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dleton, 156 U. S. 667 [39: 574]; and Covington & L. Turnpike Road Co. v. Sandford, 164 U. S. 578 [41: 560],-determines in favor of appellant's contention. That we do not think so is probably sufficiently indicated, but we cite the cases to preclude the thought that they have been overlooked, or that the

near the mouth of the Brazos river, was not of such character or made under such circumstances as to require the court to relieve the Elfrida against the payment of such stipu lated compensation.

[No. 60.]

cember 12, 1898.

rule announced by them is questioned. In- Argued November 10, 11, 1898. Decided Dedeed, we regard it as salutary, and not impaired by our decision, which simply rests on the terms of the statute.

The decree is affirmed.

TERRITORY OF NEW MEXICO, Appt.,

V.

UNITED STATES TRUST COMPANY of New

York et al.

SAME

v. SAME.

(See S. C. Reporter's ed. 186.)

[Nos. 169, 170.]

APPEALS from the Supreme Court of the

Territory of New Mexico.

Mr. Frank W. Clancy for appellant. Messrs. Victor Morawetz, C. N. Sterry, E. D. Kenna, and Robert Dunlap for appellees.

On the authority of the foregoing opinion the decrees in these cases are affirmed.

THE ELFRIDA.†

(See S. C. Reporter's ed. 186–206.)

Salvage contract, when valid-contract to pay one fourth the value of the vessel contract as to steamship Elfrida, valid. 1. A salvage contract for stipulated compensation, dependent upon success within a limited time, although the amount may be much larger than a mere quantum meruit, will not be set aside unless corruptly entered into, or made under fraudulent representations, a clear mistake, or suppression of important facts, in immediate danger to the ship, or under other circumstances amounting to compulsion, or unless its enforcement would be contrary to equity and good conscience. 2. An agreement to pay one fourth of the value of a vessel as salvage, although it gives a very large compensation for the work which actually proves necessary to be done, will not be considered unconscionable ог exorbitant, when it was made after a refusal by the master of an offer to do the work for such salvage as the court should award, and after receiving bids and full advice from the owners of the vessel and the underwriters' agent, who came to the vessel and saw her situation, and when the vessel, though in serious danger, was in fact never in imminent peril. 3. The salvage contract between the steamship Elfrida and its owners of the one part, and Charles Clarke & Company of the other part, by which the former agreed to pay the latter $22,000 to release the Elfrida, then stranded The docket title of this case is "Charles Clarke and Robert P. Clarke, Petitioners, v. The Steamship Elfrida, etc."

ON WRIT of certiorari to the United States

Circuit Court of Appeals for the Fifth Circuit to review a decree of that court reversing the decree of the District Court of the United States for the Eastern District of

Texas in favor of the libellant Charles Clarke & Co., against the British Steamship Elfrida for $22,000 and interest, and remanding the case with instructions to enter a decree in favor of libellants for $10,000, with interest at 6 per cent. Decree of the Circuit Court of Appeals reversed, and the case remanded to the District Court for the Eastern District of Texas, with directions to execute its original decree.

See same case below, 41 U. S. App. 585.

Statement by Mr. Justice Brown: *This was a libel in rem by the firm [187] against the British steamship Elfrida, to reCharles Clarke & Co., of Galveston, Texas, cover the sum of $22,000, with interest and costs, claimed to be due them for services ren

dered in the performance of a salvage contract with the master, to release the Elfrida, then stranded near the mouth of the Brazos river.

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The principal averments of the answer were in substance that the agreement was signed by the master under a mutual mistake of fact, or by mistake on his part, which libellants took advantage of, as to the danger in which the vessel was, and that it was improvidently made for an excessive compensation, without a proper understand-[188] ing by him of the vessel's alleged freedom from danger; that the master had been prevented from carrying out his instructions to information of the cable being conveyed to accept a tender made, if lower impossible, by the salvors before the master saw it; that the parties were not upon an equal footing; that libellants made an unreasonable bargain with the master because of the stress of the situation and that of his vessel, and acted collusively with other salvors in obtaining from him the agreement.

