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Before WOODS, WADDILL, and spects as the buyer and seller desired, it ROSE, Circuit Judges.

was withdrawn and another dated May 11,

1920, was issued in its place by the bank, ROSE, Circuit Judge. This is another

This is another the National Bank of Commerce of Norsugar case. Those concerned in the trans- folk, Va. It is upon this latter document actions out of which it arose will be re

that the seller is here seeking to recover ferred to as the seller, the buyer, and the from the bank. It was for $53,123.84, a bank. Only the first and last of these are sum arrived at by figuring what the buyer parties to this litigation. The seller was

would owe the seller if the amount of sugar plaintiff below and is defendant in error exceeded by the permissible 10 per cent. the here. It is a partnership trading as Lam- 1,000 bags at 224 pounds each. In that born & Co., and is composed of nearly a

event there would be delivered 246,400 dozen persons, every one of whom is a citi- pounds of sugar which at 22 cents per zen of some other state than Virginia. pound would foot up $54,208, from which

On the 23d of April, 1920, it entered in- by the terms of the contract 2 per cent., or to a written contract with the buyer, South- $1,084.16, would be deducted leaving the gate & Co., of Norfolk, Va., by the terms

amount for which letter of credit was isof which it sold the latter 1,000 bags of sued. Apparently, when the letter was reJava white sugar, of about 224 pounds to ceived by the seller, it did not notice that the bag, 10 per cent. more or less at 22 it contained the provision that before paycents per pound, duty paid, f. o. b. cars ment could be demanded by the seller, the Philadelphia, landed weights. The sugar latter must present to the bank, or rather was to be shipped during August/Septem- to the Bankers' Trust Company of New ber, at the option of seller, from Java, by York, through which the credit was made steamer or steamers to Philadelphia. The payable, a sight draft with invoice and names of such steamer or steamers were to copy of ocean bill of lading covering shipbe declared later. Should the steamer or ment, Java to Philadelphia, and order nosteamers declare against the contract fail tify bill of lading; the latter bill, of course, to arrive at the port of destination for any being the one to be issued by the railway cause, seller was to be relieved of responsi- carrier to whom in accordance with the conbility under the contract. It was further tract the sugar was to be delivered f. o. b. provided that in case there was damage to cars at Philadelphia. In the contract the the sugars in transit to Philadelphia pre- seller had bargained to attach to the draft venting seller from making full delivery, only the invoice and bill of lading, by seller was to deliver to each purchaser of which it understood the railroad bill. When sugar aboard that steamer a proportionate the seller realized that the letter of credit part of the sound packages. Payment was required it to present with its draft a copy to be made net cash on presentation of of the ocean bill of lading as well, it took sight draft with invoice and bill of lading up the matter with the other parties, writattached. Buyer was to open within five ing on the 10th of June that the sugar was days confirmed irrevocable letter of credit being shipped from Java in cargoes of in favor of seller for the full invoice value thousands of tons, and as each cargo would of the 1;000 bags. If unforeseen circum- include the sugars intended for a number stances, such as embargoes, government su- of different purchasers, it would be impervision or interference, accidents, fires, practicable to furnish to each of these a strikes, car shortages, riots, stress of weath- copy of the ocean bill of lading. Some er, etc., prevented shipment within the time correspondence ensued and finally on the specified, the buyer had the option of can- 15th of July, the bank notified the seller celing the portion of the contract affected that it had been authorized by the buyer to by the delay or taking the sugar so affect- eliminate the copy of the ocean bill of laded for later shipment without claiming ing covering shipment from Java to Philadamages. The buyer's decision was to be delphia. It added that all other terms and given immediately upon advice of the sell- conditions in the credit were to remain as er that delay had occurred. In the event theretofore. One of these other terms of such cancellation by the buyer, the sell- which consequently was unchanged was that er was to be under no further obligation which was headed "Shipment” and which under the contract.

reads as follows: "Shipment to be made A letter of credit was promptly opened, during August/September, 1920, at option but because it was not worded in some re- of the sellers from Java by steamer or

