The Eliza Lines/Opinion of the Court

by Oliver Wendell Holmes, Jr.

United States Supreme Court

199 U.S. 119

The Eliza Lines

 Argued: April 11, 12, 13, 1905. --- Decided: October 30, 1905

This case comes here by certiorari to the circuit court of appeals. The decree in that court was made in a cause in which were consolidated four suits: A libel for salvage against the Eliza Lines, her cargo and freight; a libel for possession by the cargo owners against the cargo; a libel by the master against cargo and cargo owners for freight and general average; and a libel by a bottomry lender against the vessel and freight. The Eliza Lines, a Norwegian bark, was bound on a voyage from Pensacola to Montevideo with a cargo of lumber, under a charter party, 'the dangers of the seas, fire, and navigation always mutually excepted.' It was abandoned, justifiably, in consequence of dangers of the seas, and was afterwards picked up by salvors and brought into Boston on September 19, 1889. The master was notified by the owners, and came on from St. John, New Brunswick, arriving on September 21. The cargo owners (Ward & Company) and the master both demanded possession of the cargo from the salvors, but the salvors retained possession, and filed their libel for salvage on September 26. The next day the master filed a claim for ship and cargo, and within an hour Ward & Company filed their claim for the cargo, as above mentioned. On October 5 the vessel was delivered to the master, and on October 18 the master moved for a delivery of the cargo to him upon stipulation, in order to resume his voyage, while Ward & Company moved that the cargo be sold, on the ground that its value was rapidly diminishing by reason of charges and costs. The former motion was denied and the latter granted on November 16. On November 27 the master filed his libel for freight and general average. The circuit court, reversing the decision of the district court, held that the master should have been allowed to complete the voyage and earn freight, and charged the cargo owners personally with the net freight that would have been earned, with other particulars not necessary to mention. 61 Fed. 308, 102 Fed. 184. The decree was affirmed with a slight variation by the circuit court of appeals. 52 C. C. A. 195, 114 Fed. 307.

The question is whether the abandonment of the vessel by the master and crew gave the cargo owners a right to refuse to go on with the voyage in the circumstances disclosed; in other words, whether the cargo owners properly were treated as guilty of a breach of contract for preventing the continuance of the voyage by their refusal and by procuring a sale. It will be noticed that the decree must stand on the ground that the contract was broken by the cargo owners, and that the shipowners were entitled to recover under it, although the voyage was not completed. The decree was not upon a new contract, such as it was attempted to set up in Hopper v. Burness, L. R. 1 C. P. Div. 137, or upon the analogy of a quantum meruit at common law, which was expressly disavowed. The very foundation of a recovery upon the latter ground is that the express contract is out of the way, but that a benefit has been received which ought to be paid for. Therefore, in such a case the recovery cannot exceed the benefit, as often has been explained in the books. Gillis v. Code, 177 Mass. 584, 59 N. E. 455; Keener, Quasi-Contracts, chap. 4. See Flaherty v. Doane, 1 Low. Dec. 148, 150, Fed. Cas. No. 4,849. In the case at bar, while the district court allowed freight pro rata as a charge on the proceeds of the cargo, the circuit court of appeals held the cargo owners personally for a sum much exceeding that amount, and therefore much exceeding the benefit actually received. It will not be necessary to consider the decree of the district court, since that was not appealed from by the cargo owners, and we shall not discuss the effect of the judicial sale, as it is not necessary in the view which we take.

There is no doubt that the English decisions confidently assert the cargo owner's right to refuse to go on. They may be read in the reports, and there is no need to do more than to refer to them. The Arno, 8 Asp. Mar. L. Cas. 5; The Leptir, 5 Asp. Mar. L. Cas. 411; The Argonaut, Shipping Gazette, Weekly Summary, Dec. 5, 1884, p. 775; The Cito, L. R. 7 Prob. Div. 5; The Kathleen, L. R. 4 Adm. & Eccl. 269. The only point which they leave open is whether, if the master should get the abandoned vessel and cargo back from the salvors before the cargo owners had declared an election to end the contract, he might in that way revive his right to finish the voyage. On that point it is enough to say here that if the English rule is right, then, even if there is any such qualification to it, the exception must depend upon something more substantial than a few minutes' priority in filing a libel, when neither master nor cargo owner has possession either of cargo or ship, as, plainly, neither had in this case.