On Friday, October 5, 1894, the Elfrida, a steel steamship of 1454 tons register, 290 feet long, 38 feet in width, and drawing 11 feet 10 inches, bound for the port of Velasco, Texas, in ballast, grounded on the bar between the jetties which extend from either bank of the river, about a mile into the Gulf, the outer end of these jetties, for a distance of a thousand feet or more, being sub merged. The heel of the ship touched, there being but five inches between the bottom and the bar, and an easterly wind swung her bow against the west jetty. The captain ran out a kedge from the starboard bow, hove taut with the windlass, put her engine full speed astern, but could not move the ship. The

wind and sea increased during the afternoon | tained on the part of the said party of the and evening, while the ship was straining first part, to be kept and performed, and bumping heavily. The weather moder- the said party of the second part hereby ated somewhat on the following day, and the agrees and binds himself, his administrasame efforts were continued unsuccessfully tors and assigns, to float and place in a until the evening, when the sea rose, carrying safe anchorage, Quintana or Galveston, her over the submerged outer end of the as directed, the S. S. Elfrida, which is now jetty, and some distance farther shoreward stranded west of and near to the west jetty on the beach. She brought up that night at the mouth of the Brazos river, in said about a cable's length to the west of the west county and state; to furnish all labor and jetty. That part of the jetty which was material at the cost of said party of the secabove high water projected seaward beyond ond part, and to furnish diver and necesher stern and sheltered her from easterly sary apparatus to survey or examine the winds. She lay parallel with the jetty bottom of said steamship, and to complete about four or five hundred feet from the the same within twenty-one (21) days from beach, head on, and about one thousand feet date hereof. from water of sufficient depth to float her. The shore at this point is very flat, the bottom consisting of a layer of quicksand about ten feet deep. The steamer settled in the quicksand to her normal draft, rocking and 89]moving in it whenever there was a high sea. She lay in nine feet of water at high tide. The weather continued generally favorable from the 7th to the 17th, with occasional gales and high seas. The ship drifted somewhat further on the beach, but efforts to relieve her by her own resources seem to have been practically abandoned.

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On Tuesday, October 9, the master sent the following letter to the libellants:

Velasco, Oct. 9, 1894. Capt. Chas. Clarke, re 8. 8. Elfrida. Dear Sir: Please tender for to float and place in a place of safety, say Galveston, where her bottom can be examined, furnishing diver and his apparatus. Also to furnish all material and labor in floating said steamship Elfrida, also time required. Reply at your earliest convenience under seal to Jas. Sorely, Lloyds' agent, or myself. No cure, no pay.

Yours truly,

By B. Burgess, Master. P. S.-A convenient time to be laid to get the ship off, and if at the expiration of the time the vessel is still aground, all claim on this contract to cease and to be null and void. B. Burgess, Master.

In reply to this libellants submitted a tender, offering to perform the service for the sum of $22,000, which was accepted by the advice of Lloyds' agent, who was on board the vessel at the time, and with the consent of Pyman, Bell, & Co., of Newcastle-on-Tyne, owners of the Elfrida.

The following contract, which forms the basis of the present suit, was thereupon entered into:

The State of Texas,
County of Brazoria.

This agreement made and entered into this 15th day of October, 1894, between the steamship Elfrida and the owners thereof, represented herein by B. Burgess, master of said steamship, as party of the first part, and Charles Clarke & Co., of Galveston, Texas, as party of the second part.

Witnesseth, that for and in consideration [190] of the covenants and agreements herein con

The said party of the first part agrees to pay to the said party of the second part for such service, i. e., when he shall have successfully floated said ship, as above set forth, the sum of twenty-two thousand dollars (22,000). The said party of the first part, however, reserving the right hereby to abandon the ship to and in favor of the said second party in lieu of the amount of $22,000 agreed to be paid as aforesaid.

It is further understood and agreed by and between the parties hereto that a failure to float and place in a position of safety, as above stated, said steamship within the time hereinbefore specified, to wit, twentyone days from date hereof, that said party of the second part shall receive no compensation whatever from said first party for work performed, labor, tools, or appliances furnished.

Anything that may be discharged to enable vessel to float shall be replaced when she is in a position of safey. It is also agreed and understood that the use of crew and engine shall be at the use and disposal of said party.

