and the acceptance of the benefit of the contractor's work without objection.
S.
SAME-WAIVER BY CORPORATION.
Appeal from the District Court of the United States for the District of South Carolina. J. P. K. Bryan, for appellants. J. N. Nathans and Henry Buist, for appellees. Before GOFF, Circuit Judge, and MORRIS and WADDILL, District Judges. WADDILL, District Judge. These are two libels in rem against the steamer Sappho, her tackle, apparel, etc., oWIled by the respondent company, the Mt. Pleasant & Sullivan's Island Ferry Company, a corporation of South Carolina, conducting a ferry between the city of Charleston, )ft. Pleasant, and Sullivan's Island, in said state, the said steamer being employed in that service. The controversy arose out of a contract for repairs to be made upon the .said steamer. The claim of Samuel J. Pregnall, libelant, contraCtor and shipwright, is for a balance due on account for repairs, labor, and supplies in the sum of The claim of William Bird 8l Co., libelants, mer('hants, is for $867.43 for materials furnished for the steamer in makf
94 F.-35
546
94 FEDERAL REr'ORTER.
ingsqch-r'epairs. In the loWer all bilhe taken beforei'a appointed -for- the' pUrpose, and upon the depositions sO talen the two eauseswere heard t6gether,and the dis: tricFcourt; by'order' af'the'30th of AuguSit, 1898, dis'mlssedboth libels. 89 Fed. 366. The libelant Samuel J. Pregnall, C)n the 25th day of February, 1897, entered into awriftell contract with the respondent company for making, certain repairs ,to the said steamer Sappho, specifically set forth in said contract, and 'which work may be particularizedas' follows:" . "Haul out the said steamer on the' mariile railway of said contractor; take out and renew all clamps; take O\1t and new. the"gW/Xds, ,a.nd als,Q the mudsIlls ilJ:Ottnd ,steamer; put in new breas(li()oJis;put in mo;'extra in ,two new ,extra standfl;lch"iron; strip off entire ards, one weacbside, witl\bog copper (Iut jl11 old ()ak,1,Im,tWd,rec\l'!lllt entire vessel to deck; ,01-' copper; straig;hten and \:llmpb vessel while on railway', putiing'in2;172'feettimber at $1;00, putting In 3,901 feet planking at 60 cents, 820, feet ceilIng;, at, pents."
Atthe prices fixed in amounted to $6,676.60." Vndet regularly entered upon thewQrkto bepe,rformffd.by the steamer on the railway of his yaxdFlUldstrippingher, it was found that her condition'was worse than had'l:>een' anticipated, so much so that it was go on with' the .work according to the eontract; and,lb,eJieu.pou, after the. libelant,. the .master of the steamer, the .president of the:respondenticompany, and the government illSpeci;(Jl', other work was' done, mach 'of .it', to the hull of the steamer' 'itSelf, not 'stipulated for in the contract, amounting to the sum of $2,539.17, made necessary by reason, of therottell' defective, and unsafe condition in, which the w.as [pund to be, in order to put said steamer in 'a proper and, safe condition" for service. No question was raised as'to'theperformance of the work covered by the original contract, and the amountdlle thereon was fully paid, but the bill for the extra work was disputed as a whola, and the result, was the filing of the libel herein; to which the respondents replied that all work set forth in the written c0J?,tract had f.ullypaid for, and $308.35 in addition, and·. denied jU:rther upon the ground that the extra work was" not embraced, in the wr,itten contract, .and was not authorized. . They 'further that tIle work on libelant's part was unskillfully performed, and that there was delay in the completion of the same, whereby damage to them in the sum of $2,200. No testimony was taken by'claimant tending to maintain its. defense, .either as to the alleged uil.skillful manner in which the work was performed, or that there was any delay in its execution, and, case furned lower court solely upon the right of the libelant, under the circumstances, to recover for the extra work done. The written contract contained a clause that no new work of any kind done on the and no work of any kind, should be considered as extra work unless a separate estimate in writing should be made for the same before its commencement, and submitted by the contractor to the respondent company, and the signature of the chairman of the board of directors obtained thereto.' i
1
