Burn Line v. United States & A.S.S. Co.

• Decision Date: 05 May 1908
• Docket Number: 259.
• Citation: 162 F. 298
• Parties: BURN LINE, Limited, v. UNITED STATES & A.S.S. CO.
• Court: U.S. Court of Appeals — Second Circuit

162 F. 298

BURN LINE, Limited, v. UNITED STATES & A.S.S. CO.

No. 259.

United States Court of Appeals, Second Circuit.

May 5, 1908

Wing Putnam & Burlingham, for appellant.

J Parker Kirlin and Charles R. Hickox, for appellee.

Before LACOMBE, WARD, and NOYES, Circuit Judges.

WARD Circuit Judge.

January 24, 1906, the United States & Australasia Steamship Company operating a line of steamers between New York and Australia chartered of the libelant the steamship Oakburn for a voyage to Australia and New Zealand. The charterer put up the ship on its line as a general ship, and gave to shippers its own line bills of lading, signed by it in the master's name by his authority. The charter party contained the following provisions, among others:

'(19) Steamer is to hoist the line flag of the charterers, which will be supplied by charterers, and funnel is to be painted as required by charterers.'

'(16) The master or owner to attend daily, or when requested, at the charterers' or agents' office to sign bills of lading as presented and as customary, and at any rate of freight, without prejudice or reference to this charter; but charterers or their agents are authorized to sign bills of lading on behalf of the master or owners against written authority from the master, such authority to be binding upon the owners.'

'(18) The owners agree to hold the charterers free of and indemnified against claim for loss or damage to cargo arising through the act, neglect, or default of the captain, officers, or crew, or from any cause whatever after the goods have been delivered to the steamer.'

The above conditions show a very clear intention to make the steamer appear to shippers to be a line steamer, but as between the charterer and the owners to make the owners responsible for the transportation. The shippers, if advised of all the facts, could sue, for loss of or damage to cargo, either the owners or the charterer. The charterer collected from shippers prepaid freight to an amount in excess of the charter money, being all the freight due except about . . . 135; the bills of lading containing the provision:

'Freight prepaid is considered earned at time of payment, and is not recoverable, ship lost or not lost.'

The provisions of the charter party as to the charter money were as follows:

'(5) Freight to be a lump sum, . . . 9,225 to be paid in New York as follows: One-third, less 3 1/2 per cent. to cover interest and insurance, with demurrage, at loading port, if any, to be advanced 10 days after final departure of the steamer from New York, bills of lading as presented by charterers having been duly signed; one-third in London two months after sailing of steamer, without discount; and the balance after right and true delivery of the cargo in Australia and/or New Zealand, less 2 1/2 per cent. commission. Any freight which may be payable by bills of lading at ports of discharge, not exceeding said balance, to be accepted by owners without recourse to charterers.'

'(7) Charterers' responsibility under this charter to cease upon payment of the aforesaid advance freight.'

Clause 7 is an illustration of the inartistic character of the charter party, because it is not to be taken literally, but only as a cesser of liability for so much of the third installment as is not covered by the freight due at destination, as may be seen from the account rendered by the charterer to the owners. It is the law of this country that freight, being compensation for the actual transportation of goods, is due only if the goods are carried to destination.

The charter freight in this case was a lump sum, and would only be earned upon delivery of cargo at the last port of discharge. The prepaid bill of lading freight, even if the goods were not delivered, could not be recovered by the shippers on account of the clause above mentioned.

April 18th the steamship sailed from New York. April 28th the charterer paid the first installment of charter money. May 21st, before arriving at the first port, the steamship ran on a reef on the west coast of Africa, and became, with her cargo, a total loss. The second installment of the charter money was not due until June 18th, and, the charterer having refused to pay the...