Jackson v Union Marine Insurance Co Ltd

 

(1874) 44 LJCP 27

Exchequer Chamber

 

Jackson chartered a ship to Rathbone. Under the terms of the charter party the ship was 'to proceed with all convenient speed from Liverpool to Newport, and there load a cargo of iron rails for San Francisco.' Jackson insured himself with Union Marine Insurance against the possible loss of business with Rathbone. Before the ship got to Newport she ran aground and remained there for a considerable time. When she was eventually got off such time had elapsed that the charter party had come to an in the commercial sense. Rathbone therefore abandoned his contract with Jackson and chartered another ship to carry his rails to San Francisco. Jackson then claimed under his policy of insurance for the loss of his business with Rathbone. The issue before the court was whether, under these circumstances, Rathbone was released from his contract to load under the charter party. If this was the case then there would have been a total loss of business within the meaning of the insurance policy.

 

Bramwell B

 

The first question in this case is, whether the plaintiff could have maintained an action against the charterers for not loading, for if he could, there certainly has not been a loss of the chartered freight by any of the perils insured against. In considering this question, the finding of the jury, that "the time necessary to get the ship off and repair her, so as to be a cargo carrying ship, was so long as to put an end in a commercial sense to the commercial speculation entered into by the shipowner and charterers" is all important. I do not think the question could have been left in better terms, but it may be paraphrased or amplified. I understand that the jury have found that the voyage the parties had contemplated had become impossible; that a voyage undertaken after the ship was sufficiently repaired would have been a different voyage; not, indeed, different as to the ports of loading and discharge, but different as a different adventure; a voyage for which, at the time of the charter, the plaintiff had not in intention engaged the ship, nor the charterers the cargo; a voyage as different as thought it had been described as intended to be a spring voyage, while the one after the repair would be an autumn voyage. It is manifest that, if a definite voyage had been contracted for, and became impossible by perils of the seas, that that voyage would have been prevented, and the freight to be carried thereby would have been lost by the perils of the seas. The power which undoubtedly would exist to perform, say, an autumn voyage, in lieu of a spring voyage, if both parties were willing, would be a power to enter into a new agreement, and would no more prevent the loss of the spring voyage and its freight than would the power which would exist if both parties were willing to perform a voyage between different ports with a different cargo.

 

But the defendants say that here the contract was not to perform a definite voyage, but was at some and any future time, however distant, provided it was by no default in the shipowner and only postponed by perils of the seas, to carry a cargo of rails from Newport to San Francisco; that, no matter at what distance of time, at what loss to the shipowner, whatever might be the ship's engagements, however freights might have risen or seamen's wages, though the voyage, at the time when the ship was ready, might be twice as dangerous, and, possibly, twice as long, from fogs, ice and other perils, though war might have broken out meanwhile between the country to whose port she was to sail, and some other, still she was bound to take and had the right to demand the cargo of the shippers, who in like way had a right to have carried, and was bound to find, the agreed cargo, or, if that had been sent on already, a cargo of the same description, no matter at what loss to them, and however useless the transport of the goods might be to them. This is so inconvenient that, though fully impressed with the considerations so forcibly put by Mr Aspland, and retaining the opinion I expressed in Tarrabochia v Hickie, I think that, unless the rules of law prohibit it, we ought to hold the contrary.

 

The question turns on the construction and effect of the charter. By it the vessel is to sail to Newport with all possible despatch, perils of the seas excepted. It is said this constitutes the only agreement as to time, and provided all possible despatch is used, it matters not when she arrives at Newport. I am of a different opinion. If this charterparty be read as a charter for a definite voyage or adventure, then it follows that there is necessarily an implied condition that the ship shall arrive at Newport in time for it...

