Dewar v. Mowinckel

GILBERT, Circuit Judge (after stating the facts as above). The District Court found that Dewar & Webb were the consignees. Aside from the presumption which attends such a finding of fact on conflicting testimony, it is to be observed that the finding is well supported by the evidence. In answering the libel Dewar & Webb alleged that the Western Fuel Company was the consignee. On the trial it amended its answer, and alleged that the charterer was the consignee. fIt was not denied that the bill of lading came indorsed by the charterer “Deliver to the order of Evan C. Evans,” that Evans indorsed it to the order of Barneson as agent of the charterer, and that it was subsequently reindorsed to Evans. Evans attempted to explain the transaction by saying that the cargo was purchased for the charterer “delivered on the wharf here, duty paid,” and that he indorsed the bill of lading over to Barneson as agent of the charterer, in order that he might tender the cargo in accordance with the terms of the contract; that, desiring Evans to finance the cargo for the charterer, [360] Barneson reindorsed the bill of lading to Evans, but that the charterer remained the owner of the cargo until it was landed on the wharf, or, in other words, the bill of lading was indorsed to Evans, and he refused to accept it when he found that the terms of the contract were that the coal was sold, delivered on the wharf, and that he. afterwards entered the cargo for the charterer at the customhouse at the suggestion of Barneson as agent of the charterer. This was on March 12th, and, although the affidavit filed in the customhouse declared on oath that Evans was the consignee, he testified that he made it as agent for the charterer, but was not allowed so to express that fact in his affidavit, and he testified that Barneson had appointed him agent of the charterer to enter the cargo, and had directed him to enter the cargo and to pay freight and duty, and take the costs of the same out of the money to be collected eventually from the Western Fuel Company. There was no corroboration of Evans’ testimony in these particulars. On the contrary, it is inconsistent with Barneson’s letter of February 15th, in which the latter stated that he had no authority to represent the charterer in the matter of the cargo of the Rygja. Barneson was not called as a witness to corroborate any of Evans’ statements. It is to be observed also that in his letter of February 18th to Capt. Svendsen Evans stated that Dewar & Webb, his principals, had instructed him to pay the freight “for their account.” In view of the undisputed facts, as shown by the correspondence and papers, it is not surprising that the trial court failed to credit the statements of Evans. Tie, as the agent of Dewar & Webb, was the indorsee and holder of the bill of lading. He filed the bill of lading in the customhouse, paid the custom duties, and required the captain of the steamship to give him notice of his readiness to discharge. He made the payments of freight as the discharge progressed, and he received the master’s receipts of payments on account of freight. His letters to the master were signed as agent for D'ewar & Webb, and the captain’s letter of March 13th, on ascertaining who his consignees were, is addressed to Evans as representing the consignees of the cargo, and Evans made the affidavit to Dewar & Webb’s first answer to the libel, in which it was stated that the Western Fuel Company was the consignee. It is contended that the District Court erred in holding that, under the charter party, notice assigning the ship to a berth must be given within a reasonable time, and it is said that it is immaterial when the notice is given so long as the ship receives the first available berth. The rule that the consignee’s option must be exercised within a reasonable time is supported by Carver on Carriage by Sea (5th Ed.) 625b, and Scrutton on Charter Parties (5th Ed.) 99. In Tharsis Sulphur & Copper Co. v. Morel, 7 Asp. Mar. Cases (N. S.) 106, Bowen, L. J., said, “The option.was given for the benefit of the charterers, and must be exercised within á reasonable time”; and in Carlton S. S. Co. v. Castle Mail Co., 8 Asp. Mar. Cas. (N. S.) 325, Lord Esher said that, upon the arrival of the ship in pvort, “the charterers became entitled to give the order as to the berth into which the ship should go, and the owners were entitled to receive the order from the charterers. The charterers had no right to wait for a month before giving the order. They were bound to give it almost immediately.” The appellants [361] quote the language of Lord Herschel on the appeal of Carlton S. S. Co. v. Castle Mail Co., to the House of Lords (App. Cas. 1898, 492), in which he said that the obligation of the charterers to name a berth as soon as the vessel arrived was not to be found in the charter party. “It is not there in terms — there is no provision to that effect. If it exists, it must be only because that is the reasonable inference to draw as to the intention of the parties from the construction of the whole of the contract. It seems to me impossible to find properly by implication in this contract any such condition. * * * If, when the ship arrives, they delay naming a berth, but yet load within a reasonable time, they are not liable. The obligation is to load within a reasonable time.” But the remarks of Lord Herschel must be measured by the facts of that case, facts materially different from those of the case at bar, and his remarks were not concurred in by Lord Watson, Lord Macnaughton, or Lord Shand. From their opinions it would seem that the views of the lower court as to the point under discussion were approved. In The St. Bernard (D. C.) 105 Fed. 994, Judge Brown held that a designation by a charterer of a berth on notice of the vessel’s arrival in port was given within a reasonable time when delivered within two or three hours after such notice. Every suggestion of equity as well as the exigencies of carriage by sea tend to support the rule that such an option must be exercised promptly on the arrival of the ship, and that then the shipowner is entitled to be informed to what berth his ship is to be assigned. If he consents to give the consignee the option to name a place of discharge, he should have the right to demand that the option be exercised within a reasonable time. He does not contract that his ship shall lie in the harbor as a storehouse of cargo. The facts in the present case serve to emphasize the reasonableness of the rule. The captain spent a number of days in a blind search to find his consignee. On February 5th he was directed by Evans to take his orders from the Western Fuel Company, who, Evans said, were the receivers of the cargo. But that direction to take orders was not an exercise of the option. When the master did as he was told, he found that the Western Fuel Company denied its obligation to receive the cargo. He then applied to Barneson, who,, as Evans said, represented the charterer. Barneson could give him no-information about a berth. He did not then