THE BILL OF LADING

Hokitika Guardian, 13 October 1930, Page 7

THE BILL OF LADING

PIOUS PHRASING IN EARLY DOCUMENTS. (By J.’ P. JONES in TheP.L.A. Monthly). This most important of all shipping documents, known until about 1599 as a “bill of loading,” is of comparatively recent origin. > The earliest known “bill of lading is dated 1538 and deals with the carriage from Newcastle to London of a consignment of salt for Sir Oswald Wylstrop in the ship Thomas. It specifies the amount of the freight and states that the master shall lie given two horse-cloths in consideration of his speeding the voyage (cf. the later'custom of paying “primage”). Later the Puritan ascendancy brought in a very pious form of wording, commented upon by Charles Lamb (in “The South Sea House”) who says, “pious sentences at the beginning, without which our religious ancestors never ventured to open a book of business or a bill of lading.’ Such a bill is one dated 1766 in London, which runs:—•

“Shipped by the grace of God. . . in the good ship called The Friends, whereof is master, under God. < . Wttv Spender. . . by God’s grace hound for Liverpool. . . J’—then follow the usual details of the cargo, consignee, etc,, rounded off by the phrase, “And so God send the good ship to her desired port in safety. Amen.” - The form of bill now employed is not prescribed in detail and shipowners can adopt their own wording, provided certain particulars, enumerated later, are included, but all bills made in this country must bear a sixpenny stamp impressed before execution. Shipping is an international business and it is necessary in case of dispute to determine which country’s laws shall apply to the contract, and the practice is for that country’s laws to operate which appear to have been in the minds of the parties to the contract. The first assumption is then that they intended to carry out the transaction under the laws of the ship’s flag,' but this may be rebutted by contrary-evidence. A bill of lading fulfils several functions.

It is primarily a receipt' for goods shipped, setting out the description of the goods, the name of the ship, the shippers, • consignees and ports of shipment and destination.

It also constitutes evidence of the terms of the contract of affreightment, stating the rates of freight, terms upon which the 1 cargo is carried; place of delivery and a statement of the shipowner’s lien on the goods for : freight. Of great importance is its function as q document of title the goods, evidencing the transactions of the original consignee and of subsequent buyers. This title to the goods can be transferred from hand to hand for value by delivery and endorsement of the bill.

Although possessing some of the features of negotiability, a bill of lading is not strictly a negotiable instrument,

for a buyer acting in good faith who receives by endorsement and deliveij. from a person whose title is defective docs not have an unassailable right to the goods as would be the case with a bill of exchange or a bank note. Endorsement of the bill may be “in blank” or “in full.” The insertion of the name by the holder will convert a “blank” into a “full” endorsement. The receipt for the goods is usually given first by the mate in the form of a “mate’s receipt” which is afterwards exchanged for bills of lading signed by the master as agent for. the owners or charterers. Should the master give a bill for goods that are not on board, the shipowners thereby have the onus placed on them to prove non-shipment, upon which they are relieved from liability. In such a case, however, the signing of the bill of lading is conclusive evidence against the master and he is liable unless it can be shown that the skipper was aware that the goods had not been shipped or that he was guilty of fraudulent action. A “clean” bill gives an unqualified receipt for the goods shipped in apparent good order and condition. If u “clean” bill is given for faulty goods, the ship-owners are liable to subsequent bona fide purchasers. A “claused” bill gives a qualified receipt, such as “contents unknown” or “not responsible for weight,” etc. A “Through” or “transhipment” bill of lading is one for goods which are to be carried by different shipowners Of curriers on different stages of the journey. Bills of lading are usually made out in “sets” of from three to six, according to consular requirements, us in some cases copies must be lodged with the consul. Where there is a set, as soon as one bill is accomplished the others become void, the first transferee for value being entitled to the goods. When a stamped bill is signed it be-comes-an “original.” The shipper and the master may retain plain copies and the “originals” are forwarded to the consignee. Should the master, unaware of conflicting interests, deliver the goods to the holder of any part of the bill of lading presented to him, he is not liable if the person taking delivery is not the first transferee.

Until recently there was nothing in English Iqw to oblige a shipowner to accept any liability whatever, but by the Carriage of Goods by Sea Act of. 1924, the Hague Rules were made to apply to all outward bills of lading. Thereby certain duties are imposed and immunities granted to carriers by sea. The duties are: (a) to exercise care to make the ship seaworthy, properly equipped and manned; (b) to stow, carry, care for and discharge tile goods; (c) to issue bills of lading showing marks, numbers, quantity or weight as shown in writing by the shipper, > and the apparent order and condition of the goods. Any clauses in the bill lessening these liabilities will be of no legal effect.

By the same Act, the shipowner is exempted from liability for loss or damage caused by the "excepted pel** ils," e.g., Barratry, Jettison, Act of God, etc., unless there is proof of the negligence or unskili'ulness of his servants or. of his failure to make the ship seaworthy. In connection with the clause stating that the carriers are not responsible for damage by vermin, it is interesting to read in an Admiral Jurisdiction of 1685 that "The master . . . may not sail without one cat or more is his vessel.”

Following the excepted perils clauses, there is usually a clause stating that the shipowner has a lien on the goods for the "freight, primage and charges.” "Primage,” now levied by the shipowner, was originally a bounty paid to the master, who at one time also received "hat money” as a reward for his care of the cargo. Until these charges are paid, the goods may not be delivered and are "under a stop for freight.” Wheh this liability is discharged, the shipowner issues a "release” permitting the custodian of the goods to deliver them to the owners.

The treatment of such a subject involves a consideration of almost every aspect of affreightment contracts and can of necessity be only in the nature of .a brief outline. Readers desirous of more detailed information are referred to the Bill of Lading Act of 1855, the Merchant Shipping Acts, the Carriage of Goods by Sea Act of 1924, and the very, exhaustive exposition of the law in Sir T. E. Serutton’s "The Contract of Affreightment as expressed in Charter Parties and Bills of Lading.”