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Scottish Court of Session Decisions
You are here: BAILII >> Databases >> Scottish Court of Session Decisions >> W. M. Barkley & Sons v. Simpson [1896] ScotLR 34_276 (15 January 1896)
URL: http://www.bailii.org/scot/cases/ScotCS/1896/34SLR0276.html
Cite as: [1896] ScotLR 34_276, [1896] SLR 34_276
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SCOTTISH_SLR_Court_of_Session
Page: 276↓
Court of Session Inner House Second Division.
[Sheriff of Lanarkshire.
v.
Facts:
A, a coal merchant in Belfast, instructed B, a shipping agent in Glasgow, to charter a vessel to convey a cargo of coal from Glasgow to Belfast. A charter-party was therefore entered into between B and C, a shipowner in Glasgow. By the charter-party C was taken bound to deliver “as customary.”
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When B sent a copy of the charter-party to A, the latter objected to the discharging clause as being contrary to his instructions, and asked B to get it altered to a clause requiring the discharge to be “into lighters in turn.” C, when requested by B, refused to alter the clause, but this refusal B did not intimate to A. On the arrival of the ship A refused to take delivery on the quay, which was the customary mode of delivery, and insisted that the coal should be delivered into lighters. After the expiry of the twenty-four hours allowed for discharging, C discharged and stored the cargo and held it under his lien for freight and demurrage. The cargo was afterwards sold, and realised less than the invoice price. C then sued A for damages, freight, demurrage, and disbursements. After the action had been raised, A and C agreed to submit their differences to arbitration. In this arbitration B was examined as a witness. The arbiter held that A was bound under the charter-party to take delivery on the quay, and found him liable to 0 in demurrage, the cost of discharging and storing the cargo, and in five-sixths of the expenses of the arbitration. A then raised an action against B for (1) the demurrage and costs of discharging and storing the cargo; (2) the whole expenses of the arbitration; and (3) the amount lost on the coal.
The Court assoilzied B, holding (1) that A had acted unreasonably in refusing to take delivery of the coal, his proper course being to have taken delivery and thereafter sued B for any extra expense incurred by reason of the cargo not having been delivered into lighters, and (2) that even if B's liability for the other items of the pursuer's claim were assumed, he could not be made liable for the expenses of the arbitration, as he was not a party to the proceedings, and had not their dependence intimated to him.
W. M. Barkley & Sons, coal merchants, Belfast, raised an action in the Sheriff Court at Glasgow against John Simpson, shipping agent, Glasgow, for £367, 7s. 6
d. 3 4 The facts giving rise to the action were as follows—In March 1894 the pursuers instructed the defender to charter a vessel for them to convey from Glasgow to Belfast a cargo of coal, the coal being destined for the Belfast Gas Company. A charter-party was therefore entered into between the defender and Messrs Paton & Hendry, shipowners, Glasgow. The discharging clause inserted in the charter-party was one by which the shipowners were taken bound to discharge “as customary.” Under such a clause the ship was only bound to discharge the coals at the quay, delivery being taken within twenty-four running hours. On 30th March 1894 the defender sent to the pursuers a copy of the charter-party he had executed for them. On receipt, the pursuers took exception to the terms of the discharging clause as being contrary to their instructions to him, and requested him to get it altered to a clause requiring the shipowners to discharge “into lighters in turn.” When requested by the defender to alter the clause, Paton & Hendry refused to do so, but this refusal the defender did not communicate to the pursuers. The ship arrived at Belfast on the evening of 4th April. The pursuers refused to take delivery of the coals at the quay, insisting that they should be delivered into lighters. The ship refused to deliver except at the quay. After the twenty-four hours for discharging had expired, the shipowners landed and stored the cargo and held the same under their lien for freight and demurrage. The cargo was afterwards sold, and realised less than the invoice price. The shipowners then sued the pursuers for damages for breach of contract, freight, demurrage, and disbursements. After the action was raised, the shipowners and the pursuers agreed to submit their differences to arbitration. In this arbitration the defender was examined as a witness. The result was that the pursuers were practically unsuccessful in their contention. The arbiter found that under the charter-party the pursuers were bound to take delivery of the coals on the quay, and found them liable to the shipowners in demurrage, the cost of landing and storing the coal, and in the expense of the arbitration less one-sixth of the taxed amount. The pursuers then raised the present action against the defender for £367, 7s. 6
d., consisting of (1) £102, 10s. 6d., the demurrage and cost of landing and storing the coal; (2) £127, 14s. 2d., the expenses of the arbitration incurred to the shipowners; (3) £78, 6s. 7d., the expenses incurred to their own solicitors: and (4) £58, 16s. 3 3 4 d., the amount lost in the coal by the sale thereof, being the difference between the amount realised and the invoice price. The ground on which the defender was alleged to be liable was that the pursuers had suffered loss or damage to that amount “through the defender's failure to comply with their instructions” by entering into the foresaid charter-party without his authority. 3 4 On 22nd November 1895 the Sheriff-Substitute ( Erskine Murray) pronounced an interlocutor, in which, after various findings in fact, he found in law “(1) that, except as hereinafter excepted, the above losses and expenditure were caused to the pursuers through the act or neglect of the defender when acting as their agent, and that he is liable to them in repayment thereof; (2) that as regards the item of £41, 1s. 3d. for freight, that was an item which the pursuers would have been in the circumstances fairly bound to pay even had the arbitration been successful, and therefore is not one for which the defender can be held liable; (3) that as regards the item of £45, 7s. 3d., as this might have been avoided by the pursuers had they, when they offered to take delivery on the quay, accompanied their offer with an offer under protest, of freight and demurrage, this item also is one for which the defender is not
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fairly chargeable; (4) that of the arbitration expenses, half thereof may fairly be held as attributable to the fault of the defender, being £103, Os. 4 d: Therefore finds that if judgment is to be given on the evidence now in Court, the defender would be liable to pay to the pursuers the balance, being £177, 18s. 8d. with interest as craved.” 1 2 The defender appealed to the Sheriff ( Berry), who on 29th July 1896 adhered.
