Scottish Court of Session Decisions

On 4th March 1913 the Rowtor Steamship Company, Limited, Cardiff, owners of the s.s. “Glamorgan,” pursuers, brought an action against Love & Stewart, Limited, pitwood importers, Glasgow, defenders, to’ recover £315, 15s. 5d. (restricted to £305, 15s. 5d.) as demurrage due for the detention in July 1912 of their ship “Glamorgan” at Newport, Monmouthshire, the port of discharge of a voyage for which she had been chartered.

The charter-party, which was headed “Chamber of Shipping Wood Charter (Scandinavia and Finland) to the United Kingdom 1899” was printed, with extensive alterations in writing. It contained the clause 3 quoted supra in rubric.

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The pursuers pleaded—“(2) In respect that on a sound construction of the charter-party it was in the option of the pursuers to have the vessel discharged at the rate of 125 fathoms per day, and that the pursuers exercised this option, and that the defenders were accordingly bound to take delivery in 13 days, and that the pursuers' vessel was, through the failure of the defenders to take delivery within said 13 days, on demurrage for 6 1 2 days after the expiry of the said discharging time, the defenders are bound to pay the pursuers the sum sued for in terms of the charter-party. (4) Esto that the terms of the charter-party permitted the number of days saved in loading to be added to the number of days allowed for discharging, the defenders are not entitled to found upon this circumstance in respect (1) that the pursuers settled with the charterers by payment for the days saved in loading, and (2) that the bill of lading which the defenders presented in order to obtain delivery of the cargo bore that all the days allowed for loading had been used. [The words in italics were added by amendment.]

The defenders pleaded—“(3) The pursuers' vessel having been discharged at the rate provided for in the charter-party, and/or with customary steamship despatch, during the ordinary working hours, and according to the custom of the port of Newport, the defenders should be assoilzied, with expenses.”

The facts are given in the opinions of the Lord Ordinary ( Hunter), who on 13th June 1913 gave decree for the sum sued for as restricted.

Opinion.—“The pursuers, who are the owners of the steamship ‘Glamorgan,’ sue the charterers of that vessel for payment of the sum of £315, 15s. 5d., restricted to £305, 15s. 5d., in name of demurrage for detention of the vessel beyond the lay-days allowed for discharging her cargo. By the charter-party, dated 11th June 1912, entered into between the pursuers and defenders it was agreed that the ‘Glamorgan’ should proceed to ‘one or two places Kristinestad, and there load a full and complete cargo of pit props, maximum 9 feet length, for Cardiff, Barry, or Newport, as ordered.’ It was provided ‘the cargo to be loaded at the rate of 125 fathoms daily, and discharged at the rate of 125 fathoms daily reversible with customary steamship despatch, as fast as the steamer can receive and deliver during the ordinary working hours of the respective ports, Sundays, general or local holidays (unless used) in both loading and discharging excepted.’

“It is stated for pursuers and admitted by the defenders that the cargo consisted of 1613 fathoms, so that the stipulated time for discharging amounted to 13 days.

The ‘Glamorgan’ left Kristinestad on 10th July 1912 and arrived at Newport, Monmouth, on 18th July 1912. She was ready to start discharging on 19th July, and from that date the lay-days began to run. The time occupied by the defenders in taking delivery of the cargo amounted to 19J days, and the amount sued for represents demurrage for 6 1 2 days, at the rate of 5d. per net registered ton per day, in terms of a provision in the charter-party that ‘should the steamer be detained beyond the time stipulated as above for loading or discharging, demurrage shall be paid at five-pence per net registered ton per day, and pro rata for any part thereof.’

The defenders do not dispute the dates given by the pursuers for the start and completion of the work of discharging the vessel. They maintain, however, that in terms of the charter-party the vessel was to discharge according to the custom of the port, and during the ordinary working hours thereof, Sundays, general or local holidays (unless used) excepted. They say that ‘the discharging of Baltic pit props at the Alexandra Dock, Newport, Monmouthshire, is done by the dock authorities, and it is a custom of the port that the discharging of Baltic pit props is suspended during wet weather. The discharging of the’ Glamorgan ‘on this occasion was done by the dock authorities. The weather at Newport while the’ Glamorgan ‘was discharging was excessively wet, and throughout the whole time it hindered the work of discharging. In particular, from this cause work proceeded for only a quarter-day on 29th July, and on 31st July and 6th August no work was possible. Explained further that according to the custom of said port the work of discharging proceeds for only a half day on Saturdays.’ They add that ‘the’ Glamorgan ‘was discharged with customary despatch according to the custom of the port, within thirteen days from 9 a.m. of 19th July, at which time the vessel is believed to have been ready to discharge, and notice of readiness to discharge was sent to the defenders.’ The defenders moved for a proof of these averments, but the pursuers maintained that they were irrelevant. This question of relevancy depends upon the construction to be put upon the charter-party.

