Wessels v. The Ceres

SHIPMAN, Circuit Judge. The libelants in the principal libel are importers of fruit in the city of New York, under the firm name of G. Wessels & Co., who, on May 25, 1891, entered into a charter party with the agents of a Swedish corporation which owned the steamship Ceres, for the hire of that ship, by a demise charter, for 4 months from the time of delivery, with the option of continuing the charter for the further period of 12 months, on giving 30 days’ notice, previous to the expiration of the first term, and with the further option of canceling the charter party during the extended term upon like 30 days’ notice. The charter was extended October 2, 1891. The charter party declared that the vessel had 581 tons net register, and 720 tons dead-weight capacity, exclusive of bunkers, which are of 2 tons capacity, and had about 63-300 feet clear cargo capacity, exclusive of bunkers. At the top of the printed charter party were the words “New York Fruit Form.” It was a form used by New York fruit merchants, and contained the following clause: “The owners guaranty the steamer to malee an average speed, under steam, of not less than (11) eleven knots per hour, fruit or light laden, in moderate weather, and with good American coal.” Other clauses indicate that the saving of time was a point of importance, and that the transportation of bananas or other perishable property was in contemplation. The eighteenth and twenty-eighth clauses are as follows: “(18) Ship’s bottom to be kept properly cleaned and painted, and steamer to be docked whenever captain and charterers may think it necessary, but at least once in every four months, and payment of the hire to be suspended until she is again in proper state for the service.” “(28) Steamer is to lay up for overhauling two weeks each year (in winter, at time charterers designate).” The steamer was delivered to Wessels & Co. on July 2, 1891, and thereafter made six voyages, which were completed December 4,1891. Hhe was then sublet to one Vanderbilt for three months, and made one voyage, when she went to Mobile, where Vanderbilt failed, and gave up his subcharter on January 14, 1892. On the same day Wessels & Co. notified the agent of the owners that they wished the steamer to “lay up for two weeks * * * without pay from 17th January.” Before the expiration of the two weeks, Wessels & Co. sublet the vessel to a coal company, and she made two voyages, which expired March 22d. She thereafter made, for Wessels & Go., two voyages, called, in the record, voyages 8 and 9, to Colon, for bananas and other freight, and to return with the cargoes to New York. She returned on April 10th. The first libel, which was filed August 2, 1892, was brought to recover from the ship compensation for the damages which the bananas sustained on these two voyages, by means of her inability to maintain the guarantied speed. The charter was canceled on May 21st, without giving the specified 30 days’ notice, upon the ground ihat she was unable to comply with its conditions. The owners filed a cross libel to recover $1,586, the amount of hire alleged to he due for the two-weeks “lay-up” at Mobile, and for damages, amounting to $244, for the cancellation of the charter without giving 30 days’ [938] notice. The district court decreed, upon the first libel, that the libelants recover $7,320.04, and dismissed the cross libel. 01 Fed. 701. From each of these decrees the owner appealed. The answer to the first libel, which was filed September 30, 1892, alleged the neglect of the charterers to supply the Geres with good American coal as the reason ftir her failure to make an average speed of 11 knots per hour, which failure, during most of the voyages, was admitted. After considerable testimony had been taken, the owner alleged, by an amendment, filed October 10,1893, that the failure was also due to the fact that the steamer was not fruit or light laden, and that the voyages were not made in moderate weather. The defense in regard to poor coal ,was practically abandoned during the trial in the district court. These averments are to be read in connection with the construction which the claimant gives to the charter party, and which is that the guaranty of speed was a warranty that, at the commencement of the charter, the Ceres had a capacity of 11 knots under the conditions named, but not that she would continuously maintain it, and that the clause, “fruit or light laden,” means laden with fruit, as usually stowed, or with a light cargo, not including any cargo which exceeds in weight such a fruit cargo, and that, under such a construction, the Ceres was too heavily laden. During the last two voyages she was not entirely fruit laden, but had additional cargo. Upon the construction of the warranty, the vessel was manifestly hired for the main purpose of carrying a very perishable cargo. The clause provides for her speed, not as it existed at the date of the charter, but as it would exist, provided, among other conditions, she was furnished with good 'American coal. The speed is also to be an average speed, and