Revett v. Globe Navigation Co.

123 P. 459, 68 Wash. 300, 1912 Wash. LEXIS 1285

• Court: Washington Supreme Court
• Decided: April 30, 1912
• Docket: No. 9535
• Status: Published

Opinion

Crow, J.

This action, which was commenced by Ben Stanley Revett against Globe Navigation Company, Ltd., a corporation, to recover damages for the breach of a charter party agreement, has heretofore been in this court, 56 Wash. 550, 106 Pac. 176. After remittitur, a new trial was had, and findings, to which the plaintiff excepted, were made as follows:

“(1) That heretofore and on to wit: the 27th day of May, 1905, plaintiff and defendant entered into a contract of affreightment in words and figures set forth in paragraph 2 of plaintiff’s complaint herein, which said contract, among other things, contained, the following clause:

“ ‘Dangers of the sea. Fire, explosion, bursting of boilers and pipes, breakage of shaft, latent defects in boilers, pipes, machinery or hull, stranding, collision at sea, restraints of Princes or rulers, strikes and all other unavoidable accidents excepted.’

“(2) That the freight agreed to be delivered and delivered to the steamship Tampico on or before June 1st, was duly accepted by the defendant and¹ shipped, in accordance with said contract.

“(3) That on the 27th day of May, 1905, the time when the said contract between plaintiff and defendant was entered into, the steamship Eureka was not at the Port of Seattle, but was then engaged in a voyage from the Port of Seattle to ports in California and return to the Port of Seattle.

“(4) That said steamship Eureka returned to the Port of Seattle at 3 a. m. on June 20th, 1905, and that upon her return the defendant discovered certain latent defects in her boilers which were not known and could not have been discovered by the exercise of ordinary diligence at the time of the making of said contract of affreightment, which said defects rendered said steamship Eureka unseaworthy to undertake a voyage to Nome, Alaska, and return without extensive repairs being made to her said boilers; that her said condition, immediately upon the arrival in Seattle, was reported to the agent of plaintiff in the city of Seattle and also communicated to plaintiff, and the balance of the lumber was shipped north on an available vessel leaving the port of Seattle after said June 20th, 1905, and that the remainder of the cargo, to wit: certain machinery, went north on the second sailing of the steamship Tampico; that said cargo was shipped as aforesaid.

“(5) That until the return of the Eureka to Seattle on June 20th, 1905, defendant had no opportunity to discover the said defects in her boilers or to make repairs to the same, and did send a portion of said cargo on the steamship Olympia, and the balance on the steamship Tampico. To have shipped said cargo forward on the Eureka at the time specified in said contract would have jeopardized vessel and freight.”

Upon these findings, the trial judge held that the relation of carrier was not actually assumed by defendant; that it was entitled to the exemptions from liability contained in the clause set forth in finding one;' and that, owing to the condition of the boilers of the Eureka at the time she was to have sailed, the defendant was excused from taking plaintiff’s freight. Thereupon the action was dismissed, and the plaintiff has appealed.

Other portions of the charter party then considered material were quoted in our former opinion, but we did not then quote the clause providing for exceptions from perils of the sea etc., as it was not then under consideration. The cause is now before us for trial de novo, and two controlling questions are presented: (1) Did the exception clause exempt respondent from performing its contract? and (2) if it did not, what damages is appellant entitled to recover?

Findings requested by appellant and refused by the trial judge need not be here set forth, as we will state our own findings. The charter party, which was executed on May 27, 1905, called for two sailings by respondent’s steamships, one by the Tampico on or about June 1, 1905, and one by the Eureka on or about June 15, 1905. The first was made, but the second was abandoned. Respondent contracted to have the steamship Eureka at the port of Seattle on or about June 15, 1905, in seaworthy condition ready to receive and carry appellant’s freight. In the absence of any express stipulation to the contrary, the charter party carried an implied warranty on the part of respondent that the ship would then be in fit condition for the voyage. 3 Kent, Commentaries, 205.

