*643 fair wear and tear from reasonable and proper use only excepted," and requiring the hirer to make all repairs and to assume liability for all loss and damages, fixes in express terms the value of the vessel, and makes provision for security to protect against any loss or damage sustained by a failure of the hirer to fulfil any of the obligations which the contract imposes. 7. The obligation imposed upon a newspaper corporation by a charter party executed for It by its managing editor, of paying $75,000, the agreed value of the vessel, in the event of her nonreturn, is not so modified as to require a deduction of the hire paid from such agreed sum, due as a consequence of a default in the return of the vessel, by a stipulation in an agreement executed by such editor for the corporation, in compliance with the requirement of the charter party, that the charterer should give security in that sum for the performance of the contract, that the lability thereunder should in no case exceed the sum of $75,000, which stipulation followed the provisions that the corporation bound itself that the hirer would perform the obligations expressed in the charter party, and that the intention of the parties was to hold the corporation primarily liable for such obligations. 8. Whether a particular stipulation to pay a sum of money is to be treated as a penalty or as an agreed ascertainment of damages is to be determined by the contract, fairly construed, and it is the duty of the court, where the damages are uncertain and have been liquidated by an agreement, to enforce the contract. 9. Parties to a charter party may stipulate the agreed value of the vessel as liquidated damages to be paid in the event of a failure to return the vessel, and such stipulation is conclusive upon them, in the absence of fraud or mistake. [No. 49.] Sun Association, and of the newspaper as the Sun. In the body of the charter party the hirer agreed to furnish security, and contemporaneously with the execution of the contract a paper was signed, which is described in the body thereof as the "understanding or agreement of suretyship" required by the charter party. This paper recited on its face that it was made by "the Sun Printing & Publishing Association," and it also was signed by Lord exactly as he had signed the charter party. Before the time fixed in the charter party had expired, that is to say, about the middle of May, 1898, a second charter party and a second agreement of suretyship were executed. These agree ments were substantially identical with the previous ones, except they provided for a new term to begin at the expiration of the previous one and to continue for four months thereafter, that is, up to October 1, 1898. On the execution of the first papers the yacht was delivered to the Sun Association, and provisioned, and one or more of its rewas by it immediately manned, equipped, porters were placed on board with authority to direct the movements of the vessel, and she was sent to Cuban waters, to be used as a despatch boat for the purpose of gathering news concerning the events connected with the hostilities between the United States and Spain. Early in September, 1898, the yacht was wrecked, and became a total loss. For a breach of an alleged covenant to return the vessel, asserted to be contained in the charter party, this libel in personam was filed against the Sun Association, and the damages were averred to be the value of the vessel, which it was alleged was fixed by the charter party at the sum of $75,000. The Argued October 24, 25, 1901. Decided Jan- district court held that the writings were uary 13, 1902. WRIT of Certiorari to the United States Circuit Court of Appeals for the Second Circuit to review a decree which re versed a decree of a District Court in favor of plaintiff in an action to recover damages for the breach of a covenant in a charter party and remanded the cause with instructions to enter a decree for a larger sum. Affirmed. See same case below, 41 C. C. A. 506, 101 Fed. 591. Statement by Mr. Justice White: contracts of the Sun Association through Lord, its authorized agent, and were virtually one agreement; that by them that corporation was responsible for the nonreturn of the ship, whether or not the vessel had been lost by the fault of its agents or employees; and that there was a liability to pay the value of the vessel as fixed by the charter. Construing the two writings as a whole, this value, it was held, was subject to be diminished by the extent of the charter hire, paid when the charter party was executed. A judgment was entered for the sum of $65,000, with interests and costs. 95 Fed. 485. On appeal the circuit court of appeals coincided with the district court except it disapproved the conclusion that the value of the vessel should be reduced by the sum of the charter hire. The decree of the district court was reversed, and the cause remanded with instructions to enter a decree for $75,000, with interest and costs. 