U.S. Supreme Court
The Camanche, 75 U.S. 8 Wall. 448 448 (1869)
75 U.S. (8 Wall.) 448
1. A corporation is not disqualified, by the simple fact of its being a corporation, from maintaining a suit for salvage. Hence, where a service, in its nature otherwise one of salvage, was performed by a stock company, chartered to hire or own vessels manned and equipped to be employed in saving vessels and their cargoes wrecked, and to receive compensation in like manner as private persons, and where the persons actually performing the service had no share in the profits of the company, but were hired and paid under permanent and liberal arrangements and rates of pay -- the net profits being divided among stockholders -- such service was held to be a salvage service, and the corporation to be entitled to pay as salvors accordingly.
2. A suit for salvage cannot be abated on the objection of claimants that others as well as the libellants are entitled to share in the compensation. chanrobles.com-red
The remedy of such others is to become parties to the suit, or to make a claim against the proceeds, if any, in the registry of the court.
3. The defense that the services for which salvage is claimed were rendered under an agreement for a fixed sum payable in any event is waived unless set up in the answer, with an averment of payment or tender.
4. Nothing short of a contract to pay a fixed sum at all events, whether successful or unsuccessful, will bar a meritorious claim for salvage.
5. A salvage service is nonetheless so, because it is rendered under a contract which regulates the mode of ascertaining the compensation to be paid, but makes the payment of any compensation contingent upon substantial success.
6. Decrees in salvage will not be disturbed as to their amount unless for a clear mistake or gross overallowance of the court below.
The case was this:
In November, 1863, in the midst of a violent southeast gale, the ship Aquila, then but a few days in port, sunk at her moorings in deep water, alongside her wharf, in San Francisco. She had just hauled in there to discharge her cargo, consisting of the materials and armament -- shot, shells, guns, ordnance, stores &c. -- of the monitor Camanche, which was to be constructed under contract with the government by Donahue & Ryan, who owned both the Aquila and the whole cargo sunk.
The materials, armament &c., were valued at $400,000. Of this, $340,000 were insured by various companies, each having a certain part of the risk. This left $60,000 at the risk of Donahue & Ryan, the owners.
The Aquila had been anxiously expected at San Francisco with her cargo. Her foundering in an exposed and difficult part of the bay, made the loss of the monitor highly probable. The public mind, excited by the civil war then raging, and by fears of attacks by hostile cruisers on a harbor and city inadequately defended, was shocked by the shipwreck of the only sure means of protection provided by the government for both, and this feeling extended itself throughout the country.
Measures were promptly taken to save, if possible, the vessel and cargo. Donahue & Ryan, who owned her and chanrobles.com-red
the cargo, and had contracted to build the monitor, then in San Francisco, of which they were residents, made within a day or two after the Aquila sunk, an abandonment of ship and cargo to the agent of the underwriters at San Francisco.
The agent did not accept, but took vigorous measures to save the property. The government superintendent for the building of the monitor was early on the ground and was active.
The best mechanics of the city were contriving measures. A dry-dock was thought of, and plans were drafted. The first attempt actually made was by pumping out the ship. This was after full consultation. It proved unsuccessful. The next attempt was to lift the ship by chains under her bottom. Different modes of getting these under were tried by divers -- by blowing a hole underneath &c.; all in vain. This attempt, like the other, was abandoned.
These efforts were continued several weeks, at a cost to the underwriters of $38,000 in gold, but were finally given up. Ryan, one of the contractors, bore a leading part in these operations, had charge of the pumping process, and received $1,000 for his services.
In this juncture, the efforts at San Francisco having proved abortive, a company called the Coast Wrecking Company, agreed at New York, with the underwriters, to undertake the recovery of the materials of the monitor.
The peculiar character of this company, and their agreement in the case -- matters, both of them, much discussed in the argument -- must here be stated.
The company was an incorporated stock company, incorporated by the Legislature of the State of New York, and invested by their charter with authority to hire or own vessels manned and equipped, to be employed in towing, aiding, protecting, and saving vessels and their cargoes wrecked or in distress, whenever such wrecks or distress occur, and to receive compensation or salvage for such services in like manner as private persons, and entitled to like liens and remedies. chanrobles.com-red
The location of the company was in the City of New York, and its chief business was with the cruising grounds of the large Eastern ports. Its business of wrecking or salvage was conducted exclusively by vessels, equipments, and materials supplied and paid for out of the corporate funds, and the officers and men executing the work done, did not participate in the losses or gains springing out of the services rendered on the occasion of their employment, but, of whatever rank and position, were paid by the corporation, and out of its funds, as in cases of pure contracts of hiring.
