5. Wreck or Stranding.—
Shipwreck or disaster does not affect the title of the owners of the cargo but the goods themselves may become subject to superior liens for salvage and general average.[13] If the voyage is broken up the owner may take his property wherever he can find it, subject to such maritime liens as may have lawfully accrued and, also, in some cases, to a claim for freight in proportion to the part of the voyage which has been performed. In the absence of the owners, the master is the agent of all concerned and has as much authority as the necessities of the situation require.
In practice almost all matters growing out of a disaster are dealt with by the underwriters. Cargoes are seldom uninsured. The owner should promptly notify his insurers or brokers and tender an abandonment and the underwriters will attend to the situation which develops. If the abandonment be accepted, the shipper receives the insured value of his goods and the insurers stand in his stead as owners. The policy will also ordinarily protect against the loss if less than total and cover all charges for salvage, general average, and warehousing to which the property may be subjected. The shipper and his representatives are entitled to a copy of the master's protest and all other information in regard to the disaster and also to be consulted in regard to operations for the release of the ship and cargo if they so desire.
6. Arrival and Discharge.—
It is the duty of the consignee of the cargo, apart from local custom or special contract, to be reasonably diligent to ascertain when the ship arrives with his goods on board and the master is not bound to seek him out and notify him.[14] He should, however, report at the Custom House or make such other public notification of arrival as is usual in the port. If the consignee does not appear to claim and receive his goods, the master may land and warehouse them at his expense. The master is bound to deliver the goods to the right person, that is, the person entitled to them as owner or as holder of the bill of lading and all outstanding bills of lading should be taken up. They are quasi-negotiable, and, in the hands of third parties, may become the basis of a claim for the goods.
The consignee, producing a proper bill of lading, is, of course, entitled to inspect the goods before accepting them and the ship must afford him the opportunity even if the instructions be not to deliver them until paid for. If damaged, he may decline to receive them, but if he accepts he should closely observe the provisions of his contract in regard to notice and claim for damages. Most bills of lading contain provisions limiting the time within which claims may be made and these, when explicit, are enforced by the courts. Failure to present a claim in accordance with such stipulations will usually exonerate the carrier even if the damage was occasioned by his fault or negligence.
This subject is fully discussed by the Supreme Court in the case of Constable v. National Steamship Co., 154 U. S. 51. The S. S. Egypt arrived at New York from Liverpool at 1.45 P. M. and there being no room for her at her owner's pier, was taken to the pier of the Inman Company, where she was unladen, pursuant to a permit issued by the Collector of Customs whereby the cargo was allowed to remain on the wharf for forty-eight hours upon agreement by the owners of the ship that the goods should be at the sole risk of the owners of the ship who would pay the consignees the value of such cargo as might be stolen, burned or otherwise lost. Notice of the time and place of discharge was then posted upon the bulletin board of the Custom House in accordance with the usual practice, but no notice was sent to the consignee, nor did he have actual notice or knowledge of the arrival and unloading of the vessel. On the night of the day of the arrival the goods were burned on the pier upon which they had been unladen without negligence on the part of the owners of the Egypt. The bill of lading contained this provision:
The goods to be taken alongside by the consignee immediately the vessel is ready to discharge, or otherwise they will be landed by the master and deposited at the expense of the consignee, and at his risk of fire, loss or injury in the warehouse provided for that purpose or in a public store as the Collector of the Port of New York shall direct.... The United States Treasury having given permission for goods to remain forty-eight hours on wharf at New York, any goods so left by consignee will be at his or their risk of fire, loss or injury.
The Court (Brown, J.) held:
1. That the stipulation in the bill of lading that respondent should not be liable for a fire, happening after unloading cargo was reasonable and valid.
2. That the discharge of the cargo at the Inman pier, was not in the eye of the law a deviation such as to render the carrier and insurer of the goods so unladen.
3. That if any notice of such unloading was required at all, the bulletin posted in the Custom House was sufficient under the practice and usages of the port of New York.
4. That libellants, having taken no steps upon the faith of the cargo being unladen at respondent's pier, were not prejudiced by the change.
5. That the agreement of the respondent with the Collector of Customs to pay the consignees the value of the goods was not one of which the libellants could avail themselves as adding to the obligations of their contracts with the respondents.
