Vlassopulos (N. & J.) Ltd v Ney Shipping Ltd (Santa Carina)
| Jurisdiction | England & Wales |
| Judge | THE MASTER OF THE ROLLS,To,LORD JUSTICE ROSKILL,LORD JUSTICE LAWTON |
| Judgment Date | 01 December 1976 |
| Judgment citation (vLex) | [1976] EWCA Civ J1201-4 |
| Docket Number | 1974 N. No. 2600 |
| Court | Court of Appeal (Civil Division) |
[1976] EWCA Civ J1201-4
In The Supreme Court of Judicature
Court of Appeal
On Appeal From The High Court of Justice
Queen's Bench Division
Commercial Court
(Mr. Justice Mocatta)
The Master of the Rolls
(Lord Denning)
Lord Justice Roskill and
Lord Justice Lawton
MR. J. BULLEN (instructed by Messrs. Constant & Constant, Solicitors, London) appeared on behalf of the Plaintiffs (Respondents).
MR. B RIX (instructed by Messrs. Holman, Fenwick & William, Solicitors, London) appeared on behalf of the Defendants (appellants).
On the 16th May, 1947 a small vessel, the "Santa Carina", was at Renang in Malaysia. She needed fuel oil, and she was supplied by Esso with 248 tons of it. The price payable was nearly 20,000 United States dollars. But it has never been paid. The owners of the vessel have no money and cannot pay. As a result we have this action in which one of the brokers on the Baltic Exchange in London sues another of the brokers on the Exchange for the price. The Judge has held that the broker, who gave the order for the oil, is liable to pay for it. The broker appeals to this court.
I must first say something about the two brokers. The plaintiffs Viassopulos Ltd. are brokers concerned with supplying bunkers for ships. They act as agents for a Greek company called the Ulysses Shipping Company. That company orders fuel oil from the big oil companies such as Esso or Shell for delivery to ships at ports all over the world' - where those oil companies have depots. They arranged, for instance, for Esso to supply the 248 tons of fuel oil to this vessel at penang.
The defendants Ney Shipping Ltd. are brokers concerned with fixing charters for ships, For instance, when a vessel was let on a time-charter, they might act as agents for the time charters. They would get a commission of 5 per cent on the price paid. They would not be bound to do anything for the vessel - during the period of the time-charter, tint in practice they often helped by arranging for bunkers to be supplied at a port of call when she needed them. For so doing they would get a very small commission of 1s Od. per ton on the fuel supplied.
The head time-charter. I now return to the "Ganta Carina". She is a small vessel owned by a Panamanian company. On the 25th April, 1973 she was let on time-Charter for eight months to Grainvacs S. A. of Panama. She was to be placed at the disposalof the time-charterers at Singapore and re-delivered at a port in the Persian Gulf-Singapore range. The Charter price was $1,525.00 a month. The time-charterer was to provide and pay for all fuel.
That time-Charter was negotiated on behalf of the time-charterers by the brokers Ney Shipping Ltd. Those brokers signed the time-charter: "By Authority of Grainvace S. A. Ney Shipping Limited (As Agents Only)". A commission of 5 per cent was payable to Ney Shipping Ltd. on hire earned and paid. That is, $76.25 a month for eight months.
During that time-charter, when the vessel required a supply of fuel oil at a particular port, the brokers Ney Shipping Ltd. used to telephone the brokers Vlassopulos and ask them to supply the bunkers. A simple telephone message: "Can you supply bunkers for this vessel at Penang?" Answer: "Yes. We will arrange it". Vlassopulos then got in touch with Ulysses who go in touch with Esso. And the fuel was supplied. Then Vlassopulos used to send an invoice of which this is an example:
"N. & J. Vlassopulos Ltd. Ship Brokers
17th September, 1975.
Messrs Ney Shipping Ltd.
Ref: "Santa Carina"
Cost of fuel bunkers supplied to this vessel at the port of Singapore Rds on the 25th August, 1973
Tons 160.80
Price $25.70
Per ton =$4,114.06
Kindly remit to: Williams & Glyn's Bank Ltd. for the credit of: Ulysses Shipping Agency Ltd.
Agents for Ulysses Shipping Agency Ltd."
On receipt of that invoice the Ney Shipping Company instructed the bankers to remit the amount to Williams & Glyn's," less the usual 10 cents per ton fittage". In that case the fittage would be only $16.00.
Similar transactions took place whenever the vessel required bunkers at any of her ports of call.
The sub-time-charter. on the 16th February, 1974 the time-charterers Grainvacs S. A., as disponent owners, sub-let the vessel on a time-Charter to P. T. Pelajaran of jakarta for a period of 30 to 45 days, The sub-charter-hire was $2,400 a day. The sub-time-charterers were to provide and pay for all fuel. And other usual terras.