The evidence shows that, on or about May 26, 1905, the steamship Eureka sailed for San Pedro, California, with a cargo of lumber and railroad ties; that she returned to Seattle with a cargo of cement, arriving about June 20, 1905; that during the voyage difficulties had arisen with her boilers, causing them to leak; that she was not then in fit condition to safely proceed on the contemplated voyage to Nome; that her boilers could have been thoroughly repaired within ten days, which would have enabled her to sail about July 1, 1905; that, instead of so repairing them, respondent, on June 21, contracted with the Pacific Coast Company, to carry a cargo of coal to San Francisco; that temporary repairs, requiring about two days, were made so that the ship might proceed to San Francisco; that while such temporary repairs were being made, the vessel was being loaded with coal, and that she went upon the San Francisco and Seattle run where she continued' for several months before permanent repairs were made.

Respondent contended, and the trial court held, that the exception clause applied to defects that occurred after the execution of the contract, and while the Eureka was at sea on the San Pedro voyage. Appellant contends that the exceptions applied only to such perils of the sea, defects in boilers, etc. as might occur after actual commencement of the contracted voyage from Seattle to Nome. Under the law and evidence, we conclude that appellant’s contention • must be sustained. Commenting on such exceptions in a charter party contract, Carver in the fourth edition of his treatise on Carriage by Sea, at § 148, says:

“But it seems that the exceptions do not apply to matters which may happen before the ship has entered upon the voyage dealt with by the charter party. So that if she were disabled by perils of the sea while still completing a voyage on which she was engaged at the time of chartering, the shipowner would not be excused by the exceptions.”

The same doctrine has in effect been announced in this ■ country. The Caledonia, 157 U. S. 124; The Carib Prince, 170 U. S. 655; The Indrapura, 178 Fed. 591. Under the charter party, it was respondent’s duty to have the steamship at Seattle on or about June 15, 1905, in fit condition to receive appellant’s freight and carry the samé to Nome. If respondent did not intend to assume liability for any possible breach of its contract that might result from accidents or injuries to the steamship during a previous voyage, it should have contracted against such liability. This it did not do. In The Caledonia, supra, the supreme court of the United States said:

“There was no exception in this bill of lading which in express words exempted the shipowner from furnishing a seaworthy vessel at the commencement of the voyage. As the exceptions were introduced by the shipowners themselves in their own favor, they are to be' construed most strongly against them, and we perceive no reason why the obligation to furnish a seaworthy vessel should be held' to have been contracted away by implication. Their meaning ought not to be extended to give the shipowner a protection, which, if intended, should have been expressed in clear terms.”

In the opinion of the United States circuit court in The Caledonia, 43 Fed. 681, 685, Mr. Justice Gray said :

“In every contract for the carriage of goods by sea, unless otherwise expressly stipulated, there is a warranty on the part of the shipowners that the ship is seaworthy at the time of beginning her voyage, and not merely that he does not know her to be unseaworthy, or that he has used his best efforts to make her seaworthy. The warranty is absolute that the ship is, or shall be, in fact seaworthy at that time, and does not depend on his knowledge or ignorance, his care or negligence.”

Under the authorities, our construction of the contract is, that respondent was under an obligation to have the steamship in the port of Seattle on or about June 15, 1905, in fit condition and ready to carry appellant’s freight to Nome; and that, in the absence of any express exceptions in the charter party, which would specifically apply to perils of the sea and accidents to machinery that might occur on a previous voyage, their occurrence would not relieve respondent from the obligation imposed upon it. In their brief, counsel for respondent say:

“Where a charter party provides that a vessel shall proceed to a port without cargo, or with cargo for owner’s benefit, and take a cargo on board there, and then proceed on a voyage to a port of discharge, the exception of the perils of the sea and so forth includes not only the voyage with the cargo on board, but also the preliminary transit to the port of loading. Barker v. M’Andrew, 34 L. J. C. P. 191; 2 Asp. 205; 18 C. B. (N. S.) 759; The Carron Park, 15 P. D. 203; Bruce v. Nicolopulo, 11 Exchequer, 129. The obligation imposed by the decision in the Caledonia and Cardo Prince does not attach until after the vessel has actually commenced the voyage.”

