Scottish Court of Session Decisions

By charter-party entered into at Glasgow on 4th June 1879 between Roberts and Burdis, on behalf of the owners of the vessel “Lewis M. Lamb,” and Robert Stephens, that vessel was chartered by Stephens to proceed to Patagonia, and there load a cargo of guano or other lawful merchandise. The material parts of the charter-party were, that the ship should “proceed, as directed by the charterer or his agent, to Monte Video, for orders for the Guano Islands, on the coast of Patagonia, east coast of South America, not beyond 50 degrees south, and there load as customary, with the ship's boats and crew, a full cargo of guano or other lawful merchandise, and being so loaded she shall therewith proceed to a port of call and discharge in the United Kingdom, or on the Continent between Havre and Hamburg, both inclusive. Orders to be given by telegram immediately on receipt of telegram of ship's arrival, or lay-days to count, and deliver the said cargo agreeably to bills of lading, and according to the custom of port, and so end the voyage and charter. (The dangers and accidents of the seas, rivers, and navigation of whatever nature and kind soever during the said voyage always excepted.) The freight to be paid on final delivery of the cargo, in cash, at the rate of 42s. 6d. sterling per ton of 20 cwt., if discharged in the United Kingdom, with 2s. 6d. per ton extra if discharged on the Continent, with £ 10 gratuity to the captain for his extra care and attention to the business of this charter. Should the vessel be ordered direct at her final loading to her port of discharge, 1s. 6d. per ton is to be deducted from the above rates of freight. The vessel to be consigned to charterer's agents at port of discharge, paying the usual commission once only of 2 1 2%, which includes custom-house business inwards. The vessel, if required, is to take a boat, guano bags, materials, &c, from Monte Video, also the charterer's agent and labourers, to and from the coast; and after the vessel is loaded land them at Port Desire, Monte Video, or any other place on the way home that may be arranged, free. The charterer to pay any port charges that may be in curred in consequence of the vessel calling to land labourers, material, fee,; but she is not to lie longer than forty-eight hours at her port of call, unless compelled by stress of weather. The charterer pays and provides the labourers with rations while on shore, also will provide water-casks, the vessel to provide the men with rations while going to and from the coast or islands, and also with water. The vessel is not obliged to take the cargo beyond 50 yards from the beach or place of shipping. Sixty running days are to be allowed for loading the said vessel at the islands, to commence twenty-four hours after arrival at place of loading, and end when she has finished taking in cargo. Any days on demurrage at the rate of 4d. per register ton per working day. The owners shall have an absolute lien on the cargo laden on board for all freight, dead freight, and demurrage. The owners engage that the said vessel, her boats, crew, and materials, shall be kept up in the same good and efficient state during this voyage, and the captain and crew shall render all usual and customary assistance in working the cargo.… Bills of lading to be signed by the captain for the cargo when presented to him, but at not less than the chartered rate. No claim for demurrage nor dead freight will be allowed, unless intimated to charterer's agent by the captain in writing when getting his final sailing orders from the coast. Penalty for non-performance of this charter, the amount of freight. The brokerage on this charter is at five per cent, on the gross amount of freight, is payable to Alston & Tulloch by the vessel as customary, and may be deducted from the freight unless previously paid. The vessel to provide six men (labourers) with rations and waters, same as crew, for which charterer will allow 1s. 9d. per man per day, on board and on shore. Disbursements to not exceeding £50 sterling to be advanced at Monte Video by merchant, subject to cost of insurance.”

Stephens, the charterer, accompanied the vessel, which arrived at the Guano Islands on 11th Nov ember 1879, having on board labourers for the purpose of assisting in loading the guano. Work was begun on 13th November. On 29th Nov ember a portion of the cargo had been shipped, and the master executed bills of lading in the following form—“Shipped, in good order and well-conditioned, by Robert Stephens, on board the good ship or vessel called the ‘Lewis M. Lamb,’ whereof T. Williams is master for the pre sent voyage, and now at, bound for a port of call in the United Kingdom for orders, to say, one hundred tons guano, fifteen water puncheons, the same being marked and numbered as on the margin, and to be delivered in the like good

