Scottish Court of Session Decisions

Messrs Hugh Hogarth & Sons, the managing owners of the steamship “Baron Fairlie,” raised an action against the Leith Cotton Seed Oil Company, concluding for, inter alia, the sum of £20, 13s. 6d.

The following narrative is taken from the opinion of Lord Ardwall:—The pursuers in this case are managing owners of the s.s. ‘Baron Fairlie’ of Ardrossan, and for the purposes of this action represent the whole owners thereof. The defenders are a company carrying on the manufacture of cotton seed oil and cotton cake, and for the purposes of this action represent the receivers of a cargo of cotton seed, bone meal, and Kurdee cake carried by the said vessel from Bombay to Leith under bills of lading of which No. 10 of process is a specimen.

By the said bills of lading the pursuers undertook to deliver the cargo ‘from the ship's tackles (where the ship's responsibility shall cease) at the aforesaid port of Leith.’

The cargo consisted of 52,424 bags of cotton seed, 18,280 bags of bone meal, and 727 bags of Kurdee cake.

These bags were distinguished from each other by nineteen different varieties of marks. The cargo was shipped under twenty-seven separate sets of bills of lading representing different portions thereof, and there were eight consignees or receivers of the cargo. The pursuers having had considerable difficulty in delivering from the s.s. ‘Gloamin’ a cargo of a somewhat similar nature but not so much mixed, intimated to the defenders before the ship arrived that the entire cargo would probably have to be treated as an ordinary general cargo to be landed by the ship's porters or stevedores, and assorted in shed, the cost of ‘shedding’ to be paid by the defenders. In reply the defenders gave a note of the bags of cotton seed consigned to them, and intimated that all the bags bearing their marks would be weighed and sampled separately on board the steamer, and would be loaded on to the lorries direct ex ship by their own porters. They further intimated that if the seed was put into shed by the pursuers' men, it would be entirely at the pursuers' own expense. Some further correspondence followed, which shows very clearly the positions taken up by both parties from the first. The ‘Baron Fairlie’ arrived in Leith on 5th February 1907, and the discharge of the cargo started at ten o'clock that day. The pursuers refused to deliver the cargo into the defenders' lorries, which were ready to receive it at the ship's side, and landed the whole of it into shed and assorted the various bags there according to their marks and the bills of lading, and delivered their portion of the cargo to the defenders out of the shed. In the present action they seek to recover, inter alia, the defenders' proportion of the expense of putting the cargo into shed and weighing it there, amounting to 6d. or 7d. per ton, or in all £20, 13s. 6d. It ought here to be mentioned that the present is a test case, and represents much more than that amount.

The defenders maintain that under the contract between them and the pursuers contained in the bills of lading they were entitled to delivery from the ship's tackle at the ship's side. The pursuers maintain

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that notwithstanding the clause in the bill of lading they were entitled to ‘shed’ the goods in respect of an alleged custom of the port of Leith which is so set forth in articles 3 and 4 of the condescendence and the answer to the first statement of facts for the defenders. The result of these averments is very fairly stated by the Lord Ordinary in his interlocutor to this effect—

‘That it is the custom of all ships discharging at the port of Leith mixed or general cargoes with a variety of distinguishing marks, similar to that carried by the “Baron Fairlie,” and deliverable to a number of receivers, to send the cargo into shed and thereafter assort the several parcels according to the various marks at the expense of the said receivers.’

The defenders pleaded, inter alia—“(1) The pursuers' averments as to the custom of the port of Leith being irrelevant, the same should not be remitted to probation.”

On 22nd January 1908 the Lord Ordinary ( Salvesen) repelled the first plea for the defenders and allowed a proof.

Opinion.—[ After narrating the nature of the action and the circumstances in which it was raised]—The defenders do not admit the custom, but contend that if it exists it is not binding upon them, on the ground that it is inconsistent with the bills of lading under which they took delivery. In particular, they refer to the clause with reference to delivery from the ship's tackles.