547 while, ,eIther by thell: J:iemg aone, wh{l;t had been qqne;rriight make liable for'e#rawork, was, that there, was nofsufficienf' evtdeiJ.'ce in the record to sus'the contention that the respondellt' company had ever, fof-nially abrogated the written contract, or, in view of the said clause, as to extl'awork,had ever l}uthorizedthe libelant to do the work as cllarged for by him, or acquiesced in or ratified what he did so as to become liable therefor. With these ,conclusions we do not agree, and think, under the Circumstances, the libelant is entitled to recoverJor the amount of the extra work ,performed by him. The decision of the trial court upon questions of fact, where the judge saw and heard the witnesses testify, might have great and controlling weight; but here,. where the evidence was taken by an examiner, this court ,will more exa,mine the same, and, reach its own conclusions thereon. The Glendale, 26 e.G. 81 Fed. 633, 635; Duncan.v. Nicholls, 14 Fed. 302; The Ludvig):IoIQerg, 43 Ped,.; 120; The Thomas Melville, 37 Fed. 271. But we do, not regard this as a case depending upon conflicting evidence, ,or the credibility or witnesses, but rather upon the legal effect of what it is admitted was said and done by those acting for. the respondent corporation u,nder circumstances hot disputed. That there was ,a for. the extra work isapparent from the whole e"idence, and without the extra work it would have been entirely impracticable to have carried out the written contract at all. The claimant's ,witness Cherry, the master of the steamer, and superintendent placed iIlCbarge of the repairs, thus described the conditipn of the steamer after she was stripped: pe
m what
of
"I did not think she' was ,Ir, very bad shape after we got her on the railway until we ripped the lining off" and It was all gone. underneath, The timbers would look good on top, but were all gone underneath, like the shell or an egg." ,
He also stated, in answer to the question, of whether he had not stated to Mr. Bird, the secretary of the company, that they would have to make a nev hull: "Yes, I told him In these words: That I thought It cheaper to pay Mr. Pregnall to cancel the obligation, and build, a new hulL I thought it would be cheaper in the end."
The United States inspector of hUlls, W. R Cannon, testified as fol· lows: "Question. What did she show ,after she was stripped? Answer. Very bad. l'imbers completely gone, except or ten under the engine, It was necessary for them all to come out except ten or twelve. Question. Did you see any decayed knees? Answer. Some I did not count More were there,but, when I found that Capt. Cherry had a disposition to repair the boat, I did not interfere with him."
Witnesses Seth Ferrara lUJ,d John F. Cummen, both shipwrights, and who worked upon the steamer while the repairs were being made, say that the main keelson, fore andllft, and various portions of the AulI, were in a rotten and charred cOndition; that it was dry rot from the heat and dampness, would nofhold anything, and that it was
548
D4
.u,n4erilie boiler'rotten, her"plank stern posts defective, In short, that there was Dine-tenths 'of, her that had to be rebUIlt; and that it was impossible for him to' do the work covere(} by the ment without these rotteil. parts; .that he could not fasten s0U;Dd'm'atei'i.alt9 a r?tten structur,er:,and thatthere was nothing upon WhICh to buIld; It IS the controversy as. to what occurred between the discovery of this condition of the steamer, and was thereafter done, which gave rise to this litigation. Libelant's statement is that after he and Capt. Oherry, the master of the steamei', . and superintendent of the work, consulted, they went down to see Mr. of theco?Ipany, and told him the would' ha"e' to be' rebUIlt; and, In answer, to t'!Ie questIOn, "DId you describe of affairs?" thJibelantsays: . l
keelSon all
the
"I dld,and sO did Captl'lID Cherry.. 'After: atiIl;le, he wanted to know If· I coult'fdo the work In time tok"e the season. 'He then considered the costs'ot a'new'bOllt against rebulldlng that'one. Lj8Uggested that by tak-, lng .could save tho,usandor five thOll$anddollars. I did offer to" Alijl4 . new boat hull for $11.000.00. They declp.ed then that I the old hull new. Mr. Witte told me, 'AlU'lght, go ahead.' should I told him that 'I did not have means to do that much work. He said he would furnish me :Wrth; means every .weekt<ll pay men, which he did; and I went .along the work, and (:llIiJlpleted It."
