IN PRIZE-GOODS ex s.s ” MARO Y ”

038-NLR-NLR-V-43-IN-PRIZE-GOODS-ex-s.s–”-MARO-Y-”.pdf


In Prize-Goods ex s.s. “ Metro Y ”.
157
[Colonial Court of Admiralty.]
1941Present : Moseley S.P.J.
IN PRIZE-GOODS ex s.s. MARO Y ”.
In the matter of the claim of the Master and Owners of the Vessel datedAugust 15, 1940.
And
In the matter of the claim of the Shippers and of the Hongkong andShanghai Bank dated May 21, 1941.
Restraint of Princes—Goods seized as contraband—Vessel bound from Saigon
to Marseille—Chartered by French Company—Claim of owners tofreight—Proceeds of sale claimed by shippers—Charter-party.
A vessel whose owners were of Greek nationality was chartered inLondon by a French Company to proceed to Saigon and load a cargo ofrice and from there to proceed to Marseille via the Suez Canal anddischarge the cargo there.
> 42 X. L. R. 221.
43/14
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MOSELEY S.P.J.—In Prize-Goods ex s.s. " M«ro Y
The vessel was accordingly loaded at Saigon and put to to sea onJune 7,1941. At that time, France was an ally, and the ship,
claiming Greek nationality was neutral. The vessel arrived at Colomboon June 19, and on June 21 the Master applied to the naval authoritiesfor clearance via Suez which was refused.
On July 5 the Master was informed by the naval authorities thatif he proceeded on the intended voyage he would be required to proceedto a British port where his cargo would be taken a.- contraband.
The Master, thereupon, decided on the instructions of the ownersto sell the cargo at Cplombo ; but on the same day the cargo was seizedby the lawful authority as contraband of war.
At the instance of the Crown a writ for the condemnation of the cargoas good and lawful prize was issued. The cargo was thereupon sold andrealized a sum of Rf. 626,683 of which a sum of Rs. 70,000 was paidto the Master on account of freight. The balance was in Court.
The present proceedings were instituted by way of motions, firstlyby the shippers and the Hongkong and Shanghai Bank for release to themof the proceeds of sale, and secondly by the owners and the Masteropposing the release till the full freight had been paid.
Held, that the continuation of. the voyage was rendered impossiblethrough the restraint of princes;
Held, further, that the owners were not entitled to the full freightwhich would have been due to them had the vessel reached the port ofdestination.
Freight to the amount of the voyage completed could only be claimedupon an agreement, express or implied. '
In the absence of such an agreement the only satisfaction which theowners and the Master may be granted is that which may be deemedproper by a rational application of fair and equitable considerations.
lASE heard before the Colonial Court of Admiralty. The facts
appear from the head-note.
E. G. P. Jayetilleke, K.C., Attorney-General (with him M. F. S. Pulle,
C.) instructed by John Wilson, Proctor, Agent for His Majesty’sAttorney-General.
H. V. Perera, K.C. (with him E. B. Wikremanayake) instructed byMessrs. D. L. & F. de Saram, Proctors, for the Master and Owners.
N. Nadarajah (with him E. F. N. Gratiaen) instructed by Messrs. Julius& Creasy, Proctors, for the Shippers.
E. F. N. Gratiaen instructed by Messrs. Julius & Creasy, Proctors,for the Hongkong and Shanghai Banking Corporation . The Custodianof Enemy Property (A. G. Ranasinha) is also present on notice. M. F. S.Pulle, C.C., watches his interests.
October 29, 1941. Moseley S.P.J.—
For the facts of this case, I have had to depend upon the avermentscontained in an affidavit sworn by the master of the “ Maro Y ” for thepurposes of another application and upon the documents put in byCounsel for the respective parties..
On April 13, 1940, Messrs. Yannoulatos Brothers, Ltd., the owners of thevessel, entered into a charter-party with the .Services EcoriomiquesFrancais de Londres, whereby the vessel was to proceed to Saigon andthere load a cargo of rice of a quantity within certain limits and to
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Cur. adu. vult.