In dealing with a charter-party which provided that the cargo was to be discharged with customary steamship despatch as fast as the steamer can deliver during the ordinary working hours of the port of discharge, but according to the custom of the port, Lord Chancellor Halsbury (in Hulthen v. Stewart & Company, L.R., 1903, A.C. 389) said—‘There are two forms in which charter-parties of this character can be made. In one a specific number of days are given within which the discharge is to be taken, and if those days are exceeded, quite apart from the circumstances, the demurrage is due. If on the other hand the parties choose to agree not to a definite number of days but to a charter-party such as this, they necessarily import into it the circumstances under which the discharge takes place.’ In which of these forms is the present charter-party framed?

On examining the actual charter-party it appears that in the printed form of clause 3 you have that form of charter-party which, to use Lord Halsbury's words, ‘imports into it the circumstances under which the discharge takes place.’ There is, however, a marginal note upon the document to the

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effect that ‘owners may arrange for a fixed average number of standards per day for loading or discharging.’ As such an arrangement fixes a definite number of days just as much as the actual statement of time, I think that the effect of the marginal note is to give the owners the option of converting the printed form of the charter-party into a form where if the time is exceeded the demurrage is due quite apart from the circumstances. In the present case there are words in manuscript showing that parties arranged for loading and discharging at the rate of 125 fathoms per day. The printed words, which are appropriate for importing the circumstances under which discharge takes place into an obligation to discharge which is indefinite as to time, have been allowed to remain. I do not think that I should allow this circumstance to override what I hold to be clear evidence in writing of the parties agreeing to the owners exercising the option given them to substitute a definite for an indefinite time for discharge. Referring to the case of Pearson v. Goschen, 17 C.B. (N.S.) 352, Mr Justice Brett, in the case of Gray v. Carr, 1871, L.R., 6 Q.B. 522, at p. 536, said—“That case seems to me, if I may be allowed to say so, rightly and according to the true mode in which the courts ought to deal with mercantile business, to point out a necessary and timely modification of the older rule of construction as to giving, if possible, a meaning to every term in the contract, in cases where a modern mercantile instrument is known to be in a printed and general form, with parts of it to be filled up in writing to apply it to particular transactions.’ It may be, as Mr Justice Charles said in the case of Baumvoll Manufactur von Scheibler, L.R., 1891, 2 Q.B. 310, at p. 317, that ‘in construing a charter-party no greater effect can be given to writing than to print, although a different rule may prevail with reference to policies of insurance.’ But such a rule does not preclude one from disregarding printed words which are inconsistent with writing which evidences the exercise of an option given in the printed form. I am equally unable to hold that the written word ‘reversible,’ whatever it may mean, gives the charterer the alternative of either loading in the specific time mentioned or in such time as he can in the circumstances under which the discharge takes place.

I should notice that the defenders in answer 4 say that the cargo was loaded in nine days, and accordingly seventeen days were available for discharging as provided for in the charter-party. No argument was submitted to me in favour of this view. The pursuers maintained, apparently rightly, that the obligations to load and to discharge are separate, and that a failure in the performance of either as stipulated results in the obligation to pay demurrage without any right on the part of the charterer to lump the time for loading and discharging—see Lord Trayner's opinion in Avon Steamship Company, Limited, 18 R. 280, at p. 285, 28 S.L.R. 226, at p. 228–9.

I hold the defences to be irrelevant, and give decree for the sum sued for as restricted, with expenses.”

The defenders having reclaimed, and having proposed amendments of the record, on 18th June 1914 the Extra Division ( Lord Dundas, Lord Mackenzie, and Lord Cullen) opened up the record, allowed the amendments, recalled the Lord Ordinary's interlocutor, and remitted to him to allow parties a proof before answer.

