McFadden v Blue Star Line, King’s Bench Division

Case Summary

Ship—Bill of Lading—Seaworthiness—Warranty of Fitness to receive Cargo—Duration of Warranty—Incorporation of Harter Act —Effect of, on Obligation of Shipowner.

The warranty, which is primâ facie implied in a contract for the carriage of goods by sea, that the ship is fit for the reception of the cargo, is an absolute warranty; and the incorporation in the bill of lading of the provisions of the Act of Congress known as the Harter Act does not cut down the obligation of the shipowner in that respect to an obligation to exercise due diligence to make the ship fit for that purpose.

The above warranty is a warranty only as to the condition of the ship at the time of loading; it does not continue in force after the goods are once on board.

The defendants received on board their ship for carriage certain goods of the plaintiff. After the goods were on board the ship’s engineer had occasion to open a sluice-door in a watertight bulkhead in the lower part of the ship. He shortly afterwards shut the sluice-door, but failed to screw it down so closely as to make it watertight. He subsequently proceeded to fill one of the ballast tanks, for which purpose he opened a sea-cock in the ship’s side to allow the water to flow in. The water, on its way from the sea-cock to the ballast tank, passed through a valve-chest, the joint between the lid and body of which had been packed in the ordinary way with cotton to make it watertight. This joint had been remade shortly before the plaintiff’s goods were put on board, and it had been imperfectly done. When the tank was full the engineer screwed down the sea-cock, but, owing to the accidental presence of some hard substance, the screw-valve was prevented from bedding down closely on to its seating and the sea-cock was left partially open, with the result that the continued pressure of the water forced out the defective packing of the valve-chest, and the water flowed through the joint down into the lower part of the ship, where it passed through the sluice-door into the cargo hold and damaged the plaintiff’s goods:—

that the defective fitting of the sea-cock and of the sluice-door, being defects which came into existence after the plaintiff’s goods were loaded, were not breaches of the implied warranty of the fitness of the ship to receive the cargo; but that the defective packing of the valve-chest, being an existing defect at the time of the loading of the goods, was a breach of the warranty.

TRIAL before Channell J. without a jury.

The action was brought to recover damages for injury to cotton delivered by the plaintiff to the defendants for carriage from Wilmington, U.S.A., to Bremen. The cotton was shipped on board the defendants’ ship Tolosa under bills of lading which provided that the carrier should not be liable for loss or damage occasioned by “the perils of the seas or rivers,” or by “accidents of navigation of whatsoever kind even when occasioned by the negligence, default, or error of judgment … of the servants of the shipowner,” and whereby it was also agreed that the shipment should be “subject to all the terms and provisions of, and all the exemptions from liability contained in, the Act of Congress approved on the 13th day of February, 1893,” commonly known as the HarterAct . The ship arrived at Wilmington in ballast on November 11, 1903, and she commenced to take the plaintiff’s cotton on board on the following day, and the loading of the ship was not completed till the morning of November 24. Between November 17 and 21 all the ballast tanks except one, No. 4, were pumped out, and on the 23rd in the afternoon No. 4 ballast tank, which was not completely full of water, was “hardened up,” that is to say, a sea-cock in the ship’s side was opened to allow of the sea-water flowing into the tank and completely filling it. This operation of hardening up lasted about three hours, at the end of which time the sea-cock was screwed down. In its passage from the sea-cock to the tank the water had to pass through a valve-chest, about 2 feet long by 1 foot wide, containing several valves leading to the different tanks. The lid of this valve-chest was fastened down by bolts to a flange about 2½ inches wide, there being inserted a layer of lamp-cotton and tallow between the lid and the flange for the purpose of making the joint tight. The screws of the valves projected through the lid of the valve-chest, so that the valves were capable of being screwed up or down without removing the lid. After the tank No. 4 had been sufficiently filled, the sea-cock was closed and screwed down hard, and the engineer on going his rounds on the night of the 23rd found everything apparently all right, with all valves and joints tight. On the morning of November 24 it was discovered that during the night a quantity of water had found its way into the stokehold, and thence into one of the cargo holds, owing to a sluice-door in the bulkhead between the stokehold and the bilge beneath the cargo hold being imperfectly fastened down. The water was pumped out, and it was then discovered that the presence of the water in the stokehold was due, first, to some hard substance having got into the sea-cock and prevented the valve from bedding down firmly on to its seating, whereby the water continued to flow through the sea-cock after it had been screwed down; and, secondly, to the fact that the continued pressure of the water in the valve-chest had forced out the cotton packing, whereby the water escaped at the lid joint, and thence flowed down into the stokehold. The joint of the valve-chest had been remade shortly before the ship arrived at Wilmington, but it had been imperfectly made, and of insufficient strength to resist the pressure which it might reasonably be expected that it would be required to resist. The bulkhead between the stokehold and the bilge was intended to be a watertight bulkhead, and was so described in the shipbuilding plan. The sluice-door above mentioned had been opened on the morning of November 23 for the purpose of draining the bilges dry, and had been shut down after that operation was completed, but not sufficiently tightly to prevent the passage of water. In consequence of the water finding its way into the cargo-hold the bales of cotton belonging to the plaintiff, which were at the bottom of the hold, were damaged. The damaged bales had been loaded on board on November 12 or 13, some days before the accident happened.