MOSELEY S.P.J.—In Prize-Goods ex s.s. " Maro Y159
proceed, via the Suez Canal, to Marseille and there to discharge thecargo. The freight was agreed at 110 shillings per ton and was expressed,in the charter-party, to be paid in sterling in London on telegraphicadvice that Bills of Lading had been signed. The vessel accordinglyloaded at Saigon and put to sea on June 7. The Bills of Lading, twenty-three in number, had been signed on various dates between May 28 andJune 5, and advice thereof was cabled to London on June 6. At thattime France was an ally, and the ship, claiming Greek nationality, wasneutral. The vessel arrived at Colombo on June 19, and on the 21st theMaster applied to the naval authorities for clearance via Suez, whichwas refused. Cablegrams passed between the master and ownersrelative to the possibility of the vessel proceeding to Madagascar with aview to discharging the cargo there. By July 4. the owners appearto have changed their minds and cabled the Master that since the freighthad not been paid in terms of the charter-party, he should apply to thenaval authorities to obtain a clearance for Suez, or. failing that, heshould apply to the “Colombo Tribunals ” for permission to sell thecargo with a reserve sufficient to cover the full freight and detentioncharges. On July 5 the Master applied accordingly to the navalauthorities and was handed a letter signed by the Naval Control ServiceOfficer in which he was informed that, if he wished to proceed to Marseillehe would be required to proceed into a British Port either at Aden orelsewhere, and that there the cargo of rice would be “ taken as contraband.”The Master thereupon decided to sell the cargo at Colombo, but on thesame day the cargo was seized by the local authority as contraband ofwar. At the instance of the Crown a writ for the condemnation of thecargo as good and lawful prize was issued. The writ was subsequentlyamended by the addition of a prayer for an order for the “ detentionand/or sale ” of the cargo. The cargo had, prior to the amendment,been sold' and realized a sum of Rs. 626,683. Of this amount a sum ofRs. 70,000 has been paid out to the Master on account of freight. Thebalance is now in Court.
On September 6, 1941, the agent for the Attorney-General gave noticeof discontinuance. This notice has now been withdrawn. The presentproceedings are by way of two motions, firstly by the shippers and theHongkong and Shanghai Banking Corporation for release to themof the proceeds of sale, and secondly by the owners and Master of thevessel, opposing the release to the above-mentioned claimants untilfreight has been paid,, and asking for an order for payment of such freight.The position taken up by the Attorney-General is that he consents tothe release of the proceeds of the sale to non-enemy claimants uponownership being established; subject to the rights of the shipownersat the date of the seizure. It should be mentioned that the Hongkongand Shanghai Banking Corporation appear in the matter as the indorseesof Bills of Lading in respect of three out of the twenty-three lotsof rice. –
The owners and Master claim the full freight agreed to be paid inarticle 3 of the charter-party, that is to say, £35,392 10s. less the sum ofRs. 70,000 which has been received out of Court from the proceeds of the
160MOSELEY S.P.J.—hi Prize-Goods ex s.s. " Maro Y ".
sale of the rice. Their Counsel, in the first place, relied upon the termsof the charter-party and particularly upon article 10 thereof whichexempts the owners from liability for loss and damage caused by theUsually " excepted perils He contends that the abandonment of thevoyage by the Master was due to restraint of princes; and that, althoughthe abandonment took place before the seizure of the cargo, it wasimpossible in the circumstances to continue the voyage. Counsel reliedupon the case of Nobel’s Explosives Company v. Jenkins and Company'where it was held that the risk of the cargo being seized, if attemptedto be carried further, amounted to restraint of princes. In the case ofBecker. Gray and Company v. London Assurance Corporation % cited byCounsel for the shippers, where the Master of a vessel had been advisedby the Admiralty that she should be in peril of capture, had she proceededon her voyage, and he had put into a neutral port to avoid that riskthe Master’s action was attributed by Lord Sumner to self-restraintand not to restraint of princes. No doubt it is true that in that casethe Master was influenced by the opinion of the Admiralty, but it seemsto me that in the present case the Master had been provided w.ith some-thing more than an opinion. He had been informed in no uncertainterms that if he proceeded on the intended voyage he would be requiredto proceed to a British Port where his cargo “ will be taken as contra-band ”. It seems to me that in this respect the Master of the “ Maro Y ”was in at least as strong a position as the Master of the vessel in Nobel’sExplosives Company v. Jenkins and Company (supra). I hold thereforethat the* continuation of the voyage was rendered impossible owing torestrain of princes.