not one which she can occasionally make. The object of the provision was to guaranty an actual result during the voyages, and not an ability to attain the result at the commencement of the term for which the vessel was hired. We agree with the conclusion of the district judge that the warranty “was intended to be a continuing guaranty that the average speed of 11 knots should be accomplished under the conditions stated,” in the absence of any faults of the charterers. The inharmonious testimony of experts, in regard to their definition of the term “light laden,” proved that it had no settled meaning, but that its meaning is to be determined from the context, or by the circumstances under which it is used. This being true, we agree with the district judge that its meaning, in the charter party, is “that the ship shall make 11 knots laden with a fruit cargo, or with its equivalent, i. e. Avhen as light laden as with a fruit cargo, or one not more cumbersome, nor more unfavorable for speed.” If expert testimony is important, this definition has the support of competent witnesses. Upon the questions of fact which arose under the guaranty clause, the district court found that an average speed of 11 knots was not maintained, that the charterers never waived their objections on account of the defect, and, further, that they complained of it from the first, and were constantly met by excuses, promises, and hopes of improvement. During the last two voyages, which are the subjects [939] of these suits, a speed of II knots was never attained, even for a day. The only question on this subject, therefore, is whether the conditions of the guaranty were complied with, as respects (he weather, cargo, and coal, and whether the failure to make 11 knots is to he ascribed to any fault of the charterers in the loading and trim of the ship. The court further found that the Ceres did not transgress the conditions in regard to amount or weight of cargo, but bad less cargo than she was entitled to carry, if entirely laden with fruit, and that she was not loaded too much by the stem. Upon these questions of fact, i he failure of the vessel to make the specified average speed, during most, of the voyages, was admitted in the answer, and this admission was adhered to in the .amendment. As the claimant probably foresaw, it lost nothing by making this admission, for the testimony as to ihe last two voyages enforced it. In view of the inherent weakness in the testimony for the claimant, in regard to the alleged excessive amount of cargo and improper trim of the vessel, no addition to the comments which" the district judge made upon those two defenses is required. The district judge referred the question of damages to a commissioner, whose careful investigation showed that a large part of the damage which the bananas sustained upon the last two voyages was occasioned by the ship’s inability to make the guarantied speed. From the total loss resulting from the decay of the fruit he deducted 20 per cent., as loss which would have resulted if there had been no breach. The district judge added a further deduction of 5 per cent., and, with this modification, confirmed the report. The claimant insists that the damages to the fruit should not he allowed, because they are too remote, and because, before the last two voyages were attempted, the libelants knew that the speed requirt'd for (he safety of the cargo was impracticable. The import ant question in this part, of the case is whether the damages to the cargo can he regarded as the natural consequences of a breach of the contract which were within the contemplation of the parties, or whether the damages, in the event of a breach, must be considered as confined t;o tlie increased consumption of coal, loss of time, and that class of damage. If this guaranty had been contained in an ordinary charter party, by which the vessel was to be used for general purposes, the position of the owners would have been sound, and the guaranty would he construed to have reference to the value of the vessel to the charterers, in respect to economy of time, wages, supplies, hire, and the like general particulars which are immediately connected with the ship itself. But the charter party bore upon its face that it was a form for a fruit charter. The owner, by its agent, and the charterers, understood that the vessel was wanted for a particular use, and the warranty of speed had reference to the adapt-edness or fitness of the vessel for that use. The charter party was entered into in view of the necessities of speed in the business in which the vessel was to engage, so that the damage to a perishable cargo, which directlv occurred from a failure to make the requisite speed, must have naturally been in the mind and con [940] templation of the owner’s agent when the contract was executed. The claimant’s next point is that charterers cannot he allowed damages to cargo for a continued breach of the guaranty if they continuously ran the vessel with reasonably certain knowledge that she could not comply with the charter party, and that loss