Culliford v. Gomila - 128 U.S. 135 (1888)
U.S. Supreme Court
Culliford v. Gomila, 128 U.S. 135 (1888)
Culliford v. Gomila
Argued October 18-19, 1888
Decided October 29, 1888
128 U.S. 135
A charter party, containing a guarantee by the owner of the vessel that she should carry not less than 10,000 quarters of grain of 480 pounds, held to have been complied with by the owner of the vessel.
The charter party not having contained any cancelling clause or any provision as to any time for beginning or completing the lading or shipping the grain, the charterer could not have, in a suit against the owner of the vessel for a breach of the charter party, the benefit of any clause limiting the time of the shipment of the grain contained in a prior contract for its sale made by the charterer where such contract had been made known to the owner of the vessel before the charter party was signed.
The vessel having been loaded with less than 10,000 quarters, and appearing to be full, as she was then stowed, the parties negotiated for a settlement, but before any was concluded, the owner of the vessel notified the charterer that the stowage would be rearranged so that the vessel would on the next day be ready to take the full 10,000 quarters. The charterer on the latter day sold the cargo at auction, on board, with privilege of the charter. The vessel afterwards took on board enough more grain to make the fall 10,000 quarters and delivered it under a charter for the same voyage, made with the vendee named in the contract of sale of the grain made by the first charterer. Held that the owner of the vessel was not liable to the first charterer for any losses sustained by him by the failure of such vendee to pay for the grain under such contract of sale.
The charter party with the first charterer was complied with by the owner of the vessel in a reasonable time.
This is a libel in admiralty, in personam, filed in the District Court of the United States for the Eastern District of Louisiana on the 9th of July, 1883, by A. J. Gomila and Learned Torrey, composing the firm of Gomila & Co., against J. H. W. Culliford and John S. Clark, composing the firm of Culliford & Clark, as owners of the steamship Deronda, a British vessel, to recover damages for the alleged breach of a
charter party entered into at New Orleans on the 19th of June, 1883, chartering that vessel to Gomila & Co. The material parts of the charter party are as follows:
"It is this day mutually agreed between De Wolf & Hammond, as agents of the steamship Deronda, of 1,090 tons net register or thereabouts, now in New Orleans, and Mess. Gomila & Co., of New Orleans, merchants, that the said steamer shall, with all convenient speed, proceed to New Orleans, or so near thereto as she may safely get, and there, being in hull, boilers, and machinery tight, staunch, and strong, classed 100 A 1, and every way fitted for the voyage, shall load as customary at such safe loading berth, always afloat, as ordered by charterers on arrival (and, if afterwards required by them to shift, they to pay the ordinary expense of towing), a full and complete cargo of wheat and/or maize and/or rye in bulk and/or ship's sacks, as customary, which is to be brought to and taken from alongside, as customary at merchants' risk and expense at ports of loading and discharge (all lighterage required to be paid for by cargo), and at charterers' risk, not exceeding what she can reasonably carry over and above her tackle, apparel, fuel, provisions, and furniture, and, being so loaded, shall therewith proceed, under steam, to a safe port, always afloat, in the United Kingdom or on the Continent, between Bordeaux and Hamburg, both inclusive, excluding Rouen, calling at Queenstown or Falmouth for orders, which are to be given within twelve hours of arrival, or lay-days to count, or so near thereunto as she may safely get, one port only to be used, and deliver the same on being paid freight, all in British sterling, as follows: five shillings and three pence sterling per quarter of 480 pounds weight, delivered in full, if calling at Queenstown or Falmouth or ordered direct to Continent; if ordered to Continent from port of call, ten percent additional; if ordered to United Kingdom direct, three pence off. Charterers having option of Elsinore for orders to discharge at Copenhagen or Aarhuns at five shillings and nine pence per quarter of 480 lbs. Steamer is guaranteed to carry not less than ten thousand quarters of 480 lbs. "
"* * * *"
"4. Stevedore for loading said steamer to be appointed by charterers under captain's directions at current rates for such labor. Charterers are not to be held responsible for improper stowage."
"5. Steamer to have liberty to call at any ports for coal or other supplies."
"* * * *"
"13. Sixteen running days, Sundays excepted, are to be allowed the said merchants (if the steamer is not sooner dispatched) for loading and discharging, and ten days on demurrage, over and above the said lay-days at six pence sterling per gross register ton per day."
