Van Etten v. Newton — 45 N.Y. St. Rep. 768

Majority

p. 768

Ambrose Van Etten, Resp’t, v. George B. Newton et al., App’lts.^[1]

(Court of Appeals, Second Division,

Filed June 7, 1892)

Headnote

1. Charter party—Demurrage.

C. purchased a cargo of coal of defendants, fixed the rate of freight, and directed them to advise plaintiff, a boat captain, to call upon them in relation thereto. He did so, and told defendants he did not wish to take the cargo unless it could he promptly loaded. They said it would he ready for loading on the 10th. Coal was first put in on the 15th, and tire balance of the cargo on the 17th. The load could have been put in in five hours. Seld, that although the contract did not provide for demur-rage, plaintiff under it was entitled to recover for unreasonable delay.

p. 769

3. Same.

The fact that the consignee fixed the rate of freight did not constitute him the shipper, or change the relation between these parties, that of ship owner and shipper.

Appeal from a judgment of the general term of the court of common pleas for the city and county of New York, affirming a judgment of the district court of said city, rendered in favor of the plaintiff.

This action was brought in the first district court of the city of New York to recover damages in the nature of demurrage for the unreasonable detention of plaintiff’s boat

A member of the firm-of Merritt Clark’s Sons, of Derby, Ct., called on the defendants on the 7th day of May, 1888, and purchased a cargo of coal, at the same time directing the defendants to advise Captain Yan Etten, this plaintiff, to call upon them in relation to the freight of the cargo. Merritt Clark’s Sons fixed the rate of freight. The defendants immediately wrote the plaintiff asking him to call, which he did the day following.

The plaintiff was operating two boats, one of them was propelled by steam, and used to tow the other, and he advised the defendants that he did not wish to take the cargo unless it could be promptly loaded, as he could only use his two boats to advantage by having his cargo so arranged as to take both boats on each trip.

He testifies that he was assured that the coal would be ready for loading at Perth Amboy on the 10th of May.

Coal was first put in his boat on the 15th of May, at which time eighty tons were loaded, the balance of the cargo, in all 250 tons, being loaded on the 17th of May. The defendants admitted on the trial that if the coal had' been ready for loading the boat could have been loaded in five hours.

The evidence is ample to support the judgment rendered, provided the défendants are legally chargeable with any damages whatever by way ‘of demurrage. That question alone requires consideration on this review.

Be Lagnel Berrier, for appl’ts; Nelson Zabrishie, for resp’t

When a bill of lading contains a stipulation for demurrage, the acceptance of the goods is evidence of an agreement on the part of the consignee to pay both freight and demur-rage. Jesson v. Solly, 4 Taunt., 52; Wegener v. Smith, 15 C. B., 285 .

But in the absence of such a stipulation it is generally held that the consignee is not bound to respond in damages in the nature of demurrage, because not being a party to the contract in the bill of lading, the contract implied from its subsequent acceptance by Mm, cannot extend beyond the conditions upon which its delivery is made dependent. Gage v. Morse, 12 Allen (Mass.), 410; Young v. Miller, 5 E. & B., 755. A delay at the place of delivery, occasioned by the fault of the consignee, furnishes an exception to the rule. Ford v. Cotesworth, L. R., 4 Q.

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ford v. Riltenhouse, 1 Fed. R., 688 . Here the direct contract of the plaintiff under the bill of lading was with the defendants, who were the shippers of the coal. Blanchard v. Page, 8 Gray, 281 , 290-5. Merritt Clark & Co., the consignees, were not parties to it. The delay complained of was not due to any fault on their part. It did not occur at the place of delivery, but at Perth Am-boy, where the vessel was loaded. Within the rules alluded to, therefore, the consignees were not liable, as the bill of lading contained no stipulation that the consignees should pay demurrage.