On 27th January 1915 the Lord Ordinary, after the proof, pronounced this interlocutor—“… Finds that the defenders' construction of the charter-party is not a sound construction, and that they are liable in demurrage: Fixes the same at 2i days, and decerns against the defenders for payment to the pursuers of the sum of £117, 12s. 1d. in respect thereof. …”

Opinion.—“At the conclusion of the argument in the procedure roll on 13th June 1913 I held the defences irrelevant, and found the pursuers entitled to demurrage for 6i days. In reaching that conclusion, for the reasons given by me in my opinion at the time, I attached no importance to the word ‘reversible’ contained in the clause as regards the discharge of cargo, which is in the following terms:—‘Cargo to be loaded at the rate of 125 fathoms daily, and discharged at the rate of 125 fathoms daily, reversible.’ The defenders reclaimed against my interlocutor, and before the hearing proposed an amendment to the record making an averment to the effect that the presence of the word ‘reversible’ in the clause I have referred to meant that if the stipulated time, which it was agreed was thirteen days for either loading or discharging, was not used in either of these operations, the balance fell to be credited to the time available at the other operation. That averment was answered by the pursuers, who in their original answers denied the averment, but put forward a special case to the effect that in any event the ship had purchased the difference in time between the thirteen days and the time actually occupied in the loading, and that therefore the charterers were not entitled to any benefit from the admitted circumstances that less than thirteen days were occupied in loading.

Before the proof was taken a minute was put in for the pursuers admitting that the customary use of the word ‘reversible’ in charter-parties in the shipping trade is to signify that if any time be saved in loading cargo it may be added to the time allowed for discharge. That, of course, admits the defenders' case unless the pursuers establish that they purchased the time, which they aver they did.

Now as regards what occurred it is proved that an arrangement was made between the shipmaster as acting for the pursuers and a Mr Grankull, whereby dispatch was procured in connection with the loading of the cargo, and I think it may be taken as now proved that the cargo was loaded in nine days instead of the thirteen days which were available.

Mr Grankull received consideration for that dispatch, and I think that the captain in negotiating with him thought that Mr

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Grankull represented the charterers. The way in which the consideration was given to Mr Grankull was that he was allowed to treat the sum as part of the ship's disbursements, and a statement was put upon the bill of lading to the effect that thirteen days had been occupied in loading. That statement, of course, was contrary to the fact.

What I have to consider and determine—and it appears to me to be the only question I have to consider—is whether in making that arrangement Mr Grankull was acting on behalf of the defenders. I reach the conclusion on the facts that it is not proved that he was so acting. Mr Reid, whose testimony I saw no reason whatever to doubt, was quite clear that Mr Grankull had no such authority. Mr Grankull was not in fact the charterers' representative for all purposes in the port of Christianstad, although in connection with certain acts his action was no doubt binding upon them. Mr Reid explains that although when paying freight a deduction of this £31, 10s. was made because it was treated as part of the ship's disbursements, he in fact has received no benefit from the payment. It has not come to him. I believe him when he made that statement. Taking the evidence as a whole, I cannot hold that there was any action on the part of the defenders which amounted to a holding out of Mr Grankull as their agent at Christianstad, or as one clothed with authority to effect such an arrangement as that suggested. Mr Horne argued that in this case, whether or not he had proved that Mr Grankull was agent for the defenders in effecting this arrangement, the defenders were barred from pleading that he was not their agent. There does not appear to me to be on record any precise plea raising that question, nor are facts averred properly raising the plea.

The second branch of the fourth plea is that the defenders are not entitled to maintain that they had extra days available for the discharge in respect that the bill of lading which the defenders presented in order to obtain delivery of the cargo bore that all the days allowed for the loading had been used.

I do not think on the facts in this case that the defenders were bound by that statement on the bill of lading. There is no clear evidence of how it came to be made. There is a considerable amount of evidence, however, in the case that so far as Love & Stewart's representatives on the other side were concerned they were no parties to the arrangement by which time was purchased by the ship. In fact they say that it is against the interests of the defenders that loading should proceed not merely during working hours but at night and in weather that is not suitable. If that be so, so far as the payment of the £31, 10s. is concerned, the defenders appear to have received no benefit, and I have difficulty in seeing how a plea of bar, even if it had been properly pled and properly averred, would apply to the circumstances of the present case.