"14. Should the steamer not be ready to load at New Orleans on or before the _____, charterers or their agents have the option of cancelling this charter."
"15. Lay-days to commence the day after the steamer is declared ready to receive cargo, and having been passed by the surveyor of grain vessels, and written notice given by the master to the charterers or their agents."
"* * * *"
"19. Penalty for nonperformance of this agreement, estimated amount of freight."
The charter party was signed by De Wolf & Hammond, as agents of the vessel, and by Gomila & Co.
The libel alleges that on the 28th of June, 1883, the libellants provided and furnished a cargo of 10,000 quarters, of 480 pounds each, of corn, to the vessel for her voyage; that the loading was then commenced and proceeded with until June 30, 1883, when all further loading of cargo was stopped by official order of the marine inspector of the port, who was present at the time and who pronounced the vessel full all over, as in fact and truth it was; that when the loading was so stopped and the vessel declared to have a full and complete cargo, only 82,588 2/56 bushels, the equivalent of 9,635 130/480 quarters of 480 pounds each, had been loaded on the vessel, and it was in fact impossible to properly stow in her any greater quantity, and she was entirely unable to carry
the 10,000 quarters of 480 pounds each; that the respondents wholly failed to comply with the said guarantee; that, in consequence thereof, the libellants were prevented from fulfilling their contract of sale of the 10,000 quarters of corn of 480 pounds each, with special reference to which they had entered into the charter party; that afterwards the libellants, in order to save loss as far as possible, offered the cargo, which was so loaded on the vessel, to the respondents at the price at which the libellants had sold it, which offer was refused by the respondents; that, all other negotiations for a settlement failing, the libellants were obliged to have the cargo sold for account of whom it might concern, which was done at public action on the 7th of July, 1883, after notice to the respondents through De Wolf & Hammond and advertisement in the newspapers of New Orleans, that being in the opinion of the libellants for the best interests of all parties concerned; that the libellants had performed all their undertakings in the charter party, but the respondents, and their agents, and the master of the vessel, had not performed the undertakings of the respondents contained in the charter party, and that the libellants had thereby sustained damages to the amount of more than $24,559.70.
The vessel was attached on process, and the respondents appeared and answered the libel. The answer sets up that shortly after the charter party was signed and before any cargo was offered to the vessel, the libellants informed De Wolf & Hammond that their interests and obligations in the charter party had been transferred to Messrs. E. Forestier & Co.; that the charter party was delivered back to the agents of the respondents by E. Forestier & Co., and, with the agreement of all parties, was cancelled, and a new charter party for the vessel was entered into with E. Forestier & Co. as charterers; that the vessel was loaded under such new charter party, which, in all of its conditions, had been performed on the part of the vessel; that the vessel carried and delivered the 10,000 quarters of grain, according to the guarantee contained in the charter party with E. Forestier & Co., and that the libellants had sustained no loss by any act of the respondents. There
is also a denial of the allegations of the libel that the libellants had performed all the undertakings on their party in the charter party with them.
The case was tried in the district court on proofs taken on both sides, and on the second of June, 1884, that court entered a decree in favor of the libellants for $9,360.97, with five percent interest from June 30, 1883, until paid, and costs of suit, against the respondents and against Thomas D. Miller and Emile L. Carriere, as sureties in the bond releasing the vessel from attachment. The decision of the district court is reported as Gomila v. Culliford, 20 F. 734. The respondents and their sureties, and also the libellants, appealed from that decree to the circuit court. Further proofs were taken in the circuit court, and that court, on the 28th of February, 1885, filed its findings of fact and conclusions of law, and rendered a decree in favor of the libellants, against the respondents and against Miller and Carriere, as such sureties, for $23,993.76 damages, with five percent interest from June 30, 1883, until paid, and costs of suit.
The material findings of fact by the circuit court were as follows:
"First. On the 7th day of June, 1883, Gomila & Co., who were large grain dealers in the port of New Orleans, entered into the following grain contract:"
" Bought from Gomila & Co., by Messrs. E. Forestier & Co. at the price of (60 cts.) sixty cents per bushel of 56 lbs., on board seller's vessel, with freight at (6s.) six shillings per quarter, and to be shipped from New Orleans during the month of June, not later than the 30th (midnight) (seller's option), a cargo of not over 12,000 and not under 10,000 quarters (480 lbs.) of No. 2 mixed corn of the standard of New Orleans inspection. Destination: Elsinore, for orders to Copenhagen or Aarhuns. Any difference in freight for account of seller. Cash on delivery of documents."
