10 F.(28) 950 Huntley, 2 C. P. D. 464, [1877], the ship was let for six months with a full complement of officers, seamen, engineers, and firemen, and was placed under the direction of the charterer. The captain was to sign bills of lading and follow the charterers' instructions "as regards loading, discharging, and departure." In the course of a voyage under this contract, the vessel was wrecked, owing to the negligence of the master and crew. It was held that the owner was liable to the charterers for that negligence, inasmuch as by the charter party it was intended that, so far as it concerned the navigation of the vessel, the owner was to retain her under his control for the purpose of carrying out his contract. The charterers might direct where the ship was to go, and with what she was to be laden, but the owner was in all respects accountable for the manner in which she might be navigated. Under the charter in this case the owners appointed the master and officers and hired the crew, and the charterers had no power to displace them, and it is not suggested that the ship was in the possession of the charterers. She was, during the whole period involved, in the possession of her owners, and consequently the master bound the ship, and not the charterers merely in all the bills of lading which he lawfully signed. As between the shipowner and the charterer, the master, in signing bills of lading, acted as the agent of the charterer, but as between the shipowner and the shipper he was the agent of the owner, who appointed and paid him, and who, in not allowing the ship to start on the voyage from New York, obeyed the orders given him by the owner whose agent he continued to be. [16] In every contract of affreightment, whether by charter party or bill of lading, the ship is by the admiralty law hypothecated to the shipper for any damage sustained by his goods through the failure of the ship to transport them in safety to their destination-the injuries not being occasioned by the excepted perils. In 36 Cyc. 70, it is said: "The shipper under an ordinary bill of lading has his remedy against the ship, whether the charter is one where the owner retains possession and command, or whether the control and navigation pass to the charterer; but whether the owner or the charterer is ultimately liable depends on the terms of the charter party. It is immaterial, however, to the question of liability, whether the owner receives for the use of the vessel a stipulated sum or a share of its earnings. In either case the party who by the contract with the owner is entitled to the possession and command of the vessel is liable for not delivering goods. If the charterer is owner pro hac vice, he alone is personally liable for injury to or nondelivery of the cargo, unless the owner has by his conduct induced a reasonable belief in the shipper that the vessel was to sail on his account, and under his direction and control." See Richardson v. Winsor, 20 Fed. Cas. 726, No. 11,795, 3 Cliff. 395; The T. A. Goddard (D. C.) 12 F. 174. The only question we are concerned with in this case is that of the liability of the ship. The suit is in rem against the ship, and is not in personam against either the shipowner, or the charterer, or the ultimate liability of either. In Schooner Freeman v. Buckingham, 18 How. 182, 189 (15 L. Ed. 341), Mr. Justice Curtis, writing for the court, said: "We are of opinion that, under our admiralty law, contracts of affreightment, entered into with the master, in good faith, and within the scope of his apparent authority as master, bind the vessel to the merchandise for the performance of such contracts, wholly irrespective of the ownership of the vessel, and whether the master be the agent of the general or the special owner." And we are not aware that the Supreme Court in any subsequent case has ever expressed a contrary opinion. In The Alert, 61 F. 113, 9 C. C. A. 390, this court held that, even in the case of a demise of the ship, the vessel is not freed from liability on contracts of affreightment received from the agent of the ship. In Field Line v. South Atlantic S. S. Line, 201 F. 301, 304, 119 C. C. A. 539, 542, the charter party provided that the captain should sign the bills of lading when presented to him. It was held that there was no demise of the vessel, the master and crew remaining in possession. The Circuit Court of Appeals in the Fifth Circuit said: "The charter party permitting the master and crew to remain in control of the vessel, the master continued to be the representative of the shipowner; and the meaning of the stipulation that the master shall sign the bills of lading is that the shipowner shall, through the master, contract with shippers for the charterer's benefit. It would seem to follow that the shipowner in such cases is bound by the bill of lading, although it may in terms differ from the charter party." In The Coventina (D. C.) 52 F. 156, a controversy arose between the shipowner and the charterer, which led to an unreasonable delay in the sailing of