Lowber v. Bangs

BANGS & SON being owners of the ship Mary Bangs, then at sea, on her passage from New York to Melbourne, chartered her at Boston, on the 4th June, 1858, to Lowber, who was there, for a voyage from Calcutta to Philadelphia, &c. The charter-party contained the following clauses:

'Ship to proceed from Melbourne to Calcutta with all possible despatch. It is understood that the 'Mary Bangs' is now on her passage from New York to Melbourne (sailed 3d day May last); that the owners will use the most direct means to forward instructions to the master, with copy of this charter, ordering it to be fulfilled; but should it so happen that the ship should arrive at Melbourne before these instructions, and the master should have engaged his ship before receiving them, this charter will be void.'

No provision, it will be observed, was made for the case of the vessel's having left Melbourne unengaged, or, indeed, for anything but for her arriving at Melbourne, and her engagement before receiving the instructions promised by Bangs & Son, to be sent. The vessel reached Melbourne on the 7th of August; she discharged her cargo, and was ready to sail on the 7th of September. She waited for the mail until the 16th of that month. It was due there on the 5th of September, but by an accident did not arrive until the 14th of October. The voyage from Melbourne to Calcutta, at that time of the year, usually consumed from forty-five to sixty-days. Had the vessel proceeded to Calcutta direct, she ought to have reached there before the middle of November. She went, however, to Manilla, much out of the direct course from Melbourne to Calcutta, and arrived there on the 16th of November. She left Manilla on the 24th of January, and arrived at Calcutta on the 26th of February, more than three months after the time at which she ought to have arrived, if she had gone there directly from Melbourne. The owners addressed to the master five letters, of different dates, advising him of the charter-party, and directed them to Melbourne. The charterers, on the 23d of June, despatched an agent to Calcutta, who arrived there on the 25th of August. As soon as he learned that the vessel had not come direct from Melbourne, he declined loading her under the charter-party. Freights, it may be added, had largely fallen between the date when the charter-party was made, and that of the vessel's arrival at Calcutta; and, also, that after the arrival of the Mary Bangs, and after she was ready and had offered to receive a cargo, the charterers engaged another vessel, of about the same tonnage, to take her place, and loaded her with a cargo purchased after the arrival of the Mary Bangs, with funds provided for her. The case thus showed that the object of the voyage had not been frustrated.

On error from the Massachusetts Circuit, where the case had come before the court as a case stated, the question presented for the determination of this court was, whether the fact that the ship proceeded from Melbourne to Manilla and thence to Calcutta, instead of going to Calcutta from Melbourne directly, gave the charterers a right to avoid the charter-party; in other words, whether the clause, 'ship to proceed from Melbourne to Calcutta with all possible despatch,' did or did not make a condition precedent; whether, in short, it constituted a warranty, or merely a representation? The court below considered that it was not a condition precedent, but an independent stipulation, which gave the charterers a claim for damages on failure of performance by the owners, but did not give them the right to avoid the contract; the object of the voyage not having been wholly frustrated. Judgment was given below accordingly.

Mr. Curtis, for the owners.

1. The meaning of the clause is, that the owners would have the vessel at Calcutta 'seasonably.' She was so there, as is proved by the charterers having got another vessel after the arrival and loaded her. The voyage was not frustrated, nor was even inconvenience felt. The charterers threw up their charter only because freights had greatly fallen, and it was for their interest to do so. The argument which gives to the expression in question its severest meaning is unreasonable. If the master, after receiving his instructions at Melbourne, had stopped unnecessarily for but an hour, had gone to see a friend, had sailed by any but the shortest possible line, had not kept under the utmost press of sail, the charter would be void. The ship would not have proceeded from Melbourne to Calcutta with 'all possible despatch.' The argument makes the obligation to sail dependent, not on the receipt of the instructions, but on her actual ability, at the moment, to sail. Who, on this construction of the instrument, could settle whether the contract had or had not been complied with? It might be confidently affirmed, that on this interpretation of such words no contract containing them ever had been, or ever would be, fulfilled. The more strict you make the construction, the more difficult you make it to be practically settled. You are also drawing within its scope things of no real effect. Can it be supposed that reasonable men, making a contract reaching over half the globe, and having before their eyes the contingencies which were certain to occur in distant seas and ports, could have thus contracted? Why give to a practical instrument a construction so impracticable?