Under a contract of affreightment the shipper is liable for the freight, although, as in this case, it provides for the collection of the freight from the consignee. The ship-owner is not entitled to payment unless he performs his part of the contract, and by providing in the bill of lading that the consignee shall pay, performance is first secured by the ship-owner, who "is ordinarily amply protected, as he has a lien on the goods carried for the amount due him, and a cause of action against the consignor in case the consignee refuses to pay and his lien proves insufficient or be lost. The consignee in such cases as to payment of freight being treated as the agent of the consignor. And if the bill of lading provides for demurrage to be paid by the consignee, the consignor is also liable for its payment in the event that the consignee refuses to pay.

If it be silent on the subject of demurrage in case of detention of the vessel for loading by the consignor for an unreasonable time, damages in the nature of demurrage may be recovered from him. Fisher v. Abeel, 66 Barb., 381 .

The contract between these parties did not provide for demurrage, but under it plaintiff was entitled to recover for unreasonable delay.

There was evidence tending to show such delay before the trial court, and it was so found as a fact. The general term, on the argument, as well as on the reargument, after carefully considering the evidence in such respect, affirmed the finding, and it is now controlling. So far, the discussion has proceeded on the assumption that the bill of lading "constitutes the real contract of affreightment, and the conclusion necessarily following from that position is that the plaintiff’s recovery is well founded.

The appellants contend, however, that the plaintiff was engaged by the consignee to carry the cargo, and, therefore, the defendants are not liable under the contract although the delay was unreasonable and wholly due to their fault.

His contention is founded on evidence to the effect that plaintiff agreed with the consignees as to the rate of freight, and he insists that it follows that the defendants were not liable, notwithstanding the terms of the written contract to which they were parties.

A bill of lading has a two-fold character. First, that of a re-' ceipt, and second, that of a contract. The receipt as between the shipper and ship owner is explainable, but paroi evidence is not admissible to vary the terms of that portion of it constituting the contract. Parsons on Shipping, Yol. I., p. 190, and cases cited.

The acceptance of a bill of lading by the shipper, with knowl.

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edge of its contents, makes of that instrument a binding contract, and defines the rights and liabilities of the parties to it. C., H. & D. and D. & M. R. Co. v. Pontius, 19 Ohio St., 221 ; Germania Fire Ins. Co. v. The Memphis & C. R. R. Co., 72 N. Y., 90 .

Now, the defendants do not question the acceptance of the bill of lading with full knowledge of its terms.

The evidence fails even to suggest that there was any understanding or expectation between these parties that their relations were to be other than usually obtains between consignor and ship owner, and such as are evidenced by this contract, although without objection the defendants were permitted to show that the consignees suggested plaintiff for the carrier, and that they agreed with him upon the price to be paid. But such acts are not necessarily inconsistent with the contract which these parties made.

It is usual for the consignee to pay the freight to the ship owner. Ordinarily the bill of lading provides that he shall do it. If he be the purchaser as well as the consignee, although treated for commercial reasons as the agent of the consignor in making payment, in practical effect the payment is on his own account and must necessarily be added to the price paid the consignor for the goods in order to determine the total cost to himself. He is, therefore, directly interested in fixing the rate of freight, and it is not unusual for him to take part in the negotiations for it. But that fact does not constitute him the shipper. The bill of lading names the shipper, and in this case the defendants are so designated, and the acceptance of" it by them created a contract with the plaintiff that their relation to each other was that of shipper and ship owner, and that they would severally discharge the obligations which the law had previously declared vested on those entering into such a contract.

In Bacon v. Erie & Western Tr. Co., 3 Fed. R., 344 , the consignee was charged in damages for occasioning delay to the ship owner, but it appeared that it was also the shipper of the cargo, “ and hence as a party to the contract of affreightment, is accountable for any breach of an obligation imputed by it,” citing The Hyperion, 7 Am. L. Rev., 457.

The evidence to which we have referred would doubtless have been excluded had objection been properly made. But as it is before us we have given it such consideration as it seems to merit, and have reached the conclusion that it cannot operate to nullify, destroy or impair the written contract subsequently entered into between these parties by which the defendants declared themselves to be, as they doubtless were in fact, the shippers of the cargo.

The judgment should be affirmed.

Judgment affirmed, with costs.

All concur.