Bailhache , for the plaintiff. There was a breach by the defendants of their implied warranty that the ship was seaworthy. That warranty of seaworthiness continues from the time when the vessel is tendered for the reception of the cargo down to the time of sailing. It is a warranty, in the first place, that she is fit to receive the cargo; secondly, it is a warranty that, in the interval between the loading and the sailing, she continues fit to act as a storehouse for the cargo; and, thirdly, that at the time of sailing she is fit to encounter the ordinary perils of the voyage. In the present case that warranty was broken in three particulars: the defective screwing down of the sea-cock, the defective packing of the joint of the valve-chest, and the insufficient closing of the sluice-door in the bulkhead, each and all caused the vessel to be unseaworthy as a storehouse for the cotton when loaded. If, however, the plaintiff is wrong in contending that the warranty of seaworthiness, in the sense of fitness for the cargo, continues after the goods are loaded, at all events the defect in the packing of the valve-chest was a breach of the warranty, for that defect was already in existence at the time when the goods were put on board. It is immaterial to consider whether that defect was due to negligence or not, for the warranty is an absolute warranty

Lewis Noad , for the defendants. The warranty that the ship shall be fit to receive the cargo that she is intended to carry is not a continuing warranty. Just as in the case of the warranty of seaworthiness in the ordinary sense of that term—in the case, that is to say, of the warranty that the ship shall be fit to encounter the perils of the voyage—the warranty is at an end as soon as the ship has started and the voyage begun, so in the case of the warranty of fitness to receive the cargo the warranty is at an end as soon as the loading has begun, or, at all events, as soon as the cargo is on board. So far, then, as any question of breach of warranty is concerned, the bad fitting both of the sea-cock and of the sluice-door may be disregarded, for at the time those two defects came into existence the portion of the cargo that was damaged was already on board. Nor was the defective packing of the valve-chest a breach of warranty. A defect of that kind, which can be set right in a few minutes, does not amount to such a breach.

Thus, in Steel v. State Line Steamship Co. , where the sea came through an insufficiently fastened porthole and damaged the cargo, Lord Blackburn suggested that if the porthole was in such a position that it could be shut at a moment’s notice if the sea became rough, its being partially open would not amount to unseaworthiness; though it would be otherwise if the cargo were piled against the porthole so that considerable time would be required to get at the porthole, as was in fact subsequently held in Dobell v. Steamship Rossmore Co.  Here the valve-chest was in a position in which it could be easily got at, and if the packing had come out in the daytime the escape of the water would have been at once detected, and the defect would have been put right before any damage had been done. It was only because the packing came out in the night time that any damage resulted; but that ought not to affect the question of seaworthiness. Moreover, under the terms of the bill of lading under which the cotton was carried, the warranty of fitness to receive it was not an absolute warranty, but only an undertaking to exercise care in that behalf.