The right of cargo owners to treat the contract as ended by the abandonment of the ship was asserted much earlier than the English cases by Judge Ware in Lewis v. The Elizabeth & Jane, 1 Ware, 41, Fed. Cas. No. 8,321, and earlier still by Mr. Story, before he became a justice of this court, in his Edition of Abbott on Shipping (1810), pp. 338, 512, citing Dunnett v. Tomhagen, 3 Johns. 154, and Mason v. The Blaireau, 2 Cranch, 240, 2 L. ed. 266. We see nothing in The Nathaniel Hooper, 3 Sumn. 542, Fed. Cas. No. 10,032, sufficient to prove that he changed his opinion. That case is cited in 3 Kent, Com. 13th ed. 228, along with Post v. Robertson, 1 Johns. 24, in which, and in Dunnett v. Tomhagen, 3 Johns. 154, the supreme court of New York and Chief Justice Kent took the same general view, subject to the question whether there might be a recovery on a quantum meruit when benefits were accepted under the contract, in spite of a failure of complete performance. See Caze v. Baltimore Ins. Co. 7 Cranch, 358, 362, 3 L. ed. 370, 371; 3 Kent, Com. 229. Other cases are Smith v. The Mansanito, Fed. Cas. No. 13,075; The James Martin, 88 Fed. 649. See also 3 Kent, Com. 196. In short, we are aware of no decision in this country or in England before the present case which casts any doubt upon the rule.

It was thought by the circuit court and circuit court of appeals that the doctrine so unanimously sanctioned by so many of the most eminent judges of this country and of England is unjust; and the case was put of a long voyage nearly completed and the ship and cargo subsequently brought by salvors intact to the port of destination. But we are of opinion that there is no injustice in holding that what excuses the ship excuses the cargo, and that the rule is in accord with the general principles of contract. Subject to the question whether the cargo owners broke their contract, it seems to us more unjust to charge them personally, in favor of those who failed to complete the voyage as contemplated, with a sum much exceeding the benefit which the cargo owners received from what was done. Of course, it is desirable, if there is no injustice, that the maritime law of this country and of England should agree.

To begin at a distance, a repudiation of a contract, amounting to a breach, warrants the other party in going no further in performance on his side. Roehm v. Horst, 178 U.S. 1, 44 L. ed. 953, 20 Sup. Ct. Rep. 780. But the same thing is true of an absolute repudiation not amounting to a breach. Frost v. Knight, L. R. 7 Exch. 111, 113; Phillpotts v. Evans, 5 Mees. & W. 475, 477; Ballou v. Billings, 136 Mass. 307, 309.

It appears to us, and we shall try to prove, that an abandonment of the ship must be regarded as a renunciation of the contract, even if not a repudiation of its terms as binding. It is an overt act which is more than an attempt to give up the voyage. It not merely makes the completion of the voyage so improbable, by reason of the helplessness in which the ship is left and the intent with which the act is done, as practically to destroy the value of the contract to the cargo owner (see Swift & Co. v. UnitedStates, 196, 49 L. ed. 518, 524, 25 Sup. Ct. Rep. 276), it is a present failure to do what the contract requires, if the purposes of the contract are to be carried out. The requirement is shown by the fact that the abandonment would be a cause of action unless justified. It not only would be a breach of contract, but no one questions that it would authorize a rescission of the contract on the other side, which not every breach of contract does. That it would authorize rescission or refusal to allow the master to change his mind if the vessel was saved shows that a continuous intent and effort to go on with the voyage is an essential condition to the obligation to pay freight. It shows, what needs no illustration, that the continuous care of the master is the main object of the cargo owner's interest in the contract. By the general principles of contract, an open cessation of performance, with the intent to do no more, even if justified, excuses the other party from further performance on his side. The principle is not peculiar to charter parties, it is illustrated in other parts of the law. See Roehm v. Horst, 178 U.S. 1, 44 L. ed. 953, 20 Sup. Ct. Rep. 780.

