MINERS' CO-OPERATIVE ASS'N v. THE MONARCH

MINERS’ CO-OPERATIVE ASS’N v. THE MONARCH. (Third Division. Fairbanks. April 20, 1905.) No. 200. 1. Partnership — Creation. When two or more persons join in a mercantile venture upon an agreement to share the profits and losses thereof upon a fixed basis, they are partners. [Ed. Note. — For cases in point, see vol. 38, Cent. Dig. Partnership, §§ 13, 27.] 2. Shipping — Loss ok Injuky op Goods — Freight Money — Liens op Shipper and Vessel. A maritime contract for the transportation of goods on board a vessel operates reciprocally as a tacit pledge or mortgage to the shipper for the conveyance and delivery of the goods according to the contract, and of the goods themselves to the ship to secure payment of the freight earned. The lien to the shipper arises alike whether the contract of affreightment be by charter party, by bill of lading, or by parol. [Ed. Note. — For cases in point, see vol. 44, Cent. Dig. Shipping, §§ 488, 516.] 3. Same — Carriage op Goods — Refusal of Vessel — Damages. A maritime lien arises in favor of the shipper for damages upon the refusal of the vessel to fulfill its contract of affreightment. The measure of damages for the refusal of the vessel to meet its contract is the difference necessarily paid by the shipper to procure an equal service in advance of the contract price, and such other damage as unavoidably flows from the breach of the carrier’s contract. Libelant is a voluntary association of about 30 miners on Fairbanks, Cleary, and Pedro creeks, organized in the spring of 1904 for the purpose of procuring a season’s supply of. mining goods and groceries from Seattle for each of the members. R. N. McLeod was recognized as the head of its executive committee, and R. A. Chisholm was selected and acted as its purchasing agent and general manager. Each person who desired to join in the enterprise signed an agreement promising to assist in carrying out its purpose, but a few abandoned the project before paying in their money and filing their individual orders for supplies. Those who did pay in money and apply for goods remained and still are members. McLeod and Chisholm, on behalf of libelant, contracted with the master and managing agent and owners of the steamer Monarch to transport the proposed shipment of goods from St. Michael to Chena upon the arrival of the goods at St. Michael from Seattle. Chisholm left Chena on May 30th on the Monarch, and went to Seattle via Dawson to purchase the libelant’s supplies. He left Seattle after August 1st, and upon reaching St. Michael with supplies learned that neither the Monarch nor Oil City had come there to meet his shipment. After some days’ delay he secured their shipment from St. Michael to Chena on board another steamer, and was compelled to pay $80 per ton. Libelant paid the freight, and attached the Monarch to recover the difference between the contract price of $55 and the price paid, $80, on the shipment, which the proofs show consisted of 121 tons belonging to libelant. Claypool, Stevens & Cowles and J. C. Kellum, for libelant. Heilig & Tozier, for claimant. [MAJORITY — WICKERSHAM, District Judge.] WICKERSHAM, District Judge. Upon the close of libel-ant’s testimony claimant moved to dismiss the libel because the association of parties called the “Miners’ Co-operative Association” did not constitute a partnership in law, in which capacity it brought this suit and attached the vessel. The court reserved the question, and required claimant to introduce its testimony. The proofs disclose that the Miners’ Co-operative Association was a voluntary association of about 30 miners from Fairbanks, Cleary, and Pedro creeks, in a joint effort to secure a season’s supply of mining goods at wholesale rates from Seattle. Each member signed an agreement binding himself to aid in the enterprise, voted to elect officers, including a purchasing agent and general manager, filed an order specifying the goods which he desired, and paid the amount of the order and his proportionate share of the expenses to the officers and agents of the association. It was agreed that all the goods should be purchased wholesale by the association’s purchasing agent, that all expenses of the agent, transportation, freight, and losses should be paid by the members in proportion that the value of their respective orders bore to the sum total thereof. All expenses and losses were so paid. To pay the unexpected freight charges incurred by the failure of the claimant to meet the goods at St. Michael, a portion of them were sold after their arrival at Chena, and from the proceeds and profits of such sales the increased freight charges were paid, and each member was either assessed accordingly, or given a less quantity of goods. In addition to the profit on these sales, each member received a profit from the joint enterprise, consisting of the difference between the local selling price and the outside cost price, with freight and expenses added. Where two or more persons join in a mercantile venture upon an agreement to share the profits and losses thereof upon a fixed basis, they are partners. The members of the Miners’ Co-operative Association were thus united; they also represented themselves as partners to the public, and to the agents and owners of the Monarch, who treated with them as such. It was upon this aggregate basis that both parties acted in all correspondence leading up to the contract sued upon, and neither of them ought now to be heard to deny the fact. A maritime contract for the transportation of goods on board a vessel operates reciprocally as a tacit pledge or mortgage to the shipper for the conveyance and delivery of the goods according to the contract, and of the goods themselves to the ship to secure payment of the freight earned. The lien to the shipper arises alike whether the contract of affreightment be by charter party, by bill of lading, or by parol. The lien likewise arises in favor of the shipper for damages upon the refusal of the vessel to fulfill its contract. The measure of damages for the refusal of the vessel to meet its contract is the difference necessarily' paid by the shipper to procure an equal service in advance of the contract price, and such other damage as unavoidably flows from the breach of the carrier’s contract. The Flash, Fed. Cas. Nos. 4,857, 4,858. It is the judgment of the court that the evidence clearly establishes a contract by the vessel to carry libelant’s freight from St. Michael to Chena for $55 per ton, that it refused to do so, and that libelant was forced to pay $80 per ton for 121 tons of freight, for which breach it may have judgment against the vessel in the sum of $3,025 and costs.