Witness the hand of B. Burgess, master of the steamship Elfrida, for himself, said ship and the owners, party of the first part, and the hand of Charles Clarke & Co., party of the second part, this 15th day of October, 1894. Benj. Burgess.

Witnesses:

M. P. Morrissey.
J. H. Durkie,

Chas. Clarke & Co.

Master S. S. Lizzie, of Whitby.

*The day before the contract was signed,[191] the libellants, having learned that their tender for the work had been accepted, hired the schooner Louis Dolsen, of fifteen tons, for which they paid $100, to take their plant to Galveston in tow of their tug Josephine. They also hired a large force of men, procured nearly a month's supplies, cables, chains, anchors, two tug-boats, two lighters, and two schooners, fully manned and equipped. Some of this plant belonged to them, but the schooners and lighters and their equipments were hired. For one of the lighters they agreed to pay $6,500 if she should be lost. Their entire outfit was worth from $30,000 to $50,000. On arriving at Velasco on the same or following day, they engaged a derrick lighter for use in laying the anchors, and on the two following days, the 16th and

17th, the salvors were at work planting the anchors and connecting cables from them to the winches of the ship. This work was completed during the afternoon of the 17th, the water ballast pumped out, when the Elfrida's engines, winches, and windlass were started by her own steam, and in less than half an hour she began to move herself off. She went slowly for the distance of about a thousand feet when she floated clear, but was carried by the current against the west jetty. The libellant's tug then for the first time took hold of her and towed her away from the jetty, and at 7.40 P. M., four hours after the work of hauling her off was begun, she was free and clear of everything, and put to sea under control of the pilot. Subsequent examination of her bottom, in the dry dock at Newport News, showed that she was wholly uninjured except for a slight indentation about a foot long in the bilge, which was probably caused by contact with the jetty. At the time she was stranded she was insured for the sum of £18,000, subsequently reduced to £16,000.

Upon a full hearing upon pleadings and proofs, the district court entered a final decree in favor of the libellants for the stipuleted sum of $22,000, with interest and costs. Claimants appealed to the circuit court of appeals, which reversed the decree of the district court, one judge dissenting, [192]*and remanded the case, with instructions to enter a decree in favor of libellants for the sum of $10,000, with interest at six per cent, 41 U. S. App. 585. A petition for rehearing having been denied, libellant applied to this court for a writ of certiorari, which was granted.

Messrs. James B. Stubbs, Charles J. Stubbs, Joseph H. Wilson, and Henry M. Earle for libellants and petitioners.

Mr. J. Parker Kirlin for appellees and respondents.

[192] *Mr. Justice Brown delivered the opinion

of the court:

clear mistake or suppression of important
facts, in immediate danger to the ship, or
under other circumstances amounting to
compulsion, or when their enforcement would
be contrary to equity and good conscience.
Before adverting to the facts of this par-[193
ticular case, it may be well to examine some
of the leading authorities where salvage con-
tracts have been set aside and compensation
awarded in proportion to the merit of the
services.

In the case of The North Carolina, 15 Pet. 40 [10: 653], the master of a vessel which had struck upon one of the Florida reefs was improperly, if not corruptly, induced to refer the amount of salvage to the arbitrament of two men, who awarded thirty-five per cent of the vessel and cargo. The court found that under the circumstances the master had no authority to bind his owners by the settlement; that the settlement was fraudulently made, and that the salvors, by their contract, had forfeited all claims to compensation even for services actually rendered.

