146 U.S. 483 (1892), 66, Compania Bilbaina de Navegacion de Bilbao v. Spanish-American Light & Power Company

Docket Nº:No. 66
Citation:146 U.S. 483, 13 S.Ct. 142, 36 L.Ed. 1054
Party Name:Compania Bilbaina de Navegacion de Bilbao v. Spanish-American Light & Power Company
Case Date:December 12, 1892
Court:United States Supreme Court

Page 483

146 U.S. 483 (1892)

13 S.Ct. 142, 36 L.Ed. 1054

Compania Bilbaina de Navegacion de Bilbao


Spanish-American Light & Power Company

No. 66

United States Supreme Court

December 12, 1892

Argued December 1-2, 1892




Clauses in a charter party of a vessel construed.

The owner of the vessel held not to be entitled to recover from the charterer any part of the expense of fitting up the tanks in the vessel to carry petroleum in bulk.

The owner could not affirm the charter party for one purpose and repudiate it for another.

The charter party never became a binding contract.

If there was any part of it in regard to which the minds of the parties did not meet, the entire instrument was a nullity, as to all its clauses.

Nor did the delivery of the vessel to the charterer, and her acceptance by him, constitute a hiring of her under the charter party, as it would stand with certain disputed clauses omitted.

The delivery of the vessel was the adoption by the owner of the existing charter party.

The owner could not collect rent for the time he was fitting up the tanks, and the charterer was liable to pay rent for the use of the vessel only while she was in his service.

The case is stated in the opinion.

Page 484

BLATCHFORD, J., lead opinion

MR. JUSTICE BLATCHFORD delivered the opinion of the court.

This is a libel in personam, in admiralty, filed in the District Court of the United States for the Southern District of New York by La Compania Bilbaina de Navegacion, de Bilbao, a corporation of Spain, as owner of the Spanish steamship Marzo, against the Spanish-American Light and Power Company, Consolidated, a corporation of the State of New York, claiming to recover $5,520.97, with interest from August 4, 1886; $1,800, with interest from May 21, 1886; $3,300, with interest from June 21, 1886, and $8.14. The case is fully stated in the findings of fact hereinafter set forth.

The claim is made on a charter party, a copy of which is annexed to the libel. It is dated December 14, 1885 at the City of New York, and purports to be made by the agent of the owner of the steamship and by the Spanish-American Company, and to let the steamship to that company for twelve months. The important clauses in it are those numbered 11, 12, and 18, which are as follows:

11. That the charterers shall have the option of continuing the charter for a further period of twelve months on giving notice thereof to owners thirty days previous to first-named term, and to have the liberty of subletting the steamer, if required by them.

12. That in the event of loss of time from deficiency of men or stores, breakdown of machinery, or damage preventing the working of the vessel for more than twenty-four working hours, the payment of hire shall cease until she be again in an efficient state to resume her service, and should she, in consequence, put into any other port other than that to which she is bound, the port charges and pilotages at such port shall be borne by the steamer's owners; but should the vessel be driven into port or to anchorage by stress of weather, or from any accident to the cargo, such detention or loss of time shall be at the charterers' risk and expense.

18. Should steamer be employed

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in tropical waters during the term of said charter party, steamer is to be docked, and bottom cleaned and painted, if charterers think necessary at least once in every six months, and payment of the hire to be suspended until she is again in a proper state for the service; charterers to have the privilege of shipping petroleum in bulk in water ballast tanks, which are to be fitted for the purpose at owners' expense, satisfactory to charterers, and have permission to appoint a supercargo at their expense, who shall accompany steamer, and be furnished free of charge with first class accommodations, and see that voyages are made with utmost dispatch.

The respondent appeared in the action, and put in its answer, denying that the libellant was entitled to recover any part of the $5,520.97, admitting the payment of $1,500 and $3,300, and denying that it owed anything to the libellant. It alleged that the libellant never fitted up the center water ballast tank to carry oil in bulk, its use being consequently lost to the respondent; that the capacity of that tank was about 50,000 gallons, and its loss reduced the value of the vessel to the respondent $1,100 a month from May 15, 1886, making a damage of $10,084; that from February 21, 1886, to August 27, 1886, the date of the bringing of the suit, was 188 days; that during that period, the respondent was deprived of the use of the vessel 42 days, leaving only 146 days for which hire was due; that such hire at the rate of £675 a month, amounted to $16,060; that on account of such hire the respondent had paid altogether $15,137; that it was entitled to deduct from the moneys due on the charter party $2,390 for the expense to which it was put in procuring barrels so to transport the oil, and for the charges connected therewith, and the further sum of $10,084 for the damages which it would sustain by reason of the refusal of the libellant to fit up the center tank to carry oil in bulk, and that it had filed a cross-libel to recover from the libellant so much thereof as exceeded the hire of the vessel claimed in the libel.

The case was heard in the district court by Judge Brown, and a decree was entered by that court on June 21, 1887, for the recovery by the libellant of $1,800, being the balance of

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hire unpaid for the vessel for the month beginning May 21, 1886, and for $117, interest thereon from May 21, 1886, and $95.73, costs; the whole amounting to $2,012.73.

The opinion of Judge Brown is reported in 31 F. 492. He took the view that the charter party signed by the broker of the libellant did not constitute a legal contract, binding upon either of the parties, because such broker, in signing it, exceeded his authority; that that fact was communicated at the time to the broker of the respondent; that it was agreed between the brokers of [13 S.Ct. 144] the two parties that if the clause relating to the extension of time for twelve months, and the clause requiring the vessel to fit up the oil tanks at the expense of the owner, were objected to by the latter, the matter should be settled by negotiation; that the respondent from the first refused the charter unless the vessel should fit up the tanks at the expense of her owner; that that fact was stated to libellant's broker at the time; that the owner of the vessel subsequently refused to confirm these two clauses in the charter; that notice of such refusal was given to the respondent, and it never consented to waive those two clauses; that no agreement as to those two clauses was ever arrived at; that the subsequent conduct of each party showed that neither intended to recede from its position; that, when the vessel arrived at Philadelphia, ready for the first voyage, neither party made any inquiry as to the disputed clauses; that both parties assented to the use of the vessel on the first voyage, without any definite agreement on the disputed points, and without any settlement by negotiation; that the respondent did not object, because it was not ready to use the tanks; that, when it was ready to use them, and required that they should be fitted up by the libellant in pursuance of the terms of the charter party, the libellant refused to do so; that the cargo was then taken in barrels, under a stipulation that that might be done without prejudicing the rights of either party, the respondent claiming damages for the extra expense, and that subsequently the libellant fitted up the tanks, claiming that the expense would be at the charge of the respondent, while the latter notified the libellant that it would not pay for any such expense.

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The district court also held that, although the charter party as a whole never became a contract...

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