Court of the United States
KAISHA et al.
EXPORT LUMBER CO.
260 U.S. 490
Submitted Nov. 23, 1922
- Decided Jan. 2, 1923
Mr. Wm. H. Hayden, of Tacoma,
Wash., Mr. Wm. H. Hayden, of Tacoma, Wash., for petitioners.
Mr. Erskine Wood, of Portland,
Or., for respondent.
[260 U.S. 494]
Mr. Justice McREYNOLDS delivered
the opinion of the Court.
March 19, 1917, through
its agent at Tacoma, Wash., Osaka Shosen Kaisha, incorporated under the
laws of Japan and owner of the Japanese steamer Saigon Maru, then at Singapore,
chartered the whole of that vessel, including her deck, to respondent Lumber
Company to carry a full cargo of lumber from the Columbia or Willamette
river to Bombay. In May, 1917, the vessel began to load at Portland, Or.
Having taken on a full under-deck cargo and 241,559 feet upon the deck,
the captain refused to accept more. After insisting that the vessel was
not loaded to capacity and ineffectively demanding that she receive an
additional 508,441 feet, respondent libeled her, setting up the charter
party and the captain's refusal, and claimed substantial damages. The owner
gave bond; the vessel departed and safely delivered her cargo.
The Lumber Company maintains
that it suffered material loss by the ship's refusal to accept a full load;
that [260 U.S. 495] she is liable therefor under the general admiralty
law and also under the Oregon statute (Olson's Laws of Oregon, 10281),
which declares every vessel navigating the waters of the state shall be
subject to a lien for the damages resulting from nonperformance of affreightment
Petitioner excepted to the
libel upon the ground that the facts alleged showed no lien or right to
proceed in rem. The trial court ruled otherwise and awarded damages upon
the evidence. The Saigon Maru (D. C.) 267 Fed. 881. The Circuit Court of
Appeals approved this action. 272 Fed. 799.
Little need be written of
the claim under the state statute. The rights and liabilities of the parties
depend upon general rules of maritime law not subject to material alterations
by state enactments. The Roanoke, 189 U.S. 185, 23 Sup. Ct. 491; Southern
Pacific Co. v. Jensen, 244 U.S. 205, 37 Sup. Ct. 524, L. R. A. 1918C, 451,
Ann. Cas. 1917E, 900; Union Fish Co. v. Erickson, 248 U.S. 308, 39 Sup.
Both courts below acted
upon the view that while the ship is not liable in rem for breaches of
an affreightment contract so long as it remains wholly executory, she becomes
liable therefor whenever she partly executes it, as by taking on board
some part of the cargo. In support of this view, it is said: Early decisions
of our circuit and district courts held that under maritime law the ship
is liable in rem for any breach of a contract of affreightment with owner
or master. That The Freeman (1856) 18 How. 182, 188, and The Yankee Blade
(1857) 19 How. 82, 89, 90, 91, modified this doctrine by denying such liability
where the contract remains purely executory, but left it in full force
where the vessel has partly performed the agreement, as by accepting part
of the indicated cargo. The Hermitage, 12 Fed. Cas. 27, No. 6,410; The
Williams, 29 Fed. Cas. 1342, No. 17,710; The Ira Chaffee (C. C.) 2 Fed.
401; The Director (D. C.) 26 Fed. 708; The Starlight (C. C.) 42 Fed. 167;
The Oscoda (D. C.) 66 Fed. 347; The Helios (D. C.) 108 Fed. 279; The Oceano
(D. C.) 148 Fed. 131; Wilson v. Peninsula Bark & Lumber Co., 188 Fed.
