Page
May 9, 1895.]
SUPREME COURT.
30th April.
BEFORE THE FULL COURT.
LEB KING & Co., Appellants, v. CARLOWITZ
& Co., Respondents.
CHINA OVERLAND TRADE REPORT.
345
throw up the charter, but replied that they if the special circumstances under which the would note that the Iser was to be despatched | contract was actually made were communicated and was going to commence her charter, adding by the plaintiff to the defendant and thus known they would soon be in a position "to ascertain to both parties, the damages resulting from the all charges, interest, and losses, for which we breach of such a contract which they would shall hold you responsible." The Moray brought reasonably contemplate would be the amount of 2,590 tons 6 cwt. of Aksiki coal, and the Iser, injury which would ordinarily follow from a which arrived at Moji on 20th January, loaded breach of contract, under those special circum- Mr. J.J. Francis, Q.C., instructed by Mr.V.H. and left Moji on 1st February. arriving in standes so known and communicated. But, on Deacon, appeared for the appellants (the plain-Hongkong February 7th, bringing, with other the other hand, if those special circumstances tiffs), and Mr. E. Robinson, instructed by Messrs. coals, 677 tons 12 cwt. of Akaiki Coal, which, were wholly unknown to the party breaking the Johnson, Stokes and Master, for the respondents with the 2,590 tons per steamer Moray, was in contract, he, at the most, could only be supposed (the defendants).
tended to have been brought to Hongkong by the to have had in his contemplation the amount of The Acting Chief Justice (Hon. W. Meigh Iser according to her capacity, if she had arrived injury which would arise generally, and in the Goodman) delivered the following judgment:in due time at Moji, and which was ready for her. great multitude of cases not affected by any This is an appeal from a decision of Mr. It is clear Lee King & Co., did not do their best special circumstances, from such a breach of Justice Ackroyd on a question of what damages to place the Iser at Moji about 15th January, contract. For, had the special circumstances pught to be allowed to Messrs. Carlowitz & Co. but that they used her for their own purposes, been known, the parties might have especially for a breach of contract on the part of the appresumably for their own profit, and never placed provided for the breach of contract by special pellants, Lee King & Co., with regard to a charter her at Moji till January 28th. Messrs. Les King terms as to the damages in that case and of this ad- party. It appears that by a charter party, dated & Co. sued for their freight and recovered vantage it would be very unjust to deprive them." the 19th December, 1893, between Messrs. Car judgment against Carlowitz & Co., subject to Lord Campbell states that "the rule in Hadley lowits & Co. as subcharterers and Lee King Carlowitz & Co.'s counterclaim for damages for. Baxendale accords with the Code Napoléon, & Co., the original charterers, it was agreed that breach of contract. The question of damages with Potier and with Chancellor Kent, and Mr. the steamer Iser, then on her way from Moji to was referred to the Registrar, and as to those Mayne says in his " Treatise," p. 11:-" The Hongkong, should, after completing her then items he allowed, such asdamages for detention of rale laid down in Hadley. Baxendale was in voyage, proceed with all possible speed to Moji lighters, telegrams, &c., and interest on capital tended to settle the law and it has been accepted deroct (or via Kobe) and there receive from the locked up, &c., no dispute now arises. There is both in England and America.” Its correctness subcharterer's agents a full and complete cargo no dispute that there was a most distinct breach was not disputed by counsel and, as I am of of coal, and being so loaded should therewith of contract. The question the Court now has opinion that "the special circumstances," viz., proceed, with all possible speed, direct to the to decide is as to whether Messrs. Carlowitz that Messrs. Carlowitz had sold the coals to port of Hongkong, where, after delivery of & Co. can recover one particular item, viz., arrive in January, were not communicated to cargo as per bill of lading, the voyage should damages for the loss they sustained, owing to the Messrs, Lee King, when the charter party or its end. It was also expressly stipulated by the fall in the market, with regard to the price of modification was effected between the parties, it charter party as follows:- Steamer to arrive Akaiki coal, between the date when the cargo, is clear the special damage cannot be recovered. at Moji and be ready to receive cargo not later ready for the Iser at Moji, would have arrived But, then, is the difference in market value re- than the 20th January, 1894, or charterers to u Hongkong if the Iser had complied with coverable? Is a loss from this cause one which have the option of cancelling this charter. The the terms of the contract, and the date when may fairly and reasonably be considered as aris- original charterers to be at liberty to send their that cargo actually arrived in Hongkong. It ing naturally, i.e., according to the usual course Tessel via Nagasaki and or Kobe on her was admitted before the Registrar that no writ of things from the breach of contract in ques- upward trip for their own benefit, but the ten notion was given by Carlowitz & Co. to Lestion ? or is it a loss which may reasonably be detention must not exceed three days." Some King & Co., and on the evidence I am of opinion supposed to have been in the contemplation modification was made by letter of the no notice was given at all of the special contract of both parties, at the time they made the cou- 28th December, 1893. Messrs. Carlowits did of sale to Wing Yuen & Co. The respondents tract, as the probable result of the breach of it? not want the Iser at Moji sooner than January do not now contend that Lee King & Co. must The contract for carriage was made in Decem- 11th, 1894, though they did want her there then or make good the special loss occasione by Wing ber and nothing was expressly stipulated as to soon after that date, and Lee King & Co. wanted Yuen's refused to take delivery, but they con- delivery in Hongkong in January. The Regis the Iser, which arrived in Hongkong by 28th tend they can recover the difference between the trar found that the 24th January was the date December, unloaded as quickly as possible, before market price when the cargo ought to have the Iser would, in the ordinary course of things, 1st January, New Year's day. Accordingly arrived and the price when