Hasler v. West India S.S. Co.

• Decision Date: 14 January 1914
• Docket Number: 119.
• Parties: HASLER et al. v. WEST INDIA S.S. CO.
• Court: U.S. Court of Appeals — Second Circuit

212 F. 862

HASLER et al. v. WEST INDIA S.S. CO.

No. 119.

United States Court of Appeals, Second Circuit.

January 14, 1914

On Motion for Rehearing, February 21, 1914.

On June 17, 1910, Hasler, Leitch & Co., chartered owners of the steamship M. C. holm, entered into a charter party with the West India Steamship Company; the agreement being concluded in New York City. Under this agreement the West India Company agreed to furnish Hasler, Leitch & Co. 'a full cargo under deck, of sugar in bags. ' Hasler, Leitch & Co. agreed on chartering and freighting the vessel to the West India Steamship Company 'for a voyage from one and/or a second safe port on the north side of Cuba to New York Philadelphia or Boston as ordered on signing bills of lading one port only to be used for discharging. ' It was also agreed that: 'Lay days, if required, not to commence before July 5, 10-- Charterers have privilege of canceling charter should steamer not be at loading port ready for cargo by July 12, 10.'

The Holm arrived at Havana on July 6th and completed its discharge on July 11th, about 2 p.m., when it was tendered to the agents of the West India Steamship Company in Havana. The order was then given by the charterers that the vessel should proceed to Nuevitas a port two days' sail from Havana. Hasler, Leitch & Co. refused to send the vessel to Nuevitas for reasons appearing in the opinion and for the purpose of minimizing damages ordered the vessel to Turks Island to take a cargo of salt there available.

Hasler Leitch & Co. claimed that the action of the West India Steamship Company amounted to a breach of contract. The steamship company denied any breach of contract on its part and asserted that Hasler, Leitch & Co. committed the breach by failing to send the steamer to Nuevitas. A decree was entered in the court below in favor of Hasler, Leitch & Co. for damages and costs amounting to $2,716.73.

Ralph James M. Bullowa, of New York City (Norman B. Beecher, and Ralph J. M. Bullowa, of New York City, of counsel), for appellant.

Haight, Sandford & Smith, of New York City (Charles S. Haight, of New York City, Advocate), for appellees.

Before LACOMBE, WARD, and ROGERS, Circuit Judges.

ROGERS Circuit Judge (after stating the facts as above).

The question for this court to decide is whether the respondent committed a breach of the charter party and is liable in damages therefore as decreed by the court below. In determining this question it is necessary to apply the ordinary principles of contract law. For a charter party is regarded, after all, as simply an ordinary contract and as such is subject to the same rules that govern ordinary contracts.

Under the terms of the contract in the case at bar the respondent or charterer had the right to load the libelant's vessel with sugar at some one or two of the ports on the north side of Cuba for a voyage to New York, or Philadelphia, or Boston as ordered. The vessel by the express terms of the contract was to be at the loading port ready for cargo by July 12, 1910. It was the duty of the respondent, the charterer, when the vessel was tendered at Havana on July 11th to inform the libelant to which port or ports on the north side of Cuba she should proceed as her loading port. The order was issued that the boat should proceed to Nuevitas. This she did not do, basing her refusal to go upon the conduct of respondent, which, it is claimed, released her from the obligation to proceed to the designated port. It is also alleged that respondent's conduct amounted to a breach of the charter party.

It is our understanding that under a charter party if the ship is not at the loading port its duty is to proceed there with reasonable diligence, and if she fails to arrive by the designated time the charterer may refuse to load her and may also have his action for damages-- unless the delay was occasioned by excepted perils. But in the case under consideration the action for damages is not brought by the charterer although the ship made no attempt to reach the designated port. Here the action is brought by the shipowners, and as they did not comply with the terms of their contract and do not claim that they did the circumstances must be somewhat unusual if they can maintain the suit.

It appears that the steamer reached Havana on July 6, 1910, with 3,200 tons of coal and 200 tons of coke on board, and the work of unloading began at 6 o'clock the next morning. That same day the libelant informed the respondent that they would work nights and would go to any expense necessary to discharge the cargo so as to be ready to load on time as fixed by the charter. The reply was that the respondent did not intend to cancel; that it was not necessary to work overtime and would be a waste of money; and that, as the respondent had a cargo ready, it would not make any difference if the boat was two or three days late. It also appears that, if the libelants had not been misled by the respondent, the vessel could and would have been ready according to the contract. About 500 tons-- a ten-hour day-- was actually discharged each day, and, when night work was done, fresh gangs of men being used, about the same amount of coal was discharged each night. Because of the representations and assurances of the respondent that there was no intention to cancel and that there was no reason why the libelant should work nights, no night work at unloading was done the first two nights. But later, suspicions having been aroused that the intentions of the respondent were not according to its professions, night shifts were put on and worked all Saturday night and Sunday night, and it was agreed that if night shifts had also worked on the nights of Thursday and Friday the vessel might have cleared on Saturday and conformed in all respects to her contract.

On July 11th, the steamer being unloaded, one of the agents of the respondent, well aware of the representations previously made, came to see the libelant stating that he had 'a dirty business to perform,' or words to that effect; adding that the respondent had no cargo for the boat, and that if orders were wanted they would be given in writing to proceed to Nuevitas the farthest port to which she could be sent from Havana, and that when she got there 'we are going to cancel her. ' The testimony also showed that the order to go to Nuevitas was given simply because it was known that the vessel finishing her discharge on July 11th could not reach Nuevitas on the 12th.

The libelants claim that, in view of all that took place, the respondent was in fact guilty of a breach of contract and that was the view taken in the court below. The libelants also claim that there was a waiver of the requirement that the libelants tender the steamer at the loading port on or before July 12th.

In all this we do not discover anything which amounts to a breach of contract on the part of the respondent. That there was a breach of the charter party is evident. But it occurred when and because the libelant failed to send the ship to Nuevitas and was committed by the libelant and not by respondent. There was nothing in the conduct of the respondent, bad and reprehensible as that conduct was, which discharged the libelant from its obligation to perform its agreement. The fact that the libelant was intentionally misled so to delay its unloading that it could not reach the port on the north side of Cuba within the time fixed in the charter party, did not, in itself, constitute any breach of contract by the respondent. But we are far from saying that it was without effect upon the rights of the parties under the contract.

There is no reason we are aware of why fraud or misrepresentation or misconduct in the dealings had between the parties to a charter agreement should have any different effect than would follow similar conduct as between parties who had entered into any other kind of contract. And we must admit that the testimony we find in the record has not made a favorable impression upon us, or served to convince us that the characterization given to the business by the respondent's own representative, already quoted, was not deserved. But while this representation was made by the respondent, and was acted upon by the libelants to their prejudice, it is proper to add that it was made by one of respondent's subordinate officials, and that the chief officers of the respondent company denied that they had ever authorized it or that they had any knowledge of it until after the harm had been accomplished.

A court of admiralty exercises, within certain limits, equitable as well as legal jurisdiction and is entirely competent to afford certain equitable relief. In Andrews v. Essex Fire & Marine Ins. Co., 3 Mason, 6, 16, Fed. Cas....