Court Opinion

ID: 8820858
Source: CourtListenerOpinion
Date Created: 2022-11-26 15:32:51.268018+00
Date Added: 2024-06-11T17:04:37.617758
License: Public Domain

ROSE, District Judge.
In this case the steamship Iolcos, belonging to the Hellenic Transport Steamship Company, a Greek corporation, was on June 9, 1920, chartered to the Archibald McNeil & Sons Company, Incorporated, to carry coal to Europe. When the ship reported at Baltimore, the charterer refused her, and she was after some delay rechartered at a much lower rate. Her owner seeks to recover the resulting loss.
The original charter was on what is known as the Americanized Welsh form, 1914, to which the parties made various amendments. The charterer defends under its third and its seventh articles, which excuse performance when failure is due to strikes or to the .restraint of rulers. Before the ship arrived here, the charterer had told the owner that one or the other or both these causes would probably keep it from furnishing a cargo, but refusál to accept the ship was in the end based upon the second of them, and upon it alone. It is of no moment whether the charterer thereby precluded itself from thereafter relying upon the strike clause, for the labor disturbance set up in its answer is the same which has been described in the opinion this day handed down in No. 726, Romney S. S. Co., Ltd., v. Respondent Now at the Bar, 273 Fed. 287, and which, for the reasons therein stated, would not in any event have constituted a sufficient defense. To deal intelligently with the contention that a restraint of rulers prevented the loading of the ship, it is necessary to take’ up the story of Baltimore’s coal trade where the opinion above mentioned dropped it.
The winter of 1919-20 had been in New England, as in many other parts of the country, one of unusual severity. To replenish its exhausted fuel supply was difficult, and many of its industrial and public services.were on the verge of an enforced shutdown. The unusual industrial activity was still general throughout the country. The demand upon the railroads continued great, and they were in poor condition to respond. Full use could not be made of the water routes, for, although the tonnage under the American flag was far greater than it had ever been before, a variety of causes, including the great demand for ships to take coal to Europe, had so raised rates that from this section of the country it was cheaper to ship to New England by land than by sea.
The Interstate Commerce Commission felt that immediate action was required in consequence of the shortage of equipment, congestion of traffic, and other emergencies existing in this section of the country from which New England gets coal, and that it should use the powers conferred by paragraph 15, added to section 1 of the Interstate Commerce Act by section 402 of the Transportation Act of February 28, 1920 (41 Stat. 476). Accordingly, on the 19th of June, it issued what is known as Service Order No. 6, hereinafter referred to as “S. O- 6,” to become operative on June 24th. In substance, S. O. 6 required all railroads, hauling bituminous coal to any tidewater transshipment pier *293from Charleston, S. C., north, to give preference and priority to that consigned to one Storrow for transshipment to New England, and to attain that end the railroads were directed not to furnish cars to carry that kind of coal to tidewater, except upon permit from a designated agent of the Commission appointed under the authority given by paragraph 17, also added to the first section of the Interstate Commerce Act by the section of the Transportation Act already mentioned. Such permits were not to be granted unless the shipper or consignee would be able to load the coal at the port of transportation shipment without delay to the rail equipment; they were to be issued whenever the destination of the water movement of the-coal was a United States coast-wise port. If it was bound elsewhere, the permit was not to be given, unless the agent was satisfied that it would not impede the intended preference and priority. Each of the railroads was directed to establish such rules and regulations for loading vessels at the piers and for unloading or dumping cars as would effect the desired preference and priority.
Upon the going into effect of S. O. 6, the charterer made prompt application for a permit to bring forward coal for the Iolcos, as well as for a number of other vessels under charter to it. It was not until July 7 that any permits for the movement of export coal to Baltimore were issued, and for some undisclosed reason none was ever granted for the shipment of coal for the Iolcos. When, on July 13, that ship reported herself ready for loading, the charterer refused her. The owner declined to admit its right to do so, and warned it that it would be held for all resulting damages, costs, and. expenses. In spite of S. O. 6, the owner was on July 23 able to recharter her to carry coal to Denmark or Gothenburg, Malmoe range, at $14 a ton. The rate to have been paid under the original charter here in suit had been $19 if the ship was ordered to a western Mediterranean port, or $17 if it was sent to one in the Bordeaux-Rotterdam range.
