Rodocanachi, Sons & Company v Milburn Brothers

APPEAL of the defendants from the judgment of Manisty, J., reported 17 Q. B. D. 316, and contention by the plaintiffs by way of cross appeal.

The action was upon a charterparty by the plaintiffs, as charterers and cargo-owners, against the defendants, as shipowners, for the non-delivery of a cargo of cotton seed shipped under the charterparty upon the defendants' ship. The 10th clause of the charterparty was as follows: “The master to sign bill of lading at any rate of freight, and as customary at port of lading, without prejudice to the stipulation of this charterparty, receiving the difference, if less than the rates specified therein, at port of loading, against his receipt for the same.” It was also provided that the charterers' liability was to cease when the cargo was shipped, provided it was worth the freight on arrival at the port of discharge, the captain having an absolute lien on it for all freight, dead freight, and demurrage: and that sufficient cash for ship's disbursements should be advanced, if required, to the captain by the charterers, on account of freight, at current rates of exchange, subject to insurance only. The port of lading was Alexandria, and the cargo was to be delivered at a port in the United Kingdom. The cargo having been shipped, a bill of lading was signed by the master containing an exception, which was not in the charterparty, protecting the shipowners from liability for any damage arising “from any act, neglect, or default whatsoever of the pilot, master, or mariners.”

The cargo shipped was lost by the negligence of the master of the ship.

Evidence was given at the trial with regard to the form of bill of lading in use at Alexandria. There was also evidence given on behalf of the plaintiffs to the effect that on the signing of the bill of lading a discussion had taken place as to its divergence from the terms of the charterparty, and that the captain and ship's agents had said that the bills of lading were only receipts for the cargo taken on board, and did not in any way affect the clauses of the charterparty.

The learned judge asked the jury the following questions:—

1. Was it the custom at Alexandria to insert in all bills of lading a clause exempting the ship from liability for loss occasioned by the negligence of the master and crew?

2. Was the bill of lading in this case signed in the form in which it is upon the understanding that it was to be treated only as a receipt for the cargo and in no way to affect the clauses in the charterparty?

The jury answered as follows: It appears to have been usual to sign bills of lading with a clause which exempted the owners in a greater or less degree, but there was no special custom in Alexandria: and they answered the second question in the affirmative.

After the execution of the charterparty and before the shipment of the cargo the plaintiffs had sold the cargo “to arrive” at a price less than the market price at the port of discharge at the time when the ship in the ordinary course should have arrived there. The plaintiffs had made advances under the charterparty on account of freight for ship's disbursements at the port of loading, retaining, however, out of such advances the amount necessary for premiums of insurance thereon.

The learned judge entered judgment for the plaintiffs on the ground that the terms of the bill of lading did not control the contract contained in the charterparty: and, the question of damages being left to him, he held that the plaintiffs were entitled to the price at which they had sold the cargo less the amount which ought to be deducted in respect of freight: and that such amount ought to be the total amount of the charter freight, including, therefore, the amount of the freight advanced, on the ground that the meaning of the charter was that the shipowners were to allow to the charterers a sum equal to the premium payable on the insurance of the advanced freight, and, if the plaintiffs had not chosen to insure, nevertheless they could not recover this amount from the defendants.