What, then, are the rights of the Master and owners in these circum-stances? Under article 3 of the charter-party the full freight was to bepaid in sterling in London on telegraphic advice that Bills of Lading hadbeen signed. The advice was telegraphed on June 6. Is the positionof the parties to be regulated by the terms of the charter-party, or of theBills of Lading, or of the former read with the latter. The charter-partywas entered into between (the owners and the charterers; the Bills ofLading are signed by the Master on the one side and the individualshippers on the other. In the charter-party the charterers are describedas “ agents for Merchants ” and while that description is extremelyvague, it' will be observed that the freight agreed to be paid per tonis the same in the Bills of Lading as in the charter-party which, it isargued, indicates that the charterers were acting as agents for the shippers.Moreover, it would appear that the charterers had in mind the quantityof rice that was subsequently shipped. Even so, it does not seem to methat there is any satisfactory evidence which would lead me to theconclusion that the charterers were in fact the agents of the individualshippers whose names appear as signatories to the Bills of Lading inconsequence of which position the shippers would be bound by theterms of the charter-party. There is no reference to the charter-partyin the Bills of Lading. Nor has it been shown that the shippers were
aware of the existence of the charter-party.
1 (IS9V) 2 Q. B. D. S2K.
– (ISIS) A.C. 101.
161
MOSELEY S.P.J.—In Prize-Goods ex s.s. “ Maro Y
Carver’s Carriage by Sea (7th edition), section 160, page 245, deals withsuch a position as follows : —
“ When the bills of lading are in the hands of strangers to thecharter-party, either as original shippers or as indorsees to whom theproperty has passed, they show the contract under which the goodsare being carried; and the shipowner’s claims, exemptions, andliens on the cargo, given by the charter-party, are not preserved asagainst such shippers or indorsees, except so far as those terms of thecharter are expressly incorporated in the bill of lading.”
In the circumstances of the present case it follows that article 3 of thecharter-party merely provides, as between the charterers and owners,for the time and manner at and in, which freight shall be payable. Counselfor the owners, however, contends that the same result is reached ifone applies the terms of the Bill of Lading. The relevant articles ofthe latter are as follows : —
“Article 10.—Freight payable in advance or at destination is earnedby the Company whatever may be the fate of the ship or the goods.
Article 11.—By mutual agreement, the captain has liberty to dis-charge the goods at the nearest port, at his opinion, where the voyageshall be ended and freight earned, shippers having no right to claimfor compensation for delay, in the event of there being any impossi-bility to deliver them at port of destination by reason of blocus, badweather, restraints of princes, strikes and/or lock-out, epidemicdiseases, exposing the steamer to the delivery of a foul bill of health,or yet by cause of postal necessities, obligations of the Companyservices, governmental requisitions or any other case of force majeure.
In case of quarantine or sanitary orders, all expenses therefromrelative to goods will be reimbursed to the captain.”
To the printed form of the Bills of Lading there is an addendum datedSeptember 2, 1939, as follows: —
“ By extension, as necessary, of the liberties already expressed orimplicitly included in the present Bill of Lading, the ship is entitled,on consideration of the international events, to alter the customary'and proposed routes, the ports of call, transhipment, discharge ordestination.
Everything done by reason of what is specified herebefore, or inorder to satisfy same, not to be regarded as constituting a deviationand neither the Master nor Owners are to be held responsible for loss,damage, or expenses which may result therefrom, directly orindirectly.”
It is contended against the owners and Master that the latter is notentitled to seek the protection of the terms of the Bills of Lading inasmuchas it does not appear from his affidavit that he directed his mind thereto.Moreover, it would appear, it is said, that the only contract consideredby the owners and Master was that contained in the charter-party.The cabled instructions of the owners to the Master dated July 4 wereon the footing that freight had not been paid as provided by the charter-party. It is conceivable that circumstances might exist in which it
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MOSELEY S.P.J.—In Prize-Goods ex s.s. “ Maro Y
would be possible for the Master of a ship to show that, although he infact followed a procedure authorized by a charter-party, such procedurewas also within the terms of the Bill of Lading. In the present case,however, the Bills of Lading do not confer upon the owners a lien forfreight, such as it was the Master’s intention to exercise by virtue ofarticle 10 of the charter-party. It was not therefore the Master’s in-tention, in the contemplated selling of the cargo to recover freight, toexercise any power conferred upon him by the Bills of Lading.
The Bills of Lading provide that freight is payable at destination,which he expressed to be Marseille. Counsel for the owners argues thatin accordance with the terms of the addendum to the Bill of Ladingdated September 2, 1939, the ship was entitled “on consideration of theinternational events ” to alter the port of destination, and that in factthe Master did so, and made Colombo the port of destination. Thisseems to be a necessary corollary to my finding that the continuance ofthe voyage was rendered impossible by restraint of princes.
It seems to me that the Master’s conduct thereafter must be regulatedby article 11 of the Bill of Lading. He was entitled to discharge thecargo at Colombo. Such action, with the object of placing the goods insafe custody, was approved in Nobel’s Eocplosives Company v. Jenkinsand CompanyThat, however, was not the avowed object of theMaster in the present case.
