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Fraudulent Conveyance.

strong; and few cases are to be found in which | courts of New York, into its jurisprudence, as a such conveyance has been sustained. But those sound construction of the statutes. Ibid. 501. decisions seem to have been made on the prin- 64. The statute of frauds in Maryland requires ciple that such subsequent sale furnishes a strong written evidence of the contract, or a court canpresumption of a fraudulent intent, which threw not decree performance. The words of the sta on the person claiming under the settlement the tute are, "unless the agreement upon which burthen of proving it from the settlement itself, such action shall be brought, or some memoor from extrinsic circumstances, to be made in randum or note thereof, shall be in writing, good faith, rather than as furnishing conclusive signed by the party to be charged therewith, or evidence, not to be repelled by any circum- by some other person by him thereto lawfully stances whatever. Ibid. authorized." Barry v. Coombe, 1 Peters, 640.

60. The statute of frauds in New York, is a transcript on this subject, of the statute of 29 Charles II., ch. 3. It declares that no action shall be brought to charge a defendant on a special promise for the debt, default, or miscarriage of another, unless the agreement, or some memorandum, or note thereof, be in the writing and signed by the party, or by some one by him authorized. The words "collateral" or "original" promise, do not occur in the statute; and have been introduced by courts to explain its objects, and expound its true interpretation. D'Wolf v. Rabaud et al., 1 Peters, 499.

61. Whether, by the true intent of the statute of frauds, it was to extend to cases where the collateral promise (so called) was a part of the original agreement, and founded on the same consideration, moving at the same time, between the parties; or whether it was confined to cases where there was already a subsisting debt or demand, and the promise was merely founded upon a subsequent and distinct understanding, might, if the point were entirely new, deserve very grave deliberation. But it has been closed within very narrow limits by the course of the authorities, and seems scarcely open for general examination, at least in those states where the English authorities have been fully recognised and adopted in practice. Ibid.

62. If A agree to advance B a sum of money, for which B is to be auswerable, but at the same time it is expressly upon the understanding that C will do some act for the security of A, and enter into an agreement with A for that purpose, it would scarcely seem a case of mere collateral undertaking, but rather a trilateral contract. The contract of B to repay the money, is not coincident with, nor the same contract with C to do the act. Each is an original promise; though the one may be deemed subsidiary or secondary to the other. The original consideration flows from A, not solely upon the promise of either B or C, but upon the promise of both, diverso intuita, and each becomes liable to A, not upon a joint, but a several original undertaking. Each is a direct original promise, founded upon the same consideration. Ibid. 500.

63. The case of Wain v. Warlters, 5 East, 10, was the first case which settled the point, that it was necessary, in order to escape from the statute of frauds, that the agreement should contain the consideration for the promise as well as the promise itself. If it contain it, it has since been determined that it is wholly immaterial whether the consideration be stated in express terms, or by necessary implication. That case has been adopted, to a limited extent, by the

65. A note or memorandum in writing of the agreement between parties, is sufficient under the statute of frauds of Maryland; and in order to obtain specific performance in equity, the note in writing must be sufficient to sustain an action at law. The form is not regarded, or the place of signature, provided it be in the handwriting of the party, or his agent, and furnish evidence of a complete and practicable agreement. A court of equity will supply no more than the ordinary incidents to such an agreement, such as the ingredients of a complete transfer, usual covenants, &c. Ibid. 650.

66. An examination of the cases will show that courts of equity are not particular with regard to the direct and immediate purpose for which the written evidence of the contract was created. It is written evidence which the sta tute requires; and a note, and even in one case a letter, the object of which was to annul the contract, on a ground really not unreasonable, was held to bring a case within the provisions of the statute. Ibid. 651.

67. Where, in an account stated by the parties, in the handwriting of the defendant, his name being written by him at the head of the account, a balance was acknowledged to be due by him to the complainant in the bill for a specific performance, there was the following cre dit: "By my purchase of your half, E. B. wharf and premises this day agreed upon between us, $7578 63;" it was held to be a sufficient memorandum in writing, under the statute of frauds of Maryland, upon which the court could decree a specific performance of the sale of the estate referred to; other matters appearing in evidence, and by the admissions of the defendant in his answer, to show the particular property desig nated by "your half E. B. wharf and premises." Ibid. 661.

