Allanwilde Transport Corporation v. Vacuum Oil Company/Opinion of the Court

The questions in the cases arise upon libels filed against the Allanwilde to recover prepaid freight for the transportation of certain goods and merchandise to designated ports in Europe.

The solution of the questions turns upon (1) the asserted prevention of the adventure by a storm at sea which the vessel encountered, requiring her return to port for repairs, and (2) afterwards by the restraining power of the government.

On November 1, 1917, the Allanwilde, owned by the Allanwilde Transport Corporation, was seized upon libels filed by the Vacuum Oil Company and A. W. Pidwell, respectively, each of which had shipped certain goods to be carried from New York to Rochefort, France.

In May, 1917, the Oil Company chartered the vessel to carry a cargo of oil in barrels at the rate of $16.50 a barrel (changed afterwards to $15.25).

The charter party contained inter alia the following provisions:

' * *  * Freight to be prepaid net on signing bills of lading      in United States gold or equivalent, free of discount,      commission, or insurance. Freight earned, retained and     irrevocable, vessel lost or not lost.'

On August 25, the oil having been loaded, the vessel issued a bill of lading containing inter alia the following provision:

'All conditions and exceptions of charter party are to be     considered as embodied in this bill of lading.'

Pidwell was permitted to ship certain kegs of nails on the vessel, and on August 15 a bill of lading was issued to him. Inter alia it provided that the carrier should not be liable for loss, damage, delay or default 'by causes beyond the carrier's reasonable control; * *  * by arrest or restraint of governments, princes, rulers, or peoples; *  *  * by prolongation of the voyage. * *  * '

It is provided in paragraph 5 of the bill of lading that:

'Full freight to destination, whether intended to be pre paid or collected at destination, and all advance charges * *      * are due and payable to (the Allanwilde Transport      Corporation) upon the receipt of the goods by the latter *  *      * and any payment made *  *  * in respect of the goods *  *  *      shall be deemed fully earned and due and payable to the      carrier at any stage before or after loading of the service      hereunder without deduction (if unpaid), or refund in whole      or in part (if paid), goods or vessel lost or not lost, or if      the voyage be broken up. * *  * '

In pursuance of the contracts thus attested the oil and the nails were shipped on the Allanwilde and the freight was paid in advance-$49,745.50 for the oil and $3,128.00 for the nails.

The vessel was seaworthy and properly manned and equipped, and set sail September 11. After she had been out about 14 days and was about 500 miles from New York she encountered a storm so severe that her boats were carried away and she sprang a leak so threatening that the water in her hold was three or four feet deep and was gaining on the pumps. Thereupon the master properly decided that he must seek a port of refuge for safety and repair. Halifax was about 500 miles away, but in that direction the wind was against him, while it was favorable for New York, and on this account as well as for other good reasons he headed for New York, where he arrived on October 5, having been out 24 days. Repairs were undertaken at once, the cargo remaining on board meanwhile.

'On September 28, while the vessel was at sea, the government     decided to refuse clearance thereafter to any sailing vessel      bound for the war zone. The master did not know of this     condition until the vessel returned to New York; he received      no information from the shore after September 11. The repairs     being finished, the vessel attempted to resume her voyage,      but clearance was refused, and none could be obtained in spite of her      efforts to induce the government to modify its stand. Toward     the end of October the shippers were notified by the carrier      to unload their goods, and this they did, but under protest      and reserving their rights. Afterwards the oil was forwarded     by steamship, but at a higher rate of freight and under other      charges. What became of the nails after they were unloaded     does not appear.

'The vessel declined to refund the freight to either shipper,     and the libels were filed to recover not only the prepaid      freight but also damages for failure to carry. On each libel     the District Court entered a decree for the prepaid freight      alone, refusing recovery for the other damages.'

Upon these facts the Circuit Court of Appeals have certified four questions, two in each libel, as follows:

'1. Was the adventure frustrated, and was the contract     evidenced by the charter party and by the bill of lading      issued to the Oil Company dissolved, so as to relieve the      carrier from further obligation to carry the oil?