The company was in the habit of paying to its agents and servants who were engaged in services of difficulty or danger a rate of wages or salary proportionately high, and in case of injury to any of them while so engaged, its practice was to take care of them till they recovered, and in case of their death to take care of their families, and to place them or their families, as the case might be, in a position to earn a livelihood. It also paid the medical bills of men hurt in its employment.
The rate of wages paid was high in proportion, and above pay for mere work and labor. Merritt's (the captain) salary was $4,500 a year, with primage (for the service in this case, about $1,500 to $2,000), besides all expenses paid. His assistant had $1,200 a year, and $500 primage. He and the others who went out with the expedition had all their expenses paid from the time they left New York until they returned. The principal divers averaged $13 a day, for the same time out and back, their day's work being four hours, besides expenses paid. The divers regularly employed by the company were on half pay while not engaged in service.
The agreement which the company made was between itself and different insurance companies who had taken risks on the cargo to raise it for $110,000, to be paid by the companies, each in proportion to its interest in the $400,000 valuation, insured, the Wrecking Company agreeing to complete the work in ten months, with a proviso, however, that if not completed in that time, the company should forfeit chanrobles.com-red
ten percent, and also that if there was no substantial recovery, the Wrecking Company should receive nothing. The proviso as to time was made because a cargo of the nature that this was would, as to part of it, be injured by remaining long in water.
The agreement being made, the Wrecking Company promptly dispatched to San Francisco a party of men, divers and wreckers, specially selected from New York, Boston, and Providence, and fully provided with suitable apparatus and machinery, the whole under the command of Captain Merritt, the company's general superintendent, a man of twenty years' experience and of admitted skill in his calling.
The expedition left New York, December 24, 1863, and arrived in San Francisco, January 17, 1864. Captain Merritt on the 23d of January received possession of the wreck, and on the 25th of January, after examination and study as to the best plan, began operations.
The winter had just begun, and there was reason to expect cold and stormy weather. The ship, as she lay, was exposed to the southeast gales of the season, one of which had sunk her, with the rake of the bay for thirty miles, and to its currents. She lay ten feet from the wharf, with a list to starboard (off-shore) of forty-five degrees, pitched by the head at thirty to thirty-two degrees. Her forward part, for one-third of her length, projected beyond the end of the wharf, with the bow exposed to the force of the tides and currents. Her bow was sunk in forty-eight to fifty feet of water, her stern in about nineteen feet. At low water, about one-sixteenth of her deck was out of water; at high water, she was submerged except a space on one side, close astern. In effect, she was at the bottom of the bay and at such angles of inclination fore and aft and from side to side as to make it, independent of the depth of water and the darkness, somewhat difficult to stand on her decks and even more difficult to work at getting out her cargo. Besides, she rested on a rocky bottom shelving off shore, making her liable, if her fasts should part at any time, to slip off into deeper water. chanrobles.com-red
Besides the difficulties of the ship's position, the cargo was perplexing in its character and in its stowage.
The materials of the monitor comprised a great number of iron pieces, from twenty-six tons to one hundred pounds in weight. The frame was of angle-iron, long, crooked pieces, very difficult to handle. Floor timbers, also of iron, were of irregular shape, and some very heavy and long. There were two main engines for propelling the monitor, and eight smaller engines. The guns weighed twenty-two tons each, and there was a number of shot and shell. The guns, as well as the other heavy pieces, as ex. gr., the pilot house, twenty-six tons, were liable, in the progress of loosening and getting out the cargo, to break away and do great damage. There were also a multitude of construction tools, machinery for a machine shop, and small pieces, bolts, rivets &c., by thousands. The weight of the whole was fourteen hundred tons.
By reason of the very unusual nature, construction, value, and weight of the cargo, and to keep it from shifting, extraordinary means and care had been used in the stowage of it. It was "stowed down solid," "firmly fixed in the hold," shored by staunchions or joists, one end resting under the deck beams, and the other resting on the cargo or the flooring over the cargo, in such angles and positions as required, and some of them tied with braces; the whole thoroughly wedged in. The stowage was such as in the opinion of Mr. Ryan, one of the claimants, to make it impossible to remove the cargo with divers.