2 F.(2d) 23 steamers to Philadelphia.” When in De- ar would be available without moving other cember the sugars arrived in Philadelphia cargo and must be discharged first, and and were put upon the cars, and the selle added the ship was due to arrive about Deer's draft was presented, the bank refused cember 14th. At the time the ship was payment. It says that it was entitled to somewhere in the neighborhood of the Berdo so because the sugars were not shipped mudas. The Shipping Board which was from Java to Philadelphia.

the owner of the West Cheswald was comThere is no dispute as to facts. The con- municated with and asked if it would controversy is as to the legal effect of that sider sending that ship to Philadelphia inwhich admittedly took place. On the 30th stead of New York. The Board authorized of August, the seller had notified the buyer the diversion of the steamer to Philadelphia that the sugars were going forward by the at an additional freight charge of $1 per Chifuku Maru or the Washington Maru, ton and on the afternoon of December 13, or substitutes. Nearly a month later, and the seller accepted the Shipping Board's within one day of the expiration of the terms and agreed to pay $3,572 the extra time during which the seller was bound to freight on its sugars. Thereupon, on the ship the sugar from Java, it wrote the buy- 13th, the West Cheswald by radio was dier that the Chifuku Maru was carrying the rected to proceed to Philadelphia. The latter's sugars and was due to arrive the ship reached the Delaware breakwater by latter part of October. On November 10th, midnight of the 14th and apparently arit again wrote the buyer that the 'sugars rived at Philadelphia a few hours later. were to arrive in Philadelphia the last half The courts, state and federal, in at least of November on the steamship Chifuku four other cases, have had before them tenMaru. There was shipped in that steamer ders, by this seller under similar contracts from Java to Philadelphia, a full cargo of to that here involved, of sugars brought sugar including much more than the amount by the West Cheswald to Philadelphia. which the seller had contracted to deliver Wilbur v. Lamborn, 276 Pa. 479, 120 A. to the buyer. Unfortunately the steamship 478, 27 A. L. R. 160; Matthew Smith Tea, developed engine trouble of so serious a Coffee & Grocery Co. v. Lamborn (D. C.) character that it became evident that it 276 F. 325; Smith v. Lamborn (Sup.) 200 might be forced to remain at Port Said for N. Y. S. 292; Williams Ice Cream Co. v. an indefinite period. The seller had on

Chase National Bank, 120 Misc. Rep. 301, board the steamship West Cheswald sugars

199 N. Y. S. 314, reversed by the Appellate which before the end of September had Division of the Supreme Court of New been shipped on her from Java to New York for the First Department in June of York. On the 11th of December that ves

this

year, in an opinion which we have sel was within about three days sail of her

seen (210 App. Div. 179, 205 N. Y. S. destination. The price of sugar had by 446). In every one of these, as well as that time fallen to a fraction of that which below in the instant case, it was held the the buyer had agreed to pay, and doubtless buyers were bound to receive and pay for the seller was anxious that there should be the sugars. In most of them the question no departure on its part from the terms of principally discussed was whether the sellthe contract, and it might be that the Chi- er had the right under the contract to defuku Maru would never get to Philadelphia. clare the West Cheswald as and when it

It occurred to the seller that the West did. The buyers contended that letters of Cheswald might be diverted from New August 30, September 29, and November York to Philadelphia, and accordingly on 10 from the seller, identical in phraseology the 11th the seller took up the matter with with those of the same dates above referred the agents of that ship, and asked whether to, amounted to a final declaration of the such agents would consider the sending of Chifuku Maru, which could not be subseher to Philadelphia instead of to New quently changed without the consent of York. The reply was it would all depend both buyer and seller. That particular deon how the seller's sugars were stored. A fense is not open to the buyer in the inradiogram was thereupon sent to the mas- stant case because its letter of credit conter of the ship, directing him to radio im- tains no requirement for a declaration. mediately amount general cargo and sugar Apparently the letters of credit procured aboard, how stored, and if Lamborn's sugar by the buyers in the other litigated cases could be discharged without moving other were equally silent on that point, a circargo. He replied that the Lamborn's sug- cumstance which doubtless explains why in