For the bill of lading incorporated the Harter Act , by s. 2 of which it is provided that it shall not be lawful for the owner of any ship carrying merchandise between ports of the United States and foreign ports to insert in any bill of lading any agreement “whereby the obligations of the owner … of said vessel to exercise due diligence … to make said vessel seaworthy … shall in anywise be lessened.”  The introduction of that clause necessarily imports that the parties intended that the shipowner’s obligation should be limited to the exercise of due diligence. Here there was no evidence of want of diligence. The packing had successfully withstood the pressure during the whole of the time that the sea-cock was intended to be open. Then if there was no breach of warranty the defendants are relieved from liability by the exceptions of the bill of lading.

The presence of the hard substance in the sea-cock, and the consequent incursion of the sea-water through it, was an ordinary “peril of the sea.” Further, the defects in the packing of the valve-chest and in the closing of the sluice-door were “accidents of navigation.” In The Southgate  , where the defendants’ engineer improperly left open a circulating-pump delivery-valve in the side of the ship whereby a quantity of sea-water entered the ship and damaged the cargo whilst the ship was lying at her moorings engaged in loading, Gorell Barnes J. expressed a strong opinion, though he declined to decide the point, that the damage was an accident of navigation. So, too, in The Carron Park 5 , where the cargo was damaged whilst the ship was still loading by water which came through a valve negligently left open by the shipowners’ servants, it was held that the damage came within an exception by which the shipowners were not to be responsible for any neglect or default of their servants “during the voyage.” So in The Glenochil  it was held that the exception in the Harter Act of “faults or errors in the management of the vessel” was not limited to the period during which the vessel was at sea.

Bailhache , in reply. The extent of the obligation which the shipowner undertakes, under the implied warranty of fitness to receive the cargo, is not cut down by the incorporation of the provisions of the Harter Act in the bill of lading. It has been held in America that neither the provisions of s. 2 of that Act, which prohibit the shipowner from inserting in his bills of lading a clause exempting him from the obligation to use due diligence to make the vessel seaworthy, nor those of s. 3 , which exempt him from loss resulting from faults or errors in navigation or in the management of the ship if he has exercised due diligence to make her seaworthy, raise any implication that the law has relieved him from the duty of furnishing a seaworthy ship: The Carib Prince .  But if the Court is disinclined to follow that decision, and if the incorporation of the Harter Act is to be treated as limiting the defendants’ duty to the exercise of due diligence, here due diligence was not in fact exercised. The fact that the packing of the valve-chest was forced out, without any extraordinary pressure and after the joint had been made but a short time, points to the conclusion that it must have been carelessly made at the outset. And to satisfy the provisions of that Act it is necessary to shew, not merely that the shipowner has personally exercised due diligence, but that his servants have done so also: Dobell v. Steamship Rossmore Co.  There was also negligence in not fitting down the sluicedoor properly. Under these circumstances it becomes unnecessary to consider whether the facts of the case come within any of the exceptions of the bill of lading.

CHANNELL J.