" New Orleans, June 7, 1883."
"GOMILA & Co."
"A similar copy was made at the same time, signed, 'E. Forestier & Co.'"
"Second. June 18, 1883, the steamship Deronda, of which J. H. Culliford was the sole owner, though Culliford & Clark, claimants, were the apparent owners and agents in England, and of which De Wolf & Hammond were the New Orleans agents, arrived in the port of New Orleans with a cargo of salt and fruit. Her agents in New Orleans, Messrs. De Wolf & Hammond, and Gomila & Co., had opened negotiations for a charter on the 16th of June. Gomila & Co., having the contract aforesaid with Forestier & Co., insisted on owner's guarantee that the Deronda would carry 10,000 quarters of 480 lbs., whereupon the following cable dispatch was sent to Hammond, of De Wolf & Hammond, who was then in Europe, and in communication with the claimants:"
" JUNE 16TH"
"To W. J. Hammond, Liverpool:"
" Deronda. Are offered 5-6, Copenhagen, Aarhuns, calling at Elsinore for orders. She must be guaranteed to carry not less than 10,000 quarters; charterers to have power of cancelling charter party if vessel is not ready to load cargo by 25th of June."
"To which dispatch the following reply was sent:"
" Fix Deronda, 5-6, Aarhuns; guarantee 10,000 quarter, provided captain agrees quantity; lighterage at charterers' risk and expense. Try 5-9."
" W. J. HAMMOND"
"Third. On the 18th, De Wolf, agent, and the master, called on Gomila & Co., and consulted as to whether the Deronda could carry 10,000 quarters of corn, the question relating more to space than to weight. At this consultation, calculations were made by Mr. Gomila, of the firm of Gomila & Co., and the master, as to the cargo space of the steamer from her general plan, and her ability to carry 10,000 quarters of corn; both
reaching the conclusion that the steamer would be able to carry 10,000 quarters, and Gomila advised the master to so cable owners. A cable message was then made up by the master and DeWolf from Gomila's codebook in which the master said: 'The vessel will carry 10,000 quarters of grain, if we coal at Halifax.' After the said message was prepared, Gomila gave, as his reasons for insisting on a guarantee, the aforesaid contract with Forestier & Co., which was produced and read, and Gomila stated that he had no use for any vessel that would not carry 10,000 quarters of grain; that he must have a guarantee, and feared that if the vessel would not carry that amount, the consequences would be serious; that the market had declined, and was still declining, and the loss would be very heavy, because the buyer would have the right to reject the cargo if the conditions were not strictly fulfilled. The same day the following cable message was sent by ship's agents:"
" JUNE 18TH"
"To W. J. Hammond, Liverpool:"
" Deronda. Captain's opinion she can carry 10,000 quarters, coaling Sydney; have closed, subject to owner's approval, 5-9, calling at Elsinore for orders Copenhagen, Aarhuns, charterers' option; Cork or Falmouth for orders, 5-3, to discharge at a safe port in U.K. or Continent, Bordeaux to Hamburg. If ordered to U.K. direct, 3d. off. If ordered to Continent from port of call, 10 percent additional."
" DE WOLF & HAMMOND"
"To which message, on June 19th, De Wolf & Hammond received the following answer:"
" JUNE 19TH"
" Fix Deronda. After hard work got Culliford, owner, accept your offer, but must exclude Rouen; cannot go there."
" W. J. HAMMOND"
"Fourth. On June 19th, the charter party was entered into, of which a true copy is attached to the libel, except the
endorsement in red ink across the face, and is made part of this finding."
"Fifth. The cancelling date of said charter party was not fixed because Gomila & Co. waived it, as the ship was in port, and they had confidence in the ability and willingness of the master to get the ship ready in time."
"Sixth. On the 28th of June, the ship was ready to receive cargo, and the loading then commenced. No formal tender appears to have been made of the ship on that day, but the loading was commenced with the consent of all concerned. The loading was continued, with slight interruptions from rain, and until twenty minutes past three o'clock in the afternoon of the 30th of June, when the loading was stopped and the ship was declared by the underwriters' inspector to be full all over, and ready to proceed on her voyage, and the inspector gave his certificate to that effect. She then had only 9,635 quarters on board, equivalent to 82,588 2/56 bushels, and could take no more with safety, as she was then loaded and stowed, although libellants had the balance of the cargo of 10,000 quarters in barges alongside, and it could have been put on board before midnight if the ship could have taken it."
