The shipowner's lien under a charter-party may be modified by the bills of lading which have been given for the goods. As regards the charterer himself, the terms of a bill of lading given to him for goods which he has shipped, do not alter the contract with him. The charter-party is still the contract. The master has no authority to qualify it. But as regards third persons, not parties to the charter, the terms of the bill of lading may greatly change the shipowner's powers over the goods. If the bill of lading has been given with the shipowner's authority, or by the master acting within the scope of his ordinary apparent authority and if goods have been shipped, or purchased from shippers, upon the faith of it, the shipowner cannot avail himself of rights given by the charter-party, but not indicated in the bill of lading, to the prejudice of the shipper or purchaser. He is precluded from contradicting the terms of the bill of lading.

Thus, he cannot claim a lien for more freight than is reserved by the bill of lading against a shipper or purchaser who is a stranger to the charter-party, and has taken the bill of lading without notice of it; though by the charter-party itself the owner may have stipulated for a lien on all goods shipped, for the whole charter freight.1

The shipowner is generally bound by the bill of lading contracts which the master has made, and he cannot, as against strangers to the charter who have shipped goods, or have become consignces or indor

1 Carver, 2nd Ed. 689.

sees of the bill of lading for value, claim to set up rights under the charter-party which are inconsis tent with the terms of those bills of lading; although notice of the existence of a charter-party be given by the bills of lading themselves. So where the charter-party made the cargo deliverable on being paid freight as follows:-"the ship to have a lien on cargo for freight; 37. 10s. per ton of 50 cubic feet to be paid to captain or his agents on right and true delivery at port of discharge." It was held, that the shipowner had no lien against the indorsee of a bill of lading for the whole chartered freight, but only for the freight due on the goods mentioned in the bill of lading; and the holder of the bill of lading, subject to the conditions of a charter-party will be liable for dead freight where such is payable under the charter-party.1

A charter-party by which the owner gives up the possession and control of the ship to the charterer is not consistent with a lien for the freight on the goods carried in the ship. For the owner has not possession of the goods. He cannot therefore detain them for unpaid freight due under the charter."

But, where a lien on the lading of a ship was expressly reserved to the owner by a charter-party, it was held, that goods which the charterer purchased and put on board, and then transferred with a stipulation to convey them to their destination for a certain amount of freight were even as against an indorsee of the bill of lading, subject not only

1 Fry v. Chartered Mercantile Bank, L. R. 1 C. P. 689; 35 L. J.C. P. 306. 2 Belcher v. Capper, 4 M. & G. 502; Christie v. Lewis, 2 B. & B. 410; Hutton v. Bragg, 7 Taunt. 14,

to that freight, but to the shipowners' lien for a balance due to him under the charter-party; whether possession of the ship was by the charter-party completely out of the shipowner and vested in the charterer or not.1

If the consignee of a cargo charters a vessel for the shipment of it and properly incurs expenses in relation thereto, he is entitled to a lien on the cargo, and the proceeds arising from a sale of it. If a person other than the consignee has advanced money for the shipment of the cargo, with the consent of the principal, he is entitled to a lien on the proceeds, if he can stop them before they come to the hands of the shipper.2

When, by the terms of a charter-party, a lien upon the cargo is given to the shipowners for "dead freight," and the charter-party is recited in the bill of lading, it is a question whether the shippers can exercise the lien against all parties interested for freight which should have been earned on cargo short-shipped. It is generally believed that damages for short loading are synonymous with "dead freight;" this is not altogether a safe assertion. Before the case of McLean v. Fleming was decided in the House of Lords, in 1871, the term "dead freight" had been frequently defined by the judges as denoting an agreed sum to be paid in respect of space not filled according to charter-party, in the

1 Small v. Moates, 9 Bing. 574.

Young v. Neill, 9 L. T. 9.

3

L. R. 2 H. L. Sc. 128,

Lien on cargo

for dead

freight.

1

event of the freighters not loading a full cargo. For this fixed sum, and for no other, it was said an absolute lien would be given, if a lien for dead freight was stipulated for, and the charter-party, or this term of the charter-party, was recited in the bill of lading. Unliquidated damages for short loading were not considered to be covered by the words "dead freight." Whether or not the judgment in McLean v. Fleming has made any alteration in the law, is a question which has not only puzzled the shipping and commercial public, but it has produced also a considerable divergence of opinion among Her Majesty's Judges. The action in which this judicial difference was chiefly shown was that of Grey v. Carr, tried in the Exchequer Chamber, in the same year 1871. How the respective judg ments in these cases are to be reconciled is a matter of extreme difficulty. The material facts in McLean v. Fleming, are as follows:-McLean & Hope, merchants of Edinburgh, purchased 701 tons of bones of a merchant at Constantinople, and through an agent chartered a vessel belonging to Fleming to carry the bones to the United Kingdom. An "absolute lien on the cargo" was given, not only for actua! freight, but for "dead freight." The freight was to be 358. a ton. Bills of lading were signed for the whole 701 tons, but only 386 tons were shipped, the vessel being able to carry in fact 210 tons more. On the arrival of the vessel at her port of discharge (Aberdeen) the master refused to deliver to McLean

& Hope unless he was paid freight for the 386 tons carried and "dead freight," i.e. a proportionate sum for the 210 tons not shipped but for which there was room in the vessel. Other questions of fact and law arose, but the question of law as to "dead freight," arising on the deficiency of the cargo is the only one to which it is necessary to refer. The House of Lords unanimously pronounced in favor of the shipowner, the respondent, Fleming, Lord Hatherly and Lord Chelmsford both adopting an old definition by Lord Ellenborough, pointing as they considered to the effect that "dead freight" was "unliquidated compensation for loss of freight generally." Lord Colonsay held, that "dead freight' was the only expression we have for the claim which arises in consequence of the failure to furnish a full cargo. While Lord Westbury considered that the charterparty gave the shipowner a right to a reasonable sum, that is unliquidated damages, by way of compensation for 'dead freight.' In the face of these expressed opinions, if this case stood alone, there would be great difficulty in coming to any other conclusion than that a lien for 'dead freight,' must now be held to give generally a lien for any damages sustained by reason of short shipment; a lien, indeed, which could be exercised against any one who had notice of the term in the charter-party, and even if the damages were wholly undetermined and doubtful in amount. Previous, however, to the decision of this action the case of 'Gray v. Carr,'

1 L. R. 6 Q. B. 522.