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United Kingdom House of Lords Decisions
You are here: BAILII >> Databases >> United Kingdom House of Lords Decisions >> Rowtor Steamship Co., Ltd v. Love & Stewart, Ltd [1916] UKHL 706 (25 July 1916)
URL: http://www.bailii.org/uk/cases/UKHL/1916/53SLR0706.html
Cite as: [1916] UKHL 706, 53 ScotLR 706
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SCOTTISH_SLR_House_of_Lords
Page: 706↓
House of Lords.
(Before
v.
(In the Court of Session, December 7, 1915, 53 S.L.R. 280, 1916 S.C. 223.)
Subject_Ship — Charter-Party — Lay-Days — Demurrage — Construction of Printed Charter-Party with Written Interlineations as Affecting Lay-Days and the Exceptions to the Running thereof.
Ship — Agent and Principal — Bill of Lading — Charter-Party — Dispatch in Loading Added to Lay-Days Actwdly Used, and, Total Noted on Bill of Lading as Days Used for Loading.
Facts:
The lay-day and demurrage clause of the charter-party of a ship chartered for the carriage of pit props ran as follows,
Page: 707↓
the words in italics being written interlineations on a printed form—“The cargo is to be loaded at the rate of 125 fathoms daily, and discharged at the rate of 125 fathoms daily, reversible, with customary steamship dispatch 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. …” Held, in an action for demurrage, (1) that the charter-party was for a fixed number of days for loading and discharging, known as soon as the amount of cargo was known, and that the printed words so far as inconsistent therewith must be read as referring only to the manner of loading and discharging, and (2) that time lost owing to wet weather and Saturday half-holidays, when according to the custom of the port of discharge work was suspended, could not be read into the exception.
The charterers of a vessel were entitled to thirteen days for loading and thirteen days for discharging “reversible,” i.e., to twenty-six days for both operations. The shipper of the cargo, who was to deliver f.o.b., also acted as the charterers' agent to load a full cargo and to make disbursements on account of freight for ship's disbursements, and also as the ship's agent to report and clear her at the custom-house and to do her business generally, including the engagement of her stevedores. By arrangement with the captain the shipper by working overtime loaded the cargo in nine instead of thirteen days, and took credit in the ship's disbursements for the amount so earned, viz., £31,10s. On the bill of lading was noted the amount of the ship's disbursements, and on the margin—“Thirteen days used for loading.” The shipper included the amount of the ship's disbursements in his invoice and in his bill, which was duly met by the charterers on taking up the bill of lading. In the knowledge that there had been an arrangement for dispatch, though not of its extent, and of the total of the ship's disbursements, though not of how they were made up, the charterers took delivery of the cargo under the bill of lading.
In an action for demurrage, held that the charterers were entitled to seventeen days for unloading.
This case is reported ante ut supra.
The defenders, Love & Stewart, Limited, appealed to the House of Lords.
At delivering judgment—
To provide for the carriage of part of this parcel Messrs Love & Stewart, Limited, chartered the pursuers' steamship “Glamorgan,” by a charter dated 11th June 1912. It was in the well-known “Scanfin” form with some manuscript alterations. In particular, clause 3, the lay-day and demurrage clause, was altered by interlineating after “loaded” the words “at the rate of 125 fathoms daily,” and after “discharged” the words “at the rate of 125 fathoms daily, reversible.” None of the printed words as to loading were struck out and no question of mistake or of rectification was raised. The ship loaded and discharged a quantity of pit props, which at the agreed rate gave thirteen days each at the ports of loading and discharge respectively. She was ordered to Newport, Monmouth, and there discharged her cargo to Messrs Love & Stewart, Limited.
The question which arises on this clause relates to wet days and Saturday half holidays. The pursuers admitted that “according to the custom of the port at Newport, Monmouth, the discharge of Baltic pit props is suspended during wet weather and during the half of each Saturday.” The question is whether on the words of the charter the time when the discharge of the “Glamorgan” was suspended for these reasons counts as laying time against the receivers of the cargo.
