Opinion
May 8, 1929.
Charles H. Tuttle, U.S. Atty., of New York City (Harold F. Birnbaum, Sp. Asst. U.S. Atty., of New York City, of counsel), for the United States.
John H. Stone and Howard M. Long, both of Philadelphia, Pa., Burlingham, Veeder, Fearey, Clark Hupper, of New York City, Eugene Underwood, Jr., and Roscoe H. Hupper, both of New York City, of counsel), for respondent.
In Admiralty. Libel by United States, as owner of the tank steamer Bald Hill, to recover demurrage against the Atlantic Refining Company, charterer. Libel dismissed.
The American tank steamer Bald Hill, of 4,600 tons net register, was chartered by the libelant to the respondent under a written charter party dated September 5, 1924. By the terms of the charter, the vessel undertook to proceed to one safe United States gulf port, or so near thereto as she may safely get (always afloat), and there load a full and complete cargo. The charterer was to have the privilege of loading at:
"(Atreco and Port Arthur or Sabine to count as one port)
"(Smith's Bluff and Sabine or Port Arthur to count as one port)
"(Beaumont and Sabine, to count as one port)
"(Pasadena or Sinco and/or Texas City, to count as one port)
"It being understood that if loading be at Atreco or Smith's Bluff or Beaumont or Pasadena or Sinco vessel is to load to a safe draft at Master's discretion completing, if necessary, at the above respective port or place. * * *"
The following clauses are pertinent:
"5. The Steamer shall load and discharge at a place or at a dock or alongside lighters reachable on her arrival, which shall be indicated by Charterer, and where she can always lie afloat, any lighterage being at the expense, risk, and peril of the Charterer. Charterer has the right of shifting the Steamer at port of loading and/or discharge from one berth to another on payment of all expenses incurred. Time used in shifting to count.
"6. The laying days shall commence from the time the Steamer is ready to receive or discharge her cargo, the Captain giving six hours' notice to the Charterer's Agents, berth or no berth.
"7. * * * A: Orders for loading port to be furnished Owner's or their agents before vessel is ready to leave her last port of discharge prior to entering upon this charter."
"20. Steamer to be loaded and discharged within 120 running hours (Sundays and Holidays excepted unless used), weather permitting, provided the steamer can load and discharge at that rate."
"21. The demurrage shall be payable at the rate of forty dollars ($40.00) U.S. Currency per running hour but if by accident a delay should take place at port of loading or discharge by fire or a breakdown of machinery of Charterer, the rate of demurrage shall be reduced to twenty dollars ($20.00) U.S. Currency per running hour for time so lost. If steamer is held in port or sent into port of refuge owing to enemy activity, no demurrage shall be payable in respect of delays thus caused."
"26. Charterers agree to pay any towage and pilotage incurred in connection with the shifting of the steamer, to complete cargo, from Beaumont or Atreco or Smith's Bluff to Sabine or Port Arthur; or from Sinco or Pasadena to Texas City; time used in shifting not to count as part of the lay-time."
Pursuant to charterer's instructions to load to a safe draft at Smith's Bluff from the terminal of the Pure Oil Company, and to complete her loading at Port Arthur, the vessel sailed from Baltimore on September 13, 1924. In order to proceed from the high seas to Smith's Bluff, it is necessary to navigate Sabine Pass and the Port Arthur Ship Canal to Port Arthur, thence through the Sabine Neches Canal to the Neches river, and thence up the Neches river to Smith's Bluff. The Port Arthur Ship Canal is about 26 feet in depth and 250 feet top width. The Sabine Neches Canal has a top width of approximately 180 feet and a depth of 25 feet. The distance from Sabine Bar to Smith's Bluff is approximately 38 miles.
On September 16th, the motorship Isonzo was sunk in the upper reaches of the Sabine Neches Canal, between Port Arthur and the Neches river, completely blocking the channel, so that no vessels could pass from Port Arthur to Smith's Bluff from September 16th until October 7th, on which day traffic down the canal was opened, the first vessel passing up on October 8th. Before the Bald Hill arrived off Sabine Pass, there were communications between the parties, but no change in their contract obligations as expressed in the charter party; nor was any place other than Smith's Bluff designated by the charterer for loading.