 

The two stipulations to use all possible despatch and arrive in time for the voyage are not repugnant, nor is either superfluous or useless. The shipowner, in the case put, expressly agrees to use all possible despatch; that is not a condition precedent, the sole remedy for and right consequent on the breach of it is an action. He also impliedly agrees that the ship shall arrive in time for the voyage; that is a condition precedent, as well as an agreement, and its non-performance not only gives the charterers a cause of action but also releases them. Of course if these stipulations, owing to excepted perils, are not performed there is no cause of action, but there is the same release of the charterers. The same reasoning would apply if the terms were, to "use all possible despatch, and further, and as a condition precedent, to be ready at the port of loading on June 1st." That reasoning also applies to the present case. If the charter party be read, as for a voyage or adventure not precisely defined by time or otherwise, but still for a particular voyage, arrival at Newport in time for it is necessarily a condition precedent. It seems to me it must be so read. I should say reason and good sense require it. The difficulty is supposed to be that there is some rule of law to the contrary. This I cannot see, and its seems to me that in this case the shipowner undertook to use all possible despatch to arrive at the port of loading, and also agreed that the ship should arrive "there at such a time that, in a commercial sense, the commercial speculation entered into by the shipowner and charterers should not be at an end but in existence." That latter agreement is also a condition precedent. Not arriving at such a time puts an end to the contract, though, as it arises from an excepted peril, it gives no cause of action. And the same result is arrived at by what is the same argument differently put. Where no time is named for the doing of anything the law attaches a reasonable time. Now, let us suppose this charter party had said nothing about arriving with all possible despatch. In that case, had the ship not arrived at Newport in a reasonable time, owing to the default of the shipowner, the charterers would have had a right of action against the owner, and would have had a right to withdraw from the contract. It is impossible to hold that in that case the owner would have a right to say, "I came a year after the time I might have come, because, meanwhile, I have been profitably employing my ship, you must load me, and bring your action for damages." The charterers would be discharged, because the implied condition to arrive in a reasonable time was not performed. Now, let us suppose the charter party contains, as here, that the ship shall arrive with all possible despatch. I ask again, is that so inconsistent with or repugnant to a further condition that, at all events, she shall arrive within a reasonable time? or is that so needless a condition that it is not to be implied? I say certainly not. I must repeat the foregoing reasoning. Let us suppose them both expressed, and it will be seen they are not inconsistent nor needless. Thus, "I will use all possible despatch to get the ship to Newport, but, at all events, she shall arrive in a reasonable time for the adventure contemplated." I hold, therefore, that the implied condition of a reasonable time exists in this charter party. Now, what is the effect of the exception of perils of the seas, and of delay being caused thereby? Suppose it was not there, and not implied, the shipowner would be subject to an action for not arriving in a reasonable time, and the charterers would be discharged...

 

The words are there, what is their effect? I think this: they excuse the shipowner, but give him no right. The charterers have no cause of action, but are released from the charter. Both, therefore, the shipowner and charterers are released. The condition precedent has not been performed but by default of neither... The exception is an excuse for him who is to do the act and operates to save him from an action and makes his non-performance not a breach of contract; but does not operate to take away the right the other party would have had if the non-performance had been a breach of contract to retire from the engagement, and if one party may, so may the other. Thus A, enters the service of B., and is ill and cannot perform his work. No action will lie against him; but B. may hire a fresh servant, and not wait his recovery if his illness would put an end, in a business sense, to their business engagement, and would frustrate the object of that engagement. A short illness would not suffice if consistent with the object they had in view... There is then a condition precedent that the vessel shall arrive in a reasonable time. On failure of this the contract is at an end, and the charterer discharged, though he has no cause of action, as the failure arose from an excepted peril. The same result follows, then, whether the implied condition is treated as one that the vessel shall arrive in time for that adventure, or one that it shall arrive in a reasonable time, that time being in time for the adventure contemplated. And in either case, as in the express cases supposed, and in the analogous cases put, non-arrival and incapacity by that time ends the contract. The principle being that though non-performance of a condition may be excused, it does not take away the right reserved from him for whose benefit the condition was introduced. On these grounds I think that in reason, on principle, and for the convenience of both parties, it ought to be held in this case that the charterers were on the finding of the jury discharged.