Had the question here raised been new, I think it would have been by no means an easy one; but I cannot distinguish the facts of the present case from those which occurred in Marzetti v. Smith, 49 L.T. (N.S.) 58. The decision of the Court of Appeal is one of high authority, because of the eminence of the Judges who took part in it, and it has never been questioned in England during the comparatively long period that has since elapsed. Even, therefore, if I saw occasion to differ from the reasoning of the learned Judges, I should be very slow to disregard the decision, as I was asked by the defenders' counsel to do. As matters stand I see no reason whatever for questioning the soundness of the decision, and if so it practically settles the present case in favour of the pursuers. It was there held that in the case of a mixed cargo carried under bills of lading with a clause as to delivery identical with the one with which I am now dealing, the shipowner was not bound to discharge the cargo, as the consignees requested him, direct into lighters, but was entitled at their expense to have it put upon the quay and assorted there. It was suggested that the charges for which the consignees were held liable in Marzetti's case were the charges of the dock company in whose sheds the goods were landed, while the charges that are here sought to be recovered are those incurred by the ship in landing and assorting the goods. As the dock company, however, undertook the landing of the goods in Marzetti's case, I think the services for which they charged were substantially the same, at all events in part, as those for which the pursuers now claim to be reimbursed. The case at all events settles that the obligation to deliver from the ship's tackles is not inconsistent with the right of the shipowner, where a local custom to that effect exists, to land and shed the goods so that they may be assorted with more leisure than is compatible with the rapid discharge of a ship carrying a mixed cargo, and at present I must assume that the pursuers are in a position to prove the custom averred.

“A separate point was raised with regard to the expense incurred to the consignees in weighing the cargo. According to the sample bills of lading produced, the freight was payable in Leith on nett weight delivered, and, apart from custom, the cost of weighing would probably have fallen upon the ship. This was so decided in the the case of Coulthurst, L.R., 1 C.P. 649. Willes, J., in giving his opinion, said—‘In the absence of any custom to govern the matter, the person who wants to ascertain the quantity must incur the trouble and expense of weighing. It is by no means an uncommon thing to have goods weighed on board, but I never heard of the merchant being called upon to pay for it.’ The shipowner there had attempted to prove a custom under which the consignee was bound to pay for the expense of weighing, but the jury negatived the existence of any such custom. In the present case the point does not, in my opinion, really arise. The defenders do not claim from the pursuers the ordinary expense of weighing the cargo on board ship, but only the extra expenses of weighing caused by the ship landing the cargo instead of delivering it from the ship's tackles. The liability for this extra expense seems to me to depend on exactly the same considerations as the liability for the landing and shed charges with which I have already dealt. I shall accordingly repel the first plea-in-law for the defenders and allow parties a proof of their averments.”

Proof was thereafter led, the import of which appears from Lord Ardwall's opinion infra.

On 20th March 1908 the Lord Ordinary pronounced the following interlocutor:—“Finds that the pursuers have failed to prove that it is the custom of all ships discharging at the port of Leith mixed or general cargoes, with a variety of distinguishing marks similar to that carried by the ‘Baron Fairlie,’ and deliverable to a number of receivers, to send the cargo into shed, and thereafter assort the several parcels according to the various marks, at the expense of the said receivers: Finds that in terms of the bill of lading, to which the defenders acquired right, they were entitled to require that the goods therein contained should be delivered to them from the ship's tackles, unless upon the footing of the shipowners paying the extra charges caused by landing the cargo into shed and thereafter assorting it, including in the said charges the extra cost incurred by the defenders in weighing the said cargo in shed: Finds further, that after deducting

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said charges and expenses, the amount of freight due to the pursuers amounts to the sum of £4, 3s. 9d., for which sum decerns against the defenders, with interest as concluded for.”

