Case ID: sw_252/html/0472-01.html
Source: Caselaw Access Project
Author: {"author": "CURETON, C. J.", "license": "Public Domain", "url": "https://static.case.law/"}
Date Created: 2024-08-24T03:29:51.129683

E. H. PERRY & CO. v. LANGBEHN.
    (No. 3119.)
    (Supreme Court of Texas.
    May 30, 1923.)
    1. Shipping <&wkey;I06 — Freight engagement note and bill of lading held to constitute the contract.
    While an ocean bill of lading issued for a certain number of bales of cotton would, in the absence of a prior freight engagement note, have constituted the contract between the parties, such'note having made the bill of lading used by the ship part of the contract, the two are to be considered together as constituting the contract actually executed and acted on.
    2. Shipping <&wkey;l04 — Contract construed like any other and as a whole.
    A contract for ocean shipment is construed like any other: The intent of the parties is to be sought and, if possible, made effectual; construction is to be liberal in furtherance of real intention; all provisions must be considered in determining scope and effect; and, if there are inharmonious provisions, its general intent and leading purpose should control.
    3. Shipping <&wkey;104 — Contract, when indefinite or inconsistent, interpreted in light of custom of business and construction by parties.
    A contract of ocean shipment being peculiar to the cotton export trade, and somewhat indefinite or inconsistent, may be interpreted in the light of the custom of the business and the construction placed on it by the parties.
    4. Shipping <&wkey; 108 — Purpose of freight engagement note held the shipment of cotton, and not purchase of space in boat.
    The purpose of, and contract made by, an instrument entitled “cotton freight engagement note,” and in terms a confirmation’ by defendant shipowner of plaintiff’s “engagement of room for 3,000 bales of standard-compressed cotton from Galveston to Genoa,” held- shown to be the shipment of cotton, and not the lease or purchase of space; plaintiff being engaged in the cotton export business, and the contract being made in pursuit thereof, the note showing that 3,000 bales of cotton were to be delivered at shipside to be shipped by a particular boat, with a specified freight rate per hundred pounds, and plaintiff before the cotton was loaded, and before accepting bill of lading, knowing that defendant had web-pressed the cotton, thus reducing the space occupied by it, and then claiming only that such pressing might injure the cotton, and reserving the right to make claim for any such injury.
    5. Shipping &wkey;>l06 — Title considered in determining meaning; “name.”
    The title of an instrument as “cotton freight engagement note,” like every other portion of a contract, may be looked to in determining the meaning of the contract; the purpose of giving a person or thing a name being to distinguish that person or thing or class from others (citing Words and Phrases, Second Series, Name).
    6. Contracts <&wkey;!70(I) — Reasonable construction by parties before controversy enforced.
    A construction given to an ambiguous contract by the parties by their actions thereunder before any controversy as to its meaning, with knowledge of its terms, will, when reasonable, be adopted and enforced by the courts.
    7. Shipping &wkey;> 106 — Engagement note modified by issuance and acceptance of bill of lading.
    Even if an original engagement note be considered as a contract for “room” or “space” for 3,000 bales of standard-pressed cotton, yet the shipper, by accepting a bill of lading thereafter issued for 2,500 bales, knowing that the cotton that it had delivered to the ship had been web-pressed by the carrier, and that consequently it occupied less space, a new contract for carriage merely of 2,500 bales of web-pressed cotton, superseding the original contract for space, was made.
    8. Shipping <&wkey;I48 — Shipper not entitled to profit made by carrier pressing cotton cargo reducing space occupied.
    The shipper, having contracted merely for carriage by boat of cotton at a certain price per hundredweight, was not entitled to profit made by carrier web-pressing the cotton, thus saving space which it sold to others.
    Certified Questions from Court of Civil Appeals of First Supreme Judicial District.
    Action by E. H. Perry & Co., against J. H. Langbehn. Prom judgment for defendant, plaintiff appealed to the Court of Civil Appeals, which certifies questions.
    Questions answered.
    Brooks, Hart & Woodward, of Austin, for appellant.
    Stewarts, of Galveston, for appellee.
   CURETON, C. J.

This case is here on certified questions from the Honorable Court of Civil Appeals for the First District.