7. Freight and Demurrage.—
Freight is the price of transportation by sea and demurrage has been called a kind of extended freight but is more generally understood as the price of delay in loading or receiving the cargo on the part of the shipper or consignee. Freight must be earned by conveyance and delivery of the cargo but the ship is entitled to hold the goods until payment is made. The contract of affreightment is very succinctly described by Lord Ellenborough, in Hunter v. Prinsep, 10 East 378:
The shipowners undertake that they will carry the goods to the place of destination, unless prevented by the dangers of the seas, or other unavoidable casualties; and the freighter undertakes that if the goods be delivered at the place of their destination he will pay the stipulated freight; but it was only in that event, viz., of their delivery at the place of destination, that he, the freighter, engages to pay anything. If the ship be disabled from completing her voyage, the shipowner may still entitle himself to the whole freight, by forwarding the goods by some other means to the place of destination; but he has no right to any freight if they be not so forwarded; unless the forwarding them be dispensed with, or unless there be some new bargain upon this subject. If the shipowner will not forward them, the freighter is entitled to them without paying anything. One party, therefore, if he forward them, or be prevented or discharged from doing so, is entitled to his whole freight; and the other, if there be a refusal to forward them, is entitled to have them without paying any freight at all. The general property in the goods is in the freighter; the shipowner has no right to withhold the possession from him, unless he has either earned his freight, or is going to earn it. If no freight be earned and he decline proceeding to earn any, the freighter has a right to the possession.
Where a ship does not "break ground," that is to say, does not commence her voyage at all, as in the case of the Tornado, 108 U. S. 342, in which it appeared that the vessel was destroyed by fire before sailing, the contract of affreightment is dissolved, or does not become effective, and the shipper cannot recover freight which she did not even begin to earn.
The lien for freight is a qualified one and will be lost by an unconditional delivery. The same is true of demurrage but the personal liability of the shipper or consignee will, of course, remain. The amount of freight is usually fixed by agreement and specified in the bill of lading.
So, also, are clauses in regard to demurrage. Strictly speaking, the latter can only be recovered where it is expressly reserved in the contract of carriage, but, where such stipulations have been omitted, the same result is sometimes obtained by an action for damages in the nature of demurrage on account of wrongful detention of the ship. The question of whether the ship has been unreasonably delayed or wrongfully detained is often a very confused one and its solution depends to a great extent on the surrounding circumstances. When emergency demands prevail and ports are crowded, the ship assumes some of the incidental risks of delay in obtaining and discharging her cargo, and, unless the contract is plain, can hardly insist upon more than the same treatment as others in similar situations are obtaining. When disputes arise, neither party should press his position to the extent of causing further delay, as by withholding or refusing the goods. Admiralty practice abounds in opportunities to prevent unnecessary delay by bonds or stipulations and the parties should take advantage of these or risk the disfavor of the court in which their litigation proceeds.
8. Unfair Freight Rates.—
The Merchant Marine Act of June 5, 1920 (see Appendix), forbids and makes a misdemeanor the allowance of deferred rebate of freight to any shipper; the use of fighting ships, i.e., vessels used for reducing competition by driving any carrier out of the trade; retaliation against other shippers by refusal of space accommodations when the same are available, and the making of any unjustly discriminatory contract with any shipper based on the volume of goods offered, or the making of any unjustly discriminatory charge against any shipper in the matter of accommodations, loading and landing or settlement of claims. The Shipping Board is authorized to investigate alleged violations of these provisions and the Secretary of Commerce is directed to refuse the right of entry to any ship owned or operated by a carrier whom the Shipping Board has found to be guilty of such violations.
9. Passengers.—
The carriage of passengers by water is regulated by substantially the same rules in regard to fares, tickets, special contracts and baggage as carriage by land.
The passenger is entitled to a reasonable amount of baggage having regard to his station in life and the character of the journey. As to articles which he retains in his personal custody the carrier is not an insurer but is liable only for negligence; the mere fact of loss creates no presumption against the carrier (Clark v. Burns, 118 Mass. 275). The carrier is liable for articles stolen from the passenger by its employees (Minnetonka, 146 Fed. 509) and the conditions and limitations as to value of baggage usually printed on the tickets are of slight value in the courts (Majestic, 166 U. S. 375).
