A stipulation in a charter party that the chartered vessel, then
in distant seas, would proceed from one port named (where it was
expected that she would be) to another port named (where the
charterer meant to load her),
"with all possible
dispatch," is a warranty that she will so proceed, and goes to
the root of the contract. It is not a representation simply that
she will so proceed, but a condition precedent to a right of
recovery. Accordingly, if a vessel go to a port out of the direct
course, the charterer may throw up the charter party.
Ex gr., a vessel, while on a voyage to Melbourne, was
chartered at Boston for a voyage from Calcutta to a port in the
United States. The charter party contained a clause that the vessel
was to "proceed from Melbourne to Calcutta with all possible
dispatch." Before the master was advised of this engagement, the
vessel bad sailed from Melbourne to Manila, which is out of the
direct course between Melbourne and Calcutta, and did not arrive at
Calcutta either directly or as soon as the parties had
contemplated. The defendants refused to load, and upon suit to
recover damages for a breach of the charter party, it was held that
the charterers might rightly claim to be discharged.
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 dispatch. It is understood that the
Mary
Bangs is now on her
Page 69 U. S. 729
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 Manila, much out of the
direct course from Melbourne to Calcutta, and arrived there on the
16th of November. She left Manila 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, dispatched 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,
Page 69 U. S. 730
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
Manila 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 dispatch," 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.
Page 69 U. S. 736
MR. JUSTICE SWAYNE delivered the opinion of the Court.
The question is whether it was a condition precedent, that the
ship should proceed directly from Melbourne to Calcutta; or, in
other words, whether these clauses constitute a warranty, or are
merely a representation.
"The construction to be put upon contracts of this sort depends
upon the intention of the parties, to be gathered from the language
of the individual instrument. Whether particular stipulations are
to be considered conditions precedent, or not, must in all cases
solely depend upon that intention, as it is gathered from the
instrument itself. [
Footnote 1]
. . . All mercantile contracts ought to be construed according to
their plain meaning, to men of sense and understanding, and not
according to forced and refined constructions, which are
intelligible only to lawyers, and scarcely to them. [
Footnote 2] . . . The rule has been
established, by a long series of adjudications in modern times,
that the question whether covenants are to be held dependent or
independent of each other, is to be determined by the intention and
meaning of the parties, as it appears on the instrument, and by the
application of common sense, to each particular case, and to which
intention, when once discovered, all technical forms of expression
must give way; and one of the means of discovering such intention
has been laid down with great accuracy by Lord Ellenborough, in the
case of
Ritchie v. Atkinson, [
Footnote 3] to be this: that when mutual covenants go to
the whole consideration, on both sides, they are mutual conditions,
the one precedent to the other; but where the covenants go only to
a part, then a remedy lies in the covenant to recover damages for
the breach of it, but it is not a condition precedent. [
Footnote 4] "
Page 69 U. S. 737
Rules have been elaborately laid down, and discussed in many
cases, for determining the legal character of covenants, and their
relations to each other; but all the leading authorities concur in
sustaining these propositions.
Contracts, where their meaning is not clear, are to be construed
in the light of the circumstances surrounding the parties when they
were made, and the practical interpretation which they, by their
conduct, have given to the provisions in controversy. [
Footnote 5]
This charter party bears date of the 4th day of June, 1858. The
vessel was then on her way to Melbourne. The agreed facts warrant
the conclusion, that the owner believed confidently that she would
reach Melbourne in advance of the mail, which would carry to her
master advice of the charter party. It was also probable that she
might engage her freight before the master could receive the
advice. On the other hand, it was improbable that she would have
discharged her cargo and have left Melbourne before the mail
arrived. Hence, no provision was made by the owners for any other
contingency than that she should have become engaged. In that
event, they were not to be bound, and the charterers required it to
be stipulated, simply, that if not engaged, she should proceed with
all possible dispatch from Melbourne to Calcutta.
Promptitude in the fulfillment of engagements is the life of
commercial success. The state of the market at home and abroad, the
solvency of houses, the rates of exchange and of freight, and
various other circumstances which go to control the issues of
profit or loss, render it more important in the enterprises of the
trader than in any other business. The result of a voyage may
depend upon the day the vessel arrives at her port of destination,
and the time of her arrival may be controlled by the day of her
departure from the port whence she sailed. We cannot forget these
considerations in our search for the meaning of this contract.
That
Page 69 U. S. 738
the parties could have intended that when the vessel left
Melbourne she might wander in any direction over the Indian seas,
and that whenever and wherever she should receive intelligence of
the contract, she might proceed to Calcutta and claim its
fulfillment by the charterers, strikes us as incredible. So to
hold, we think, would be to make a new contract for the parties,
and not to execute the one they have made. We cannot give any other
construction to the language, "the ship to proceed from Melbourne
to Calcutta with all possible dispatch," than that she was to
proceed direct from one place to the other, and that to this
extent, at least, time was intended to be made of the essence of
the contract. We lay out of view the state of things at Calcutta
when the vessel arrived there. To allow that to control our
conclusion, would be to make the construction of the contract
depend, not upon the intention of the parties when it was entered
into, but upon the accidents of the future.
We will now advert to the authorities to which our attention has
been directed.
Tarrabochia v. Hickie, Dimech v. Corlett,
Clipsham v. Vertue, and
Freeman v. Taylor, are in
point for the defendants in error, and seem to sustain the views of
their counsel. In these cases it was held that unless the delay was
so great as to frustrate the object of the charterers in making the
contract, it was not material to the rights of the parties. In two
of them the delay was produced by the deviation of the vessel from
the direct course to the port where she was to receive her
lading.
