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reasons for not putting back to that port, said that he considered it sheer madness to attempt to enter the harbor of Port Stanley with the ship and crew in the condition in which they were. He testified that he was a master mariner of experience, and had sailed 35 times around the Horn. He admitted that he could very easily have gone back to the region of the Falkland Islands, but he testified that it was a stormy region, subject to continual sleet, hail, and snowstorms at that time of the year; that there was very little daylight, dark coming on at 4 o'clock in the afternoon and lasting until 8 o'clock in the morning, so that it was next to impossible to get a reliable observation from the sun; that if he had attempted Port Stanley with his ship and crew crippled as they were, he would have been in serious danger of running ashore and losing his ship; that the entrance to the harbor is less than one-half a mile wide; that there is no tug there; that there would have been great difficulty in working so long a ship into the entrance, since, even with a favorable wind, there is scarcely sufficient room to clear the entrance, and that with so long a ship half a mile is very scant room for sailing; that after entering the outer harbor it is dangerous to remain there, and it is necessary to proceed on into the inner harbor, for the reason that the water is from 36 to 38 fathoms deep, so as to make the anchorage insecure, and that in the outer harbor there was the further and probable danger of easterly gales; that the entrance to the inner harbor is but 250 yards in width. His evidence as to the hazardous nature of the entrance to Port Stanley was corroborated by five other witnesses, master mariners of experience, one of whom testified that in 1889 he had sailed into Port Stanley for repairs, and that he was 24 days outside the harbor before he could get in, and that in the outer harbor he paid out both anchors to the last fathom, but that the ship dragged her anchors, and went within 20 yards of the rocks, and that he remained in the outer harbor from 11 to 16 days. The testimony of all these witnesses was that no one would come to Port Stanley except as a last resort, or in a case of dire necessity. There was no evidence even tending to contradict this testimony, except an extract from the Encyclopedia Britannica, which, after referring to the establishment of stores and workshops at Port Stanley, said:
"And now ships can be repaired and provided in every way much better and more cheaply there than at any of the South American ports; a matter of much importance, seeing that a greater amount of injury is done annually to shipping passing near Cape Horn by severe weather than in any other locality in the world. The average number of ships entering Stanley Harbor in a year is about fifty, with an average tonnage of 20,000 tons."
Even if this extract be given the force of evidence, it goes no further than to show that a considerable number of ships do at some season of the year put into Port Stanley for repairs. But that is a statement not incompatible with the testimony of the witnesses that the entrance is extremely hazardous for a large ship, and that the port is only to be availed of in case of dire necessity.
In the case of The Iroquois, 118 Fed. 1003, 55 C. C. A. 497-a case in which a seaman was injured while at sea at a distance of 480 miles from Port Stanley-we held that the master should have either taken him into that port or to Valparaiso for treatment. But in that case the
injury was more severe than in the present case. The seaman sustained a fracture of two ribs as well as of both bones of his leg below the knee. There was no one on board who possessed any surgical knowledge or experience, and the bones of the leg never united. In that case, moreover, there was no evidence before the court of any difficulty in entering Port Stanley, and the accident occurred in the summer, instead of the winter, of that region. The Supreme Court, on appeal, with some hesitation affirmed our judgment, but only on the ground that the captain might have been negligent in not putting into Valparaiso. Said Mr. Justice Brown, speaking for the court:
"Each case must depend upon its own circumstances, having reference to the seriousness of the injury, the care that can be given the sailor on shipboard, the proximity of an intermediate port, the consequences of delay to the interests of the shipowner, the direction of the wind, and the probability of its continuing in the same direction, and the fact whether a surgeon is likely to be found with competent skill to take charge of the case. With reference to putting into port, all that can be demanded of the master is the exercise of reasonable judgment and the ordinary acquaintance of a seaman with the geography and resources of the country. He is not absolutely bound to put into such port if the cargo be such as would be seriously injured by the delay. Even the claims of humanity must be weighed in a balance with the loss that would probably occur to the owners of the ship and cargo. A seafaring life is a dangerous one. Accidents of this kind are peculiarly liable to occur, and the general principle of law that a person entering a dangerous employment is regarded as assuming the ordinary risks of such employment is peculiarly applicable to the case of seamen."
The court, in conclusion, said:
"As the decision of the District Court was unanimously affirmed by the Circuit Court of Appeals, we do not think there is any such preponderance of evidence as would justify us in disturbing their conclusions.”