The charterer says that, under the well-known and long-established custom of the port of Baltimore, it had the right to wait until the ship was nearly due there before it started to forward coal for it from the mines. Randall v. Sprague (D. C.) 74 Fed. 247. It would have been unreasonable for it to have put coal for this purpose on the cars before June 24. and indeed against the public interest, in view of the congested condition of tracks, terminals, and rolling stock then existing, and at no time after that date, and until the rcchartering of the ship, was it able 1o obtain the permit required by S. O. 6. It has offered evidence that it had the coal, or had perfected arrangements for procuring it, and that inability to ship from the mines to tidewater was the only reason why the ship was not loaded as the charter contemplated. Upon this showing it insists that the loading was prevented by a restraint of rulers, and that therefore it is not responsible for any loss which the owner may have suffered in consequence. The latter replies that the ship would have been bound to take any coal which the charterer chose to tender to it. It could not have inquired whether the offered cargo came from the charterer’s own mines, whether it had *294been purchased from some one else before it was placed on cars, or whether it had been bought after it was moved forward or even subsequently to its reaching tidewater. It is common enough for coal exporters to buy their cargoes from those having the article in cars at or near Baltimore, although the number of those so procured doubtless constitutes a small proportion of the aggregate leaving this port.
The evidence seems to show that, even'during the time when S. O. 6 was in force, people who had had no coal on wheels before June 24, and who obtained no permits to send it forward after that date, got it somewhere and loaded foreign-bound ships with it. Precisely how they managed ip is not made clear. Very possibly it was through some shifting of credits in the coal exchange pools, for when S. O. 6 was later revoked by Service Order No. 11, as is stated with more particularity in the opinion in No. 710, Canute S. S. Co., Ltd., v. Diamond Fuel Corporation, 273 Fed. 301, it was apparently found expedient to forbid the purchase of credits when the effect would be to relieve for export coal which would otherwise have gone to New England.
[1] The owner is right when it says that neither S. O. 6 nor any other government order then in force purported or intended to forbid the export of coal, and that it did not in fact do so. It points to the fact that while the order was in force it obtained a new coal charter, although at a much lower rate, for the very steamer the respondents refused. Its learned advocates insist that any difficulties or hindrances which the order in question put in the way of the charterer’s getting coal to the ship were of too remote and indirect a character to constitute that restraint by public authority which the charterer had in mind. The order sought no more than to make New England, because of its urgent needs, a favored child. After it received what it was supposed was the daily share it required, or to which it was entitled, or which there were facilities for sending to it, the surplus might be shipped abroad.
Nor were the quantities so left available for the strangers’ use mere crumbs from the children’s table. They constituted by far the larger part of all that had been provided for the repast. S. O. 6 lasted but 39 days — from June 24th to August 1st, both inclusive. July was the only month during all of which it was in force. It is testified that, of all the coal which in that month was put over the Baltimore & Ohio pier, 70.7 per cent, went on foreign-bound ships. New England received 20.6, and the balance went to Chesapeake Bay and other coast-wise destinations. Before the effect of the order was felt, 80 per cent, of the coal dumped over the pier went abroad. In other words, S. O. 6 nut down .by one-eighth the proportion of coal which went out of the country. The figures for the Canton coal pier have not been so given as to be exactly comparable. The coal so handled constituted about one-third of that dealt with at Curtis Bay, and apparently even of this smaller quantity a still less considerable proportion went to New England.
It is true that because of S. O. 6, or for some other reason or reasons, the total tonnage of coal which came to the two piers in July was only about 75 per cent, of that which arrived in June, and about 80 *295per cent, of that which rolled in during August; but, even so, it compared very favorably with the figures of almost any preceding year. Export was never interrupted. There were 29 days from the 24th of June, when S. O. 6 went into force, until July 22, the day preceding the rechartering of the Iolcos. On each of 25 of them, at least one coal-carrying foreign-bound ship completed its loading at Baltimore. During the entire time, an aggregate of 57 of them were loaded, or almost precisely 2 a day, Sundays and holidays included. In the 70 days from April 15th to June 23d, 224 of them had been given cargoes, an average of 3% a day.