The authorities relied upon in behalf of the plaintiffs in error
are equally cogent. In
Glaholm v. Hays, the language of
the charter party was, "the vessel to sail from England on or
before the 4th day of February next." This was held to be a
condition precedent. Chief Justice Tindal said this language
imported the same thing as if it had been "conditioned to sail," or
"warranted to sail on or before such a day." In
Oliver v.
Fielden, the contract, as set out in the declaration, was
that
"the ship called the
Lydia, . . . then on the stocks at
Quebec, to be launched and ready to receive cargo in all the month
of May, 1848, and guaranteed
Page 69 U. S. 739
by the owners to sail in all June, A.D. 1848,"
&c., should be loaded by the factors of the charterers
&c. It was held that the readiness to receive a cargo
in
all May was a warranty, and that in an action for not loading
the vessel, a plea stating that the ship was not ready to receive a
cargo "in all May," was good on general demurrer. Pollock, Chief
Baron, said,
"The stipulation as to the vessel being ready to receive a cargo
in May is not mere description, but part of the contract, and forms
a condition precedent to the plaintiff's right to recover."
Crookewit v. Fletcher presented the same point, and was
ruled in the same way. In
Ollive v. Booker, the vessel was
described as "now at sea, having sailed three weeks ago, or
thereabouts." It was held, that the time at which the vessel sailed
was material, and that the statement in the charter party amounted
to a warranty.
The most recent and most important authority brought to our
notice is
Behn v. Burness. It was agreed by the charter
party, in that case, that the ship then "in the port of Amsterdam .
. . should, with all possible dispatch, proceed to Newport, in
Monmouthshire," and there take in cargo. At the date of the
contract the ship was not at Amsterdam, but at another place
sixty-two miles distant from there. Being detained by contrary
winds, she did not reach Amsterdam until the 23d of October. She
discharged her cargo as speedily as possible, and proceeded direct
to Newport, where she arrived on the 1st of December. The defendant
refused to load her. The plaintiff sued for damages, and the
defendant pleaded that the ship was not at Amsterdam at the time of
the making of the contract. The Queen's Bench ruled in favor of the
plaintiff, and he recovered. The defendant took the case, by a writ
of error, to the Court of Exchequer and that court reversed the
judgment of the Queen's Bench. The opinion of the reversing court
is characterized by force and clearness, and the leading
authorities on the subject are examined. The court said:
"We feel a difficulty in acceding to the suggestion that appears
to have been, to some extent, sanctioned by high authority
(see
Dimech v. Corlett), that a statement of this king in a charter
party, which may
Page 69 U. S. 740
be regarded as a mere representation, if the object of the
charter party be
still practicable, may be construed as a
warranty, if that object turns out to be frustrated, 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 the events which may afterwards occur."
Referring to
Freeman v. Taylor, Tarrabochia v. Hickie,
and
Dimech v. Corlett, they say:
"But the court did not, we apprehend, intend to say that the
frustration of the voyage would convert a stipulation into a
condition, if it were not originally intended to be one."
They evidently felt embarrassed by the prior adjudications,
which take a different view of the subject, and an effort is made
to reconcile them with the decision they were about to pronounce.
Here we have no such embarrassment, and we think we shall settle
wisely the important principles of commercial law involved in this
controversy by following the case of
Behn v. Burness.
Upon reason, principle, and authority, we are of opinion that
the stipulation before us is a condition precedent, and not a mere
representation, nor an independent covenant, and that it goes to
the entire root of the contract.
Judgment reversed and the cause remanded for further
proceedings, in conformity to this opinion.
[
Footnote 1]
Seegur v. Duthie, 8 C.B.N.S., 63.
[
Footnote 2]
Crookewit v. Fletcher, 1 Hurlstone & Norman
912.
[
Footnote 3]
10 East 295.
[
Footnote 4]
Stavers v. Curling, 3 Bingham's New Cases 355.
[
Footnote 5]
Simpson v. Henderson, 1 Moody & Malkin (22 English
Common Law) 313;
Hasbrook v. Paddock, 1 Barbour S.C. 635;
French v. Carhart, 1 Comstock 105.
MR. JUSTICE CLIFFORD, dissenting.
I am not able to concur in the judgment of the court in this
case, and inasmuch as the questions presented for decision are of
general importance, I think it proper to state the reasons for my
dissent.
Present defendants, as the owners of the ship Mary Bangs,
brought the suit in the court below to recover damages of the
charterers for refusing to load the ship as they had covenanted and
agreed to do.
Charterers resided in Philadelphia, and the owners of the ship
resided in Boston. Charter party was executed by the defendants at
Philadelphia, on the ninth day of June, 1858, and was received by
the plaintiffs in Boston on the eleventh
Page 69 U. S. 741
of the same month. Contract was for a voyage from Calcutta to
Philadelphia, New York, or Boston, one part only, at charterers'
option; but they were to give the necessary orders upon the subject
before the ship sailed from Calcutta. When the contract was made
the ship was "on her passage from New York to Melbourne," as
appears by the introductory recitals of the charter party.