On September 20th, at 3:06 p.m., the Bald Hill arrived and anchored at Sabine Bar, and on the same day gave notice to the Pure Oil Company, at Smith's Bluff, of her readiness to receive cargo as of 4:30 p.m. September 20th. In response to this, the agent for the Pure Oil Company at Smith's Bluff advised the ship's agent at Port Arthur:
"Will not accept tender of abovenamed ship until tied up at our docks at Smith's Bluff, Texas, ready to receive cargo."
Because there was no anchorage available at Sabine or Port Arthur, the vessel remained at anchor off Sabine Bar until October 2d, when she proceeded to the Gulf Refining Company's dock at Port Arthur to take bunker oil. No notice of arrival at Port Arthur, or of readiness to load there, was given to charterer's agents. The vessel remained at Port Arthur until October 8th, when she proceeded up the canal to Smith's Bluff, being the second vessel to proceed north to the Neches river.
The anchorage off Sabine Bar is an open roadstead, without protection of any kind, and the place where the ship was anchored was approximately 3½ miles from shore. There is no suggestion that cargo could have been safely loaded at this point, and it is quite apparent that it could not have been.
Owner's claim for demurrage is predicated upon the validity of notice of readiness to receive cargo, given while the vessel lay at anchor off Sabine Bar. Respondent contends that lay days did not begin until the vessel was ready to receive cargo at Smith's Bluff, when a second notice of readiness to load was given.
The designation of Smith's Bluff as the loading point fixed the primary obligation of the vessel to proceed there before announcing arrival and readiness to load. Until she "arrived," no obligation could arise to furnish cargo. But here, as in so many cases, the obligation to proceed to the place of loading is qualified by the phrase, "or as near thereunto as she may safely get (always afloat) and there load * * * a full and complete cargo." In this case, the clause appears from the context to have reference to the port, not merely to a place of loading within the port, and by virtue of the subsequent designation Smith's Bluff and Port Arthur are to count as one port for the purpose of loading. Upon the evidence it must also be found that, when the vessel arrived off Sabine Bar, she was unable to proceed further toward her destination until permission was secured to proceed to Port Arthur on October 2d, there to take bunkers. Thereafter she was prevented by the wreck of the Isonzo from proceeding further to Smith's Bluff until the first opportunity offered on October 8th.
The question presented is: How far may the clause, "as near thereunto as she may safely get," extend the right of the vessel to give notice of arrival, and thus to start the running of lay days? The interpretation of this clause by Lord Campbell in Schilizzi v. Derry (1855) 24 L.J.Q.B. 193, 4 E. B. 873, which was appoved in Metcalfe v. Brittania Iron Works (1876) 1 Q.B.D. 613, was that the meaning must be that the vessel should get within the ambit of the port, though she may not reach the harbor. In Dahl v. Nelson (1881) 6 App. Cas. 38, a decision of the House of Lords, it was doubted whether the language which Lord Campbell used was quite the most accurate to express his idea, and in the latter case decision went on the ground that the vessel, being prevented from entering the docks where the cargo was to be discharged, had come as near thereto as she could safely get, and, being at a place off the docks where it was both reasonable and customary to unload ships, she had completed her voyage. In reaching this conclusion it was taken as established by the English decisions that, if the voyage is interrupted by an impediment placed in the way of the ship at a distance from the primary place of discharge, she cannot be held to have got "as near thereto as she could safely get." This decision of the House of Lords was cited with approval in The Gazelle and Cargo, 128 U.S. 474, 9 S. Ct. 139, 32 L. Ed. 496.