it actually arrived. have arrived at Hongkong had Lee King & Co. Mr. Andrew, as agent for Lee King & Co., wrote The Registrar declined to allow this item. But, done their best to place her at Moji on 15th the following letter to Messrs. Carlowitz & Co.: on appeal, Mr. Justice Ackroyd, "not without January. I agree with the finding. It is not -"Hongkong, 28th December, 1893. Messrs. great hesitation" (as he said in his judgment), an unfair inference from the charter party as Carlowits & Co. :-Dear Sirs,-In consideration decided to allow it and refer the matter back to modified that as the date of arrival at Moji was of your discharging the steamer Iser to allow the Registrar, to enquire what the loss amounted fixed, and it was provided that, being loaded, the her to sail on Sunday, 31st instant, we undertake to. The appellants appealed, and this is Tser. should proceed "with all possible speed not to commence lay days in Moji under the the matter for the decision of the Full Court. direct to the port of Hongkong." Lee King & next charter before the 11th January, and our Mr. Robinson contended, broadly, that damages Co. had implied notice that Carlowitz & Co. best will be done to place her at her loading port should be assessed on the principle of restitutio attached importance to the arrival of the coal about 15th January, the time we are informed in integrum. However right, in theory, the in Hongkong without avoidable delay, and it will suit the shippers.Yours faithfully, John principle that one party injured by another seems clear it would have arrived in January but Andrew, agent for Lee King & Co.”—The dis- should receive in damages the precise amount of for such delay. But would there
"in the usual charge was, accordingly, effected and the Iser the loss occasioned to him by such injury, that course of things," be a loss by fall of market sailed, and the position then was that Messrs. is, that he be indemnified, it is utterly impossible, as the result of the delay of a week or two in Carlowitz had a right to Lee King's best in all the various cases which arise, uniformly to arrival at Moji and consequently of arrival being done to place the Tser at Moji apply that principle. The doctrine of restitutio at Hongkong ? Is it a loss which may reason- about 15th January, and they had a right to in integrum is discussed in The Argentino. 13 P. ably be supposed to have been in the contem- cancel the charter party if the Iser was not ready D. p. 191, both by Lord Esher and Lord Justice plation of both parties at the time they made to receive cargo at Moji by 20th January at Bowen, and the latter, at p. 201, points out the the contract, as the probable result of breach latest. On the 10th January the respondents qualifications or restrictions to that doctrine. by delay in arriving at Moji? A reference to wrote to the appellants to ask when the Iser Mr. Mayne in his Treatise on Damages," p. 9, the almanac shows that Chinese New Year falls would be at Moji. The appellants replied that says:-The theoretical idea of damages is that at varying dates. Th 1893 it fell on the 17th they had telegraphed to Shangaai and the reply they are to be a compensation and satisfaction February in 1894 on the 6th February, in 1895 was: Expect to be ready Moji 21st January" for the injury sustained," but he adds:" Prac- on the 26th January. Now, although both Mr. The respondents replied protesting against this tically, however, there can hardly ever be a case Bishoff (see p. 17 of evidence before the Regis- most strongly and informing the appellants that in which they are completely so." He then gives trar) and Mr. Jones Hughes (see pp. 27 and they would hold them responsible for damages examples. In considering the question before the 28) attributed the fall in the market to the and all consequences which might arise through Court we cannot decide as if there were no au- Chinese New Year, no evidence was given to late arrival of the Iser at Moji or late delivery thorities for us to follow. General principles show that the market usually fell at the ap- of her cargo at Hongkong. On 15th January must be considered, subject to the express decisions proach of Chinese New Year. We only have the Iser arrived at Hongkong instead of at Moji of the English Courts, especially of such decisions evidence of what happened in 1894. I cannot, and on a voyage from Shanghai to Canton. as this Court ought to consider binding upon it, therefore, judicially assume that such a fall and This caused a further protest from the respond- I will consider some of the ca es, beginning with consequent loss was contemplated by both parties ents, who had entered into a contract with Wing one decided in 1854, which has been repeatedly to the contract as the probable result of delay or Tuen & Co. for the delivery to them in January quoted with approval. as laying down the general that it would happen in the usual course of things. of about 3,000 to 3,200 tons of Akaiki coal to rules as to the recovery of damages in cases of Ip A.D. 1859 the rule in Hadley v. Baxendale arrive per steamer Iser or other, cash against | breach of contract. I refer to Hadley. Baxen- was applied in Smeed v. Foord, 28 L.J. (Queen's delivery order. It was important, therefore, to
Bench), p. 178. There, the defendant contracted the respondents to get the coal for delivery in
to deliver a threshing machine to a farmer in Hongkong in January and they, therefore, ohar-
three weeks, for the purpose of threshing his tered another steamer, the Moray, and despatched
wheat in the field. The defendant failed to pers her to Moji on 18th January, but the Moray did
form his contract and the wheat got damaged not get back to Hong kong till 2nd February, and
by rain and had to be atacked and kiln-dried. Wing Yuen & Co. then refused to take the coal, as
The plaintiff claimed damages in respect of the the market bad fallen, and Carlowitz & Co. sold
cost of stacking it, of kiln-drying it, and for the the coal for less to other customers. On 22nd
deterioration caused by its having been wetted; January the appellants wrote to say the Iser
he claimed also for loss of market, the market would be despatched in ballast direct to Moji at
price of wheat having fallen between the time it daylight next day, and the respondents did not
might have been sold had the machine been sup、
dale, 23 Law Journal, (N.S.), Exchequer, p 179. This case decided that 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 either such as may, fairly and reason ably, be considered arising naturally, i.., accord- ing 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,