U. S. Circuit Court.-The Steam Propeller City of New York. the Hero, in placing the schooner in the way of the steamer, and from that decree the libellants appealed. 1. I am unable to discover from the proofs, any want of skill or diligence in the management of the steamboat, nor any ground for imputing fault to her in coming into her berth; I think it would be unjust to charge her with the consequences of the collision. 2. On the other hand, it seems to me there was a want of prudence and good seamanship on the part of the master of the Hero at that hour in the morning, and with the wind as it was, in not looking out sharper for the steamboat, kuowing, as he must, that she was expected every moment to arrive from Albany. It seems to me, with proper caution, the schooner need not have been in a position where a collision was unavoidable. I do not think, under the circumstances, the steamboat was bound to see the Hero before the former came around the stern of a brig, and was entering between this and other vessels. Decision affirmed. U. S. Circuit Court. [Southern District of New York.] ON APPEAL. Before the Honorable SAMUEL NELSON, Circuit Judge. THE STEAM PROPELLER CITY OF NEW YORK. Held, that where a steamer is chartered for a voyage, and becomes in distress for fuel, that the master assent to a supply procured by the purser, who was only agent for the charterers binds the vessel, notwithstanding the party prescribing the supplies was informed of the charter. The facts appear in the decision of the Court. F. F. Marbury, for the libellants and appellants. NELSON, J-This suit was brought by the libellants to recover for 130 tons of coal furnished to the steamer. They had sent out the coal to Chagres in the schooner James R. Bayard, Captain Thompson, for sale. The propeller having been chartered by Haight & Palmer, of this city, put into Porto Cabello, and there purchased the coal of Captain Thompson. The purser paid him for it $1,000 down, and for the balance-$1,080-gave him a draft on Haight & Palmer, who U. S. Circuit Court.-The Steam Propeller City of New York. having failed and absconded, did not pay the draft, and this suit was commenced against the vessel to recover the balance due. Judge Betts, in the District Court, held that the sale was not made on the credit of the ship, and dismissed the libel, for which decree this appeal was brought. I am strongly inclined to think that Iaight & Palmer, the charterers in this case, are to be deemed owners for the voyage; and if so, the purser of the ship, who was their agent, was competent to bind the ship for the necessary supply of coal at Porto Cabello; and this, although the person furnishing the supplies knew of the charter, and that, according to its terms, the charterers were bound to furnishi coal for the voyage. Upon any other rule, the master or agent of a vessel in a foreign port, in distress, would oftentimes find himself unable to procure the necessaries essential for his relief, the voyage might become broken up for want of supplies, or the ship go to decay in port for want of proper repairs. I have seen no case when this knowledge on the part of the person furnishing the supplies, or making repairs under the circumstances stated, affect the right of charge upon the vessel as security for the payment. The right to charge the general owner personally, is a very different question. But admitting that the charterers were not owners for the voyage, and but hirers of the use of the vessel to carry passengers and freight, and that the general owners had the possession and navigation of it, the charter party resting in covenant, and not in a letting of the ship, in my judgment, the result must be the same. The proof shows that the ship was out of coal, and went to Porto Cabello, it may be properly said, in distress, for supplies, and without which she could not have performed her voyage. Under such circumstances, I cannot doubt but that the coal, if procured by the mas ter, would become a charge upon the vessel according to the settled maritime law. It is true the claimants seek to exonerate her upon evidence by the purser, who was an agent of the charterers, that he contracted for the supply of coal, and not the master; on the contrary, that the master repudiated the purchase for himself and the ship. The master has not been examined, the defence in this respect being allowed to rest upon the evidence of the purser. He is contradicted by the captain of the coal ship, who made the sale, and according to whose evidence, all parties were given to understand, expressly, that the vessel would be looked to in case of failure to pay the draft on Haight & Palmer. The purser contradicts himself in several parts of his evidence, and in other respects it is not calculated to inspire confidence. He testifies, in the first place, that Captain Thompson did not tell him at the time he consented to take the draft, that he should look to the vessel if it was not paid; but afterwards is obliged to admit that he did. He also testifies that he had sufficient funds on board to pay for the coal and Supreme Court.-Tracy vs. The North American Trust and Banking Co. for other expenses of the voyage, but afterwards shows that in this he was also mistaken. I think the evidence of Thompson entitled to the most credit, and according to that the master of the steamer participated, or should be regarded as participating in the purchase. He was present when the contract was made for the coal, and when the draft for the balance of the purchase money was accepted; and according to the evidence of Captain Thompson, he agreed to accept it only on the condition that the ship should be liable if the draft was not paid at maturity. It is true, the master was silent, but the inference naturally drawn under the circumstances must have been that he acquiesced in the condition. 3. The whole of the proofs show that the sale was made and draft taken, in expectation, on the part of Captain Thompson, that the ship would be liable for the balance of the coal unpaid, if the draft was not paid at maturity. This is not even contradicted by the evidence of the purser. That evidence seeks to repel the effect by establishing the fact that the master gave notice at the time that the vessel would not be considered as liable. On this point, in the absence of any evidence of the master, I think that of Captain Thompson entitled to the most weight, for the reasons already stated, and according to which the credit was given to the vessel. I must, therefore, reverse the decree below, and decree the vessel is chargeable for the balance due for the coal, with reference to the clerk, if necessary, to ascertain the amount. Supreme Court. Before MITCHELL, P. J., and ROOSEVELT and CLERKE, Justices. TRACY U. TALMAGE, President of THE NORTH AMERICAN TRUST AND BANKING COMPANY. CONSTRUCTION OF FREE BANKING LAW. The Free banks have authority to discount or to buy at a discount the bonds, notes, or other evidences of the public debt of a State, as well as of the private debts of individ uals or corporations. They are not forbidden from giving their engagements on time, provided such engage ments are not adapted, nor intended, to circulate as money. They are not bodies corporate within the meaning of the Constitution or the General Banking Law. Nor are they subject to penal regulations involving forfeiture or imprisonment, enacted in reference to corporations proper. The facts appear in the opinion. ROOSEVELT, J.