Capt; Cherry's statement is, in substance, that he infOrmed President Witte of the wretched condition of ilie steamer, his surprise as to its condition, and that the latter said: "I am sorty that we did not know it sooner. Wewill· try to do the' best we can." That he went and toldMr.PregnaU tha(ilie vesse1,'\lVould have to belripped up, lind rebuilt, or, rather, retimbered. ' In answer to the question of whether he understood, at the time he accompanied libelant to see President Witte; the latter authorized libelant to do any work he outside·of the contract, he replied, "No,'" and in reply to the specific question, "Did President Witte authorize Mr. :Pregnall to do any work outside of the contract?" replied, "Not as I know." President Witte's account is asfbllows: "I remember It distinctly. Captain Cherry and Mr. Pregnall came down to the office,as they said that the vessel :was not in as bad condition as represented by some people, making mention of some certain parties at the time, and that she could be repaired, and be a stronger and stouter vessel than before, with, some other expression, stating that putting these keelsons on, and whlebwere In the contract, the vessel would be stouter and better than ever before, ,The quest!on-'of about how. much it would cost to build a new hull came- up in this way: As some people sald It would be cheaper to build a new, than repair the old, this was reported to me that such had been said, and I asked Mr. Pregnall how much he could build a new hull for. He saId $11,000.00. I sa,ld, 'Well, I was told It, could be done for $8,000 or $9,000.' He sa:id hIs prfeewas $1f,OOO.OO.Q. DId you, in consequence ,of that conversation, saY,'All right; goabead'? A. ,No; I told them siter that that we concluded to go on with the eOlltract. ,T:hat was the result of the conversation, finisb :tha .vessel. · . · · Q. ;When Captain Cherry reported to you on the first day that the vessel was worse than he thought, and that her condition was 'rotten, was it your desire to replace witll. a.olWd all the rotten wood?
i:i49
It will be observed that this statement of President Witte is not a denial of what the libelant Pregnall stated. The question under consideration was between building a new hull or repairing an old one, and they both agree that the offer of $11,000 for the new hull was rejected, and Mr. Witte admits that he said, "Go on with the contract," which must have referred to repairing the old hull under its newly-discovered condition, and not to carrying ont of the original contract of the 25th of February, 1897, to repair the steamer when the utter unseaworthiness of the hull was not known of. 'rhe execution of the written contract without change or modification on the part of libelant would have been impossible, and, so far as respondent is concerned, would have been to have done a vain and fooli8h thing, namely, to have expended nearly $7,000 in repairing a ship without a hull. Libelant swears that the agreement was to repair the old hull, and that was what he proceeded to do, and President 'Witte's action in appointing Capt. Cherry to superintend the taking out of the rotten wood and supplying it with sound instead sustains this idea. W. M. Bird, one of the directors and 8ecretary of the respondent company, and the libelant in the second of these causes. testifies that Capt. Cherry talked with him about building a new hull to the boat. and explained that he had talked with Mr. Witte, and that the latter had told him to go ahead, and do what work was necessarY,-to repair the boat, and put her in thorough order. 'Phis was done after the foregoing interview between libelant Pregnall and President ·Witte. 'Work was immediately begun on the hull, under the direction of Capt. Cherry as superintendent, who stayed at the work, and direded personally what rotten wood and timbers should be taken out and what work should be done, and how it should be done, until the steamer was completed; and, in the language of the UnitL>d States inspector of hulls: "She was in first-class order. I never saw a boat
550
94 FEDERAL REPORTER. I :
in better;, * , *" * . I thinl{lSp,eWaS better than when she was here in 18:76.. I think she had tiiD;1;lers inl;ler." While this wonk was being done, PresidentWittewa,afrequently at, the steanier,and himself what was; being done ; the evidence be' 'ing'that down about once ':'!-,week. Hiso",n superintendent,. spec$aUy designl1ted. by'1iim for the'purpQ!le of looking after the work, was ,there all the time"" The secretary of 'the company and its superintendent, Mr. Armine Witte, were frequently there, as were also Messrs. Lapan and Thompson, two directors of the company. In all, six officers of the of wh«In had full knowledge of all that was being done, and aU of them, abundantopportunitJ to see what was done,and they oMand,all stood by and allowed the work char'ged forfo' be done and ser'Vices performed,and the respondent company acquiesced therein by weekly supplying, ,'according to contract, sums necessary to pay off the employes for the labor performed. Under these circumstances, the work, in our opinion. should be paid for, ahl1'it,'I'I:ill not do ',for PresidentWitte to say that the contractor "did the work at hU$ own risk," anll that "I expected him to take the chance of whether we would pay 'him not." Under such circuInstances the law implies a oontract, and a promise to pay. It is hot in' dispute that the services were properly and seasonably