In The Tornado, 109 U. S. 110 [27: 874], the owners of three steam tugs which had pumping machinery were employed by the master and agent of a ship sunk at a wharf in New Orleans, with a cargo on board, to pump out the ship for a compensation of $50 per hour for each boat, "to be continued until the boats were discharged." When the boats were about to begin pumping the United States marshal seized the ship and cargo upon a warrant on a libel for salvage. After the seizure the marshal took possession of the ship, and displaced the authority of the master, but permitted the tugs to for about eighteen hours, the ship was raised pump out the ship. After they had pumped and placed in a position of safety. The tugs remained by the ship, ready to assist her in case of need, for twelve days, but their attendance was annecessary, and not required by any peril of ship or cargo. In libels of intervention, in the suit for salvage, the owners of the tugs claimed each $50 per hour for the whole time, including the twelve days, as salvage. The court held that as the contract was to pump out the ship for an hourly compensation the right of the steam tugs to compensation must be reWe are all of opinion that this ques-garded as having terminated when the ship tion must be answered in the negative. Sal- and cargo were raised, and that, as the mar vage services are either (1) voluntary, shal seized the ship as the tugs began to pump wherein the compensation is dependent upon her out, the authority of the master was dissuccess; (2) rendered under a contract for placed, and the boats must be regarded as a per diem or per horam wage, payable at all having been discharged under any fair *in-[1943 events; or (3) under a contract for a com- terpretation of the contract. Standing by pensation payable only in case of success. for a period of twelve days was found to have The first and most ancient class comprises been unnecessary, and not required by any cases of pure salvage. The second is the peril to the Tornado or her cargo. The case most common upon the Great Lakes. The was not one where the contract was set aside third includes the one under consideration. as inequitable, though found to be so, but Obviously where the stipulated compensa- where it had been completed by pumping out tion is dependent upon success, and partic- the ship and the supersession of the master. ularly of success within a limited time, it See also Bondies v. Sherwood, 22 How. 214 may be very much larger than a mere quan-[16: 238], where the court overruled an attum meruit. Indeed, such contracts will not tempt on the part of the salvors to repudiate be set aside unless corruptly entered into their contract as unprofitable and recover or made under fraudulent representations, a on a quantum meruit.

But a single question is presented by the record in this case: Was the contract with the libellants of such a character, or made under such circumstances, as required the court to relieve the Elfrida against the payment of the stipulated compensation?

These are the only cases in our reports in which the question of nullifying a salvage contract was squarely presented, although there is in the case of Post v. Jones, 19 How. 150, 160 [15: 618, 622], an expression of the court to the effect that "courts of admiralty will enforce contracts made for salvage service and salvage compensation, where the salvor has not taken advantage of his power to make an unreasonable bargain; but they will not tolerate the doctrine that a salvor can take the advantage of his situation and avail himself of the calamities of others to drive a bargain; nor will they permit the performance of a public duty to be turned into a traffic of profit." Indeed, it may be said in this connection that the American and English courts are in entire accord in holding that a contract which the master has been corruptly or recklessly induced to sign will be wholly disregarded. The Theodore, Swab, Adm. 351; The Crus. V, 1 Lush. 583; The Generous, L. R. 2 Adm. & Eccl. 57, 60.

In the case most frequently cited, The
Emulous, 1 Sumn. 207, the parties treated
the contract at an end on account of unex-
pected difficulties, but Mr. Justice Story ex-
pressed the opinion that salvage contracts
were within control of the court, and that
the salvor could not avail himself of the ca-
lamities of others to force upon them a con-
tract unjust, oppressive, or exorbitant. In
the subsequent case of Bearse v. Three Hun-
drea and Forty Pigs of Copper, 1 Story, 314,
Justice Story found that no fixed or definite
contract for the services existed, although he
had previously remarked that it was "one of
the few and excepted cases in which there
may be a private contract fixing the rate of
salvage, which will be, and ought to be, ob-
ligatory between the parties.' We do not[196]
think that a salvage contract should be sus-
tained as an exception to the general rule,
but rather that it should, prima facie, be en-
forced, and that it belongs to the defendant
to establish the exception. The A. D. Patch-
in, 1 Blatchf. 414; Harley v. Four Hundred
and Sixty-seven Bars Railroad Iron, 1 Sawy.
1; The R. D. Bibber, 33 Fed. Rep. 55; The
Wellington, 48 Fed. Rep. 475; The Sir Wm.
Armstrong, 53 Fed. Rep. 145; The Alert, 56
Fed. Rep. 721; The Silver Spray's Boilers,
Brown, 349.

In Eads v. The H. D. Bacon, Newberry,
274, certain salvors, by the use of their ma-
chinery and diving bell worth $20,000, raised
a badly sunken steamboat in the Mississippi,
valued at $20,000, in twelve hours.
held that the contracted price of $4,000 was
just and reasonable.