Voyage is described, as before mentioned, and immediately
following that description is the clause which gives rise to the
controversy. "Ship to proceed from Melbourne to Calcutta with all
possible dispatch." Owners engaged, among other things, that the
vessel should be kept seaworthy, and be provided with men and
provisions, and with every requisite during the voyage. On the
other hand, the charterers engaged to load the ship, and to
provide, as part of the cargo,
sufficient saltpeter for
ballast, and what broken stowage the master might require, so
that the ship might be loaded full and in a safe and seaworthy
manner, and to reasonable draft. Price to be paid for the charter
was thirteen dollars per customary ton for whole packages, and half
price for broken stowage. Forty running lay days were allowed for
loading the ship, and the charterers agreed to pay ninety dollars
demurrage for every day the ship should be detained beyond that
time, if the detention was by their fault or that of their
agent.
Recitals of the charter party also show that the vessel sailed
from New York, on her passage to Melbourne, on the third day of
May, prior to the date of the charter, and the parties agree that
such a voyage usually occupied from ninety to one hundred and
thirty days, and that it would usually require from two to seven
weeks for the vessel to discharge her cargo and get ready to sail.
Terms of the charter party required that the owners should use the
most direct means to forward instruction to the master, with a copy
of the charter, ordering it to be fulfilled, and the agreed
statement shows that on the same day they received the charter
party from Philadelphia they complied with that stipulation.
Page 69 U. S. 742
First instructions were sent by a sailing vessel; but they also
sent similar instructions by the overland mail, and in various
other ways. Copies of the same instructions were also sent to
Singapore and Batavia; and in fact the parties agree that there
were no more direct means for forwarding instructions than such as
were used by the owners. Steamer carrying the overland mail, which
left England in July, 1858, broke down, and the consequence was
that the instructions sent to Melbourne did not arrive there so
early by a month as was expected by the parties. Vessel arrived at
Melbourne on the seventh day of August, 1858, and her cargo was all
discharged and she was ready to sail in thirty days after her
arrival. Master waited for the mail until the sixteenth of
September, but none arrived, and then he sailed for Manila, seeking
business.
Instructions reached the master at Manila, and on the receipt of
the same the master got his vessel ready and sailed for Calcutta to
fulfill the charter. Record shows that the vessel arrived there on
the twenty-sixth day of February following, and that the master on
the same day called on the agent of the charterers, and he declined
to load the ship.
I. Two principal positions are assumed by the defendants, to
show that the owners of the vessel ought not to prevail upon the
merits.
1. They insist that, by the true construction of the charter
party, it was a condition precedent to the covenant or promise to
load the vessel, that when the master received the instructions to
fulfill the charter the vessel should be found at Melbourne
disengaged, and that she should proceed direct from there with all
possible dispatch to the port specified in the charter.
2. Secondly, they insist that the long period which elapsed
before the vessel arrived at Calcutta, although the delay was
without fault either of the master or owners, discharged them as
charterers from any obligation to furnish a cargo.
Nothing can be more certain than the fact that the two questions
presented involve widely different considerations. Obviously, one
is purely a question of construction, and must
Page 69 U. S. 743
be determined from the language of the charter party when
applied to the subject matter, and considered in view of the
surrounding circumstances as they existed at the time it was
executed, while the other is a mixed question of law and fact,
depending in a great measure upon the evidence exhibited in the
record. Looking at the subject in that light, it is manifest that
any commingling of the question is wholly inadmissible, and can
only promote misconception and lead to confusion.
Province of construction can never extend beyond the language
employed as applied to the subject matter and the surrounding
circumstances contemporaneous with the instrument. [
Footnote 2/1]
General rule is that the terms of a contract are to be
understood in their plain, ordinary, and popular sense, unless they
have, in respect to the subject matter, as by the known usage of
trade, or the like, acquired a peculiar sense; but courts of
justice are not denied the same light and information the parties
enjoyed when the contract was executed. On the contrary, they may
acquaint themselves with the persons and circumstances that are the
subjects of the statements in the written agreement, and are
entitled to place themselves in the same situation as the parties
who made the contract, so as to view the circumstances as they
viewed them, and so to judge of the meaning of the words and of the
correct application of the language to the things described.
[
Footnote 2/2]
Substance of the first proposition of the defendants is that the
clause, "ship to proceed from Melbourne to Calcutta with all
possible dispatch" amounts to a warranty that the ship, when the
instructions with the charter should be received by the master,
would be found at Melbourne, and that inasmuch as she had left that
part before the instructions arrived, and did not proceed from that
port direct to the port of lading, they are discharged from all
obligations
Page 69 U. S. 744
under the charter party. Consequence of the breach of a covenant
or promise on one side, which is a condition precedent, undoubtedly
is that the proof of the fact is a sufficient excuse for the entire
disregard of all the dependent covenants or promises by the other
party. Such a construction of a charter party is never favored by
courts of justice. Whether or not a particular covenant by one
party be a condition precedent, the breach of which will dispense
with the performance of the contract by the other, says Lord
Tenterden, is a question to be determined according to the fair
intention of the parties, to be collected from the language
employed by them; but an intention to make any particular
stipulation a condition precedent should be clearly and
unambiguously expressed. [
Footnote
2/3]
Speaking of this subject, Mr. Parsons, in the last edition of
his valuable Treatise on Maritime Law, says that the doctrine of
dependent covenants, as at common law, sometimes works great
hardship, if not injustice, but adds that as applied to contracts
relating to shipping, it is seldom laid down without a distinct and
adequate reference to the intention of the parties
and the
actual justice of the case. Indeed it may almost be said,
remarks the same learned author, that there is a presumption of
law, for there is certainly a strong disposition of the courts,
against such a construction of a covenant or promise as will make
it a condition precedent. Reason for the rule, as suggested by the
same commentator, is that the construction which disconnects the
promises and obliges each party to satisfy the other for so much of
his promises as he has kept, saving his right to indemnity for any
promises which are broken, will, in the vast majority of cases, do
justice, complete justice, to both parties. [
Footnote 2/4]
Charter parties, it should be remembered, are commercial
instruments subject to the rules applicable to commercial
contracts, where the rule of construction, as universally
acknowledged, is that it shall be liberal, agreeably to the
Page 69 U. S. 745
intention of the parties, and conformable to the usages of trade
in general, and to the particular trade to which the contract
relates. [
Footnote 2/5]
Intention unquestionably is the primary consideration, and when
that is ascertained, under the rules already suggested, all
artificial forms of expression, as was well said in
Stevens v.
