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ing them. He cannot reimburse himself by selling what has never come into existence or into his hands; and the fact that he is justly excused from making or getting the goods leaves him with no recourse but the buyer for reimbursement for expense and for compensation for loss of profit. The rule for which the defendant contends not only fails to give compensation to the seller for his actual loss of profit, but fails absolutely to recognize the duty of the buyer to reimburse the seller for expenditures.
I am of the opinion that the plaintiff is entitled to recover as its loss of profit the sum of $13,717.19, being 742 cents per pound upon 182,7681/2 pounds of yarn not manufactured.
(B) Plaintiff's loss on wool.
Ìhe plaintiff claims as damages its loss on a resale of wool which it claims was left on its hands as a consequence of the defendant's breach of contract. The facts, however, do not present the simple case of a purchase of materials which the plaintiff could use only for the unperformed part of the contract.
The wool was purchased in advance of the need for it. The plaintiff could have procured the wool at any time it saw fit, and in buying consulted its own views as to the market. The wool was of a kind suitable for use on other contracts, and could have been used on other contracts had the plaintiff so chosen. It was held by the plaintiff for two years and a half before it was, in fact, needed for manufacture. This reservation of wool for so long a time does not appear to have been contemplated by either party in March, 1900, the time of the contract.
It also appears that during this period the plaintiff had the opportunity, had it so chosen, to have used 83,333 pounds in the manufacture of the special yarn. It elected not to do so, and used other wool for this purpose. It also chose to use in manufacturing for the deliveries of regular yarn other wool than that on hand. If, when manufacturing 67,236 pounds of the regular yarn, it chose to purchase or to use other wool, it exercised its own judgment at a time more than two years after the original contract. If it preferred to reserve this wool for the later and final deliveries rather than to use it for the earlier deliveries, such a choice could hardly have been made without regard to the plaintiff's speculations or opinions as to the wool market. The appropriation of this wool (if it was appropriated) to the final and more remote deliveries was an act of independent judgment. To do this increased carrying charges, and any act of the deferring of the use of this wool for the contract, was an expense not chargeable to the defendant.
That the plaintiff had on hand so large a quantity of wool at the time of the breach, or at the date of its writ, seems to have been due to several reasons—to its purchase of wool in advance of the need for immediate use to fill defendant's orders; to its judgment that, in view of the condition of the market, it was advisable to do so; to its election not to use any part of the wool for the special yarn or on other orders; to its election not to use any part of the wool for its deliveries of regular yarn, or for the yarn manufactured for delivery; to its reservation of the wool for the later and more remote deliveries.
In all these acts of independent judgment, opinions as to the market
were doubtless a factor. It is true that the plaintiff had incurred a fixed charge for a certain quantity of wool; but, when it did so, it had the option of using the wool either for this or other orders for yarn. There was no specific act appropriating the wool to this contract. It is hardly probable that material suitable for use in its regular business would have been reserved during a period of more than two years, unless during that time the condition of the wool market enabled the plaintiff to get wool at a price cheaper than the price it had paid for the wool on hand. So far as the plaintiff went in this contract, it used other wool; and, so far as can be known, had the plaintiff manufactured the remaining 182,176 pounds of yarn, other wool might still have been used, and the present lot still have remained in plaintiff's hands.
The plaintiff contends that this wool was bought to cover this contract, but this means little more than that the plaintiff, in view of what wool it had on hand and of this contract, and doubtless of other contracts, thought it advisable on March 22, 1900, to buy additional wool in anticipation of or as a precaution against a higher market. Can it be said that this defendant is in any proper sense responsible for the fact that the plaintiff not only bought at a high market, but that it reserved the wool for four years and unloaded it on a low market? It must not be overlooked that this material was not special material adapted for use only on this contract. It was such material as was ordinarily used, and as was usable in the plaintiff's ordinary business.
It is probable that the contract was a factor in the plaintiff's judgment that it should buy wool on March 22, 1900; but how important a factor it was in view of other considerations, of other contracts with this defendant and with third persons, or prognostications as to the wool market and as to other orders, it is impossible to say. That it was the sole factor, or even a principal factor, is not apparent. The amount of wool bought does not correspond to the amount required for this contract; and the amount of wool reserved does not correspond with the amount required to complete the contract. There seems to be little more warrant for saying that this lot of wool was appropriated for this contract than for saying that the lot of 349,000 pounds of California wool in the grease at 1112 cents a pound (which apparently was figured by Mr. Adie in estimating the profit) was appropriated for this contract.
