Standard Varnish Works v. The Bris/Opinion of the Court

This case was submitted with Nos. 449 and 450, 248 U.S. 377, 39 Sup. Ct. 147, 63 L. Ed. 312, and No. 479, 248 U.S. 387, 39 Sup. Ct. 149, 63 L. Ed. 318, being a suit in admiralty, as they were, to recover prepaid freight upon a shipment of articles of merchandise which were not carried to destination, the carriage having been prevented by action of the government. Judgment was rendered for libelant and the case taken to the Circuit Court of Appeals.

The case is here on certificate from that court (254 Fed. 987), induced, as the court recites, by its decision in the case of International Paper Co. v. The Schooner Gracie D. Chambers (No. 479), to review which a certiorari has been granted by this court.

'On August 17, 1917, varnish belonging to libelant was     shipped by it in the port of New York for Gothenburg, Sweden,      upon the steamship Bris, consigned to the Allmanna Svenska      Elektriska A. B. Westeras, and the agents for said ship      thereupon delivered to libelant a bill of lading, of which a      copy is annexed hereto, which formed a contract between      libelant and claimant in reference to said goods. Particular     reference is made to clause 6, clause 7 and the next to last      clause of the bill of lading. The libelant paid in advance     the freight mentioned in said bill of lading. At the time of     said shipment, shippers were required to obtain export      licenses from the British government on cargo of this class,      and were also required by the United States Statutes to      obtain export licenses from the United States government in      connection with such articles as the President should, by      proclamation, designate. At the time that said shipment was     made the President had designated certain articles as to      which licenses must be thus procured when destined for Gothenburg, Sweden,      but varnish was not included among them. At the time of     shipment, the libelant presented a license which it had      procured from the British government. On August 27, 1917, the     President made a further proclamation, effective August 30,      1917, whereby shippers of varnish and all other cargo      destined for Gothenburg, Sweden, were required to procure      licenses before the same could be exported. The libelant     thereupon made application for such a license, and the      claimant held its vessel in port until October 8th, to see if      such licenses could be procured, before beginning the      discharge of the cargo. Unless shipments were accompanied by     the aforesaid licenses they were not allowed by the      men-of-war belonging to the Allies to proceed to destination. On or about October 8th the United States, acting through the     Exports Administrative Board, refused the application for a      license to transport the goods mentioned in the libel, and      other cargo destined for Gothenburg, and claimant thereupon      began to unload the cargo of the Bris and concluded the      discharge on October 22, 1917. The claimant continued ready     and willing to carry said cargo forward if a license therefor      were obtained by libelant. The libelant took redelivery of     the cargo at the port of shipment and made a demand upon the      claimant that the claimant should return the freight paid,      which demand was refused. The question aforesaid is as     follows:

'1. Did the bill of lading contract justify the carrier,     under the facts stated, in refusing to refund the prepaid      freight?'

Clause 6 of the bill of lading is as follows:

' * *  * Prepaid freight is to be considered as earned on      shipment of the goods and is to be retained by the vessel's      owners, vessel or cargo lost or not lost, or if there be a      forced interruption or abandonment of the voyage at a port of      distress or elsewhere. * *  * '

The material parts of clause 7 are as follows:

'Also, in case the ship shall be prevented from reaching her     destination by *  *  * war *  *  * or the hostile act of any      power,' the master may wait until the impeding obstacle be      removed 'or discharge the goods into any depot or at any      convenient port or bring her cargo back to port of shipment      where the ship's responsibility shall cease. * *  * '

Clause 2 should be considered. It exempts 'by arrest and restraint of princes, rulers or 'bt arrest and restraint of princes, rulers or peoples.'

We think the case is within the principle of the decision of the cases submitted with it. In this case, however, it is urged that the clause relied on by the ship to justify the retention of the advance of freight does not contain the word 'irrevocable' and that upon that word stress was put by the Circuit Court of Appeals and presumably by this court. The word undoubtedly is one of intensity but its absence does not remove the meaning or intention of its associates. Their declaration is that 'prepaid freight is to be considered as earned on shipment of the goods and is to be retained by the vessel's owners, vessel or cargo lost or not lost.' The declaration is clear, and, in anxiety of purpose, uses some tautology. The words 'prepaid freight is to be considered as earned' declare a completed right and carried the power of retention without the expression of the latter. And the expression of the right and the power cannot be put aside. Counsel, however, would make them purposeless and would consider the bill of lading as if they were not contained in it, and urges that the only effect of the refusal of clearance to the ship was the 'commercial frustration of the adventure' working a dissolution of the contract, absolving from performance but requiring the restitution of the payments that were made as the consideration of performance.

We are not insensible to the appealing force of the contentions nor to the strength of the argument advanced to support them, but the contract determines against them and the reasons for assigning to it that effect we have given in our opinions in the other cases.

We, therefore, answer the questions certified in the affirmative.

Os ordered.