68. In cases not absolutely closed by authority, the supreme court has always expressed a strong inclination not to extend the operation of the statute of frauds so as to embrace original and distinct promises, made by different persons at the same time upon the same general consideration. Townley v. Sumrall, 2 Peters, 182.

69. If A says to B, pay so much money to C and I will repay it to you, it is an original independent promise; and if the money is paid upon the faith of it, it has been always deemed an obligatory contract, even though it be by parol; because there is an original consideration moving between the immediate parties to the contract. Ibid.

70. A bill was filed in the circuit court of the

United States for the district of Kentucky, claim

Fraudulent Conveyance.

ing certain lands in Kentucky, under an agreement by parol, by Carrington with Williams, for an exchange of lands, and in which exchange C., the husband and devisor of the claimant, agreed to give certain lands then owned by him in Virginia to W., and of which W. took possession, and part of which he sold, and for which W. was to convey certain military lands in Kentucky to C. The bill prayed that the heir of W. should be decreed to convey the lands; and that certain persons who, knowing of the agreement between C. and W., had purchased from the heir of W., and who had obtained from the heir of W. the legal title to a part of the same lands, should be decreed to convey the same to the complainant. The court held that although the statute of frauds avoids parol contracts for lands, yet the complete execution of the contract in this case by Carrington, by conveying to Williams the land he agreed to give to Williams in exchange, prevents the operation of the statute in this case. This was undoubtedly supposed in Virginia to be the sound construction of the statute, when this contract was made; and as the lands then lay in Virginia, Kentucky being then a part of that state, this construction forms the law of the contract. Caldwell v. Carrington, 9 Peters, 86.

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money actually received for those which have been sold, and interest thereon, from the time that the demand was made, viz., from the insti tution of the suit. Ibid.

73. R. B. L., in 1809, then residing in Virginia, for a valuable consideration, made a conveyance in trust for the benefit of his wife, of certain personal property and slaves, which deed was duly recorded according to the provisions of the act of the legislature of Virginia. The property thus conveyed, remained in the possession of the husband and wife while they resided in Virginia; and in 1814, R. B. L. removed to the District of Columbia with his wife and family, and brought with him the slaves and property, conveyed in trust for his wife. In 1817, R. B. L. borrowed a sum of money of the Bank of the United States, on his promissory note, endorsed by one of the trustees named in the deed of trust of 1809. At the time the loan was made, R. B. L. executed a deed of trust of eleven slaves, &c., and among them were the slaves and the household furniture conveyed by the deed of 1809, to secure the bank for the amount of the loan. In 1827 R. B. L. died, entirely insolvent. During his residence in Washington, being in reduced circumstances, he sold some of the slaves conveyed by the deed of 1809, for 71. A father, in 1783, made a voluntary deed the support of his family, without objection by of gift of certain slaves to his only son, and his wife, or her trustees. In 1834, the debt to possession followed and accompanied the deed; the bank being unpaid, a bill was filed against in 1785 the father died, having appointed his Mrs. E. L., the wife of R. B. L., and the trustees, wife and another, executrix and executor of his in order to compel the surrender of the remainlast will. Subsequently, the son and donee ing slaves and the household furniture to the qualified as administrator de bonis non, upon trustee for the bank, for the sale of the same, to his father's estate; and in that capacity, a judg-satisfy the debt due to the bank. Held, that the ment at law, quando assets, was rendered against him for a considerable sum of money, the jury having found for the administrator on the plea of fully administered. Many years after the date of this judgment, the plaintiffs filed a bill in chancery against the administrator and others, assailing the deed of 1783, as fraudulent as to creditors, and claiming to have their debt discharged out of the property conveyed by that deed. Held, that the slaves conveyed by such voluntary deed, are not assets in the hands of the representative of the donor's estate, although such re presentative was the donee himself. Backhouse, Adm'r, v. Jett's Adm'rs et al., 1 Brockenb. C. C. R. 500.