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order and condition at the aforesaid port of, as directed. The act of God, the Queen's enemies, fire, and all and every other dangers and accidents of the seas, rivers, and navigation, of whatever nature and kind, excepted. Unto Messrs Kaselack, Alsen, & Co., 134 Fenchurch Street, London, or to their assigns. Freight for the said goods to be paid by the consignees at the rate of Two pounds two shillings and sixpence per ton, other conditions as per charter, with per cent. primage, and average accustomed. In witness whereof, the master of the said ship hath affirmed to four bills of lading, all of this tenor and date, one of which being accomplished, the others to stand void. Weight and contents unknown—leakage and breakage excepted. Dated at Crusoe Island, Patagonia, the 29th day of Nov. 1879.” On 13th December certain quantities of penguin skins and bones having been also shipped, the master executed bills of lading therefor. The consignees therein were to be Kaselack, Alsen, & Company, and their assigns, as in the bills of lading of 29th November. The freight was to be £2, 2s. 6d. per ton, “other conditions as per charter,” as in the bills of 29th November. The lay-days for loading cargo expired on 12th January 1880. At that time the ship was not nearly filled up, owing, as the charterer said, to the fault of the crew in not taking their proper share of the labour of filling the guano bags and conveying them to the ship in boats according to the custom of the trade, and owing to the fault of the master in wrongously refusing to load cargo at certain of the Guano Islands to which he was requested to proceed, and in leaving behind a quantity of guano which was filled into bags and ready for conveyance to the ship. Had it not been for those breaches of contract on the part of the master, the ship could, the charterer maintained, have been filled up within the sixty days allowed as lay-days, and no demurrage would have been caused, nor would any plastic have had to be taken on board, as about to be explained. On the other hand, the master maintained that the ship was not filled up within the lay-days owing to the scanty supply of guano at certain small and dangerous islands to which the charterer insisted that the vessel should be taken. He alleged that the guano tendered to him was in great part of such a quality, being so much mixed with stones, that he was not bound to receive it as cargo.

On 16th January 1880 the master executed other bills of lading for 150 tons guano, Kaselack, Alsen, & Company being consignees, freight £2, 2s. 6d. per ton, and “all other conditions as per charter-party.” The vessel left the islands on 16th February 1880, having previously completed her loading by shipping at Penguin Island, from a person named Foverty, residing on that island with a number of labourers from Monte Video, 357 tons of plastic; a bill of lading for this quantity was executed by the master in favour of Foverty.

The ship was ordered to Leith to discharge. She arrived there on 17th June, and by 25th June she was placed in a berth and was ready to discharge. On that day Gillespie & Cathcart in formed the master that they held the bills of lading for the whole cargo other than the plastic, which formed the upper portion of it, and were ready to take delivery of it. No consignee appeared to claim the plastic. The master and owners claimed a right of lien over the whole cargo on board for freight and demurrage under the charter-party, and declined to discharge the plastic, and allow Gillespie & Cathcart to take delivery of the under portion of the cargo, except on the footing that that claim should be recognised. On 6th July 1880 Gillespie & Cathcart presented a petition to the Sheriff of Midlothian, in name of Kaselack, Alsen, & Company, to have the master ordained to deliver the under portions of the cargo on consignation of a sum of £650, being the sum estimated as freight for their portion of the cargo. Defences were lodged for the master, and on 17th July 1880, the parties having arranged the matter, the Sheriff-Substitute of consent pronounced this interlocutor:—“On payment of the sum of £600, and on consignation of £500, to await the order of the Court in this process, or in any other action which may hereafter be brought for payment of the claims of the shipowners mentioned in the defences, Ordains the defender to deliver to the pursuers the goods mentioned in the bills of lading founded on.”

On the same date the agent of Gillespie & Cathcart undertook that their clients would give a guarantee for payment of any further sum over and above what was to be paid and consigned in terms of the interlocutor, if any, and for which it might be established that the shipowner was entitled to retain the goods referred to in the bills of lading founded on, for which said goods, or consignees thereof, were legally liable. Meanwhile the master had applied to the Provost and Magistrates of Leith, as admirals thereof, for warrant to land and warehouse the plastic, and had obtained warrant on 13th July to do so. The landing and warehousing of the plastic was completed on the morning of 17th July.

Thereafter delivery of the cargo belonging to Gillespie & Cathcart began, and was continued till 23d July, when it was stopped in consequence of the master demanding, and Gillespie & Cathcart refusing, immediate payment of the sum of £600 mentioned in the interlocutor above quoted. Gillespie & Cathcart maintained that payment and delivery should take place from time to time, simul et semel, and that the master and owners of the ship were not entitled to be paid the whole £600 at once, lest it should turn out that there was not cargo on board belonging to them corresponding to £600 of freight. On 27th July, however, they sent to the master, through their agents, this guarantee, in pursuance of their agents' letter above quoted, undertaking that they would make a guarantee:—“Dear Sir,—We guarantee you payment of any further sum than what is paid and consigned in terms of the interlocutor in this case of date 17th July, if any, and for which it may be established that the ship-owner was entitled to retain the goods referred to in the bills of lading founded on, or for which said goods, or consignees thereof, were legally liable, but this without prejudice to pleas of parties.” Then followed a testing clause in usual form. It was further arranged that they should go on paying on delivery at the rate stipulated in the charter-party, and consign in addition to the sum of £500 mentioned in the interlocutor of the Sheriff-Substitute, a sum corresponding to any difference between the amount they should so pay

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and the £600. On 27th July, accordingly, delivery was resumed, and the discharge was completed on 31st July.