"Seventh. After the loading had begun and before it was known whether the Deronda could take the guaranteed quantity, all parties supposing that she could, Gomila & Co., as is usual in such cases, handed their copy of the charter party to Forestier & Co. The latter, without authority from the charterers, took the copy to the ship's agent unendorsed, and obtained a charter in their own name, but otherwise the same in all respects as charter to Gomila & Co., for the purpose, as they explained, of appearing to their correspondents as original parties. Gomila & Co. were advised of this by De Wolf, of De Wolf & Hammond, before the loading was finished on June 30th, but replied to him that they would not object to such a change if the vessel fulfilled the guarantee in the charter, but that if she failed, they would expect the return on the papers. On this point the court finds that Gomila & Co. did not authorize the surrender of their charter, and the giving of a new one to Forestier & Co., save upon the condition that the Deronda should first execute her guarantee. "
"Eighth. When, on the 30th of June, the steamer was loaded, as described in the sixth finding, all parties had notice at once that the steamer could not carry the quantity guaranteed, whereupon Gomila, who was about to depart for St. Louis, left the matter in the hands of Bangston, of Forestier & Co., to arrange, instructing him substantially as follows:"
"I have no doubt this matter can be arranged with the owners, and anything you do to protect me I will be satisfied with. It seems to me the best way to arrange the matter would be to telegraph to the owners that if they will take the cargo off our hands at twenty-eight one and one-half pence, as agreed upon, no one will be injured, and I will be satisfied; but in case they do not do this, then all that I ask is to be made whole in my contract, and you can make negotiations to that effect."
"Forestier & Co. cabled their correspondents as follows: 'Deronda. We have shipped 9,600 quarters; reply if in order or not. What do you propose? Cable at once,' and received answer July 2d to refuse Deronda, and De Wolf & Hammond cabled claimants as follows:"
" To Culliford & Clark, Sunderland: Deronda loaded; carries 9,635 quarters; cargo sold not less than 10,000 quarters. Copenhagen, 28-3; present value, 25; buyers refuse acceptance, as cargo falls short. Charterers hold ship responsible. Advise."
"DE WOLF & HAMMOND"
"To this last dispatch the following was sent:"
" Complete swindle. Captain knows ship discharged 10,380 Bordeaux. Compromise; pay value grain."
"CULLIFORD & CLARK"
"To Culliford & Clark, Sunderland:"
" Cargo on board 2,065 tons maize, 170 tons coal; surveyors refuse load deeper; ship full all over; no advantage Newport;
cargo sold, June loading; shippers can sell Copenhagen, 25s., you paying difference, or owners buy cargo 28.3 cif.; best can do. Which do you advise? Cargo maize, No. 2 mixed, sail grade, very good. May we draw on you for same?"
"DE WOLF & HAMMOND"
"To which the following answer was made:"
" Consult indemnity lawyer, McConnell. If he approves, dispatch Deronda; give bail, if necessary. First telegram simply means paying difference value alleged short shipment; save delay."
"CULLIFORD & CLARK"
"It does not appear that charterers at the time had any knowledge of these dispatches."
"Ninth. Negotiations were opened and continued between the parties with a view to compromise, but without result until July 5th, on which day Forestier & Co. notified Gomila & Co. that they refused the cargo because it was short and their buyers in Copenhagen had declined to accept it. They claimed damages of Gomila & Co. for violation of the contract of sale, consisting in the loss of their commissions, amounting to $3,194.39, which Gomila & Co. paid."
"Tenth. From July 3d to July 5th, Gomila & Co. telegraphed to some of the best known dealers in England and France for quotations and offers. The best offer was twenty-three shillings, ordinary terms, or twenty-four shillings, rye terms (shippers guarantee sound condition on arrival). Libellants then decided to sell the cargo on board at the shipper's risk, in the port of New Orleans, with the privilege of the charter, and so notified Messrs. De Wolf & Hammond, at the same time giving the owners the option of taking the cargo at the price at which it had been sold to Forestier & Co."
"Eleventh. On the 6th day of July, the ship's agents notified Gomila & Co. that they would take out coal, and make room for the balance of the cargo, and that the ship would be made ready by the 7th. Gomila & Co. refused this proposal.