52, 110 C. C. A. 190, were cited. [260 U.S. 496] We think the argument
Prior to The Freeman and
The Yankee Blade, this court had expressed no opinion on the subject; but,
so far as the reports show, the lower courts had generally asserted liability
of the ship for breaches of affreightment contracts. 'It is grounded upon
the authority of the master to contract for the employment of the vessel,
and upon the general doctrine of the maritime law, that the vessel is bodily
answerable for such contracts of the master made for her benefit.' The
Flash, 1 Abbott, 67, 70, Fed. Cas. No. 4,857; The Rebecca, 1 Ware, 188,
Fed. Cas. No. 11, 619; The Ira Chaffee, supra. Since 1857, some of the
lower courts have said that the ship becomes liable for breaches of affreightment
contracts with her owner or master whenever partly executed by her; but
it is forcibly maintained that in none of the cases was the point directly
involved. The Hermitage, The Williams, The Ira Chaffee, The Director, The
Starlight, The Oscoda, The Helios, The Oceano, and Wilson v. Peninsula
Bark & Lumber Co., supra.
The Freeman and The Yankee
Blade distinctly rejected the theory of the earlier opinions. They are
inconsistent with the doctrine that partial performance may create a privilege
or lien upon the vessel. And in so far as the lower courts express approval
of this doctrine in their more recent opinions, they fail properly to interpret
what has been said here.
While, perhaps, not essential
to the decision, this court, through Mr. Justice Curtis, said in The Freeman:
'Under the maritime law
of the United States the vessel is bound to the cargo, and the cargo to
the vessel, for the performance of a contract of affreightment; but the
law creates no lien on a vessel as a security for the performance of a
contract to transport cargo, until some lawful contract of affreightment
is made, and a cargo shipped under it.'
In The Yankee Blade, Mr. Justice
Grier, speaking for the court, declared:- [260 U.S. 497] 'The maritime
'privilege' or lien is adopted from the civil law, and imports a tacit
hypothecation of the subject of it. It is a 'jus in re,' without actual
possession or any right of possession. It accompanies the property into
the hands of a bona fide purchaser. It can be executed and divested only
by a proceeding in rem. This sort of proceeding against personal property
is unknown to the common law, and is peculiar to the process of courts
of admiralty. The foreign and other attachments of property in the state
courts, though by analogy loosely termed proceedings in rem, are evidently
not within the category. But this privilege or lien, though adhering to
the vessel, is a secret one; it may operate to the prejudice of general
creditors and purchasers without notice; it is therefore 'stricti juris,'
and cannot be extended by construction, analogy, or inference. 'Analogy,'
says Pardessus (Droit Civ. vol. 3, 597), 'cannot afford a decisive argument,
because privileges are of strict right. They are an exception to the rule
by which all creditors have equal rights in the property of their debtor,
and an exception should be declared and described in express words; we
cannot arrive at it by reasoning from one case to another.' ...
'Now, it is a doctrine
not to be found in any treatise on maritime law that every contract by
the owner or master of a vessel, for the future employment of it, hypothecates
the vessel for its performance. This lien or privilege is founded on the
rule of maritime law as stated by Cleirac (597): 'Le batel est obligee
a la marchandise et la marchandise au batel.' The obligation is mutual
and reciprocal. The merchandise is bound or hypothecated to the vessel
for freight and charges (unless released by the covenants of the charter
party), and the vessel to the cargo. The bill of lading usually sets forth
the terms of the contract, and shows the duty assumed by the vessel. Where
there is a charter party, its [260 U.S. 498] covenants will define
the duties imposed on the ship. Hence it is said (1 Valin, Ordon. de Mar.
b. 3, tit. 1, art. 11) that 'the ship, with her tackle, the freight, and
the cargo, are respectively bound ( affectee) by the covenants of the charter
party.' But this duty of the vessel, to the performance of which the law
binds her by hypothecation, is to deliver the cargo at the time and place
stipulated in the bill of lading or charter party, without injury or deterioration.
If the cargo be not placed on board, it is not bound to the vessel, and
the vessel cannot be in default for the nondelivery, in good order, of
goods never received on board. Consequently, if the master or owner refuses
to perform his contract, or for any other reason the ship does not receive
cargo and depart on her voyage according to contract, the charterer has
no privilege or maritime lien on the ship for such breach of the contract
by the owners, but must resort to his personal action for damages, as in
other cases. ... 'And this court has decided, in the case of The Schooner
Freeman v. Buckingham, 18 How. 188, that the law creates no lien on a vessel
as a security for the performance of a contract to transport cargo, until
some lawful contract of affreightment is made, and a cargo shipped under
In Bulkley, Claimant of the
Barque Edwin v. Naumkeag Steam Cotton Co., 24 How, 386, 393 (16 L. Ed.