the vessel. The shipper, who held the bills of lading issued by the master of the ship, sought to hold the ship liable for the loss he incurred by the delay. Judge Addison Brown held the ship liable with right of recourse for indemnity over to the person causing it. Referring to the controversy which had arisen between the charterer and the shipowner, Judge Brown said: "The shipper was a stranger to that controversy. Its consequences were not at the shipper's risk, but at the risk of the owners, who had voluntarily dealt with the charterers and had chosen to obtain cargo in that way. If the charterers were in the wrong, the owners were entitled to indemnity from them; and the court of appeal, as above stated, seems to have awarded that indemnity." The English rule is different. It is not that a bill of lading signed by a master binds the shipowner, although the ship is under a charter which is not a demise, and that the master is regarded as having made it on the owner's behalf, and not on behalf of the charterer. The English cases are reviewed in Carver's Carriage by Sea (7th Ed.) secs. 154-157. At page 242 Carver states "In effect, then the contract is in general with the shipowner; and the master should be regarded as having made it on his behalf, and not on behalf of the charterer. And this is the more consistent view; for, if the master is agent for the charterer in giving the bills of lading, his agency ceases at that point; in carrying out the contract, he clearly acts as servant of the owner." [17,18] It is claimed by the steamship, and by her owner, that neither is liable on the freight contracts, and that whatever liability exists is that of the Fulton Steamship Corporation. This seems to be based on two considerations: First, because the dock receipts stated that "The Fulton Steamship Corporation shall not become responsible for the goods as carrier until the goods are actually loaded on the steamer." Second. That while bills of lading were signed, "Fulton Steamship Corporation, Agents for Master," there is no proof of any authority given to that corporation by the master to sign bills of lading on his behalf, and the charter did not expressly provide that the master should sign bills of lading. But that it was clearly understood that he should do so is shown by the statement made in the charter that the charterers indemnified the owners against all liabilities arising from his signing bills of lading. their reverse order. Let it be admitted, as it must be, that there is no proof that the Fulton Steamship Corporation was ever authorized to sign bills of lading on behalf of the master. What the testimony shows is that all "on board" bills were in fact signed by the master, and that no bills were stamped "on board" unless the cargo was actually on board. It is admitted that the bills of lading issued prior to the arrival of the steamship and signed "Fulton Steamship Corporation, Agents for Master" were so signed without authority from the master. But after the arrival of the ship at New York these bills of lading were presented to the master, who was told what had been done. He expressed his full approval, and then affixed his own signature to them. The testimony establishing that fact has been herein before set forth. The law is elementary that, where one assumes to act as agent, but does so without previous authority, the principal has the right either to repudiate or to ratify the unauthorized transaction. If he ratifies, he accepts the contract which the agent made, and it becomes binding and takes effect as of the date when the agent made it. It is a confirmation of the original contract; and the general rule is that any person can ratify an unauthorized act of another on his behalf if at the time of ratification he himself had the power to do the act which he ratifies. And as a valid ratification is equivalent to prior authority, it relieves the agent from any liability to third persons for acting without authority, provided the third person is not by ratification placed in a worse position than he would have been in, had the agent acted under prior authority. The ratification of an unauthorized act is equivalent to a prior authority to perform it. As Mr. Justice Story said in Fleckner v. Bank of the United States, 8 Wheat. 338, 5 L. Ed. 631: "No maxim is better settled, in reason and law, than the maxim 'omnis ratihabitio retrotrahitur, et mandato priori equiparatur'; at all events, when it does not prejudice the rights of strangers." And in Cook v. Tullis, 18 Wall. 332, 21 L. Ed. 933, Mr. Justice Field declared that "the ratification operates upon the act ratified precisely as though authority to do the act had been previously given, except where the rights of third parties have intervened between the act and the ratification." We confess ourselves entirely at a loss to understand why it should be supposed to We shall consider these propositions in make any difference whether the Fulton 10 F.