E. H. Perry & Co., a corporation, cotton exporters, and Langbehn Bros., shipowners, entered into the agreement shown by the cotton freight engagement note, which reads as follows:

“Cotton Freight Engagement Note. HLB. Langbehn Bros., Steamship Agents. No. 486. Galveston, Texas, March 27, 1916. Messrs. E. H. Perry & Co.: We beg to confirm your engagement of room for 3,000, three thousand * * * bales of standard-compressed cotton from Galveston to Genoa * * * at 300 ets. per 100 lbs., basis 100 A1 Tramp * * * insurance, shipper paying wharfage, per SS Kaupanger (built 1890) other 100 A1 steamer; to be shipped from interior on or before-; to be delivered alongside vessel or at her loading berth on or before May 10th, 1916. Freight to be paid through.
“Steamer has option of calling at other port or ports in any order to load and/or discharge coals and/or other cargo and/or passengers. It is understood and agreed that this contract is subject to the Rules of the Marine Committee of the Galveston Cotton Exchange and Board. of Trade, extracts from which are printed on bach, and all of which are made a part hereof, and on the express understanding that it is subject to all clauses and conditions contained in the ocean bill of lading used by the vessel, copies of which will be furnished on application, and said bill of lading is made a part of this contract. Prepaid freight will be considered earned, ship or goods lost or not lost.
“Transferred without consent of the steamship agent.
“Approved and accepted. Signed in Duplicate : E. H. Perry & Co., by K. Schmidt. Lang-behn Bros.
“Most probably all of these 3,000 bales will be shipped by us for account and in name of E. C. Smith & Co.”

After the execution of the above, Perry & Co. in due time delivered to Langbehn Bros. 2,500 bales of standard-compressed cotton for shipment under the terms of said instrument. Thereafter, without the consent of appellant, Langbehn Bros.,.at their own expense, caused said cotton to be web-pressed, a process which reduced the bales in size, and by reason of which Langbehn Bros, saved considerable space in their ship, Kaupanger, which they sold to others for a large sum.

Prior to June 13, 1916, Mr. Zeigler, the ship broker who acted for Perry & Co. in making the original contract with Langbehn Bros., and at the' time certain changes and modifications (not disclosed in the certificate) therein were made, had informed Perry & Co. that the cotton had been web-pressed.

On June 13th he wrote Perry & Co. a long letter with reference to Langbehn’s having had the cotton web-pressed. It is unnecessary to quote the whole of this letter. It gave appellant full and complete information on the subject of web-pressing this cotton. He thought Langbehn had a right to recom-press the cotton, but only^by the standard-pressing process. Speaking with reference to Langbehn, he said:

“He is taking a chance when he recompresses it by the web process, but I dare say the chance is slight, because in my opinion it does not damage the cotton,” in view of the slipshod manner in which the webbing whs done.

The Court of Civil Appeals in the certificate, with reference to this letter, says:

“He said further, however, * * * that he supposed Langbehn was able to pay any damages suffered by the owner, if Langbehn had no right to web the cotton.”

The certificate quotes the letter in part as follows:

“The only thing I can see is if there is a claim from the other side for damage on account of webbing, Mr. Langbehn will have to pay the bill.”

On the 20th of June, Perry & Co., replying to said letter, said:

“We beg to acknowledge receipt of your favor of the I3th inst. in regard to webbing of our 2,500 bales Kaupanger cotton, and meanwhile our Mr. Hopkins has personally investigated the cotton at the pier, and he advises that every bale of this cotton has been webbed.
“Please note that we are writing to our European friends regarding this webbing, and that we reserve the right to make such a claim against Mr. Langbehn as our European friends might see fit, and if you think it advisable, you might inform Mr. Langbehn of the contents of this letter.”

Langbehn Bros, were informed of the contents of this reply from Perry & Co. shortly after they issued the bill of lading for the cotton, and before the ship cleared. The bill of lading was issued on June 17, 1916, after Perry & Co. had been informed that the cotton had been web-pressed; was accepted by them, and the cotton permitted to go forward without any protest other than that shown in the letters above referred to. Hopkins, general agent for Perry & Co. at Galveston, after he saw that the cotton had been web-pressed by Langbehn, took out the bills of lading . for its shipment and clearéd the cotton through the custom house on June 22d.