An examination of the English cases which respondent’s counsel thus cites will show that they are not applicable to the facts before us. In Barker v. M’Andrew, 34 L. J. C. P. 191, the charter party, • containing the usual exceptions, stipulated that the steamer Smyrna, then at Newcastle, should with all convenient speed proceed to the usual place of loading, there load, proceed thence to Alexandria, Egypt, and there discharge the cargo on payment of the freight. It was conceded that the exceptions were available to the shipowner at all times after the voyage had commenced, but the question to be determined was whether the voyage commenced at Newcastle where the vessel was at the date of the charter party contract, or whether it was to commence at the place of loading. As the charter party expressly stipulated that the owner was to cause the vessel to proceed from Newcastle, it was held that the contracted voyage commenced at that place, and the exceptions were available to the owner at all times thereafter. After the voyage from Newcastle had commenced, and after the ship had secured a portion of her cargo at the place of loading, she was hindered and prevented by dangers .of the sea, then happening, from receiving and loading the remainder of the contracted cargo. This caused a delay to the damage of the charterer, but it was held that the dangers of the sea had intervened after the commencement of the voyage from Newcastle, and that under the exceptions the owner of the vessel was relieved from liability.

In The Carron Park, 15 P. D. 203, the syllabus, which states the substance of the opinion, reads as follows:

“By a charter party it was agreed' that the defendants’ steam vessel should go to New Fairwater, and there load from the agents of the plaintiffs a cargo of sugar and proceed therewith to Greenock, the defendants not to be responsible ‘for any act, neglect, or default whatsoever of their servants during the said' voyage.’ The agents commenced loading the vessel with sugar belonging to the plaintiffs, and during the loading the cargo was damaged by water through a valve in the engine-room having been negligently left open by one of the engineers of the vessel:—

“Held, that the term ‘voyage’ included the period¹ of time during which the vessel was being loaded, and that consequently the damage was within the exception and the defendants were not liable.”

In Bruce v. Nicolopulo, 11 Exch. 129, the charter party agreement was that the owners of the ship Gipsey should proceed to Constantinople, thence to Galatz or Ibralia as ordered by the charterer’s agent where she was to receive the contracted cargo, and it was held that she was on the contracted voyage from the time of leaving Constantinople. If the charter party now before us had stipulated that respondent should cause the steamship Eureka to proceed from San Pedro, California, to Seattle, to there load appellant’s freight and proceed to Nome, and had the injuries to her boilers occurred while she was proceeding from San Pedro to Seattle, it might then be held that they had occurred after the commencement of the contracted' voyage, and that they came within the exceptions. We have no such case before us; the contemplated voyage was to commence at Seattle; the injuries to the boilers occurred before its commencement, and were not within the exceptions of the contract. This being true, respondent is liable to appellant for any damages he may have sustained as the result of the breach of the contract.

Respondent contends the evidence is not sufficient to show that it knew of appellant’s contract to complete the dredge at Nome on or before September 1, 1905, and that appellant’s contract was not within the contemplation of the parties to the charter party when it was made. This contention cannot be sustained. Appellant’s position on this issue is supported by the clear preponderance of the evidence. Appellant had entered into a prior charter party with another steamship company to carry this same freight. That contract, as respondent was then advised, was cancelled in order that appellant might contract with respondent for earlier sailings and thus save time, which was of vital importance. Appellant at the time informed respondent of his contract with the Seward Peninsular Mining Company for the building of the dredge, that he was under bond to have it completed by September 1, 1905, and that prompt delivery of the freight was of such material and vital importance as to make it the essence of the contract.