In view of that expression of the opinion of the Supreme Court and the circumstances of the present case, we do not think that the captain of the Erskine M. Phelps was negligent in not putting back to Port Stanley. But the trial court found, further, that the captain was negligent at a later date in not deviating from his course on August 6th, and putting into Valparaiso, which he could have reached by sailing nine days from that date. The captain testified that his reason for not going to Valparaiso was that at that time the weather was fine, and he had reason to believe that the bones of the appellee's leg had united, and that he was doing well. Three surgeons testified in the case-one for the appellee and two for the appellants. There is no substantial variance in their testimony. Their opinion was that, so far as the ultimate recovery of the appellee was concerned, nothing could have been done surgically after August 6th, and that from that time the conditions were as favorable on the ship as they would have been on land; that the motion of the ship would have no effect on the setting of the leg and its recovery if the leg were set and placed in a position where it could swing; that the best time to set it was as soon as possible after the fracture; and that, unless land could have been reached within two or three days from the time of the fracture, the appellee was practically as well off on board the ship as in a hospital. One of the surgeons testified that he found the appellee's right leg one
and one-quarter inches shorter than the other, but that he made no measurement. The other two measured it, and found it half an inch shorter than the other. But they all agreed that nature compensates, and in a measure corrects, such a shortening, and that an operation could be performed by breaking and resetting the bones, but that this could have been done as well on the arrival of the vessel in Honolulu as at Valparaiso or at Valdevia, three weeks after the accident. There was some difference of opinion as to the question of the permanence of the injury to the appellee by reason of the fracture of his leg if not further operated upon. Dr. Herbert testified that the appellee would ultimately have perfect use of his leg. Dr. Day thought that he would be able to follow his occupation, but that he would have to favor himself a little; that he would not be as nimble as he had been. Dr. Cooper considered the mending of the leg "a good job,” and thought that the appellee would have a good leg-a leg that would enable him to earn a livelihood in any walk of life. When, on August 23d, the appellee was injured the second time by falling on the deck, the ship was as near to her port of destination as to any other. So far as the evidence goes, the shortening of the appellee's leg may have been caused by a second fracture sustained at that time. If that be true, the ship could not, in any view of the case, have been responsible for that injury. Considering the whole of the evidence as it is presented here, we think that the captain was not negligent at any point in the history of the case, and that the ship is not liable, therefore, in damages.
The decree is reversed, and the cause is remanded to the District Court, with instructions to dismiss the libel.
SPRIGG v. COMMONWEALTH TITLE INS. & TRUST CO.
(Circuit Court of Appeals, Third Circuit. June 24, 1904.)
1. DECEIT FALSE REPRESENTATIONS-CONSTRUCTIVE FRAUD.
A mortgage to defendant, as trustee, securing bonds executed by a timber company, provided that the bonds should not be valid until certified by the defendant, and that before issuing any of the bonds there should be deposited with defendant, by the mortgagor, a sum of money sufficient to pay off the first four coupons (two years' interest) on the bonds. The mortgagor, after defendant had accepted the trust, pledged 100 of the bonds to plaintiff, and gave plaintiff an order on defendant therefor, whereupon defendant delivered to plaintiff a letter reciting receipt of the order; that the bonds were part of an issue described on the mortgagor's property, the title to which, etc., had been examined and approved by defendant; and that the papers were then in its possession, and stating, "We will hold the one hundred bonds subject to your order." Held, that defendant's promise to hold such "bonds" constituted a representation that defendant had certified the bonds, and received the money in compliance with the conditions precedent to their validity, the falsity of which representation was sufficient to entitle plaintiff to recover damages suffered by its having acted on the faith thereof, in an action against defendant for deceit.
In Error to the Circuit Court of the United States for the Eastern District of Pennsylvania.
For opinion below, see 119 Fed. 434.
Thomas Leaming, for plaintiff in error.
J. Hazleton Mirkel, for defendant in error.
Before ACHESON and GRAY, Circuit Judges, and KIRKPATRICK, District Judge.
