and the receipt by plaintiffs of the money and note, and the credit thereof on their books to Arndt, would and did constitute Arndt a partner with plaintiffs, as between themselves, from the time of the receipt by plaintiffs of said money, and had the effect to convey and transfer to and vest in Arndt a joint and undivided interest and title with plaintiffs in the insured property." The instruction refused, as well as the one given by the court, assumes that the admission of Arndt at any time before the loss as a partner in the firm to which the policies were issued, would have involved such a transfer of the property or such a change in its title or possession as would render the policies void. Without considering whether that assumption is justified by a proper interpretation of the policies, we have now only to determine whether there was error in holding that Arndt, by virtue of the agreement of May 24, 1883, and the facts recited in the charge to the jury, became a partner in the firm of Drennen, Starr & Everett. This question is within a very narrow compass; for our inquiry is restricted to the ascertainment of the real intention of the parties as disclosed by the written agreement, considered as a whole, and by their conduct in execution of its provisions.

It appears, in the forefront of the agreement, that Arndt did not acquire an interest in the firm property immediately upon its execution; for the plaintiffs only agreed to receive him into their business on certain terms and conditions thereafter to be performed. The first of those conditions was that the company--the one to be formed by the proposed connection between the plaintiffs and Arndt-should become incorporated; then he was to pay into the firm for its use, on or before June 14, 1883, the sum of $5,000, and a like sum on the first of January, 1885, the latter to be evidenced by his note, each sum to bear interest from January 1, 1883, until paid; finally his interest was to be decreased 50 per cent. if he failed to pay the second $5,000 by January 1, 1885; "the business"-that in which Arndt was to have an interest-"to be carried on by the new company, to be formed as aforesaid, shall be of the same nature as that now conducted by Drennen, Starr & Everett." Then follows a declaration as to the property upon the basis of which the new company was to be organized, viz., all the rights and effects owned by Drennen, Starr & Everett, in the proportion of their respective interests to be put into the corporation to be formed, according to their value as shown by the inventory of January 1, 1883, less any loss by reason of non-payment for goods sold before that date, to which was to be added the $10,000 which Arndt agreed to pay; the interest of the several parties in the new company to be according to the amounts contributed by them, respectively, to its capital stock.

These provisions all plainly point to an interest that Arndt was to acquire, not presently, nor immediately upon the agreement being signed, but at some future period, when the conditions distinctly set out in the agreement-not some, but all of them-were performed. When those conditions were satisfied, and not before, he would have been entitled to demand, as of right, the execution of the stipulation that he be received into the business then represented by Drennen, Starr & Everett, but thereafter to be represented by the new or incorporated company. The parties appear, ex industria, to have excluded the possibility of his acquiring an interest in or control over the insured property in advance of the formation of an incorporated company. Upon no other ground can the clause, "that no change in the name or character of the firm of Drennen, Starr & Everett shall be made until said corporation shall be formed," be satisfactorily accounted for. It may be that Drennen, Starr & Everett were unwilling to establish the confidential relations of partner with Arndt, but were willing to unite their property with his money, to be owned by a corporation in which all would become stockholders according to the amounts respectively contributed to its capital stock. Hence, perhaps, the wording of the clause last quoted. If, as the jury were in effect instructed,

Arndt became a partner in the firm of Drennen, Starr & Everett prior to the loss, then the character of that firm was essentially changed; for, as partner he would have become, at and before the proposed corporation was formed, at least as to third parties, a general agent of his copartners in respect of all matters within the scope and objects of the partnership, with authority, implied from the relation itself, to participate in the control and management of the property, and, in the name of the firm, even to dispose of the entire right of all the partners for partnership purposes. The agreement is not, in our judgment, fairly susceptible of a construction which is attended by such results. The requirement that Arndt was to be received into the business upon the condition, among others, that the company should be incorporated, and the further requirement that neither the name nor the character of the firm was to be changed until the proposed corporation was formed, cannot be satisfied by any other interpretation than one which excludes him from all control or management of, or legal interest in, the property insured prior to the formation of such corporation.