Portions of the bill of lading are shown in the supplemental certificate of the Court of Civil Appeals. We deem it unnecessary to quote therefrom. It is clearly a bill of lading for cotton, to be delivered to a designated consignee at the port of Genoa, upon surrender of the bill and payment of the freight at $3 per hundred pounds — at which point the carrier’s responsibility ceases. All clauses in the bill'of lading clearly show that it was issued for goods (in this instance cotton), and its terms are only consistent w,ith a shipment of goods. It contains no reference in any manner, so far as we are able to ascertain; to “space” or “room.” Evidently it was an ordinary ocean bill of lading for the shipment of cotton, and in np sense had reference to the leasing or chartering of space in a vessel.

After the bills of lading were issued, Perry & Co. attached them to drafts, and sold them to a certain bank. Hopkins, their general agent at Galveston, testified that after the sale of the bills of lading to the bank, everything they represented belonged to the other party, and not to Perry & Co., and that no claim had been made by any one against Perry & Co. for any kind of damage by reason of the recompressing of the cotton by Langbehn Bros. In the recompressing process the marks on the cotton were not obliterated or damaged, and the cotton shipped was the same cotton as that delivered to Langbehn Bros.; and, so far as this witness knew, every bale reached its destination.

The basis of appellant’s action is that Lang-behn by web-pressing the cotton was enabled. to load it into a smaller space in the vessel than it otherwise would have occupied; that the space thus saved, although the property of Perry & Co., was sold by Langbehn to other parties, for which he received $18,345.

Appellant did not sue for damages suffered by reason of the recompressing of its cotton. It waived its a'ction for damages, and elected to sue for tile profits or gains above specified. In fact, there was no evidence showing that appellant suffered any loss by reason of the recompressing of the cotton. The uncontra-dicted evidence shows that appellant had' sold the cotton to parties in Genoa'; that it was delivered, and appellant fully paid therefore ■ without any claim for rebate or damages.

The appellee, Langbehn, contended that the cotton when delivered to him was in bad order; that he was compelled to recompress it to a higher density in order to put it in a proper condition for shipment (which was done without damage to appellant); and that under the custom of the ‘port of Galveston the terms of the contract hereinbefore set out were for transportation of the cotton, and not for a given space in the vessel.

Zeigler and Merrow were the only witnesses who testified directly as to the general interpretation put upon the language of the contract in issue here by those engaged in the business to which the contract relates. These witnesses were familiar with the contracts of the character here involved, and the usage and custom of the cotton shipping trade at Galveston. The effect of their testimony is that the expression used in the freight engagement note of “room” for a given number of bales of cotton is considered a contráct for carriage of the cotton, and not a reservation of any particular quantity of space in the vessel. Merrow expressly so testified; and Zeigler, who represented Perry & Co. in making the contract in issue, said that the freight engagement note in question is not an iron-clad agreement to take so much space on a ship, that that was not what he was talking about when he was talking to Langbehn Bros., 5-at was only making an engagement for the shipment of so ma)ny bales of cotton.

After hearing all the evidence, the trial court instructed a verdict for appellee.

The foregoing shows what we deem the essential facts, abbreviated to some extent, shown in the certificate.

On this record the following questions are* certified to us:

“Question 1. Under the pleadings and facts above stated, was the contract between 'the parties a contract for such space in the ship as 3,000 bales of standard compressed cotton would cover, or was it a contract only for transportation of said cotton from Galveston, Tex., •to Genoa, Italy?
“Question 2. Independent of whether or not the contract between the parties was for such space as 3,000 bales of cotton would cover or occupy, was appellee liable to appellant for such profits as he received for the sale of the space saved in said ship by reason of the re-compressing of appellant’s cotton?”

The bill of lading in this case issued for 2,500 bales of cotton, and in the absence of the freight engagement note, would have constituted the contract between the parties. 36 Cyc. pp. 213, 214; Elliott on Contracts, vol. 4, .§ 3160; The Thames v. Seaman, 14 Wall. 98, 105, 20 L. Ed. 804; Ryan v. M., K. & T. Ry. Co., 65 Tex. 14, 17, 57 Am. Rep. 589; Schloss v. A., T. & S. P. Ry. Co., 85 Tex. 601, 602, 22 S. W. 1014; Montague v. Hyde (D. C.) 82 Fed. 681. However, since the freight engagement note made the bill of lading part of the contract, the two are to be considered together as constituting the contract actually executed and acted upon. Page on Contracts, voir 2, §§ 1115, 1116; Williston on Contracts, vol. 1, §§ 581, 582, 583; 36 Cyc. pp-65, 212, 213; O’Connell v. 1,002 Bales of Cotton (D. C.) 75 Fed. 408. See, also, 4 Miehie’s Digest, p. 597.