I therefore hold that so far as the discharge of the cargo is concerned the defenders had about four days available in addition to the thirteen days they were allowed under the charter-party.

The principal question in this case is really on the interpretation of the contract, because the matter I have dealt with is entirely special to the circumstances of the case. But a point of general interest undoubtedly is raised on the question of construction. The Inner House, as they found that it was necessary to have proof upon the averment with reference to the meaning and the use of the word ‘reversible,” allowed a proof to parties of their averments generally. I do not read Lord Dundas' opinion as necessarily at variance with the opinion which I expressed at the conclusion of the argument in the procedure roll. I thought it however safer to allow such evidence as was tendered, particularly by the defenders, upon the question of construction. I have now to express my opinion upon it. It appeared to me to be wholly useless so far as assisting me in interpreting the contract is concerned. I look upon it as both irrelevant and incompetent evidence. It amounted merely to this that Mr Reid, a partner of the defenders, said he considered that, notwithstanding the circumstance that written words had been put in clause 3 of the charter-party, the printed matter should remain. The evidence for the pursuers was to the opposite effect, i.e., that in introducing the written matter their intention was to delete a considerable portion of the printed matter. It is perhaps sufficient that I should simply repeat the opinion that I already gave, because nothing in the case has in any way led me to alter that opinion. I may, however, say this—the printed charter-party was a charter-party where the intention of parties was, and the effect of the language used was, to introduce the custom of the port and other circumstances as affecting the time available for either the loading or the discharging of the cargo. But there is a marginal note to the clause which gives the owners an option to insert a fixed average number of standards per day for loading or discharging. The owners availed themselves of that option, and fixed a certain number. The fact of their so doing appears to me to substitute a fixed number of days for loading and discharging as opposed to a number that might vary according to the circumstances in which the loading or discharging was to take place. I cannot, in addition to giving an interpretation to the written words, give any interpretation to the words ‘ordinary steamship dispatch,’ because the two things are inconsistent the one with the other, and I have no hesitation whatever in preferring the written part which vouches the exercise of the option, to attempting to retain the printed matter, which would only have the result of making the whole clause something approaching to nonsense.

I therefore find that the defenders' construction of the charter-party is not a sound construction, and that they are liable in demurrage; but in view of the facts which have been proved in the other parts of the

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case, I think that the demurrage to which the pursuers are entitled is 2i days as against the 6 1 2 days which I previously allowed.”

The defenders reclaimed, and argued—(1) Admittedly written words in the charter-party must prevail against printed words, but if they did not conflict they should be read together. The written words at the rate of 125 fathoms daily “were not inconsistent with the printed words according to the custom of the respective ports,” and the latter words were not superseded by the exercise of an option such as the Lord Ordinary supposed the memorandum to confer on the parties. The memorandum conferred no such option. It merely indicated that the charter-party might be varied— Central Argentine Railway Company v. Marwood, [1915] A.C. 981; Mawson Shipping Company, Limited v. Beyer, [1914] 1 KB 304, per Bailhache, J., at 309; Elderslie Steamship Company v. Borthwick, [1905] AC 93, per Lord Halsbury, L.C., at 96; Wemyss Collieries Trust, Limited v. Melville, (1905) 8 F. 143, 43 S.L.R. 98; Hulthen v. Stewart & Company, [1903] AC 389; Baumvoll Manufactur von Scheibler v. Gilchrist, [1891] 2 QB 310, per Charles, J., at 317. The words according to the custom of the respective ports “were not limited to the mode of delivery. They affected the time of delivery, inasmuch as the local custom of the port of Newburgh exempted wet days and entitled the defenders to break up the days and to count half days— Horsley Line, Limited v. Roechling Brothers, 1908 S.C. 866, 45 S.L.R. 691; Houlder v. Weir, [1905]2 K.B. 267; Yeoman v. The King, [1904], 2 K.B. 429; Aktieselkabet Argentina v. Von Laer, (1903) 19 T.L.R. 151; Branckelow Steamship Company v. Lamport & Holt, [1897] 1 QB 570; Nielsen v. Wait, (1885) L.R., 16 Q.B.D. 67; Postlethwaite v. Freeland, (1880) L.R., 5 A.C. 599; Nelson v. Dahl, (1879) L.R., 12 Ch D 568; Hough v. Althyra & Son, (1879) 6 R. 961, 16 S.L.R. 553; Holman v. Peruvian Nitrate Company, (1878) 5 R. 657, 15 S.L.R. 349; Commercial Steamship Company v. Boulton, (1875), L.R. 10 Q.B. 346; Brown v. Johnson, (1842) 10 M. & W. 331; Cochran v. Retberg, (1800) 3 Esp. 121. (2) The defenders were entitled to credit the three days saved at the port of loading. The evidence showed that Grankull had no authority to take payment for these days and to bind the defenders thereby— Sinclair, Moorhead, & Company v. Wallace & Company, (1880) 7 R. 874, 17 S.L.R. 604; Hamilton v. Dixon, (1873) 1 R. 72, 11 S.L.R. 39; Gloag, Law of Contract, p. 164. (3) The terms of the bills of lading could not affect the defender's rights under the charter-party— Sewell v. Burdick, (1884) L.R., 10 A.C. 74, per Lord Bramwell at 105; Wagstaff v. Anderson, (1880) L.R., 5 C.P.D. 171.