I have to consider whether upon the facts of this case the shipowners are responsible for the damage to the plaintiff’s cotton. Mr. Bailhache rests his case upon a breach of the implied warranty of seaworthiness, or rather of the implied warranty that the vessel is fit for the reception of the goods and for carrying them upon the voyage in question. Now I think it is clear that, apart from the Harter Act , that warranty is an absolute warranty; that is to say, if the ship is in fact unfit at the time when the warranty begins, it does not matter that its unfitness is due to some latent defect which the shipowner does not know of, and it is no excuse for the existence of such a defect that he used his best endeavours to make the ship as good as it could be made. And there is also another matter which seems to me to be equally clear—that the warranty of seaworthiness in the ordinary sense of that term, the warranty, that is, that the ship is fit to encounter the ordinary perils of the voyage, is a warranty only as to the condition of the vessel at a particular time, namely, the time of sailing; it is not a continuing warranty, in the sense of a warranty that she shall continue fit during the voyage. If anything happens whereby the goods are damaged during the voyage, the shipowner is liable because he is an insurer except in the event of the damage happening from some cause in respect of which he is protected by the exceptions in his bill of lading. His liability for anything happening after the ship has sailed depends, not upon there being a breach of a warranty that the ship shall continue fit, but upon his position as carrier. So, too, it is clear that the warranty of the ship being fit to encounter the perils of the voyage does not attach before she sails and while she is still loading her cargo.

There is, of course, no warranty at the time the goods are put on board that the ship is then ready to start on her voyage; for while she is still loading there may be many things requiring to be done before she is ready to sail. The ordinary warranty of seaworthiness, then, does not take effect before the ship is ready to sail, nor does it continue to take effect after she has sailed: it takes effect at the time of sailing, and at the time of sailing alone. But Mr. Bailhache contends that the warranty with which we are here concerned, namely, that the ship was fit to receive the goods, differs in this respect from the warranty of fitness to encounter the perils of the voyage: he says that it is a continuing warranty, meaning thereby a warranty that the ship shall continue fit throughout the period of loading.

Now there is very little authority about the warranty of fitness to receive the cargo; but when one comes to consider it as a matter of principle, I do not think there is much difficulty about it. In my opinion one must apply the rule which one would have to apply to the warranty of seaworthiness when the voyage is in stages. When a voyage is in stages the warranty is that the ship on starting on each particular stage is fit for that stage. Thus, if she is going to stop at an intermediate port, she must have sufficient coals to take her to that port, but she is not bound to have sufficient coals to take her the whole voyage. It is treated as a separate warranty for each stage of the voyage. I think one must apply exactly the same rule to the loading stage of a vessel whilst she remains in her port of loading. I think the warranty is that at the time the goods are put on board she is fit to receive them and to encounter the ordinary perils that are likely to arise during the loading stage; but that there is no continuing warranty after the goods are once on board that the ship shall continue fit to hold the goods during that stage and until she is ready to go to sea, notwithstanding any accident that may happen to her in the meantime. And the reason for so holding is precisely the same as that which exists with respect to the warranty of fitness to encounter the perils of the voyage; as soon as the goods are on board they are in the custody of the carrier, and he is liable for any accident which then happens because he is an insurer of them unless he is protected by some clause in his bill of lading.

In that view of the matter, then, I proceed to consider whether the facts of the present case shew a breach of the warranty of fitness to receive the cargo. If there was such a breach, I think it is clear that the exceptions in the bill of lading would not apply to exempt the defendants from liability; for primâ facie words of exception are intended to exempt the shipowner only from his liability as a carrier, and not to affect the warranty that would otherwise be implied. An intention to exclude the warranty must be indicated by express words, and there are no such express words here.

Now it is suggested by the plaintiff that there was a breach of the warranty in respect of each of the three apertures through which the water came. The sluice-door in the bulkhead was left insufficiently screwed down, and if it had been left in that condition before the goods were loaded I think that that fact would have amounted to a breach of the warranty; for it was an aperture which in the ordinary state of things ought to have been closed except when it was being used, and it was imperfectly closed. It was not obviously left open, and was consequently a source of danger. Thus it is a breach of warranty of seaworthiness to go to sea with a porthole which is improperly closed but is believed to be closed, and which is in such a position that the defect cannot be remedied immediately and in time to prevent the damage being done: Dobell v. Steamship Rossmore Co.  

