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usual risk. But certain circumstances may justify deviation, and the Marine Insurance Act, 1906, lays down that deviation or delay in prosecuting the voyage is excused
(a) Where authorised by any special term in the policy: (b) Where caused by circumstances beyond the control of the master and his employer;
(c) Where reasonably necessary in order to comply with an express or implied warranty;
(d) Where reasonably necessary for the safety of the ship or subject-matter;
(e) For the purpose of saving human life, or aiding a ship in distress where human life may be in danger;
(f) Where reasonably necessary for the purpose of obtaining medical or surgical aid for any person on board the ship;
(g) Where caused by the barratrous conduct of the master or crew, if barratry be one of the perils insured against.
Obviously, where the cause excusing the deviation ceases to operate, the ship must resume her course with reasonable despatch. Barratry is defined by the Act as every wrongful act wilfully committed by the master or crew to the prejudice of the owner or the charterer." Examples would be setting fire to the ship, scuttling the ship, or using it for the purpose of smuggling.
Bill of Lading.
Very often, instead of chartering the whole or part of a ship, the person who wishes to send goods by sea makes an agreement with the shipowner to carry his goods, without hiring any particular part of the ship. Such an agreement is termed a "bill of lading," which is both a receipt for the goods to which it relates and a contract for the carriage and delivery of those goods upon the terms and conditions therein stated. Although it constitutes a receipt for the goods, a bill of lading is not a Bill of Sale within the meaning of the Bills of Sale Acts, 1878 and 1882.
A bill of lading is generally used even where the ship has been let out to a charterer, but where he ships his own goods the bill of lading need usually only be a receipt by the master for the goods shipped. If, however, the charterer carries goods belonging to other persons, then it contains the terms and conditions referred to above.
When the goods are first shipped, a more informal document termed a "mate's receipt" is given, and this is afterwards
exchanged for the formal bill of lading signed by the master of the ship. The master signs as agent of the owner of the ship, except that where the whole of the ship has been chartered he may be the agent of the charterer. The bill of lading need not necessarily name a special consignee, and it may be made out in blank, in which case the right to receive the goods remains in the consignor. Where a consignee is named, he is the person entitled to possession. It requires a sixpenny stamp, which must be impressed before execution for goods exported or shipped coastwise.
Form of Bill of Lading.-As in the case of charter parties, Bills of Lading vary according to the practice of the parties thereto, but the following is very usual
in and upon the is master for the present and bound for . .
Shipped in good order and condition by good ship called. . . . . . whereof. voyage, and now in the port of . with liberty to call at any ports on the way for coaling or other necessary purposes, [Three Hundred Casks of Wine] being marked and numbered as in the margin, and to be delivered in the like good order and condition at the aforesaid port of . . . . . ., the act of God, the King's enemies, fire, machinery, boilers, steam, barratry of the master and crew, and all and every other dangers and accident of the seas, rivers, and navigation of whatever kind or nature soever excepted, unto or to his assigns, he or they paying freight for the said goods £.... per ton of twenty cwts. net delivered with primage and average accustomed. In witness whereof, the master of the said ship hath affirmed to bills of lading all of this tenor and date, one of which bills being accomplished the others to stand void. Dated etc.
Weight value and contents unknown.
The "primage and average " referred to are small payments customarily made by the master of the ship for such matters as lights, pilotage, etc. Average here must not be confused with Average used in a totally different sense, as to which see Chapter 7 on Shipping.
Liability of Master or Owner.-The words "in good order and condition" imply what is termed a clean bill of lading. The words "weight value and contents unknown" are inserted for the purpose of protecting the master, as where a clean bill has been given it is evidence against him that the goods were, in fact, put on board in good order and condition, and he must deliver them accordingly, even should the statement be untrue. By Section 3 of the Bills of Lading Act, 1855, every bill of lading in the hands of a consignee or indorsee for valuable consideration, representing goods to have been shipped on board a vessel, shall be conclusive evidence of such shipment as against the master or other person signing the same, notwithstanding
that such goods or some part thereof may not have been so shipped."
But he will not be liable if
(a) The holder of the bill at the time of receiving it is aware that the goods have not been actually shipped, or (b) The misrepresentation in the bill was caused by the fraud of the shipper, the holder, or of some person under whom the holder claims. The bill of lading must state that the goods are actually "shipped." Such words as received for shipment" are not sufficient. Diamond Alkali Corporation v. Bourgeois (1921).
