Isbrandtsen Co. v. Producers Cotton Oil Co.

California Court of Appeal Mar 26, 1958 No. Civ. 5623Published

Before: Barnard

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Holding. The court held that the proper measure of damages for a breach of a shipping contract is the difference in the net return from the space reserved for the undelivered cargo, adjusted for savings and additional expenses incurred in securing substitute cargo.

Issues

What is the proper measure of damages for a shipper's breach of a contract to transport a specific quantity of cargo?
Did the trial court err in its calculation of damages by relying on estimates of cargo weight and the classification of substitute cargo?

Disposition. affirmed

Quotations verified verbatim against the opinion

“The proper measure of damage is the difference in the net return from that space, as it actually was and as it would have been had the contract been performed, as adjusted in accordance with any savings on the one hand and any extra expense”

“The appellant, whose wrongful act gave rise to the injury, may not be heard to complain that the exact amount thereof could not be determined with mathematical precision.”

BARNARD, P. J.

This is an action for damages based on the failure to ship an agreed amount of cotton.

The plaintiff is engaged in a world-wide shipping business in which it owns and operates a number of ships in regular service with scheduled sailings. It also engages extensively in “tramp” operations whereby it charters a vessel from its owner for a definite voyage between given ports, and contracts with various shippers for the transportation of cargo between those points. This case involves such a tramp operation.

Early in 1951, shipping space for cotton from the Pacific Coast to India was difficult to obtain. The plaintiff proposed to a number of cotton shippers that if sufficient offers of cotton at a freight rate of $2.65 per 100 pounds could be obtained it would charter a vessel to load at Los Angeles and San Francisco between March 15 and April 15, for a direct voyage to Bombay, India. As a result, it obtained contracts from the defendant and three other shippers to ship a total of 17,175 bales of cotton, the defendant agreeing to ship 5,000 bales.

[714]

The plaintiff chartered a vessel at the rate of $2,136.53 per day of 24 hours and agreed to redeliver the vessel at a port in the Colombo-Karachi range. On March 24, while the vessel was en route to Los Angeles to begin loading, the various shippers tried to cancel a part or all of their respective commitments for space for cotton on this ship. The plaintiff refused to cancel these contracts. Each of these shippers shipped some cotton and a total of 10,946 bales of cotton were thus shipped. Of the 6,229 bales which were not shipped the defendant failed to ship 2,846 bales.

Prior to this attempted cancellation the plaintiff had booked some other cargo for Bombay, including some oil and asphalt in drums, and was looking for additional cargo to fill portions of the ship in which cotton could not be placed. After the attempted cancellation it was unable to locate any additional cotton, but it obtained two large additional shipments of asphalt and oil in drums, part of which was to be delivered at Colombo and part at Karachi, Pakistan. This necessitated an extra stop for loading at Port Hueneme, an extra stop at Colombo on the way to Bombay, and an extension of the voyage from Bombay to Karachi. The plaintiff returned the vessel to its owners at Karachi when the final unloading was completed.

Isbrandtsen Co. v. Producers Cotton Oil Co.

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BARNARD, P. J.

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