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United Kingdom House of Lords Decisions
You are here: BAILII >> Databases >> United Kingdom House of Lords Decisions >> Crawford & Law v. Allan Line Steamship Co., Ltd [1911] UKHL 117 (19 December 1911)
URL: http://www.bailii.org/uk/cases/UKHL/1911/49SLR0117.html
Cite as: 49 ScotLR 117, [1911] UKHL 117
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SCOTTISH_SLR_House_of_Lords
Page: 117↓
House of Lords.
(Before the
v.
(In the Court of Session, March 17, 1911, 48 S.L.R. 648, and 1911 S.C. 791.)
Subject_Ship — Bill of Lading — Through Bill of Lading — Goods Found Damaged on Arrival — Acknowledgment — Goods Received in Good Order — Onus.
Facts:
Where a through bill of lading has been signed, inter alios, on behalf of the last carriers, the shipowners, providing that each carrier is only to be liable for damage occurring on his portion of the route, and acknowledging that the goods have been received in good order at the beginning of the transit, and the last carriers have taken no exception to the condition of the goods when handed over to them, they are liable for any damage discovered unless they prove it occurred previously.
This case is reported ante ut supra.
The pursuers Crawford & Law appealed to the House of Lords.
Page: 118↓
At delivering judgment—
The facts may here be very briefly stated. The flour was in 41,000 bags, in good order and condition, and was so delivered to the first carrier. Its route was prescribed. It was to go via New York, and each carrier in turn was to certify by a system of checking the state and condition of the goods carried in handing it over to his successor, and the succeeding carrier was to receive them in like order and condition, and to be responsible for himself delivering them to his own successor on the route except so far as they were marked. It is proved that this course was pursued at New York (whether this was accurately done is another matter with which I will deal presently). A somewhat trifling number were marked at New York, but a very serious number, upwards of 4000 bags, were discovered at Glasgow which had been damaged.
Here I may say that it appears to me to be irrelevant to discuss what is the nature of the damage done, and whether it may or may not be comprehended in certain other words. In respect of the question as applicable to these upwards of 4000 bags caked, the question may be separated entirely from the question of the amount of damages that may be recovered in respect of it. It is enough to say that there is no doubt that these 4000 and odd bags had been damaged, and the sole question to my mind is the responsibility upon these bills of lading. To my mind the whole question is one of law, because as a matter of fact it does not appear to me that upon the facts stated there is any real dispute between the parties. The sole question is, as I have described, the validity of this form of bill of lading.
It is proved, as I have said, that this was the course of business that was pursued from New York to Glasgow, and whether this which was involved in what I have described as the course of business was done accurately or not at New York does not appear to me (if the bill of lading as it is called is valid at all) to be very material, because, as I think the Lord Ordinary has pointed out, it is quite clear that the liability is one which follows, and one must assume that each of these carriers in turn receives the things in good order and condition except so far as they were marked in the manner which has been described.
The Lord Ordinary decided after proof that the defenders were liable by reason of the contractual engagement by the two documents called bills of lading, one signed at Minneapolis and the other at New York, but both signed by authorised agents.
Of course this part of the arrangement was most important, since but for this neither carrier nor merchant could fix responsibility for loss or damage, since there is an express engagement that no one of the independent carriers should be responsible for loss or damage except on his own part of the line. This obligation amongst others was duly signed by Mr P. R. Jarvis on behalf of the defenders. The successive obligations and responsibilities of each succeeding carrier are absolutely essential to such a system as is established by the through bill of lading, enforced as it is by the contract to which all are parties, that none of them shall be held answerable for loss or damage beyond their own line, and I am wholly unable to agree to the passage in Lord Salvesen's judgment in which he says that no bill of lading of any kind was signed by the master or agent of the steamer at New York. Of course the learned Judge does not merely mean that it must have been signed at New York. He has, I think, omitted to notice that the bill of lading which is given to us as a specimen of all the bills of lading was signed by him expressly on behalf of the steamer which was to carry the flour from New York to Glasgow—that is, on behalf of the defenders themselves. And as it appears to me that, as I have said more than once, is the only question that can arise in the cause. He appears not to have noticed this fact, and upon that the whole question turns. If this bill of lading is valid according to its true construction, I do not think it is necessary to go into the question of the incorporation of the contract, because it seems to me the bill of lading with considerable accuracy describes what is to be done and what is to be assumed if no such marks as are indicated are found upon the bags on their arrival. This has been done, and it appears to me the judgment of the Lord Ordinary is perfectly right and ought to be restored.