GRAY, Circuit Judge. The record brought up by the writ of error in this case discloses testimony tending to prove the following facts: In the spring of 1893, the firm of Rice Bros., of Providence, R. I., had dealings with the Standard Coal & Timber Company, a corporation then recently organized and doing business under the laws of the state of West Virginia, which resulted in a contract arrangement between them, by which Rice Bros. purchased a large quantity of timber, upwards of ten millions of feet, to be delivered, with freight and other charges paid, at Boston, Mass., at a price agreed upon. In pursuance of said contract, Rice Bros. were to advance to the timber company $15,000 to enable the company to proceed with the delivery of the timber. As security for the performance on their part of the contract, the timber company agreed to deliver to Rice Bros. 100 of their first mortgage coupon bonds, for $1,000 each. By an indenture dated the 2d of May, 1892, the said Standard Coal & Timber Company had executed a mortgage to the defendant, the Commonwealth Title, Insurance & Trust Company, which, after stating that certain bonds were to be executed and issued by said company for the aggregate amount of $1,000,000, and to be secured by said mortgage, conveyed to the said defendant as mortgagee, in trust, all its property, corporate rights, privileges and franchises in connection with the land and premises. therein more particularly described, and comprising a tract of land in the state of West Virginia, of 204,000 acres. By a covenant contained in said mortgage, it was stipulated that the bonds issued to the said defendant company, in trust, should not be valid until certified by the said trust company, and further, that "before issuing any of the bonds herein described, there shall be deposited by the party of the first part, with the said trustee, a sum of money sufficient to pay off the first four coupons (two years' interest) on said bonds." The Commonwealth Title, Insurance & Trust Company, the defendant, was incorporated for the purpose, among other things, of accepting and executing trusts of this character, and was entitled to receive compensation therefor. The trust was duly accepted by the said company, as appears by the following acceptance upon said mortgage, and duly recorded therewith: "The Commonwealth Title, Insurance and Trust Co. accepts the Trust mentioned in the foregoing instrument on the terms, conditions and limitations therein prescribed.
[Seal of Incorporation]
Henry M. Dechert,
Prior to April 29, 1893, the whole number of bonds executed, so far as the timber company was concerned, were in the hands of the defend
ant company, as trustee, and some had been issued prior to that date by the said trust company, certified by it as required by the stipulation in the mortgage above referred to, and for the four coupons (two years' interest) on which there had been deposited with the said trustee, a sum sufficient to pay the same. On the date last mentioned, and pursuant to the dealings between Rice Bros. and the defendant, the following order was issued in favor of the Rice Bros. to the defendant:
"Philadelphia, April 29th, 1893. A. A. Stull. Esq.. Secy. Commonwealth Title Insurance & Trust Company, Philadelphia, Pa.
Dear Sir:-You will please hold in trust or deliver to the order of Rice Brothers, lumber dealers of Providence, R. I., one hundred (100) first mortgage one thousand dollar ($1,000) bonds of the Standard Coal and Timber Company, in accordance with the terms of mortgage or trust deed held by you to secure said bonds.
Standard Coal and Timber Company.
Rice Bros. then deposited with their counsel, Carroll Sprigg, the contract they had with the timber company, and six promissory notes, aggregating in amount $15,000, which represented the advance they were to make to the timber company, to be held in escrow by him until the defendant, the Commonwealth Title, Insurance & Trust Company, should acknowledge the receipt of the above order, and deliver the bonds, or hold them for the benefit of Rice Bros., his clients. He accordingly drafted a letter, which was taken to Philadelphia by the timber company's assistant secretary, and a letter copied therefrom was signed by the defendant and brought back to New York, whereupon Mr. Sprigg delivered the contract and notes to the timber company. These notes were afterwards paid in full, at maturity. The letter referred to, and which is the foundation of the suit in the court below, is as follows:
Messrs. Rice Brothers, Providence, R. I.
"Philadelphia, April 29th, 1893.
Gentlemen:-We are in receipt of an order from the Standard Coal and Timber Co., of West Virginia, instructing us to hold in trust for you one hundred, first mortgage, $1,000 bonds of said Company; the same being part of an issue of 1,000 bonds, $1,000,000, all of which are equally secured by a first mortgage or deed of trust dated May 2nd, 1892, made to the Commonwealth Title, Insurance and Trust Company of Philadelphia as Trustee by the said Standard Coal & Timber Company of West Virginia, covering 204,000 acres of mineral and timber lands located in McDowell County, in said State of West Virginia.
The Company is incorporated under the laws of the state of West Virginia, and the bonds are secured by the first mortgage or deed of trust now held by us as Trustee. Said mortgage or deed of trust together with certified abstract of title, opinions as to value of property covered by said mortgage or deed of trust, maps, surveys, and other papers relating to the same have been carefully examined and approved by us and are now in our possession. We will hold the one hundred (100) bonds subject to your order. A. A. Stull, Treasurer."
It was testified that, at the date of this letter, a decree of the court of last resort in West Virginia had been entered, declaring the title of the 204,000 acres of land mortgaged, absolutely void. It was also in testimony that the Rice Bros. lost their advances of $15,000 and also about $40,000 on the timber contract. On November 6, 1893, Rice