The master and owners obtained warrant from the Provost and Magistrates of Leith to sell the plastic already landed and warehoused as above mentioned, and thereafter sold it by public roup at a price of £75—a sum insufficient to pay the expense of landing.

Thereafter, to determine the various questions between them and the consignees, the owners of the ship raised this action against Kaselack, Alsen, & Co. and Gillespie & Cathcart. The conclusions of the summons were—(1) For declarator that under the charter-party and bills of lading they were entitled to retain the goods shipped on board the vessel until payment of all freight and demurrage due under the charter-party, and in particular until payment by Kaselack, Alsen, & Co. of (1) £21, 2s. 6d., being a balance remaining due of £477, 2s. 6d., the proportion of freight corresponding to the goods mentioned in the charter-party after deduction of £456 paid to account at Leith; (2) of £660, 0s. 3d., the unpaid balance of freight of the plastic shipped under the charter-party; (3) of £190 as demurrage at the Guano Islands, from 13th January, the day after the expiry of the lay-days, till 18th February, the day after the vessel left the islands; (4) of £57, 2s. 6d., the balance of the cost of victualling six men in the service of the charterers while at the islands; (5) of £133 for detention of the vessel at Leith. The summons also concluded against Gillespie & Cathcart for the five sums above mentioned, under deduction of the sum of £500 consigned as already stated, and of £144, being the balance of a deposit for £600 on 27th July.

The pursuers pleaded, inter alia—“(1) The pursuers having a lien over the said cargo for all freight, dead freight, and demurrage, were entitled to retain the same until payment of the freight and demurrage claimed. (4) The defenders Gillespie & Cathcart, under their said letter of guarantee, having guaranteed payment of the pursuers' claims, and the pursuers' claims being well founded, the pursuers are entitled to decree as concluded for, with expenses.”

The argument of the defenders with regard to the alleged detention at the Guano Islands is above explained. They denied that there had been any delay attributable to their fault at Leith, and therefore disputed liability for demurrage at that port. They disputed the alleged lien over their goods for any of the sums sued for, and particularly they disputed that the pursuers had any claim for freight of the plastic, which they alleged to have been improperly put on board instead of the guano which they had offered the master. Assuming the plastic to have been rightly put on board, and that the pursuers had a claim against them for its freight, they maintained that it had been sacrificed at a small price without due notice of the sale, and that they were entitled to set off against the pursuers' claims its true value at the date of the sale.

After a proof the Lord Ordinary pronounced this interlocutor:—“Decerns against the de fenders (1) for the sum of £660, 0s. 3d., being the unpaid balance of freight; and (2) for the sum of £101, 6s. 8d., being demurrage at Leith; with interest on said two sums at 5 per cent. per annum from 31st July 1880 until payment:

Further, grants warrant to and ordains the Clydesdale Banking Coy. to make payment to the pursuers of the sums consigned in their hands under the deposit-receipts, and of the interest which has accrued thereon, in payment pro tanto of the said sums and interest, and grants warrant for delivery of the said deposit-receipts to the pursuers or their agents that they may obtain payment accordingly: Quoad ultra assoilzies the defenders from the conclusions of the summons, and decerns,” &c.