599), the barque was libeled to recover damages for not delivering part
of the cotton-707 bales-which the master had agreed to carry from Mobile
to Boston. With most of the cargo on board the vessel was towed below the
bar, there to receive the remainder from lighters. A lighter carrying 100
bales sank, and the cotton was lost or damaged. The barque delivered 607
bales at Boston in good condition. The owner of the vessel claimed exemption
for her upon the ground that she never received the 100 bales. This court
'In the present case the
cargo was delivered [260 U.S. 499] in pursuance of the contract,
the goods in the custody of the master, and subject to his lien for freight,
as effectually as if they had been upon the deck of the ship, the contract
confessedly binding both the owner and the shipper; and, unless it be held
that the latter is entitled to his lien upon the vessel also, he is deprived
of one of the privileges of the contract, when, at the same time, the owner
is in the full enjoyment of all those belonging to his side of it.'
Later opinions approve the
same general rule.
'The doctrine that the
obligation between ship and cargo is mutual and reciprocal, and does not
attach until the cargo is on board, or in the custody of the master, has
been so often discussed and so long settled, that it would be useless labor
to restate it, or the principles which lie at its foundation. The case
of the Schooner Freeman v. Buckingham, decided by this court, is decisive
of this case.' The Lady Franklin, 8 Wall. 325, 329 (19 L. Ed. 455).
'It is a principle of maritime
law that the owner of the cargo has a lien on the vessel for any injury
he may sustain by the fault of the vessel or the master; but the law creates
no lien on a vessel as a security for the performance of a contract to
transport a cargo until some lawful contract of affreightment is made,
and the cargo to which it relates has been delivered to the custody of
the master or some one authorized to receive it.' The Keokuk, 9 Wall. 517,
519 (19 L. Ed. 744).
The maritime privilege or lien,
though adhering to the vessel, is a secret one which may operate to the
prejudice of general creditors and purchasers without notice and is therefore
stricti juris and cannot be extended by construction, analogy or inference.
The Yankee Blade, supra. The contract of affreightment itself creates no
lien, and this court has consistently declared that the obligation between
ship and cargo is mutual and reciprocal and does not attach until the cargo
is on board or in [260 U.S. 500] the master's custody. We think
the lien created by the law must be mutual and reciprocal; the lien of
the cargo owner upon the ship is limited by the corresponding and reciprocal
rights of the shipowner upon the cargo. See The Thomas P. Sheldon (D. C.)
113 Fed. 779, 782, 783.
The theory that partial
acceptance of the designated cargo under a contract of affreightment creates
a privilege of lien upon the ship for damages resulting from failure to
take all, is inconsistent with the opinions of this court and, we think,
without support of adequate authority. In The S. L. Watson, 118 Fed. 945,
952, 55 C. C. A. 439, 446, the court well said:
'The rule of admiralty,
as always stated, is that the cargo is bound to the ship and the ship to
the cargo. Whatever cases may have been decided otherwise disregarded the
universal fact that no lien arises in admiralty except in connection with
some visible occurence relating to the vessel or cargo or to a person injured.
This is necessary in order that innocent parties dealing with vessels may
not be the losers by secret liens, the existence of which they have no
possibility of detecting by any relation to any visible fact. It is in
harmony with this rule that no lien lies in behalf of a vessel against
her cargo for dead freight, or against a vessel for supplies contracted
for, but not actually put aboard. The Kiersage, 2 Curt. 421, Fed. Cas.
No. 7,762; Pars. Ship. & Adm. (1869) 142, 143. It follows out the same
principle that Mr. Justice Curtis states in The Kiersage, 2 Curt. 424,
Fed. Cas. No. 7,762, that admiralty liens are stricti juris, and that they
cannot be extended argumentatively, or by analogy or inference. He says:
'They must be given by the law itself, and the case must be found described
in the law."