Brett v. Van Praag , 157 Mass. 132 ( 1892 )

Lathrop, J.

No question of pleading is raised in this case, and we proceed to consider such of the questions discussed by the parties as seem to us to be material.

It is not disputed that the plaintiffs are entitled to recover the freight on the outward voyage, less advances on account thereof, unless this freight is included in the bottomry bond, and rightly included, with interest, subject to the right of set-off on account of the draft drawn by the master at St. Thomas, and paid by the defendant. The principal questions in the case are whether the master in fact did include the outward freight in the bottomry bond, and whether he had a right so to include it. By the terms of the charter-party, the vessel was to proceed from Brunswick, Georgia, to Surinam, in South America, and back to New York or Boston. The defendant was to furnish at Brunswick a full cargo of lumber, and at Surinam sufficient cargo or ballast for the voyage. The defendant was also to pay, “ for the use of the vessel during the voyage aforesaid,” certain charges and fees, and fifteen dollars and a half “ for each and every thousand feet, superficial inch invoice measure, delivered at Surinam, which shall be in full for the voyage out and home, two hundred dollars in specie to be advanced the captain at Surinam, free of premium, exchange, or commission, the balance payable on return of vessel and proper discharge of cargo. If vessel should be lost after discharge of outward cargo, one half of this charter shall be considered due and payable at Boston.”

By the terms of the bottomry bond, the “ vessel, her tackle, apparel, furniture, and freight, as per charter-party,” were hypothecated.

If we assume, in favor of the defendant, that the master of the vessel intended to include in the bottomry bond the entire freight payable for the round voyage, we are still of opinion that the master had not the power to include it, since it was not liable to the danger of perishing by reason of a maritime risk. The language of the charter-party is peculiar. The parties evidently intended to provide for two contingencies, the arrival of the vessel and its non-arrival. On the facts of the case we have no doubt that the vessel was “ lost," within the meaning of that term in the charter-party, although, very possibly, we might be constrained to hold that the bond could be enforced against salvage of the wreck, if any could be found. Insurance Co. v. Gosslor, 96 U. S. 645.

In The Staffordshire, L. R. 4 P. C. 194, it was held by the Privy Council, after much consideration, that freight to be earned on a voyage entered upon after the maturity of the bond could not be hypothecated. It was said by Lord Justice Mellish: “ By the very nature of a bottomry bond the person who takes it is to become liable for the maritime risk, and therefore nothing can be hypothecated, except something which is in danger of perishing by maritime risk during the time that the bond is running.” L. R. 4 P. C. 210. See also The Brig Draco, 2 Sumner, 157, 186; The Indomitable, Swabey, 446.

For the same reason, if freight is pledged, the charterer is entitled as against the bondholder to deduct from the freight payable at the end of the voyage any advances that have been made before the making of the bond. The Karnak, L. R. 2 P. C. 505. The John, 3 W. Rob. 170. The Cynthia, 16 Jur. 749.

The principal case upon which the defendant relies in support of his contention is that of The Schooner Zephyr, 3 Mason, 341. In that case the vessel was bound on a voyage from Messina to Boston, with a cargo of fruit. On the way she was compelled by sea perils to put into Lisbon for repairs; and there a bond was given on the ship and freight. In the District Court, an allowance of freight for the voyage from Lisbon to Boston was made, excluding what might be considered a pro rata freight from Messina to Lisbon. This was reversed by Mr. Justice Story in the Circuit Court, and it was held that the bond covered freight for the whole voyage; and that learned jurist said: “ Upon any other construction, where the vessel is repaired at an intermediate port, without any change of her cargo, no freight at all would be hypothecated ; for no distinct freight would grow due for the voyage from the port of repairs. The freight ultimately paid would not be divisible; it would be the entire freight for the fulfilment of the original contract for the whole voyage, and not a pro rata freight, as upon a receipt and delivery at the intermediate port. When the parties pledge freight, it must, in the absence of all other counter proofs, be presumed that they mean the freight to be earned by the ship in the course of the voyage, which has been interrupted by the disaster.”

In the case of The Schooner Zephyr, there having been no delivery of goods at the intermediate port and acceptance by the owner, the doctrine of freight pro rata itineris was not applicable ; and the entire freight, being at risk, was held to be covered by the bond.

In the case of The Eliza’s Cargo, 1 Lowell, 83, on which the defendant also relies, the vessel was chartered for a voyage from Boston to Aux Cayes, in St. Domingo, and back to Boston, at twelve hundred dollars for the round voyage, one half of the charter to be earned on delivery of the cargo at Aux Cayes. The question was whether the master of the vessel had a lien on the homeward cargo for the entire charter, the goods having been shipped on a bill of lading by the terms of which freight was payable “ as per charter-party.” It was held that he had such a lien. In regard to the clause “ one half the charter to be earned,” etc., Judge Lowell said: “ The agreement that one half the freight should be earned at the out port, is intended to regulate the rights of the parties between themselves and with underwriters of freight, in case of a loss of the vessel. One half of the freight is put at risk on each trip.”

We have no occasion to question the correctness of the point decided; and the words last quoted are in favor of our view that only the freight of the homeward voyage was at risk when the bond in the case at bar was given; and we are of opinion that only the homeward freight could be included in the bond.

The next question is as to demurrage. The defendant’s contention is, that, as “demurrage is only extended freight,” it is included in the bond under the clause “ freight as per charter-party.” That “ demurrage is only an extended freight ” was said by Mr. Justice Heath in Jesson v. Sully, 4 Taunt. 52; and this remark has been frequently repeated since. Hall v. Barker, 64 Maine, 339, 343. Sprague v. West, Abb. Adm. 548, 554. Donaldson v. McDowell, Holmes, 290, 292. Hawgood v. Tons of Coal, 21 Fed. Rep. 681, 686. The Giles Loring, 48 Fed. Rep. 463, 473. These were all cases against the owner or the consignee of cargo for the improper detention of the vessel. See also Coggeshall v. Read, 5 Pick. 454, 460.

No case has been called to our attention by the learned counsel for the defendant, where a sum due for demurrage has been held to be included in a bottomry bond under the name of freight. The demurrage provided for by the charter-party had been earned before the bond was executed, and cannot be said to have been at risk. Moreover, we should be slow to hold, where the charter-party contained specific clauses relating to both freight and demurrage, and the bond hypothecated the “ freight as per charter-party,” that the parties intended to include the demurrage.

As to the advances at Surinam on account of the freight, we are of opinion that they are to be deducted from the outward freight.

With respect to the defendant’s claim in set-off, there seems to he no dispute between the parties; and the defendant is entitled to recover the sum of $543.81, and interest.

The result is that the judgment entered in the Superior Court must be set aside; and a judgment entered in accordance with this opinion.

So ordered.