The action in which the last-mentioned interlocutor was pronounced was raised to recover damages alleged to amount to £167, 12s. 6d. for injury done to 4112 bags of flour, portion of a cargo of 41,110 bags loaded at New York on the 19th of
Page: 119↓
It is not disputed by the respondents that these 4132 bags of flour were, when delivered in Glasgow, “caked.” Caking is the damage complained of, and consists in this, that the texture of the bag getting wet, the wet got through the bag and wetted the portion of the flour immediately contiguous to its inner surface, turning the flour into dough, which when dry hardened and became what is called a cake. It is admitted on both sides that this caking does not injure the uncaked portion of the flour contained in the bag. And it is further admitted that the caking in this case resulted from the bags having been wetted by fresh water, and that this wetting did not take place in the hold of the steamer “Corinthian,” though, of course, the caking might, and almost certainly would, take place there if the bags were wet when placed in the hold. It is admitted further that the bill of lading was not drawn up, delivered, or signed by the master of the ship, and that it was not conversant exclusively with the ocean voyage from New York to Glasgow. The goods had been purchased from the Pittsburg Wasburn Flour Mills Company, Limited, carrying on business at Minneapolis, Minn., in the United States of America, and were, on the 10th of October 1903, delivered to the Lehigh Valley Transportation Company, consigned to Glasgow to the order of this milling company, to be carried, as the appellants alleged, the entire way to this Scotch port under the terms of certain bills of lading, somewhat peculiar in form, for a through freight. One of these bills of lading is printed as a specimen. It is signed P. R. Jarvis, Agent, “on behalf of carriers severally but not jointly.” And immediately above this signature the following paragraph is to be found:—“In witness whereof the agent signing on behalf of the said Lehigh Valley Transportation Company, and of the said Ocean Steamship Company or ocean steamer and her owner severally, and not jointly, hath affirmed two bills of lading, all of this time and date, one of which bills being accomplished, the other to stand void.”
The sum sued for is of small amount, but the proper construction of through bills of lading such as this, which are common, and the determination of the rights and obligations of the parties concerned under them, are of vast importance. It is for the purpose of getting these matters finally decided that this litigation was, admittedly, commenced. The bill of lading contains on the face of it a statement that the flour was received “in apparent good order except as noted.” The provision immediately following is to the effect that the goods so received “are to be carried to the port of New York, and thence by Allan State line to the port of Glasgow, Scotland … and to be there delivered in like good order and condition as above consigned, or to the consignee's assigns,” &c. It then proceeds to provide that in consideration of the freight named, the service stipulated for is to be performed thereunder subject to the conditions, whether printed or written, contained in it. Then follow eleven conditions dealing with the service up to the port of New York.
It is only necessary to refer to three of these, namely, No. 1, providing that no carrier shall be liable for loss or damages caused, amongst other things, by “heat, frost, wet, or decay” No. 3, providing that “no carrier shall be liable for loss or damage not occurring on its own road or its portion of the straight route, nor after the property is ready for delivery to the next carrier or consignee …” and also that “claims for loss or damage must be made in writing to the agent at point of delivery promptly after arrival of the property, and if delayed for more than 30 days after the delivery of the property or after due notice of delivery thereof, no carrier should be liable thereunder” and No. 11, providing that the contract is executed and accomplished, and all liability thereunder terminates, on the delivery of the property to the steamer, her master, agents, or servants, or to the steamship company, and that the inland freight and charges should be a just lien due and payable by the steamship company.
The second part of the bill of lading deals with the service after delivery at New York, and until delivery at Glasgow. It contains nineteen separate paragraphs. Of these No. 1 provides amongst other things that the steamer should not be liable for inland damage, and No 11 that the steamer should only be responsible for such part of the goods as are actually delivered to her at the Port of New York, and should not be liable for any loss or damage that might have occurred before such delivery, while agreeing promptly to present to inland carriers for account of owners of the goods any claim for shortage, loss, or damage that may have occurred before delivery of goods at the Port of New York.