I think that the parties have manifested a clear intention in the charter to contract on the basis of a fixed number of lay-days, for discharge at a daily rate enables the number of lay-days to be fixed as soon as the quantity of the cargo is known and is equivalent to fixing the number of lay-days beforehand. The clause, having begun with the expression of such a stipulation, then proceeds in the words of the form, words which refer to the customs of the port and to the circumstances of the shipowner and his ship and of the receiver and his appliances as they happen to exist at the particular port at the time of loading or discharge as the case may be. Your Lordships' House placed an interpretation on these printed words in Hulthen v. Stewart, 1903 AC 389, which is not only final in law but is exceedingly well known among all persons concerned in chartering steamers in this trade. That decision was in accordance with the earlier decision in Postlethwaite v. Freeland, 5 A.C. 599. In view
Page: 708↓
I think that time during which the weather is wet, which is time that may be measured by minutes or by hours, and the half of each Saturday, which though half of a calendar day may not be the same as a moiety of the number of working hours on an ordinary day, cannot be brought within the exception of “Sundays, general or local holidays.” They are not days within the exception in the clause. A wet day, even if it rains all day, is not a day in the sense in which Sunday or Monday or Bank Holiday is a day. Consecutive days are running even though rain may prevent the receiver from getting any benefit from them. Saturday afternoons are the more plausible case of the two, but the exception in the charter is clearly based on days, not on parts of days. I do not think the term extends to the latter part of a week-day, on which it is usual not to work, although we all call it and enjoy it under the name of a Saturday halfholiday. Really it is a half day, which while it lasts is wholly holiday, and I do not think that “general or local holidays” cover it. No case to that effect was cited out of the many cases decided on lay-days, and one must remember that this form of words was meant to apply to the varying conditions of a great variety of foreign ports as well as to those of ports in the United Kingdom.
At Kristinestad the whole cargo was loaded in nine days, and the effect of the word “reversible” in the charter is that the receivers were entitled to seventeen lay-days under the charter for discharging the ship at Newport. The pursuers claim (and the burden is on them) to be able to show that in the circumstances only thirteen days were available for the receiver. The circumstances are these. By a memorandum written in the margin of the charter the captain was instructed to apply for cargo to a Mr Easton, of Wiborg. Mr Easton was the defenders' general agent in Finland, though what the precise limits of his authority may have been we do not know. By him the captain was referred to Mr Grankull. In loading the cargo Mr Grankull partly acted on his own account to deliver the pit props on board of a ship of the purchasers' providing in accordance with the contract of sale, partly as the charterers' agent to fulfil their charter obligations to load a full cargo and to make advances on account of freight for ship's disbursements, and partly as the ship's agent to report and clear her at the custom house at Kristinestad, and to do her business generally, and particularly to engage her stevedores, all for some moderate fees to himself.
As is very commonly done, the captain and Grankull made an arrangement for a payment to the latter if he gave the ship dispatch. Accordingly he worked overtime, saved four days on the total of thirteen which the ship was bound to allow him under the charter, and earned £31, 10s. If the captain had carried £40 or £50 about with him in cash he might have paid the money then and there. Instead the amount was by agreement included in the ship's disbursements and brought up the sum of £436, 5s. 6d. disbursed for customs and port dues, stowage, and so forth, to a total of £467, 15s. 6d. The captain was to acknowledge this sum to have been received by him under the charter as an advance on freight to be earned on the voyage. In substance, having to pay Grankull £31, 10s. for himself, he did so by borrowing the money for the purpose from Grankull as the charterers' agent under the charter to advance money for ships' disbursements at the port of loading. He then enabled Grankull to obtain the money for himself from the defenders by including it in the sum acknowledged by him on the bill of lading as advance freight, and Grankull in due course included in his invoice for the timber sold the sum of £467, 15s. 6d. advanced for disbursements, and his bill for the total amount was duly met by the defenders on taking up the bill of lading.
What is the effect of this? The captain, using a familiar phrase, says that Grankull “sold” him the four days, and when the bill of lading came to be made out he wished to write in the margin “thirteen days left for discharging,” pursuant to instructions from his owners to “try and get under the bill of lading the days left for discharging inserted in the margin.” A Mr M'Kerrachar, a clerk of Mr Easton's, whose business had been to superintend the loading in the interest of the defenders, was present when the bill of lading was completed and successfully stood out for the words “thirteen days used for loading.” They were written seemingly by M'Kerrachar himself in the margin of the bill of lading but not among the words which express a contract of carriage. The bill of lading incorporated the charter, of which the captain had a copy.