rendered, and it 'is equally clear that the work was necessary; and to allow, under the circumstances, the respondent comllany to have the benefit of libelant's money and labor without compensation, would he grossly unjust and inequitable. When the president'of the company, upon being:t()ld 'that the contract could not be performed, so as to make the steamer seaworthy, 'without replacin.g the rotten material disco'Vered in her hull, directed' Pregnall to go on with the contract, and had his superintendent overlook and direct the replacing of the rotten knees and timbers, Pregtiall, from his words and conduct, had a right to understand that the president consentM to his doing the necessary e:x'tra work, no matter what the president may have had in his mind, undisclosed to Pregnall, with regard'to' the effect of the contract. . :, In what we have said we have not been unmindful of the clause in tMwritten contract as to the'conditions on which extra work could be done., This clauseis carefully worded, and is sweeping in its terms, but, nevertheless, in: our opinion, can be and Will'! waived by what took place between the parties. .Authorities to show that such clauses can he waived 'by the subsequent acts and conduct of the parties are abundant. Wood: v. City Wayne, 119 U. S. 320, 321, 7 Sup. Ct. 219; Westv. Platt,' 127 :Mass. 367, 372; O'Donnell v. Clinton, 145 Mass. 461; 4:63, 14 N: E. 747; Bartlett v. Stanchfield, 148 Mass. 394,19 N.E. 549; Cunningham v. Fourth Baptist Church, 159Pa,8t: 620,28 At!. 490; Bowe'v.U. R, 42 Fed. 777. . The contentionlllade, or,rather, suggested, that the liability should be ¢scaped because the respondent is a corporation, and did' not formally, by its board of directors, agree! to the making of a new contra.et, or authorize, assent to, Or acquiesce in the performance of the additional work in question, is equally without merit. Corporations only act by and through agents, and in Pittsburgh, C. & St. L.
TIlE SAPPHO.
551
Ry. Co. v. KeoKuk & H. Bridge Co., 131 it is said:
"When a contract Is made by tlDy agent of a corporation In Its and for a purpose authorized by its charter, and the corporation recelve-s the ben,. efit of the contract without objection, it may be presumed to nave authorized or ratified the contract 'of its agent. Bank v. Patterson's Adm'r, 7 Cranch, 299; Bank v. Dandridge, 12 Wheat. 64; Zabriske v. Railroad Co., 23 How. 381; Gold-Min. Co. v. National Bank, 96 U. S. 640; Gas Co. v. Berry, 113 U. S. 322, 327. 5 Sup. at. 525. This doctrine was strongly stated by Mr. Justice Story, delivering the judgment of this court In eacl1 of the first two ot the case-s Just cited." CPs.
'rhe supreme court has passed upon this qU 13tion in many instan· In Railroad Co. v. Howard, 7 Wall. 413, it is said:
"Corporations, as much as Individuals, are bound to good faith and fair dealing, and the rule is well settled that tl1ey cannot, by their acts, represen· tatlons, or silence, involve others in onerous engagements, and then turn round and disavow their acts, and defeat the just expectationfil which theJr own conduct bas superinduced." ,
The second case involves the question of whether libelants William M. Bird & Co. have a lien under the statute of South Carolina, enforceable by libel in rem in a court of admiralty against the steamer for materials furnished the general contractor, Pregnall, in making the repairs aforesaid to the steamer. The learned judge of the court below, was of opinion that such lien existed, and was enforceable in a court of admiralty by libel in rem against a domestic vessel for materials. and supplies, -maritime in their nature, such as were furnished in this case (The Planter, 7' Pet. 3<13; The Lottawanna, 21 Wall. 568; The J. E. Rumbell, 148 U. S. 1,13 Sup. Ct. 498; The Kate, 164 U. S. 470, 17 Sup. Ct. 135; The Glide, 167 U. S. 610, 17 Sup. Ct. 930), but held that it was necessary to prove that the debt was con· tracted upon the credit of the steamer, and not of the owner or contractor making repairs; and, believing that the libelants' claim was not one incurred on the faith of the ship, dismissed the libel. With our view of the evidence, we deem it unnecessary to do more than pass upon the question of fact involved in this decision. Our conclusion upon the whole evidence is that the mate-daIs were furnished upon the credit of the steamer, and not to the contractor individually. The libelants so testify. :Many of the articles were ordered by the master of the steamer, placed in charge of the work thereon by the respondent company, and the others by the respondent's general contractor, _who was himself without credit; and there is no claim but that the supplies were. furnished to, and used in the repair of, the steamer, and that they have not been paid for, either to the libelants, who furnished them, or to the general contractor, who used them in 13seI. 1 Rev. St; S. C. § 2504, is rebuilding respondent company's v very comprehensive in its terms, and a lien is expressly given to any person for labor performed, materials used, or labor and materials furnished in the construction, launching, repairs of, or for provisions, stores, or other articles furnished for or on account of a ship or vessel by virtue of a contract, or implied, with the owners of a ship or vessel, or with the agents, contractors, or subcontractors ()f such owners, or any of them, or with any person having been em: ployed to construct, repair, or launch such ship, or to assist them.