But here the opening and imperfect closing of the sluice-door only took place the day before the damage happened, and long after the goods were on board. Therefore, in my opinion, it cannot amount to a breach of the warranty as I have interpreted it. The same observations apply to the insufficiently closed sea-cock. It was intended to be closed and was apparently closed, and was consequently in a dangerous condition. But that state of things also was brought about after the goods were on board, and consequently was not a breach of the warranty. Then we come to the defective packing of the valve-chest. It may be that that is a defect which points to a certain amount of negligence on the part of the man who packed the joint, but it is immaterial for the present purpose to consider whether there was negligence or not, for, as I have already said, the warranty is, apart from any consideration of the Harter Act , an absolute warranty. The result shews that in fact there was a defect, in the sense that the packing was not as good as it ought to have been. It resisted the pressure during the three hours that the tank was being hardened up, but was insufficient to resist the subsequent pressure. That defect, unlike those in the sluice-door and the sea-cock, existed before the plaintiff’s goods were loaded. Whether a particular defect is sufficiently substantial to amount to a breach of the warranty must in all cases be a question of fact; but it is a question of fact which must be determined by certain rules. And the rule applicable to the present case is, I think, correctly stated in a passage in Carver on Carriage by Sea, s. 18, where it is said that a vessel “must have that degree of fitness which an ordinary careful and prudent owner would require his vessel to have at the commencement of her voyage having regard to all the probable circumstances of it. To that extent the shipowner, as we have seen, undertakes absolutely that she is fit, and ignorance is no excuse. If the defect existed, the question to be put is, Would a prudent owner have required that it should be made good before sending his ship to sea had he known of it? If he would, the ship was not seaworthy within the meaning of the undertaking.” Applying that to this case, I cannot doubt that any prudent owner, if he had known that the joint would not resist something more than a three hours’ pressure, would have at once ordered the joint to be remade. Therefore, it seems to me that I must hold that the defect was a substantial one, and that as it existed before and at the time of the loading of the goods it amounted to a breach of the warranty, unless the incorporation of the Harter Act in the bill of lading makes any difference. Then does the incorporation of that Act make any difference? For the purposes of this question I will assume that there was no negligence in the packing of the valve-chest, though I do not decide that point one way or the other. Is the absence of negligence material? In other words, does the incorporation of the Harter Act have the effect of cutting down the absolute warranty of fitness to an undertaking to exercise due diligence to make the ship fit? In my opinion it does not. The effect of the incorporation of s. 2 , which provides that it shall not be lawful to insert a clause in a bill of lading whereby the obligation of the owner to exercise due diligence to make the vessel seaworthy shall be lessened, is as though the parties said, “If we have in the exceptions inadvertently inserted a clause cutting down the obligation in respect of seaworthiness below an obligation to exercise care, that clause shall be null and void”; but it does not amount to a stipulation that the exercise of due diligence shall be sufficient. For that purpose an express stipulation is necessary, and there is none to be found in the section itself, and of course therefore none imported by its incorporation. And the incorporation of s. 3 does nothing more than give immunity in respect of loss resulting from certain specified causes in the course of the voyage, provided the shipowner has exercised due diligence to make the ship seaworthy. The reference to due diligence is a mere qualification upon that immunity; it is not a limitation of the obligation under the warranty. There has, therefore, been a breach of the warranty of the fitness of the ship to receive the cargo, and the defendants are consequently responsible.

Under these circumstances, it becomes unnecessary to consider whether these several contributory causes of the damage to the plaintiff’s cotton were within the excepted perils of the bill of lading, though, if I had come to the conclusion that the defect in the valve-chest was not a breach of the warranty, I should have inclined to the view that they were. I think the defendants would have been exempted both by the provisions of s. 3 of the Harter Act and also by the other exceptions specified in the bill of lading. I think the authorities shew that the words “in the management of the vessel” in s. 3 include matters that are complained of during the period of the loading.