was the certain result; and it is said that it was their duty to use reasonable exertions to make the injury as light as practicable, and not persistently to allow the damages to be multiplied or increased. This proposition is true; but, in this case;" the agents of the owner desired that the charter should not be canceled. On November 4, 1891, the charterers notified the agents that the vessel would be returned because she was not up to the guarantied speed. On the next day the agents promised to endeavor to remedy any faults that were not in accordance with the charter party, and requested a withdrawal of the notice of the preceding day, which request was complied with on November 6th. „ On November 24th the charterers again notified the agents that they might throw up the vessel in consequence of her failure to make the required speed, and the agents requested that they would “allow the matter to stand until the vessel arrived.” On December 18th the charterers informed the owner that, from the assurances of the agents and captain they thought that the speed would be improved. After the charter was canceled, the agents write, on May 28, 1892, that the ship is capable of performing the guaranty with proper coal. The continuance of the use of the vessel was not a heedless act, but was at the expressed desire of the agents, and apparently upon their assurances of improved speed. The cross libel was for the recovery of the hire of the vessel for the half month during which she was laid up at Mobile, and for the loss of £50 sterling by reason of the failure of the charterers to give 80 days’ notice of cancellation. The owner insists that, whereas the eighteenth clause provides for a suspension of payment of the hire while the vessel is docked, the twenty-eighth clause does not provide for such suspension while the vessel is being overhauled. The charter party required the owner to maintain the vessel in a thoroughly efficient state, in hull and machinery, and also provided that she was to lay up two weeks in each year for overhauling, and at the time in the winter which the charterers should designate. We agree with the district judge that the latter clause required an annual overhauling of two weeks, and, for the convenience of the charterers, they had a right to designate the time in winter when the lay-up and overhauling should take place; and we also are of opinion that, if the designation was not a subterfuge, and a mere stratagem to evade the payment of hire, such payment was suspended during the lay-up. We are not, however, of opinion that charterers can be permitted to escape payment as the reward of an unfair artifice. The vessel was sublet, on November 30, 1891, to Vanderbilt, for a period of about three months. He became insolvent, and the vessel reached Mobile about January 5, 1892, with half the hire due on December 23d unpaid. The charterers instructed the' cap [941] tain not to leave Mobile until that amount, and also the hire to be due on January 8th, were paid. After litigation in Mobile, the hire was paid until January 24th, and on January 14th Vanderbilt surrendered the vessel, in Mobile, to the charterers, who, on the same day, notified the owner’s agents in New York that they wished the Ceres to lay up for two weeks from January 17th, without pay. The owner’s agents'asked permission to run the ship during that time, and perhaps two weeks more, on its account, and were told that the charterers would be willing to make some such arrangement for four or six weeks. This proposed arrangement apparently fell through, because the owner protested against withholding the hire for the two weeks after the 17th. On January 23d the charterers wrote the captain that they regret to lay him up, “but bananas won’t pay to run at present, and we are doing same with America.” On January 2(5 th the charterers sublet the vessel to W. 1). Munson, who took her on February 1st. The vessel had been docked in New York, on December (1th, at the charterers’ request, when repairs were made at an expense of about $700 or $800. The charterers had no knowledge whether she needed repairing in January. This pretended lay-up for overhauling was a subterfuge;,, for the purpose of getting rid of payment of the hire of a vessel which had suddenly come back upon their hands, by shoving her over as suddenly upon the owner. The claim of the owner that it was entitled to 30 days’ notice of the cancellation of the charter party which was based upon and was authorized by a continued breach of one of the vital parts of the contract is without adequate foundation. The decree of the district court, upon the libel of Weasels & Co., is affirmed, without interest, and without costs of this court, with the exception that the decree of the district court shall be without costs of that court. The decree of the district court, upon the cross libel of the owner, is reversed, without costs of this court, and the cause is remanded to that cotirt, with instructions to enter a decree in favor of the libelants for $1,586, and interest from January 17, 1892, without costs.