Court Opinion

ID: 8910228
Source: CourtListenerOpinion
Date Created: 2022-11-27 02:40:24.379183+00
Date Added: 2024-06-11T17:08:27.824918
License: Public Domain

GODBOLD, Circuit Judge,
dissenting:
The decision to reverse rests on the conclusion of this court that the district court erred in finding the contract ambiguous. I think the district court was correct.
The parties used a printed form for a standard voyage charter and modified it to cover their agreement for a time charter for consecutive voyages for a twelve-month period with option in the charterer to renew for one additional year. Special Provision 4 was added:
This Charter Party shall remain in full force and effect for as many consecutive voyages as vessel can report for loading within twelve consecutive months from first tendering notice of readiness under this Charter Party. Charterers have the option for one additional year declarable by June 1st, 1974.
The lien clause in the printed form was not altered. It said:
21. LIEN. The owner shall have an absolute lien on the cargo for all freight, deadfreight, demurrage and costs, including attorneys fees, of recovering the same, which lien shall continue after delivery of the cargo into the possession of the Charterer, or of the holders of any Bills of Lading covering the same or of any storageman.
With deference, the majority’s reasoning appears to me defective. First, they examine the lien clause in stark isolation. “We must therefore interpret the clause they accepted without modification for application to successive voyages.” (Mss. pp. 9-10, emphasis added.) The “interpretation” consists of simply stating that “on its face [the lien clause] deals with a single cargo.” Mss. p. 10. This analysis, which treats the lien clause as though it had been clipped from the charter document and laid on the desk for scrutiny, is erroneous. “A writing is interpreted as a whole and all writings forming part of the same transaction are interpreted together.” Restatement of Contracts § 235(c). See also Comment thereto:
Where a writing contains a sentence or paragraph of doubtful meaning when taken by itself, it may be made clear by other parts of the writing, and even words which have in themselves a clear *874meaning may be controlled and given a different meaning because of other parts of the writing.
Id. at 322. See also 3 Corbin on Contracts, § 536, p. 27:
[I]t can hardly be insisted on too often or too vigorously that language at its best is always a defective and uncertain instrument, that words do not define themselves, that terms and sentences in a contract, a deed, or a will do not apply themselves to external objects and performances. .
The reason for requiring consideration of the entire document is made clear by this case. The majority’s initial inquiry was: “From reading only paragraph 21, what is ‘the cargo’ intended to mean?” Nothing in the lien clause, read in isolation, answers this inquiry. For example, goods carried by what means? So far as I know, railroad cars are leased rather than “chartered” but they incur demurrage and railroads issue bills of lading. If one concludes that the language is sufficient to establish unalterably that “the cargo” means goods carried by sea, does paragraph 21 cover goods carried by one vessel or several vessels? Dry cargo transported in the hold of a freighter, automobiles carried on the deck, or liquid in a tanker? Goods carried when? These and numerous questions are simply not answered on the face of paragraph 21. The words “the cargo” only take on flesh, substance and meaning when they are considered in the light of the contract as a whole.1
Examining the entire document, as we must, the essential inquiry is:
What is “the cargo” intended to mean where:
(a) the parties made a time charter for a single vessel for consecutive voyages, using the standard voyage charter form, with changes as described in the majority opinion.
(b) Paragraph 21 of the agreement reads as quoted above.
There is no truly unalterable answer but rather, at most, an unanswered tension between the consecutive voyage language of the agreement and such parts of the agreement, including paragraph 21, as tend to show intent to treat each consecutive voyage as a single voyage and the cargo as that carried on such single voyage. We must, then, look to the universe outside the document itself,2 and examine the operative usages in the chartering of ships. Restatement of Contracts, § 230, p. 310. To aid in applying the standards for interpreting an agreement
(d) All circumstances accompanying the transaction may be taken into consideration [subject to exceptions not here applicable].3
Id. § 235(d), p. 319. All of this inquiry into the document and the usages of the trade is not for the purpose of modifying, curtailing or enlarging the meaning in paragraph 21 of “the cargo” but for the purpose of determining its meaning. Restatement of Contracts § 235, p. 324, Comment on Clause (d).
With the universe expanded beyond the instrument itself, the inquiry is broadened to add to factors (a) and (b), above, these factors:
*875(c) In the usage of the trade, paragraph 21 is the usual provision for a voyage charter.
.(d) In the usage of the trade, the usual arrangement under a time charter is for a lien on “all cargoes”.
What is the effect of the trade usages? Restatement of Contracts § 246:
Operative usages have the effect of (a) defining the meaning of the words of the agreement or the meaning of other manifestations of intention, and (b) adding to the agreement or manifestations of intention provisions in accordance with the usage, and not inconsistent with the agreement or manifestations of intention.
Id., Comment on Clause (a):
The rule stated in the Clause is not confined to unfamiliar words or to words often used ambiguously. Familiar words may have different meanings in different places. A usage may show that the meaning of a written contract is different from an apparently clear meaning which the writing would otherwise bear. .
Clearly usages are operative here because of the occupations and experience of the parties, noted in the majority opinion. See Restatement of Contracts § 248.
Looking at factors (a), (b), (c) and (d), I would conclude, as the district court did, that “the cargo” included all cargoes, because this is the usual arrangement that parties make in time chartering for successive voyages and nothing here definitively tells us that they intended to depart from what is usual in the business. The illustration to Subsection 2 of Restatement, § 248, is instructive:
In an integrated contract, A promises to sell and B promises to buy a certain quantity of “white arsenic” for a stated price. In the trade in which A and B are both engaged, “white arsenic” means, among other things, arsenic colored with lamp black. This usage is operative, and (see § 246) defines the scope of the meaning of the words “white arsenic” in the agreement.
Id. at p. 355.
I would affirm the district court.

. Even if examining the lien clause in splendid isolation were correct, the majority’s conclusion drawn therefrom is not supportable. As already pointed out, no language in paragraph 21 tells us what “the cargo” means. The opinion does not state how the majority, by reading paragraph 21, came to the revealed truth that the correct and unalterable meaning of “the cargo” was cargo carried on a single voyage. The sole hint is the sentence following the revelation, quoting the standard time charter clause, which refers to “all cargoes.” This is not information conveyed by paragraph 21, or even by the document as a whole, but is drawn from the universe extrinsic to the document.
The majority have expressly done what Professor Corbin points out that courts often do:
It seems highly probable that when a court says that it will enforce a contract in accordance with the “plain and clear” meaning of its words, the relevant surrounding circum-. stances have in fact been proved and have been carefully weighed. . . .
3 Corbin on Contracts, § 542, p. 105.

. If indeed we should not have done so earlier.

. See Restatement of Contracts, §§ 228 and 230.