The fact appears to be that, for the first few days after S. O. 6 had time to affect the operation of the piers, comparatively few foreign-bound colliers received cargoes, but that during the latter half of July they were loaded at the rate of almost 3 a day; that is, about as many of them were being supplied as before the order went into effect. The truth is that it was itself a consequence, and not the cause, of the difficulties in which so many coal shippers and would-be coal shippers found themselves in the spring and summer, of 1920. What brought about the trouble was that the charterer in these cases, as well as dozens of others operating through this and other ports, tempted by what appeared to be an easy opportunity to make a handsome profit by shipping coal to Europe, hired more vessels to carry it than it was possible for our railroads and piers promptly to load. The limits of their capacity, as well as the shortage in their equipment, and the labor difficulties by which they were embarrassed, were well known when this charter was made.
[2] It is true that, if the government had forbade the export of coal, the charterer would be excused, although, if such prohibition had not been issued, it would for other reasons have found it impossible to furnish a cargo; but, as has been pointed out, that the government never did. Doubtless, if without prohibiting others from sending coal abroad, the public authorities had commanded it not to do so, and had been able to make the order effective, it would have been equally freed of responsibility, but that, too, was not done unless the failure or refusal to grant a permit to put the coal on cars and send it forward to this ship was equivalent thereto. Was it?
The able and industrious advocates have cited all the cases in which have been discussed or applied the principles which have some relation to those which must be here considered, and all of those referred *to, as well as others, have been carefully examined. A detailed analysis and discussion of them will be little to the point here, for no one of them had occasion to pass upon a state of facts closely resembling those at bar. The charterer stresses such cases as Hudson v. Ede, L. R. 2 Q. B. 566, 3 Q. B. 412, The Sailing Ship Allerton v. Falk, 6 Asp. Marine Cases, 287, Smith v. The Rosario Nitrate Co., Ltd., 1 Q. B. Div. 174, and Furness v. Forwood Bros. & Co., 77 Law Times, N. S., 85, in which, by the established custom of the trade and the port, goods of the kind to be transported were never stored at the water side, but, until the ship was ready for them, were kept somewhere else — a few ot *296many miles away, so that in a certain sense this more or less distant point was the storage place of the port, and for that purpose, perhaps, might be considered as within its bounds, and when the only commercially practicable way of getting the cargo to the ship was blocked by something which was, within some aptly expressed exceptions in the charter party, as by ice in the Danube, by neaps at the juncture of the Weaver and the Mersey, by civil war, or by floods and frost along the single railroad over which the cargo had to travel.
Reference is also made to Dobell v. Green, [1900] L. R. 1 Q. B. 526, where the charter was held subject to the terms of the guaranty of the particular colliery from which the charterer had notified the ship the coal was to come, as he had reserved the right to do. On the other hand, the owner affirms, with Lord Blackburn and numerous other judges, that as a rule the undertaking of the merchant to furnish a cargo is absolute. Postlewaite v. Freeland, L. R. 5 App. Cas. 620. There are limitations upon the doctrine. One of them, applied and enforced in the case last cited, might have been important in the case here tried. The ship, unless she protects herself by an appropriate stipulation, must, at her own charges, await access according to the custom of the port to its facilities for loading and discharging.
[3] The owners offered testimony to show that, if it had at Baltimore procured a cargo for the ship, it would not have been allowed by the railro'ad officials to take its place at the pier until a permit to move from the mines coal specifically for it had been granted by the agent of the Interstate Commerce Commission. The owner and the charterer, by inserting a provision in the charter party that “time for loading to count from 72 hours after master has given written notice of steamer’s readiness to load to. charterers or their agents, whether steamer is in berth or not,” had, however, agreed that the charterer, and not the owner, should assume the risks of delays in getting a berth.