41 C. C. A. 506, 101 Fed. 591. The The yacht Kanapaha, the property of the respondent Moore, was let on April 1, 1898, for the term of two months, by a charter party, in which Chester S. Lord was recited to be the hirer, but which was signed by him as follows: "Chester S. Lord, for The Sun Printing & Publishing Association." At the time Mr. Lord was, and for many years prior thereto had been, the managing editor case was then brought here by certiorari. of the Sun newspaper, and had special charge of the collection of news for the Sun Printing & Publishing Association, the publisher of the newspaper aforesaid. We shall hereafter speak of this corporation as the 22 S. C.-16. Messrs. James Russell Soley and *646 Mr. Justice White, after making the | both a principal contract and an accessory foregoing statement, delivered the opinion contract of suretyship. The two writings of the court: All the issues involved are to be determined by ascertaining the nature of the writings, the obligations which arose from their execution, and the conduct of the parties in connection therewith. It is essential, then, to bear in mind the exact form of the writings and their text. They are annexed in the margin.t It would seem to be necessary on the threshold to ascertain whether there was †Memorandum of agreement made and entered into this 14th day of May, 1898, by and between William L. Moore of the city of New York, by Thomas Manning, his agent, party of the first part, hereinafter called the owner, and Chester S. Lord of the city of New York, party of the second part, hereinafter called the hirer, witnesseth: are both signed by Lord in exactly the same character. Judging by the signatures alone, it is impossible to conceive of two contracts, the one principal and the other accessory thereto, as, in the nature of things, if the first evidenced the obligations of the one who hired and the second manifested the agreement of the same person to fulfil his own duty resulting from the hiring, there could be no accessory contract of suretyship, since both documents but exagreement shall be at all times, and at his own cost and expense, keep the said yacht, its hull, machinery, tackle, spars, furniture, gear, boats, and the like, in repair. In witness whereof the parties hereto have hereunto set their hands and seals the day and year first above written. Thomas Manning, Chester S. Lord, That the said William L. Moore, being the owner of the steam yacht Kanapaha, enrolled For The Sun Printing & Publishing Association. in the Atlantic Yacht Club, agrees to let and hereby does let, and the hirer agrees to hire and hereby does hire, the said yacht as she is now for the term of four months from the 1st day of June, expiring on the 1st day of October now next ensuing, for the sum of ten thousand dollars ($10,000.00), payable on the signing of this agreement. That the hirer will carry out the provisions of the charter party made on the 1st day of April last, and will until the expiration of this contract keep said yacht in repair, and will pay all its running expenses, including, amongst other things, uniforms, wages, provisions, pilotage, tonnage, light-house and port dues, and any and all other dues and charges, and will surrender said yacht with all its gear, furniture, and tackle, at the expiration of this contract, to the owner or his agent, at Manning's basin, foot 26th street, South Brooklyn, New York, in as good condition as at the start, fair wear and tear from reasonable and proper use only excepted, and free and clear of any and all Indebtedness, liens, or charges of any kind or of any description. That the hirer will use the said steam yacht as a yacht only, and will under no circumstances use her to carry freight, merchandise, or passengers for hire, nor do anything in contravention of its status as a yacht, nor in the sailing or navigating of the same do anything in contravention of the laws of the United States or of any foreign country. That for the purpose of this charter the value of the yacht shall be considered and taken at the sum of seventy-five thousand dollars ($75,000.00), and the said hirer shall procure security or guarantee to and for the owner in the sum of seventy-five thousand dollars ($75,000.00), to secure any and all losses and damages which may occur to said boat or its belongings, which may be sustained by the owner by reason of such loss or damage and by reason of the breach of any of the terms or conditions of this contract. That in the event of the failure of the hirer to return and surrender the said yacht to the owner as hereinbefore provided, the hirer shall be charged demurrage and shall pay