bank, by its proper officers, answered that the plaintiffs had never proved their ownership of the notes, except by their own affidavits, which were not evidence in their own behalf; that the bank, in common with other banks in that place, had adopted, and made public a regulation, that they would not pay half-notes, except under the decision of some competent tribunal. The bank demanded that the plaintiffs ought to give ample security against any other claim respecting the notes; and they contended that they had been in no default, and that, therefore, they ought not to be compelled to pay either interest or costs.

Upon the trial, the plaintiffs produced satisfactory evidence, other than their own, respecting the loss, and the Chancellor decreed that the bank must pay the notes, with interest from the time when the halves were presented, and the costs of the suit; the payment to be conditioned upon the giving of good security by the plaintiffs.

From this the bank appealed. They insisted that they had not been in default, in not paying before, and that so they were not liable for interest

or costs.

The Court of Appeals took the same view. The judge said-(Farmers' Bank vs. Reynolds, 4 Rand., 186)—"The appellants were in no fault whatever, in not paying the notes, in this case. Banks are under no obligation to seek out their creditors; they are bound to pay only on a demand for payment, made at their offices of discount and deposit. And in the case of the presentation of a moiety of a note, the demand for payment at the bank must be accompanied with such evidence of the ownership of the note, as ought to satisfy the bank. The demand, in the case before us, was unaccompanied by any such evidence; that demand, therefore, imposed no obligation to pay the principal, and, of course, could give no claim to interest. Sufficient evidence of ownership has been exhibited since the institution of this suit, but no demand of payment has been made at the bank since the evidence was taken. The appellants, therefore, are not yet in default, and consequently ought not to pay interest."

The decree of the Chancellor was, therefore, affirmed as to the principal, but reversed as to the interest and costs.

A gentleman who had bought a reversionary interest in certain English bank stock at auction, and paid the deposit required by the auctioneers on the sale, was finally obliged to lose his bargain, because the seller could not show a clear title to the stock. Various difficulties produced a delay of four years, and all that time his deposit of over $1,000 was lying in the hands of the auctioneers. They could not invest it, for it was not their money, and to use it would make them personally liable. And neither the seller nor the purchaser was entitled to receive it, pending the questions on the title. Finally, the sale was abandoned. The purchaser sued the auctioneers for the deposit and four years' interest. He recovered from them the principal, but no interest. Of course, according to the rules above stated, the auctioneers were not liable for interest for a delay which had not been their fault. He then sued the seller, who had employed the auctioneer, to recover from him the four years' interest. The court held that he was entitled to recover it. (Farquhar vs. Farley, 7 Taunt., 592.)

It thus appears that in general no debtor is liable for interest until he is in default. It becomes, therefore, a matter of prudence for a business man to mark the circumstances which put him in default to others, or others in default to him.

In the case of written promises to pay it is not difficult to tell, from an inspection of the paper, what circumstance will render the debt payable, and thus put the debtor in default. In respect to accounts generally, a demand by the creditor or his agent is necessary; and if it is an account bearing credit, it must be a demand after the expiration of the credit. This demand need not be a formal demand in words-presentation for payment is sufficient. Where mutual accounts subsist, and the one party makes out and sends to the other a statement of the account, he who receives it is bound to make objection to it, if he has any, within a reasonable time. If he makes no objections, he is justly considered as having admitted its correctness, and will not be afterwards allowed to question it. Where the balance due is thus ascertained, by the concurrence or acquiescence of the parties, the account is said to be liquidated. Such a liquidation amounts to a demand, and if no objections are made to an account thus stated, it bears interest from the time of its statement.

When an agent collects money, it is his duty to pay it over to his principal immediately. If he neglects to do this, or conceals the fact that he has received it, he is in default from the first.

If a trustee or fiduciary agent uses moneys intrusted to him for purposes foreign to the trust; if he applies them to his own debts, or invests them in his own business, or even mixes them with his own funds, and lets them lie idle and unproductive, or if treating them separately he manages them negligently, and loses interest, or if irreproachable in all other respects, he neglects to account, or wrongfully withholds settlement, he is chargeable with interest.

In all cases where the act of the creditor is an essential preliminary to fixing the liability of the debtor, it will very likely be of no avail that the creditor performs the act unless he preserves evidence of having performed it. To make a demand for the purpose of setting interest to run can only prove useful in that way by the preservation of proof of such demand.

Cases very frequently occur where a person has taken every precaution to fix and preserve his right, yet from having no evidence of some of the precautions he has lost their benefit. This happened in the case of Barnard vs. Bartholomew, (22 Pickering, 291.) The defendant, Bartholomew, was sued on an account of charges for services. It was an old account, and the plaintiff claimed interest. He was unable, however, to produce any evidence of any demands, except such as was contained in a letter of the defendant to the plaintiff, written nearly five years after the last item in the account, and a year before suit was brought. In this letter he said "I shall call according to your request and settle with you." The court held that this was evidence of a demand at that date, and interest was allowable, therefore, from that time.