It is suggested that Arndt would not have paid $10,000 in cash and notes "into the firm for its use" unless he supposed that he would thereby acquire a present interest in the firm's property. The answer is that the want of business sagacity in such an arrangement, if such there was, cannot control the interpretation of the written agreement between the parties. Arndt, in effect, agreed to pay Drennen, Starr & Everett $5,000 on June 14, 1883, and a like sum on January 1, 1885, with interest on each sum from January 1, 1883, until paid, for the privilege of becoming, to the extent of such payments, a stockholder in a corporation thereafter to be formed, whose capital stock should represent all the effects and rights of that firm, as of the date from which Arndt was to pay interest, (less any loss arising from the nonpayment of goods previously sold,) increased by the $10,000 which Arndt agreed to pay into the old firm. Such was the whole extent of the agreement. The instruction by the court below proceeded upon the ground that the pay-* ment by Arndt in cash and money of the amount which he agreed to pay, and their receipt and entry upon the books of the firm to his credit, gave him an interest as partner in the business; whereas such facts only established the performance of some, not of all, the conditions prescribed; for, by the agreement, the formation of the proposed corporation was expressly made a condition, with the others named, to Arndt's becoming interested in the busi

ness.

In our judgment, looking at the whole agreement, the parties did not contemplate a partnership, and none was ever established between them. The agreement looked only to a corporation, the payments and other things specified being in preparation for its ultimate formation, which was an adequate, as it was the actual, consideration; consequently, there was, prior to the loss, and under the most liberal interpretation of the policies, no change in the title or possession of the property, nor any transfer thereof, that avoided the the policies. This is sufficient to dispose of the case. For the reasons given the judgment must be reversed, and a new trial had.

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DAVISON and others, Owners, etc., v. VON LINGEN and others, Copartners, etc.1

(January 5, 1885.)

1. CHARTER-PARTY-STIPULATION AS TO SAILING.

A stipulation in the charter-party of a steamer, that she is "now sailed, or about to sail, from Benizaf, with cargo, for Philadelphia," is a stipulation that she has her cargo on board and is ready to sail.

2. SAME-WARranty-Time AND SITUATION OF VESSEL-RIGHT OF CHARTERER TO REPUDIATE CONTRACT.

A charter-party with the above stipulation was made on the first of August, in Philadelphia. The steamer was at Benizaf, in Morocco, only three-elevenths loaded, and did not sail for Philadelphia till August 7th, and left Gibraltar August 9th. Before signing the charter-party, the charterers asked to have in it a guaranty that the steamer would reach Philadelphia in time to load a cargo for Europe in August, but this was refused. They declined to have inserted the words "sailed from or loading at Benizaf." On learning when the steamer left Gibraltar, they proceeded to look for another vessel. The unloading of the steamer at Philadel phia was completed September 7th, but the charterers repudiated the contract. Held: (1) The stipulation was a warranty or a condition precedent, and not a mere representation. (2) Time and the situation of the vessel were material and essential parts of the contract. (3) The charterers had a right to repudiate the contract, and to recover from the owners of the steamer the increased cost of employing another vessel.

Appeal from the Circuit Court of the United States for the District of Maryland.

A. Sterling, Jr., for appellants. John H. Thomas and T. Wallis Blackistone, for appellees.

BLATCHFORD, J. On the first of August, 1879, a charter-party was entered into between the owners of the steam-ship Whickham and the firm of A. Schumacher & Co., composed of George A. Von Lingen, Carl A. Von Lingen, and William G. Atkinson, of which the parts material to this case are as follows:

*"GRAIN CHARTER-PARTY,

STEAMER.

