Taylor v. Caldwell, concurred in Baron Bramwell's judgment in Jackson v. Union Marine Insurance Co.1 The fact that these cases of maritime ventures involve the construction of special clauses in charter-parties and similar documents is apt at first sight to obscure their bearing upon the general principles of the discharge of contracts, but a few words from Baron Bramwell's judgment in Jackson's case put these special clauses in their proper light. At p. 143 he said: 'The shipowner, in the case put, expressly agrees to use all possible dispatch: 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 charterer a cause of action, but also releases him. Of course, if these stipulations, owing to excepted perils' (as actually happened in this case) 'are not performed there is no cause of action, but there is the same release of the charterer.' Here lies the point in Jackson's case for us. The excepted perils (dangers and accidents of navigation') protect the shipowner from an action, but if the contract is such that the Court will imply a term that the vessel will arrive to load at a certain time, then they will not protect him from the right of the charterer to a discharge of the contract if that term is not fulfilled. It is the implied term that is of interest for our present purpose. Again, on p. 144, speaking of the excepted perils, he says: "They excuse the shipowner but give him no right. The charterer has no cause of action, but is released from the charter. When I say he is, I think both are. The condition precedent has not been performed by default of neither. It is as though the charter were conditional on peace being made between countries A and B, and it was not.' In Dahl v. Nelson1 the House of Lords held that a shipowner who had undertaken to take his vessel and her cargo 'to the X Docks, or as near thereto as she can safely get,' and found when she arrived outside the docks that she must wait at least five weeks, was entitled to call upon the charterer to take 1 Supra. delivery outside the X Docks at the charterer's expense. Five weeks would have been an unreasonable period to wait, and ' in matters of business a thing is said to be impossible when it is not practicable, and a thing is impracticable when it can only be done at an excessive or unreasonable cost1.' In all these cases of maritime ventures the judgments, in so far as they rest upon precedent and not merely upon a businesslike construction of a written contract, rely upon an entirely different line of authority from that under consideration in Taylor v. Caldwell. The arguments have a definitely maritime flavour, and any references to the ordinary principles of the common law affecting discharge of contract are apologetic. We are now in a position to approach the war cases, and if the journey so far has lain over too familiar ground, some indulgence may be sought on the plea that the events of the past four and a half years have tended to set up a new standard of legal memory and to make pre-war law more distant from us than the mere lapse of time would justify. In the first place our attention is claimed by three decisions of the House of Lords, Horlock's case2 and Tamplin's case3 in 1916, and the Metropolitan Water Board's case1 in 1917. In the first and third of these cases the interruption of the performance discharged the contract. In the second it did not. In Horlock's case the plaintiff sued upon an allotment note given by her husband, a seaman on board the defendant's vessel, the Coralie Horlock, which had the misfortune to be in the port of Hamburg upon the outbreak of war, and was detained with her crew by the German authorities, at any rate until 1916 and probably throughout the war. The House of Lords, reversing the decision of Rowlatt J., and of the Court of Appeal, held that as from the date of the detention the 1 Maule J., in Moss v. Smith (1850) 9 C. B. at p. 94, a case of constructive total loss: cited by Lord Blackburn in Dahl v. Nelson (1881) 6 App. Cas. at p. 52. 2 Horlock v. Beal [1916] 1 A. C. 486. 3 F. A. Tamplin Steamship Co. v. Anglo-Mexican Petroleum Products Co. [1916] 2 A. C. 397. ▲ Metropolitan Water Board v. Dick, Kerr & Co. [1918] A. C. 119; see also Bank Line, Limited v. Arthur Capel & Co. [1919] A. C. 435. further performance of the contract became impossible, and that the defendant was not liable to pay the wages of the crew after the detention. The majority judgments rest partly on Taylor v. Caldwell and the line of authority developed from that case and partly on the doctrine of frustration of voyage associated with the case of Jackson v. Union Marine Insurance Co.1 The fact that these two currents of authority are (or were) distinct though not (or at any rate no longer) in conflict is acknowledged by Lord Shaw in the passage in Horlock's case previously quoted2. Lord Parmoor's dissenting judgment rests mainly upon the case of Beale v. Thompson3, decided by the House of Lords in 1813 upon the effect of hostile detention which lasted for a period of about six months and then terminated, whereupon the seamen took part in the remainder of the voyage. Tamplin's case dealt with a time charter whereby the owners of the British tank-steamship F. A. Tamplin chartered her for five years from December 1912 to the charterers for the purpose of carrying oil or other suitable cargo within certain specified geographical limits, paying the shipowner monthly hire. In February 