(2d) 950 Steamship Corporation signed the bills of thorized the Fulton Steamship Corporation, lading without authority as "Agents for Mas- by J. H. Everson, to sign "for and in my ter," when the master afterwards, approving behalf as agent for the owners and charterand confirming what had been done, affixed ers" of the ship the bill mentioned. The Dishis own signature to the bills with full knowl- trict Judge very properly held this was a edge of all the facts. This was ratification, ratification and bound the ship. In Armour and it related back to the time when the un- & Co. v. Ft. Morgan S. S. Co., Limited (C. authorized act was done, and made it as C. A.) 297 F. 813, a cattle company had effective as though it had been originally au- chartered a vessel with a full complement of thorized. "Omnis ratihabitio retrotrahitur officers, seamen, engineers, and firemen for et mandato priori equiparatur." the transportation of cattle from a port in Costa Rica to Jacksonville, Fla. The charterer libeled the steamship, claiming it was liable for the death and injury of some of the cattle, and attributed it to the alleged unseaworthy condition of the vessel when it started on the voyage. The basis of the claim against the vessel was the bill of lading. It was signed "The Central American Cattle Co., Inc., by Tho. Johannesen, Master S. S. Ft. Morgan." The Circuit Court of Appeals for the Fifth Circuit, affirming the court below, held that the shipper could not hold the ship or its owner, but only the charterer, as the shipper's contract for the carriage of the cattle was with the charterer, the Cattle Company, alone. "Nothing in the terms of the charter party indicates that it was contemplated that the ship or its owner could be made liable for a breach of a contract of affreightment made by a shipper with the charterer." [19, 20] Before concluding that part of this opinion relating to the subject of the ratification of the bills of lading, it is necessary to refer to the antedated bills, issued in April, which were then delivered to the shippers, and which we have discussed previously in another connection. As these bills were delivered prior to the arrival of the ship, they were not in the possession of the Steamship Corporation upon the arrival of the ship, and so were not presented to and signed by the master at the time he signed the other bills. But the testimony herein before set forth shows that his attention was specifically called to them and that he said that it was "all right." He thereby ratified all such bills as effectually as though he had himself placed his signature upon them. No particular formality is ordinarily necessary to enable a principal to ratify the unauthorized acts of one who has assumed to act as his agent. The general rule is that, except in cases where ratification in writing is required by a sealed instrument, or where ratification in writing is required because some statute makes a writing necessary, ratification need not be in writing, and may be by parol. Mechem on Agency (2d Ed.) vol. 1, § 428. And what has been said as to the bills of lading signed in April, and not signed by the master, applies equally to the few bills signed by the Fulton Steamship Corporation as agent after the arrival of the ship, and which were not signed by the master. The testimony set forth herein, and which is uncontradicted, shows that, when the master was informed that the Steamship Corporation might sign bills notwithstanding the ship had arrived, he waved his hand and said, "It is all right; go ahead and do so." This was all that was required, and as in all cases the goods were placed on board the ship, all the bills of lading involved must be held valid and binding on the ship. [21] In the testimony previously set forth there appears a letter, dated May 5th and signed by the master, in which he refers to bill of lading No. 22, and states that he au That case is plainly distinguishable from the case at bar. In the Armour Case the bill of lading was signed by the master as the agent of the Central American Cattle Company. In the case at bar the Fulton Steamship Corporation signed the bills of lading as "agents for the master." If it did this without authority, it would have made itself liable, if it were not for the fact that the master subsequently ratified its unauthorized act. In the Armour Case the form of the master's signature indicated the absence of intention to bind any one but the charterer; but in this case the master's signature is not limited but is unrestricted and bound the ship. [22] As respects the defense urged at the argument, and herein before mentioned, that the steamship is not liable because of the language of the dock receipts, in which it was stated that "the Fulton Steamship Corporation shall not become responsible for the goods as carrier until the goods are actually loaded on the steamer," little need be said. This is a suit against the ship. It cannot be defeated by showing that a suit might or might not have been brought against the charterer in personam. It cannot be defeated by showing that some one else was or was not liable. The