552
94 FEDERAL REPORTER. ,.
We think the libelantsWilUaqJ.M. B,ird & Co. hll.:ve a lien upon the steamer for the suWnes s6 furnished and used in its construction. For these reasons, the decrees appealed from are reversed, and causes remanded to the. lower court,' with instructioIls to enter a therein in favor of the liJ,'1elants iq the lS(!cdnd-named libel for the sum of $868, with interest at the rate of 6 per.cent. per annum from the22d day of May, 1897, until paid, with costs, and a like decree in favor of the libelant Samuel J. Pregnall for $i,18'4,!.37, with interest from May 22, 1897, until paid, with costs. Reversed·
. THE CLARA A. (DIstrict Court, E. D. North Carolina-May 17,1899.) 1. BILLS AND NOTES-COLLATERAL SECURITy-CONDITIONS-MORTGAGES. Llabllity of one on a note to a bank secured by a mortgage conditioned that the mortgage should be and remain a continuing security for all notes, bills of exchange, drafts, checks, and other evidences of debt to a specified amount of said party or a corporation 'with which he was connected, is not established where it appears that he had neither signed nor indorsed such note, that no demand on him for its: payment had been IllAde, that he had not. been' notified of renewals and the bank books do not ",how that he bad any connection with the of the notes. 2. ADMIRALTY-RULES-INTERVENTION. Adm. Rule 34, providing that one may Intervene and be heard in his own interest if he shall propound the matter in suitabie allegations, and be admitted by the court, requires the court to pass· upon the claim of the intervener to give him a standing in court. 8. CHAMPERTY AND MAINTENANCE. An agreement that the purchaser of a note and mortgage from receivers, for which he pays nothing, shall foreclose the mortgage, bring all necessary suits, and pay all necessary costs. and pay the receivers one-half of what he may recover, he to retain the balance, is champertous. 4. SAME-CONFLICT OF LAWS. . That the common-law doctrine of champerty does not obtain In New York except as brought forward under the statutes cannot be urged in an action on a contract made in New York, to be performed in North Carolina, Which is brought by one who.buys under an agreement to divide the amount recovered, it nOt appearing that the purchaser ·is an attorney, as the courts of New York hold that "an agreement by .one who is not an attorl1ey to aid in defending a suit is lllegai and void for maintenance." 5. SAMIIl-RULE IN NORTH . Tbere can be no recovery in North Carollna on a claim founded on a champertous contract. 6., ASSIGNllENT OF NOTE BY RECEIVER-EVIDENCE OF AUTHOlltTY. . Recovery on a note assigned by receivers cannot be had uniess it II sllown that the assignment was authorized by the court. 7. MARITIME LIENS-EVIDENCE TO SUPPORT. A'claim for a. maritime lien for money advanced at the speclai instance . of the master will.be the deposij:ion of claimant doesIlot show at whose request the money was advanced, aQ.d It does not appear that the advancement was necessary for the naVigation of the vessel,and neither the master of the vessel nor the agent through whom the money. was paid are examined ,as witnesses, and the evidence is the. unsatisfactory testimony of claimant, as such liens are' stricti juris, and wllI not be extep-(led by Implication or construction. . 8: SAME-SEAMEN'S WAGES-RIGHTS OF ASSIGNEES., . The assignee of a seaman's claim for wages has no lien.