1. A voyage charter party for a vessel to be named, with no
provision for a substitution, under which a vessel has been
selected, is to be treated thenceforth as a contract for that
particular vessel. P.
256 U. S.
627.
Page 256 U. S. 620
2. Error in permitting the British Ambassador to intervene, as
amicus curiae, and to present a certificate avowing the
requisition of the ship here in question as an act of his
government,
held not prejudicial. P.
256 U. S.
629.
3. A British ship, owned by a British corporation, was subject
to requisition by the British government for war purpose while in
British waters preparing for service under a voyage charter party
made in this country with an American corporation. Pp.
256 U. S. 628,
256 U. S.
631.
4. A telegraphic requisition treated a binding in the practice
of the British government, and followed by use of the ship as a
government transport and compensation of the owner therefor,
held valid. P.
256 U. S.
628.
5. Where a ship is rendered unavailable for the performance of a
charter party by a valid requisition of government, not invited by
the owner or provided for in the contract, for a service likely to
extend (which in this case did extend) beyond the time for the
projected charter voyage, the owner is excused from performance. P.
256 U. S.
629.
6. The contract must be deemed to have been entered into subject
to an implied condition that, in such an event, it should be at an
end, and the parties absolved from further liability under it. P.
256 U. S.
31.
267 F. 1023 affirmed.
Certiorari to review a decree of the circuit court of appeals
affirming a decree of the district court in admiralty. The facts
are stated in the opinion,
post, 256 U. S.
625.
Page 256 U. S. 625
MR. JUSTICE VAN DEVANTER delivered the opinion of the Court.
This is a suit in admiralty to recover damages for an alleged
breach of a voyage charter party entered into in New York, February
6, 1915, between a British corporation, which owned the
Baron
Ogilvy and other freight ships, and a Texas corporation, which
was engaged in shipping and marketing petroleum products. The
charter party did not name a particular ship as the subject of the
hiring, but required that one of a certain type be designated from
among the ships of the British company, on or before March 15. In
due time, that company named the
Baron Ogilvy, and the
Texas Company assented. The intended voyage was from a port in
Texas to another in South Africa with a full cargo of refined
petroleum in cases. The ship was to be tendered at the initial port
ready to load between April 15 and May 15, 1915, and in case of
Page 256 U. S. 626
default, the Texas Company was given the option of cancelling or
maintaining the charter party. If the vessel was then at that port,
the option was to be exercised at once, and if she was not then
there, it was to be exercised within 24 hours after her arrival.
There was no clause expressly excepting restraints of princes, etc.
April 10, 1915, the
Baron Ogilvy, while in British waters
and being provisioned for the intended voyage, was requisitioned by
the British government and pressed into its war service, in which
she continuously was retained until October 20 following. On April
12, the British company notified the Texas Company that the vessel
had been requisitioned and therefore would not be available to
carry out the charter party. The Texas Company thereupon procured
another vessel to make the voyage at the time intended, but at an
increased freight rate, and subsequently brought this suit against
the British company on the theory that the latter had broken the
charter party and was liable in damages for the difference between
the rate which it was to receive and that actually paid to the
other vessel. On the final hearing, the district court rendered a
decree for the respondent, the principal grounds of the decision
being (a) that when, in accordance with the terms of the charter
party, the
Baron Ogilvy was named as the ship to make the
voyage, the contract became an ordinary voyage charter party for
that ship, and none other, and (b) that that ship, before the time
for the voyage, was taken
in invitum by the owner's
government for war use for a period likely to extend beyond the
time for the intended voyage, and that this dissolved the charter
party and excused the owner from furnishing the ship., 265 F. 375.
The decree was affirmed by the circuit court of appeals, 267 F.
1023, and a writ of certiorari brings the case here. 254 U.S.
625.
We agree that, after the designation of the
Baron
Ogilvy,
Page 256 U. S. 627
conformably to a provision in the charter party, every element
of an ordinary voyage charter party for a particular ship was
present. It was then as if that vessel had been named at the
outset. And, as there was no provision for substituting another
ship, there was no obligation on the part of the owner to furnish,
nor on the part of the charterer to accept, another.