demurrage to the owner at the rate of five hundred dollars ($500.00) per day for each and every day's detention. The hirer shall be liable and responsible for any and all loss and damage to hull, machinery, equipment, tackle, spars, furniture, or the like. That the hirer during the continuance of this May 14th, 1898, William L. Moore, of the city Whereas by agreement or charter party dated of New York, hereinafter called the owner, did or is about to hire or charter unto Chester 8. Lord, of the city of New York, hereinafter called the hirer, the steam yacht Kanapaha, enfully and at large appear by a copy of said rolled in the Atlantic Yacht Club, as will more agreement or charter party hereunto annexed and hereby made part hereof. Now at the request of the said hirer and for valuable consideration received from him, and in consideration of one dollar ($1.00) from the said owner received, and receipt whereof is hereby acknowledged: We, the Sun Printing & Publishing Company, of us, our successor or successors, and for each of the city of New York, for ourselves and each of our executors or administrators, enter into the following understanding and agreement of suretyship: First. That the said hirer will well and faith fully perform and fulfil everything in and by the said annexed agreement on his part to be kept and performed. Second. That we expressly waive and dis pense with notice of any demand, suit, or action at law against the hirer, and expressly waive any and all notice of nonperformance of the terms of said annexed agreement on the part of the hirer to be kept and performed; the intention of this understanding being to hold us primarily llable under the terms of the annexed agreement. Third. That our liability hereunto shall in no case exceed the sum of seventy-five thousand dollars ($75,000.00). In witness whereof we have hereunto set our hands this 14th day of May, 1898. Chester S. Lord, State of New York, County of New York,}**: personally appeared Chester S. Lord, to me On this 14th day of May, 1898, before me known and known to me to be the managing editor of the Sun Printing and Publishing Company, and who duly acknowledged that he executed the above undertaking for and on behalf of his firm, under authority of said company, as its act and deed. A. H. Bradley, [Seal.] Notary Public, New York. pressed the covenants of the same person re- | Association provided for no other officers to lating to one and the same transaction. manage its concerns but a board of trusThere is, however, this difference between the two papers. In the body of the first "Chester S. Lord" is recited to be the hirer, while in the body of the second paper it is recited that it is made by the Sun Printing & Publishing Association. The first question to be determined is, assuming for the present that Lord had authority to bind the Sun Association, Was the first document the individual contract of Lord or that of the Sun Association? The rule of law to be applied in the determination of this question is thus expressed in Whitney v. Wyman (1879) 101 U. S. 392, 395, 25 L. ed. 1050, 1051: "Where the question of agency in making a contract arises, there is a broad line of distinction between instruments under seal and stipulations in writing not under seal, or by parol. In the former case the contract must be in the name of the principal, must be under seal, and must purport to be his deed, and not the deed of the agent covenanting for him. Stanton v. Camp, 4 Barb. 274. "In the latter cases the question is always one of intent; and the court, being untrammeled by any other consideration, is bound to give it effect. As the meaning of the lawmaker is the law, so the meaning of the contracting parties is the agreement. Words are merely the symbols they employ to manifest their purpose that it may be carried into execution. If the contract be unsealed and the meaning clear, it matters not how it is phrased nor how it is signed, whether by the agent for the principal or with the name of the principal by the agent, or otherwise. "The intent developed is alone material, and when that is ascertained it is conclusive. Where the principal is disclosed, and the agent is known to be acting as such, the latter cannot be made personally liable unless he agreed to be so.' tees. In the by-laws provision was made for the election of a president and secretary, whose duties were not prescribed, except as to the signing of certificates of stock and the transferring of stock on the books of the company. An examining committee, as also an executive committee, were provided for in article VII.