Steamship Rutherglen Co., Ltd. v. Howard Houlder & Partners, Inc.

• Decision Date: 10 February 1913
• Docket Number: 130,131.
• Citation: 203 F. 848
• Court: U.S. Court of Appeals — Second Circuit
• Parties: STEAMSHIP RUTHERGLEN CO., Limited, v. HOWARD HOULDER & PARTNERS, Inc.

203 F. 848

STEAMSHIP RUTHERGLEN CO., Limited, v. HOWARD HOULDER & PARTNERS, Inc.

Nos. 130, 131.

United States Court of Appeals, Second Circuit.

February 10, 1913

Haight Sandford & Smith, of New York City (J. W. Griffin and C. S Haight, both of New York City, of counsel), for Howard Houlder & Partners, Inc.

Convers & Kirlin, of New York City (J. M. Woolsey and J. Parker Kirlin, both of New York City, of counsel), for Steamship Rutherglen Co., Limited.

Before LACOMBE, WARD, and NOYES, Circuit Judges.

WARD Circuit Judge.

The owners of the British steamer Rutherglen chartered her to Howard Houlder & Partners for a voyage from New York to Dalny and Takow, Formosa, with a cargo of railway material which has been duly delivered. Various disputes have arisen between the parties which are now to be disposed of.

1. The owners filed a libel to recover an unpaid balance of charter hire. The charter called for a lump sum hire of . . . 9,400 to be paid before sailing.

The charterers paid only . . . 9,122.12.6, claiming that the vessel fell short of the dead weight capacity guaranteed by the owners to the extent of 219.3 tons. The charterers filed a cross-libel to recover the freight engaged for the cargo shut out by this breach of guaranty.

The District Judge found that the vessel did fall short of the guaranty as claimed by the charterers, and that the bill of lading freight coming to them for cargo shut out would be, if it had been carried, . . . 397.11.6. He allowed to the charterers the difference between the charter hire and the bill of lading freight, to wit, . . . 120.3.11. The owners claim that the charterers are only entitled to the difference between the unpaid charter hire, . . . 277.7.7, and 120.3.11, the profit on the bill of lading freight. This would result in the charterers being liable to the owners on this account for the sum of . . . 157.3.8.

We think the District Judge was right. If the vessel had conformed to the guaranty the charterers would owe . . . 277.7.7. Because it did not, they have lost . . . 397.11.6. Setting one claim off against the other, the difference is against the owners and in favor of the charterers, . . . 120.3.11.

The court below entered a decree in each action, the effect of which is precisely the same as if the better practice of entering one decree as in case of bill and cross-bill in equity had been followed. The contention of the owners is manifestly wrong, because it makes the charterers pay . . . 157.3.8 for cargo space they never received, and this for the singular reason that they had sustained an additional loss of . . . 120.3.11. In other words, if they had not engaged at a profit the cargo shut out, they would have been better off, because they would have been allowed . . . 277.7.7 for the cargo capacity short, instead of . . . 157.3.8.

2. The owners claim 15 1/2 days' demurrage at Dalny, and the District Judge allowed it. The provisions as to demurrage are as follows:

'Fifteen (15) running days, Sundays and holidays excepted, to be allowed charterers for loading steamer and the cargo to be discharged with all possible speed, according to the custom of the port of discharge. Vessel to receive cargo on clearing day if required, free of demurrage. Demurrage over and above the said lay days to be paid at the rate of four pence per net register ton per day for each and every day the steamer is detained at port of loading by the default of the charterers.'

The steamer arrived December 17th, was free of pratique on the morning of December 18th, and on that day served notice of readiness to discharge upon the charterers' agents. She did not get into her berth until January 2d, nor begin discharging until January 3d. The District Judge allowed demurrage at the rate of four pence per net registered ton for every day from December 19th to January 3d.

The charterers contend that they were relieved of liability for anything occurring at Dalny by virtue of the cesser clause, which reads:

'Charterers' liability to cease on cargo being shipped and freight paid.'

The freight was paid at New York on the shipment of the cargo, and the owners make no claim for demurrage or anything else occurring there.

The clause would protect the charterers from liability for anything done at the discharging port by others, but not for anything which they had themselves agreed to do. The charter contemplates that the charterers will receive the cargo at Dalny. It provides that in certain circumstances they will be obliged to provide lighters, and that for delay in discharging, due to certain excepted causes, they are not to be liable, and that the vessel is to be consigned to their agents. Accordingly the cesser clause does not protect them from liability for delay incurred in discharging at Dalny not within the exceptions.

There is a wilderness of law upon the subject of demurrage. The decisions depend upon the language of the various charters and are difficult to reconcile. Mr. Carver has laid down six propositions in his work on Carriage by Sea (section 623) which have been approved in the case of Leonis S.S. Co. v. Rank, 1 K.B. (1908) 499. We need not consider them, because they are confined to charters which provide for a fixed number of lay days within which a charterer is bound to load or unload, and which generally, as in the case of the Leonis Company, define precisely when the lay days shall begin to run. Notwithstanding these propositions, it is the law in England...