The defender appealed, and argued—If it were assumed that the defender was at fault in not getting the proper clause of discharge put into the charter-party, the measure of his fault was the difference between the expense of carrying the coal in lighters to the gas-works, and the expense of carrying it in carts from the quay. If the pursuers had taken delivery on the quay, and conveyed the coal in carts to the gas-works no extra expense might have been incurred on account of the mistake in the terms of the clause. But the amount sued for was all incurred by reason of the pursuers refusing to take delivery on the quay, and thus acting unreasonably and unwarrantably. The defender was not liable for the expense so incurred. At all events, the defender was not liable for the expenses incurred in the arbitration proceedings, proceedings to which he was not a party, and of which no legal intimation had been given to him. If it were assumed that there was fault on the part of the defender, it was impossible to suppose that the expenses incurred by the pursuers, the amount now sued for, were the natural or approximate consequence of that fault. If they were not the natural or approximate consequence the defender was not liable— Hadley v. Baxendale, 1854, 9 Exch. 341; Baxendale v. London, Chatham, and Dover Railway Company, 1874, L.R., 10 Exch. 35; Ovington v. M' Vicar, May 12, 1864, 2 Macph. 1066; M'Gill v. Bowman & Company, December 9, 1890, 18 R. 206; Campbell v. A. & D. Morison, December 10, 1891, 19 R. 282.
Argued for pursuers—The whole of the expenses sued for had been incurred by reason of the defenders' mistake in getting the wrong clause of discharge inserted in the charter-party. He having done this in violation of his instructions, was the person primarily liable for the loss occasioned to the pursuer. The arbitration proceedings were the natural sequence of the defenders' mistake and the difference with the ship-owners that followed therefrom. He must therefore be held liable for expense reasonably following upon his neglect— Hughes v. Graeme, 1864, 33 L.J., Q.B. 335; Hammond & Company v. Bussey, 1887, L.R., 20 Q.B.D. 79. It was said that no intimation of the arbitration proceedings had been given to the defender. But he had been called as a witness in the proceedings, and that was sufficient notice. Even if it were not, the want of notice did not bar the claim— Duffield v. Scott, 1789, 3 Term Reports 374; Smith v. Compton, 1832, 3 B. & A. 407; Jones v. Williams, 1841, 7 M. & W. 493.
At advising—
The Sheriff has sustained the claim to the extent of £177, 18s. 8d. He disallows the claim for repayment of freight, which is obviously right, and was admitted to be so by the pursuers' counsel. He disallows further the claim connected with the discharging and storing of the coal for a reason which I shall afterwards notice, and he disallows one-half of the expenses occasioned by the arbitration. The only two items of the pursuers' claim which he finds the pursuers entitled to as claimed are demurrage, and the loss sustained by the sale of the coal. I am unable to follow the logical sequence of the Sheriff's findings. It appears to me that if the pursuers are entitled to any decree at all on this action they are entitled to something more than the Sheriff has awarded, and if not entitled to what the Sheriff has disallowed, then not entitled to what the Sheriff has given. What I mean by this will be made clear by considering the ground on which the Sheriff has disallowed the charge connected with the discharging and storing of the coal. He says that “as this might have been avoided by the pursuers had they, when they offered to take delivery on the quay, accompanied their offer with an offer under protest of freight and demurrage, this item is one for which the defender is not fairly chargeable.” But if it; is a good ground for refusing this part of the pursuers' claim, that that item of their loss could have been avoided by their making the offer to which the Sheriff refers, it would follow that the defender is not “fairly chargeable” with any damage or loss whatever which could have been avoided by such an offer if made. Now, it appears to me that that ground, logically carried out, strikes at almost the whole of the pursuers' claim, for if the offer referred to had been made and acted upon by the pursuers, the greater part of their alleged loss and damage would have been avoided. The offer alluded to was made under these circumstances. The pursuers having refused to take delivery of the cargo at the quay, the shipowners intimated that if this refusal was persisted in they would land and store the cargo under their lien until their freight and demurrage were paid. The pursuers, on the same day, offered, “without prejudice to the charter-party,” to discharge the cargo and place it in their own store, but offered no payment or security for the freight or demurrage. Had they offered (even under protest) to pay freight and demurrage, the coal would have been delivered to them, there would have been no legal proceeding or arbitration, and no forced sale of the coal involving a loss. In short, this course, if adopted, would have avoided practically the whole loss and damage now in question.
