Lund v. Ganahl

KERRIGAN, J.

In January, 1907, Ganahl & Co., a copartnership, with certain individuals and a corporation agreed to form a shipping corporation to purchase several steamers, to be operated on the Pacific coast in the lumber trade. In pursuance of the enterprise L. A. Ganahl, the authorized agent of the incorporators, went east and purchased two steamships, one of them being the “Minnie E. Kelton,” taking title thereto in the name of Ganahl & Co. Charles R. Lund, a marine engineer, proceeded from San Francisco to Milwaukee, and there arranged with L. A. Ganahl that he would take employment as chief engineer of the “Minnie E. Kelton,” and he also agreed in writing to purchase a .1/32 interest in that vessel, the purchase price to be a 1/32 part of her cost at San Francisco.

Thereafter the prospective corporation was duly organized under the name Tillamook Navigation Company and took over by assignment from Ganahl & Co. all right, title, and interest in and to said vessel.

In February, 1908, and subsequent to the arrival of the vessel in San Francisco it was found that, after deducting payments by Lund and certain credits to which he was entitled, he still owed on account of his purchase of a 1/32 interest in the ship the sum of $782.19. Lund was unable to pay this balance at the time agreed, and it was arranged that he should give his promissory note therefor to the Tillamook Navigation Company, which he did. Thereafter he made three payments aggregating one hundred and forty dollars. No formal transfer of his interest was ever made to him, and on the records of the United States custom house the title remained in the name of the Tillamook Navigation Company.

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The agent of the proposed incorporators had insured the ship for its voyage from the place of purchase to San Francisco, and on the way she was damaged. The amount of the premium and the cost of repairs were charged against the ship, and formed part of the price which Lund was required to pa.y under his contract of purchase, and a proportion of the insurance was credited to his account.

Just before the ship began voyages on the Pacific coast she was insured by the Tillamook Navigation Company for forty-nine thousand dollars. Subsequently the vessel was wrecked, and the Tillamook Navigation Company in writing abandoned the ship to the underwriters, and received forty-nine thousand dollars as insurance. The testimony shows that the navigation company insured the whole of the vessel for this sum, and that at the time the insurance was placed the vessel was valued at seventy-eight thousand five hundred dollars. The wreck of the vessel occurred on its second voyage on the Pacific coast, and at that time Lund, who was her chief" engineer, was drowned.