Counsel for the Bank was inclined to. put the case against the Mastereven more strongly than was Counsel for the shippers. He viewed theaction of the master as a voluntary abandonment of the voyage withthe intention of performing an illegal act. In such circumstances, heargued, articles 10 and 11 of the Bills of Lading do not apply. I havealready expressed my opinion that the discontinuance of the voyagewas due to Restraint of Princes, and .that articles 10 and 11 of the Bills ,of Lading apply. The point for immediate decision is, upon considerationof these articles, to what extent, if any, the Master and owners areentitled to recover freight from the fund in Court. The articles inquestion since' they introduce conditions in favour of the owners andMaster must be construed strictly against them. Under article 11 theMaster, in certain circumstances, was entitled to discharge the cargoat the nearest port, say Colombo, where “ the voyage shall be ended andfreight earned ”. He did not, however, discharge the cargo at Colombo.He cannot therefore take advantage of the provisions of article 11.Article 10, however, seems at first glance to place the matter on a differentfooting. Counsel for the shippers argued that in the absence of com-pliance with article 11, the owners and Masters cannot set up article 10in their favour. Under this article freight payable at destination, asI have held it to be here, is “ earned ”, ship lost or not lost. In TheGreat Indian Peninsula Railway Company v. Turnbull‘ where thevessel was lost through negligence in navigation it was held thatmoney paid in respect of freight advanced could be recovered. Thisdecision is cited by Scrutton ( (14th edition) page 395, footnote (/) ) asauthority for the proposition that the clause “ ship lost or not lost ”only refers to losses through “ excepted perils ”. As Counsel for the* {1S9G) 2 Q. B. D. 326.2 S3 L. T. 323.
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MOSELEY S.P.J.—In Prize-Goods ex s.s. “ Maro Y
shippers put it, the position has arisen, not from the circumstanceswhich rendered impossible the continuation of the voyage, but from theMaster’s decision to carry out the instructions of the owners. Thisdecision has been described by Counsel for the Bank as a decision toperform an illegal act. The alleged illegality is on the footing that nolien for freight was in existence at the time of the proposed sale. I havealready indicated my view that the lien conferred by the charter-partyis inoperative as against the shippers who were not parties thereto.What is the position in regard to the lien by common law ? In ThePrins Der Nederlanden* Lord Sumner held that the carrier’s lien wasdetermined when the goods came into the marshal’s hands. Thatbeing so, it would seem that the Master’s lien, if any, ceased at the timeof seizure. Construing article 10 strictly against the owners and Master,as I feel I must do, I do not think that in the circumstances the freightcan be said to have been earned.
Freight proportional to the amount of voyage completed can only beclaimed if an express or implied agreement to that effect exists. InSt. Enoch Shipping Company, Limited v. Phosphate Mining Company"where the completion of the voyage was impossible, it was held that theshipowners were not entitled to the freight, either in whole, since theyhad not completed the voyage, or in part, since no new contract to giveand take delivery at a port short of the original destination could beinferred. I can find no circumstances, in the present case, from whichsuch an agreement may be implied.
It seems therefore that the only satisfaction, which the owners andMaster may be granted by this Court, is that which may be deemedproper “ by a rational application of fair and equitable considerations ”.The quotation is from the judgment of Sir Samuel Evans P. in The Juno(1916—p. 169) where the learned President went on to say “ The PrizeCourt has always claimed to exercise equitable jurisdiction, using thatterm in its broadest sense, and not in its more technical Chancerymeaning”. In a later judgment, viz., The lolo (1916—p. 206); Sir SamuelEvans quoted. Lord Stowell as saying in the case of The Friends3 “ Ifthe incapacity''of completing the voyage could be exclusively” (theitalics are mine) “ attributed to one of the parties, it would be properthat the loss would fall there; but the fact is that the calamity is commonto both, for both ship and cargo were equally effected by the blockade…. I think therefore that the loss should.be divided.”
There is no evidence before me upon which I can assess the amount offreight which ought to be allowed in the present case. I have beengiven to understand that there will be little difficulty in the way of theparties arriving at an agreement on this point. I propose, therefore,to refer the matter to the Registrar and the parties in order that theappropriate amount may be ascertained. The report of the Registrarwill then come before me for confirmation or such order as the circum-stances may require.
I make no order as to costs.
* (1021) A. C. To-t at 7S9- -*(1916) 2 K. B. D. 624.
3 2 Eng. P. C. 4S.