That sub-time-Charter was negotiated on behalf of the disponent owners Gainvacs S. A. by the brokers Ney Shipping Ltd. Those brokers signed the sub-time-charter: "By authority of Grainvacs S.A, Ney Shipping Ltd. (as agents only)".
It was during that sub-time-Charter that the vessel needed fuel bunkers at Penang The brokers Ney Shipping Ltd. telephoned Vlassopulos as usual and asked for the bunkers to be supplied. Vlassopulos through Ulysses got Esso to supply them, and sent the invoice as usual:
N. & J. Vlassopulos Ltd.
Ship Brokers
13th dune, 1974.
Messrs. Ney Shipping Ltd.
Ref: "Santa Carina"
Cost of fuel bunkers supplied to this vessel at the port of Penng on the 16th May, 1974
Tons 248.21
Price $79.00
Per ton =$19,608.59
£ Fuel Additional Charges for delivery
71.02 US $19,679.61"
The Ney Shipping Company did not pay the amount of this invoice, because they had no funds in hand to do it. The reason was the slump in the shipping trade. The time-charterers and the sub-time-charterers both became insolvent.
On the 12th August, 1974 the solicitors for Vlassopulos wrote to Hey Shipping demanding payment, sayings:". in accordance with your instructions, they stemmed from Esso the above mentioned vessel with 248 tons of fuel oil at Penang".
On the 12th August, Ney Shipping replied: ". We agree that on behalf of clients we ordered bunkers for the above vessel but, as you and N. & J. Vlassopulos are well aware, under the rules of the Baltic Exchange we cannot act as a principal. Any bunkers which have been ordered by us and paid by us over the past few years have always been, as N. & J". Vlassopulos are well aware, on behalf of principals and in this particular-case were ordered on behalf of Grainvacs S.A. As we have already informed N. & J. Vlassopulos Ltd., we have been continually pressing our principals for settlement but have not had any response from them. We are, of course, making every effort to collect the amount due from Grainvacs S.A."
The question is whether, as a result of the telephone message asking for hunkers to be supplied, the brokers are personally liable to pay for the whole of the fuel oil. It is the brokers Vlassopulos who sue for the price of the bunkers, and they seek to make the brokers Ney liable who gave the order.
On the facts I have stated, it is clear that Vlassopulos, the brokers for the suppliers, knew that Ney, the brokers for the time-charterers, were ordering the fuel simply as agents. They were agents either for the owners or the time charterers of the vessels. The brokers for the suppliers knew they were agents, They received a telephone message saying: "Pleasesupply this fuel oil to the vessel", But they knew it was from the agents as agents.
The judge held that the brokers who ordered the fuel were personally liable. He was much influenced by the cases where a person gives a written order for goods or signs a written contract when he is known to be acting as an agent. Nevertheless, although he is known to be acting as an agent, he will be liable on that order or liable on that contract if he signs in his own personal name without qualification. That is settled by cases both in this court and in the House of Lords: see H.C. Brandt & Co. v. H.N. Morris & Co. Ltd. (1917) 2 King's Bench 784 at page 796 per Lord Justice Scrutton and Hichens Harrison, Woolston & Co. v. Jackson & ors. (1943) Appeal Cases 266 at page 273 per Lord Atkin. In order to exclude his liability he has to append to his signature some such words as "as agent only" or "for and on behalf of" or such exclusion must be apparent elsewhere in the document. That is clear from Universal Steam Navigation Co. v. James Mckelvie & Co. (1923) Appeal Cases 492 at pages 505 - 6.
The judge thought that those case on written orders and written contracts should be applied to the present case of an oral contract. He felt that if there is an oral conversation on the telephone, as in this case ordering bunkers, the broker is liable unless he uses some express words so as to show that he is acting as agent only and is not to be held personally liable. He said: "Thus some words must be mused to indicate that the agent is not himself undertaking any financial obligation or liability".
I have no doubt that those cases on written orders and written contracts arose out of the old rule of evidence whereby it was not permissible to admit oral evidence to alter or contradict a written contract. Those cases still apply today to written orders and written contracts. But they do not apply to oral orders or oral contracts. At any rate not so rigidly.In many cases if a man, who is an agent for another, orders goods or makes a contract by word of mouth, but does not disclose the name or standing of his principal (so that his credit is unknown to the other contracting party) the agent himself is liable to pay for the goods or to fulfil the contract. It may be that the other contracting party knows that the man is only an agent, but, as he does not know who the principal is, it is to be inferred that he does not rely on the credit of the principal but looks to the agent. That, I think, is the thought...
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