Scottish Court of Session Decisions

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Cite as: [1867] ScotLR 5_269, [1867] SLR 5_269

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SCOTTISH_SLR_Court_of_Session

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Court of Session Inner House First Division.

Wednesday, February 19. 1867.

5 SLR 269

Youle

v.

Cochrane and Others.

Subject_1Ship
Subject_2Freight
Subject_3Charter-party
Subject_4Agreement — Lien — Shipmaster.
Facts:

A chartered a ship for two years. He then “sub-chartered” it to B for carriage of a cargo to Rio at a stipulated freight, agreeing with B that one-third was to be paid on the sailing of the ship, and the rest at Rio. The cargo was loaded, and one-third of the freight paid by B to A. On arrival of the ship
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at Rio, the consignee paid to the master the full freight. In an action by B, the shipper, against the owners for repetition of one-third of the freight paid by the consignee, paid, it was alleged, in ignorance of the previous payment to A,— Held that the owners were not bound to repeat, no more having been paid to them (or their master as representing them) than they were entitled to, they not being bound to deliver the cargo until payment of the full freight.

Headnote:

In November 1863 Kitto chartered from the defenders their ship “Marcellus” for a period of twelve months, with liberty to retain the ship for the extended period of twenty-four months. In February 1865 he entered into a sub-charter with Youle to convey a cargo of coals from Cardiff to Rio de Janeiro, freight at the rate of 27s. per ton, to be paid thus: “One-third in cash on sailing from Cardiff, remainder on right and true delivery of cargo, in cash at current rate of exchange, or by good and approved bills on London, at captain's option.” The coals were put on board, and the master signed a bill of lading, which bore that the cargo was to be delivered at Rio to the consignee or his assignees, he or they paying freight for the same, and other conditions as per charter-party. Youle paid to Kitto £207, being one-third of the freight of the cargo, payable under the sub-charter-party, and there was endorsed on the bill of lading a receipt, signed by Kitto, in these terms:—“Received on account of freight the sum of Two hundred and seven pounds shillings and pence, which I agree to have deducted from the same on settlement hereof.” The ship sailed from Cardiff and arrived at Rio, and the consignee paid to the master the full freight for the cargo.

The shipper, Youle, now brought an action against the owners for repetition of £207, alleging that the consignee, in settling the freight-account with the master at Rio, had overlooked the fact that one-third of the freight had already been paid at Cardiff, and had by mistake paid the full freight.

The defenders contended that, under the charter-party between them and Kitto, in respect of which a sum exceeding the freight above mentioned was due, they were entitled to retain the cargo from Cardiff to Rio until payment of the freight was received by the captain for them, and the freight having been paid and the cargo delivered, they were not bound in repetition of the freight; and that it was ultra vires of the shipper and Kitto, by any arrangement of the nature founded on, to defeat the owners' lien over the cargo.

Issues were proposed, but a joint minute of admissions was afterwards lodged, admitting, inter alia, that the master knew the terms of the sub-charter, and knew of the payment of £207 to Kitto at Cardiff when he received payment at Rio; and that the consignee settled the freight account in ignorance that the said sum had been paid to Kitto, and in the belief that no sum had been previously paid.

The case was argued on the record and documents and joint-minute.

A. Moncrieff and Gloag for pursuer.

Clark and Shand for defenders.

Judgment:

Lord President.—This action is raised for repetition of £207, which is one-third of the freight stipulated to be paid by the pursuer to the defender under a contract of affreightment for the carriage of goods from Cardiff to Rio de Janiero, and the ground of action is, that that was an overpayment, the freight being overpaid to the extent of one-third.

I must take leave to say, that the facts on which this question depends are not satisfactorily before us, and but for the circumstance, that the sum is not a large one, I should have been very much disposed to have the facts brought before us in a more satisfactory form. But I think we have enough in the record, and minute of admissions, and contracts of affreightment, to enable us to decide the case.