So far as the plaintiff bought wool merely to cover its obligations to deliver yarn, as a protection against a change of price of wool as distinguished from the provision of material necessary for the contract, his dealings in wool must probably be regarded merely as a collateral enterprise, for the results of which the defendant is not responsible. But, at all events, the postponement of deliveries of the regular yarn for more than two years and six months seems to break all connection between what was in the contemplation of the parties at the date of the contract and the final outcome. There was also the intervention of independent acts of judgment in reserving the wool when an opportunity arose to use it.
It is well settled that one who breaks his contract is answerable only for such consequences as may reasonably be supposed to be in the contemplation of the parties at the time of making the contract. Globe Refining Co. v. Landa Cotton Oil Co., 190 U. S. 510, 23 Sup. Ct. 1954, 47 L. Ed. 1171. After a careful consideration of this item of loss, I am of the opinion that it was neither a necessary nor a contemplated consequence of defendant's acts, and is too remote for allowance.
The plaintiff may take judgment for $13,717.19 damages, with interest from September 12, 1903.
THE MYRTLE TUNNEL.
(District Court, D. South Carolina. July 9, 1907.)
1. SALVAGE-BASIS OF COMPENSATION-QUASI DERELICT.
Prima facie a vessel found at sea in a situation of peril, with no one on board, is a derelict; but, where the master and crew have left temporarily for the purpose of obtaining assistance, and with intent to return and resume possession, she is not technically a derclict, although another vessel finding her in such condition and rescuing her is entitled to salvage compensation as in case of a derelict.
[Ed. Note.--For cases in point, see Cent. Dig. vol. 43, Salvage, SS 7, 8.] 2. SAME-SCHOONER TEMPORARILY ABANDONED AT SEA-SALVAGE AWARD.
The schooner Myrtle Tunnel, laden with cross-ties, was disabled by a hurricane off the Florida coast, and, a passing steamer being unable to tow her, the master and crew took passage on such steamer to Charleston to procure assistance. The master proceeded to Savannah, where her owners resided, who hired two ocean-going tugs to go in search of the schooner. Three days later the steamer Shawmut, on a voyage from Jacksonville to Philadelphia, finding the schooner abandoned and waterlogged, took her in tow and proceeded with her to Jacksonville, which was the nearest port, and some 60 to 75 miles distant. Owing to her being so deep in the water, she could not be taken over the St. John's Bar, and the master of the Shawmut, after a delay of a day and a half, by direction of his owners, took her to Charleston. One of the tugs sent out to search for her came up with the Shawmut and her tow before they reached the bar, and demanded that the schooner be surrendered to her, and also that she be taken to Charleston, advising the master of the Shawmut that she could not cross the St. John's Bar. The other tug joined them at the bar, and both accompanied the Shawmut and tow to Charleston. The value of the schooner and cargo was $38,500. Held that, under the rule that a salvor is bound to the exercise of ordinary care only, the Shawmut was not chargeable with fault which deprived her of the right to salvage or lessened the amount to which she was entitled, because she proceeded to the bar and stayed there until the master could communicate with her owner's agent at Jacksonville, or because of his refusal of the assistance of the tugs, or the use of an alleged defective hawser on the towage to Charleston, which proved sufficient, but that she would not be allowed for the hire of two tugs engaged to take the schooner into the harbor at Charleston, the two tugs under hire from the owners being present, and having tendered their services; that under the circumstances, and in view of the efforts being made by the owners to regain the schooner, which would probably have been successful, the Shawmut was entitled to an award equal to one-third the value of the vessel and cargo.
[Ed. Note.For cases in point, see Cent. Dig. vol. 43, Salvage, $ 69. Awards in federal courts, see note to The Lamington, 30 C. C. A. 280.).
In Admiralty. Suit for salvage.