Contracts of the character before us are to be construed as any other class of contracts. The intent of the parties is to be sought, and when found is to be made effectual, if possible. A liberal construction is to be given in furtherance of the real intention of the parties, and all provisions must be taken into consideration in determining the scope and effect of the contract as a whole. If inharmonious provisions are found, its general intent and leading purpose should control minor provisions. 36 Cyc. pp. 62, 64, 206, 213; Hearne v. Gillette 62 Tex. 23, 26; Knapp v. Patterson, 99 Tex. 400, 90 S. W. 163; Moore v. Waco, 85 Tex. 206, 211, 20 S. W. 61.

Not only are we to construe this contract as a whole but since it is one peculiar to the cotton export .trade, and somewhat indefinite or inconsistent in its terms, we may interpret it in the light of the custom of the business, and the construction placed upon it by the parties themselves. Page on Contracts, vol. 2, § 1126; Williston on Contracts, vol. 2, § 623; Elliott on Contracts, vol. 2, §§ 1705, 1706, 1707; Williams v. Arnis, 30 Tex. 37, 48; G., H. & S. A. Ry. Co. v. Johnson, 74 Tex. 256, 263, 11 S. W. 1113.

We are of the opinion that the freight engagement note was not a contract for space or room in the ship, but was one exclusively for the shipment of cotton. The “room” referred to in the note was merely an incidental term used to make an engagement for the shipment of the cotton. The clause “3,000 bales of standard-compressed cotton from Galveston to Genoa” was not placed in the note as the measuring rod or descriptive term by which the amount of ship space contracted for was to be determined.

The title of the initial instrument describes the document. It is named a “cotton freight engagement note,” and not a “space or room engagement note.” The title, like every other portion of a contract, may be looked to in determining its meaning. See Finch v. Trent, 3 Tex. Civ. App. 568, 22 S. W. 132, 24 S. W. 679. In fact, the purpose of giving a person or thing a name is to distinguish that person, or thing, or class from others. Words and Phrases, Second Series, vol. 3, p. 516. The reason for designating the document before us as a “cotton freight engagement note” was no doubt to indicate its object, and distinguish it from other classes of maritime contracts.

Appellant was engaged in the cotton export business, and the contract in issue was made in pursuit of this business. The engagement note shows that 3,000 bales of cotton were to be delivered at shipside, to be shipped by a particular ship, with a specified freight rate per hundred pounds, to be paid through. In other words, the shipment of the cotton was plainly the purpose of the engagement note; and, in fact, cotton was shipped. The bill of lading was for cotton, and its various clauses are consistent only with the shipment of cotton.

That the contract was for the shipment of freight, and not for the lease or sale of space, is likewise clearly shown from the acts of the parties themselves. Appellant, before the cotton was loaded, and before it accepted and negotiated the bill of lading, knew that .appellee had web-pressed the cotton. The only claim or contention then made by appellant was that it reserved the right to make a claim against Langbehn on behalf of the consignees of the cotton, if the latter made any claim.

As shown by the statement of the case, Mr. Zeigler was of the opinion that the only result of the web-pressing of the cotton by Langbehn was the possible injury to the cotton, and a claim for damages from the consignees on account’ thereof. Such a thing as a claim on the part of appellant for the space saved by this process did not arise in his mind. This position was concurred in by appellant in its letter in reply to that of Mr. Zeigler; that is, appellant, after having been fully advised as to the facts, requested Mr. Zeigler to inform Langbehn that appellant reserved the right to make a claim against Langbehn, if the consignees of the cotton saw fit to make a claim for damages to the cotton. Such a thing as a claim based upon the sale of space in the vessel, such as is here insisted on, never arose in the mind of appellant at the time. Clearly, there was nothing in Zeig-ler’s mind, nor in that of appellant, that a contract for space had been breached in any manner by Langbehn.