It is, I think, plain that by these provisions for the prompt delivery of claims for damage, contained in paragraph 3 (dealing with inland carriage) and in paragraph 11 (dealing with ocean carriage), it was designed to set up machinery to protect on the one hand each carrier from claims for damages not occurring on his portion of the through route, and to secure on the other hand for the owners of the goods the means of enforcing any claim he might have against the carrier on whose portion of the through route his goods were, in fact, lost or damaged The shippers contracted with the transport company to carry these goods, in the way and by the means stipulated for, to their destination at Glasgow. The shippers were neither bound nor entitled to interfere with the cargo en route, and if, on the arrival of the goods at Glasgow in a damaged condition,
Page: 120↓
The second part of the bill of lading contains two other important provisions—first, by section 2, it provides that the shipment until delivery at Glasgow is to be subject to all the provisions of the American Statute of 1893, called the Harter Act. By section 4 of that Act the owner, master, or agent of every vessel transporting goods from an American port to any foreign port is bound to issue to the shippers a bill of lading containing, amongst other things, a statement of the apparent order and condition of the property delivered and received by the owner, master, or agent of the vessel for transportation, which document is thereby made primâ facie evidence of the receipt of the merchandise described in it; and second, paragraph 18, a condition to the effect that the property covered by the bill of lading is to be subject to all the conditions expressed in the regular forms of bills of lading in use at the time by the steamship company. One of these so-called ocean bills of lading is printed. It commences with the statement—“Received in apparent good order and condition by the Allan State line from the … to be transported by the good British ship, ‘Corinthian’ … to be delivered” in like order and condition at the Port of Glasgow.
Unless, therefore, the respondents violated the American law the bill of lading so signed by Jarvis must be taken to be a bill of lading issued by them for the ocean voyage, and Jarvis must be taken to be their agent for that purpose.
I am quite unable, therefore, to follow the reasoning of Lord Salvesen when he says, as he is reported to have said, that the admission contained in the through bill of lading as to the condition in which the flour was received applies, and can only apply, to Minneapolis. That condition is that the goods are in apparent good order and condition except as notified. It is more restricted than what is required by the Harter Act or by the ocean bill of lading. Neither can I follow his reasoning where he says—“It would, of course, have been different if there had been a bill of lading signed on behalf of the ship, acknowledging receipt of the flour in good order and undertaking to deliver it in the same order, for this would have been a contractual obligation which it would lie on the ship to excuse itself from discharging. Here, as I hold, there is nothing of the kind.” But what are the facts? The flour arrived at New York in due course. It was there warehoused. On the 12th of November 1903 H. C. Davis, the foreign freight agent of the Lehigh Valley Railway, wrote to Austen Baldwin & Company, the agents of the respondents, to notify them of the arrival of flour “engaged with you for Glasgow,” and asking for a shipping permit. The only way in which the flour was “engaged” with the respondents for Glasgow was under the through bill of lading; On the 12th of December these same agents of the respondents sent a permit authorising the receiving clerk of the “Corinthian” to receive this flour from the Lehigh Valley Railway Company.
That is followed by the delivery of the goods to the steamer on the 19th and subsequent days of December 1903 in presence of the respondents' officials, their receiving clerk, L. L. Le Furge, having been sent there for the purpose of checking the delivery and giving receipts therefor. He gave receipts on a printed form, I presume, headed Received for shipment on board steamship “Corinthian,” bound to Glasgow, subject to the exceptions and restrictions of liability contained in the usual bills of lading of the company. But these latter are the bills of lading incorporated into the through bill of lading by paragraph 18 of the latter. It would therefore appear to me impossible to hold that whether Jarvis, when he signed the general bill of lading, purporting to act as agent for the respondents, amongst others, had antecedent authority from them so to do or not, they have adopted, acted upon, and taken the benefit of the contract of carriage he purported to enter into on their behalf, and can no more be permitted now to disclaim any liability it may by its terms impose upon them than if they had placed the seal of the company under Jarvis's name on the 10th of October 1903.