The owners of this vessel contracted, through their master, to charter her to Mr Charles Kitto. That charter party is dated 18th November 1863. The vessel is chartered in what may be called the usual way, that is, the entire use of her is given to the charterer with the services of the master and crew. But there is no surrender of possession by the owners. They remain in possession through the master and crew, their own servants. The entire use of the vessel is given to the charterer for twelve months, and he is bound to employ it for that time, but he is at liberty to retain her for a period of, in all, twenty-four months beyond this time. The freight stipulated under this charter party is 18s. 6d. per registered ton for every calendar month, part of a month being remunerated in proportion. And then comes the usual clause with regard to bills of lading, which is expressed in these terms:—“The captain to sign bills of lading on any freight there in mentioned, without prejudice to this charter, the captain having a lien on the cargo for all freight, dead freight, and demurrage.” Now, the meaning of all this is, that, notwithstanding the rate of freight in this charter-party, contracts of affreightment may be made by the captain, as representing the charterer, with parties whose goods are to be conveyed, at rates that may be got for the time. But that is without prejudice to this charter-party, and is not to interfere with the rate stipulated. The captain has a lien for all freight, dead freight, and demurrage. It matters little what is the precise meaning of these words, for the right of lien by possession of the vessel is as good at common law as by a special clause in the charter-party. The captain is to have a lien in both characters, as representing both the owners and the charterers. There is one other clause to which it may be right to refer. “The vessel to be consigned at all loading and discharging ports to charterers or their agents, free of all commission abroad.” The object of that clause is to prevent the agent or consignee of the charterer abroad from having any charge they could deduct from the freight at the port of discharge, and so to enable the master to recover the whole freight as a condition of delivery of the goods. “But paying a consignment commission of 2 1 2 per cent. in London on all freight carried under this charter for ship's benefit.” All that is plain, and if the ordinary course had been followed, the present question could never have arisen. The ordinary course, when the charterer wishes to load the goods of another shipper, is to frame ordinary contracts by bills of lading between the master and the shipper. But there is interposed here between the charter-party and the bill of lading, a document called a “sub-charter,” a name I never heard before. It is not a charter-party, for that can only be made between the owners, or the captain as representing them, and the charterer, but this is between the charterer and somebody else. It is a kind of copy of a sub-lease, but as the charterer is not in the position of a lessee, he cannot convey to a sub-lessee. This is an innominate agreement between the charterer and Youle, by which, for a certain voyage in the course of the time for which the

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vessel is in the hands of the charterer, Youle was to have the exclusive use of the vessel. He was to fill the vessel as shipper. But that is not binding on the owners or master for neither of them are parties to it. And therefore, it is not properly a contract of affreightment at all, for no one is bound to carry the goods under this agreement. The vessel is not bound at all; the agreement might have stood for ever without any effect, had it not been for the subsequent bills of lading signed by the master. This agreement makes certain provisions that the rate shall be 27s. per ton, one-third to be paid in cash on sailing from Cardiff, and the remainder on delivery of the cargo. It appears to me, that if either the owners or the master had been asked to agree to that stipulation, they would have refused; for that is a plain interference, to the extent of one-third, with the right of lien belonging to the owners and the master. They could not have been called on to agree to such a stipulation. But then came the bill of lading, and it is said that, under it, this condition of the agreement between Kitto and the pursuer is adopted and made part of the contract of affreightment expressed in the bill of lading. The words relied on are, “that the goods are to be delivered at Rio to the consignee or his assigns, he or they paying freight for the same, and other conditions as per charter-party.” It is said that means that the captain, in signing this bill of lading, assented to the condition of one-third of the freight being paid at the port of loading or sailing from Cardiff. I do not think that is the fair or true meaning of the words. I think the only reference made to the private agreement is for the rate of freight, and the other condition prestable or per-formable by the consignee or his assignees. No such general words, which are explained sufficiently by the meaning I have given, can be construed as importing into this contract of affreightment anything so entirely subversive of the right of the owner as would be imported if we gave effect to the contention of the pursuer.