10. Reciprocal Duties.—
The real differences between rules of law applicable to land and sea travel result from their own peculiar circumstances. Thus, the relation of passenger and ship necessarily implies something more than mere ship room and personal existence on board. For the time being the ship's company and the passengers constitute a community by themselves and remote from the rest of the world. There must be a certain amount of mutual toleration and concession. The situation requires, indeed, not mere toleration but respectful treatment,—"That decency in demeanor which constitutes the charm of social life, that attention which mitigates evils without reluctance, and that promptitude which administers aid to distress." (Chamberlain v. Chandler, 3 Mason 242; Western States, 151 Fed. 929.) The passengers must be prepared to submit on proper occasions to the authority of the master, which may, indeed, occasionally become despotic where the safety of the ship is involved. He may compel passengers to work at the pumps, for example, in the face of actual danger (1 Parsons' Shipping and Admiralty, 637) or even to risk their lives if the common safety requires it (Boyce v. Bayliffe, 1 Campbell, 58). Of course this power must be judiciously exercised and if it is overstepped the law will afford redress. The old case of Prendergast v. Compton, 8 C. & P. 454, is illustrative; the defendant was master of a ship from Madras for London, in the days when long voyages around the Cape were common. The plaintiff was a passenger whose table manners were distasteful to the other members of the master's table; he first attempted to correct them by mild suggestions and remonstrances, but the plaintiff responded by threatening to cane the master, who thereupon excluded him from the cabin and otherwise subjected him to discipline during the voyage. On arrival in port the plaintiff brought this action and the case affords an interesting discussion of the subject; the question was finally left to a jury who concluded that the master had exceeded his authority and allowed the plaintiff twenty-five pounds as damages.
The maritime law required a high degree of care for the protection of the passenger from personal injury. A ship must answer for such damages as might have been avoided by the exercise of unusual diligence and extraordinary skill. Although not technically an insurer, a presumption against a ship will be heavy in such cases, and ordinarily damages will follow unless it can be shown that the injury was entirely due to the passenger's own fault.[15]
11. Baggage.—
Passengers' baggage or luggage is in, substantially, the same class as cargo as far as the liability of the ship is concerned. Some cases have held that there was an exception of property which the passenger retained in his own custody but the general rule is that this only relieves the carrier where the passenger's own negligence occasioned the loss; in such cases the passenger must show that the shipowner failed to exercise reasonable and proper care. The matter is frequently covered by express stipulations in the ticket or contract of carriage but these will not usually be enforced in the American courts unless reasonable and plainly agreed to by the passenger. Thus arbitrary limitations of the value of the baggage of a steamship passenger are void. Passengers' baggage is not limited to wearing apparel and similar articles, although the general rule is that it must be confined to such articles as are reasonably required for the purposes of the journey, having in mind its general scope and the station and circumstances of the passenger. It is not permitted to impose extraordinary liabilities upon the ship by carrying as baggage goods of great value which should be otherwise shipped. In a recent case recovery was allowed for the loss of a manuscript of a manual on Greek grammar contained in the passenger's trunk; he valued it at $5,000; the Court, however, allowed only $500, on the theory that it was an imposition on the carrier to place so valuable an original in his baggage when he might have carried an equally serviceable copy.
12. Personal Injuries.—
Passenger carriers by water are subject to the same general liabilities of carriers by land. The highest degree of care for the safety of the passenger is required of the ship and negligence is presumed where an injury is sustained on board. It is the duty of the vessel to protect its passengers from harm by reason of defects in construction or acts of the ship's company or other passengers. Actions for damages may be brought against the ship or the owner. An injured passenger is entitled to at least the same degree of care and attention that a member of the crew is and may have an additional claim if this is neglected. The cases exhibit a wide range of injuries on shipboard for which recoveries have been allowed; thus, where a sailor carelessly fell from the foretopmast upon a passenger, a libel was sustained; so where a passenger was thrown from his berth by the pitching of the ship in a storm, through absence of a protecting board; so for failure to accord to a passenger respectful treatment by the officers and crew; for failure properly to protect exposed parts of machinery and openings in the deck; failure to provide a sufficient supply of wholesome food; furnishing unsanitary drinking water; and, indeed, for the negligence of those conveying passengers to and from the ship or on excursion trips on shore when advertised as a part of the voyage in question. The ship is required to have a doctor on board for the care of passengers but, when due care has been exercised in his selection, there is no liability for his mistakes or negligence in his professional work.