72. Although such voluntary deed is void as to creditors, whether the transaction involves moral turpitude or not, it vests in the donee a title that is good against all the world save creditors, and defeasible by them only. Though creditors have a claim upon the slaves conveyed by such deed, for the payment of their debts, they have no title to the slaves themselves. The donee does not seem to be a mere trustee for creditors, and is not liable for the hires and profits of the slaves and their issue, or for interest on the sales of such as have been sold from the time that he received them, or that the slaves were sold; but he is responsible only for the slaves themselves, and their issue that were in being when the demand was made by creditors, and their profits from that date; and for the

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deed of 1809, vesting the property in Mrs. L.'s trustees, was effectual, according to the laws of Virginia, to protect the title thereto against the subsequent creditors, or purchasers, from R. B. Lee; and that the removal of R. B. L. and his wife into the District of Columbia, with the property conveyed to the trustees for the use of Mrs. L., did not affect or impair the validity of the deed of trust. Bank of the United States v. Lee et al., 13 Peters, 101.

74. A liberal construction should be given to the clause of the Virginia statute for the suppression of fraud. This is the well-established rule in the construction of the statute of Elizabeth, which the first section of the Virginia statute substantially adopts. Ibid.

75. If A sells or conveys his lands or slaves to B, and then produces to another his previous paper title, and obtains credit on the goods or lands, by pledging them for money loaned, he is guilty of fraud; and if the true owner stands by and does not make his title known, he will be bound to make good the contract, on the principle, that he who holds his peace when he ought to have spoken, shall not be heard now that he should be silent. He is deemed, in equity, a party to the fraud. Ibid.

76. A conveyance had been made of certain lands on the 7th of May, 1829. Before it could be properly recorded, the defendant attached these lands, to secure a note signed by the grantors on the 8th of May, 1829, the day following

Fraudulent Conveyance.

the execution of the conveyance, and payable in thirty days, but which was antedated as of the 3d of April preceding, being the time when the goods which formed the consideration of it, had been sold on a credit of six months. Held, that the antedating the note, and creating a present debt on which the attachment of the lands was laid, was not a fraud upon the grantees, and did not disturb their rights under the conveyance, whatever might be the validity of the proceeding as between the parties. Briggs v. French, 1 Sumner's C. C. R. 643.

77. A person upon the eve of a decree, about to be rendered against him, for a large sum of money, which it was admitted would go far to his ruin, made a conveyance of his whole property to his brother-in-law, for an asserted consideration, equal to its full value. The brotherin-law was a thrifty, industrious man, but not at the time known to have property sufficient to pay the purchase-money, and as soon as the purchase was made, suffered the estate to remain in the possession of the former tenant. This conveyance was held fraudulent as against creditors. Venable v. The Bank of the United States, 2 Peters, 107.

78. It is an admitted principle that a court of law has concurrent jurisdiction with a court of chancery in cases of fraud; but where the matters alleged to be fraudulent are investigated in a court of law, it is the province of a jury to find the facts and determine their character. Gregg v. The Lessee of Sayre and Wife, 8 Peters, 244.

79. Fraud, it is said, will never be presumed, though it may be proved by circumstances. Now, where an act does not necessarily import fraud; where it has more likely been done through a good than a bad motive, fraud should never be presumed. Ibid.

80. Where there is clearly a bona fide grantor, the grant is not one of those conveyances within the statutes against fraudulent conveyances. Clarke et al. v. White, 12 Peters, 178.

81. W. purchased a lot of ground in the city of Washington, early in 1829, for one thousand five hundred and thirty-two dollars, on a credit of one, two, and three years, and paid the notes at maturity. He took possession immediately after the purchase, and commenced improving by erecting buildings on it. On the 14th of January, 1832, Smith, who had sold the land at the request of W., conveyed it to a trustee, for the benefit of the infant children of W. The improvements before the deed amounted in value to three thousand dollars; and after the deed, to twelve hundred dollars, or fifteen hundred dollars. He failed in December, 1833, and the property was then worth about six thousand dollars. The deed of conveyance by Smith was not recorded until within one day of the expiration of the time prescribed for recording such deeds by the statute of Maryland. The parties who made a composition of a large debt due to them by W., in which composition they sustained a loss of thirty per cent., knew at the time of the composition, of the conveyance of this property to the infant children of W., and of his large improvements on the same, and made the compo

sition with this knowledge. The supreme court refused to declare the agreement of composition void, because of this transaction. Ibid.

82. A voluntary conveyance, or a conveyance in fraud of the law, is not a nullity, but binds parties and privies. Randall v. Phillips, 3 Mason's C. C. R. 378.