BRAWLEY, District Judge. The four-masted schooner Myrtle Tunnel, of which the Paulsen Company of Savannah, Ga., is managing owner, sailed from Brunswick laden with cross-ties, bound for New York, March 31, 1907, and one day out was struck by a hurricane, her sails torn away, her forward house amidships stove in, waterways on port side and her deck load carried away, and was badly leaking. On April 3d her master requested towage by the steamship Mae to the port of Charleston; but said steamship, because of her own damaged condition and lack of coal, was unable to tow the schooner, and at 1:30 p. m. April 3d took off the master and crew, who arrived at the port of Charleston on the night of April 4th. The master forthwith communicated by telegraph with her owners at Savannah, and took the next train to that place. The owners hired the ocean-going steam tugs Jacob Paulsen and the Cynthia to go in search of her; the former leaving on the same day, as soon as she could coal, and the latter on the second day thereafter, when she was free from prior engagements, and the master of the Myrtle Tunnel going on the Cynthia, of which Capt. Avery, a skillful and experienced navigator, was master. The Myrtle Tunnel had been abandoned at a point about 53 miles E. by S. from St. Augustine, Fla., in longitude 80° 16'; latitude 29° 40'. On the night of April 7th, the steamship Shawmut, owned by the libelants, of the value of $100,000, with a cargo valued at $20,000, while on her regular route as a freight-carrying steamship, from Jacksonville, Fla., to Philadelphia, sighted the Myrtle Tunnel, and lying by her until the next morning, and finding that she was abandoned and water-logged, took the schooner in tow, and started to return to Jacksonville. There was a slight discrepancy in the testimony as to the point at which the schooner was picked up; the libel stating it as being about 60 miles from St. John's Bar, and there is testimony that the master of the Shawmut told Capt. Brown that she was picked up at a point about 75 miles from the St. John's Bar and about 90 miles from Charleston. The schooner was carried to the St. John's Bar, arriving on the afternoon of April 8th, where she remained until Wednesday morning, April 10th, on account of her inability, by reason of her depth of draft, to enter the St. John's river. She was carried to Charleston and anchored inside of the harbor on the afternoon of April 11th. The steam tug Paulsen, which had been cruising in search of the Myrtle Tunnel, came up with the Shawmut having her in tow on Monday afternoon. Brown, the master of the Paulsen, states the time at 12:30, and Hansen, the master of the Shawmut, states the time at 2:15; Brown testifying that she was 26 to 30 miles from St. John's Bar, and Hansen testifying that she was about 18 miles. Brown testifies that he informed the master of the Shawmut that the tugs Paulsen and Cynthia had been sent by the owners in search of the Myrtle Tunnel, that her draft was such that she could not enter the St. John's river, and that he had papers aboard which would satisfy the master of the Shawmut of these
facts, and demanded that the schooner be taken to Charleston, and the answer states that he required the steamship Shawmut to turn over the schooner to said tugs to tow her forthwith to Charleston. The tug Cynthia, Avery, master, arrived at the St. John's Bar Monday afternoon, shortly after the arrival there of the Shawmut, with her tow. Avery has described in detail his cruise in search of the Myrtle Tunnel and his plan of operation. He is an uncommonly skillful navigator, and there is little doubt that, according to the plan mapped out and followed by him, he would have discovered the Myrtle Tunnel within a relatively short time after she was actually found by the Shawmut.
This court has recently been called upon to consider many of the questions involved here (The Myrtle Tunnel, 146 Fed. 324; The Flora Rodgers and The J. W. Belano, 152 Fed. 286), and has reviewed most of the cases involving salvage awards. It is unnecessary therefore to state the law with much elaboration.
The first question that arises is whether the Myrtle Tunnel is a derelict. Prima facie a vessel found at sea in a situation of peril, with no one aboard of her, is a derelict; but where the master and crew leave such vessel temporarily, without any intention of final abandonment, for the purpose of obtaining assistance, and with the intent to return and resume possession, she is not technically a derelict. It is not of substantial importance to decide that question. She was what may be called a quasi derelict; abandoned, helpless, her sails gone, entirely without power in herself to save herself from a situation not of imminent, but of considerable, peril; lying about midway between the Gulf Stream and the shore, and about 30 miles from either. An east wind would have driven her upon one, and a west wind into the other, where she would have become a total loss. Lying in the pathway of commerce, with nothing aboard to indicate an intention to return and resume possession, it was a highly meritorious act upon the part of the Shawmut to take possession of her, and the award must be governed by the rules which govern in case of derelicts; the amount of it to be modified in some degree in the interest of the owners in consideration of their prompt, intelligent, and praiseworthy efforts to resume possession of her, wherein they incurred considerable expense. The contention of the claimants in the main is that this award has been forfeited or greatly diminished by the negligence and misconduct of the libelants.
Stripped of the vituperative epithets in which it has been articulated, the charge is :
First. That the Myrtle Tunnel should have been taken immediately to Charleston, that being the only safe port, owing to her draft; that in taking her to Jacksonville, where the depth of water is only 23 feet, she drawing over 28 feet, the schooner was exposed to unnecessary peril. It cannot be disputed that it is the duty of salvors to take the salved vessel to the nearest safe port, and that, of course, means a port into which she can be safely carried. There was no outward or visible indication on the Myrtle Tunnel of her depth of draft. There was a sounding well, from which it could have been approximated by allowance for the skin of the ship and her depth of keel, which were, of course, unknown and unknowable quantities, and a very high de