It

them the controversy took the form either destination of the ship was New Yorkof an application by a buyer for an injunc- that this latter circumstance would avoid tion to prevent payment on the letter of the contract.” From the report of the case credit or of a suit by the buyer against the it appears that Filley v. Pope, 115 U. S. seller to recover what the latter had re 213, 6 S. Ct. 19, 29 L. Ed. 372, was cited ceived upon such letter. The right of the by counsel but is not referred to by the seller to declare the West Cheswald when court. and as it did was sustained by every one of In the instant case the learned judge bethe courts which felt called to pass upon low said. “The letter of credit is complied that question. It is not before us, and we with it seems to me by the shipment within are not called upon to say anything about a reasonable time, of course, from Java it.

and the arrival within a reasonable time at [1] In two of the cases, namely, Smith v. Philadelphia. I cannot imagine that the Lamborn, supra, and Wilbur v. Lamborn, contract contemplates or requires that there supra, as well as by the learned judge below must have been all the time from the inin the one now at bar, something was said as ception of the voyage, an intention and to the contention upon which we are re- purpose to send the vessel to Philadelphia. quired to pass, namely, whether the "ship- If the intention occurred and was consumment” of sugars on the West Cheswald was mated by the act itself any time after the made "from Java by steamer or steamers to voyage commenced, it seems to me it would Philadelphia.” In the jurisdictions other be in compliance with the contract. than this, each of the courts apparently felt would be all that reason and fair play and that the answer it gave was so obviously cor- justice would require. I was very much inrect as to require the support neither of dis- terested in the Supreme Court case, and of cussion nor of authority.

course, if it is parallel with this, I shall In Williams Ice Cream Co., Inc., v. Chase have to follow it and be bound by it; but National Bank, the learned judge in the

I do see a difference in a shipment from

Leith and a shipment from Glasgow. The court of the first instance who heard the

delivery of this shipment to New York case thought it sufficient to say: The

would have been unquestionably a noncom"plaintiff urges that the sugar was not a shipment from Java to Philadelphia, but to pliance with the contract which would have New York;

avoided this letter of credit; so the shipin other words, that a shipment is not the course that a desig; than Java would have been a noncompli

ment of this sugar from some other point nated vessel takes, but a course intended that it should take. This refinement to me precise quantity and the precise quality of

ance with the contract, notwithstanding the seems more one of sophistry than reason

sugar was furnished, but to say that aland carries with it failure of conviction."

though the exact terms of the contract were In the Appellate Division this particular complied with, because it was not the purpoint is not noticed at all. The Supreme Court of Pennsylvania in Wilbur v. Lam- pose, or not the intention, or not the arborn was almost as brief: “Some point is done at the beginning vitiated this guaranty,

rangement that what was done should be made

of the fact that the West it seems to me is going farther than I think Cheswald was originally bound for New I have the right to go.” York and diverted to Philadelphia. We

The Supreme Court case referred to in think this diversion was of no consequence, the above quotation was, of course, Filley under the contract. Plaintiff was concerned

v. Pope, supra. In it a Scotch iron master, only with the delivery of the merchandise, by contract with a resident of St. Louis, that there should be no delay in its arrival. sold the latter 500 tons of pig iron, and It was delivered as the result of a continu- undertook that shipment should be from