Cases abound illustrative of these principles. For example the old cases of Behrens v. Furnessia, 35 Fed. 798, and the City of Panama, 101 U. S. 453, in both of which passengers were injured by falling down open hatchways, which were customarily kept closed, and the more modern case of Dempster Shipping Co. v. Pouppirt, 125 Fed. 732, where the plaintiff while on deck was struck by a beam which was being thrown overboard. In the two cases first mentioned plaintiffs recovered damages, it being considered that under the circumstances the ship was negligent in leaving open and unguarded hatchways which were customarily kept closed and over which passengers were accustomed to pass. In the case last cited plaintiff failed to recover because it appeared that he had voluntarily placed himself in dangerous proximity to boards that were being swung over the side. The law is quite fully reviewed in these cases. In the City of Panama, it was said:
Owners of vessels, engaged in carrying passengers, assume obligations somewhat different from those whose vessels are employed as common carriers of merchandise. Obligations of the kind in the former case are, in some few respects, less extensive and more qualified than in the latter, as the owners of the vessel carrying passengers are not insurers of the lives of their passengers, nor even of their safety; but in most other respects the obligations assumed are equally comprehensive and even more stringent....
Passengers must take the risk incident to the mode of travel which they select, but those risks in the legal sense are only such as the utmost care, skill and caution of the carrier, in the preparation and management of the means of conveyance are unable to avert.
In the case of Shipping Co. v. Pouppirt, the court quoted with approval the following language from Railway Co. v. Myers, 80 Fed. 361:
If a passenger of mature age leaves the place which he knows has been provided for him, and, without any occasion for so doing, or to gratify his curiosity, goes to another, where the dangers are greater, or places himself in a dangerous attitude, which he was not intended to assume, or if he disobeys any reasonable regulation of the carrier, it should be held that he assumes whatever increased risk of injury is incurred in so doing.
13. Loss of Life.—
Until March 30, 1920, the general maritime law did not give any right to recover for loss of life. On that date an act of Congress was approved, the text of which follows:
That whenever the death of a person shall be caused by wrongful act, neglect or default occurring on the high seas beyond a marine league from the shores of any State, or the District of Columbia, or the Territories or dependencies of the United States, the personal representatives of the decedent may maintain a suit for damages in the district courts of the United States, in admiralty, for the exclusive benefit of the decedent's wife, husband, parent, child, or dependent relative against the vessel, person, or corporation which would have been liable if death had not ensued.
Sec. 2. That the recovery in such suit shall be a fair and just compensation for the pecuniary loss sustained by the persons for whose benefit the suit is brought and shall be apportioned among them by the court in proportion to the loss they may severally have suffered by reason of the death of the person by whose representative the suit is brought.
Sec. 3. That such suit shall be begun within two years from the date of such wrongful act, neglect, or default, unless during that period there has not been reasonable opportunity for securing jurisdiction of the vessel, person or corporation sought to be charged; but after the expiration of such period of two years the right of action hereby given shall not be deemed to have lapsed until ninety days after a reasonable opportunity to secure jurisdiction has offered.
Sec. 4. That whenever a right of action is granted by the law of any foreign State on account of death by wrongful act, neglect, or default, occurring upon the high seas, such right may be maintained in an appropriate action in admiralty in the courts of the United States without abatement in respect to the amount for which recovery is authorized, any statute of the United States to the contrary notwithstanding.
Sec. 5. That, if a person die as the result of such wrongful act, neglect, or default as is mentioned in section 1 during the pendency in a court of admiralty of the United States of a suit to recover damages for personal injuries in respect of such act, neglect, or default, the personal representative of the decedent may be substituted as a party and the suit may proceed as a suit under this Act for the recovery of the compensation provided in section 2.
Sec. 6. That in suits under this Act the fact that the decedent has been guilty of contributory negligence shall not bar recovery, but the court shall take into consideration the degree of negligence attributable to the decedent and reduce the recovery accordingly.
Sec. 7. That the provisions of any State statute giving or regulating rights of action or remedies for death shall not be affected by this Act. Nor shall this Act apply to the Great Lakes or to any waters within the territorial limits of any State, or to any navigable waters in the Panama Canal Zone.
Sec. 8. That this Act shall not affect any pending suit, action, or proceeding.
It will be observed that this act places loss of life on the high seas in the same category as personal injuries. The suit is to be brought by the personal representative of the decedent for the benefit of the decedent's wife, husband, parent, child or dependent relative. It would appear that if there are no such persons an action could not be maintained. This would seem to exclude a right of action where the decedent leaves only creditors or heirs of more remote degree than those enumerated. Nearly all the states have statutes providing for recovery on account of loss of life at sea and these statutes have hitherto been enforced in the admiralty courts. Section 7 provides that the federal act shall not affect rights of action or remedies for death provided by state laws. The act is broad enough in terms to include a right of action for the death of seamen, but there is another statute covering such cases (see Chapter V, § 6, supra).