Curting, [
Footnote 2/6] must
give way. Applying these rules to the present case, it is clear,
beyond controversy, that the views of the defendants cannot be
sustained. Suppose it were otherwise, however, and that the
construction and meaning of the charter party, instead of being
controlled by those liberal and equitable rules, to which reference
has been made, and which have been followed for centuries in all
commercial jurisdictions, must be determined by the application of
the sternest technicalities ever applied in a common law court to a
building or other construction contract, still, I am of the opinion
that the clause in question cannot be construed to be a condition
precedent without doing violence to the language employed by the
parties, when rightly applied to the subject matter of the
contract, and justly compared with other parts of the same
instrument.
The purpose of the contract was to let and hire the ship for a
voyage from Calcutta to a port in the United States. Defendants had
no merchandise on hand, and they had not sent out any agent to make
the purchases. Time, frequently a long time, is required to
purchase large cargoes in that market. Adventure was to be
undertaken in a distant port which would involve great expense, and
that expense would be greatly increased if the vessel or vessels
were sent from the ports of the United States without a profitable
outward cargo. Preference, therefore, was given by the charterers
to vessels navigating in those seas. They accordingly applied to
the plaintiffs, but both parties knew that it was impossible to
foreknow on what precise day the vessel would arrive at her port of
destination, or how long it would take
Page 69 U. S. 746
her to unload and get ready to sail, or the precise length of
time that would be required for the voyage to Calcutta. All these
matters were known to be involved in uncertainty, and it is equally
obvious that they knew that the owners might not be able to forward
the instructions to the master before he would arrive at Melbourne,
discharge his vessel, and sail seeking business. Knowing these
uncertainties, the parties incorporated into the instrument two
special provisions to protect their respective interests, which was
all they could safely do without incurring the hazard of defeating
the main purpose they had in view.
1. Owners of the ship stipulated to use the most direct means to
forward instructions to the master, with a copy of the charter,
ordering it to be fulfilled, which was obviously inserted for the
benefit of the charterers. Object of the provision was to insure,
if possible, prompt notice to the master. But it might happen that
the means of transmitting intelligence to him in that distant sea
would fail until after he had sailed from the port of destination,
and had engaged his ship, and in that event the owners, unless
their interests were also protected by some suitable provision,
would be liable at law to the defendants, or the last charterers,
in damages.
2. Special provision was accordingly made, that if it happened
that the ship should arrive at Melbourne before the instructions,
and the master should have engaged the ship before receiving them,
the charter should be null.
Both of these provisions are plainly dependent covenants, and
they show to a demonstration, as was well said by Erle, Ch.J., in
Seeger v. Duthie, [
Footnote
2/7] that the parties, when they intended to make a condition
precedent or a dependent covenant, knew how to carry that intention
into effect. But they made no stipulation as to the time when the
ship should arrive at Melbourne, nor as to the day when the cargo
should be discharged, nor the day she should sail to fulfill the
contract, nor the day when she should arrive at Calcutta.
Stipulations
Page 69 U. S. 747
upon the several matters mentioned, if made, might defeat the
object in view, which both parties desired to avoid, and looking at
the surrounding circumstances, it is quite clear that if they had
been inserted they would have been of no special importance to the
defendants. They had chartered two other vessels to be employed in
the same commercial adventure. When this charter was executed they
had purchased no merchandise at Calcutta, and the agent they
afterwards appointed to make the purchases for the three vessels
was still in the United States. Charters for the other two vessels
were executed about the same time as that of the Mary Bangs, and
the agreed statement shows that one of them at that time was on a
voyage from Liverpool to Calcutta, and the other was at Callao
waiting orders. Attending circumstances negative the assumption
that the interests of the charterers required anything more than
ordinary expedition, and there is not a word in the charter party
to favor that view, outside of the clause under consideration.
Some stress is laid, in the opinion of the court, upon the
words, "with all possible dispatch," and the argument is that they
must have the same effect as a stipulation for a day certain.
Covenant that the ship shall be at or sail from a certain place on
a certain day, and there to receive cargo, says Mr. Parsons, is a
condition precedent, and if she is not there on that day the
freighter is discharged from all obligation to load her, as the
condition, in that state of the case, is not fulfilled. [
Footnote 2/8] Such was the case of
Glaholm v. Hays, [
Footnote
2/9] decided in 1841, and referred to in the opinion of the
court.
Contract, in that case, was as follows: "the vessel to sail from
England on or before the fourth day of February next," and it was
held, and well held, that the clause was a condition precedent.
