Russell v. Allerton — 13 N.Y. St. Rep. 629

Majority

p. 629

Charles T. Russell et al., App’lts, v. Samuel W. Allerton, Resp’t.^[1]

(Court of Appeals,

Filed February 7, 1888.)

Headnote

1. Contract—Construction of—What can be considered in construing.

When the question arises as to what meaning is to be attached to words or phrases used in a contract, if there be any uncertainty or doubt concern-the same, considerations as to the effect as a matter of business, etc., of a certain construction, are entirely legitimate, and should not be lost sight of while endeavoring to learn the true meaning of the parties as evidenced by the terms used.

2. Same—Charter party—Construction of.

According to the terms of a certain charter party, which was entered into in England in July, 1878, the performance of which was not to be

p. 630

entered upon until the middle of the following March, when the plaintiffs were to send their ship over to Philadelphia to load, it was provided, “ Charterers to approve the ventilation.” Held, that the charterers did not have the right arbitrarily and without reason to refuse to approve the ventilation of the ship.

3. Same—When a question for the jury, whether a refusal to perform, WAS REASONABLE AND WITHIN TERMS OF CHARTER PARTY.

' The plaintiffs proved that the ship had four extra large sized hatches and, in addition, five iron ventilators in the hold and eight wind sails. Such ventilation, there was evidence- to show, was extraordinary. The defendant demanded that in addition there should be furnished blowers at a large expense, which there was evidence tending to show would not assist in ventilation and were not used on ships employed for the purpose of carrying live cattle. It was also shown that the refusal to load the ship wasfirst made only on the ground that it was not ready in time; that, at the time of such refusal, the price of freight had very much depreciated. Held, that it was for the jury to say whether the refusal to load was or was not, under all the circumstances, unreasonable; that it would not be necessary to find that the defendants refusal was in actual bad faith.

Appeal from a judgment of the supreme court, general term, first department, affirming a judgment entered upon the verdict of .a jury in favor of defendant rendered at the circuit court and from an order denying a motion for a new trial. A previous trial resulted in a judgment in favor of the plaintiffs, which was reversed at the general term (see 31 Hun, 307 and 640), and a new trial ordered.

This action was brought to recover $25,000 damages claimed to have been sustained by reason of defendant’s refusal to load the plaintiffs’ steamer, with live cattle in in pursuance of written contract.

The material portion of the contract upon which the questions in this case arise is as follows, viz.:

“Liverpool, July 23, 1878.

“It is this day mutually agreed»between Messrs. Charles T. Russell & Co., disponents of the good screw steamship called the Bertha, 100 Al, of the burthen of and 2,200 gross tons register measurement or thereabouts, whereof is Master , now^[1] , owners to have the liberty to substitute a new ship now building in place of the above-named ship, and Messrs. Samuel W. Allerton & Co., of Chicago, 111., U. S. A., merchants. That the said vessel being tight, staunch ana strong, and every way fitted for the voyage, shall (with leave to take cargo to an outward port, for owner’s benefit, and being discharged), sail and proceed to Philadelphia. Ship to run regularly, commencing at loading port on March 15, 1879, or not later than April 1, and continuing up to July 15, 1879; but if boat arrives on or before July thirty-first, charterers to . load her, or so near thereunto as she may safety get, and there, load, always- afloat, from said merchants, or his agent, live cattle, which the said merchants hereby bind

p. 631

themselves to ship, not exceeding what she can reasonably ■stow and carry in between decks, and on deck, poop included, over and above her tackle, apparel, provisions and furniture; and being so loaded, shall therewith proceed to uny direct port in U. K., that live cattle can be loaded at, under government regulations and with railway communications at owners’ option, and there deliver the same, always afloat, on being paid freight at the rate of five pounds sterling per head, on or before sailing from loading port. Cattle fittings to be furnished by Charles T. Russell & Co., and to be loaded and discharged at charterer’s risk and expense, ship finding water only and returning attendants to America or loading port. Steamer to carry freight free, sufficient fodder for the cattle. (The act of God, the queen’s enemies, pirates, robbers, restraints of rulers and princes, fire, accidents to or damage from boilers, and, or machinery, damage from vermin or from sweating, damage or loss by collision, and all and every other dangers and accidents of the seas, rivers and steam navigation, of whatever nature and kind soever, before and during the said voyage, always excepted). Ship to have liberty to sail with or without pilots, and to tow and assist vessels in all situations, and to call at ports to coal as required. Charterer to approve the ventilation. Cash for ship’s ordinary disbursements not exceeding,” etc.

On the back of this contract, and forming, a part thereof, is the following indorsement, viz.:

“It is hereby mutually agreed between first and second parties, that in case either fails to comply with the within ■contract, the liquidated damages shall be five thousand pounds.”

James L. Bishop, for app’lts; Ira D. Warren, for resp’t.

We do not think that the effect of the words in the charter party, “ charterers to approve the ventilation,” was to leave the subject of the ventilation of the ship to the absolute unreasonable and wholly arbitrary decision of the charterer. The agreement was entered into in England in July, 1878, and performance was not to be entered upon, at the earliest, until the middle of the following March, and plaintiffs were to send their ship over to Philadelphia to load. It can scarcely be regarded as credible that the owners of the vessel would place in the hands of the charterer the right to arbitrarily and without reason refuse to approve the ventilation of the ship.