The act does not affect the right of the owners of a ship to limit their liability. Claims for loss of life when properly payable under the act would apparently be included among claims to be paid out of the limited liability.
The act does not enlarge the responsibility of the owners. Whether they are responsible in personam, or whether the vessel is solely responsible in rem depends on the privity or knowledge of the owner, as discussed in Chapter VIII, § 9 infra.
REFERENCES FOR GENERAL READING
Carriage of Goods by Sea, T. G. Carver. London, 1909; Stevens and Sons, Ltd.
Law of Carriers, E. P. Wheeler. New York, 1890; Baker, Voorhis & Co.
Maritime Law, Albert Saunders. London, 1901; Sweet & Maxwell, Ltd.
Wildcroft, 201, U. S., 378.
Sumner v. Caswell, 20 Fed. 249.
Dan, 40 Fed. 691.
Harlem, 27 Fed. 236.
Hattie P., 63 Fed. 1015.
Manitoba, 104 Fed. 145.
Majestic, 56 Fed. 244.
Normania, 62 Fed. 469.
Kensington, 183 U. S. 263.
[13] See p. 181.
[14] Prior to the advent of steam navigation this was not the rule. A carrier, in order to discharge his liability, was obliged to deliver the cargo upon the usual wharf of the vessel, and give actual notice to the consignee, if he were known.
[15] See § 2, this chapter, infra.
CHAPTER VII
CONTRACTS OF AFFREIGHTMENT, BILLS OF LADING AND CHARTER PARTIES
1. Definitions.—
Contracts of affreightment are for the carriage of goods in vessels. This definition is sufficiently comprehensive to include contracts evidenced by bills of lading and charter parties. In practice the expression, "contracts of affreightment," is commonly used in a somewhat narrower sense to indicate those cases in which a vessel is operated by her owners on their own account, contracting directly with the shippers.
A bill of lading is the document issued for carriage of goods which form only a part of the cargo; it is both a receipt and a contract of carriage.
A charter party is a contract in writing by which the shipowner lets the ship in whole or in part. It corresponds to a lease of lands or buildings. The name comes from the fact that it was formerly prepared on a card which was then cut into two parts from top to bottom (carta partita) and each of the parties retained one for production when required and thus prevented counterfeiting.
By an order dated October 1, 1920, made pursuant to the provisions of the Merchant Marine Act (see Appendix), the Shipping Board requires two certified copies of every charter or contract of affreightment made on American or foreign steam or sailing vessels leaving continental United States to be filed with the Chartering Executive Committee, 45 Broadway, New York, which will then issue a certificate of filing. Unless this is done, clearance will be refused the vessel; but where there is not time to file certified copies before sailing, a letter or telegram to the Committee, giving all details of the contract, will answer the purpose. General cargo and passenger vessels, those in ballast and those carrying cargo for owners are not subject to this regulation.
Freight is the price of the carriage of goods by sea under a bill of lading, and also the sum agreed on for the hire of the ship under a charter party.
Before discussing the particular features of these contracts it will be well to observe certain elements which enter into substantially all contracts for the carriage of goods for hire. These are the warranty of seaworthiness, the obligation against deviation and the exemption of the carrier from liability on account of the perils of the sea.
In the Chapter, "Liabilities and Limitations," § 10, will be found a discussion of the Harter Act. This must be taken into consideration in connection with these subjects.
2. Seaworthiness.—
The warranty of seaworthiness underlies all contracts between the vessel and the shipper. It is an implied warranty on the part of the owner that the vessel is seaworthy, and sufficient for the use to which she is to be devoted. This warranty may be modified between the parties as they see fit by express agreement or necessary implication; a man may hire an unseaworthy boat and agree to put her in good condition; a charterer who examines and accepts a ship whose condition is defective cannot complain of an injury to the cargo caused by such defects. Otherwise the warranty subsists and the charterer cannot be held liable to the owner for depreciation in the ship resulting from unseaworthiness and has also the right to cancel the charter on the same ground. He may also hold the owner for such damages as he is obliged to pay third parties on account of unseaworthiness. This warranty, unless restricted by agreement, extends to latent or hidden defects, since it requires that the ship be seaworthy at the commencement of the voyage and is not satisfied by the fact that the shipowner does not know her to be unseaworthy or has used his best efforts to make her seaworthy. It runs up to the time she breaks ground for the voyage, but is modified by the results of subsequent excepted perils until it is reasonably practicable to repair them.