His Lordship pronounced this opinion—“The first question is as to the right of the pursuers to recover £660 of freight for the shipment of plastic. They say that it was carried under the charter-party, and therefore that the freight is due to them in terms of that contract. The defenders maintain that the master improperly refused to take on board guano, and that then he made an arrangement with a person of the name of Foverty, under which he took on board this plastic, to save loss to all concerned, and that it was carried, not under the charter-party, but on the ship's account. I have to consider, in the first place, whether or not the master refused to take guano tendered to him by the charterer, and I am of opinion that he did not. I think, on the evidence, that the commodity that was tendered was not merchandise in the sense of the charter-party at all, and that the captain was not bound to take it even upon the offer of payment that was made by the charterer, because I doubt much whether he was in a position to fulfil it, and because there were no means of taking such stuff from the shore to the ship with safety to the boats. The plastic was, I think, shipped under an arrangement to which the charterer was a party, or, in other words, was shipped as cargo instead of guano. Therefore I am of opinion the freight is due under the charter-party. The pursuers have a lien over the cargo for the whole freight, and that being so, the pursuers are entitled to decree for the sum of £660. I may add that I do not think that there is evidence to show that the master unjustifiably refused to go to the island of Quettana. The next claim is for £190 in name of demurrage before or during loading. This involves a question of fact; but there is a preliminary question in law raised. There is a condition in the charter-party that no claims for demurrage will be allowed unless notice in writing is given to the charterer's agent when getting sailing orders on the coast. It is not disputed that this is a binding clause; but it is said it only could operate when the ship reached Monte Video, where she could get her final sailing orders for a home port, or some port of discharge. I do not think so. I think the meaning of it is that the ship was to go to the coast from Monte Video. Monte Video was not the ‘coast’ in the sense of the charter-party at all; that is the plain meaning of the word ‘coast’ in one part of the charter-party. The vessel was to be employed going about from place to place on the coast as the charterer directed, and then when the ship was full, and she got her final sailing orders from the coast, the captain was bound to give in writing notice of his claim of demurrage to the charterer, who accompanied the ship, and if he — did not, then I think the owners are not entitled to enforce it. Mr Stephens, charterer, accompanied the ship during the voyage. I am of

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opinion that there is no lien over cargo for the claim of £51, and therefore the defenders are entitled to absolvitor.” [His Lordship then dealt with the question of the detention at Leith, and the guarantee given by the defenders.]

The defenders reclaimed, and argued—(1) The evidence showed that the master had wrongfully refused to receive on board guano tendered to him under the charter-party. If so, no freight would be due. Although the terms of the charter-party were imported into the bill of lading, that did not make every part of the cargo liable for the whole freight so as to make the defenders liable for the freight of the plastic. There were here three separate bills of lading, and separate liability for freight under them—Maclachlan on Shipping, 3d ed., p. 434; Soder-green v. Flight, rep. in Hanson v. Mayer, 6 East. 614 (see p. 622); Porteous v. Watney, infra. The charter-party gave a lien for dead freight, but dead freight did not mean unliquidated damage for short shipment, which was the meaning pursuers had to put upon it here. It meant in a legal sense stipulated damage per ton of the vessel not filled up— Gray v. Carr, 6 L.R. Q.B. 522. See also Abbot on Shipping, 12th ed. 234, and Foster v. Colby, 3 H. and N. 705 (Baron Watson's opinion); Maclachlan on Shipping, 512. “Dead freight” in this charter was surplusage. There was nothing to which it could apply. (2) As to demurrage. There were here no termini habiles for claiming demurrage. That was liquidated penalty irrespective of fault if a ship was delayed beyond the lay-days. Here that was not stipulated, and the pursuers' case was one for damages for detention through defenders' fault.

Argued for pursuers—(1) It was clear upon the evidence that the cargo tendered by the charterer and refused by the captain was nothing but stones mixed with a little guano dust. If so, the captain was justified in refusing to load it (a) because it was not lawful merchandise in the sense of the charter; ( b) because it was dangerous to load into the boats. But in any event the charterer had waived his right to insist on loading the stones, and had entered into an agreement with Foverty to fill up the ship with plastic. The master had not made any bargain with Foverty, and had no authority to alter the charter-party under which the voyage was prosecuted— Burgon v. Sharpe, 2 Campb. 529. (2) Assuming the plastic to have been shipped under the charter-party, its plain terms gave a lien over the whole cargo for the freight of any portion. Hence the guano was liable to be retained for the freight of the plastic though consigned to different persons. This construction of the words giving the lien had never been the subject of express decision, but had always been assumed to be the true one— Small v. Moates, 9 Bing. 574; Gilkison v. Middleton, 26 L.J. C.P. 209; Fry v. Chartered Bank of India, 35 L.J. O.P. 306. The consignees of the guano had notice in their bills of lading that the charter-party and all its conditions had been imported as against them— Wegerner v. Smith, 24 L.J. O.P. 25; Carr v. Gray, L.K. 6 Q.B. 522; M'Lean &, Hope v. Fleming, 43 Jur. 565, 9 Macph. (H.L.) 39; Porteous v. Watney, 3 Q.B. Div. 534. (3) By the terms of the guarantee Gillespie & Cathcart had come under an absolute obligation to pay the lien debt. Apart from the guarantee, the defenders would not have been liable beyond the value of the cargo consigned to them, but no such qualification could be read into the guarantee. The defenders could not demand delivery except on payment of the lien debt, and they took the risk of its exceeding the value of the cargo. (4) The defenders were also liable for damages.

The Court made avizandum.

At advising—