* of the by-laws, as amended June 27, 1893, a copy of which is excerpted in the margin.t The provisions relating to such committees, however, were omitted in the by-laws as amended June 28, 1898. At the time of the hiring of the Kanapaha, Mr. Paul Dana was the president of the Sun Asociation, he having been elected to that office on October 26, 1897. Long prior to the last-mentioned date, however, from about 1879, Lord had been the managing editor of the Sun. As such, the evidence establishes, he exercised an unlimited discretionary authority in the collection of news for the Sun, making all pecuniary and other arrangements in respect thereto. Prior to the hiring of the Kanapaha he had, solely on his own volition, hired vessels for the use of the Sun for periods of a week at a time. By whom he was vested with this authority does not appear with certainty, but in the absence of direct evidence we are authorized to presume that the authority was conferred, either directly or indirectly, by the trustees of the association, in whom was lodged the power to manage the concerns of the company. Bank of United States v. Dandridge (1827) 12 Wheat. 64, 6 L. ed. 552. In the Dandridge Case, speaking through Mr. Justice Story, the court said (p. 69, L. ed. p. 554): "By the general rules of evidence, presumptions are continually made in cases of private persons of acts even of the most solemn nature, when those acts are the nat ural result or necessary accompaniment of other circumstances." Now, while Lord is referred to in the After illustrating the application of the body of the first writing as an individual, principle to cases of public duty and many he signed the agreement "for the Sun Print- others, it was said (p. 70, L. ed. p. 554): ing & Publishing Association." Clearly "The same presumptions are, we think,' this was a disclosure of the principal, and an apt manner of expressing an intent to applicable to corporations. Persons acting bind such principal. Bradstreet v. Baker, publicly as officers of the corporation are to 14 R. I. 546, 549; Tucker Mfg. Co. v. Fair.be presumed rightfully in office; acts done by the corporation, which presuppose the banks, 98 Mass. 105. existence of other acts to make them legally It results that the first paper or charter party manifested the intent to bind the Sun Association as hirer, if Lord possessed the authority which he assumed to exercise, and consequently that the two papers are in legal effect but one contract, must be interpreted together, and the obligations of the parties arising from them be enforced according to their plain import, seeking always to give effect to the intention of the parties. It is not denied that Lord was in some †The executive committee shall have the supervision of all the property of the association contained in their building, and of the building itself. It shall be their duty to rent such portion of the same as is not required for the use of the association, and to see that all necessary alterations and repairs are faithfully and economically executed; but no expenditure shall be made by the committee exceeding the sum of $500, unless by authority of the They shall report their doings to the trustees at each regular meeting. trustees. It shall be the duty of the examining com respects the agent of the corporation; but mittee to examine the accounts of the associ it is asserted that he had not the power oration, and to inquire into both the receipts and authority to make a contract of the charac disbursements of money. They shall report to ter here involved. The charter of the Sun the trustees at each regular meeting. *649 ⚫650 879. *651 he assumed to exercise in executing the contracts. Patterson v. Robinson, 116 N. Y. 193, 200, 22 N. E. 372, and cases cited. As the trustees of the Sun Association were unrestrained by the charter, and might have authorized Lord to execute the writings in question, and the association failed to rebut the prima facie presumption, he must be held to have been vested with such power. operative, are presumptive proofs of the Water Co. 143 N. Y. 430, 436, 26 L. R. A. latter. Grants and proceedings beneficial 544, 38 N. E. 461, and cases cited. The to the corporation are presumed to be ac- burden was on the Sun Association to estabcepted; and slight acts on their part, which|lish that Lord did not possess the authority can be reasonably accounted for only upon the supposition of such acceptance, are admitted as presumptions of the fact. If officers of the corporation openly exercise a power which presupposes a delegated authority for the purpose, and other corporate acts show that the corporation must have contemplated the legal existence of such authority, the acts of such officers will be deemed rightful, and the delegated authority will be presumed. If a person acts notoriously as cashier of a bank, and is recognized by the directors, or by the corporation, as an existing officer, a regular appointment will be presumed, and his acts as cashier will bind the corporation, although no written proof