Opinion.—In this case, after hearing parties in the procedure roll, I repelled a plea to the relevancy, and in doing so expressed an opinion that if the pursuers succeeded in establishing their averments of custom they would be entitled to decree for the sum concluded for. In the interlocutor pronounced, however, all questions are left open, and I do not consider myself foreclosed from reconsidering, in view of the fuller information and argument now before me, any of the points to which I adverted in my previous opinion.

The action is a test one, and raises the general question whether in the case of a mixed cargo, such as the ‘Baron Fairlie’ carried from Bombay to Leith, it is the recognised custom of the port of Leith that the extra charges incurred in landing the goods into shed and there assorting them fall to be paid by the shipowners or by the receivers of the various parcels of which the cargo consists. The first question is one of fact, namely, whether such a custom has been proved to exist; the second, whether, assuming its existence in the ordinary case, it is not inconsistent with the terms of the contract between the parties as contained in the bills of lading.

The proof discloses that the ‘Baron Fairlie’ was not loaded under a charter—party. She is a vessel carrying about 7000 tons cargo, and she was sent by her owners to Bombay after only cargo to the extent of 4500 tons had been booked. Instructions were given by the owners to their agents to secure such other parcels of goods as they could at the best rates of freight obtainable, and this they did with such success that in the end she obtained a full cargo. The cargo consisted of three commodities—cotton seed, bean meal, and a small quantity of Kurdee cake, these commodities being easily distinguishable from each other by the size and appearance of the bags which contained them. The cotton seed, however, was of many qualities, which were indicated by different marks upon the bags. For the most part each bill of lading represented a homogeneous parcel, but in one case, where 2958 bags were shipped under one bill of lading, there were three different marks on the bags, and in another case two different marks were covered by the same bill of lading. Although there were twenty-seven bills of lading, the actual receivers of the cargo numbered only eight, and this was known to Messrs Henderson & M'Intosh before the vessel's arrival in Leith. This firm acted as the agents for the ‘Baron Fairlie’ at the port of discharge, and they had also acted in the same capacity for about two-thirds of the steamers which have carried cargoes of a similar kind from India to Leith during the five years that this trade has been established. The majority of these cargoes were of cotton seed only, or cotton seed with a small proportion of lentils; and where there were different marks upon the bags, these were as a rule not so numerous as to occasion any difficulty in the discharge, more especially as the receivers did not usually exceed two or three in number. Accordingly, with one exception, all the cargoes arriving prior to the ‘Baron Fairlie’ were delivered to the receivers from the ship's tackles. In the case of the ‘Rillgrove,’ Henderson & M'Intosh, owing to the number of marks and receivers, directed the cargo to be put into the shed alongside the ship and there assorted, so as to facilitate the rapid discharge of the vessel, and prevent any mistakes in the delivery of the cargo; and the receivers, after some friction, acquiesced in the extra cost of shedding and sorting the goods being charged against them. It was represented for the defenders that this was the result of an arrangement, but I do not think that is made out. At the same time there are cases in which receivers find it to their advantage to have their goods put into shed, even when they require to pay the landing charges, as they may not have available accommodation in their own warehouses, or may desire to sell the goods while they are lying in shed.

In the subsequent case of the s.s. ‘Gloamin,’ which arrived in Leith on 9th March 1906 with a cargo of 3140 tons of cotton seed and bone meal, the bags of which had fifteen different marks, delivery was given to the receivers from the ship's tackles. Owing to the difficulty, however, of sorting out the different marks in the ship's hold or on deck, the discharge occupied at least twice as long as if the cargo had been a homogeneous one—a serious matter for vessels of such large tonnage. Accordingly, when Mr M'Intosh received information as to the character of the cargo carried in the ‘Baron Fairlie,’ he resolved not to expose that vessel to similar risk of detention, and before her arrival he intimated to all the receivers, including the defenders, that the cargo would be treated ‘as an ordinary general cargo, i.e., it will be landed by our porters and/or stevedores, and selected in shed, the cost of which will of course be for your account.’ The defenders, who were consignees of over 10,000 bags, protested against this, stating that they would take the cotton seed direct ex ship as usual, and that if the seed was taken from the ship and the marks separated in shed, the extra expense must be borne by the ship. Parties adhered to their respective positions, the defenders sending down porters to receive the cargo consigned to them, and the shipowners landing the goods in the shed notwithstanding by means of a gang of stevedores employed by them.