After full examination, the plan adopted by Merritt and his company was to get out the cargo by divers as far as necessary, and then to raise the ship, lay her on the flats, and hoist out the remaining cargo. It was considered impracticable to raise the ship with the cargo in her.
The first part of the work, getting out the cargo by divers, was commenced January 28th, 1864, and by unremitting labor from early in the morning until late at night, except two and a half days stormy and Sundays, it was completed about April 20th, 1864; somewhat less than three months. chanrobles.com-red
The risk of life and limb during this part of the labor was testified to be "great and constant."
"The divers were obliged to work in entire darkness, and the inclination of the deck both ways, and the mud which rendered it slippery, made it impossible for them to walk, and compelled them to crawl by a line on the weather or upper side of the ship. Yet they had to follow up every piece to the hatchway. To find and hook on the pieces to be hoisted out, they had to grope their way in the dark, and feel with their hands all over each piece. This part of the operations was peculiarly dangerous. With the utmost care in breaking away the timbers which formed the stowage of the cargo, it was almost impossible to prevent the heavy pieces on the upper side of the ship from fetching away. One of the large guns, weighing twenty-two tons, fetched away in this manner. One of the long, crooked iron ribs, coming away, cut off a finger of an experienced diver, who had just hooked it on. He dived no more. Many of the pieces had sharp edges, so that if one of them had struck a diver in a vital part, it must have killed him."
In getting out the cargo, the ship was necessarily a good deal injured. Holes had to be cut in her. But her value bore no comparison at all to that of the cargo. [Footnote 1]
After the cargo was got out, the raising of the ship was undertaken. The attempt was first made to get chains under her. This failed, as she rested forward so heavily on the rock that the divers, after working two days with picks &c., could not get the chains under her. Another plan was tried, and succeeded, that of lifting her with chains fastened to the deck-beams and other parts of the ship, and hove through pontoons, with levers worked by powerful hydraulic machines, until the bow was raised from the bottom, so that chains could be introduced under her whole length. The chanrobles.com-red
chains were worked in the same way through the pontoons. About the 20th of May, after a month's incessant work, day and night, Sundays included, the ship was raised and floated upon the flats.
Steps were then taken for pumping her out. By means of a large hole made in the mud under her, the divers stopped the leaks; the ship was pumped out by steam, the mud removed, and the remaining cargo hoisted out. Captain Merritt, with some of his men, returned to New York about the middle of June, 1864, and the last of the materials were landed July 3. The duration of the salvage service, from the time of leaving New York until its completion, was about six months and a half, or until the return to New York, over seven months. The outlay made by the company in its work of recovering the cargo, was nearly $70,000, all of which but $5,300 was consumed in the enterprise.
The Aquila, or vessel on which the cargo had been shipped, was raised by the Wrecking Company, though the main matter to which attention was directed was the cargo, which from the character of a part of it (fine machinery and polished metal), it was indispensable to get from under the water at once, and this necessity for expedition interfering somewhat, perhaps, with the recovery of the vessel itself in the best condition, and along with the cargo.
All the insurance companies (except one which had a risk for $15,000 and had failed) paid the money which by the terms of their contract they were bound to pay, but there remained over and above their interest in the cargo, the $60,000 uninsured. For rescuing this the Wrecking Company claimed salvage of the owners, Donahue & Co. These refused to pay. Thereupon the company filed a libel in the District Court for Northern California to have salvage for this $60,000 saved, and for the $15,000 insured on the cargo by the broken company, and a monition issued in due form, to everyone having anything to say, to come in. Donahue & Ryan answered, admitting in effect the recovery of the cargo, but denying the vast and unheard of peril, difficulty, and labor alleged, and setting up that the Wrecking Company chanrobles.com-red
had paid very little regard to what damage they did to the Aquila and had seriously and lastingly injured her, without setting up, however, either as a fact or fear, that the individual men who performed the actual labor would make a claim for salvage. No tender of money for anybody was made.
The district court, regarding the service as a salvage service, awarded on the two items $24,062, and the circuit court affirmed the decree, with interest at seven percent from the beginning of the suit. And from this decree the appeal came. chanrobles.com-red