1915 the steamer was requisitioned by the British Admiralty, and by means of structural alterations converted into a troopship. The shipowners thereupon claimed that the contract was determined or suspended by these acts of the British Government; the charterers, who were willing to continue to pay the agreed hire, resisted this claim. Article 20 of the charter-party was a common form of exceptions clause, enumerating amongst many other perils and contingencies 'restraints of princes, rulers, and peoples,' which clearly comprise a requisition by the Admiralty. The House was divided, not upon the principles of law to be applied, but upon their application to the facts of this case. Lord Parker delivered the principal majority judgment in favour of the charterers; Lord Buckmaster L.C. concurred in it; and Earl Loreburn delivered a less elaborate judgment on the same lines. Lord Parker, after quoting the Taylor v. Caldwell line of authority 2 [1916] I A. C. at p. 513. 1 Supra. and mentioning its application to cases of contracts of service of which he gives Horlock's case as an example, deals very fully with the doctrine of frustration of a commercial adventure as illustrated in Jackson v. Union Marine Insurance Co.1 He points out the difference between a time charter and a voyage charter in respect of the adventure involved. In the charter-party of the F. A. Tamplin 'the parties are not contemplating the prosecution of any commercial adventure in which both are interested. They are not contemplating the performance of any definite adventure at all.' The owners' interest was to receive their monthly hire, which the charterers were quite willing to pay. Lord Parker knew of 'no case in which this principle has been applied to time charter-parties as distinguished from charterparties which contemplate particular voyages,' and 'without laying it down that the principle can in no circumstances be applicable to time charter-parties' expressed his 'opinion that its application is in such cases much more difficult than in the case of charter-parties which contemplate a definite voyage within certain limits of time.' True, the parties had provided for 'restraints of princes, rulers, and peoples' by agreeing that during the period of such restraint the freight continued payable and the owners were not liable for their inability to give the charterers the use of the ship. But an exceptions clause which protects one party (or both parties) from an action for damages does not, as is clear from Jackson v. Union Marine Insurance Co.1, determine the contract, unless the effect of the peril which has occurred is to destroy the basis of the contract. Viscount Haldane took a more serious view of the events which had happened and was of opinion that the sweeping character of the requisition, the complete change in the nature of the contemplated use of the ship, and the uncertainty as to the 1 Supra. 2 Approving the opinion expressed by Bailhache J. in Admiral Shipping Co. v. Weidner, Hopkins & Co. [1916] 1 K. B. 429. But see the views of the Court of Appeal in this case at [1917] 1 K. B. 222 (C. A.). In Bank Line, Limited v. Arthur Capel & Co. [1919] A. C. 435 the House of Lords have since applied the principle of frustration of an adventure to a time charterparty. duration of the requisition, destroyed the entire basis of the contract and determined it as from the date of the requisition. He admits that the same event which might destroy the basis of a voyage charter might not be enough to destroy that of a time charter, and he quotes and applies the principles of Taylor v. Caldwell and Horlock's case. Lord Atkinson analysed Geipel v. Smith1 and Jackson v. Union Marine Insurance Co.1 (both cases of voyage charter-parties) and was unable to agree that the principle of these decisions could never apply to a time charter. With Viscount Haldane he was of the opinion that the requisition had caused 'such a substantial invasion of that freedom of both parties to exercise the rights and discharge the obligations secured to and imposed upon them by the charter-party, the continued existence of which must, I think, have necessarily been in their contemplation as to the foundation of the contract when they entered into it, that, in the events which have happened, each of them is now entitled to treat it as at an end.' It must be noted that in Tamplin's case it was the shipowner who was seeking to be released from his contract, although he would not suffer from its persistence, as the charterer was willing to continue to pay the monthly freight. While the vessel was under requisition it mattered little to either what happened to the contract, but there was good cause to expect that, once the requisition ceased, freights would be very different from what they were at the date of the contract in 1912. The Metropolitan Water Board's case is of a slightly different character in that the impossibility of performance alleged arises from temporary illegality. The Minister of Munitions, in pursuance of his powers under the Defence of the Realm Regulation Acts, gave notice to Dick, Kerr & Co. requiring them 'to cease work on your contract for the Metropolitan Water Board and to remove the plant.' The contract was a measure and value contract entered into in July, 1914 (as modified by a supplemental contract of May, 1915) for the construction of reservoirs within six years, and contained a 1 Supra. |