'2. Whatever answer may be given to the first question, did     the contract thus evidenced justify the carrier under the      facts stated in refusing to refund the prepaid freight?

'3. Was the adventure frustrated, and was the contract     evidenced by the bill of lading issued to Pidwell dissolved,      so as to relieve the carrier from further obligation to carry      the nails?

'4. Whatever answer may be given to the third question, did     the contract thus evidenced justify the carrier under the      facts stated in refusing to refund the prepaid freight?'

A copy of the charter party and copies of the bills of lading are attached to the certificate and also the official bulletin refusing clearance to 'sailing vessels destined to proceed through the war zone.'

The argument of counsel upon the elements of the questions is quite extensive, ranging through all of the ways in which contracts can be dissolved or their performance excused by the agreement of the parties or prevented by some supervening cause independent of the parties and dominating their convention. We do not think it is necessary to follow the argument through that range. It may be brought to the narrower compass of the charter party and the bills of lading.

The physical events and what they determined are certified. First, there was the storm, compelling the return of the ship to New York to avert greater disaster; then the action of the government precluding a second departure. Does the contract of the parties provide for such situation and take care of it, and assign its consequences? The charter party provides, as we have seen, that 'Freight to be prepaid net on signing bills of lading. * *  * Freight earned, retained and irrevocable, vessel lost or not lost.' And it is provided that this provision is, with other provisions, 'to be embodied' in the bill of lading. They seem necessarily, therefore, deliberately adopted to be the measure of the rights and obligations of shipper and carrier. Let us repeat: the explicit declaration is-'Freight to be prepaid net on signing bills of lading. * *  * Freight earned, retained and irrevocable, vessel lost or not lost.' The provision was not idle or accidental. It is easy to make a charge of injustice against it if we consider only the defeat of the voyage and the noncarriage of the cargo. But there are opposing considerations. There were expected hazards and contingencies in the adventure, and we must presume that the contract was framed in foresight of both and in provision for both. We cannot step in with another and different accommodation. It is urged, however, that there is no provision in the contract (charter party and bill of lading) of the Oil Company excepting 'restraints of princes, rulers and peoples' and that, therefore, the carrier was not relieved from its obligation by the refusal of clearance to sailing vessels. And it is further urged that such embargo was at most but a temporary impediment and the cargo should have been retained until the impediment was removed or transported in a vessel not subject to it. We cannot concur in either contention. The duration was of indefinite extent. Necessarily, the embargo would be continued as long as the cause of its imposition-that is, the submarine menace-and that, as far as then could be inferred, would be the duration of the war, of which there could be no estimate or reliable speculation. The condition was, therefore, so far permanent as naturally and justifiably to determine business judgment and action depending upon it. The Kronprinzessin Cecilie, 244 U.S. 12, 37 Sup. Ct. 490, 61 L. Ed. 960.

There is no imputation of bad faith. The carrier demonstrated an appreciation of its obligations and undertook their discharge. It was stopped, first by storm, and then prevented by the interdiction of the government. In neither situation was it inactive. It quickly repaired the effects of the former and protested against the latter, joining with the shipper in an earnest effort for its relaxation. It gave up only when the impediment was found to be insurmountable.

The answer to the other contention is that the contract regarded the Allanwilde, a sailing ship, not some other kind of ship or means. The Tornado, 108 U.S. 342, 2 Sup. Ct. 746, 27 L. Ed. 747; The Kronprinzessin Cecilie, supra.

The bill of lading in No. 450 is even more circumstantial. It provided that—

'Full freight to destination, whether intended to be prepaid     or collect at destination *  *  * shall be deemed fully earned      and due and payable to the carrier at any stage before or      after loading of the service hereunder, without deduction (if      unpaid) or refund in whole or in part (if paid), goods or      vessel lost or not lost, or if the voyage be broken up.'

And there is exemption from liability 'for any loss, damage, delay or default * *  * by arrest or restraint of government, princes, rulers, or peoples. * *  * '

The questions certified are therefore answered in the affirmative.

So ordered.