It was

The intimations of this court have been followed, except in very rare instances, by the subordinate courts. Thus, in the case of The Agnes I. Grace, 49 Fed. Rep. 662, and 2 U. S. App. 317, a schooner bound for Port Royal, South Carolina, put into Tybee Roads under stress of weather. She came up on the sands in an exceedingly perilous condition. The ground was treacherous and dangerous, and while lying there she was exposed to the full force of the sea and winds. A towboat company offered its services, and a contract was entered into to pay the sum of $5,000 as salvage. A portion of the cargo, amounting to [195]$7,000, was saved, as well as the schooner, In The J. G. Paint, 1 Ben. 545, an agreewhich was sold for $5,030, probably about ment to pay a steamboat $5,000 for towing one half her value. The contract was sus-a vessel worth $8,000, with a cargo of sugar, tained. The court put its decision upon the ground that the case could not be considered as belonging to that class "where the master being upon the high seas or an uninhabited coast, at a distance from all other aid, is absolutely helpless and without power to procure assistance other than that offered, and is compelled in consequence to make a hard and inequitable contract. He was within easy reach of Savannah, where, had he desired to assume the risk for his owners, he could have procured lighters and other tugs to render the service."

The cases in these courts are too numerous for citation, but it is believed that in nearly all of them the distinction is preserved between such contracts as are entered into corruptly, fraudulently, compulsorily, or under a clear mistake of facts, and such as merely involve a bad bargain, or are accompanied with a greater or less amount of labor, difficulty, or danger than was originally expected.

In the earliest of these (1799), Cowell v. The Brothers, Bee, 136, the libellant very properly relinquished his written agreement and applied to the court for such compensation as his services appeared to deserve, although the court expressed the opinion that the contract would have been held void as having been made under circumstances of great distress. To the same effect is Schutz . The Nancy, Bee, 139.

for twenty-seven hours, was sustained by
Judge, subsequently Mr. Justice, Blatchford.

In most of the cases where the contract
was held void the facts showed that advan-
tage was taken of an apparently helpless
condition to impose upon the master an un-
conscionable bargain. Brooks v. Stmr. Adi-
rondack, 2 Fed. Rep. 387; The Young Amer-
ica, 20 Fed. Rep. 926; The Don Carlos, 47°
Fed. Rep. 746.

It must be admitted that some of these courts have exercised a wide discretion in setting aside these contracts, and have laid down the rule that they are to be closely scrutinized, and will not be upheld when it appears that the price agreed upon by the master is unreasonable or exorbitant. We do not undertake to say that these cases were improperly decided upon their peculiar facts, but we are unable to assent to the general proposition laid down in some of them, that salvage contracts are within the discretion of the court, and will be set aside in all cases where, after the service is performed, the stipulated compensation appears to be unreasonable. If such were the law, contracts for salvage services would be of no practical value, and salvors would be forced to rely upon the liberality of the courts.

Nor is such a contract objectionable, when prudently entered into, upon the ground that[197] it may result more or less favorably to the parties interested than was anticipated when

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[198]

the contract was made.

A person may law | agreement depended upon whether they fully contract against contingencies; in could, with any reasonable probability, affect fact, the whole law of insurance is based the services about to be performed. He upon the principle that, by the payment of found that the weather was very tempestua small sum of money, the insured may in- ous and the task was made much more diffidemnify himself against the possibility of a cult for the want of ground tackle, and hence greater loss; or, by the expenditure of a that the agreement was null and void. Per trifling amount to-day in the way of pre- contra, in the case of The Canova, L. R. 1 mium, his family may receive a much larger Adm. & Eccl. 54, he held that, as no danger to sum in case of his subsequent death. If there property was proved, the agreement would were ever any doubt with respect to the va- not be set aside by reason of the fact that a lidity of such contracts it was long since re- great part of the crew of the vessel was dis moved by the universal concurrence of the abled by illness. courts, and an enormous business has grown up all over the world upon the faith of their validity. Indeed, nearly every contract for a special undertaking or job is subject to the contingencies of a rise or fall in the price of labor or materials, to the possibility of strikes, fires, storms, floods, etc., which may render it unexpectedly profitable to one party or the other.