The master is bound to deliver the goods to the consignee upon payment of the freight or, of course, if the bill has been assigned, to the holder of the bill. Where, as is usually the case, the bill of lading is drawn in triplicate, this is termed "drawing in a set," and one copy is retained by the consignor, one by the master, and the third is sent to the consignee. In such a case the first transferee for value is entitled to the goods; but the master is not liable if he delivers the goods to any person who presents any of the parts of the bill, providing he acted bonâ fide and without notice of conflicting claims. If he has notice of a dispute it is his duty to interplead, that is, to express his readiness to deliver the goods to whichever of the disputants is decided to be the rightful owner of them, such decision being arrived at by the disputants settling the matter between themselves.
The duty of the shipowner is to carry the goods safely, subject to the exceptions agreed, and the shipowner is bound by the signature of the master to any bill of lading which contains any terms within his express or implied authority. But the master has no authority to sign a bill of lading for goods not actually received on board, and the owner is not, therefore, liable if he does so.
The shipowner has a lien on the goods carried until he has received payment of the freight, but such lien ends on delivery of the goods. Under the Merchant Shipping Act, 1894, the shipowner may still retain the lien on parting with possession of the goods on giving written notice to the custodian that he retains his lien for freight, and he has a power of sale after ninety days, or earlier if the goods are perishable. The shipowner also has a lien for General Average. (z)
Transfer.-A Bill of Lading is an assignable document of title to the goods, but it is not a negotiable instrument, as it cannot confer a better title than the indorser possesses. It may
(z) See ante, p. 188.
be transferred by indorsement and delivery by the person entitled to the goods named in the bill of lading, and the property in the goods may thus pass; and such an indorsement taken bona fide and for value without notice will deprive the vendor of his right of stoppage in transitu.
Where goods are delivered to the master of a ship chartered by the buyer, it will be a matter for decision on the particular facts as to whether they come into possession of the master as agent for the buyer or as carrier. But where they are delivered to the master of a ship belonging to the buyer, unless the bill of lading contradicts this idea, the transitus ends and no further right of stoppage exists.
The Bills of Lading Act, 1855, provides that “ every consignee of goods named in a bill of lading, and every indorsee of a bill of lading to whom the property in the goods therein mentioned shall pass upon or by reason of such consignment or indorsement, shall have transferred to and vested in him all rights of suit, and be subject to the same liabilities in respect of such goods as if the contract contained in the bill of lading had been made with himself."
Dock Warrants and Delivery Orders.-There are two other documents found in connection with contracts of affreightment, they are Dock Warrants and Delivery Orders. A Dock Warrant is a warrant issued by a dock company authorizing the person named therein to take possession of goods. A Delivery Order is an order by the owner of goods authorizing the person in whose charge they are to deliver them to the person named in the order. All the above-mentioned documents, Bills of Lading, Mate's Receipt, Dock Warrant and Delivery Order are documents of title as they convey a more or less good title to the goods to which they refer and they fall under the definition of documents of title found in the Factors Act. But only the last two are negotiable instruments, being recognized as such by the custom of merchants.
Freight. The price paid to the shipowner for the carriage of the goods is not usually payable until the voyage has been completed and the goods delivered, except where the non-delivery is caused by the fault of the consignor or by the perils expressly excepted by the contract of affreightment.
Advance Freight.-If so stipulated, freight is payable before the delivery of the cargo and in any event, in which case it is known as "Advance Freight."
Dead Freight. Where a charterer fails to load a full cargo, as agreed, he is liable for damages. This is termed "Dead Freight."
Lump sum Freight.-Where an entire sum is to be paid for the hire of the ship for a definite service, if the whole of the goods should be lost no freight will be payable; but, if any part is delivered and delivery of the residue is excused by the excepted perils, the lump sum is payable.
Freight pro rata." If the original contract has not been performed, no claim can arise under it; but, if there is a voluntary acceptance of the goods at a point short of their destination, in such a mode as to raise a fair inference that the further carriage was intentionally dispensed with, a new contract will be implied to pay compensation commensurate with the benefit actually received; that is to say, to pay freight for that portion of the voyage which has actually been performed." (a)
There are varying forms of contract for the sale of goods to be carried by sea, e.g., C.I.F., F.O.B., F.O.R., F.A.S., etc. In a C.I.F. contract the price includes "cost, insurance and freight," so that the purchaser requires to have delivered to him before he pays for the goods the Bills of Ladings and Insurance documents. In a F.O.B. contract ("free on board") the goods are delivered on board free of expense to the purchaser, and they are not at his risk until actually delivered on board; similarly, F.O.R. means "free on rail." A F.A.S. contract means "free alongside ship," that is, they are delivered alongside the ship free of expense to the purchaser; after that the charges incurred are to be met by him. In a bill of lading the statement often occurs "freight and all other conditions as per charter party," in which case the terms of the charter party bind the purchase to the extent to which he is concerned as to the payment of freight and all other conditions so far as not in conflict with any express stipulation contained in the bill of lading.
(a) MAUDE and POLLOCK on Shipping, 4th edn., p. 368.