That being the nature of the contract, the question is, what is the effect of what was done at Rio? That involves the question, what were the rights of the parties on the arrival of the vessel at Rio? It appears to me that the right of the master of the vessel, as representing the owners, was to hold the goods, and to refuse delivery until the full amount of freight stipulated by the bill of lading was paid. Certainly, the goods of the pursuer, under this contract of affreightment in the bill of lading, were not to be made liable in virtue of the owner's lien for anything but their own freight, but that is of no consequence in the case. The admission of the defender is that the consignee at Rio paid the whole amount of freight “in ignorance that the said sum of £207 had been paid to Kitto at Cardiff, on account of freight, payable under charter-party, No. 9 of Process, and in the belief that no sum had been previously paid.” Now, if it were necessary to go into this, I think this ignorance and this belief were somewhat strange in the circumstances. The bill of lading, which we have before us, has on its margin a receipt at Cardiff for the £207. Whether that was on the bill of lading sent to the consignee was not stated. If it was, then the ignorance and belief of this consignee arose from his not reading this addition on the margin. If it was not on his copy of the bill of lading, he is at least in this position, that if he cannot from it ascertain what he must pay as freight, he must go elsewhere, and if he had asked how and where the rate was stipulated, he must have arrived at a knowledge of this sub-charter, in which is expressed not only the rate, but the way in which it is to be paid. So that this consignee, if really in ignorance, was in a position to have ascertained the facts with a very little trouble. But that is not of much importance, for the master was entitled to retain the cargo until the entire freight was paid. That was the right of his owners, and therefore his right; and, therefore, if the consignee had insisted on delivery of the cargo on payment of two-thirds of the freight, the master would have been entitled to resist that demand. It follows that the payment actually made was no more than the master was entitled to demand, and therefore this action cannot lie. Therefore I am for assoilzing the defenders.

Lord Curriehill—I have no difficulty in this case. By charter-party this vessel was chartered for a period of two years, on the conditions contained in the charter-party, and by one of these conditions the charterers are bound to pay the captain the sum there mentioned for freight. This vessel, in the course of the period to which this charter-party related, arrived at Rio, and, according to the terms of the charter-party, the charterer, Kitto, and those acting for him, were bound to pay the freight due at that time. The freight contained in the charter-party was then due and payable. The owners, besides having the personal obligation of Kitto, had a lien on the cargo carried to Rio, and they were entitled to retain until they got payment of the debt owing to them. That was their right under the only charter-party to which they were parties. They make a claim in terms of the charter-party, and the full amount is paid to them. The question is, is there any ground in law why they should repay that sum, or any portion of it? My opinion is, that if the consignee had declined to pay the freight at Rio, the owners would have been entitled to retain the cargo at Rio, and to sell it for payment of the whole sum. Nothing had occurred to discharge their personal claim on Kitto, or their lien in security of the freight. They got nothing but what was their own, and I see no ground in law on which it can be contended, with any chance of success, that they must make any repayment of the money they received. If the case had been raised at Rio, that would have been their right to get payment, and the case is a fortiori where they had actually got payment. With regard to the transaction between the charterer and Youle, the owners were no parties to it. Kitto seems to have stipulated that part of the freight should be advanced to him, the debtor of the owners. But was the captain bound to think that his owners would give up their claim on Kitto, or their lien? The captain, even supposing he knew of this private arrangement, was entitled to think that Kitto had made arrangements by which the whole freight would be paid at Rio. There was nothing to indicate that the owners' right of lien was to be affected. In no view is there any ground for Youle's claim of repetition from the defenders. The pursuer may have had a claim for repetition, but only as against Kitto.

Lord Deas concurred.

Lord Ardmillan—I am quite prepared to concur on the first ground mentioned by all your Lordships. That ground of judgment is probably all

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that is necessary to take up. If, however, we go farther, and consider the question of condictio indebiti, I think the argument of Mr. Clark would be entitled to very great weight, that an error in fact, arising from mere ignorance, is not enough to sustain a plea of condictio indebiti; the ignorance must be excusable. The only admission in the joint-minute is of ignorance; it is not admitted that it was excusable. We are accordingly left to gather from the circumstances of the case whether the ignorance of the consignee was excusable or not, that is, whether he had within his reach the means of knowing that of which he was ignorant. Looking to the bill of lading with the receipt on the margin, I think there can be very little doubt on that point. Accordingly, I should have very great difficulty in supporting the action on the ground of condictio indebiti. But I do not rest my opinion on that ground, but on the other. The measure of the lien is in the first charter-party, and the document called a sub-charter-party is only an assignation of the right of the charterer to the pursuer, Mr Youle, for a limited purpose. That does not interfere in any way with the owners' existing lien for freight over the cargo.

Solicitors: Agents for Pursuer— Wilson, Burn, & Gloag, W.S.

Agent for Defenders— L. Macara, W.S.

1867