2. It has been decided, in a large number of English cases, that such clauses as 'ship to proceed with all convenient speed,' or 'in a reasonable time,' and similar clauses, are not, in charter-parties, conditions precedent, but are merely independent stipulations; and unless the alleged breach goes to the whole root and consideration, it only gives a claim for damages. In Tarrabochia v. Hickie, the charter contained a provision, that the vessel should 'sail with all convenient speed.' The jury found, in an action for refusing to load, that the vessel did not sail with all convenient speed; but the court held that this was no excuse for a refusal to load, because it did not appear that the object of the voyage was wholly frustrated by the breach of the stipulation. In Dimech v. Corlett, the vessel was described as now at anchor in the port of Malta; and it was agreed that 'she, being tight, stanch, and strong, and properly manned, and every way fitted for the voyage, should, with all convenient speed, proceed in ballast to Alexandria, in Egypt.' The ship was not then finished, and did not get ready to sail for more than a month. Held, that the failure to sail 'with all convenient speed' was no answer to an action for a refusal to load, because the charterer had not shown that the object of the charter-party was frustrated by the delay; it not being 'shown that the charterer had taken up any other vessel or declined any cargoes, or in any way altered his position, in consequence of the delay.' In Clipsham v. Vertue, it was held, on demurrer, that a failure to perform a stipulation in a charter-party, to sail 'within a reasonable time,' was no answer to an action for not loading; it not being alleged that the purpose of the voyage was frustrated. In Freeman v. Taylor, the charter contained a stipulation to proceed from the Cape of Good Hope to Bombay 'with all convenient speed.' The master wilfully deviated, and went to Mauritius, and caused a delay of six weeks. The court directed the jury to find whether the deviation deprived the defendant of the benefit of the contract.

In some cases, it has been held in England that a stipulation in a charter to sail on or before a day certain was a condition precedent; and such stipulations were distinguished from those containing the words, 'all convenient speed,' 'within a reasonable time,' and 'with all possible despatch.' Such was Baron Pollock's idea in Tarrabochia v. Hickie; but there appears to be no decision in which a clause similar to that in this case has been held to be a condition.

Mr. S. Bartlett, contra.

1. The contract is explicit and clear. 'Ship to proceed from Melbourne,'-not from Manilla, or any other port in the Eastern seas, where she might at any time be found. 'With all possible despatch;' that is to say, direct from Melbourne to Calcutta. Do these words leave a doubt that both parties contemplated that the contract should apply only to a vessel at Melbourne? How could the owners have been willing to bind themselves and their ship by a contract which should take effect after she left Melbourne, wheresoever notice reached the master, without making some provision in that contract for a probable or possible state of things which might involve them in severe loss? How could the charterers have been willing, without making some limitation of time, to bind themselves to keep an agent and funds at Calcutta, ready to load a ship under a contract to take effect when notice should reach the master, it may be, in distant seas, and pending or after intermediate voyages?

2. How stands the case on authority? In Graves v. Legg, the plaintiffs contracted to import and sell the defendant wools, to be laid down in certain ports of England. The contract recited that it was 'to be deliverable at Odessa during August next, to be shipped with all despatch, the names of the vessels to be declared as soon as the wools were shipped.' The breach relied on in defence, as a condition precedent, was that the plaintiff did not notify to the defendant the name of the vessel in which the wool was shipped as soon as it was shipped. The defendant threw up the contract. In the argument and judgment the effect of the clause 'to be shipped with all despatch,' as a condition precedent, and forming part of the same clause, was discussed, and the requisition to give notice of the names of the vessels, held to be a condition,-on the ground, among other things, that the terms 'to be shipped with all despatch,' in the same clause, clearly constituted a condition precedent. Thus Parke, B., asks, 'Could the plaintiff contend that the shipping the wools with all despatch is not a condition precedent?' and the counsel for the plaintiff substantially admitted that it was. In its judgment, the court say the giving notice of the names of the ships 'was a condition precedent, quite as much, indeed, as the shipping of the goods at Odessa, with all despatch, after the end of August.'