In Bowring v. Thebaud, 56 Fed. 520, it was held:
The shipowner in every contract of affreightment impliedly engages with the shipper of the goods that his ship on the commencement of her voyage is seaworthy for that voyage and supplied with a competent crew.
And the following statement of the law, from Carver on Carriage by Sea, was approved:
The warranty of seaworthiness for a voyage must be satisfied at the time of sailing with the cargo. It is not sufficient that the ship was fit for the voyage while the cargo was being taken on, if she became unfit before she started. The warranty in truth appears to be a double one, viz., that the ship shall be fit to receive the cargo when receiving it and shall be fit to sail at the time of sailing.
The Court proceeded:
The warranty that the vessel is tight and fit for the employment for which she is offered,—that is, for the contemplated voyage on which she is to carry cargo,—is the very foundation and substratum of the contract of charter. The exception in a charter party as to dangers of the seas and navigation is not applicable to the perils and dangers which arise from the breach of the owner's obligation. Consequently it does not apply to the warranty of seaworthiness. Undoubtedly in cases where, under the language of the charter party, the warranty is satisfied if the vessel is seaworthy at the commencement of a voyage preliminary to her being laden, the shipowner is relieved by the exception from liability for any peril of the seas or navigation which are subsequently encountered without fault or negligence on his part.... In all of these adjudications, the question was as to the meaning of the contract of the parties. This must be decided in each case by applying the rules of interpretation to the contract on hand.
3. Deviation.—
The ship must cover the proposed voyage without deviation. Deviation is defined to be "a voluntary departure without necessity or reasonable cause, from the regular and usual course of a voyage" (Hostetter v. Park, 137 U. S. 30). Deviation makes the carrier liable for losses occasioned thereby as an insurer notwithstanding any limitation of liability in the contract of carriage. It may be excused for the purpose of saving life or avoiding perils if the master acts in accordance with sound judgment, and it is excused if it be the custom of the trade to put in at a particular port on similar voyages. The consignee, if he intends to insist upon the deviation as a defense to his liability for freight, should refuse to receive the cargo.
An instructive discussion of the rule with regard to deviation is found in the case of the Indrapura, 171 Fed. 929, where a vessel bound from Hong Kong to Portland, Oregon, was placed on a drydock at Hong Kong without maritime necessity and there caught fire, whereby the cargo was injured. The owners of the cargo libeled the ship for their damages, alleging that the unnecessary docking of the ship was a deviation. The Court said:
The term "deviation" in the law of shipping has at the present day a varied meaning and wide significance. It was originally employed no doubt, for the purpose its lexicographical definition implies, namely, to express the wandering or straying of a vessel from the customary course of voyage; but it seems now to comprehend in general every conduct of a ship or other vehicle used in commerce tending to vary or increase the risk incident to a shipment. Thus delay in starting a shipment when unreasonable or unexcused came to be regarded as a deviation, not because the vehicle employed departed from the usual route of travel, but because the risk of shipment was changed or increased, and became, in effect, not the same as the one with reference to which the parties contracted.
And in Bulkley v. Insurance Co., Fed. Cas. No. 2,118, it was said:
The shortness of time or distance of deviation is immaterial if voluntary and without necessity, and not justified by usage.
The contract of carriage frequently purports to give the ship liberty to make deviation. This is construed strictly against the owner of the vessel. She may make only "reasonable deviation." She may call at a port lying directly on the route of her voyage, but may not go out of her way to any considerable degree, and if she does so and the shipper is damaged the exemption will not avail to protect her owner.
4. Perils of the Sea.—
Almost every contract in respect of employment of the ship contains an express or implied exception of perils of the seas. This provides an exemption of liability on account of losses caused by these perils. These casualties cannot be accurately defined. The expression denotes accidents peculiarly incident to navigation, whether on lake, river, or the deep sea, not attributable to any human agency or intervention. It is rather more comprehensive than the "acts of God," but by no means includes all the dangers which may occur while journeying on the sea. Collision is a peril of the sea if it occurs without fault of either ship but not if by reason of the negligence of the carrying ship. Tempests, rocks, shoals, icebergs and other obstacles are within the expression; so are incursions of sea water, which damage the goods, as well as such bad weather as prevents ordinary ventilation and causes the cargo to heat and sweat. Where the peril is the proximate cause of the loss, the shipowner is excused.