Argued for the respondents—(1) Where the written and printed words in the charter-party were in conflict the latter were superseded— Nelson Line (Liverpool), Limited v. James Nelson & Sons, Limited, [1908] AC 16; Scrutton v. Childs, (1877) 3 Asp. Mar. Ca. 373; Gray v. Carr, (1871), L.R., 6 Q.B. 522; North British Insurance Company v. Tunnock & Fraser, (1864) 3 Macph. 1; Pearson v. Goschen, (1864) 17 C.B. (N.S.) 352. The rate of discharge as fixed by the writing was inconsistent with the printed words “with customary steamship dispatch” and “according to the custom of the respective ports,” and therefore the latter words were superseded— Bennetts & Company v. Brown, [1908] 1 KB 490; Houlder v. Weir ( cit.); Postlethwaite v. Freeland ( cit.); Carver, Carriage by Sea (5th ed.), sec. 611; Scrutton, Charter-Parties and Bills of Lading (7th ed.), sec. 131. “According to the custom of the respective ports” did not go beyond the method and machinery of discharge— Gardiner v. Macfarla ne, M'Crindell, & Company, (1893) 20 R. 414, 30 S.L.R. 541; Kearon v. Radford & Company, (1895) 11 T.L.R. 226; Castlegate Steamship Company v. Dempsey, [1892] 1 QB 854, per Lord Esher, M.R., at 858 and Fry, L. J., at 861; Nelson v. Dahl ( cit.). Days” in the charter-party meant consecutive days, and included Sundays and holidays, and part of a day counted as a whole day— Houlder v. Weir ( cit.); Metcalfe, Simpson, & Company v. Thomson, Pattrick, & Woodwark, (1902) 18 T.L.R. 706; Hough, v. Athya & Son ( cit.); Holman v. Peruvian Nitrate Company ( cit.); Brown v. Johnson ( cit.). Saturday might be a half-holiday, but as a lay-day it counted as a full day— The “Katy,” [1895], P. 56; Leonis Steamship Company v. Rank No. 2, (1908) 13 Com. Cas. 161. (2) Grankull was the defenders' agent, and the defenders were bound by his actings. Accordingly the “purchased” days should not be included in the days allowed for discharge— Nelson & Sons, Limited v. Nelson Line (Liverpool), Limited, [1907] 2 KB 705; The “Glendevon,” [1893], P. 269; Avon Steamship Company, Limited v. Leask & Company, (1890) 18 R. 280, per Lord Young at 285, 28 S.L.R. 226, at 229; Freeman v. Cooke, (1848) 2 Ex. 654. (3) In any event the defenders were bound by the terms of the bills of lading— Craig & Rose v. Delargy, &c., (1879) 6 R. 1269, 16 S.L.R. 750; Compania Naviera Vascongada v. Churchill & Sim, [1906] 1 KB 237; Oakville Steamship Company v. Holmes, 1899, 5 Com. Cas. 48; Allen v. Coltart, (1883) L.R., 11 Q.B.D. 782; Glyn, Mills, & Company v. East and West India Dock Company, (1882) 7 A. C. 591; Hayn v. Culliford, (1879), L.R., 4 C.P.D. 182.

At advising—