In the case at bar the vessel was abandoned with the intent not to return to her or to complete the voyage. This is admitted, if admission be necessary, by the testimony of the master. Of course it is not disputed that the completion of the voyage and delivery of the cargo are absolute conditions to the undertaking to pay freight, by the express terms of the contract and the familiar rule of law. 3 Kent, Com. 220, 228. The master left ship and cargo to their fate, and we cannot doubt, although it was denied, that, after he had done so, if the cargo owners had been the salvors, they could have treated the voyage as at an end. The ground must be that the abandonment was more than an attempt, or a mere offer of rescission, which might be revoked by the master before acceptance, and that it was an unequivocal departure from the conditions which the contract imposed. If the abandonment had been unjustified and a breach of contract, of course it would not have ended the contract, but would have left the choice whether to end it or not to the cargo owner. If justified, the simplest view would be that it was so because the contract authorized the master to end it when prevented from performance by perils of the sea, and that the contract was ended. But at all events, as control of the ship and voyage was given up and never regained, the abandonment at least gave an irrevocable power to the cargo owners to decline to be further bound. See, in addition to cases cited above, 3 Kent, Com. 196. The opposite view must be that the master still is bound to go on with the voyage notwithstanding his justifiable abandonment, if a chance should turn up,-a view which leaves his duties in a very ambiguous shape; or else that the master has the choice, which gives the election to the party whose act has made the trouble, as against the party that has done nothing and has had nothing to say.

If it be true that if, on the other hand, the master had rejoined the ship before anyone else had taken possession, or had got it back from the salvors before the cargo owners had been heard from, he might have had a right to complete the voyage, the ground must be that the law would not insist on a technical breach of condition when there had been no substantial change of circumstances and no harm done.

The argument on the other side consists largely in the attempt to treat leaving the ship under stress of perils of the sea as not distinguishable on principle from being torn bodily away from it by tempest. This is one of the oldest fallacies of the law. The difference between the two is the difference between an act and no act. The distinction is well settled in the paralled instance of duress by threats, as distinguished from overmastering physical force applied to a man's body and imparting to it the motion sought to be attributed to him. In the former case there is a choice and therefore an act, no less when the motive commonly is recognized as very strong or even generally overpowering, than when it is one which would affect the particular person only, and not the public at large. It has been held on this ground that duress created by fear of immediate death did not excuse a trespass. Gilbert v. Stone, Aleyn, 35, Style, 72; Scott v. Shepherd, 2 W. Bl. 892, 896. See Miller v. Horton, 152 Mass. 540, 547, 10 L. R. A. 116, 23 Am. St. Rep. 850, 26 N. E. 100. It has been held that a similar plea in the case of shipwrecked men at sea did not prevent the killing of one of them being murder. Queen v. Dudley, L. R. 14 Q. B. Div. 273. See United States v. Holmes, 1 Wall. Jr. 1, Fed. Cas. No. 15-383. It is clear that a contract induced by such fear is voidable only, not void, and that the ground of avoidance being like fraud, that the party has been subjected to an improper motive for action, when that motive has been created by a stranger, and is unknown to the party, the contract stands. Keilwey, 154 a. pl. 3. Fairbanks v. Snow, 145 Mass. 153, 1 Am. St. Rep. 446, 13 N. E. 596. So a conveyance induced by duress is operative until avoided, and cannot be set aside when the property has passed to a purchaser without notice. Bainbrigge v. Browne, L. R. 18 Ch. Div. 188, 197; 2 Wms. Vend. & P. 767; Clark v. Pease, 41 N. H. 414. The distinction is as old as the Roman law. Tamen coactus volui. D. 4, 2. 21, § 5; 1 Windscheid, Pandekten, § 80.

The same principles which apply to the making of a contract apply to the breach of it and to nonperformance of the conditions attached to performance on the other side. The contract before us by construction provides that an abandonment of the voyage in consequence of the perils of the sea shall not be an actionable breach, but it equally provides that a completion of the voyage shall be an absolute condition to the right to freight. The same absoluteness attaches the further condition implied from the first, that the effort to complete the voyage shall not be given up voluntarily, midway.

The argument urged to the effect that the cargo's liability to general average created a right to have the voyage finished, however it might have been otherwise, does not need an extended answer. The cargo owners had the same right to treat the contract as ended as against a shipowner who had cut down a mast, that they would have had against one who had made no sacrifice for the common good. The contract is the supreme source of mutual rights, and cannot be overridden by the incidents of its performance.

The case was brought here by the cargo owners to get rid, if possible, of the personal liability imposed by the circuit court. As this court is of opinion that the personal liability should not have been imposed, no other question needs consideration here.

Decree reversed.

Mr. Justice Brown, with whom were Mr. Justice Harlan, Mr. Justice McKenna, and Mr. Justice Day, dissenting:

Notes