Where, also, there is a definite statement of a material existing
fact, as that "the ship is now in the port of Amsterdam," the
better opinion is that it is a
Page 69 U. S. 748
warranty, and not a mere representation, and consequently is
synonymous with precedent condition. Decision of the Exchequer
Chamber, in
Behn v. Burness, [
Footnote 2/10] is to that effect, and I have no doubt
it is correct. Question presented on the charter party, say the
court in that case, is confined to the statement of
a definite
fact, and they add that if the statement of the place of the
ship is a substantive part of the contract, it seems to us that we
ought to hold it to be a condition, unless we can find in the
contract itself, or the surrounding circumstances, reason for
thinking that the parties did not so intend. But where the
stipulation as to time is not of a day certain, or where the
statement relied on is not of an existing fact, or is expressed in
indefinite terms, the rule is otherwise by all the authorities.
Take, for example, the case of
Constable v. Cloberie,
[
Footnote 2/11] which is an early
case upon the subject. Covenant was to sail with the first wind,
and the covenant was not performed; but the court held that the
covenant was not a condition precedent.
Material clause of the charter party in
Bornman v.
Tooke, [
Footnote 2/12] was
"to sail with the first favorable wind direct to the port of
Portsmouth;" but the ship deviated, and unnecessarily entered
another harbor, where she was detained several weeks, by means
whereof the charterer was put to additional expense for insurance
upon the cargo. Held that the covenant to sail, as above, was not a
condition precedent, and that the deviation could not be given in
evidence in bar of the action.
Origin of the true criterion by which to determine whether a
particular covenant is to constitute a condition precedent or not,
is to be found in the case of
Boone v. Eyre, [
Footnote 2/13] which was decided by Lord
Mansfield. Where mutual covenants go to the whole of the
consideration on both sides, said the judge, they are mutual
conditions, the one precedent to the other. But where they go only
to a part, as where a breach may be paid for in damages, there the
defendant has
Page 69 U. S. 749
a remedy on the contract, and shall not plead it as a condition
precedent. Same rule was laid down by Lord Ellenborough in
Ritche v. Atkinson, [
Footnote 2/14] decided twenty years later. Stipulation
in that case was that the ship should, "with all convenient speed,
sail and proceed" to a certain port, and there take on board a
complete cargo, and therewith proceed to another port and deliver
the same, and the evidence showed that she did not bring home more
than half what she could have carried. Judgment was that the
covenant was not a condition precedent, but that the master might
recover freight for a short cargo at the stipulated rates, subject
to the right of the freighter to recover damages for such short
delivery.
Ruling of Lord Ellenborough in
Havelock v. Giddes,
[
Footnote 2/15] is to the same
effect. Covenant of the owner in that case was that he would
"forthwith at his own expense make the ship tight and strong," and
it appeared that the owner was in default. Decision was that the
covenant was not a condition precedent, but merely gave the
charterers a right in a counter action to such damages as they
could prove they had sustained from the neglect. Subsequently the
same question was presented for a third time to the same court in
Davidson v. Gwynn, [
Footnote
2/16] and it was ruled in the same way. Particular phrase in
that case was, "to sail with the first convoy," and the master
neglected to do as directed.
Seriatim opinions were
delivered by the judges, and they all held that it was not a
condition precedent, but a distinct covenant, for a breach of which
the party injured might be compensated in damages. Nonperformance
on one side, in order to justify the conclusion that the
stipulation requiring it is a condition precedent, must go to the
entire substance of the contract, and to the whole consideration,
so that it may safely be inferred as the intent and just
construction of the contract, that if the act to be performed on
the one side is not done, there is no consideration for the
stipulation on the other side. Proof of the breach of an express or
implied
Page 69 U. S. 750
covenant on one side is not sufficient, not even if it is
attended with some loss and damage to the other, because if it does
not go to the whole consideration, and the loss can be compensated
in damages, the construction must be that the stipulation is
independent, and the losing party, under such circumstances, is not
absolved from performance on his part. [
Footnote 2/17]
Repeated decisions confirm this rule, and indeed it may almost
be said that it is universally approved. Reference will now be made
to some of the more modern cases decided in the courts of the
parent country. Excuse for that course, if any be needed, will be
found in the opinion of the court, which assumes that those cited
by the defendants are inconsistent with those cited by the
plaintiffs, which in my judgment is error. Plaintiffs refer to
Freeman v. Taylor, [
Footnote
2/18] which is regarded as a leading case.
Terms of the charter party were that the ship should proceed to
the Cape of Good Hope, and having there discharged cargo, should
"proceed with all convenient dispatch to Bombay," where the
freighter engaged to put on board a cargo of cotton for England.
Master, instead of conforming to the stipulation, willfully
deviated, causing a delay of six weeks, and in consequence of the
deviation the agent of the defendants refused to load the vessel.
Case was tried before Tindal, Chief Justice, and he charged the
jury that, inasmuch as the freighter might bring his action against
the owner and recover damages for any ordinary deviation, he could
not for such a deviation put an end to the contract; but if the
deviation was so long and unreasonable that, in the ordinary course
of mercantile concerns, it might be said to have put an end to the
whole object the freighter had in view in chartering the ship, in
that case the contract might be considered at an end, and he left
it to the jury to decide whether the delay was of such a nature as
to have put an end to the ordinary objects the freighter might have
had in view when he entered into the contract.
Page 69 U. S. 751
Rule
nisi, to set aside the verdict, was granted, but
the whole court held that the instructions were right. Precisely
the same views were expressed by Lord Denman and his associates in
Clipsham v. Vertue, [
Footnote 2/19] which is admitted to be in point for the
plaintiffs. Stipulation in the charter was to load and
"
forthwith proceed to the port of destination." Delay
ensued and the charterers refused to load. Suit was brought by the
owners, and the defendants pleaded that the vessel did not arrive
at the port of lading until after an unreasonable delay. Plaintiffs
demurred, and the plea was held bad because it did not show that
the delay frustrated the voyage.
