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could recover nominal damages for the breach of contract in not signing bills of lading as presented; but that there had been no conversion by the defendants of the cargo, as they had carried it for the plaintiffs, had intended to deliver the whole of it to the consignees of the plaintiffs, and had been prevented by the acts of the plaintiffs from completing the delivery.1
Where a shipowner has been careful to retain a lien by a charter-party, his object may be frustrated by the master giving bills of lading inconsistent with the retention of the lien.2
It frequently happens that ships let by charterparty are again sub-let by the charterers, or put up by them as general ships, and when the shipowner seeks to avail himself of the lien he has retained by the charter-party for the chartered freight, he is met by the cargo owners producing bills of lading entitling them to their cargo on payment of something less. In all such cases the shipowner's lien is restricted to the amount of the bill of lading freight, unless the holder of the bill of lading is identified with the charterer; or perhaps, in some cases, the master in giving the bills of lading was acting outside the scope of his authority.3
The usual practice is for the master or agent of the ship to give bills of lading for the cargo, although it may be shipped under a charter-party.
1 Jones v. Hough, L. R. 5 Ex. D. 115; 49 L. J. Ex. 211.
Gardner v. Trechmann, L. R. 15 Q. B. D. 154; 54 L. J. Q. B. 515.
3 Abbott on Sh. 13th Ed. 260.
When the charterer himself ships the goods, these bills of lading operate as receipts for them, and also as documents of title which he can negotiate, and thereby constructively transfer the possession of the goods.1
But they do not, as between the shipowner and the charterer, operate as new contracts, or as modifying the contract in the charter-party. Though after taking and negotiating bills of lading for one port, the charterer cannot alter the ship's destination to another port.3
Where, however, a bill of lading given to the charterer has been transferred for value to third persons, who are strangers to the charter-party, its terms become very important. It then constitutes an undertaking on the part of the shipowner with the holders, which is independent of the charterparty, except so far as that is expressly incorporated in it; and that is so although the holders may have notice, from the bill of lading itself, that a charter-party is in existence.
Whether the bill of lading so transferred is binding upon the shipowner where it has been issued to the charterer in an improper form, without the
1 Jones v. Hough, L. R. 5 Ex. D. 115.
2 Rodoconachi v. Milburn, L. R. 17 Q. B. D. 316; L. R. 18 Q. B. D. 67; Wagstaff v. Anderson, L. R. 5 C. P. D. 177; Capper v. Wallace, L. R. 5 Q. B. D. 166.
3 Davidson v. Gwynne, 12 East. 381.
4 Fry v. Chartered Mercantile Bank, L. R. 1 C. P. 689; Chappel v. Comfort, 31 L. J. C. P. 58; Shand v. Sanderson, 28 L. J. Ex. 278; Foster v. Colby, 28 L. J. Ex. 81; Gardner v. Trechmann, L. R. 15 Q. B. D. 154; Leduc v. Ward, L. R. 20 Q. B. D. 475,
shipowner's authority may be doubtful.' The charterer, through whom the holders of the bill of lading claim, must generally have known of the improper conduct or absence of authority. And if the assignee had the same knowledge when he gave value for it, it seems clear that he cannot rely on it as against the shipowner. But the policy of the law is to maintain the negotiability of the bill of lading. Probably
therefore, it would be held that, although there had been fraudulent collusion between the master and the charterer, the right of an innocent transferee of the bill of lading, for value, to regard it as a binding contract, would not be affected; unless, indeed, the bill of lading were such as to put any one taking it upon inquiry.
When the charterer does not ship the cargo himself, but procures a cargo to satisfy the charterparty from other merchants, questions arise as to who is responsible to those shippers for the performance of the contracts of carriage made with them, and who may enforce those contracts against them. These must be answered by considering who made the contracts. If the charterer has himself, or by his agents, agreed with the shippers on his own behalf, he is answerable for the carriage of the goods accordingly. So, with the shipowner, if he made them. But uncertainty arises when the contract has been made with the master, for he may possibly be regarded as agent either for owner or charterer. Grant v. Norway, 20 L.J.C.P. 93; Faith v. East India Co., 4 B. & A. 630. 2 The Emilien Marie, 32 L. T. 435.
a refusal to
load at the
If the charter-party is such as to give the charterer possession of the vessel, as well as the right to use her carrying capacity, so that the vessel is, in effect, let to him, and the master in charge of her is his servant, then the owner is not in the position of a carrier, either as regards the charterer or any one else, and there is no reason for regarding the master as actually, or presumptively, his agent in contracting with shippers.'
In Arrospe v. Barr, it was held that the clause, "to sign bill of lading as presented, at any rate of freight, without prejudice to this charter-party," only entitled the charterer to vary the rate of freight, so that the master could require the insertion in the bill of lading of the words "other conditions as per charter-party." But it was doubted whether that would be so when the clause is simply "to sign bills of lading as presented."
A refusal by the charterer to load in the agreed manner will excuse the shipowner from proceeding agreed place. to the port of loading. And when the charterer breaks his contract in this way on one of an agreed series of voyages, that may entitle the shipowner to treat the whole as at an end. In Bradford v. Williams, a vessel was chartered in May, to carry cargoes of coal from Bullo to
ball, until the end of March.
Highbridge or Dun
"Vessel to load with
Gollop & Co., or Gould & Co., till end of Septem
ber, with Captain's option;
after September at
1 Carver, 2nd Ed. s. 151.
28 Sc. Sess. Ca. (4th) 602.
3 L. R. 7 Ex. 259.
Gould & Co." The ship made several voyages under the charter-party, until September. To an action by the charterer for not sending the ship to load after the commencement of September, the owner pleaded that the Captain had elected to load from Gollop & Co., and that the plaintiffs were not ready, and had refused to load there during September or at any subsequent time. It was held on demurrer that this was a good defence. The refusal to load at Gollop & Co. not only excused the shipowner from sending the ship during September, but also entitled him to treat the charter-party as at an end altogether. "The contract was for the continuous employment of the ship, and the defendant, owing to the plaintiff's refusal to perform what was a material part of the bargain, was unable to go on as he expected earning his freight."
The ship ought, if necessary, to wait for cargo at the port of loading during all the agreed lay-days; unless the charterer has definitely refused to provide a cargo.
Thus where by a charter-party it was agreed that a vessel should proceed to A. and there load a cargo for B., six days being allowed for loading. Before the expiration of the lay-days, the charterer's agent offered the master a cargo at a lower rate of freight than was stipulated for, saying that the broker would make good any difference there might be, but the master refused to take anything not according to the terms of the charter-party. Held, that
fails to load agreed time.