The discharge of the ‘Baron Fairlie’ was accomplished in the remarkably short period of twenty-seven working hours, as compared with seventy-one hours occupied in discharging the ‘Gloamin,' a vessel less than half her size. The shipowners were thus amply justified in their own interests in adopting this method of discharge, and the defenders do not contest their right to

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do so. As the bills of lading, however, provided that the cargo was to be delivered from the ship's tackles on payment only of the freight specified, it clearly falls upon the pursuers to establish a custom by which they are warranted in charging the extra expense against the receivers; and I shall now proceed to consider the evidence by which they claim to have done so.

Parties are agreed that in the ordinary case, under such a bill of lading as this, the shipowners pay the stevedores by whom the goods are attached to the ship's tackles, and put on the ship's deck or over her rail, while the consignees pay the porters by whom delivery is then taken. They are also agreed that where the vessel falls to be discharged as fast as the cargo can be delivered, if the consignee's porters are not in attendance, or are not able to take delivery as fast as it is tendered by the ship, the shipowners have the right of landing the cargo into shed, and charging the extra expense against the consignees. This is obviously in the interest of the consignees, who would otherwise have to pay demurrage. The defenders, however, say that they are entirely unaware of any custom entitling the ship to take this course where they are ready and willing to take delivery as fast as it can be given from the ship's tackles; and it is this contention chat the pursuers have to meet. In the case of vessels belonging to regular lines trading between foreign ports and Leith, and which as a rule carry a miscellaneous cargo, consisting of a great variety of commodities, it is, I think, proved that the general custom is for the ship to discharge the goods into shed and deliver them there to the consignees. In such cases the consignees, although not invariably, pay a sum in addition to the freight in name of landing charges. Messrs Currie and Gibson & Company, who have regular lines to near Continental ports, make no express charge for landing, and in other cases the actual cost of such landing (6d. or 7d. per ton) is not debited to the consignees, but a regular charge of 3d. per ton is made against them, which would point to the custom having originated in a compromise. Even where the full charge is made, as it is by Messrs Thomson and Cormack, under bills of lading, which in this matter are comparable with the bills of lading held by the defenders, the evidence rather suggests that the receivers acquiesce in paying these charges, because it might cost them more to have porters in attendance to receive small consignments, since they might have to wait for considerable periods before the goods were brought up from the ship's hold. But even general ships owned by the various shipping lines will in some cases deliver considerable parcels direct from the ship's tackles at the consignees' request, a practice which is equally consistent with such delivery not interfering with the rapid discharge of the steamer, as it is with the shipowner recognising the right of the consignees to take delivery in this manner. What is, however, of much greater importance is that, apart from the case of the ‘Hillgrove,' it has not been proved that in any case the owners of a ship carrying miscellaneous cargo have refused to deliver to the consignees from the ship's tackles when the latter sent their porters so to receive the cargo.

The trade with the United States, which, as regards the external appearance of the commodities carried, is most comparable to the Indian trade, stands on a different footing. When the trade was first started about twenty-eight years ago, delivery was always made from the ship's tackles. These vessels were usually loaded with grain in bulk in the lower holds and flour in bags and general merchandise on the top. As the trade developed, however, and the flour carried came to be marked with numerous marks, it was found that there was difficulty in the consignees obtaining the special consignments to which they were entitled, and that the vessels were liable to be detained when the various parcels were assorted in the ship's hold or on deck. The matter, however, was not left to custom, but the shipowners inserted a special clause in the bills of lading entitling them to land the goods in shed, and to charge the cost of landing against the consignees. No inference can therefore be drawn from the mode of delivery in this special trade with regard to custom. On the contrary, it rather appears that the shipowners were obliged to protect themselves against the inconvenience of delivering a mixed cargo from the ship's tackles by contracting with the consignees that they should receive it on the quay and pay for the expense of landing it.

