Case ID: ad_60/html/0567-01.html
Source: Caselaw Access Project
Author: {"author": "Hirschberg, J.:", "license": "Public Domain", "url": "https://static.case.law/"}
Date Created: 2024-08-24T03:29:51.129683

Henry M. Randall, Appellant and Respondent, v. James E. Brodhead, Respondent and Appellant.
    
      Charter pa/rty — effect of the charterer increasing in the hill of lading the freight rate, and of the master's collecting only the freight mentioned in the charter pa/rty — the master cannot reduce the demurrage charge — the court cannot after the trial strike out an admission from an answer.
    
    Where the managing owner of a vessel enters into a charter party for the use thereof, by which the charterer agrees to furnish a full cargo of railroad ties and pay freight at the rate of nineteen cents for each tie, and the charterer consigns the goods to himself under a bill of lading which provides that the freight shall be paid at the rate of twenty cents per tie„his object in changing the price being to obtain from his vendees freight in excess of the true amount, the fact that the master of the vessel, upon reaching the port of discharge, collects only nineteen cents per tie as stipulated in the charter party, does not entitle the charterer to deduct from the freight to be paid by him for the use of the vessel during a subsequent voyage the one cent per tie which the master thus failed to collect.
    Where the charter party provides that the charterer shall pay demurrage at the rate of §100 per day and the demurrage lasts eleven days, the master has no power to settle the claim for demurrage upon the receipt of §300, especially where he might easily have communicated with the managing owner and obtained instructions from him.
    The judge presiding at the trial of an action brought by the managing owner against the charterer to recover the one cent per tie which the charterer retained and for the demurrage, has no power, after the decision has been made and signed, to strike out, on the ground that it is immaterial, an admission contained in the answer that the charterer received the cargo at the port of discharge, as on an appeal it may be considered that, whether the defendant was the consignee, had an important bearing upon the rights of the parties.
    
      Appeal by the defendant, James E. Brodhead, from a judgment of the Supreme Court in favor of the plaintiff, entered in the office of the clerk of the county of Suffolk on the 19th day of May, 1900, upon the decision of the court rendered after a trial before the court without a jury at the Suffolk Trial Term.
    Also an appeal^ by the plaintiff, Henry M. Randall, from an order of the Supreme Court, -made at the Suffolk Trial Term and entered in the office of the clerk of the county of Suffolk on the 19th day of May, 1900, granting the defendant leave to amend his answer.
    
      Thomas J. Ritch, Jr., for the plaintiff. i.
    
      Henry W. Goodrich, for the defendant.
   Hirschberg, J.:

The complaint states two causes of action. The plaintiff, as managing owner of 'the schooner Lucy H. Russell, executed a charter party with the defendant on the 17th day of November, 1898, for a voyage from Brunswick, Ga., to Perth Amboy, N. J. The defendant engaged to provide a cargo, of railroad ties for transportation and pay freight under terms and conditions not material to the present inquiry. On the 13th day of December, 1898, the parties executed a second charter party for the use of the same vessel, then lying in the harbor of Brunswick, Ga., for a voyage from that port to Havana, Cuba, the defendant engaging to furnish a full cargo of railroad ties and to pay freight at the rate of nineteen cents for each tie. The defendant as charterer guaranteed the vessel free of all foreign port charges including tonnage dues, light dues, pilotage and landing tax. The lay days for loading and discharging were to commence from the time the vessel was ready ■ to receive or discharge cargo at least 150,000 feet per running day, Sunday excepted, the charterers agreeing to receive from the vessel for discharging at Havana at least 1,800 ties per running day, Sundays excepted, and to pay to the plaintiff the sum of $100 a day for each day’s detention by his default.

The parties subsequently agreed that the Havana charter should be first fulfilled. For that voyage 18,327 ties were furnished and loaded, and subsequently delivered at Havana, the complaint charging that the defendant detained the vessel on demurrage at the port eleven days, but has only paid $200 on account, leaving him still, indebted for the balance. The bill of lading provided that the freight for the ties should be at the rate of twenty cents per tie, “ other conditions as per C/P.” The master collected at Havana only nineteen cents freight per tie as stipulated in the charter. On the fulfillment of the Perth Amboy charter the defendant deducted and retained from the freight of that trip the one cent per tie difference between the Havana freight as stipulated in the charter party and in tí e bill of lading computed on the 18,327 ties. The first cause of action is for the $183.27 freight; the second cause of action is for the $900 demurrage.

The case turns entirely upon the power of the master to bind the plaintiff. Could he raise the price of the freight for the exclusive benefit of the charterer ? Could he settle the demurrage, not disputed, at any figure he saw fit? There were no witnesses presented by the defendant. There was little or no conflict about the questions of fact. At the conclusion of the plaintiff’s case, the jury' was discharged, and by stipulation the questions both of fact and of law were submitted to the learned trial justice and resolved by him in the plaintiff’s favor.

