Diederichsen v Farquharson Brothers
| Jurisdiction | England & Wales |
| Year | 1898 |
| Date | 1898 |
| Court | Court of Appeal |
Ship - Bill of Lading - Incorporation of Conditions of Charterparty - “Freight and all other Conditions as per Charterparty” - Limitation to Conditions to be performed by Consignee.
By a charterparty a vessel was to load a full cargo of timber, including a deck cargo at merchant's risk. Timber was loaded under a bill of lading which contained no reference to deck cargo, but in which there was a clause “freight and all other conditions as per charterparty.” In an action for freight by the shipowner against the consignees of a part of the cargo which had been carried on deck, the defendants counter-claimed for damage to their cargo:—
Held (by A. L. Smith and Collins L.JJ., Rigby L.J. dissenting), that the conditions of the charterparty incorporated into the bill of lading were limited to such as were to be performed by the consignee, and did not include the exemption of the shipowner from liability in respect of deck cargo.
APPEAL from a judgment of a Divisional Court.
The action was by a shipowner to recover freight from the consignees of a portion of the cargo. The vessel was chartered to carry a full and complete cargo of timber from Norway to the port of London, “including a deck cargo at merchant's risk.” The defendants were consignees of a part of the cargo, which was carried on deck, but the bill of lading contained no reference to a deck cargo. It contained no exception, but there was in it the following clause: “freight and all other conditions as per charterparty dated 1st August, 1896,” which was the charterparty above referred to.
The action was tried in the Mayor's Court of London, and the defendants counter-claimed for damage to the timber consigned to them. The damage was not disputed, but the plaintiff claimed to be exempt from liability for such damage by reason of the incorporation in the bill of lading of the condition as to deck cargo at merchant's risk contained in the charterparty. The learned judge decided in favour of this contention, and gave judgment for the plaintiff on the claim and counter-claim.
The Divisional Court (Day and Lawrance JJ.) on appeal gave judgment on the counter-claim in favour of the defendants.
The plaintiff appealed.
Nov. 3. Lawson Walton, Q.C., and E. Bray, for the plaintiff. The decision of the Divisional Court makes the bill of lading in effect an absolute contract to carry the goods, without any of the exceptions contained in the charterparty. Such a contract is so unusual that it is plain some of the exceptions must have been intended to be incorporated. The question then comes to be, what is the proper interpretation of the words of the bill of lading in this particular case? It is true that the words “payment of freight and all other conditions as per charterparty” have been held to incorporate those conditions only that fall on the consignee: Russell v. NiemannF1; but in the present case the words are different. Freight is treated as one of the conditions, and the sentence set out fully runs thus: “conditions as to freight and all other conditions as per charterparty.” Consequently all the conditions applicable to a bill of lading are incorporated, and among others the condition as to deck cargo.
[They cited Wegener v. SmithF2; Gray v. Carr.F3]
J. A. Hamilton, for the defendants. The case is covered by authority, from Russell v. NiemannF1 to Serraino v. CampbellF4 and Manchester Trust v. Furness.F5 The fact that “payment of” is omitted before “freight” does not distinguish those cases from the present one, because the expressions must be equivalent. If so, the conditions which are incorporated are those that are to be performed or submitted to by the consignee to entitle him to receive the goods. Only such conditions are to be incorporated, and not exceptions and limitations. The incorporation of an exception from liability in respect of deck cargo would contradict the bill of lading, which says nothing about deck cargo, and presumably refers to cargo carried between decks. A number of other incongruous results might arise if the plaintiff's contention is right, as, for instance, where one of the terms is that money should be advanced should the captain require it. Could it be said that such a term was incorporated so as to enable the captain to sue the consignee? [He cited also Gullischen v. Stewart.F6]
Lawson Walton, Q.C., in reply.
Nov. 22. A. L. SMITH L.J. read the following judgment:- We are called upon in this case, as it appears to me, to consider the at one time much debated question as to how much of a charterparty is incorporated into a bill of lading which contains the words “he or they paying freight and all other conditions as per charterparty.”
The point arises thus. The plaintiff, the shipowner, sues the defendants, who are the receivers of cargo under a bill of lading, for freight. The defendants counter-claim for damage to cargo during the voyage, the cargo having been carried on deck, whereby it became damaged, and not delivered in like good order and condition as when shipped. The shipowner replies to this claim of the bill-of-lading holder that by the charterparty he was at liberty to carry a deck cargo at merchant's risk, that this term was incorporated into the bill of lading, and thus he is not liable to the defendants for the damage counter-claimed for.
The question in this case, therefore, is, whether this term of the charterparty as to “the deck cargo being carried at merchant's risk” is incorporated into the bill of lading by the words “freight and all other conditions as per charterparty,” for, if not, the plaintiff (the shipowner) is liable under the counter-claim to the defendants.
The bill of lading in question was given for a portion of a timber cargo to be carried from Norway to London, the material parts of which are as follows:—
“Shipped in good order and condition …. red wood (specifying it) …. to be delivered in like good order and condition at the port of London unto orders. Freight and all other conditions as per charterparty.”
Now, there is a body of authority which has established conclusively that the words in a bill of lading, “they paying freight for the goods and all other conditions as per charterparty, do not incorporate all the conditions of the charterparty, but only those conditions “which would apply to the person who has taken the bill of lading, and in taking delivery of the cargo, such as payment of demurrage, the payment of freight, the manner of paying, and so on.” These are not my words, but the words of Lord Blackburn in the House of Lords in Taylor v. Perrin.F7
It would be mere waste of time to go through all the cases upon this question, especially as this was done by the late Kay L.J. in this court in the year 1890 in the case of Serraino v. Campbell.F8 I will just take three cases to shew what has been held to be incorporated in a bill of lading containing the words “they paying freight and all other conditions as per charterparty,” and what is the rule of construction to be applied thereto.
Thirty-three years ago, in the case of Russell v. NiemannF9, the late Willes J., after consideration, gave the judgment of the Court of Common Pleas upon this point as follows. He said: “We disposed of the first question in this case yesterday; and we now proceed to dispose of the second, which is, whether the exception contained in the bill of lading is expanded by the exception in the charterparty. That depends upon whether the words ‘and other conditions as per charterparty’ include all the stipulations and conditions contained in that instrument, or whether they are not limited to conditions ejusdem generis with that previously mentioned, viz., payment of freight — conditions to be performed by the receiver of the goods. It is a mere question of language and construction; and we think it is enough to say that the latter is the construction which we put upon these words.”
This case has never been overruled; but, on the contrary, this Court in Serraino v. CampbellF8, at p. 287 and p. 294 of the report, point out that it was expressly approved of by the House of Lords.
In that case Lord Esher M.R. laid down the rule of construction which was to be...
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