Holt v. Westcott

Rice, J. The question presented by this report is whether in a case where a ship owner, by charter party, contracts [448] with a shipper to carry a cargo at a stipulated price, and subsequently signs a bill of lading, in which he stipulates to deliver such cargo to the consignee of the shipper, or his assignee, in good order, &o., dangers of the sea only excepted, he or they paying freight, at the rate stipulated in the charter party, the owner is thereby bound to look only to the consignee for his freight, and is concluded from demanding it from the shipper, in case he shall fail to collect it of the consignee. It is often provided in charter parties, that the goods shall be delivered agreeable to bills of lading, to be signed by the master; and the master, upon receiving the goods, signs bills of lading, agreeing to deliver them on the payment of freight, or with words of similar import, giving him a right to refuse to make delivery to the person designated by the bill of lading, without payment of freight. And as it has sometimes happened that the master has not insisted upon the exercise of this right, it has been much questioned whether the merchant charterer was answerable for the freight; and it has been determined that he is answerable. Abbott on Ship., 141. It was once held that if the master parted with the goods to the consignee without securing his freight he was deprived of all recourse to the consignor; but it is now decided otherwise. If the master cannot recover the freight from the consignee to whom he has delivered the goods without receiving the freight, he still has his remedy over on the charter party against the shipper, and the condition precedent to the delivery inserted in the bill of lading was intended only for the master’s benefit. 3 Kent’s Com., 4th ed., 222. Such is the settled law in England, though at one time Lord Kenyon, at Nisi Prius, ruled differently. The case was, however, carried to the King’s Bench, and the ruling of Lord Kenyon overruled by the full bench, and subsequently, in the case of Shepard v. DeBernales, 13 East., 565, the question was again before the King’s Bench, and the [449] English authorities fully reviewed by Lord Ellenborough, and the decision was that the provision “he or they paying the freight ” usually inserted in bills of lading, was for the benefit of the master or owners, which provision they might waive if they saw fit and fall back upon the consignor for payment. In Barker v. Stevens, 17 Johns., 234, the same rule is adopted. In giving the opinion of the court, Spencer, C. J., remarked, that the effect of the clause “ he or they paying-freight,” has been repeatedly before the English Courts, and the decision has been uniform in both the King’s Bench and Common Pleas. But, he continues, quoting the language of Lord Ellenborough, I should be clearly of the opinion, that if it appeared that the goods were not owned by the consignor, and were not shipped on his account and for his benefit, the carrier would not be entitled to call on the consignor for freight; and I should be inclined to the opinion that in all cases the captain ought to endeavor to get the freight of the consignee. Parsons, in his recent work on Mercantile Law, 352, thus states the rule : “ If the bill of lading requires delivery to the consignee or his assignees, 'he or they paying freight,’ which is usual, and the master delivers the goods without receiving freight, which the consignee fails to pay, the master or owner cannot, in the absence of an express contract, fall back on the consignor and make him liable unless he can show that the consignor actually owned the goods; in which case the bill of lading, in this respect, is nothing more than an order by a principal upon an agent to pay money due from the principal.” In Spencer v. White, 1 Iredell, 236, the defendant shipped on board a vessel belonging to the plaintiff, then lying at Elizabeth City, a cargo of corn, for which the captain signed bills of lading, that the cargo was to be delivered to John Williams, at Charleston, in South Carolina, or to his assigns, “ he or they paying freight for the same.” The consignee received the cargo and paid the freight, except the sum of [450] one hundred dollars, and for that balance the action was brought. The hundred dollars was withheld on account of the damaged state of the corn. At the trial the defendants contended that it was the duty of the plaintiff to have collected the freight of the consignee, and also that the corn was damaged by the negligence of the plaintiff. The evidence showed, however, that the damage was occasioned by the dangers of the sea, and the court held the plaintiff was entitled to recover, and was not obliged to look solely to the consignee. The same doctrine was held in Howard v. Middleton, 3 McCord, 121. Grant and al. v. Wood, 1 Zabrisker, 292, was an action by the owners against the consignor of a quantity of lumber for a balance due for freight, the consignee having paid in part only. There was no charter party; but a bill of lading with the usual clause as to payment of freight by the consignee. The claim was resisted by the consignee, who was the owner of the lumber, on the ground that the consignee alone was liable, after the delivery of the lumber. The court, however, after a careful examination of the authorities, held the defendant to be liable; and that the fact that the consignee had also made himself liable by a reception of the lumber, did not relieve the consignor from his original liability; that the right of the master to retain the goods until freight is paid is an dditional security for his benefit. The same rule prevailed in Domet v. Bickford, 5 B. & Ald., 521. Kent, C. J., in announcing the opinion of the court in Griswold v. N. Y. Ins. Co., 3 Johns., 322, remarked, that the lien which the ship owner has on the goods conveyed is only an additional security for the freight. This lien is not incompatible with the personal responsibility of the shipper, and does not extinguish it. The consideration for the freight is the carriage of the articles shipped on board, and the state or condition of the articles at the end of the voyage [451] has nothing to do with the contract. It requires a special agreement to limit the remedy of the carrier for his lien to the goods conveyed. The cases in which this question has been before the courts in this country and England are numerous, and the circumstances attending those cases, of course, various. Without further citations, we think the general rule doducible from them to be, that in all cases where goods are shipped by a consignor under a contract, or for bis benefit, he is originally liable for freight, and that the insertion in a bill of lading of a provision that the goods are to be delivered to the consignee, &c., “ be or they paying freight,” will not, of itself, relieve him from that liability; that provision being designed for the benefit of the carrier, be may waive it if be choose so to do, and resort to bis employer, the consignor, for bis freight, unless there is some special stipulation by which that employer is to be exonerated. The action must stand for trial.