is or can be adduced of his appointment. In short, we think that the acts of artificial persons afford the same presumptions as the acts of natural persons. Each affords presumptions, from acts done, of what must have preceded them, as matters of right or matters of duty." See also Jacksonville, M. P. R. & Nav. Co. v. Hooper (1896) 160 U. S. 514, 519, 40 L. ed. 515, 521, 16 Sup. Ct. Rep. 379, and cases cited. to The argument that if it be granted that the writings embodied an absolute obligation to return and a stipulation as value in the event of nonreturn, such conditions were SO extraordinary that it must be assumed that authority had not been conferred to agree to them, is equally unfounded. The proposition must rest on the assumption that to charter a yacht upon the conditions referred to was ultra vires of the corporation, which, as we have seen, is not correct. Certainly an authority to charter a yacht for the purpose of collecting news was clearly within the corporate powers of the Sun Association; the mere signing of a charter party in execution of such a contract was not illegal, nor can it, we think, with any plausibility be said where, in a case like this, the vessel chartered was to be manned, equipped, and operated by the hirer, to be taken far from her home port, in time of threatened or actual war, on a presumably hazardous venture, that the agreement to absolutely return, or, in default, to pay a fixed value, was so be As said in Mahoney Min. Co. v. AngloCalifornia Bank, 104 U. S. 192, 26 L. ed. 707, speaking through Mr. Justice Harlan: "An agency may be established by proof of the course of business between the parties themselves, by the usages and practice which the company may have permitted to grow up in its business, and by the knowl-yond the means incidental to the exercise edge which the board, charged with the duty of the power to charter as to cause the act of controlling and conducting the transac- to be beyond the corporate power. For if tions and property of the corporation, had, the corporation could have done these or must be presumed to have had, of the things, the agent having the broad powers acts and doings of its subordinates in and possessed by Lord had a similar right. about the affairs of the corporation." But the case in this regard does not deAs, therefore, the trustees of the Sun As-pend upon legal presumptions arising from sociation must be presumed to have exer- the general course of business in other matcised a supervision over the business of the ters, for the following reasons: The evicorporation, they are to be charged with dence clearly justifies the inference that the knowledge of the extent of the power usual-president and secretary and the other trusly exerted by its managing editor, and must be held to have acquiesced in the possession by him of such authority, even though they had not expressly delegated it to him. It being then within the scope of the general authority possessed by Lord to hire the yacht, the contention that in its exercise he must be assumed to have been without right to incur an absolute liability for the return of the vessel or become responsible for the value thereof, and to stipulate as to such value, is without merit. As Lord was charged with the full control of the business of collecting news, and impliedly vested with power to enter into contracts in respect thereto, he was in effect a general officer of the corporation as to such matters; and it is well settled that the president or other general officer of a corporation has power prima facie to do any act which the directors or trustees of the corporation could authorize or ratify. Oaks v. Cattaraugus tees of the Sun Association knew that Lord He *653 also a trustee of the Sun Association, signed a check on behalf of the corporation for a $10,000 payment, as recited on the books of the association, for "charter Kanapaha to October 1." President Dana testified that he was not consulted in regard to the drawing of the papers, and did not in April or May, 1898, know of their execution. He, however, was aware in those months that despatch boats were being used by the Sun to obtain news in regard to the progress of events in Cuban waters, such information having been ac quired from several sources, including Mr. Lord. President Dana testified that Lord had charge of the getting of information as to the progress of events in Cuban waters and in connection with the war; that he had talked with him about the matter early in April, 1898, and had inquired if his arrange ments were satisfactory. He further testified that if the arrangements made were satisfactory to Lord, they were to the witness, and that that was understood in the Sun office, and by the other trustees. Lord attempted no concealment of his actions in respect to the hiring of the