Pacific Molasses Company v Entre Rios Compania Naviera S.A. (San Nicholas)
| Jurisdiction | England & Wales |
| Judge | THE MASTER OF THE ROLLS,LORD JUSTICE ROSKILL,LORD JUSTICE ORMROD |
| Judgment Date | 10 June 1975 |
| Judgment citation (vLex) | [1975] EWCA Civ J0610-1 |
| Date | 10 June 1975 |
| Court | Court of Appeal (Civil Division) |
[1975] EWCA Civ J0610-1
In The Supreme Court of Judicature
Court of Appeal
Appeal by defendants (by leave of Mr. Justice Donaldson) from order of Mr. Justice Donaldson on 10th December 1974.
Revised
The Master Of The Rolls (Lord Denning),
Lord Justice Roskill and
Lord Justice Ormrod.
Mr. J. GILMAN (instructed by Messrs. Holman, Fenwick & Willan) appeared on behalf of the Appellant Defendants.
Mr. D. JOHNSON (instructed by Messrs. Ince & Co.) appeared on behalf of the Respondent Plaintiffs.
In February 1972 a motor vessel, the San Nicholas, sailed from Recife in Brazil destined for a port in the United States Gulf. She was carrying a cargo of molasses. Unfortunately about 6th March, 1972. On the course of that voyage, she sank. The Master and the Chief Officer lost their lives. The question now arises as to the cargo which was lost.
The owners of the cargo of the molasses seek to bring an action in the Courts in England. They desire leave to serve a writ or a concurrent writ out of the jurisdiction against the owners of the ship. She was registered in Liberia, but she was owned by a Panamanian company, Entre Rios Compania Naviera S. A. The plaintiffs rely on Order 11, r. l (f)(iii). They say that the contract of carriage was, by its terms or by implication, governed by English law. Mr. Justice Donaldson gave leave to serve out of the jurisdiction. The defendants appeal to this Court.
The contract of sale and purchase was made in July 1971. The United Molasses Trading Co. Limited., an English company, agreed to buy from the Dayton Corporation of Panama a large quantity of molasses. Shipment was to be made from Recife in Brazil between September 1971 and mid-1972. There was a clause saying that "the title to the molasses and the risk of loss of the molasses shall pass to buyers at the permanent hose connection of the vessel receiving the molasses at loading port."
The contracts in respect of the carriage were contained in a head charterparty, two sub-charters, and a bill of lading. They were made in February 1972.
The head charter was dated 4th February, 1972. It was a tank motor vessel voyage charterparty made between the shipowners, Entre Rios Compania Naviera of Panama and the charterers, Athelqueen Tankers Co. Limited. under it the San Nicholas was to proceed to Recife and there load a cargo of molasses, and so loaded, to proceedfrom Recife to one or two ports in United States Gulf at charterers' option. Clause 13 said:
"This Contract shall be governed by the laws of England. General Average to be adjusted in London according to the York/Antwerp Rules 1950".
Clause 18 said:-
"Any dispute arising during execution of this charterparty shall be settled in London, owners and charterers each appointing an arbitrator"….
The first sub-charter was also dated 4th February, 1972. It was a short document stating that it was mutually agreed that the San Nicholas was to be sub-let by Athelqueen Tankers Co. Limited. to the United Molasses Trading Co. on exactly the same terms, conditions and exceptions as set out in the head charterparty dated 4th February, 1972.
The second sub-charter was also dated 4th February 1972. It was described as Molasses charterparty. It was by the United Molasses Trading Co. Limited. (chartered owners), to the Pacific Molasses Co, (charterer) for the same voyage. Clause 19 of this sub-charter said:- "This charter shall, so far as possible, be governed by the law of the flag of the vessel, except in oases of general average, which shall be settled according to York/Antwerp Rules 1950."
Those three charters were all dated "London, 4th February, 1972". A telax was sent from London on 7th February, 1972, to the Master of the San Nicholas, giving details of the Molasses fixture, stating the principal points, such as "loading Recife, discharging one or two ports U. S. Gulf, and there was this summary of the other clauses:-"Otherwise on London form type of charterparty usual United Molasses term a pro forma copy of which will be mailed to Recife."
We do not know how much the Master knew of those terms: because he went down with the vessel. On 21st February, 1972, the goods were shipped on board the San Nicholas at Recife. A bill of lading was signed by the Master. It had been prepared by agents in Recife, Messrs. Williams & Cia., who had at that time not received copies of any charterparty. It is a tanker bill of lading. It follows the ordinary wording of a bill of lading: "Shipped in apparently good order condition by Simab S. A. Comercie E Industria on board the vessel San Nicholas, etc. … to be delivered at portable ports U. S. Gulf…. to order on payment of the freight at rate agreed", and so forth. Then there are these important words in the printed form:-
"This shipment is carried under and pursuant to the terms of the Charts dated—", the date is left blank with nothing filled in— "at"—blank — "between" — blank — "and" — blank — "as Charterer, and all the terms whatsoever of the said Charter except for the rate and payment of freight specified therein apply to and govern the rights of the parties concerned in this shipment—
Dated at Recife this twenty-one day of February, 1972."
The buyer — United Molasses — opened a letter of credit in favour of the sellers. 95% of the cost was paid and the buyers got the shipping documents, including the bill of lading. This was before the vessel was lost. She went down on 6th March, 1972. The plaintiffs as the owners of the cargo, now seek leave to sue the shipowners for the loss of the cargo. They say the contract is governed by the English law. The action is brought on the bill of lading, or rather on the Contract evidenced by the bill of lading.
The first question that arises is: Who were the parties to the contract? Who can sue? Mr. Gillman for the shipowners said that the United Releases Co. were net entitled to sue as parties to the contract because they did not fall within the Bills of Trading Act, 1855. He submitted the property passed to United Molasses (under the f.o.b. contract of July 1971) when the molasses passed through the permanent hose to the ship at Recife. It did not pass to them "upon or by reason of the consignment or endorsement" of the bill of lading. He relied upon a passage in Scrutton on Charterparties, 18th edition at page 26, that — "If the property in the goods passes otherwise that upon or by reason of the consignment or indorsement the rights of suit do not pass to the receiver." That proposition is based on the decision of Mr. Justice MoNair in Gardano and Giampiers v. Greek Petroleum George Mamidakis & Co. (1962) 1 W. L. R. 40. That case was, however, a very exceptional case. It has no bearing on the present case where the bill of lading was for delivery "to order", that is, to the order of the shippers, ay reserving it "to order", the shipper reserved no himself power of disposing of the property and the property did not pass to the purchaser on shipment, see Mirabit v. Ottoman Bank (1875) 3 Ex. D. at page 173. In order to obtain delivery, the bill of lading would have to be indorsed specially or in blank. When produced by United Molasses, it would be evidence that they had taken it by indorsement and were entitled to the goods by reason of it. I think that there is at least a prima...
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