Mencke v. Cargo of Java Sugar

Background

A cargo ship called the Benlarig, owned by Watson Brothers and chartered by Erdmann & Sielcken, carried sugar from Java to New York. The sugar had been sold to Arbuckle Brothers, who asked the ship to discharge at their refinery near the Brooklyn Bridge. The parties agreed the cargo would be lightered at Arbuckle’s expense into lighters at a pier below the bridge. Arbuckle paid $1,466.12 for lighterage and deducted that amount from the freight. The shipowners sued to recover the deducted freight.

Reasoning

The Court examined the charter terms that required the vessel to discharge “always afloat” at a safe port and stated that lighterage, if necessary, remained for the account of the receivers. The Benlarig’s tall, solid steel masts made it impossible to pass under the Brooklyn Bridge without cutting or removing them. The Court held that requiring the ship to mutilate its permanent masts would be unsafe and unreasonable. Given the charter language and the facts, using lighterage was a natural, reasonable result and its expense fell on the receivers.

Real world impact

The decision means that when a ship cannot safely reach the appointed berth without damaging its structure, the cargo receivers who ordered the berth must pay reasonable lighterage costs. The Court affirmed the District Court’s judgment for the owners and reversed the Court of Appeals.