As to the«freight, the plaintiff deems it important that the defendant was himself apparently both shipper and consignee. The bill of lading ran to “ order or to its assigns,” and the master before signing required thé name of the consignee. He was furnished with the following paper : “Consigned to Jas. E. Brodhead, C/O Drake and Stratton Co. Havannah. . Princejye Car.” The complaint alleged that this cargo, consigned to the order of blank, was duly accepted and received by the defendant who kept the vessel detained on demurrage, etc., as stated ; and the answer admits the receipt of the cargo by the defendant. But assuming that Drake & Stratton were the consignees, I know of no principle which would permit the master to alter the terms of the .charter party for the benefit of the charterer. Whatever power he possesses he exercises as the agent of the owner. If he could increase the rate of freight it would naturally inure to the benefit of his principal. The vessel was chartered by the defendant to carry a stipulated cargo at a specified sum for freight, the only object of the change in price on defendant’s theory being to enable him to obtain from his vendees on the sale a sum as freight in excess of the true amount; and although the brief of the learned counsel for the defendant exhibits great research and industry, no authority is cited for the proposition that the agent of the owner is authorized to increase the freight under the circumstances of this case solely for the purpose of furnishing the charterer with an opportunity to secure a profit which the owner is bound to collect. The master cannot vary the contract which the owner has made, and in this instance the bill of lading must be regarded not as a contract but as a mere receipt.

As to the demurrage, the same conclusion müst be reached. The master undoubtedly has authority to settle a claim for demurrage upon receiving payment, but he cannot settle without receiving payment, nor has he under the circumstances of this case authority to change the contract as to the stipulated sum per day. That the detention was caused .by the default of the defendant or his agents is undisputed, as is also the fact that it lasted eleven days. The contract provided for the payment of $100 per day, and the master could not lawfully reduce the sum to less than $20 per day. Alexander v. Dowie (1 Hurlst. & N. 152) is not in point. While a majority of the court express the opinion that the master had aüthority to settle, the decision was put distinctly upon the ground that he was a part owner of the vessel and as such had authority to bind the other owners. The case arose in 1856 and can have little application to the conditions of the present day, when submarine cables furnish means of speedy communication.' Here the master could have easily communicated with the plaintiff and have obtained without delay whatever sanction might be required for any contemplated settlement, and necessity, which is often the basis of the master’s power, did not require that he should assume the •responsibility of varying the terms of the charter party. Nor can •the transaction be upheld as an accord and satisfaction. No such plea is set up in the answer, the evidence does not prove the existence of any dispute or compromise, but only a valid claim for $1,100,. settled by the master on receipt of $200 accompanied by a receipt, not under seal, but purporting to release both parties from all claims.” The case of Holman v. Peruvian Nitrate Co. (5 Court Ses. Cas. [4th series] 657), cited by the learned counsel for the defendant, is certainly no authority in his favor. According to the head note the Court of Sessions held in that case that it was not within the power of the master to grant a discharge of demurrage due to the owners of a vessel, except upon payment. An examination of the case does not disclose that the question was decided by the court, either expressly or necessarily. But Lord Shand did state his opinion as to the law, and no dissent on the part of his associates is recorded. Referring to the receipt which it was claimed effected a release of the claim for demurrage executed by the master, he said (p. 665): “ I think it very difficult in these circumstances to say that the defenders have satisfactorily proved anything like a transaction between the charterers and captain, though the terms of the receipt are no doubt very particular. But, apart from that question, I am of opinion that the captain had no power to grant any such discharge. I have already referred to the powers of a shipmaster as agent of his owners in a foreign port. It,may often be that a claim for demurrage may be as large, or almost as large, as the claim for freight itself. If a vessel be detained, waiting for a cargo, there may arise vei’y large claims indeed. These are claims stipulated for in the charter-party as between the shipowner and the charterer. The right to payment arises to the shipowner, and I do not think the captain in a foreign port has power in ordinary circumstances to discharge that right. Such a power is not necessary in the ordinary use of the ship or performance of the voyage, and it would be a serious matter for shipowners if a captain in a foreign port should be entitled to discharge a large claim of demurrage for a comparatively small sum. The demurrage in this case was to be paid daily, and that shews that the captain had power to receive and discharge the demurrage actually paid. I think he had not authority, however, to grant a discharge binding his owners for demurrage that he never received.”

I accord fully with the opinion of the learned trial justice in the case at bar that the master of the vessel had no right, under the circumstances of this case, to vary the contract made between the plaintiff and defendant either in respect to the freight sale or amount of demurrage.”

After the decision had been made and signed, the learned trial justice granted an order amending the answer by striking out the admission of the receipt of the Havana cargo by the defendant. This was error. He states in his opinion ‘‘ that it is immaterial so far as the freight sale is concerned whether the defendant or some-other person was consignee.” I am inclined to the opinion that this is correct, but a higher court may think otherwise. It is not neces-. sary to pass on the question of the scope, extent or materiality of the admission. The defendant regards it as sufficiently material to inspire an earnest desire to get rid of-, it, and the plaintiff is equally anxious to retain it. Without desiring in the slightest degree to limit the large discretion vested in trial courts on the subject of amendments to pleadings, it seems plain that- the exercise of such discretion cannot be extended to the verified admission of a fact which the litigants deem material, and which in reason could no more be stricken out after the trial when embodied- in a pleading than if it had been spread upon the record as a part of the formal evidence. The order involves a substantial right in a matter which may possibly tend to jeopardize the plaintiff’s judgment.

The judgment should be affirmed, with costs, and the order reversed, with ten dollars costs and disbursements.

All concurred; Goodrich, P. J., not sitting.

Judgment affirmed, with costs, and order amending answer reversed, with ten dollars costs and disbursements.