Reliance is placed by the defendants upon the case of
Oliver
v. Fielden, [
Footnote 2/20]
which was decided in 1849, by Pollock, C.B., and his associates.
Essential clause of the charter party, dated the 28th of March,
1848, was that the ship, then on the stocks at Quebec, should "be
launched and ready to receive cargo in all May" next following the
date of the charter. Action was by the owners for a refusal to
load. Plea that "the ship was not launched and ready to receive
cargo in all May," as stipulated. Demurrer by plaintiff and joinder
by defendants.
Court held that the readiness to receive cargo in all May was a
condition precedent. Beyond question the ruling was correct upon
the ground that a definite limitation of time is precisely
equivalent in principle to a day certain. Pleadings, therefore,
presented a case where the condition precedent was clearly and
unambiguously expressed. Authorities cited by the court furnish
indubitable evidence that such was the view taken of the case at
the time of the decision. They cited
Glaholm v. Hays,
[
Footnote 2/21] and
Olive v.
Booker, [
Footnote 2/22]
where the decision turned upon a statement material in character
and of an existing definite fact.
Statement was that the vessel is "now at sea, having sailed
three weeks ago, or thereabouts," which was a material
Page 69 U. S. 752
statement and wholly untrue, and the court held that it was a
warranty, and it is not possible to see how it could have been held
otherwise. Unless I am greatly mistaken, these explanations are
sufficient to show that the case of
Oliver v. Fielden, and
the cases therein referred to by the court, run entirely clear of
the question involved in this case. Should further confirmation of
the proposition, however, be needed, it will be found in the case
of
Terrabochia v. Hickie, [
Footnote 2/23] decided in 1856, by the same court which
seven years previously decided the case of
Oliver v.
Fielden, on which the defendants rely.
Provision of the charter party was that the ship "being tight,
stanch, and strong, and every way fitted for the voyage, should,
with all possible speed, sail and proceed" to a certain
port, and there load a full and complete cargo in the customary
manner. Breach alleged was that the defendants made default in
loading the agreed cargo. Second plea was that the ship did not,
with convenient speed, or in a reasonable time in that behalf, sail
or proceed to the port of lading, insomuch that by reason thereof
the object of the charter party and of the voyage was wholly
frustrated. Issue was joined and the parties went to trial. Jury
found:
1. That the vessel did not proceed with reasonable speed and
diligence.
2. That the whole object of the voyage was not thereby
defeated.
3. That the vessel was not fitted for her voyage when she sailed
for the port of lading, but that she was so fitted when she arrived
at that port.
Verdict was entered for the defendant, with leave to the
plaintiff to move to enter a verdict in his favor. Rule to show
cause was accordingly granted, and the questions were fully argued.
Separate opinions were given by Pollock, C.B., and his associates,
and they unanimously decided that the stipulation referred to was
not a condition precedent. Opinion of the Chief Baron is a very
able one, going over
Page 69 U. S. 753
the whole ground and reviewing the principles involved in all
the preceding cases. All of the cases decided prior to 1857, when
the judgment was given for the plaintiff, were cited at the
argument, and it does not appear to have even occurred to the
learned Baron that he was guilty of any inconsistency in
pronouncing the judgment.
Special reference was made to the remark of Maule, J., in
Glaholm v. Hays, [
Footnote
2/24] that if the covenant to sail on a day certain was a
condition precedent, then it might be said that a covenant to sail
in a reasonable time should be held to have the same effect; and
the answer to the suggestion, if such the remark can be called, was
that the distinction between the two cases was obvious, which in my
judgment is a sufficient answer to every argument of the kind.
[
Footnote 2/25]
Repetition of the explanation as to what the distinction is, it
seems to me, is unnecessary, as it has already been stated in
language as clear as I can employ. Same distinction is explained by
Erle, Ch.J., in
Seeger v. Duthie, [
Footnote 2/26] in a manner entirely satisfactory.
Principle of the distinction, as explained in the case of
Dimech v. Cortlett, [
Footnote 2/27] is that a contract that a thing shall be
done on a day named is in itself certain and defined, because it
excludes all consideration of future circumstances; and the same
remark is equally applicable to a positive statement of a definite
existing fact, if it is material to the object of the instrument.
But a contract that the thing shall be done with all convenient
speed, say the court, necessarily admits a consideration of all the
future circumstances; and different minds may plausibly enough come
to different conclusions as to what is "all convenient speed."
Execution of the charter party in that case was at Malta. Clauses
to be noticed are as follows:
1. That the ship is "now at anchor in this port."
2. That she shall, "with all convenient speed, proceed in
ballast to Alexandria, in Egypt, and there load a full cargo."
Page 69 U. S. 754
Report of the case shows that she was neither at anchor in port
nor entirely coppered, but was then in a drydock undergoing
repairs. Failure to furnish the cargo was the ground of the action,
and the decision in the colonial court was against the owner, who
prosecuted the appeal. Questions were fully argued, and all the
authorities of a date prior to the judgment, which was pronounced
in 1858, were reviewed. Conclusion was that neither of the
stipulations was a condition precedent, but the decision in respect
to the first one turned upon the question of intention, as
collected from the whole instrument. Ruling on the second point was
undoubtedly correct. Opinion was given by Sir John T. Coleridge. He
first stated the propositions submitted by the plaintiff, which
were that the failing to sail within a reasonable time or with
convenient speed was no answer to the action on the contract, and
that the case was governed by the general law of mercantile
contracts. Having stated the propositions, he proceeds to say: "We
agree to both parts of the argument. Parties," said the judge,
"have not in this case expressly stated for themselves in the
charter party that unless the vessel sailed by a specified day the
charter party should be at an end, and courts ought to be slow to
make such a stipulation for them."
