'The analogies to be derived from the law of stoppage in transitu are perhaps not perfect, but they are sufficiently near to furnish a rule for the present case. When goods are sold to be paid for in the notes of the buyer, and he becomes insolvent before the delivery is complete, the seller may arrest the delivery and rescind the sale. There is nowhere in the terms of the contract any such condition. The law implies it, because the assumed ability of the buyer to pay for the goods was the inducement to the sale.'
But in this case we have the very terms of the contract. The charterer had failed to perform the charter-party on his part by not having paid his acceptance for the one-fourth. There was thus 'non-performance' of the agreement; and, by the terms of the contract, 'the penalty for non-performance of this agreement is to be the chartered freight in pounds sterling.' That is to say, in cash on delivery.
There were also in this case circumstances which aid in the construction of the contract. This, it must be remembered, was the longest voyage known to commerce, ending many thousands of miles from the parties; no security except the cargo; the cargo homogeneous, of great value and ready sale; the taking the bill of lading in addition to the charter-party; the making the acceptances fall due before the end of the voyage, so that, if not paid, the charterer would violate the charter-party and the master be entitled to enforce his lien for the whole freight by the bill of lading, and the improbability that any ship-owner would despatch his ship on such a voyage with no possible security for any freight: all these coincide with those provisions of the contract which provide for the usual lien.
III. But if this were not true as to the whole amount conceding that as to the second instalment the language of the charter-party ('the remainder by like bill at three months from delivery, at charterer's office in Liverpool, of certificate of right delivery') may place, as to that balance, the risk of solvency on the ship-owners-yet certainly as to the quarter for which the draft was given and not paid, the case is different. There has assuredly been no payment of that fourth; while payment of it was a condition precedent to delivery. In any view, by the terms of the contract, as well as by the now prevailing rule of commercial law, the giving of a worthless draft was no payment.
I. The provisions of the charter-party are inconsistent with any lien upon the cargo for the freight.
The freight was to be paid at Liverpool, the port of loading, not at San Francisco, the port of discharge. A payment to the master at San Francisco, therefore, would not protect the party making such payment. The freight was to be paid not concurrently with the delivery of the cargo, but partly in advance and partly three months after such delivery: 'One-fourth in cash and one-fourth by charterer's acceptance at six months from the final sailing of the vessel.' These payments were to be made in advance of any freight being earned, in consideration therefore not of having carried, but simply of agreeing to carry and of taking the cargo on board. 'The remainder, by like bill, at three months from date of delivery, at charterer's office in Liverpool, of the certificate of the right delivery of the cargo.' This portion was, therefore, payable also in Liverpool, and not payable there till a certificate should be produced at the charterer's office in Liverpool, that the cargo had been duly delivered in San Francisco, and then payable by bill at three months, or in cash, at charterer's option.
It is impossible to sustain a lien as for freight, under a special contract of this character, without disregarding the whole current of authority.
The lien exists only where the master has a right to demand the freight on unlading the cargo, or where the freight is payable so soon after the cargo is discharged as to imply a right in the master to detain for that short period; as in the case of The Kimball, in this court, relied on by opposite counsel, where the freight was payable, 'one-half in five, and one-half in ten days after discharge' of the cargo. There a distinction was drawn between a discharge of the cargo and the delivery of it, the period allowed being held 'only a reasonable one for examining the condition of the cargo.'
In the case at bar, however, the credit given was so long, and the provisions of the charter-party in reference to place of payment so inconsistent with any lien, as to make it quite clear that the contract was made upon the personal responsibility of the charterer and the consideration of the cash received in advance.