5. Fire.—
Sec. 4282, U. S. Rev. St., is as follows:
No owner of any vessel shall be liable to answer for or make good to any person any loss or damage which may happen to any merchandise whatsoever, which shall be shipped, taken in, or put on board any such vessel, by reason or by means of any fire happening to or on board the vessel, unless such fire is caused by the design or neglect of such owner.
It will be noticed that while this statute provides complete protection against fire on shipboard it does not protect against liability for damage by fire occurring on shore. To cover this it is common to insert in the contract of carriage an exemption from loss "before loading in the ship or after unloading." Such an exception is upheld by the courts where fire is not attributable to the neglect of the owner of the ship. Such a case was that of Constable v. National Steamship Co., 154 U. S. 51, where goods were delivered on the pier of the Steamship Company and injured by fire before they were laden. The Court held that the clause in the bill of lading, excepting loss by fire "before loading in the ship or after unloading," was a valid defense.
6. Restraint of Princes.—
The contract usually contains a provision exempting the shipowner from liability for damage due to "restraint of princes." This quaint phrase means any kind of governmental action which interrupts the voyage, or otherwise prevents the performance of the contract. These restraints occur most often during war, although they may happen in time of peace, as in the case of detention in quarantine. If the restraint results from some action taken by the shipowner, such as the taking on of contraband goods, the clause will not relieve him from liability.
A simple illustration of the restraint of princes clause appears in Allanwilde Transport Corp. v. Vacuum Co., 248 U. S. 377, where a sailing vessel, the Allanwilde, was chartered to the libellants for the transportation of a cargo of oil and nails to Rochefort, France. The freight was prepaid. She started on the voyage and while she was at sea the government prohibited sailing vessels departing from the United States on voyages which would carry them through the war zone. The vessel ran into bad weather and was obliged to put back to the United States for repairs. By reason of the governmental order she did not resume her voyage. The owners of the cargo libeled the vessel to recover the prepaid freight. They also presented a claim for damages. The Court held that the restraint of princes clause of the charter party was a valid defense to the suit. Thus the vessel retained the freight which had been prepaid, although the voyage did not take place, and the cargo-owners did not recover their damages.
7. Freight.—
(a) Dead Freight.—
In case the charter party provides for the shipment of a full cargo by the charterer and compensation to the owner of the ship is payable per unit of cargo, the shipowner will be entitled to recover from the charterer the amount of freight which would have been payable by so much cargo as could have occupied the space left vacant. This is called dead freight.
On the other hand cases arise in which the owner has to pay dead freight to the charterers. This occurs where the compensation for the ship is a lump sum and the owner fails to load a full cargo.
(b) When Freight is Earned.—
Freight is earned when the goods have been carried to their destination and not until then. If it be paid in advance and the goods do not arrive at destination it must be refunded. Of course, the parties may by their express stipulations in charter parties, bills of lading and other forms of agreement change these rules, and frequently do so. For example it is sometimes provided that prepaid freight shall be considered earned on the shipment of the goods, or if the ship be lost the freight shall not be refunded. Such bargains are, of course, entirely legal and will be enforced by the courts according to their tenor.
Charters sometimes provide for the carrying of cargo out and back. Here the terms of the contract with reference to the outbound and homeward-bound voyage are inseparable. No freight is earned until the ship returns with the homeward-bound cargo. But if the contract can be construed so as to regard each voyage separately, the freight for the outbound voyage will be earned at destination whether the ship returns with cargo or not.
8. Contracts of Affreightment.—
Where the contract is not plainly a demise of the ship, i.e., a conveyance which turns over her full operation and control, it will not be so interpreted, and the owner will be in a position of a carrier of goods or as himself contracting for such other service by the ship as the charter requires, that is to say, the contract is one of affreightment.
Thus in Hagar v. Clark, 78 N. Y. 45, it was held:
If it remains doubtful whether the charterers were to have sole possession and control of the vessel during the voyage or were to be constituted owners pro hac vice, then the general owners must be deemed such for their rights and authority continue until displaced by some clear and definite transfer of them. The legal presumption is in favor of continuance of ownership and against any transfer of the ship to the charterer for the voyage, and is said to be so strong that, if the end sought to be effected by the charter party can conveniently be accomplished without the transfer of the vessel to the charterers, courts of justice are not inclined to regard the contract as a demise of the ship, although there may be express words of grant in the formal part of the instrument.