Court of Exchequer also recognized the same distinction in the
case of
Crookewit v. Fletcher, [
Footnote 2/28] decided in 1857. Words of the charter
party were, ship "now in Amsterdam, and to sail from thence for
Liverpool on or before the 15th of March next," and the court held,
on the authority of
Glaholm v. Hays, Olive v. Booker, and
Oliver v. Fielden, that the stipulation as to sailing on
the day named was a condition precedent, but the court expressly
said,
"We entirely agree with the judgment of the Lord Chief Baron, in
Terrabochia v. Hickie, who clearly points out the
distinction between a stipulation to sail on a particular day and
any general stipulation as to sailing 'in a convenient time,'
or other words of the same description. [
Footnote 2/29] "
Page 69 U. S. 755
Some answer ought to be given to this long and unbroken course
of judicial decisions almost unparalleled for their ability and
consistency in any other branch of commercial law. Attempt is made
to furnish an answer, and what is it?
1. Suggestion is made that the phrase, "with all possible
dispatch," is more intensified than any of the expressions found in
the cases cited by the plaintiffs. Shadowy as the theory appears,
still it deserves to be examined on account of the source from
which it is suggested. None will pretend, I suppose, that the
phrase "with all possible dispatch" is more intensified than the
phrase "as soon as possible," which is one of daily use; and yet it
was held, in the case of
Atwood v. Pomeroy, [
Footnote 2/30] decided in 1856, that the
latter phrase means within a reasonable time, regard being had to
the surrounding circumstances; and it is not believed that there is
a decision to the contrary in any jurisdiction where our language
is spoken. Considered in the light of that decision, it is obvious
that the suggestion is entirely unsubstantial and without merit.
Another suggestion is that the contract was not to attach at all,
unless the master received the instruction before he sailed. But
the parties inserted no such stipulation into the charter party,
and I think that courts of justice ought to be slow to make such a
stipulation for them. [
Footnote
2/31]
They provided that if the ship happened to arrive at the port of
discharge before the instructions,
and the master should have
engaged his ship before receiving them, the charter should be
null, but they made no other provision for the termination of the
charter, and it is confidently believed that the suggestion is
utterly inconsistent, not only with the intent of the parties, but
with the whole scope and purpose of the instrument. Suppose the
vessel had sailed direct for Calcutta, and the day after the vessel
left the wharf at the port of discharge she had met the British
steamer and the master had received his instructions, or suppose
the ship, instead
Page 69 U. S. 756
of being met on the day after she sailed, had proceeded on her
voyage and touched at Singapore or Batavia, and the master had
received his instructions at one or the other of those places, or
suppose the ship, instead of touching at one of those ports, had
proceeded direct to Calcutta, and on her arrival there the master
had met his instructions and had immediately tendered the ship,
under the charter party, all would agree, I think, that it would be
impossible to hold, if the defendants had refused to load, that
they would not have been liable on the covenants of the charter
party. Would anyone pretend, in the case last supposed, that if the
master, instead of tendering the ship, had refused to fulfill the
charter, that the owners would not have been liable? I think not,
and yet, if they would have been liable in the case supposed, it
can only be upon the ground that the clause in question is not a
condition precedent, because the proposition concedes that the
charter attached, notwithstanding the ship had sailed.
Defendants also suggested at the argument that the case of
Graves v. Legg, [
Footnote
2/32] decided in 1854, was inconsistent with the rights of the
plaintiffs to recover, but I think not, for several reasons.
1. Because it has no application to the case, being an action
upon an ordinary written agreement, and not upon a charter
party.
2. Because, if it were inconsistent with the cases cited for the
plaintiffs, the later cases ought to be regarded as furnishing the
true rule.
3. Because the decision is perfectly consistent with the earlier
and later cases to which reference has been made.
Agreement of plaintiff was to sell to the defendant certain
merchandise, to be shipped with all dispatch,
"and the names of
the vessels to be declared as soon as the goods were shipped."
Names of the vessels were not notified to the defendants, and they
refused to accept the goods. Held that the provision in the
contract that the names of the vessels should be
Page 69 U. S. 757
declared as soon as the goods were shipped was a condition
precedent to the obligation of the defendants to accept and pay for
the goods. Judgment was delivered by Parke, B., and he approved the
rule laid down in
Boone v. Eyre, as the criterion for
determining whether a particular covenant is independent or a
condition.
Result of my examination is that I find no inconsistency between
the cases cited by the defendants and those cited by the
plaintiffs. Supposed difference consists only in the application,
and therefore is unreal. Doubts were expressed in
Behn v.
Burness, whether the first point ruled in
Dinech v.
Cortlett was correct, but the court finally came to the
conclusion that their decision did "not at all conflict" with the
decision of the Privy Council, even on that point. First point
decided, it will be remembered, was that the statement that the
ship is "now at anchor in this port" was not a warranty, which has
no application whatever in this case. Second point decided in that
case, which is the one applicable here, was not questioned either
by the bar or the bench, and is undoubted law. [
Footnote 2/33] For these reasons, I am of the
opinion that the clause in question is not a condition
precedent.