Then, again, I am unable to see any reason
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I am of opinion that the pursuers are not entitled to succeed in this action, and for a reason very much the same as that on which the Sheriff refuses them the item of £45, 7s. 3d of the expenses of discharging and storing the coal. I think the pursuers could and should have avoided the loss for which they seek now to be indemnified by the defender, and that the loss which they have sustained was not the consequence of what the defender did, but the result of their own actings.
When the pursuers received the copy of the charter-party on 31st March, four days before the vessel left Glasgow with the coals, they saw they were bound to discharge the coals “as customary.” They knew or should have known what that meant. They knew it was not what they wanted, nor what they had instructed the defender to agree to as the discharging clause. They knew further that their request to have the discharging clause altered had not been replied to, and therefore, so far as their knowledge went, the charter remained in the, to them, objectionable terms. In such circumstances I think their duty was plain. Their agent had made a contract for them; they must fulfil it, and claim any relief from him competent to them in the circumstances. They should at once have recognised that under the charter-party as executed, the shipowner, in offering to discharge “as customary”—that is, on the quay, was doing all he was bound to do, and they should have taken delivery there. If taking delivery there incurred loss or expense beyond what would have been occasioned by discharging the cargo “into lighters in turn,” for that they should have had recourse against their agent, by whose fault or failure to obey his instructions such loss had been occasioned. Such a course, if followed, would have avoided all the loss now claimed. I cannot hold the defender liable in the consequences of the pursuers having maintained a position altogether untenable, having regard to the plain terms of the charter-party executed by their agent, and under which their cargo had been carried. I think the pursuers might have had a good claim, for the difference, if any, between the cost of carrying the coals to their purchaser the gas company, by carts from the quay, and by lighters from the ship's side. But no decree can be given for that in this action, as there is no information or proof before us from which the account of such differences, if any, can be fixed.
The view which I have taken of the case renders it unnecessary to dispose of the question argued before us, whether assuming the defender's liability for the other item of the pursuers' claim, he could, in any view, be made liable for the expenses of the arbitration. Had it been necessary to decide that question, my opinion on it would have been adverse to the pursuers. I know of no case or other authority in our books in which such a claim has been given effect to, where (as in the present case) the person sought to be charged with such expenses was not a party to the proceedings, or had not, at least, had the dependence of them intimated to him that he might protect his own interests therein.
On the whole matter I think the interlocutor appealed against should be recalled and the defender assoilzied.
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Lord Justice-Clerk—I shall confine myself to a consideration of the question whether the pursuers took proceedings and carried them on in such circumstances and in such manner as can entitle them to succeed in the present action. The pursuers, without intimation to the defender, embarked on this litigation, and then in the course of it, again without intimation to the defender, entered into an agreement to take the case out of the hands of the official court and submit it to arbiters chosen, without the defender being consulted. Thus throughout the defender was afforded no opportunity for dealing with the matter as it might affect his interests. And what is now maintained by the pursuers is, that they having been held to be wrong in a case conducted entirely by themselves, and without the defender having any control whatever over the proceedings, or any voice as to their mode or their management, he, the defender, must make good all that has been lost to the unsuccessful parties in the litigation. I am entirely unable to assent to that. I think the Sheriffs have erred here in holding that the pursuers were entitled to a decree. I cannot assent to the proposition that parties to a contract are entitled to carry on a litigation at their own hand, and to submit the subject-matter of it to arbiters to decide, all without intimation to the agent who made the contract for them, and on being unsuccessful in the litigation, to demand payment of all they have lost from that agent, because before the litigation he had stated as a fact what they found they were afterwards unable to prove by sufficient evidence, and expressed an opinion as to its effect upon the contract. And I do not think that a refusal so to hold involves any hardship to a principal in such a case, Here the pursuers, if their agent was in fault, might have saved all this expense and kept themselves indemnis by taking delivery as the shipowners insisted, and then proceeding against the agent for any loss caused by the mode of discharge being different from that which he had led them to understand he had secured for them, It is plain that any such loss would have been of trifling amount and ascertainable in a less expensive manner than, first, an action in the High Court of Justice in Ireland, then an arbitration before two arbiters and an oversman, and lastly an action practically for relief before this Court. A real sum at issue of probably at the utmost £20 has by these litigations been swelled to what cannot be less now than £500—a result much to be deplored—and which I can see no just ground for imposing upon this defender.
The Court recalled the interlocutor appealed against and assoilzied the defender.
Counsel for the Pursuers— H. Johnston— Hunter. Agent— J. Gordon Mason, S.S.C.
Counsel for the Defender— Ure— A. S. D. Thomson. Agents— Whigham & MacLeod, S.S.C.