Cases have been cited on the other side, where charter-parties have provided that the ship should sail with 'all convenient speed,' and in which the provision has been held not to be a condition precedent, entitling the charterer to repudiate the contract. The reason is that stated in some of those cases, viz., that 'what is a convenient speed or reasonable time, must always be a subject of contention. Where terms are so lax and ambiguous as to lead to a difference of opinion, then the stipulation is not a condition precedent.' In the present case, the words 'all possible despatch,' are not equivalent to 'reasonable time,' and leave no ambiguity as to the intention of the parties, as is shown by the above case of Graves v. Legg.

The other side relies apparently on the supposed doctrine, that whether a stipulation in a charter-party constitutes a condition precedent or not, may be determined by proof that its violation had or had not the effect to frustrate the voyage, and that, as in this case, the charterers do not show that the voyage was frustrated, they are to be charged. It is not to be denied that some of the cases cited by Mr. Curtis assert the principle as stated. But the conflict in the cases, and the obvious unsoundness of the doctrine, has led to its revision in the Exchequer Chamber, in Behn v. Burness. That case will be found to review the preceding cases, and to establish the following propositions:

1st. That whether a descriptive statement in a written instrument is a mere representation, and so 'not an integral part of the contract' (unless fraudulently made), or whether it is a substantive part of the contract, is a question of construction by the court.

2d. That the previous cases turn upon very nice distinctions, but that the true doctrine, as established by principle as well as authority, is, that, 'generally speaking, if such descriptive statement was intended to be a substantive part of a contract, it is to be regarded as a condition, on failure or non-performance of which the other party may, if he is so minded, repudiate the contract in toto, provided it has not been partially executed in his favor.'

3d. That if a party voluntarily receives the benefit of a partial execution, 'he cannot afterwards treat the descriptive statement as a condition, but only as an agreement, for breach of which he may bring an action to recover damages.'

4th. That the doctrine of some of the cases relied on by the defendant in error, that a descriptive statement of this kind 'may be regarded as a mere representation, if the object of the charter-party be still practicable, but may be construed as a warranty, if that object turns out to be frustrated,' is unsound, 'because the instrument, it should seem, ought to be construed with reference to the intention of the parties at the time it was made, irrespective of events which may afterwards occur.'

Mr. Bartlett referred also to Glaholm v. Hays, 8 Fielden, 9 reading from and relying upon them.

Reply: The case of Behn v. Burness, in the Exchequer Chamber, does not apply. There the words, 'now in the port of Amsterdam,' in a charter-party, were held to be a condition. The court, however, did not question the decisions in Tarrabochia v. Hickie, Dimech v. Corlett, and Clipsham v. Vertue, or question any other cases in which it was held that a stipulation that a vessel will sail with all convenient speed, or within a reasonable time, is only an agreement, and not a condition. The court held only that there was a distinction between 'stipulations that some future thing shall be done, or shall happen,' and 'statements in a contract, descriptive of the subject-matter of it, or of some material incident thereof.' The decision was based upon the ground that the statement that the vessel 'was now in the port of Amsterdam,' was of a definite fact at the date of the contract, and was not a stipulation as to the future. In the charter-party of the Mary Bangs, the clause 'ship to proceed from Melbourne to Calcutta with all possible despatch,' is merely a stipulation that a future thing should be done, and cannot, according to any of the principles stated in the opinion in Behn v. Burness, in the Exchequer Chamber, amount of a condition.

Mr. Justice SWAYNE delivered the opinion of the court.