II. Second objection is that the delay which ensued before the
vessel arrived at Calcutta discharged the charterers from all
obligation to furnish a cargo. Moral wrong is not imputed to the
plaintiffs, and it is quite clear on the facts that perfect justice
is done to both parties by regarding the provision as an
independent stipulation. Contrary conclusion is a great hardship,
as the master acted in good faith, and employed his best exertions,
after he received his instructions, to fulfill the charter.
Granting that the provision is not a condition precedent, then the
rule is that unless the deviation was of such a nature and
description as to frustrate the voyage or to deprive the freighter
of the benefit of his contract, he is not discharged from the
obligation, but is remitted to his claim in damages for any injury
he may have
Page 69 U. S. 758
sustained. [
Footnote 2/34]
Applying that rule to the case it is quite obvious what the result
ought to be.
Agent of the defendants arrived at Calcutta on the twenty-fifth
of August, and remained there till the twenty-third of January
following. Names of the other vessels were the J. P. Wheeler and
the William Cummings. Former arrived on the fourth of November, and
latter on the first of the following month. When the
William
Cummings arrived, the agent had purchased, of certain
articles, enough for two ships, but he had not purchased any
saltpeter for ballast. Part of the merchandise so purchased was
intended for the Mary Bangs, but it was all sent by the other two
vessels. Plaintiffs' ship arrived, as before stated, and the agent
of the defendants refused to load her. Freight at that time had
fallen for such a voyage to five or six dollars. Under those
circumstances, the agent refused to load the ship, but he
immediately chartered another vessel of about the same tonnage to
take her place, and loaded the vessel so chartered with the funds
provided to purchase a cargo for the
Mary Bangs, and the
parties agree that the whole cargo was purchased after the vessel
of the plaintiffs arrived.
Defendants do not venture to suggest that they have suffered any
injury, and it is clear that the construction here assumed would,
in the language of Mr. Parsons, "do justice, complete justice, to
both parties." Unless the instructions were received by the master
before the vessel sailed seeking business it must have been
understood by the defendants that some delay would necessarily
ensue in the departure of the vessel, and if, in that contingency,
they had been unwilling to accept the contract, the reasonable
presumption is that they would have insisted that some more
specific provision upon the subject should have been inserted in
the charter party. They understood the nature and effect of a
condition precedent, and if they had intended that the contract
Page 69 U. S. 759
should be null in case the vessel sailed before the master
received advices, it must be assumed that they would have said so,
"in clear and unambiguous terms."
The truth is, they intended no such thing, but the theory here
adopted speaks the true intent and meaning of the contract.
Pursuant to these views, I think the judgment should be
affirmed.
NELSON, J., also dissented.
[
Footnote 2/1]
Barreda v.
Silsbee, 21 How. 161.
[
Footnote 2/2]
Shore v. Wilson, 9 Clark & Finnelly 569;
Clayton v. Grayson, 4 Neville & Manning 606; Addison
on Contracts 846.
[
Footnote 2/3]
Abbott on Shipping (Ed. 1854) 368.
[
Footnote 2/4]
1 Parsons' Maritime Law 272.
[
Footnote 2/5]
Abbott on Shipping 352.
[
Footnote 2/6]
3 Bingham's New Cases 355.
[
Footnote 2/7]
8 J. Scott N.S. 65.
[
Footnote 2/8]
1 Parsons' Maritime Law 271.
[
Footnote 2/9]
2 Manning & Granger 257.
[
Footnote 2/10]
8 Law Times N.S. 207.
[
Footnote 2/11]
Palmer, 397.
[
Footnote 2/12]
1 Campbell 376.
[
Footnote 2/13]
1 H. Blackstone 273.
[
Footnote 2/14]
10 East 295.
[
Footnote 2/15]
10 East 555.
[
Footnote 2/16]
12 East 381.
[
Footnote 2/17]
Mill-dam Foundry v. Hovey, 21 Pickering 439;
Bennet
v. Pixley, 7 Johnson 249; Smith's Mercantile Law (6th London
ed) 312, 324.
[
Footnote 2/18]
8 Bingham 124
[
Footnote 2/19]
5 Adolphus & Ellis N.S. 265.
[
Footnote 2/20]
4 Exchequer 135.
[
Footnote 2/21]
2 Manning & Granger 257.
[
Footnote 2/22]
1
id. 416.
[
Footnote 2/23]
1 Hurlstone & Norman 183.
[
Footnote 2/24]
2 Manning & Granger 263.
[
Footnote 2/25]
Same v. Same, 38 English Law & Equity 339;
Hurst v. Usborne, 18 C.B. 144.
[
Footnote 2/26]
8 J. Scott N.S. 64.
[
Footnote 2/27]
12 Moore Privy Council 228.
[
Footnote 2/28]
40 English Law & Equity 415.
[
Footnote 2/29]
Same v. Same, 1 Hurlstone & Norman 912.
[
Footnote 2/30]
1 J. Scott N.S. 110.
[
Footnote 2/31]
Dimech v. Cortlett, 12 Moore Privy Council 227
[
Footnote 2/32]
9 Exchequer 709.
[
Footnote 2/33]
Adams v. Royal Company, 5 C.B.N.S. 492.
[
Footnote 2/34]
Freeman v. Taylor, 8 Bingham 124;
Clipsham v.
Vertue, 5 Adolphus & Ellis N.S. 265;
Seegar v.
Duthie, 8 J. Scott N.S., 45;
Terrabochia v. Hickie, 1
Hurlstone & Norman 183;
Dimech v. Cortlett, 12 Moore
Privy Council 227.