There is no evidence that M'Kerrachar had any authority or purported to have or to exercise any authority to bind the defenders in this matter. The insertion of the note in the bill of lading evidenced no new bargain with the captain. His bargain for dispatch-money had been made with Grankull some days before. Grankull had
Page: 709↓
I think that what occurred at Kristinestad in itself effected no alteration of the defenders' rights under the charter. At Newport they presented the bill of lading, knowing by that time from M'Kerrachar's letters that some dispatch had been given and paid for, but not the number of days nor the price, and knowing also that the advance freight came to £467, 15s. 6d., but not how the disbursements were made up. They knew that the note on the bill of lading as to days used was wrong but not how far it was wrong. They drew no attention to the matter on presenting the bill of lading. The witness who gave this evidence was expressly accepted by the Lord Ordinary as truthful. As was natural the balance of freight was not paid in one sum but in instalments as the discharge proceeded. The first payment of £350 was on August 1st, the 12th lay-day; there were several other payments on account, and the balance, partly made up of £467, 15s. 6d., the advance of freight for disbursements at Kristinestad, was only settled on August 18th, nine days after the end of the discharge.
It is suggested by the pursuers that in some way the defenders are barred by this conduct from disputing that thirteen days were in fact used at Kristinestad, and from disputing that Grankull had authority to sell four days for them for £31, 10s., which he kept for himself. In the alternative it is suggested that in presenting the bill of lading without protest and in taking the benefit of the amount of £467, 15s. 6d. as an advance of freight the defenders either ratified what was done at Kristinestad or approbated it in part, namely, the advance of £31, 10s. to the captain by Grankull as their agent, and must approbate the transaction in whole or not at all.
With all respect to the learned Judges of the Extra Division of the Court of Session, with whom these considerations prevailed, I think the arguments are unfounded. Grankull did not purport to act for the defenders, so there can be no ratification. If the presentation of the bill of lading could be treated as a representation by the defenders to the pursuers that thirteen days had been used at Kristinestad, it was a representation as to which the pursuers knew the truth, and they did not act or change their position on the faith of it. When the defenders took the benefit of the alleged advance of freight up to £467, 15s. 6d., the present dispute as to lay-days at Newport was in full swing. They had in fact allowed Grankull that amount as money advanced for ship's disbursements, and they declined to pay any more freight to the shipowners. Whether they need have paid Grankull or not is a matter which cannot affect the shipowner's rights. That could only be done by some bargain binding between the defenders and the pursuers. Grankull found the captain the money with which to pay for dispatch, not in a cash loan but by an entry in an account, which was intended to be available to the defenders, as in fact they have availed themselves of it, but it was not accompanied by any agreement binding on them that they should be prejudiced in respect of discharging time.
Furthermore, in presenting the bill of lading the defenders merely did what they must needs do in order to get delivery of their cargo. They received it from Grankull under the contract of sale as the symbol of the delivery of goods while afloat. Nothing had occurred by which any contract for the carriage of the goods arose between them and the shipowners other than the charter itself. No new bargain had been made under which the pursuers carried for the defenders under a bill of lading instead of a charter. The freight earned was chartered freight, and the bill of lading in the defenders' hands was only the ship's receipt for the goods. This is the ordinary effect of documents such as these under such circumstances, and the cases cited do not bear upon them.
In the result the defenders were entitled to seventeen, not thirteen, lay-days at Newport. As they cannot except days when it rained and Saturday afternoons, the ship was on demurrage but for half-a-day only, and not as the Lord Ordinary held for two and a-half days, or as the Second Division held for six and a-half. I think therefore that this appeal should be allowed with costs, that the interlocutor appealed from should be discharged, with costs here and
Page: 710↓
Their Lordships discharged the interlocutor appealed from, restored the interlocutor of the Lord Ordinary, with the variation of striking out the words “2
Counsel for the Appellants— Condie Sandeman, K.C.— Douglas Jamieson. Agents— Dove, Lockhart, & Smart, S. S. C., Edinburgh— Borland, King, Shaw, & Company, Glasgow— Ince, Colt, Ince, & Roscoe, London.
Counsel for the Respondents— Horne, K.C.— Lippe. Agents— Boyd, Jameson, & Young, W.S. Edinburgh— Holman, Fenwick, & Willan, London.