McKelvie v Wallace Brothers Ltd

• Jurisdiction: Ireland
• Judgment Date: 13 May 1919
• Date: 13 May 1919
• Docket Number: (1915. No. 10,934.)
• Court: House of Lords (Ireland)

K. B. Div.

Appeal.

H. L.

(1915. No. 10,934.)

McKelvie v. Wallace

JAMES McKELVIE (trading as the EIRINN STEAMERS CO.)

and

WALLACE BROTHERS, Limited (1)

Ship and shipping - Contract - Charter-party and bill of lading - Delivery of cargo without production of bill of lading - Detention at port of discharge - Demurrage - Sale of Goods Act, 1893 (56 & 57 Vict. c. 71), sect. 18.

New Trial Motion.

This action for demurrage was tried by Mr. Justice Gibson without a jury at Trinity Sittings, 1917. The claim was on a specially endorsed writ, and the defendants were sued as consignees under a bill of lading, dated July 10th, 1915, of a cargo of coal carried by the s.s. "Temaire," owned by the plaintiff, from Glasgow to Dublin. The coal was purchased by the defendants from Messrs. W. F. Russell & Sons, Glasgow, in the month of June, 1915, and the vendors of the cargo chartered from the plaintiff, under a charter-party dated July 6th, 1915, his ship, the s.s. "Temaire," for carriage of the coal to Dublin.

By the charter-party the entire cargo was to be discharged in twenty-four running hours from the vessel, being placed at the merchants' disposal at the berth, indicated for discharging as customary, irrespective of shortage of labour or waggons; otherwise demurrage at the rate of 15s. per hour was to be paid. The s.s. "Temaire" with her cargo of coal for the defendants arrived at Dublin on July 11th, 1915, and was berthed and placed at merchants' disposal on the following day at 7 a.m., but the discharge was not completed till 7 p.m. on July 14th, when thirty-six hours' demurrage became due, and in respect of this the plaintiff claimed £27 from the defendants. It was sought to make the defendants liable for the demurrage on the ground that they received delivery of the cargo under the bill of lading of July 10th, 1915, which incorporated the terms of the charter-party between Messrs. Russell and the plaintiff.

The defendants denied that they received delivery of the cargo of coal under the said bill of lading; they averred they did not receive the bill of lading; that they were not parties thereto; that they had no knowledge or notice thereof; that they were not parties to or bound by the charter-party made between the plaintiff and Russell & Sons. All the facts upon which this defence was founded appear sufficiently from the judgments.

Mr. Justice Gibson found that the defendants did not receive delivery under the bill of lading, and entered verdict and judgment for them. The plaintiff applied to the Divisional Court for an order that the verdict be set aside, and that judgment be entered for him on the grounds that the verdict was against the evidence and weight of evidence, and that the learned judge misdirected himself in point of law,

18, 19, and 22 April. 13 May.

The defendants appealed (1).

H. L.

The plaintiff appealed to the House of Lords.

On June 26th, 1915, the defendants, W. Bros., coal merchants in Dublin, entered into a contract for the purchase of a quantity of coal from R. & Sons, a Glasgow firm. The contract note contained no reference to demurrage; but in a letter of the same date to the vendors, the defendants intimated that they were prepared to pay a reasonable rate of demurrage. It was provided by the contract that the coal was to be supplied c.i.f. to Dublin, steamers to be discharged in twenty-four running hours from arrival. In pursuance of their contract with the defendants, R. & Sons entered into a charter-party, dated the 6th July, 1915, and executed later with M'K., the plaintiff, for the carriage of the coal by one of his ships to Dublin. The charter-party contained the usual conditions, including a cesser and lien clause, and provided that demurrage at the rate of 15s. per hour should be paid for detention over the specified time of twenty-four running hours. The plaintiff did not execute the original contract, and the defendants were not expressly parties to the contract of affreightment with the shipowner.

The vessel arrived in Dublin on the 11th of July, and the discharge of the cargo was completed on the afternoon of July 14th, thirty-six hours after the expiration of the time stipulated for discharging. A bill of lading, incorporating the provisions of the charter-party, was prepared on July 12th, signed by the plaintiff on the 13th, and posted by the shippers on the 14th to the defendants, who duly received it on July 15th, when the vessel had completely discharged her cargo, and had left the port of Dublin. In these circumstances the plaintiff' sued the defendants for demurrage.