83. A conveyance is fraudulent, under the statute 13 Eliz., ch. 5, where the same is voluntarily made by the owner of the land, if land be conveyed, the grantor being indebted at the time it was executed; the conveyance must have been made with intent to delay, hinder, or defraud creditors. Gilmore v. The North American Land Co., Peters' C. C. R. 460.

84. A fraudulent intent will, in general, be presumed from the fact that the party conveying was indebted at the time the conveyance was executed. Ibid.

85. In an action for damages for a breach, no evidence of fraud is admissible; and if, from evidence given in the course of the cause, the jury should be disposed to infer fraud, they should not permit it to influence their verdict. Willings et al. v. Consequa, Peters' C. C. R. 302.

86. In a contract of sale without warranty, if there be no fraud on the part of the seller, he is not answerable for the quality of the articles. Ibid.

87. Mere inadequacy of price may be so great as to be evidence of fraud, proper to be submitted to a jury, but is not itself a fraud, on which a court of law will pronounce a deed to be abso lutely void. Wright and Cooke v. Stannard, 2 Brockenb. C. C. R. 311.

88. Although a court of equity would consider the deed before described, as being held in trust for the wife, only to the value of the dower she has released, and for the creditor as to the residue; yet, in a court of law, the deed cannot be sustained in part and avoided in part, but will be considered entirely good. Ibid.

89. W. and C. obtained a judgment at law against K., in December, 1824, and sued out an elegit in November, 1826; meanwhile, that is, in March, 1826, M., R., and G., other creditors of K., obtained a decree in a court of chancery, directing a sale of land which had been conveyed by K. to trustees, for the benefit of his wife, (made bona fide, for valuable though inadequate consideration,) and that out of the proceeds of the sale, the trustees for the wife should first be paid the amount of the consideration which had actually passed from the wife, and then the residue to be applied to the extinguishment of the debts to said M., R., and G. Held, that the judgment creditors, W. and C., (who had their elegit executed whilst the sale was being made under the decree,) cannot recover the land in ejectment against the purchaser under the decree. Ibid.

90. It seems that when a father executes a voluntary bond to his son-in-law, the obligee will not be held responsible to the prior creditors of the father, for the money actually received in payment, in whole or in part of the bond; such voluntary bond not being within the statute of frauds. Hopkirk v. Randolph, 2 B.ockenb. C. C. R. 132.

Rules and Principles of Law relative to Freight.

91. If several voluntary conveyances are made to different individuals, which are fraudulent as to creditors, the donees will be held liable only for the proportions which their respective gifts bear to the debts of the donor; but the whole of every such gift will be subjected to the payment of the debts of the donor. Ibid.

perty is actually in the ship's owner; of which, by the general mercantile law of nations, he can not be deprived, until the freight due for the carriage of it is paid. The Frances, Irvin's Claim, 8 Cranch, 418; 3 Cond. Rep. 189.

5. A neutral ship was chartered for a voyage from London to St. Michaels, and thence to St. 92. Where A and B, partners, made certain Petersburg, or any port in the Baltic, and back conveyances to a certain creditor, of the bulk of to London, at the freight of one thousand guitheir property, to the amount of thirty-six thou-neas: on her passage to St. Michaels she was sand dollars, being at the same time indebted to captured, and brought into a port of the United an equal amount, and subsequently became States for adjudication. A part of the cargo was bankrupts, it was held, that such a conveyance condemned, and a part was restored. The was "in contemplation of bankruptcy," and in freight was held to be chargeable upon the fraudulent preference of creditors. Peckham v. whole cargo; as well upon that part restored, as Burrows, 3 Story's C. C. R. 544. that condemned. The Antonia Johanna, 1 Wheat.

93. To constitute a conveyance "in contem-159; 3 Cond. Rep. 525. plation of bankruptcy," it is not necessary that the professed creditor should know of the debtor's insolvency, or should co-operate with him to obtain a priority of payment. Ibid.

FREIGHT.