-Among the claims presented for liquidation to the Receiver of the late North American Trust and Banking Company was one on behalf of the State of Indiana, for $175,000, in the form of Supreme Court.-Tracy vs. The North American Trust and Banking Co. eighteen certificates of deposit, of the denominations of nine and ten thousand dollars each, dated January 2, 1841, and payable with interest at periods varying from five to twenty-two months after date. These certificates, it appears, were renewals of others previously given, and those again traced their origin to a written agreement of the 18th of January, 1839, between the Trust Company, a free bank formed under the general law, on the one part, and the Morris Canal Company, acting (according to the testimony) as agents for the State of Indiana, on the other. It was an agreement on the one part, without reference to any particular purpose, to sell twelve hundred "Bonds of the State of Indiana," and on the other to give in payment the "negotiable obligations" of the Trust Company, payable, not on demand, but on time, with interest-the lowest denomination of which (the highest being $150,000) need not, by the terms of the agreement, have been less than $24,750. Such an agreement, says the Receiver, was an unlawful dealing by a corporation in public stocks, and an unlawful issuing by a corporation of a prohibited species of bank notes; and no rights, therefore, cognizable by a court of justice, can accrue from it. To understand the point of the Receiver's objection, and of the answer to it, a brief recurrence to certain matters of public history is necessary. For many years prior to 1838, the business of banking in this State was a chartered monopoly, made so by various express statutory provisions, denominated collectively the Restraining Act. This act, under severe penalties, prohibited almost every branch of banking to any person, company or partnership, not specially authorized by corporate charters doled out, from time to time, by successive Legislatures to suc cessive political or personal favorites. The granting of these charters, as may readily be conceived, in time became a great abuse, so much so that the Convention which was called in 1821 to revise the State Government, inserted in the then new Constitution a provision requiring thereafter "the assent of two-thirds of the members elected to each branch of the Legislature to every bill creating any body politic or corporate." Favoritism, nevertheless, fortified as it was by the Restraining Act, still continued, with its attendant corruption, until public dissatisfaction became so strong and so universal that the Legislature were at length compelled to extirpate the root of the evil. Accordingly, on the 4th February, 1837, so much of the Restraining Act "as prohibited a person or association of persons not incorporated from keeping offices for the purpose of receiving deposits or discounting notes or bills" was repealed. And on the 18th April, in the following year, the whole system was remodelled, and the business thrown open to general competition by the passage of a law entitled, "An Act to authorize (instead of restraining) the business of banking." Under this act, on the 18th of July, 1838, twenty individuals, invited by the liberal character of its provisions, formed themselves into an association, or partnership, for which they assumed the name or style of "The North American Trust and Banking Com Supreme Court.-Tracy vs. The North American Trust and Banking Co. pany." The "Association" thus formed, construing the act, which authorized their formation, as expressly intended not to perpetuate but to abolish the principle of corporate monopoly, and to restore in a great degree the natural system of free banking, (it was popularly called the Free Banking Law,) in January, 1839, as already stated, entered into a written contract with the agents of the State of Indiana, as any other company of individuals might have done, for the purchase from them, on credit, of $1,200,000 of State bonds; which, immediately after, were delivered to, received by, and appropriated to the use of the company, and the whole purchase money, from time to time, as it fell due, regularly paid, except a balance still outstanding of about $175,000. This balance, in any form, or to any extent, the Receiver now refuses to recognize, insisting that the contract, out of which it arises, being, as he contends, prohibited by law, the association, as a consequence, were under no obligation either to pay for or return the bonds to the State, or to account for any portion of their avails. The whole case, it will be seen, on the part of the Receiver, (and here, it seems to me, is the error,) rests upon the assumption that whatever the Legislature may have called these partnerships, or whatever may have been the legislative intention as to their character and denomination, yet being in reality corporations, they are, and must be, nolens volens, subject to all existing prohibitory enactments, whether constitutional or merely legislative, affecting that kind of legal existences. Now, whether the free banks are corporations or quasi corporations, or only associations possessed, like limited partnerships, of certain corporate attributes, is to my mind, for the purposes of the present argument, quite immaterial. The only question is (all constitutional difficulties having been disposed of) did the Legislature in forming them, or rather, in authorizing their self-formation, intend that certain penal provisions of law, previously enacted to govern the action of chartered banks, (undisputed corporations,) should apply to these new forms of limited partnership; and is that intention, if entertained by the law-making power, expressed in a manner so clear as to require no implication or interpretation to discover it; the rule being inflexible, and as just as it is inflexible, that penal enactments, when not precisely clear, admit of no extension by judicial inference. To me it seems obvious, as well from the wording of the free banking law, as from the whole history of its origin, progress and final passage, that no such intention was entertained by the Legislature, and for the reason mainly, that they wished, as was indispensable, to avoid any application of the provisions of the then Constitution, which precluded, according to the universal understanding at the time, the creation or authorization of corporate bodies by any general law. (See Assembly Documents of 1838, No. 122, and the case of Beers and Warner, 22 Wendell, 103.) They accordingly, with an almost hypercritical caution, whenever speaking of the contemplated partnerships, denominated them "associations of persons," and in their organization, made |