In the absence of express agreement to that effect, a vessel cannot be held to have arrived at a loading or at a discharging port, "or as near thereunto as she can safely get," when lying in an open roadstead where cargo is not customarily laden or discharged, and where it is obviously unsafe to attempt such an operation, for this would be to imply agreement inconsistent with the mutual obligations of the parties. It would be most unreasonable to imply agreement that the charterer should be responsible for delay in loading the vessel before she had come to a place where the freight could be safely put on board. Readiness to load implies ability to safely receive the cargo, if other words do not destroy the implication. If in the preparation of commercial contracts the parties leave to implication the limitations which they must have intended should control the generality of such language as the clause here under consideration, the courts must assume that they intended to agree upon what was fair and practical in a commercial sense, with a view to the accomplishment of the business on foot. Reading the contract thus, I find nothing to warrant notice of readiness to load when the vessel lay anchored off Sabine Bar, 3½ miles from shore, in an open roadstead without shelter from the sea.
The American decisions which bear analogy in point of fact to the case at bar have been decided upon charter provisions fixing the place of arrival or the commencement of lay days, and apparent confusion has resulted from judicial efforts to deduce intention from varying charter provisions not expressly directed to the point under discussion. See Judge Rose's dissenting opinion in The Lake Yelverton, 300 F. 47 (C.C.A. 4), with which compare his opinion in F.S. Royster Guano Co. v. United States, 18 F.2d 469 (C.C.A. 4).
Brief reference will be made to the cases which may perhaps be regarded as nearest to the point. In Mencke v. Cargo of Java Sugar, 197 U.S. 248, 23 S. Ct. 86, 47 L. Ed. 163, the berth designated for discharge was the Arbuckle Sugar Refinery, located on the Brooklyn shore of the East River, above the Brooklyn Bridge. Because the height of her masts was such that the vessel could not pass under the bridge, the cargo was discharged on a dock below the bridge, presumably a safe and proper place of discharge. It was held that, having proceeded as near to the discharging point as she could safely get, the vessel was not required to carry the cargo farther.
In Yone Suzuki v. Central Argentine Ry., 27 F.2d 795, 802 (C.C.A. 2), the charter described a voyage "to Buenos Aires, or as near thereunto as she may safely get and always lie afloat and there deliver a full and complete cargo." But another clause prescribed lay days for discharging as "commencing from twenty-four hours after arrival at or off discharging port, whether steamer is in berth or not." It was held: "That such explicit language as `at or off' the `discharging port' made Buenos Aires Roads the place where the lay days began to run."
In Thomas Bell Co. Ltd. v. Stewart, 31 F.2d 44 (C.C.A. 5), the charter was for a voyage from New Brunswick to Miami, Fla. Notice of readiness was served by the master when the ship passed the customs and lay at Miami Roads, 6 miles from Miami harbor. Before lay days expired, the channel leading to the harbor was blocked by the sinking of another vessel, so that it was impossible for the ship to enter. The charter provided that lay days for loading and discharging should commence "from the time the Captain reports his vessel ready to receive or discharge cargo, having fulfilled Custom House formalities, whether berth or cargo available or not." Having passed the customs, the agreement of the parties controlled the commencement of lay days upon the giving of notice, and it was accordingly held that the consignee was liable for demurrage. Cureton Lumber Co. v. Hammond Lumber Co., 29 F.2d 973 (C.C.A. 5), which arose from the same accident, went off on the ground that the blocking of the channel was a hindrance beyond the control of either party, mutually excepted by the terms of the charter.
It may be that delay in reaching the loading point was so extended as to be entirely unreasonable, and therefore so far in conflict with the presumed intentions of both parties as to have justified the contention that it could no longer be binding on either. But that question does not arise, because the vessel insisted upon performance, as did the charterer, and performance was had by both. For the delay in performance, the loss must fall upon the ship, because she had not "arrived" when the notice of readiness to load was first given. No notice of arrival at Port Arthur, where the vessel could have been safely loaded, having been given, the lay days did not commence until she arrived at Smith's Bluff. Counting lay days from that time, no demurrage is due under the terms of the charter, and accordingly the libel must be dismissed.