and

or

“PHILADELPHIA, August 1, 1879. "It is this day mutually agreed between T. H. Davison, Esq., owner of the Br. steam-ship Whickham, of London, built 1876, at Newcastle, of 1,124 net tons register, or thereabouts, classed 100 A 1 in Br. Lloyds, now sailed or about to sail from Benizaf with cargo for Phila., and Mess. A. Schumacher & Co.: That the said steam-ship, being tight, staunch, and strong, and in every way fitted for the voyage, with liberty to take outward cargo to Phila. for owners' benefit, shall, with all convenient speed, sail and proceed to Philada. or Balto., at charterers' option, after discharge of in ward cargo at Phila.. or as near thereunto as she raay safely get, and there load afloat from said charterers, or their agents, a full and complete cargo of grain, other lawful merchandise, excluding petroleum or its products. Vessel to load under inspection of either American or British Lloyd's surveyors, at her expense, and to comply with their rules. The cargo to be brought to and taken from along-side at merchants' risk and expense, not exceeding what she can reasonably stow and carry over and above her cabin, tackle, apparel, provisions, and furniture, and, being so loaded, shall therewith proceed to Queenstown, Falmouth, or Plymouth, for orders to discharge at a safe port in the United Kingdom, or on the continent, between Bordeaux and Hamburg, both included, (Rouen excluded,) also Holland excluded, or as near thereunto as she may safely get, and deliver the same, always afloat, on being paid freight as follows: six shillings and three pence steriing per quarter of 480 lbs. delivered, 1S. C. 1 Fed. Rep. 178, and 4 Fed. Rep. 346.

of wheat or maize, other grain or stowage goods to pay in full and fair proportion thereto, as customary at loading port: ten per cent. extra if discharged on the continent, as ordered from port of call in the United Kingdom, as above; if ordered to a direct port of discharge on the continent, as above, on signing bills of lading, the rate to be the same as to the United Kingdom for orders. In full of port charges and pilotages, (the act of God, restraints of princes and rulers, the dangers of the seas and navigation, accidents to boilers, machinery, etc., always excepted,)*freight being paid on unloading and right delivery of the cargo, in cash, without discount or allowance. * Fifteen (15) running days, (if the vessel be not sooner dispatched,) commencing when vessel is all ready and prepared to receive cargo, and written notice thereof given to charterers, to be allowed for loading and discharging vessel, and, if longer detained, charterers to pay demurrage at the rate of forty (£40) pounds British sterling, or its equivalent, per day. *

"GEO. BLASSE, witness to the signature of

* *

"H. L. GREGG & Co.,

"By cable authority from T. H. Davison. “A. ALBERT, witness to the signature of A. SCHUMACHER & Co."

On the tenth of September, 1879, the charterers filed a libel in personam, in admiralty, in the district court of the United States for the district of Maryland, against the owners of the Whickham, to recover $2,000 damages for a breach of the charter-party. The libel sets forth a copy of the charter-party, as Exhibit A, and avers that on the first of August, 1879, the libelants, "having previously made a contract, which required them to ship during that month a cargo of grain to Europe, and requiring a vessel for that purpose, communicated these facts" to the agents of the respondents, and the charterparty was made; that the vessel had not sailed from Benizaf at the time of the execution of the charter-party, and was not then about to sail therefrom; that by reason of such breach of the contract and warranty, and the delay in the arrival of the vessel at Philadelphia arising therefrom, the libelants were not afforded an opportunity of loading the vessel with grain, either in Philadelphia or Baltimore, during the month of August, 1879, and she did not in fact arrive in Baltimore until after the expiration of that month, nor did she arrive in Philadelphia in time to discharge her inward cargo and load with grain during that month; that the respondents did not notify the libelants of the arrival of the vessel in, and her readiness to receive cargo at, Philadelphia; and that in consequence thereof the libelants were compelled, at higher rates of freight, to charter another vessel for that purpose.