The only remaining question is the amount of damages appellant is entitled to recover. He filed a bill of particulars setting forth numerous items of damages, amounting in all to $36,333. The evidence, which is voluminous, cannot be detailed in an opinion of reasonable length. Were it not for the fact that appellant’s contract to complete the dredge on ,or before September 1, 1905, was within the contemplation of the parties, when the charter party was executed, it might be seriously questioned whether appellant could recover any of the damages which he claims under the facts shown. We conclude he can only recover upon' the first item contained in his bill of particulars, which is based upon his expenses incurred in retaining an idle crew of employees during a period of delay caused by respondent’s breach. The elementary rule for measuring damages is that compensation only shall be made for losses actually sustained. Ordinarily such losses to become the basis of an award must be the direct and proximate result of the breach of the contract, as damages of a remote or speculative character should not be allowed. In some instances, however, pecuniary losses may arise out of special circumstances or conditions which were within the contemplation of the parties when executing their contract. This is such a case, as it was comtemplated that delays in shipment would in all probability result in serious loss to appellant. In the leading English case of Hadley v. Baxendale, 9 Exch. 341, Alderson, B. said:

“Where two parties have made a contract which one of them has broken, the damages which the other party ought to receive in respect of such breach of contract should be such as may fairly and reasonably be considered either arising naturally, i. e., according to the usual course of things, from such breach of contract itself, or such as may reasonably be supposed to have been in the contemplation of both parties, at the time they made the contract, as the probable result of the breach of it. Now, if the special circumstances under which the contract was actually made were communicated by the plaintiffs to the defendants-, and thus known to both parties, the damages resulting from the breach of such a contract, which they would reasonably contemplate, would be the amount of injury which would ordinarily follow from a breach of contract under these special circumstances so known and communicated.”

What damages resulting to appellant could we reasonably infer were contemplated by the parties? Manifestly they would be such damages only as the delay in shipment would impose upon appellant in the completion of his contract to build the dredge. The evidence is that the second shipment was partially made on the steamship Olympia about July 26, 1905. Had respondent permanently repaired the Eureka, it could have proceeded to Nome on or about July 1st. This respondent failed to do. As a result, appellant’s crew was compelled to remain idle at Nome awaiting materials necessary to proceeding with the construction of the dredge, and appellant was compelled to retain this idle crew on pay and expense, about fifteen miles from Nome, where they could obtain no other employment, and where appellant was compelled to hold them until the freight arrived.

It is shown that a delay occurred in completing the dredge, and that appellant thereafter incurred expense in collecting his final payments from the Seward Peninsular Mining Company. He has included in his bill of particulars a claim for damages on this account. We conclude, however, that, under the circumstances shown, this and other included claims are too remote and speculative to form a basis of recovery. The Seward Peninsular Mining Company did delay final payment, but it is not at all clear a like delay with resulting expense to appellant would not have occurred in any event, without regard to any wrongful act of respondent. The evidence shows that the enterprise for which the Seward Peninsular Mining Company had the dredge constructed resulted in failure; that the company nevertheless made the final payment; that it later went into the hands of a receiver; but that it could not or at least did not make the final payment until it had received the necessary funds by contribution from its stockholders and trustees. The evidence does show without dispute that, by reason of the delay in shipment, appellant’s crew of twenty employees remained idle for a period of at least twenty-five days; that four teams employed by appellant remained idle the same time; that the daily wages and expenses of each man whom appellant was compelled to pay, was $7.46; that the daily cost and expense of each team was $18, and that appellant’s total loss on account thereof was $5,530. This sum he is entitled to recover.

The judgment is reversed, and the cause is remanded with instructions to enter judgment in appellant’s favor for $5,-530, with six per cent interest thereon from the date of the commencement of this action. Appellant will also recover his costs in the superior court and in this court.

Dunbar, C. J., Morris, and Ellis, JJ., concur.