Neither can I concur in the suggestion of Lord Salvesen, that the inland carrier who tendered this flour to the ship was, as regards the loading, the agent of the original shipper, and that accordingly the consent of this carrier to have the goods loaded in rain binds the appellant. I think Mr Bailhache is quite right in his contention that the shippers had contracted with the first carrier to transport and deliver these goods to the steamship, just as the steamship had contracted to receive them when delivered, that the relation between the shipper and the inland carrier was the contractual relation thereby created, and that the carrier was no more the agent of the shippers to see to the proper delivery of the goods, than was the steamship company their agent to see to the proper reception and stowage of them.
It is not suggested that this flour got wet in the warehouse. If it did it must have been caked when delivered, and this should have been readily detected. It is admitted it must have got wet before it was placed in the hold of the steamer, though the caking might, and possibly did, take place there. I concur with the Lord Ordinary in thinking that respondents have failed to prove that these bags of flour
Page: 121↓
The summons in the action was as far back as May 1904, and the amount in dispute is not large, but the Lord Ordinary states that the object of the action was to stop the loading of flour at New York in wet weather.
The flour was despatched under through bills of lading from Minneapolis for Glasgow. It is admitted that the sacks or bags of flour when delivered to the inland carriers were in apparent good condition. According to the bills of lading, the goods were stated to be received at Minneapolis “in apparent good order (except as noted), contents and condition of contents of package unknown,” to be carried to New York and thence by the Allan State Line to Glasgow, and there delivered in like good order and condition. The conditions in the bills of lading were divided into two parts. The first dealt with the service by the inland carriers, the Lehigh Valley Transportation Company, to the port of New York, which terminated with delivery to the steamer (clause 11). The delivery in this case was from the inland carriers' lighters, when the sacks or bags were placed in the steamer's slings to be hoisted on board the steamer.
The second part dealt with the service after delivery to the steamer until delivery at Glasgow. By condition 1 of the second part the steamer was not liable for inland damage, and by condition 2 of that part the shipment was subject to all the terms, provisions, and exemptions in what is known as the Harter Act—an Act of the United States of 1893. By condition 11 of the same part the steamer was only responsible for such part of the goods as were actually delivered to her at New York, and not liable for any loss or damage that might have occurred before such delivery, “while agreeing to promptly present to inland carriers for account of owners of goods any claims for shortage or loss or damage that may have occurred before delivery of goods at the port first above mentioned,” i.e., at New York. Condition 18 of the said second part provided “that the property covered by this bill of lading is subject to all conditions expressed in the regular forms of bills of lading in use by the steamship company at time of shipment, and to all local rules and regulations at port of destination not expressly provided for by the clauses herein.”
The through bill of lading was signed by an agent on behalf of the carriers severally but not jointly.
The receipts given by the respondents at New York to the inland carriers were headed—“Received for shipment on board steamship ‘Corinthian’ bound to Glasgow, subject to the exceptions and restrictions of liability contained in the usual bills of lading of the company.” I understand that these receipts notified that 26 sacks or bags were “caked” and that 84 were wet; but on delivery at Glasgow it was found that 4132 were “caked.” “Caking” appears to be a well-recognised form of damage to flour resulting from wet. A layer next the covering becomes hard, and the covering seems to be firm and hard to the touch. It is not disputed that the caking in question was caused by fresh water. Caked flour requires reconditioning, and the expense of this process to 4022 sacks or bags (the difference between 4132 bags found caked at Glasgow and the said 110 notified at New York as wet or caked), £167, 2s. 2d., is claimed in this action.
The Harter Act, which will be found conveniently given in the late Judge Carver's work on Carriage by Sea, sec. 103, requires the giving of an ocean bill of lading or shipping document in case of goods carried out of the United States by sea, and such bill of lading must state, inter alia, “the apparent order and condition of such merchandise or property delivered to and received by the owner, master, or agent of the vessel for transportation, and such document shall be prima facie evidence of the receipt of the merchandise therein described.”
The through bill of lading in question in effect incorporates by clause 18 of the second part the respondents' form of ocean bill of lading which is given in the appendix, and commences, “Received in apparent good order and condition,” and provides for delivery “from ship's dock, where the shipowner's responsibility shall cease, in like order and condition at the port of Glasgow,” and also incorporates the Harter Act.