If I have fairly stated the result of the pursuers' evidence, it appears to me that they have failed to instruct the custom averred. One searching criticism, which is in itself almost destructive of the alleged custom, was made by the defenders' counsel. He pointed out that the pursuers admitted that in the case of such a cargo as the ‘Baron Pairlie’ carried, if the steamer in order to obtain extra dispatch chooses to carry on unloading during the night, the extra charges of landing are borne by the ship and not by the receivers. I can find no explanation of this except that after ordinary working hours the consignees are not bound to be in attendance to receive the cargo. If, however, the custom were that whether they are in attendance or not the ship has the absolute right of discharging a mixed cargo into the shed, it would be immaterial to the consignees whether the discharge were carried on during the day or at night, provided the expenses of landing it at night were not in excess of those exigible for daylight discharge.

So far I have dealt only with the pursuers' case, but it is not unimportant that a large number of merchants have given evidence in the witness-box that although they have carried on business in Leith for many years in commodities similar to those carried by the ‘Baron Pairlie,’ they have never heard of the custom which the

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pursuers aver. If such a custom were a general one it would be impossible to account for this alleged want of knowledge except on the footing that these witnesses were deliberately stating what they knew not to be the fact—an assumption which appears to me to be quite inadmissible.

If my conclusion in fact is sound, it is not necessary that I should consider the other point raised—namely, whether the alleged custom is not inconsistent with the terms of the contract between the parties. On this point I would only like to say that I rather think I misinterpreted the import of Marzetti's case, on which my former opinion largely proceeded. It is, however, difficult to ascertain the exact facts from either of the two reports of the decision in question; but the sole controversy seems to have been as to the right of the ship, in the case of a general cargo, to put it upon the quay and assort it there, notwithstanding the clause in the bill of lading that delivery should take place from the ship's tackles. It was held that the clause was one in favour of the ship, which might be waived, provided that no extra expense was thereby entailed on the consignees. The complaint, no doubt, was that extra expense had been occasioned by the ship's failure to deliver into lighters, but what was the nature of this expense is not clearly disclosed, and the report of the case seems to show that, after the cargo had been landed into shed at ship's expense, the shipowners were willing to put it into the receivers' lighters also at ship's expense. If so, the decision in Marzetti's case, instead of being an authority in favour of the pursuers, as I was at first inclined to regard it, distinctly supports the defenders' contention.

I quite recognise that in the case of the ‘Baron Fairlie’ the marks and receivers were so numerous that in all probability the discharge of the vessel would have been very much impeded but for the shipowners’ resolution to have the whole cargo put into shed; and it may well be that the inconvenience to the ship is out of all proportion to the extra cost that would be thrown upon the consignees. If so, the shipowners’ remedy is to amend the contract, as was done by the American liners.

“The pursuers admit that if I sustain the defences, not merely are they not entitled to the sum of £20, 13s. 6d., being the total amount of landing charges applicable to the defenders' consignment, but that the remainder of the freight due requires to suffer a deduction of £12, 4s. 10d., being the extra cost imposed on the defenders in weighing the goods in shed as compared with weighing on deck. The result is that the pursuers are only entitled to decree for the sum of £4, 3s. 9d. As a larger sum than this was offered before the action was raised, the pursuers must be found liable in expenses.”