Mr. Hopkins, the general agent of Perry & Co. at Galveston, took out the bill of lading for the 2,500 bales of cotton after it had been web-pressed, and cleared it at the custom house; showing definitely that, as the agent of Perry & Co., he thought that Lang-behn was complying with the contract, except in so far as damages might accrue in favor of the consignees of the cotton by reason of the injurious effect of the web-pressing process. It never occurred to him that Perry & Co., had bought space in the vessel, instead of having made a contract of affreightment for the cotton. As a matter of fact, the cotton was not injured, and no claim was ever made, either to Perry & Co. or against Lang-behn Brosv, because of the recompressing process. The fact that Perry & Co., made no claim for space in the boat, that it accepted the bill of lading for the web-pressed cotton, and continued with the contract, _ as evidenced by the bill of lading, after the cotton had been web-pressed, shows clearly that the purpose of the engagement note and the bill of lading was to ship cotton, and not to purchase space in the boat.

It is familiar law that where a contract is ambiguous in its terms, a construction given it by the parties .thereto and by their actions thereunder, before any controversy has arisen as to its meaning, with knowledge of its terms, will, when reasonable, be adopted and enforced by the courts. Elliott on Contracts, vol. 2, §§ 1537, 1538; G., H. & S. A. Ry. Co. v. Johnson, 74 Tex. 256, 263, 11 S. W. 1113; and authorities supra.

The cotton engagement note appears to be a type of contract more or less peculiar to the cotton trade, but one in general use at Galveston. The testimony of Zeigler and Merrow, as set out above, as to the meaning of this character of instrument in the cotton trade at Galveston, shows that such contract is one for the shipment of cotton, and not for the lease or rental of space in a boat, measured by the number of bales specified. In fact, Zeigler, who acted for Perry & Co. in the matter, testified that when he made the original agreement, he was only making •an engagement for the shipment of so many bales of cotton.

However, considering the original engagement note as in reality a contract for “room” or “space” for 3,000 bales of standard-pressed cotton, the result to appellant in this litigation is the same.

When we come to consider all the faeté, and construe the engagement note and bill of lading together as the evidence of one contract, we find that the bill of lading was issued and accepted for 2,500 bales after appellant knew the cotton had been web-pressed, and that the space which would then be occupied by it would be less than had it remained standard-pressed. The acceptance of the bill of lading under these conditions as to the terms of the bill of lading clearly made a contract binding on appellant as well as appellee. 36 Oye. pp. 213, 214; Schloss v. A. T. & S. F. Ry. Go., 85 Tex. 601, 602, 22 S. W. 1014; and other authorities supra. We think the partial contract evidenced by the engagement note merged into, and to the extent of all inconsistencies was superseded by, the completed contract evidenced by that note and the bill of lading issued and made a part thereof; that is, the terms of the engagement note providing for “room” for 3,000 bales of standard-pressed cotton were modified by the issuance and acceptance of the bill of lading for 2,500 bales of web-pressed cotton, and the latter controls. Elliott on Contracts, vol. 3, § 1860; 36 Cyc. p. 60; Boyd v. Moses, 7 Wall. (U. S.) 316; The Donald (D. C.) 115 Fed. 744, 747; Wheeler v. Curtis, 11 Wend. (N. Y.) 654, 664.

Therefore, construing the contract as a whole, considering the engagement note as modified by the bill of lading, and interpreting the two according to the acts of the parties, it is entirely clear that the actual completed contract entered into was for the shipment, or “space” for the shipment, of 2,500 bales of web-pressed cotton,' instead of 3,000 bales of standard-pressed cotton, and that this contract was in all respects carried out without injury or damage to appellant.

It has been heretofore noted that appellant has not sued for damages suffered by reason of the recompressing of its cotton. Nor was it damaged. Appellant sold the cotton to parties in Genoa, and was paid therefor. If it be said that the act of web-pressing the cotton was a trespass, it was one without injury and without any damages. Besides, since appellant occupied all the space in the ship for which it in reality contracted, it is not entitled to any profits which appellee may have made by sale of the space saved by web-pressing the cotton.

To the first question we answer that the contract in question was only for transportation of cotton from Galveston, Tex., to Genoa, Italy, and not for so much space in the ship.

To the second question we answer that ap-pellee was not liable to appellant for such profits as he received for the sale of space saved in the ship by reason of the recom-pressing of appellant’s cotton. , 
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