In my opinion the effect of these documents is to charge the respondents with the receipt of the flour in apparent good order and condition, except so far as they notify the inland carrier that this is not the case. Here they notified 110 sacks or bags as caked or wet. There were also
Page: 122↓
During part of the time on which the cargo was loaded, after intimation from the steamship agents that the steamer was ready for cargo, the weather was wet, and precautions appear to have been taken to prevent the goods from being wetted as they were being taken on board from the lighters in which they came alongside it. The Lord Ordinary found that there had not been negligence in the attempts to protect the goods, but it seems reasonably clear that they, in fact, became wetted in the loading, although it is said the loading was stopped when heavy showers or storms came on. If the bags were wet when taken on board the steamer it would be apparent, and if they were at that time caked the Lord Ordinary finds that “caking is damage to the contents of the bag indicated by external appearance.”
In these cases of through bills of lading the consignors and consignees have no control over the transit, and the convenience of business requires that the shipowner, when he receives from the inland carrier, shall be careful to see what the apparent order and condition of the goods then is. If he accepts them as in apparent good order and condition, he takes the responsibility of delivering them in that order and condition, except so far as it is shown that the damage complained of was done before he received the goods or was caused by perils excepted in his part of the contract. None were relied on in this case. If they are not in apparent good order and condition he must notify the inland carrier, against whom the owner of the goods may claim, subject to any answer that carrier has. It is said that this imposes a heavy duty on the shipowner, but I do not see that this places him in any worse position than would be the case were he the first receiver of the goods, as in any ordinary case of shipment from port to port, where for his own protection he must be careful not to sign bills of lading for goods as in apparent good order and condition when the goods are not so in fact.
The result is that in this case goods are admitted to have been received by the respondents in apparent good order and condition, to have been discharged in a damaged state, and no sufficient proof is given by the respondents that the damage was in fact done before they had possession of the goods, or by perils excepted after they had such possession.
If it had been established that the damage had in fact been done before the steamer took delivery of the goods, the question would arise as to the duty imposed on the respondents to notify the inland carriers, and I think they would be liable for breach of duty in this respect if they did not make a reasonable and proper inspection in the circumstances and notify the results to the inland carrier by qualifying the receipts accordingly.
The Lord Ordinary finds that the loading of what was a very large cargo was pressed on, with the result that the examination, which would have disclosed caking, was not properly made. It seems to me the evidence shows this. An experienced witness, Mr Maloney, states it was about the biggest shipment of flour that he ever saw. The owners were evidently anxious to get the steamer away on her sailing day, and it would seem that they could not do this without going on loading notwithstanding the state of the weather, and that the result was an inadequate and hurried examination. It is not an excuse that the respondents desired to keep to the steamer's sailing date. If the shipowners do not notify, they in effect admit that the goods are received by them in apparent good order and condition, and if they wish to protect themselves they must make a proper examination. If they do notify, then the cargo owners must look to the inland carriers so far as the latter are not excused by the terms of their contract.
I am of opinion that the appeal should be allowed, and the decision of the Lord Ordinary restored.
1. The “through bill of lading” was for the transport of goods from Minneapolis to Glasgow via the Great Lakes. It was most natural that the consignor in such a case should make a contract for the entire journey and know his rights throughout, and most natural that the transporting interests should combine to facilitate such business. Your Lordships have given the details of the document. It was signed by P. R. Jarvis, agent, “on behalf of carriers severally but not jointly,” the document bearing that the agents signed “on behalf of the said Lehigh Valley Transportation Company and of the said Ocean Steamship Company or ocean steamer and her owner.” There are stipulations in it, also perfectly natural, that no carrier is to be liable for loss or damage
Page: 123↓
A special branch of contract with a special series of provisions applies to the sea-going portion of the route, and the earlier portion just referred to only bears upon this case as illustrating that the provisions of the entire contract point to liability for damage being promptly localised and the damage being paid, the particular carrier being thus ascertained by that carrier. In the second portion of the contract, into which the form of an ocean bill of contract is imported by reference, it is provided, entirely in accordance with the general scheme of the bargain just mentioned, that the steamer is not liable for loss that may have occurred before delivery to it, while the ocean carrier agrees to present promptly to inland carriers “any claims for shortage or loss or damage that may have occurred before delivery of goods at the port.”