The pursuers reclaimed, and argued—The evidence established that there was a custom of the port of Leith whereby a shipowner in discharging a general cargo was entitled to send the cargo into shed in order to assort it at the expense of the consignee. It was further proved that a cargo such as that carried by the “Baron Fairlie” was properly described as a general cargo. Though it might sometimes be difficult to say whether any cargo was or was not a general one, and though the term “general cargo” might not be capable of exact definition—the question being really one of degree—that did not prevent it being proved that there was in point of fact such a custom—see Malcolm v. Lloyd, February 4, 1886, 13 R. 512, 23 S.L.R. 371; Wimbledon and Putney Commons Conservators v. Dixon, 1875, 1 Ch. Div. 362. There was no inconsistency between the custom and the bill of lading. The obligation on a shipowner was to deliver according to the method established by the custom of the port—Carver, Carriage at Sea, 4th ed., sec. 461, p. 540; Marzetti v. Smith & Son, 1883, 49 L.T. 580, 5 Asp. Mar. Law Cases, 166, 1 Cababd and Ellis, 6. Any contract as to delivery of cargo was made subject to the custom of the port, and must be construed in the light of the custom. Section 493 (4) of the Merchant Shipping Act 1894 (57 and 58 Vict. cap. 60) did not apply— Marzetti v. Smith, cit.

Argued for the defenders (respondents)—The custom averred by the pursuers was inconsistent with the contract between the parties, whereby the pursuers undertook to deliver the cargo from the ship's tackle, and it could therefore not be imported into the contract— Tancred, Arrol, & Company, v. Steel Company of Scotland, Limited, March 7, 1890, 17 R. (H.L.) 31, 27 S.L.R. 463; Robinson v. Mollet, 1879, L.R., 7 H.L. 802, per Blackburn, J., at p. 811; Hayton v. Irwin, 1879, 5 C.P.D. 130; “ The Nifaf [1892] P 411; Holman v. Wade, the Times, 11th May 1877 (also reported in Carver, Carriage at Sea, 4th ed., section 463, p. 544); Kearon v. Radford & Company, 1895, 11 T.L.R. 226. The case of Marzetti v. Smith, cit., was in the defenders' favour. In general the duty of a shipowner was to put the goods carried by him in such a position that the consignee could take delivery— Peterson v. Freebody & Company, [1895], 2 Q.B. 294, per Esher, M.R., at p. 297, and no freight was due till the ship was ready to give delivery—Scrutton, Charter-Parties and Bills of Lading, 5th ed. p. 287. It followed that the obligation to separate his cargo fell on the shipowner—Carver, Carriage at Sea, 4th ed., sec. 462, p. 542; Merchant Shipping Act 1894, section 493 (4); Bradley v. Dunipace, 1862, 31 L.J. (N.S.), Ex. 210, 32 L.J. (N.S.) Ex. 22. In any event the evidence did not establish the existence of the custom averred. In order to be imported into a contract, a custom must (Scrutton, Charter-Parties and Bills of Lading, 5th ed. p. 18), in addition to being consistent with the contract, be reasonable, certain—Carver, Carriage at Sea, 4th ed., section 186, p. 229; Sewell v. Corp, 1824, 1 Car. and Payne, 392; universally acquiesced in— Armstrong & Company v. M'Gregor & Company, January 19, 1875, 2 R. 339, per L. P. Inglis, at p. 342, 12 S.L.R. 243, p. 246;

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Brown v. M'Connell, June 7, 1876, 3 R. 788, per Lord Gifford; and not contrary to law. The custom must also be known to both parties— Kirchner v. Venus, 1859, 12 Moore P.C. 361, per Lord Kingsdown, at p. 399; Norden Steam Company v. Dempsey, 1876, 1 C.P.D. 654, per Brett, J., at p. 662; Holman & Sons v. Peruvian Nitrate Company, February 8, 1878, 5 R. 657, per Lord Shand at p. 663, 15 S.L.R. 349, at p. 352. No custom complying with these conditions had been proved to exist. Counsel also referred to Clacevich v. Hutcheson & Company, October 28, 1887, 15 R. 11, 25 8.L.R. 11.

At advising the opinion of the Court was delivered by