The master remains the agent of the owner under any contract falling short of a demise, and the owner is bound by all his acts and omissions within the scope of his authority as in the ordinary relation of carriage by sea. If the instrument amounts to a demise, the master is the charterer's agent, and not that of the owner. Bills of lading or other contracts of affreightment signed by the master bind the owner or the owner pro hac vice on the theory of the master's agency. This subject is discussed in the case of Freeman, 18 How. 182, quoted extensively in Chapter III, § 10, supra. Charter parties frequently contain a clause whereby the charterer agrees to indemnify the shipowner against any liability arising from the signature of bills of lading by the master. Probably this clause would be implied in a charter party if not expressed therein. This gives the owner of the ship a right of action over against the charterer on account of any liability to which the shipowner or ship may have been subjected at the hands of the shipper. Thus if the charter party contained covenants for the protection of the shipowner under certain circumstances and the bill of lading issued by the master did not contain these restrictions and the shipper recovered under the bill of lading against the ship or her owner, the latter in turn could recover against the charterer (Field Line v. South Atlantic Co., 201 Fed. 301).
9. Bills of Lading.—
The forms differ greatly in contents and legal effect but have the common features of an acknowledgment of the receipt of the goods; a description by which they may be identified; an agreement to carry to destination and deliver; the rate of freight and an exception of certain perils. In addition to these features it has been usual to include more or less elaborate provisions tending to a diminution or limitation of the ship's liability, sometimes extended to great length in small or illegible type, and the attempt to take advantage of these is sometimes described as "fine print and coarse work." These stipulations, in so far as they attempt to exempt the shipowner from the consequences of his own or his servants' negligence are not enforced in courts of the United States on grounds of public policy. They probably, however, have some value as deterrents of claims and litigation but should be studied in connection with the Harter Act (7 Comp. St. §§ 8029-8035). (See Chapter VIII, p. 119.) The common carrier by sea is subject to the same rules of extraordinary liability as the common carrier by land but this liability is controlled by the admiralty law of limited liability (Liabilities and Limitations, Chapter VIII, p. 112) and the provisions of the Harter Act. Like the land carrier, he may also enlarge or diminish his liability by special contract; such a contract must be clear and plain, based upon a meeting of minds, due consideration or mutuality, and conformity with law; it will not, however, protect against negligence on the part of the carrier. An example is found in the Guildhall, 58 Fed. 796, where a cargo was damaged in a collision occasioned by improper navigation. The owners of the ship based their defense on a provision in the bill of lading, which attempted to exempt from liability for "any neglect or defaults of the master, mariners, or others in the service of the owners, collision, perils of the seas," etc. It was held:
These stipulations are valid by the law of Rotterdam (the port of departure), and of England. But the obligation of the steamer, as a common carrier, was to deliver her cargo safely in this country, at the port of New York. As against the consignee and owner here, she can not commit torts on the high seas against his property with immunity, nor justify such torts, except by some valid contract, proved according to the law of the forum. By numerous decisions of the Supreme Court of the United States, stipulations like these, inserted by a common carrier in a bill of lading, are, first, void as against public policy; and secondly, they are not evidence of any contract to that effect on the part of the shipper and consignee; because unreasonable and not having the necessary element of voluntary assent.
See also Compania de Navigacion La Flecha v. Brauer, 168 U. S. 104:
Exceptions in a bill of lading or charter-party, inserted by the shipowner for his own benefit, are unquestionably to be construed most strongly against him.
In this case the cargo consisted of cattle, and the bill of lading contained this:
On deck at owner's risk; steamer not to be held accountable for accident to or mortality of the animals from whatever cause arising.... It is also mutually agreed that the carrier shall not be liable for loss or damage occasioned by ... accidents of navigation, of whatsoever kind, even when occasioned by the negligence, default or error in judgment of the pilot, master, mariners or other servants of the shipowner.
The vessel was improperly ballasted and rolled over on her beam ends. Some of the cattle were injured and in order to right the ship a number of them were thrown overboard, no discrimination being exercised between sound animals and those which had been injured. The court after laying down the general principles above quoted, further held: