United Kingdom House of Lords Decisions

The question which was argued, and the main question, is this—It was said that this was what is called a lump sum contract, and that as the ship did not arrive at Port Talbot and deliver in the ordinary way the freight is not payable. The shipowners, who were the plaintiffs in the Court of Appeal, sued for the freight, and the answer was, “No, you have not performed your contract, which is an entire contract. You were to proceed to Port Talbot and your ship never got there, so that you never really performed your contract and are not entitled to the consideration stipulated for.” I do not think that the question whether the freight is a lump sum freight is in the least decisive of the character of the contract. There may be contracts, as the learned Judge said, in which the stipulation is simply for the use of the ship, which is to proceed to a certain port for a lump sum, and in that case it may be as was argued in this instance, but we have not to deal with such a contract but with this contract, and in regard to this contract I entirely concur with what the learned Judge says, that the meaning of the contract in this case is that it is an ordinary and regular charter for the services of the ship to carry a particular cargo to a particular port. The substance of the contract is to deliver the cargo, and the ship is the instrument in which the cargo is to be carried. In that state of facts the law which seems to me to apply is that laid down by Lord Ellenborough in the case of Hunter v. Prinsep, 10 East. 378, which is to this effect—The shipowners undertake that they will carry the goods to the place of destination unless prevented by dangers of the seas or other inevitable casualty, and the freighter undertakes that if the goods be delivered at the place of their destination he will pay the stipulated freight, but it is only in that event that he, the freighter, engages to pay anything. If the ship is disabled from completing her voyage the shipowner may still entitle himself to the whole freight by forwarding the goods by some other means to the place of destination. The Judge has held here what took place was equivalent to that transhipment of which Lord Ellenborough speaks. It does not matter that it was not done in lighters; it was done by cutting holes in the vessel and floating the cargo on to the beach. The point is that the cargo arrived there, and that the master was doing his best to secure that this took place. Under these circumstances the Judge has found that the facts are facts which amount to transhipment, that there was delivery of three-quarters of the cargo, and that the rest was lost by perils of the seas.

I entirely agree with that judgment of Pickford, J., confirmed as it was by the Court of Appeal, and therefore move that this appeal be dismissed with costs.

Lord Shaw—By a contract of affreightment certain shipowners for a lump sum undertook to convey a full cargo of pit—props from Uleaborg to Port Talbot. The charter-party is in no unfamiliar terms, and contains the usual exception as to perils of the seas. The ship performed the voyage almost to the harbour of Port Talbot. She anchored outside, where her cable parted owing to stress of weather and she foundered. She never, as a ship, did arrive at the port of delivery. I am of opinion that the dominant idea of this contract is delivery of the pit-prop cargo. I agree with the manner in which that idea is expressed by Farwell, L.J., who said that the gist of the contract was that the shipowner should convey and deliver to the charterer or his consignee the goods included in the charter. It is proved that the shipowner in the circumstances collected all the available cargo (for I hold that the action of the underwriters and others while the ship was in that position and subsequently to that position was action with the shipowners' authority), and they blew in the side of the vessel to facilitate discharge, and delivered all the goods except those which were lost by perils of the seas.

I am of opinion that under these circumstances the freight agreed upon was earned, and that there has been right and true delivery, taking into account that exception of perils of the seas which the contract itself contains. This appears to me to be in complete accord with the principles laid down by Lord Ellenborough. The dominant idea of the contract was delivery, and I venture to use the language of Pickford, J.—“I think if the whole of the cargo had been collected and delivered it is exactly as if the whole of the cargo had been transhipped and delivered in another ship.” That being the principle as regards the whole cargo, I think that the same principle should apply if there is, as here, a delivery of a substantial part of the cargo, the balance being undelivered owing to an excepted peril. In this instance we have a contract which covers the situation which has arisen. I have no doubt that the Courts below have reached a conclusion not only in accord with shipping law but in accordance with mercantile practice and precedent.

Lords Moulton and Parmoor concurred.