In the document as a whole the flour, which was the cargo, was acknowledged as received at Minneapolis in apparent good order, and it is further admitted by the joint minute of parties that each bag and sack of flour when delivered to the inland carrier was in good condition. In the adopted form of ocean bill of lading precisely the same language—“Received in apparent good order and condition”—was used. It is admitted that the Allan Line Company, the respondents, accepted delivery of the goods at New York, taking exception to the caked condition of about only a hundred sacks (I proceed upon the concessions as to figures quite properly made in argument), and that when the goods were ready for discharge at Glasgow over 4000 sacks were discovered to be caked.
Were it not for the judgment of the Second Division it would be rather difficult to discover what upon those facts constitute difficulties in the way of construing this contract. These difficulties, however, in so far as they have led to the reversal of the Lord Ordinary's judgment, appear to be reduced to two. It has been held, to use Lord Salvesen's words, that “the admission contained in the through bill of lading as to the condition in which the flour was received applies, and can only apply, to Minneapolis, and the obligation to deliver in the like good order and condition, while it is undertaken by the agent who signs it on behalf of all the carriers severally but not jointly does not apply in terms to successive carriers.” I can only say that the very opposite appears to me to be the case. “In the second place, I think,” says the same learned Judge, “it may well be argued that the inland carrier, by whose servants the flour is tendered for shipment, is the agent for that purpose of the original shipper.” It humbly appears to me that this is not the contract of parties. Under a proper construction of this contract the several carriers must, in the view which I entertain, be held bound, unless notification to the contrary is promptly made, to the fact that the goods were received in apparent good order. And with regard to the shipowners for the Atlantic voyage, it appears to me, first, that they are expressly bound by the terms of the through bill of lading signed by Jarvis, who was agent for them as well as for the other carriers, that bill of lading stating that the goods were received in apparent good order and condition; while, further, it must be borne in mind that under the law of the United States such an obligation could not be dispensed with. It would appear to me to be a curious result if by the device of a through bill of lading a means of escape could be provided from the general shipping law of the United States.
Once, however, the point of law is settled in the sense that I have indicated, I do not find in Lord Salvesen's opinion that there would be any doubt in the mind of that learned Judge as to the legal consequences which would follow. “If there had been a bill of lading, signed on behalf of the ship, acknowledging receipt of the flour in good order, and undertaking to deliver it in the same order … this would have been a contractual obligation which it would lie on the ship to excuse itself from discharging.” I entirely agree in that view. As, accordingly, I am, along with your Lordships, of opinion, that there was such a bill of lading on behalf of the ship in this case, I think the contractual obligation referred to rests upon the respondents. When the judgment of the Inner House is analysed, it is, however, observed that a consideration of the facts and of points as to the onus of proof is made from the opposite point of view, namely, that there was no such contractual obligation, and that the onus under a contract, worded like the present, for through carriage by land, lake, and ocean, rests upon the consignor to prove how the damage was caused and to localise where it occurred. This might be singular as a matter of business, and it appears to me to be out of keeping not only with the provisions, but with the scheme of the bargain of parties.
The construction of the contract being as stated, the determination of the case upon fact is greatly simplified. If there had been no proof whatever, standing the contract, the principle of the “ Peter der Grosse” ( 1 P. D. 414) would apply. That principle is thus expressed by that very learned Judge, Sir Robert Phillimore—“Fairly construed, and giving all due weight to the legal effect of the marginal note, the result must be that apparently, and so far as met the eye, and externally, they were placed in good order on board this ship. Well, then, if that be so, if the plaintiffs have shown by prim a facie evidence that having put these bales and bags in good order on board the ship, they were taken out in bad order externally and
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I humbly agree in the course proposed.
Their Lordships reversed the interlocutor appealed against, with expenses.
Counsel for the Appellants— Bailhache, K.C.— Fleming. Agents— James Ness & Son, Writers, Glasgow— Gill & Pringle, W.S., Edinburgh— Woodhouse & Davidson, London.
Counsel for the Respondents— Morison, K.C.— C. H. Brown. Agents— Wilson, Caldwell, & Tait, Glasgow— Webster, Will, & Company, S.S.C., Edinburgh— Pritchard & Sons, London.