U.S. Supreme Court
The Emily Souder, 84 U.S. 17 Wall. 666 666 (1873)
The Emily Souder
84 U.S. (17 Wall.) 666
1. In June, 1865, the American steamer Emily Souder, owned by residents in New York, whilst on a voyage to that port from Rio Janeiro, lost her propelling screw and put into the port of Maranham, on the coast of Brazil, in distress. She was towed into that port by another steamer for which she had signaled. The captain was without adequate funds to make the repairs required and furnish the vessel with the supplies necessary to enable her to proceed on her voyage, or to pay the expenses of her towage into port, and of pilotage, custom house dues, fees of the consul in the port, and expenses of medical attendance upon the sailors. Both he and the owners of the vessel were unknown in Maranham and without credit there. Under these circumstances, the captain borrowed of the libellants the necessary funds to enable him to pay these several expenses and gave them drafts on the owners of the vessel in New York for the amount, payable thirty days after sight, which drafts were accepted on presentation, but were protested for nonpayment.
Held, 1st, that the items of expense for towage, pilotage, custom house dues, consular fees, and medical attendance upon the sailors stood in the same rank with the repairs and supplies to the vessel, and that the libellants advancing funds for their payment were equally entitled as security to a lien upon the vessel; 2d, that the drafts were only conditional payment, and did not discharge and satisfy the original debt.
2. After the libellants in one of the cases had agreed with the captain to advance all the funds required by him, the libellant in the other case, who had been first applied to by the captain, agreed to advance a portion of the funds, and did so; held that this subsequent agreement did not affect the implied hypothecation of the vessel for the whole, the advances by both libellants having been made on the credit of the vessel, and not solely on the personal credit of the captain or owners.
3. The presumption of law is, in the absence of fraud or collusion, that where advances are made to a captain in a foreign port, upon his request, to pay for necessary repairs or supplies to enable his vessel to prosecute her voyage, or to pay harbor dues, or for pilotage, towage, and like services rendered to the vessel, that they are made upon the credit of the vessel as well as upon that of her owners. It is not necessary to the existence of the hypothecation that there should be in terms any express pledge of the vessel, or any stipulation that the credit shall be given on her account.
4. The presumption in such cases can be repelled only by clear and satisfactory proof that the master was in possession of funds applicable to the expenses, or of a credit of his own or of the owners of his vessel, upon which funds could be raised by the exercise of reasonable diligence, and that the possession of such funds or credit was known to the party making the advances or could readily have been ascertained by proper inquiry. chanroblesvirtualawlibrary
5. Liens for advances of funds for the necessities of vessels in a foreign port have priority over existing mortgages to creditors at home.
6. Where advances in a foreign port are made in gold, and drafts for the amount on the owners show that the payment to the parties making the advances is to be also in gold, the court may direct that its decrees be entered for the amount in like currency.
The firm of Packenham Beatty & Co., and also a certain Pritchard, filed separate libels in the district court of the district just mentioned, against the steamer Emily Souder, an American vessel owned in New York. The case was thus:
The steamer, while on a voyage to that port from Rio Janeiro in June, 1865, lost her screw and was compelled to put into the port of Maranham, on the coast of Brazil, for repairs. Her captain was without funds sufficient to meet the expenses for these repairs and other expenses incurred and to be incurred to enable the vessel to proceed on her voyage. The funds in his possession did not amount to $600, and both he and the owners of the vessel were unknown in the port of Maranham and without credit. He accordingly applied to the consul of the United States there to find him a consignee who would advance the necessary funds and attend to the business of the vessel. The consul applied in company with the captain to several persons without success, but finally an arrangement was made which was satisfactory, with the firm of Packenham Beatty & Co., merchants at that port; they to receive five percent commission on the amount advanced, and five percent commission for attending to the business of the vessel.
The steamer was repaired, and supplies furnished to enable the vessel to proceed on her voyage, and the funds for these items, and also to pay the charges for towing the vessel when disabled into port by another steamer which had been signaled for, and for pilotage, and for the dues at the custom house, fees of the consul, and charges for medical attendance upon the sailors in port, were furnished by chanroblesvirtualawlibrary
the libellants. The different items were all submitted to the captain, and were approved by him before they were paid.
Pritchard, one of the libellants, was applied to by the captain to advance the funds before the arrangement was made with Packenham Beatty & Co., the other libellants. He then said that he would see what he could do. Afterwards he consented to advance a portion of the funds. Accordingly, two drafts were drawn by the captain on the owners of the vessel in New York, for the amounts advanced, and one of them was given to Pritchard, and the other to Packenham Beatty & Co. The drafts were payable thirty days after sight in gold; the currency in which the advances were made. The drafts were presented and accepted, but on their maturity were protested for nonpayment. The holders thereupon filed libels against the vessel, producing the drafts in court on the trial, and surrendering them for cancellation. Beatty, of the firm of Packenham Beatty & Co., and Pritchard, both testified that the advances in Maranham were made on the credit of the vessel, and would not have been made on any other condition; but that the drafts were taken only as conditional payment, and not in satisfaction of the sums advanced. The testimony of the captain was somewhat in conflict with this, he stating that the advances were made on the credit of the owners of the vessel and upon drafts on them, nothing being said at the time about bottomry of the vessel or raising money on her credit.
The vessel was at the time the advances were made under mortgage to the former owners for the purchase money. They were obliged to take back the vessel before the libels were filed, and they were the claimants here.
The district court rendered a decree in favor of the libellants in both cases, for the amounts advanced by them respectively, with interest, and directed that the amounts should be paid in gold coin of the United States. The circuit court affirmed the decrees and the claimants appealed to this Court. chanroblesvirtualawlibrary