[4] As the language quoted is found in a typewritten interlineation in the printed form, which constitutes the body of the charter, it is evident that the minds of the parties were specially directed to the matter with which the amendment dealt, and it is familiar law that it must be given its natural meaning, even though such a construction may limit the terms of some of the printed clauses or even be inconsistent with them. Carver on Carriage of Goods by Sea, § 173; Clyde Commercial S. S. Co. v. West India S. S. Co., 169 Fed. 276, 94 C. C. A. 551. Of-course it cannot be reasonably contended that the general declaration that performance shall be excused, if prevented by restraint of rulers, is made of no effect by this particular provision. But the owner insists that the insertion shows that the parties intended that the risks of any unusual delays, not clearly within the restraint of princes and other excepting clauses, should be assumed by the charterer, and that it emphasizes the general law that, while they will be given a common sense construction, they will not be extended beyond their plain import. The India, 49 Fed. 92; 1 C. C. A. 174.
[5] In order that the contingencies specified in them shall constitute a good defense, performance must have been thereby rendered in a *297practical sense impossible, illegal, or dangerous. British & Foreign Marine Insurance Co. v. Sunday, [1916] L. R. 1 App. Cas. 650; Furness Withy & Co. v. Redereaktiegolabel Banco, [1917] Weekly Notes, K. B. 215. It is not sufficient that the happening of one of them adds materially to the difficulties and embarrassment of the parties relying on it, if nevertheless it is still possible to perform. Becker Gray & Co. v. London Assurance Corporation, L. R. 2 K. B. 156, [1918] L. R. App. Cas. 101.
[6] It is true that the restraint may not have been directed against the ship or the goods. It may have had other objects, as, for example, the prevention of ingress or egress to or from a besieged or blockaded place, and in that sense may have been indirect. Carver on Carriage of Goods by Sea, § 82; Rodocanochie v. Elliott, Law Rep. 9 Com. Pleas, 519. It must, however, have been the proximate, as distinguished from1 the remote, cause. W. K. Niver Coal Co. v. Cheronea S. S. Co., 142 Fed. 403, 73 C. C. A. 502, 5 L. R. A. (N. S.) 126. If by itself it could not have prevented performance, it will not excuse merely because, in combination with nonexc.epted clauses, it did so. Stevens v. Harris, 57 L. R. (N. S.) Q. B. 203; Adams v. Royal Mail Steam Packet Co., 5 C. B. (N. S.) 491.
[7] Still more clearly is it settled that it will not relieve from liability merely because its happening prevented the party relying upon it from getting his cargo for the ship from the source at which he had planned to obtain it, unless that was, by the terms of the charter, or in the contemplation, of the parties at the time it was made, or by the well-established course of trade, the only source from which he could have been expected to get it. Grant v. Coverdale, L. R. 9 App. Cas. 470; Ardan S. S. Co. v. Weir, [1905] L. R. App. Cas. 501; Dinkam, Francis & Co. v. Witherington & Everett, [1916] Weekly Notes, K. B. 154.
. The instant case is undoubtedly close, but to hold the charterer excused would extend the protection of the restraint of rulers farther than has ever before been done. In Vazalet v. Morris & Co., [1916] Court of Sessions Cases, 963, under a not dissimilar state of facts,’ the same question was raised, and although it was unnecessary there to pass upon it, Rord Mackenzie, who delivered the principal opinion, was evidently not impressed by a contention similar to that which the charterer here makes, and after much consideration, I find myself of like mind.
[8] It is no light matter to weaken the binding force of mercantile contracts, and the burden is heavily on him who asks that it be done. After the charterer, and others, who wished to ship coal abroad, had hired more ships than could be loaded with reasonable promptness, somebody was bound to lose heavily. W. K. Niver Coal Co. v. Cheronea S. S. Co., supra. Such miscalculations are always costly. They are less likely to be repeated, if those who make them find themselves unable to shift the burden to other shoulders.
As neither defense set up by the charterer can be sustained, it must be held liable for its failure to load the ship.