We do not say that, to impugn a salvage contract, such duress must be shown as would require a court of law to set aside an ordinary contract; but where no such circumstances exist as amount to a moral compulsion, the contract should not be held bad simply because the price agreed to be paid turned out to be much greater than the services were actually worth. The presumptions are in favor of the validity of the contract. The Helen and George, Swab. Adm. 368; The Medina, L. R. 2 Prob. Div. 5, although in passing upon the question of compulsion the fact that the contract was made at sea, or under circumstances demanding immediate action, is an important consideration. If when the contract is made the price agreed to be paid appears to be just and reasonable in view of the value of the property at stake, the danger from which it is to be rescued, the risk to the salvors and the salving property, the time and labor probably necessary to effect the salvage, and the contingency of losing all in case of failure, this sum ought not to be reduced by an unexpect ed success in accomplishing the work, unless the compensation for the work actually done be grossly exorbitant.

In The Phantom, L. R. 1 Adm. & Eccl. 58, an agreement for eight shillings six pence as an award for salvage services was set aside as futile, where it appeared that there was real danger to the salvors in rendering the services. The value of the Phantom was about seven hundred pounds. The case was certainly a very hard one upon the salvors, who appeared to have been ignorant beachmen. But it is somewhat difficult to reconcile that with the prior case of The Firefly, Swab. Adm. 240, where the court distinctly held that it would not set aside a salvage agreement because it seemed to be a hard bargain; or that of The Helen and George, Swab. Adm. 368, unless proved to be grossly exorbitant, or to ha e been obtained by com [199] pulsion or fraud. It was also held in The Waverley, L. R. 3 Adm. & Eccl. 369, that a steamer which contracts to render salvage services for a fixed sum will be held strictly to her agreement, and that it is no ground for extra salvage remuneration that the serv ice was prolonged or became more difficult. See also The Jonge Andries, Swab. Adm. 303.

The

In The Cargo ex Woosung, L. R. 1 Prob. Div. 260, it appeared that the ship was wrecked on a reef in the Red sea, and was in a position of imminent peril, and subsequently went to pieces. A government vessel was sent to her relief from Aden, and the master of the Woosung, "under circumstan ces of enormous pressure," agreed to pay half of the proceeds of the cargo saved. agreement was upheld by the admiralty court (Sir Robert Phillimore), but was set While in England there has been some that the officers of government ships, while aside by the court of appeal upon the ground slight fluctuation of opinion, by the great weight of authority, and particularly of the entitled to salvage, could not impose terms more recent cases, it is held that if the con- upon the persons whose property they saved, tract has been fairly entered into, with eyes and refuse to render assistance unless these open to all the facts, and no fraud or compulwere accepted. The circumstances sion exists, the mere fact that it is a hard showed a clear case of compulsion. So, too, bargain, or that the service was attended in The Medina, L. R. 1 Prob. Div. 272; S. C. with greater or less difficulty than was antic-L. R. 2 Prob. Div. 5, where the master of a ipated, will not justify setting it aside. The Mulgrave, 2 Hagg. Adm. 77; The True Blue, 2 W. Rob. 176; The Henry, 15 Jur. 183; S. C. 2 Eng. L. & Eq. 564; The Prinz Heinrich, L. R. 13 Prob. Div. 31; The Strathgarry [1895] P. 264.

In The Kingalock, 1 Spinks, Eccl. &
Adm. 263, an agreement was set aside upon
the ground that when the vessel was taken
in tow the master concealed the fact that she
had been compelled to slip an anchor and
cable, and that her foresail was split. Dr.
Lushington thought that whether the omis-
sion to state those farts would vitiate the
172 U. S.
U. S., Book 43.

21

terms

vessel found passengers of another steamer
(550 pilgrims) wrecked on a rock in the Red
sea in fine weather, and refused to carry
them to Jeddah for a less sum than four
thousand pounds, and the master of the
wrecked vessel was by such refusal com-
pelled to sign an agreement for that sum,
and the service was performed without di
culty and danger, the agreement was held in-
equitable and set aside. The compulsion in
this case was even clearer than in the last.

In The Silesia, L. R. 5 Prob. Div. 177, a vessel which with her cargo and freight was valued at £108,000, on a voyage from New

417

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