Nickoll
& Knight v. Ashton, Edbridge & Co., [1901] 2 K.B. 126,
131. The contract related to a particular ship, just as it related
to a particular voyage. Neither could be changed without departing
from the contract, which could not be done without the consent of
both parties.
The libelant challenges the good faith of the owner and seeks by
taking mere fragments of the evidence here and there to show that
the owner invited the requisition, welcomed it as promising a
better return than the charter party, and in effect voluntarily
turned the vessel over to the government. But the fragments to
which attention is invited must be read with the context, and all
the evidence must be considered. When this is done it becomes very
plain that there is no basis for the challenge. The owner made the
usual preparations for complying with the charter party, earnestly
sought to prevent the requisitioning of the vessel, urged the
existence of the charter party as a reason for leaving her free,
and respected the requisition, when made, because no other course
was reasonably open. It may not be material, but in fact the
charter party gave promise of a better return and called for a
service which would be less hazardous. The vessel was taken by the
government for the use to which she was subjected, and after the
taking, the owner agreed to furnish certain additional facilities
by reason of which a higher compensation was obtained than
otherwise would have been allowed. Beyond this, the owner was
accorded no voice in the matter.
As the ship was British and in British waters and the
Page 256 U. S. 628
owner was a British corporation, the power of the British
government to requisition the ship is beyond question. But the
libelant insists that those who assumed to exert this power did not
proceed in the mode prescribed, and therefore that the requisition
was invalid. The facts adequately proved are as follows: a royal
proclamation of August 3, 1914, authorized and empowered the Lords
Commissioners of the Admiralty, "by warrant under the hand of their
Secretary," "to requisition and take up" British vessels within
British waters for use as transports and auxiliaries. The
Baron
Ogilvy was requisitioned by an order of the Lords
Commissioners, and the order was communicated to the owner by a
telegram signed "Transports" and saying: "SS.
Baron Ogilvy
is requisitioned under royal proclamation for government service."
The telegram was sent by the Assistant Director of Military Sea
Transports, the officer through whom requisitioning orders were
executed. This was the usual mode of communicating such orders.
Formal warrants never were issued. Generally, the telegraphic
communication was followed, after a time, by a letter of like
import bearing a block (printed) signature of the Secretary, but in
this instance, through an error in office routine, no letter was
sent. These letters were intended to be corroborative, but were not
deemed essential, and in actual practice the Lords Commissioners
and those who executed their orders proceeded on the theory that
the ship was taken when the order was received by the owner,
however the order was communicated, and that a telegraphic
communication of it was effective, and must be obeyed. Indeed, the
evidence is that, if the telegraphic order was not obeyed, the
vessel would be taken by force. The owner here, six of whose ships
had been requisitioned theretofore, so understood the practice and
respected the order. It does not appear that the government at any
time or in any way disapproved of the practice, but it does appear
that, in
Page 256 U. S. 629
this instance, the government treated the telegraphic order as
effective by using the ship as a transport for more than six months
and compensating the owner accordingly. In these circumstances, the
contention that the requisition was invalid is quite untenable.
Whether in different circumstances it could and should be
pronounced invalid here we need not consider.
See Underhill v.
Hernandez, 168 U. S. 250;
American Banana Co. v. United Fruit Co., 213 U.
S. 347;
Oetjen v. Central Leather Co.,
246 U. S. 297,
246 U. S.
303-304;
Ricaud v. American Metal Co.,
246 U. S. 304,
246 U. S. 309;
Northern Pacific Ry. Co. v. American Trading Co.,
195 U. S. 439,
195 U. S.
467-468.
In the district court, the British Ambassador was permitted to
intervene as
amicus curiae, object to the adjudication of
the libelant's claim, and present a certificate avowing that the
requisition was a governmental act. Complaint is made of this. The
permission was improvidently granted, as was afterwards indicated
by this Court in other cases.
In re Muir, 254 U.
S. 522;
The Pesaro, 255 U.
S. 216. But the libelant was not prejudiced, for the
intervention and certificate ultimately were not considered, and
the decree was rested on the evidence otherwise presented.
