Court Opinion

ID: 6242162
Source: CourtListenerOpinion
Date Created: 2022-02-17 20:47:23.296759+00
Date Added: 2024-06-11T08:58:13.769263
License: Public Domain

Opinion by
Mr. Justice Fell,
This case comes directly within the ruling in Ennis v. Pennsylvania Steel Co., 154 Pa. 138. The plaintiff in each case agreed in writing to sell iron ore to be shipped from Mediterranean ports and delivered free on board cars in this country, and in both the prices were based on freight charges, and the forms of charter parties, showing what commissions and allowances the charterer was entitled to receive, were incorporated in the contracts. The controversy in that case, as in this, related to the right as between the buyer and the seller to the dispatch-money, and was to be determined by the written agreement between the parties. In the case of Ennis v. Pennsylvania Steel Co., supra, the contract provided : “ It is understood and agreed that the steamers to load under this contract are to be furnished by buyers on the basis of nine shillings sterling per ton usual present gross form of London steamer iron ore charter; any variation to be for buyers’ account, sellers, Ennis & Co., to attend to the chartering.” In this it reads : “ The above price is based upon a rate of ocean freight of eleven shillings per ton (conditions as per Naylor, Benzon & Co.’s usual form of charter party), the buyers to receive or pay ai^r differences ; such differences to be settled by their paying or receiving actual difference between eleven shillings and the rate of freight paid on delivery to them.”
In one case it was agreed that any variation in freight was to be for the buyer’s account, and in the other that the difference in rate of freight was to be settled by the buyer receiving or paying the difference. There is no substantial difference between these contracts.
In construing the Ennis contract it was decided that the words “ any variation ” meant a^r variation in freight, and not any variation in the actual cost of transportation; and in the contract in this case the words “ such differences ” refer to differences in the rate of ocean freight, as freight, and not to freight charges, as diminished by dispatch-money. The con*69trolling thought of the contract in this regard is that the seller is to deliver at Philadelphia or Perth Amboy, and to assume all expenses and all risks except the risk of freight strictly so called. If this clause had been omitted from the contract the buyer would have paid the exact price stipulated without deduction or addition, and the seller’s profit would have been the profit on that price, increased by dispatch-money or lessened by demurrage. That the actual cost of transportation would vary from the rates of ocean freight was almost certain in the delivery by vessels of 160,000 tons of ore and extending over a period of two years. There was danger of ruinous charges for demurrage, and the earning of dispatcll-money depended upon the energy and foresight of the seller. There was but a chance of doing this, and there could be no reasonable expectation that it would ever be more than a chance unless the party whose skill and vigilance could improve it would be benefited thereby.
When therefore the parties stipulated for a price based on a rate of ocean freight of eleven shillings per ton, and gave the buyer the benefit or burden of the difference, they meant the freight rate strictly so called, and not the net cost of transportation. The freight rate would be diminished by dispatch-money or increased by demurrage, but these were unknown quantities upon which nothing could be based. They were risks which might result in gain or loss, but to the extent to which they were not purely chances, they depended upon the action of the seller. It is conceded that the plaintiffs would have borne the burden of demurrage charges, and they are entitled under the contract to the benefit of the dispatch-money.
The judgment is affirmed.