OF THE SHIP-OWNER'S LIEn for freigHT; AND HEREIN, (Ss.)1. Maritime and French Law on this subject. 2. Of the clause in Charter-parties whereby the Merchant binds the goods. 3. Of the Lien for Freight of the Owner of a chartered Ship. 4. Remarks on decided Cases. * 1. By the Marine Law, the ship and freight are bound to the performance of the covenants of the ship-owner, and the goods to the performance of the covenants of the merchant. "Le batel," says Cleirac, "est obligé à la marchandise et la marchandise au batel" (a). By the French Ordinance it is expressly provided, "That the ship with her furniture, equipment, and apparel, and the cargo, are respectively bound to the performance of the covenants in the charter-party." And this provision is adopted word for word in the Code de Commerce. Valin informs us that the word affectés in this article, is to be read affectés par privilège (b); but the right of the merchant who would seek to make this privilege available, ranks low in the order of precedence of privileged claims against the ship; the legal expenses attending a sale, the demands for pilotage and custody of the vessel, for stowage of furniture and apparel, for repairs at the last port, for the wages of master and mariners accrued due during the last voyage, for monies borrowed by the master on his last voyage, for purchase-money of ship, furniture and stores remaining unpaid, for sums due to material men, shipwrights, and lenders on bottomry, before her last departure from port, and for premiums of insurance, being most of them justly preferred to it. The privilege of the ship-owner against the goods for his freight is of a more beneficial character. Under (a) Cleiarc on art. 21 of the Jugemens d'Oleron. Us et Coustumes de la Mer, (b) Valin, Com. sur l'Oleron, liv. 3, tit. 1, art. 11. Code de Commerce, art. 191. *the empire of the Ordinance, the master was not entitled to detain the goods in his ship until pay- [† 285] ment of the freight due upon them, because that would have deprived the consignee of the opportunity of inspecting them, and of ascertaining if they had been injured by the master's fault; but he was at liberty to stop them in the lighter, on the quay, or in the warehouse. And if third parties had not previously acquired an interest in them, he might, by a formal demand of the freight within a fortnight of their delivery, preserve his privilege against the creditors of the consignees. By the Code de Commerce (c), these regulations have been modified. The master cannot (it would seem) now detain the goods in his ship, but he has a right to insist upon their deposit in a warehouse, until his claim for freight is satisfied; and within a fortnight after delivery to the consignee, he may, unless they have passed by sale and transfer to third parties, in which case the maxim, - Meubles n'ont pas de suite étant en tierce main, — applies, assert his claim upon them in preference to the claims of other creditors. Clauses are now usually inserted in French charter-parties, by which the contracting parties expressly recognise these *dispositions as the basis of their agreement (d). 2. In England also, it is usual for each of the parties to these contracts to bind himself, his heirs, executors, and administrators; and the owner or master to bind the ship and her freight; and the merchant the cargo to be laden; in a pecuniary penalty for the true performance of their respective covenants; this is commonly done by a clause at the end of the instrument. Such a clause is not the absolute limit of damages on either side; the party may, if he thinks fit, ground his action upon the other clauses or covenants, and may in such action recover damages beyond the amount of the penalty, if in justice they shall be found to exceed it (e). On the other hand, if the party sue on such a penal clause, he cannot in effect recover more than the damage actually sustained. But although the ship and freight are by the terms of a charter-party expressed to be bound to the performance of the covenants on the part of the owners or master, and this is conformable to the maritime law; (1) yet, as I have before (c) Article 306. (d) Formulaire, tit. 6; Code de Com merce, par Rogron. (e) Harrison v. Wright, 13 East, 343. (1) The Schooner Volunteer, 1 Sumner, 550. > observed (ƒ), there does not appear to be at present [† 286] any mode of obtaining in this country the benefit of the security of the ship itself in specie, for the performance of such a contract made here. (1) The clause whereby the merchant binds the cargo, does not give to the owner a lien on the cargo by way of general security for the performance of the covenants in the charterparty, nor for any payment for which he might not detain it in the absence of such a clause, so that with us the clause is inoperative. In the cases where a lien is allowed, it is not derived from this clause, but either from some general principle of law or some special contract. Where it depends upon a general principle of law, it is confined to the specific chattels, or some part thereof, in respect of which the payment is claimed, and, consequently, goods actually brought by a ship cannot be detained for a breach of a covenant to furnish a full cargo; nor for demurrage (g); nor for pilotage or port charges, although the freighter may have engaged to pay them (h). A lien may be extended further, or wholly excluded by particular contracts, or special circumstances. In the case of Birley v. Gladstone, an entire ship was chartered for a voyage out and home, and by the terms of the charter-party, the merchant covenanted to pay for the homeward cargo at certain rates per ton, on delivery of the cargo at Liverpool, by bills at three months; to load a full cargo, and to pay demurrage, and he bound the goods to the performance of his covenants. The Court of King's Bench decided that the owner could not detain the goods, either for the freight of such as were put on board, but afterwards relanded by compulsion, or for dead freight, or for demurrage. A bill was afterwards filed in Chancery for the purpose of obtaining a declaration, that the ship-owners were entitled to (f) Ante, p. 127. (g) Phillips v. Rodie; Birley