In the meantime, Gomila & Co. had given notice in the daily papers published in New Orleans that the cargo would be sold at public auction to the highest bidder for cash on July 7th by one of the licensed auctioneers of the city. Against this proposed sale the agents made public protest on the part of the steamer both on July 6th and 7th. The sale, however, took place as advertised, and the 9,635 quarters then on board were sold for $29,622.84 to A. Carriere & Sons, with privilege of the charter. A. Carriere & Sons afterwards sold the cargo, with privilege of charter, to J. B. Camors & Co., and the latter in turn resold to Forestier & Co. for the sum of $40,422. The charter to Gomila & Co. having been destroyed by De Wolf, they made protest for substitute, and then, for want of such charter, used copy of one issued to Forestier & Co. to make title."
"Twelfth. On July 13th, the stowage of the Deronda having been in the meantime rearranged and a large quantity of coal and water, the latter from the ballast tanks, having been taken out, the Deronda was again tendered to both Gomila & Co. and to Forestier & Co., demanding balance of cargo. This was furnished by J. B. Camors & Co., and enough more grain was taken aboard to make over 10,000 quarters, with which the ship sailed, on the 18th of July for her original destination, and there safely arrived, and delivered cargo under the substitute for charter party provided as explained in finding 11."
"* * * *"
"Fourteenth. The carrying capacity of the Deronda for grain on voyages from New Orleans to Europe, when properly fitted out, was over 10,000 quarters, and she had, on a previous voyage, with 224 tons of coal in her bunkers, safely carried a cargo of 10,253 quarters of grain; but as she was fitted out and prepared and tendered, in the manner hereinbefore found, to Gomila & Co., on June 28, 1883, she could not with safety, under maritime and underwriters' rules, carry a cargo of 10,000 quarters, and she failed to receive such cargo, as hereinbefore found. By this failure the libellants lost the advantage of their said sale to Forestier & Co. "
"Fifteenth. Corn is a perishable article in shipping, both as to time and transit, and is always at risk in voyages across the ocean, particularly if it remains in the port of New Orleans under the heat of a July sun beating on the decks, in which case the risk is increased every day it remains in port."
"Sixteenth. The sale of the cargo at public auction was fairly conducted, and, under the circumstances, was necessary and proper for the protection of the rights of all parties."
"Seventeenth. By the inability and failure of the steamer to receive, when first tendered to Gomila & Co., a cargo of 10,000 quarters, they suffered loss as follows:"
1st. Amount of commission
paid Forestier & Co. . . . . . . . . $ 3,194.29
2d. Loss on 9,635 quarters
(82,588 2/56 bushels) of
corn, being the difference
between the price of the
sale to Forestier & Co. and
the sale at auction to Carriere
& Sons. . . . . . . . . . . . . . . 20,549.39
3d. Loss on 365 quarters,
3,126 bushels . . . . . . . . . . . 250.08
Making a total loss to Gomila
& Co., by the failure
aforesaid, of twenty-three
thousand nine hundred and
ninety-three and 76/100
dollars . . . . . . . . . . . . . . $23,993.76
The endorsement in red ink across the face of the charter party, referred to in the fourth finding of fact, was in these words:
"JUNE 29, 1883"
"This charter party has been cancelled, and at the request of A. J. Gomila, of Gomila & Co., similar charter parties made out to E. Forestier & Co., and the copies of said charter party previously given to Mess. Gomila & Co., have been returned to us by E. Forestier & Co., and destroyed."
"DE WOLF & HAMMOND"
On the foregoing facts, the circuit court found as follows as conclusions of law:
"1st. That under said charter party, the defendants were bound under their guarantee to see that when the Deronda was
tendered to the libellants for loading, she was fitted, prepared, and arranged so as to be able to carry not less than 10,000 quarters of grain, under underwriters' and maritime regulations."
"2d. That the said defendants were charged with full notice in law of the special objects and purposes of libellants in effecting said charter, and therefore are liable to the said libellants for the amount of damages suffered by the latter from inability to sell and deliver under the grain contract with Forestier & Co."
"3d. That the amount of such damages was the sum of $23,993.76."
"4th. That libellants should have judgment for that amount, with legal interest from June 30, 1883, against the defendants, and against the sureties on the release-bond in attachment."
From the decree of the circuit court, the respondents and the sureties have appealed to this Court.