Held, by the King's Bench Division (Sir James H. Campbell C.J. and Madden and Dodd JJ.), reversing the decision of Gibson J., that the cargo was delivered by the ship and accepted by the defendants under the bill of lading, and upon the terms that they should pay demurrage to the shipowner at the rate agreed upon between him and the consignors.

Held, by the Court of Appeal (reversing the King's Bench Division and restoring the judgment of Gibson J.), that as soon as the coal had been put on board the vessel at Glasgow there was an unconditional appropriation under the Sale of Goods Act, 1893 (56 & 57 Vict. c. 71), sect. 18; that the property then passed to the defendants; that it did not pass by the bill of lading; and that there was no contract by the defendants to pay demurrage to the plaintiff.

On appeal to the House of Lords,

Held, that the respondents were not bound by the terms of the bill of lading incorporating the charter-party, as the cargo had not been received or accepted by them thereunder.

Dodd J. delivered the judgment of the Court as follows:—

The action is brought upon a specially endorsed writ by the plaintiff who is a shipowner carrying on business in Edinburgh as the Eirinn Steamers Co., owners of the good ship called the"Temaire," for £27, being demurrage for thirty-six hours at the port of Dublin of their ship the "Temaire."

The plaintiff thought apparently the case was so clear that an application might be made on a specially endorsed writ for an ascertained amount, to which there was no defence. But a defence has been raised. It may be put in a sentence. There was no privity of contract between the plaintiff and the defendants.

The cargo of the "Temaire" was a cargo of coal, purchased by the defendants, Wrallace Brothers, a firm in Dublin, from a firm in Glasgow, trading under the name of Wm. J. Russell & Sons. The Glasgow firm and the defendants entered into a contract with each other on the 26th June, 1915, which contained among other clauses provisions as to the payment of freight, as to the running hours for discharging, and also as to the discharging of the cargo by the Dublin firm. The plaintiff was not a party to that contract. The Glasgow firm after their contract with the defendants and in pursuance of it entered into a contract of affreightment with the shipowner. This contract contained as between the shippers and the shipowner terms as to freight and demurrage, and discharge, in accordance with the contract the shippers had theretofore made with the defendants. To that contract the defendants were not parties.

The word "demurrage" was not contained in the contract between the shippers and the defendants. A point is made upon this. The shippers' letter of 26th June has only these words:"Steamers to discharge in twenty-four hours from arrival." It is said while the ship could sue the shippers for demurrage, the shippers could only sue the consignees for damages for delay. That is one of the matters I have to deal with later on. For the present we have this result of this commercial transaction: if Mr. Brown's argument is well founded, the shipowner must in the first instance sue the shippers, and recover from them on the contract between the shippers and the ship. The shippers must then sue the merchants, and recover from them what they have had to pay to the ship in consequence of the default of the merchants. It is a curious transaction in commercial dealing if this be what the parties intended. If so, of course we must abide by it. But we have to ascertain if this be the real transaction. That depends upon the contract, the intention of the parties as manifested in the documents, the conduct of the parties in relation to these matters, and the true meaning and effect of the Bills of Lading Act, 1855.

Let us begin at the beginning—the contract of June 26th, 1915, between Russell and Wallace. Russell was to supply to Wallace 6000 tons of Summarlee Hamilton Ell Coal at 22s. per ton c.i.f., Dublin, less 1s. 5d. per ton for discharging. Steamers to be discharged in twenty-four running hours from arrival, freight payable on delivery, balance of invoice net cash thirty days from date of shipment.

That would be understood by any business man in this sense, that the purchasers were to pay the freight direct to the ship, and to have credit for that as part payment of the price to the shippers. Mr. Brown does not contest this, but he says they were to pay it only as agents for the shippers. I cannot find any agency. It was part of the contract, and if damage had accrued to the shippers from the default of the purchasers in not paying it, the defendants would have been answerable in damages. Again, the defendants were under a liability to discharge the ship in twenty-four running hours from arrival. That was an absolute undertaking, if we are to take the contract in its literal acceptance by itself. Nothing could be urged by way of excuse, whether deficiency of waggons, military exigency, or congestion in the port. And for that breach of contract, again, the defendants would be answerable in damages to the shippers. Still further, the defendants were to discharge the ship, that is, they were to do the discharge for the ship as well as the consignees' part of the discharge, and they were to get 1s. a ton for so doing...