Kanapaha. The payments for the hire of the boat, the expenses connected with its management, sundry premiums paid out of the moneys of the Sun Association for insurance upon the yacht, in the sum of nearly $60,000, covering the first five months of the use of the vessel,-the later policies expiring only a few days before the loss of the ship,-were entered in the books of the Sun. Besides, the association received, under arrange ments made by its business manager and trustee, Laffan, money from various newspapers for accommodations furnished to their reporters on board the Kanapaha. All these matters must be presumed to have been brought to the notice of the board, whose duty it was to manage the concerns of the association. The deductions fairly to be drawn from them are susceptible only of the construction that full discretion in the premises had been vested in the managing editor. The strongest possible confirmation of this arises from the fact that Lord, who under oath acknowledged when executing the alleged agreement of suretyship that he possessed the authority to do so, and who was at the time of the trial below in the service of the defendant, and able to be produced in court, was not called to the witness stand. by the employees of the association, the payment of all the expenses of the vessel, the payment of the rent, the charging of the amount thereof in the books of the association, the use of the vessel for the purposes of the association, the receipt of revenues derived from such use, and the other facts previously stated, when considered together,-cause it to be impossible in reason to assume that the relation of the Sun Association to the hiring was simply that of a security for Lord as a hirer of the yacht on his personal account. It is elementary that, generally speaking, the hirer in a simple contract of bailment is not responsible for the failure to return the thing hired, when it is has been lost or destroyed without his fault. Such is the universal principle. This rule was tersely stated by Mr. Justice Bradley in Clark v. United States, 95 U. S. 539, 24 L. ed. 518, where it was said (p. 542, L. ed. p. 519): "A bailee for hire is only responsible for ordinary diligence and liable for ordinary negligence in the care of the property bailed. This is not only the common law, but the general law on the subject. See Jones, Bailm. p. 88; Story, Bailm. §§ 398, 399; Domat, Lois Civiles, lib. 1, title 4, § 3, pars. 3, 4; 1 Bell, Com. 7th ed. pp. 481, 483." But it is equally true that where by a contract of bailment the hirer has, either expressly or by fair implication, assumed the absolute obligation to return, even although the thing hired has been lost or de stroyed without his fault, the contract embracing such liability is controlling, and must be enforced according to its terms. In Sturm v. Boker (1893) 150 U. S. 312, 37 L. ed. 1093, 14 Sup. Ct. Rep. 99, both the elementary principles above stated were clearly expressed by the court, through Mr. Justice Jackson. It was said (p. 330, L. ed. p. 1100, Sup. Ct. Rep. p. 105): "The complainant's common-law responsibility as bailee exempted him from liability for loss of the consigned goods arising from inevitable accident. A bailee may, however, enlarge his legal responsibility by contract, express or fairly implied, and render himself liable for the loss or destruction of the goods committed to his care-the bailment or compensation to be received therefor being a sufficient consideration for such an undertaking." *This statement of the binding effect of contracts upon those who enter into them The contract, then, being that of the Sun was, in substance, but a reiteration of the Association, made by its agent duly em- principle clearly announced in Dermott v. powered to that end, and inuring to its ben-Jones (1865) 2 Wall. 1, sub nom. Ingle v. efit, we are not concerned with the ques-Jones, 17 L. ed. 762, where it was said: tions of ratification discussed at bar, and "It is a well-settled rule of law that if a we are thus brought to consider the obligations which the contract imposed, and, before passing from the subject just considered, it is to be observed that the facts to which we have referred, if there be ambiguity in the writings, confirm the conclusion that the two writings embodied but one contract made by the agent of the Sun in Among the cases approvingly referred to its behalf and for its benefit. This is mani- in Dermott v. Jones were Bullock v. Domfest because the taking charge* of the ship' mitt, 6 T. R. 650, and Brecknock Nav. Co. party by his contract charge himself with an obligation possible to be performed, he must make it good, unless its performance is rendered impossible by the act of God, the law, or the other party. Unforeseen difficulties, however great, will not excuse him." *655 |