6. Where a vessel is chartered, and meets another vessel in distress, in the course of the voy age, and one of the charterers is on board, and consents that a part of the crew may go on board the distressed vessel, to assist in saving her; this does not change the situation of the parties under the charterparty, but the owner of the vessel still continues to risk the freight; and the assent of the charterer can only be construed to charge him with hazards to be encountered by the cargo, and not to vary the contract respect

1. Rules and principles of law relative to freight. Page 793 ing the freight. Mason v. The Blaireau, 2

2. Where freight is lost, or forfeited

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1. Rules and Principles of Law relative to Freight. 1. A bona fide purchaser in a foreign port, of goods captured on the high seas in violation of our neutral rights, will be reimbursed in our courts for the freight which he may have paid upon the captured goods; and the innocent neutral carrier of such goods, the same having been transhipped in a foreign port, is entitled to freight out of the goods. The Fanny, 9 Wheat. 658; 5 Cond. Rep. 722.

2. Where, by the terms of the charterparty, a party covenants to load the whole or a part of the ship, at a stipulated price, and fails so to do, and the vessel sails on the voyage empty, the party thus covenanting is bound to pay the whole freight which would have been earned, if he had complied with his covenant. Kleine v. Catara, 2 Gallis. C. C. R. 61.

3. Freight is a technical expression. It does not always imply that it is the nautum merces, or fare for the transportation of goods. It is applied to all rewards, hire or compensation paid for the use of ships; it does not pass to the charterer, although the ship is let and hired to him, and although the freight reserved be a gross sum. The owner, therefore, has a lien upon the goods carried in the ship for such freight as he is entitled to claim, independent of any contract between the shipper and the charterer. Palmer et al. v. Gracie et al., 4 Wash. C.

C. R. 110.

4. Freight upon enemies' goods, seized in the vessel of a friend, is always decreed to the owner of a vessel. The possession of the proVOL. I.-67

Cranch, 240; 1 Cond. Rep. 397.

7. After an abandonment of a vessel is accepted by the underwriters, they become owners for the voyage, and are liable for seamen's wages from the time they become owners. They are entitled to the freight earned from that period. Hammond v. The Essex Fire and Marine Ins. Co., 4 Mason's C. C. R. 196.

8. Where the vessel and freight are separately insured, after an abandonment made to each set of underwriters, the underwriters on the freight are entitled to the freight earned before that time, and the underwriters on the vessel to that earned after. Ibid.

9. Where the supra-cargo of a vessel which had been captured, the voyage broken up, and the cargo abandoned to the underwriters, had invested the proceeds of the outward shipment in another cargo, upon the sales of which a freight has been made; the underwriters are entitled to the profit. Simonds v. Union Ins. Co., 1 Wash. C. C. R. 443.

10. When the outward voyage of a vessel is broken up, and the vessel insured earns freight on her return voyage; the underwriters upon her, on her outward voyage, have no claim to the freight earned after the voyage insured has been broken up. Ibid.

11. The master of a ship has a lien on the freight for all advances made on board for the ship's use. Query, If not also on the ship. Ship Packet, 3 Mason's C. C. R. 255.

12. Where freight is pledged in a bottomry bond, it means the freight for the whole voyage, and not the freight of that part of the voyage unperformed at the time of giving the bottomry bond. The Schooner Zephyr, 3 Mason's C. C. R. 341.

13. The contributory value of freight to a

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Rules and Principles of Law relative to Freight.

general average, is ascertained by a deduction | ported to their destined port, before freight is of one-third of the gross freight. Humphrey v. payable. Howland v. The Lavinia, 1 Adm. Decis. Union Ins. Co., 3 Mason's C. C. R. 429.

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14. Where a vessel has been captured on her voyage, and condemned at an intermediate port, and a part of her cargo has been restored and sold at the same port; no freight is due for the cargo so restored. Sampayo v. Salter, 1 Mason's C. C. R. 43.

15. The existence of a lien on a cargo for freight, does not vary the legal responsibility of the underwriter on such cargo, after an abandonment. Caze et al. v. The Baltimore Ins. Co., 7 Cranch, 358; 2 Cond. Rep. 528.

16. Where the general owner of a ship retains the possession, command, and navigation of her, and contracts to carry a cargo on freight for the voyage, the charterparty is to be considered a mere affreightment, sounding in covenant; and the freighter is not clothed with the character or legal responsibility of ownership. The general owner is also owner for the voyage. Marcardier v. Chesapeake Ins. Co., 8 Cranch, 39; 3 Cond. Rep. 20.

17. Freight is not a charge upon the salvage of cargo in the hands of the underwriter, whether the assured is or is not the owner of the ship. Columbia Insurance Company v. Catlett, 12 Wheat. 383; 6 Cond. Rep. 541.