voyage from Java to Philadelphia. Glasgow as soon as possible. It appeared These contracts do not say that the sugar that the seller's iron works were about equalshall be shipped by continuous voyage from ly distant from Glasgow, on the west coast place of shipment to destination, what they of Scotland, and from Leith, on the east, provide is that the shipment shall be ‘from and that in the ordinary course of trade Java by steamer or steamers to Philadel- shipments were made indifferently from eiphia,' even if they did so provide, we might ther. At the time of the sale, no vessel not be prepared to hold-under the facts from Glasgow was immediately available, here appearing, that the voyage was in re- and the only ship by which prompt transality a continuous one, although the first portation was possible was about to leave 2 F.(20) 23 Leith. The seller accordingly put the iron buyer. The sellers do not undertake to upon her, and it arrived at its destination obtain shipment, nor does the buyer agree earlier than it could possibly have done to accept iron shipped, at any other port. had it gone from Glasgow. The trial court The buyer takes the risk of delay in getting held that the provision “that the iron was shipment from Glasgow, or of delay or to be shipped from Glasgow was not a disaster in prosecuting the voyage from material provision," "that the purpose of Glasgow to New Orleans; but he does not the contract was the sale" of a certain quan- take the risk of delay or of sea perils which tity of iron to be delivered at a certain may occur in the course of the different place and that the fact "that it was shipped voyage from Leith to the same destination. from Leith, instead of Glasgow, was not One or two illustrations may help to make material to the rights of the parties." this clear. If the sellers had shipped the

That point of view is in substance the iron by the first opportunity from Glasgow, same as that which has commended itself the buyer could not have refused to accept to the courts which have heretofore passed it, even if it could have been shipped sooner upon the precise question now before us. from Leith. Again, the buyer would have They have thought that, if within a reason- an insurable interest in the iron during the able time the sugar was carried to Philadel- voyage, by reason of the title which would phia by a vessel which in fact sailed from accrue to him under the contract on arrival Java to Philadelphia, it made no difference and delivery, and of the profits that he might that, when the shipment was made in Java, make in case of a rise in the market, it was upon a ship which was bound on a but a policy of insurance upon the iron for voyage, not to Philadelphia, but on one to a voyage from Glasgow would not cover a New York. In Filley v. Pope, however, voyage from Leith;" just as in this case, althe Supreme Court held that the contract though the title to the sugar was not to pass was a mercantile one, as that now at bar is, until its delivery f. o. b. cars Philadelphia, and that in such a contract "a statement the buyer had an insurable interest in it, descriptive of the subject-matter, or of some and, had the sugar market continued to admaterial incident, such as the time or place' vance, he might well have desired to insure of shipment, is ordinarily to be regarded as the gain he would make from his contract, a warranty, or condition precedent, upon the and insurance effected on sugar from Java failure or nonperformance of which the to Philadelphia would not have covered suparty aggrieved may repudiate the whole gar on a ship bound for New York. Murcontract."

ray v. Columbian Insurance Co., 4 Johns. Referring to the case of Norrington v. (N. Y.) 443. Wright, 115 U. S. 188, 6 S. Ct. 12, 29 L. Ed. In the case before us the parties had def366, decided on the same day, Mr. Justice initely bargained for a "shipment” "from Gray said that "the provision • in Java to Philadelphia,” as in Filley v. Pope that case related to the time; in this, it re- they did for a shipment “from Glasgow." lates to the place of shipment,” as in the Some of the courts which have upheld the case now at our bar it related to the place contention of the seller in cases arising out to which the shipment was to be made. The of sugars tendered from the West Cheswald Supreme Court said it was not "merely 500 have done so because in their view whether tons of iron of a certain quality" that was the shipment was to Philadelphia depended sold, nor was "it such iron to be shipped as on the voyage the ship actually made, and soon as possible from any Scottish port or not upon the one she started out to make ports, but it 'was' iron of that quality to and for which she issued her bills of ladbe shipped from the particular port of ing. If they are right, they were of course Glasgow as soon as possible.” “The court justified in holding that Filley v. Pope was has neither the means, nor the right to de- not a controlling authority. The bank, howtermine why the parties in their contract ever, argues that in mercantile contracts specified ‘shipment from Glasgow,' instead such as this the word "shipment” has a defof using the more general phrase "shipment inite meaning. When it is used in connecfrom Scotland, or merely ‘shipment,' with- tion with the time or place at or the destinaout naming any place; but it is bound to tion to which it is to be made, it has refergive effect to the terms which the parties ence to the conditions which existed at and have chosen for themselves. The term 'ship- before the sailing of the ship and that therement from Glasgow defines an act to be fore the sugar tendered under the letter of done by the sellers at the outset, and a credit was a shipment, not "to Philadelphia," condition precedent to any liability of the but “to New York.” If that be so, Filley v. Pope is necessarily decisive of the con- cuse for rejecting contracts when prices have troversy.