suit is brought against the ship, and it is based solely on the bills of lading, and neither the libels nor the answers make any reference to the dock receipts. [23] The District Judge in his opinion attached importance to the fact that the ship never broke ground. He said: "As to all cargo not covered by legal original bills of lading, or the letter signed by the master, the ship was not bound to carry the same on the default of the charterer in payment of the charter hire. The Esrom, supra [C. C. A.] 272 F. 266; The Devona [D. C.] 272 F. 275. Had the ship broken ground and commenced the voyage a different rule would be applied, and the ship would have been obliged to carry the cargo to a port stated in the bill of lading." In this we think he fell into serious error. The Esrom Case (C. C. A.) 272 F. 266, certainly affords no authority for the proposition which he lays down. In that case each of the three judges wrote a separate opinion. In not one of them is there to be found the doctrine that the liability of the ship to the shipper for goods actually received on board is contingent on the ship's actually breaking ground in a case in which the bills of lading were signed by the master. Judge Manton, who wrote for the majority of the judges, expressly declared that "the lien of the vessel upon the goods and of the goods upon the vessel attaches from the moment the goods are laden on board, and not from the time only when the ship breaks ground." And in support of that proposition he cited several decisions of the Supreme Court in which the same identical proposition is stated, and also the decision of this court in National Steam Navigation Co., Limited, v. International Paper Co., 241 F. 862, 154 C. C. A. 565, in which this court said: "The obligation of the ship to carry, and of the shipper to pay for the carriage, accrues when the goods are delivered to the ship." Judge Hough, in a separate opinion, stated that he substantially agreed with the opinion written for the court by Judge Manton. He then went on to say: "There did exist between shipper and the personified ship mutual obligations dependent wholly upon that union of ship and goods arising from the lading of the former on the latter, lately discussed at some length in The Saturnus, 250 F. 407, 162 C. C. A. 477, 3 A. L. R. 1187." And the reason for his concurrence is really stated in the concluding statement of his opinion, which follows: "In the absence of . that contract with the owners usually evidenced by a master's bill, this libelant was entitled to look to the personified ship for proper stowage, seamanlike management, and right delivery; but he can look to charterers only for the date of sailing. As he knew of the chartered relation, he is presumed to know that charterers direct the movements of the ships they hire; all ships are chartered for that purpose." The statement quoted shows that though the ship had not sailed, and the master had not signed the bills of lading, the libelant was entitled to look to the ship for "right delivery." In the Esrom Case a libel was filed against the ship to recover damages caused to cases of prunes. The ship was under charter, and the bills of lading were not signed by the master of the ship, but by the charterer, and it was held by Judges Hough and Manton that, as the charter bound the ship not to sail until she had a full cargo, the ship was not liable to the shipper for damage to the prunes due to delay in sailing while waiting for a full cargo. Judge Ward dissented, and held the ship bound, notwithstanding the master had not signed the bills of lading for this particular shipment. He said: "As the master had signed some of these bills of lading, knowledge of their contents is imputable to the owners. How can it be said that the owners, knowing that cargo be longing to various shippers was going aboard their steamer under bills of lading signed by the charterers, as agents for the steamship, did not make the charterers their agents for that purpose? The bill of lading, if signed by the master, would have bound the ship; and if the charterers signed it as the agent of the owners of the ship, with their consent, express or implied, it has exactly the same effect. Whether the master or the charterers signed the bill of lading was a mere technicality as Lord Chancellor Loreburn said in Owners of Steamer Knutsford v. E. Tillmans & Co., [1908] A. C. 406: 'The other point namely, that one of the bills of lading was signed by Messrs. Watts, instead of by the captain-to my mind is destitute of validity in law, and even more destitute in merits. If the captain had been directed to sign it, he was obliged to sign it. The point is a merely technical point, that the proper signature was not there. As a matter of fact, I should be very sorry to lay down any rule that under such a contract the charterer or shipowner could always sign; but I am not satisfied that the captain did not know perfectly well of this signature and sanction it. I think that 10 F.