## Facts

- The British steel screw steamship *Elfrida* (about 1,930 tons register), loaded with cargo, stranded in October 1894 near the mouth of the Brazos River, Texas, after grounding on or near the bar, being driven over the west jetty, and coming to rest on the beach inside the ordinary high-water line.
- The vessel remained aground for roughly two weeks, during which the master and crew made unsuccessful efforts to get her off with available tugs and other measures; the ship faced real risk if heavy weather arrived, even though the damage later proved relatively limited.
- The master, B. Burgess, sought a firm offer for salvage services and stated that if the vessel was not gotten off within the stated time, the contract would be void and the salvor would have no claim.
- Charles Clarke & Co., a Galveston salvage firm, submitted a written tender that was accepted with the advice of a Lloyd’s agent on board and with the owners’ consent.
- On October 15, 1894, the parties executed a written salvage contract under which Clarke & Co. agreed to float the *Elfrida* and place her in safe anchorage within twenty-one days, supplying all needed labor, materials, tugs, and equipment, and to survey the bottom after refloating.
- The contract fixed compensation at $22,000 payable only upon success within the time limit; if Clarke & Co. failed, “all claim” under the contract would cease (an all-or-nothing, no-cure-no-pay arrangement).
- Clarke & Co. assembled tugs, lighters, anchors, chains, and a wrecking outfit, hired many workers, and incurred substantial expense; conditions during the successful effort were more favorable than might have been expected when the contract was made.
- Clarke & Co. succeeded in refloating the vessel and placing her in safe anchorage; afterward, the ship’s interests refused to pay the full contract price, asserting the sum was excessive and should be reduced to a reasonable salvage award.
- The district court awarded the full $22,000 under the contract; the circuit court of appeals reduced the recovery to $10,000; Clarke & Co. sought Supreme Court review.

## Issues

1. Whether an admiralty court may reduce a lump-sum, success-conditioned salvage contract after successful performance solely because the agreed price appears high in hindsight.
2. What showing is required to relieve a vessel from paying the stipulated contract compensation for salvage services.

## Decision

- The Supreme Court reversed the circuit court of appeals.
- The Court held the salvage contract was fairly made, with advice from a Lloyd’s agent and owner participation, and without fraud, concealment, misrepresentation, or coercion.
- The Court concluded the $22,000 figure was not so grossly exorbitant, given the value at stake and the risks and costs assumed under a no-cure-no-pay bargain, as to amount to extortion or to shock the conscience of the court.
- The Court directed restoration of the district court’s decree enforcing the contract for $22,000 (with costs as awarded below).

## Legal Principles

- Salvage services may be compensated either by a court-determined award (when voluntary and not fixed by agreement) or by a contract that sets compensation in advance, including compensation payable only upon success.
- A salvage contract is, as a rule, enforceable according to its terms; it is not treated as a special category that invites routine judicial price revision after the fact.
- The party seeking relief from a salvage contract bears the burden to show a recognized basis for setting it aside or revising it.
- Grounds that can justify relief include fraud, concealment, or misrepresentation in procurement; compulsion or coercion arising from distress; or a stipulated sum so grossly exorbitant, in light of the peril, value saved, and risks assumed, that it amounts to extortion or shocks the conscience.
- A court does not revise a salvage bargain merely because the operation proved easier or less dangerous than expected; the agreed price may reflect uncertainty, the possibility of total nonpayment if unsuccessful, and the salvor’s outlays and exposure.

## Conclusion

*The Elfrida* holds that a no-cure-no-pay salvage contract fixing a lump-sum fee will be enforced when fairly made and successfully performed, and that admiralty courts may grant relief only upon a clear showing of fraud, coercion, or an amount so extreme as to constitute extortion; mere hindsight disagreement with the price is not enough.


*The Elfrida*, 172 U.S. 186 (1898)

The Elfrida, 172 U.S. 186 (1898)