Undoubtedly, in this case, the creditor had demanded his account more than once before the five years had elapsed, but he could not prove it. A very simple way of preserving the evidence of all such transactions is to act by a messenger, and to cause him to make a memoranda of what he does, which will serve to refresh his memory if the circumstances should ever be called in question.

Although it is true that the debtor is not in default unless the creditor has done all that devolves upon him to do, yet it does not follow that the debtor is in default whenever the creditor has done all. Any circumstance which completely exculpates the debtor from any responsibility respecting

the delay, will completely exonerate him from payment of interest for that delay. Thus the intervention of war between the United States and a foreign country, since it would suspend all commercial relations with that country, would relieve our merchants from any liability for interest upon debts due to the merchants of that country, the payment of which might be postponed by the war.

It not unfrequently happens that the delay is the direct consequence of the creditor's act. In some cases of complicated controversies, the creditor has procured the injunction of a court forbidding the holder of moneys in dispute to pay them to any one, or make any disposition of them, until the controversy respecting them should be determined by the court. It has been held in such cases that the person thus enjoined was not liable for interest. It has sometimes happened that when a debtor has been ready to settle, his creditor has been in concealment and not to be found. In such a case, if the debtor takes the precaution to preserve evidence of his readiness to pay, and his inability to discover his creditor's residence, he may successfully resist any claim to interest that may afterward be set up.

It is necessary to take the same precaution respecting the preservation of evidence in cases where the debtor makes a tender of his debt, which the creditor refuses to receive. By such a refusal the creditor forfeits not his debt, but only interest from that time and all right to recover the costs of an action for the debt. The debtor's tender becomes a defense, but a defense which is only available in case he has evidence of it.

JOURNAL OF MERCANTILE LAW.

CHARTER PARTY-NAVIGATION OF WESTERN RIVERS.

United States District Court, for the District of Missouri. In admiralty, September adjourned term, 1856. Hill & Cown, and others, libelants, vs. Golden Gate. Opinion of Judge Wells.

The steamer Golden Gate was owned in Indiana, and enrolled at Louisville, Kentucky.

The owners chartered her to certain persons who resided at St. Louis, Missouri. By the terms of the charter party the charterers were to have the boat for four months, with a privilege to renew the charter party, upon a specified notice, for four months more. The charterers were to pay the owners $800 per month for the hire of the boat, and were to have the entire and exclusive control and management of her for the time specified-were to receive her earnings, and keep her clear of all liens and claims. The charterers appointed the master, ran the boat, and during the charter party contracted debts in Missouri for materials and supplies, a part of which were furnished by the libelants, and are the same for which the libels in this case are filed. Other libelants furnished materials and supplies before the boat was chartered.

The principal question for the Court now to examine and decide is, have the libelants in this case a lien upon the boat by the general maritime law of the United States for the materials and supplies thus furnished?

If materials and supplies be furnished to a vessel in a port of the State to which she belongs, the material men have no lien by the general maritime law— the presumption being that the supplies are furnished on the credit of the owners, and not on that of the boat. On the contrary, if the materials and supplies be furnished to a foreign vessel, that is, a vessel belonging to a foreign country, or 29

VOL. XXXVI.-NO. IV.

to another State, then a lien is given on the vessel by the general maritime law— the presumption being that the material men looked to the vessel as well as to the owners for security. There may be a lien on a vessel for materials and supplies furnished in a port of the State to which she belongs, but in such case it is given by the local law of the State. (1 Conklin's Ad., 56, and pages following.) In regard to these principles there is no controversy.

The question whether the Golden Gate is subject to a lien by the general maritime law for supplies furnished in St. Louis, after the charter party was entered into, will depend for an answer on her being then in a foreign or domestic port. Does her being a foreign or domestic vessel depend on the residence of her owners, or on the port of her enrollment?

As a general rule-which general rule, however, is subject to some modifications and exceptions-it depends on the residence of her owners-or those who are, for the time, to be deemed and treated as her owners.

If it depends on the residence of her owners, then the next question will be, who are to be deemed and treated as her owners in this case? Are they the general owners residing in the State of Indiana, or the charterers residing in St. Louis, Mo.

That the Supreme and Circuit Courts of the United States look to the residence of the owners and not to the place of enrollment of a vessel to determine her character, will be apparent by examining the decided cases. The residence of the owners is proved and stated, and nothing is said about the enrollment. See the statement of the case and opinion in “The General Smith"-4 Whea. R., 438. The brig Nestor, 1 Sumner's Rep., 75, where Judge Story says: " Prima facie, the supplies of material men to a foreign ship, that is, to a ship belonging or represented to belong to owners residing in another State or country, are to be deemed to be furnished on the credit of the ship and the owners until the contrary is proved." Statement of the case and opinion in "The bark Chusan," 2 Story's Rep's., 456.

If the character of the vessel, (foreign or domestic,) depended on the enrollment and not on the residence of the owners, the statements and proof of the residence of owners, and the language of Judge Story in the case of the brig Nestor, were idle and unimportant, and as nothing was said or proved about the enrollment, there could be nothing by which to determine the character of the vessel.