18. Freight is a proper item of allowance in estimating the damages arising from illegal capture, where the voyage has been lost, or the cargo been unlivered. But it is not to be allowed where the vessel has been restored with the cargo on board, and in a situation capable of performing the voyage. The Lively, 1 Gallis. C.

126.

24. Where a portion of a vessel or her cargo is saved by the meritorious and extraordinary exertions of the seamen, a new lien arises thereon for their wages, although the freight is lost, and the original contract annulled. Adams v. The Sophia, Gilpin's D. C. R. 79.

25. Freight, pro rata itineris, is not due, unless the owner of the cargo voluntarily agrees to receive it at a place short of its ultimate destination. Caze and Richaud v. The Baltimore Ins. Co., 7 Cranch, 358; 2 Cond. Rep. 528.

26. If a neutral vessel be captured on her outward voyage from England to Amelia Island, carrying a hostile cargo which is condemned, and if by the charterparty the outward cargo is to be carried free of freight, but the homeward cargo is to pay at a certain rate, to be ascer tained by the nature of the cargo, yet the court will decree freight pro rata itineris of the outward cargo, to be assessed upon the principles of a quantum meruit. Ship Societé, Martinson, Master, 9 Cranch, 209; 3 Cond. Rep. 373.

27. The capture of a neutral ship, having enemy's property on board, is a strictly justifiable exercise of the rights of war. It is no wrong done to the neutral, even though the voyage be thereby defeated. The captors are not therefore auswerable, in pœnam, to the neutral for the losses which he may sustain by a lawful exercise of belligerent rights. It is the misfor tune of the neutral, and not the fault of the bel ligerent. By the capture the captors are substi tuted in lieu of the original owners, and take the property cum onere. They are therefore respon19. If freight is decreed for the whole voy-sible for the freight which attached upon the age, the mariner is entitled to full wages: if for only a part of the voyage, the mariner is entitled only to a pro rata wages, unless under special circumstances, as where the mariner remained by the ship, at the special request of the master, to preserve and protect the property for the benefit of all concerned. Brown v. Lull, 2 Sumner's C. C. R. 443.

C. R. 315.

20. Where a deviation occurs, the owner of the vessel is responsible to the freighter, whether insured or not, if a loss happen in consequence of the deviation. Bond v. The Cora, 2 Wash. C. C. R. 80.

21. A freighter is not entitled to salvage, unless by his act he discharge the insurer or owner of the vessel from liability for the deviation by which the property has been saved. Ibid.

22. Where a portion of a vessel which has been wrecked, and the seamen who formed its crew are brought to the United States on board of another vessel, the master of such vessel has a lien on the property for the freight, but not for the passage-money of the seamen. Bracket v. The Hercules, Gilpin's D. C. R. 191.

23. Freight on goods is not payable till delivery at the port for which they are shipped. If by stress of weather or other cause, a ship puts into another port, and unlades, or if she is wrecked and goods saved, they must, at the expense of the owners of the ship, be trans

property, of which the sentence of condemnation ascertains them to be the rightful owners, succeeding to the former proprietors. The Antonia Johanna, 1 Wheat. 159; 3 Cond. Rep. 525.

28. The neutral carrier of enemy goods is entitled to his freight. To this rule there are many exceptions. If the neutral be guilty of fraudulent or unneutral conduct, or has interposed himself to assist the enemy in carrying on the war, he forfeits his title to freight. The Commercen, 1 Wheat. 382; 3 Cond. Rep. 604.

29. The carrying of contraband goods to the enemy, the engaging in the colonial or coasting trade of an enemy, the spoliation of papers, and the fraudulent suppression of enemy interests, occasion a forfeiture of freight. Ibid.

30. By a charterparty, the sum of thirty thousand dollars was agreed to be paid for the use or hire of a ship, on a voyage from Philadelphia to Madeira, and thence to Bombay, and at the option of the charterer to Calcutta, and back to Philadelphia, (with an addition of two thousand dollars, if she should proceed to Calcutta,) the whole payable on the return of the ship to Philadelphia, and before the discharge of her cargo there, in approved notes, not exceeding an average time of ninety days from the time at which she should be ready to discharge her cargo. The charterer proceeded in the ship to Calcutta, and with the consent of the master (who was

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