deny that he had authority to act, but he subsequently denied it. On February 10th, the Western Fuel Company wrote the captain: “We are to take delivery of the cargo of coal aboard your vessel as per terms of the charter party.” But this was no designation of a place of discharge, and on the following day the manager of the fuel company denied that his company was the consignee or the holder of the bill of lading, or that it was responsible for the freight. There was no exercise of the option until February 26th when Evans, “representing Dewar & Webb of London,” instructed Capt. Svendsen to take the Gymeric’s berth “as soon as she has finished discharge,” and named the berth which the Gymeric was to take. It is no answer to these considerations to say that, if the Rygja had upon her arrival been ordered to the bunkers of the Western Fuel Company, she could not have discharged her cargo at any earlier date than she did. Those bunkers were not the only [362] places for discharge to which she might have been assigned. The court below well said that if the consignee could delay naming one of those bunkers as the place of discharge from the 4th to the 26th of February, and still retain the option given by the charterer, “it would have had the right at the latter date to direct the vessel to proceed to one of the many other places referred to in the charter and discharge, if for any reason it had been to the interest of the consignee to so order.” We find no error in the conclusion of that court that the failure to exercise the option within a reasonable time was a waiver of the right to exercise it at all, and that, where a contract provides alternative modes of performance and gives the right of election to one party, upon the failure of such party to make his election at the proper time the right to elect' the mode of performance passes to the other party. It follows that, if the right to exercise the option was waived, the Rygja became an arrived ship as soon as she reached one of the alternative places named for her discharge, and she was ready to discharge, and that her lay days began to run 24 hours after she had given notice of that fact, and that her delay was chargeable to the consignee of her cargo. The appellants contend that the charterer was released from its liability for demurrage and damages by the cesser clause of the charter party, which provides: “Charterer’s liability under this charter party to cease on completion of loading, owners having a lien on the cargo for freight and demurrage”; and it is said that there is no evidence to justify the claim that the lien so conferred was not capable of enforcement. The rule of construction of a charter party which provides that the charterer’s responsibility shall cease on completion of the loading, and also provides that the charterer shall pay freight and demurrage for delay and creates a lien on the cargo for freight and demurrage, is that the cesser clause is to be construed, if possible, as inapplicable to a liability with which the lien is not commensurate. Crossman v. Burrill, 179 U. S. 100, 21 Sup. Ct. 38, 45 L. Ed. 106, and cases there cited. The court below evidently found the lien not commensurate with the liability, and in so finding there was no error. The charter party required a discharge of the cargo at a place to be ordered by the consignee, and freight was only to be paid on final discharge. The master requested of Evans that the discharge be made in such a way as to protect his lien, but his request was not complied with. The master testified that he was required to discharge into a general coal pile. Evans, it is true, testified that a portion of the coal was taken up into the bunkers, and thence shot into the Beacon Rock, and that the Beacon Rock then went over to Sausalito, but the manager of the fuel company testified that the coal went into hulks mostly, and that only 2,626 tons of the cargo went into the Beacon Rock. In any view of the evidence, the cargo passed out of the possession of the master, and went into the possession of a third party, the Western Fuel Company. The lien for demurrage, like the lien for freight, is lost when the cargo is delivered to the consignee. “The lien of a shipowner for freight being but a right to retain the goods until the payment of freight, it is inseparably associated with the possession, of the. goods apd is lost, by an .unconditional delivery to [363] the consignee.” Chief Justice Taney in Bags of Linseed, 1 Black, 108, 17 L. Ed. 35. Another ground for holding that the cesser clause is not applicable here is that the clause was not inserted in the bill of lading and the bill of lading was in the hands of a stranger to the charter party. The shipowner’s liens on cargo given by the charter party are not preserved against the endorsee of a bill of lading except so far as those terms of the charter party are expressly incorporated in it. Carver on Carriage by Sea (5th Ed.) § 160; Scrutton on Charter Parties (5th Ed.) p. 50. The cesser clause is not imported into the bill of lading in- this instance by the use of the words “all of the terms and .exceptions contained in which charter are herewith incorporated,” for such words include only the conditions of the charter party which are to be performed by the holder of the bill of lading, such as the payment of demurrage and freight and the mode of delivery to him by the shipowner. Carver, § 160. We find no ground for disturbing the award made by the trial court for demurrage and damages chargeable against the appellants. The parties to the charter party agreed upon four pence per register ton per day for detention during the stipulated demurrage days. Ordinarily the rate of damages so agreed upon will be adopted by the court for further detention, but either party may show that it is not the true measure of the loss to the shipowner, and the rate may be adjusted accordingly. Carver’s Carriage by Sea, § 609; Randall v. Sprague, 74 Fed. 247, 21 C. C. A. 334. No effort was made by the appellants to adduce evidence before the commissioner, to whom the question of damages was referred, to show that the agreed rate of four pence per ton did not express the true measure of damages. There was evidence, however, proffered by the appellee to the effect that ¿30 per day was a fair and reasonable rate for damages under the circumstances of the case, and he found that that sum was manifestly the loss to the owner through the detention of the ship for the 20 days following the stipulated demurrage days." The appellee contends that the damages for the delay for the whole period should be fixed at the stipulated rate of four pence per day per register ton, but, in view of the evidence, we' are not convinced that there was error in the finding of the commissioner or in the affirmance of the same by the court. Having found that the lay days of the Rygja commenced to run on February 5th, instead of February 10th, the decree of the District Court is modified, by increasing the amount awarded thereby to $6,-136.32, and, as so modified, will stand affirmed.