To give the words in question the meaning attached to them by the courts below is to place the plaintiffs in a matter purely of business wholly at the mercy of others with whom they were contracting. Could the plaintiffs have

p. 632

intended any such result, or could the defendant have expected such action on the part of the plaintiffs? The plaintiffs were to be bound at all events, but by giving the meaning contended for by the defendant to the phrase in question, he has at all times prior to the. acceptance of the ship as properly ventilated, a means of escape from a contract which might by that time have become most unfavorable to him. If the circumstances changed between July and the following March so that freights were materially less than the rate contracted for, and the plaintiffs sent their ship from England to receive the load, still a simple refusal to approve the ventilation would enable defendant to avoid the binding force of the contract, while, if the rate materially advanced, defendant could enforce the contract already made. Parties have a right, of course, to make any contract they choose, so long as it is not illegal; but when the question arises as to what meaning is to be attached to the words or phrases used in a contract, if there be any uncertainty or doubt concerning the same, considerations such as are above mentioned are entirely legitimate and should not be lost sight of while endeavoring to learn the true meaning of the parties as evidenced by the terms used.

The learned judge submitted this case to the jury under an instruction that defendant was the sole judge under this contract of the proper kind of ventilation to be employed, and with his decision upon that point the plaintiffs herein •had no right to complain. He also said that if the jury came to the conclusion upon the evidence that there was a positive refusal to put blowers in, that that ended the matter; that was an absolute, positive breach of the contract.

The counsel for the plaintiffs requested the court to. charge that the clause in question did not confer upon defendant the right to refuse to load arbitarily, merely because he elected not to approve the ventilation, but was in the nature of a covenant on the part of the plaintiffs to do upon request whatever, considering the vessel and the-carrying of live cattle, might reasonably be required to secure the ventilation of the vessel.

This the learned judge refused, and the plaintiffs duly excepted.

The doctrine laid down in the charge is not in accord with that which has been announced by this court in several cases, the latest in February, 1886 (Duplex Safety Boiler Company v. Garden et al., 101 N. Y., 387 ; 1 N. Y. State Rep., 51), and cases cited in the opinion of Danforth, J., also Nolan v. Whitney ( 88 N. Y., 648 ); Bowery National Bank v. Mayor, etc. ( 63 N. Y., 336 ).

p. 633

The defendant, however, claims that, even under the above rule in this case, there was no evidence, or at any rate not sufficient evidence to go to the jury upon the claim of plaintiffs, that the refusal of defendant to approve the ventilation was in fact unreasonable.

We think there was evidence upon the subject in favor of plaintiff’s claim, which was enough to require its submission to the jury, and, if believed, to support a verdict for the plaintiffs.

The plaintiffs proved that the ship had at this time four hatches, one forward of, and another abaft the foremast, one abaft the mainmast, and another on top of what was called the booby. The fore-hatch was twelve feet long and six to eight wide, and another was twenty feet long and ten wide, while another was about as wide, and the last was smaller but a good sized hatch; that the hatches were extra sized ones; that there were in addition five iron ventilators in the hold and eight wind sails. This evidence was substantially uncontradicted, and such ventilation there was evidence to show was extraordinary. The wind sails, it was claimed were superior to blowers m ventilating the ship.

The defendant by his- agent demanded that there should, in addition, be furnished blowers, probably a pair, which would cost $500 a piece. Upon the subject of the usefulness of these blowers for any purpose of ventilation, the plaintiffs gave considerable evidence, and some of their witnesses, who were also men of considerable experience in the business, had never even heard of using blowers on a' cattle ship for purposes of .ventilation.. One witness had been in the business of shipping cattle, for eighteen years, across the ocean, and had in that time shipped from 50,000 to 100,000 and was familiar with cattle ships, and out of from 300 to 400 ships he had seen blowers on, but twice in" his recollection. There was other evidence that the blowers were useless, did not .catch, and that wind sails were much better. One of defendant’s own witnesses said he had never seen blowers on live cattle ships for ventilation, but he thought the Bertha was very poorly ventilated. The defendant also said himself that he had many shipments of cattle across the ocean, but did not know that any of the ships had blowers except one from Boston.

There was evidence also that the defendant first stated as his reason for his refusal of the load, that the ship was not ready when it ought to have been (this was April seventh), and no mention was then made of the ground being his disapproval of the ventilation.

In to the motive for a refusal to the ven

p. 634

tilation, and hence as bearing upon the real reason for defendants’ objection and the reasonableness of his demand for blowers, there was evidence that soon after the entering into the contract a privy council order was promulgated as to the importation of cattle from America, and that soon thereafter the prices of American cattle went down, but whether on that account or not it could not be stated, and that at the time when the defendant refused to load, freight on cattle had gone down largely and was depreciating continually, so that the best the plaintiffs could get was three, instead of five, pounds per head.

There was other evidence on the general subject of ventilation and as to the value and propriety of blowers. I have not, however, thought it necessary to give the substance of all the evidence of the plaintiffs on the subject. On the part of the defendant there was evidence which it is also unnecessary to repeat, but which, to some extent at least, contradicted that on the part of the plaintiffs; and the result of the whole testimony was to make it a question of fact for the jury to say whether the refusal to load was or was not, under all the circumstances, unreasonable. Upon such an issue the evidence that the refusal to load was unreasonable, should be clear and convincing, or, in other words, it should be clearly made out to the entire satisfaction of the jury that the ship was properly and sufficiently ventilated for the purpose of carrying live cattle when the defendant refused to load. It would be necessary, however, to go so far as to show that the defendants’ refusal was in actual bad faith.

The judgment should be reversed and a new trial ordered, costs to abide the event.

All concur.