The respondents filed an answer on the first of December, 1879, alleging that at the time the charter-party was executed the vessel was about to sail from Benizaf within the meaning of its language; that she did, with all convenient speed, sail and proceed to Philadelphia, and there, without delay, discharge her inward cargo, and as soon as discharged proceed without delay to Baltimore, and was, without delay, tendered to the libelants to load according to the charter-party, and was refused by the libelants for the sole cause, as alleged by them, that the respondents had broken the charter-party, because the vessel was not at Benizaf, about to sail, on the first of August, 1879; and that the libelants were aware of her arrival in Philadelphia, and of the time she finished the discharge of her inward cargo. The fact of the prior contract by the libelants to ship grain to Europe, and of the communication of knowledge thereof to the agents of the respondents, is put in issue. The answer also alleges that it is not material or competent to prove the existence of such prior contract or knowledge of it by the respondents, or the inability of the libelants to fulfill it, or the chartering of another vessel. On the same day the owners of the vessel filed a cross-libel in personam, in admiralty, in the same court against the charterers, setting forth the charter-party, and alleg

45

*44

ing that the vessel, at its date, was about to sail from Benizaf; that she did, in pursuance of the charter-party, proceed, with all convenient speed, to Philadelphia with inward cargo, and, being discharged thereof, did, in accordance with the charter-party, proceed to Baltimore, and was ready to receive cargo from the charterers, of which written notice was given to them, but they, without cause, refused to receive and load the vessel, and repudiated the charter-party on the sole ground, as by them alleged, that the vessel was not, on August 1st, about to sail from Benizaf; and that the vessel, as soon as possible after such refusal, was rechartered for a voyage from New York to Europe at a freight less by $1.912.58, and with an increase of expense of $1,000 and more. The cross-libel claims $3,000 damages.

The answer to the cross-libel, filed in January, 1880, avers that the vessel had not sailed, and was not about to sail, from Benizaf, on the first of August, 1879, but, on the contrary, had not her cargo on board, and did not complete the loading of it till the evening of August 7th, and did not sail from Benizaf till the evening of August 8th; that when she sailed from Benizaf she was not provided, and in every way fitted, for the voyage, and did not proceed to Philadelphia or Baltimore with all convenient speed, but sailed without a supply of coal for the voyage, and stopped at Gibraltar to obtain a proper supply; that the charterers received no written notice of the vessel's arrival and readiness to receive cargo from them at Philadelphia; that she did not arrive in Philadelphia or Baltimore, and the charterers did not receive written notice of her readiness to receive cargo from them until it was too late for them to use the vessel for the purposes for which they had chartered her, which purposes they communicated to the agents of the vessel at the time the charter-party was executed; and that, in consequence of such delay and default, they were compelled, before the arrival of the vessel, to charter another in her place, at a loss of $2,000, and, when she did arrive, they refused to accept and load her.

It was stipulated between the parties that the allegations made in the answer to the cross-libel should be treated as averments in the original libel, and that, under the answer to the original libel, any evidence might be offered, and any evidence taken, which might be admissible under any proper state of the pleadings. Proofs were taken, and the district court dismissed the original libel, and decreed a recovery of $4,093.18 in favor of the libelants in the cross-libel. 1 Fed. Rep. 178. The decision of the district court proceeded on the ground that the words "about to sail with cargo," in the charter-party, meant that the vessel was to sail as soon as with reasonable diligence she could get her cargo on board.

The charterers appealed to the circuit court from the decrees. Further proofs were taken, and that court found the following facts:

*"(1) The British steamer Whickham, owned by T. H. Davison and others, the defendants in the original libel, sailed from Shields on the ninth of July, 1879, bound for Lisbon, where she arrived on the 16th, and, having discharged her cargo, sailed again in ballast, on the 23d, for Benizaf, on the coast of Morocco, to take a load of iron ore, under a charter for Philadelphia. She passed Gibraltar on the 25th, and arrived at Benizaf at 4:30 P. M. of Saturday, the 26th. She began taking in cargo under the charter for Philadelphia during the forenoon of Monday, the 28th. On that day she took on board 115 tons, and on the 29th about 90 tons; but on the 30th, none; and on the 31st only four boat loads. During this time there was delay in delivering the cargo on board, as other vessels in port were entitled to precedence in loading. After the 31st the cargo was put on board with as much dispatch as could have been expected at that place, and it was all in on the seventh of August, at 5:30 P. M. An hour later the vessel sailed, and, stopping five hours at Gibraltar for coal, on the 9th, arrived at Philadelphia on the second of September. She completed her unloading at that port on the 7th.