dropped. The nonfulfillment of any term In Norrington v. Wright, supra, the Su- of the contract is a means by which a purpreme Court cited with approval Bowles v. chaser is able to get rid of the contract when Shand, 2 App. Cases, 455. In that case a prices have dropped, but that is no reason contract was made in London, for the sale why a term which is in a contract should of 6,000 tons of Madras rice, to be shipped not be fulfilled.” at Madras or coast during the months of In the same case that eminent authority March and/or April, 1874, per Rajah of on the law of sale, Lord Blackburn, said: Cochin. The 6,000 tons filled 8,200 bags, "If the description of the article tendered is of which 7,120 were put on board and bills different in any respect, it is not the article of lading signed in February, and for the bargained for, and the other party is not rest, consisting of 1,030 put on board in bound to take it. I think in this case what February and 50 in March, the bill of lad- the parties bargained for was rice shipped ing was signed in March. The House of Lords at Madras, or the coast of Madras. Equalheld the seller could not require the buyer ly good rice might have been shipped a litto accept the rice, because the meaning of tle to the north or a little to the south of the contract, as apparent upon its face, was the coast of Madras; probably equally good that all of the rice must be put on board rice might. have been shipped in February in March and April or in one of those as was shipped in April, and I dare say months. The shipment took place when the equally good rice might have been put on rice was put on board the ship, and what board another ship as that which was put was then done determined the time and char- on board the Rajah of Cochin, but the paracter of the shipment, precisely as whether ties have chosen, for reasons best known to the shipment of the sugar in the case at themselves, to say we bargained to take rice bar was made to New York or Philadelphia shipped in this particular region, at that was necessarily determined when, the sugar particular time, on board that particular being on board the ship, the bills of lading ship, and before defendants can be comfor it were issued.

pelled to take anything in fulfillment of that In answer to a suggestion similar to one contract, it must be shown, not merely that which seems to have had much weight with it is equally good, but that it is the same some of the courts which have considered article they have bargained for; otherwise, the contract now in controversy, viz. that it they are not bound to take it.” made no difference to the buyer whether the The same principle was applied by Lord sugar was originally consigned to New York Chief Justice Russell in Ashmore & Son v. or to Philadelphia, Lord Chancellor Cairns Cox & Co., L. R. 1899 1 Q. B. 436. In that said: “It does not appear to me to be a case 250 bales of Manila hemp were sold, question for your lordships or for any court shipment to be made from a port or ports in to consider whether this is a contract which the Philippine Islands by sailor or sailors, bears upon the face of it some reason, some direct or indirect to London, between May 1 explanation why it was made in that form, and July 31. No hemp was shipped by the and why the stipulation is made that the seller by sailor or sailors, nor during the shipment should be during these particular time limited; but on September 15, it did months. It is a mercantile contract, and ship 250 bales of Manila hemp by a steammerchants are not in the habit of placing ship which was expected to arive and did in their contracts stipulations to which they arrive in London about the same time as do not attach some value and importance. If the sailing ship would have arrived, had it it be admitted that the literal meaning would sailed July 31. It was held that the date imply that the whole quantity must be put of shipment, and that it was to be made by on board during a specified time, it is no a sailor or sailors, was binding. In that answer to that literal meaning, it is no ob- case it was urged, precisely as it has been at servation which can dispose of, or get rid of, bar, that all the buyer was interested in was or displace, that literal meaning to say that that goods of the kind and quality be had it puts an additional burden on the seller bargained for should arrive at the time and without a corresponding benefit to the pur- place originally contemplated. chaser; that it is a matter of which the seller Few men have been more deeply learned and the purchaser are the best judges. Nor in mercantile law than Mr. Justice Scrutton. is it any reason for saying that it would In Landauer v. Craven & Speed Bros., L. R. be a means by which purchasers without any 1912, 2 K. B. 94, he passed upon a case in real cause would frequently obtain an ex- which 500 bales of Manila hemp had been

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