(2d) 950 there is absolutely nothing in that point question simply was not in this case, and it also.'" was not in the Esrom Case. It is true that Judge Manton, in his opinion, did refer to the subject of the ship's "breaking ground." After stating that the lien of the goods upon the vessel attaches "from the moment the goods are laden on board," he later in his opinion said: "The obligations which are created one to the other, then, are that the ship is bound not to injure the merchandise by improper stowage or rough handling, and, if she does, then there will be a liability in rem, even before the voyage is begun. If the voyage is begun, the vessel must carry the goods to destination on the terms agreed by the shipper with the charterer; for when the vessel starts upon the voyage, by implication, there is a ratification and adoption by the ship of the charterer's contract with the shipper. Then the shipper is deprived of an opportunity to retake his goods, and the goods are in the sole possession and control of the ship. So, too, the ship is then bound by the charterer's bill of lading, under which the freight is prepaid, and cannot collect further freight at destination. The Ada (D. C.) 233 F. 325. Before sailing, the vessel owner is protected by his opportunity to refuse to carry the goods on the terms agreed by the charterer before the voyage is commenced." What he had in mind in the statement above quoted was not a bill of lading signed by the master, which bound the ship, but one signed by the charterer, and which he thought did not bind the ship unless the ship started upon the voyage. If and when it so started, it was the opinion that it would work a ratification and adoption by the ship of the charterer's contract with the shipper. What he said on that subject was purely obiter dicta, as before the ship sailed the prunes had been unloaded upon the demand of the shippers, because of the long delay in the sailing of the vessel, and it was the expression of his own opinion only. The substantial concurrence of Judge Hough is not to be understood as an approval of a matter which was not before the court, and especially in view of Judge Hough's own statement, already quoted, that notwithstanding the absence of a master's bill of lading the libelant was "entitled to look to the ship for right delivery." In saying what we have in reference to that portion of Judge Manton's opinion relating to the ratification of the charterer's bill of lading by the ship's breaking ground with the goods on board, we do not wish to be understood as expressing any opinion either favorable or unfavorable thereto. That The District Judge also cited in support of his conclusion The Devona, 272 F. 275. That was a decision in the District Court for the Eastern District of New York. It is enough, perhaps, to say that the single question decided in that case was whether a ship was liable for freight prepaid to the charterers, where the goods had been put on the ship and taken off before the ship sailed by direction of the captain; the money having been paid to the charterer's agent, the money never having been paid over to the shipowner who had never authorized the charterer's agent to receive moneys in its behalf. In Scott v. The Ira Chaffee (D. C.) 2 F. 401, Judge Brown (afterwards Justice Brown of the Supreme Court) held that the owner of a cargo has no lien upon the vessel for a breach of a contract of affreightment until the cargo, or some portion of it has been laden on board or delivered to the master. And in The Monte A, 12 F. 331, Judge Addison Brown, in the Southern District of New York, asserted the same doctrine. And this court in The Saturnus, 250 F. 407, 162 C. C. A. 477, 3 A. L. R. 1187, held that a breach of an affreightment contract supports a proceeding in rem if and as soon as goods are laden on board. And this we understand to be the doctrine of the Supreme Court. The Freeman, 18 How. 182, 15 L. Ed. 341; The Yankee Blade (Vandewater v. Mills), 19 How. 82, 15 L. Ed. 554; The Keokuk, 9 Wall. 517, 519, 19 L. Ed. 744. In Osaka Shosen Kaisha v. Lumber Co., 260 U. S. 490, 499, 43 S. Ct. 172, 174 (67 L. Ed. 364), the court declared that "The contract of affreightment itself creates no lien, and this court has consistently declared that the obligation between ship and cargo is mutual and reciprocal, and does not attach until the cargo is on board or in the master's custody. We think the lien created by the law must be mutual and reciprocal; the lien of the cargo owner upon the ship is limited by the corresponding and reciprocal rights of the shipowner upon the cargo." In National Steam Navigation Co. v. International Paper Co., 241 F. 861, 863, 154 C. C. A. 563, 565, this court said, through Judge Ward: "The obligation of the ship to carry, and the shipper to pay for the carriage, accrues when the goods are delivered to the ship." And in The Saturnus, 250 F. 407, 162 C. C. A. 477, 3 A. L. R. 1187, this court, in a learned opinion by Judge Hough, decided that for breach of a contract of affreightment by the ship prior to the delivery |