It is important to observe that the character of the vessel is only referred to for the purpose of ascertaining to whom and to what the credit is given; and in no other respect, so far as regards this case, is it important. If the owners reside in a foreign country or in another State, the material man is presumed to give credit to the boat and also to the owners-because he is presumed not to rely alone on the owners who live so remote and who are beyond the jurisdiction of the courts of his State. If the owners reside in the same State with the material man, the latter can easily resort to them for payment and readily enforce it in the courts; therefore, he may well be supposed to give credit to the owners alone. It is apparent, therefore, that the place of enrollment has nothing to do with the credit that is given; and has, therefore, nothing to do with the question of lien.

If the material men were ignorant of the place of residence of the owners, they might presume, and I think the presumption would be reasonable, that the owners resided at or near the port where the vessel was enrolled, but in this case there is no room for presumption, as it is admitted that the libelants knew when the supplies were furnished, that the general owners resided in Indiana, and the charterers in St. Louis, and that the boat was enrolled at Louisville.

I am aware of the case of Free vs. The Indiana, (Crabbe, 479,) and that it. decides that a vessel is to be deemed to belong to the port where she is enrolled. It is founded solely on the third section of the act of 31st December, 1792, entitled An act concerning the registering and recording of ships or vessels," (1 Lit. & B. laws U. S., 288.) That section provides "That every ship or vessel hereafter to be registered, (except as hereinafter provided,) shall be registered by the Collector of the District in which shall be comprehended the port to which

such ship or vessel shall belong at the time of her registration, which port shall be deemed to be that at or nearest to which the owner, if there be but one, or if more than one, the husband or acting and managing owner of such ship or vessel usually resides."

The substance of the section is, that the vessel is to be registered at the port to which she belongs; and for the purpose of registry, the port to which she belongs shall be deemed to be that at which the owner resides, or the port nearest to which he resides. The section is only directing at what port the vessel is to be registered, and has no other effect. It frequently happens, as it happens in this case, that the owners reside in one State, and the port nearest to them is in another State -and this is especially the case on the Ohio and Mississippi rivers, which divide States.

The above act relates to registering vessels-those engaged in foreign trade. But a subsequent act, (Feb. 18, 1793-1 Lit. and B., 305, 2,) providing for the enrollment of vessels, (those engaged in the coasting trade,) expressly provides that the place of abode of the owners shall be stated in the enrollment.

According to the late and well-considered case of Dudley and others vs. The Steamboat Superior, (American Law Register for August, 1855,) which reviews the above case in Crabbe, the place of enrollment is only prima facie evidence of the port to which the vessel belongs. See also Sharp vs. United Ins. Co., 14 Johns. R., 201; and Leonard vs. Huntington, 15 John. R., 302.

It will be observed that when the port or place to which a vessel belongs is spoken of, it always means the port or place where the owners reside to whom the vessel belongs.

I have before remarked in this opinion, that the rule that a foreign vessel was subject to a lien for supplies, and that a domestic vessel was not thus subject, under the general maritime law, was not without exceptions and modifications; but it will be seen that those exceptions and modifications all show that the lien depends on the residence, or supposed residence of the owners, and not on the place of enrollment,

Thus, if the owners of a domestic vessel held out their vessel as a foreign vessel—that is, as belonging to persons residing in a foreign country-they are precluded by their own act from denying her foreign character, when libeled by material men; and there will be a lien for the supplies furnished enforced in the admiralty. The St. Jago de Cuba, 9 Whea. R., 416, 17.

Again. If an exclusive credit be given to the master, there is no lien, although she be a foreign vessel. The brig Nestor. 1 Sumner's Rep., 75.

Again. If the contract be made with the owners personally and not with the master, there is no lien-the presumption being that the credit was given to the owners personally, and not on the credit of the vessel. The St. Jago de Cuba, supra.

The act of Congress of the 3d of March, 1851, (9 Lit. & B., 635,) entitled, An act to limit the liability of shipowners and for other purposes," section 5 provides, "That the charterer or charterers of any ship or vessel, in case he or they shall man, victual, and navigate such vessel at his or their own expense, or by his or their own procurement, shall be deemed the owner or owners of such vessel, within the meaning of this act; and such ship or vessel, when so chartered, shall be liable in the same manner as if navigated by the owner or owners thereof."

The above section applies, I presume, only to certain losses and injuries specified in the act, and morover is declared not to apply to inland or river navigation; the last, as I suppose, was because the general maritime law of the United States was not at that time (March, 1851,) thought to apply to the inland navigation, the decision of the Supreme Court of the United States declaring it to extend to inland navigation, not having, at that time, been made. But it applies in many, cases, and to all navigation except the inland navigation; and shows that the place of enrollment can have nothing to do with it. And so far as the act provides, it shows the opinion of Congress that the charterers are to be, and ought to be, considered the owners.