v. Gladstone, 3 M. & S. 205. (h) Faith v. East India Company, 4 B. & A. 630. (1) Ante, 127, note. > The Elizabeth, 1 Haggard, R. 226, where jurisdiction was sustained in case of a charter-party, and suit in personam thereon, on an appeal from the Vice Admiralty Court. And see the comments of Lord Ellenborough on this particular clause of the charter-party, in Birley v. Gladstone, 3 M. & Selw. 205, 216. If there be an express pledge of the goods, or an express covenant, that they may be detained as security for the performance of all the covenants in the charter-party, that perhaps might vary the case. See the same case in Equity, 2 Merivale, R. 401. The shipowners have a lien on goods for the freight due for maritime transportation, which may be enforced in the admiralty by a libel in rem, and it is immaterial whether the contract is by a bill of lading or a charter-party. Drinkwater v. Brig Spartan, Ware, 149; The Schooner Volunteer, 1 Sumner, 550. > a lien in equity, but the Master of the Rolls, Sir William Grant, dismissed the bill; in the course of his judgment, his Honor said, "There can be but one right construction of the clause, and if it could be said that the Court of King's Bench had ill construed it, this is not a court of appeal in which their decision can be corrected. It was asked, what effect the clause could have, if it gave no lien either in law or equity? A Court of Equity is not bound to find an equitable effect for a clause, merely because the construction which a court of law has put upon it would leave it inoperative. In truth, it has been copied † from foreign [† 287] charter-parties, with very little consideration of the effect that might be allowed to it in the law of this country. I think it very probable, that in other countries it would have the effect of entitling the ship-owner to retain the cargo for every sort of demand that could accrue to him under the charter-party "(i). 3. Neither can the owners in all cases have the full benefit of this clause, as giving a lien on the cargo for the payment of what is usually denominated freight. To this purpose, the following case is in point:- Two persons, who were factors, hired a ship of one Paul, at the rate of 481. per month, and executed a charter-party, by which the goods to be put on board were made liable to him, and they had power to appoint the master and mariners. Some merchants in the West Indies loaded the ship with goods, and allowed the factors 97. per ton for the carriage. The factors who had thus chartered the ship in their own name became bankrupts. Paul instituted a suit in the Court of Chancery to compel the merchants to pay him for the hire of the ship, insisting that they were liable to do so by reason of this clause in the charter-party. But the Lord Chancellor Hardwicke decided that he should recover of them no more than they had engaged to pay the factors for the freight, and that they were not liable to make up the deficiency to him. His Lordship observed, that by the general law, the cargo is liable to pay the freight; but that in this case, the 481. per month was improperly termed the freight of the goods, being rather the hire of the ship; that the factors had made an agreement with the master on their account, and not on the part of the merchants, and therefore the merchants were not liable; otherwise they would be in the hardest case imaginable, for they would be liable to any private agreement between the occupier of a ship and the original owners of it; "a person," said (i) Gladstone v. Birley, 2 Mer. 401; Birley v. Gladstone, 3 M. & S. 205. [† 288] his Lordship," that lets out a ship to hire, ought to take care that the hirer is a substantial man, it is his business to look into this; and if the persons who hire are not competent, the master must suffer for his neglect. Whatever hardship, therefore, there may be on the one hand to the person who lets out to hire, the hardship is much greater on the other side; and what gives additional weight to the merchant's case, is the great convenience this gives to trade in general "(k). *+A similar decision was pronounced in the case of Mitchell v. Scaife (1), although it does not appear from the report that the charter-party contained the clause in question. In that case, which was an action of trover for cotton and log wood, the defendant, being part-owner of the ship Cossack, by a charter-party let her for a voyage from Liverpool to Jamaica and back, for a gross sum, by way of freight. The captain signed bills of lading for the cargo, which belonged to a third person, specifying a rate of freight, amounting to a less sum than that mentioned in the charterparty, Lord Ellenborough said, "I am of opinion that the ship-owner had no right to detain the cargo for more than the freight mentioned in the bill of lading. The plaintiff is the bona fide indorsee of the bill of lading. We know that this is an instrument which the master has in general authority to sign, and the plaintiff seems to have had no reason to suspect that this authority was not properly exercised upon that occasion. Under such circumstances the owner of the ship cannot be heard to aver against the contract created by his own agent through the medium of the bill of lading." In the case of Christie v. Lewis (m), Mr. Justice Richardson said, "It is true, that according to the decision in Paul v. Birch, the owner has not a lien on the goods mentioned in the bills of lading for all his freight due on the charter-party, but he is entitled to the freight on the bills of lading in preference to the freighter." This doctrine was again recognised by Lord Tenterden and Mr. Justice Bailey, in the case of Faith v. East India Company (n), and more recently by the present Chief Justice of the Court of Common Pleas (o). The word "lien," in its proper sense in the law of England, imports, that the party claiming it is in the possession of the thing which he claims to detain. Where there is no possession, actual or constructive, there can be no lien. (1) (k) Paul v. Birch, 2 Atk. 621. (1) 4 Campb. 298. (m) 2 B. & B. 410. (n) 4 B. & A. 630. (1) This proposition is expressed in too general a form. There are liens by the law |