Finally, the libelant insists that the requisition, even if
valid and not invited by the owner, did not operate to dissolve the
charter party or to excuse the owner from performing it. The courts
below held otherwise, and we think rightly so.
It long has been settled in the English courts and in those of
this country, federal and state, that where parties enter into a
contract on the assumption that some particular thing essential to
its performance will continue to exist and be available for the
purpose, and neither agrees to be responsible for its continued
existence and availability, the contract must be regarded as
subject to an implied condition that, if before the time for
performance
Page 256 U. S. 630
and without the default of either party, the particular thing
ceases to exist or be available for the purpose, the contract shall
be dissolved and the parties excused from performing it.
Taylor
v. Caldwell, 3 Best & Smith, 826, 839;
In re Shipton,
Anderson & Co., [1915] 3 K.B. 676;
Horlock v.
Beal, [1916] 1 A.C. 486, 494, 496, 512;
Bank Line, Limited
v. Arthur Capel & Co., [1919] A.C. 435, 445;
The
Tornado, 108 U. S. 342,
108 U. S.
349-351;
Chicago, Milwaukee & St. Paul Ry. Co.
v. Hoyt, 149 U. S. 1,
149 U. S. 14-15;
Wells v. Calnan, 107 Mass. 514;
Butterfield v.
Byron, 153 Mass. 517;
Dexter v. Norton, 47 N.Y. 62;
Clarksville Land Co. v. Harriman, 68 N.H. 374;
Emerich
Co. v. Siegel, Cooper & Co., 237 Ill. 610. The principle
underlying the rule is widely recognized and applied to various
classes of contracts.
The Kronprinzessin Cecilie,
244 U. S. 12,
244 U. S. 22-24.
But, of course, it does not apply where the risk is fully covered
by a term of the contract, nor where performance is not practically
cut off, but only rendered more difficult or costly.
Columbus
Railway, Power & Light Co. v. Columbus, 249 U.
S. 399,
249 U. S. 410
et seq. Perhaps the oldest and most familiar application
of the principle is to contracts for personal service, where
performance is prevented by death or illness.
Robinson v.
Davison, (1871) L.R. 6 Exch. 269;
Spalding v. Rosa,
71 N.Y. 40. Another application widely recognized is where a ship
chartered for a voyage, after the date of the charter party and
before the time for the voyage, is accidentally destroyed by fire,
lost at sea, or injured in such degree as not to be available for
the service.
The Tornado, supra, was a suit on a contract
of affreightment where the ship, before beginning the voyage, was
accidentally burned, and thereby prevented from undertaking it.
This Court held that the contract was dissolved, saying, p.
108 U. S.
349:
"We are of opinion that, by the disaster which occurred before
the ship had broken ground or commenced to earn freight, the
circumstances with reference to which the
Page 256 U. S. 631
contract of affreightment was entered into were so altered by
the supervening of occurrences which it cannot be intended were
within the contemplation of the parties in entering into the
contract, that the shipper and the underwriters were absolved from
all liability under the contract of affreightment. The contract had
reference to a particular ship, to be in existence as a seaworthy
vessel and capable of carrying cargo and earning freight and of
entering on the voyage. All the fundamental conditions forming part
of the contract of the shipowner were wanting at the time when the
earning of freight could commence."
Here, the ship, although still in existence and entirely
seaworthy, was rendered unavailable for the performance of the
charter party by the requisition. By that supervening act, she was
impressed into the war service of the British government for a
period likely to extend -- and which, as it turned out, did extend
-- long beyond the time for the charter voyage. In other words,
compliance with the charter party was made impossible by an act of
state, the charterer was prevented from having the service of the
ship, and the owner from earning the stipulated freight. The event
apparently was not anticipated, and there was no provision casting
the risk on either party. Both assumed that the ship would remain
available, and that was the basis of their mutual engagements.
These, we think, must be regarded as entered into on an implied
condition that if. before the time for the voyage. the ship was
rendered unavailable by such a supervening act as the requisition,
the contract should be at an end and the parties absolved from
liability under it.
That the charter party was entered into in this country is not
material. The important consideration is that it became impossible
of performance through a supervening act of state which operated
directly on the ship and the parties could not avoid.
Decree affirmed.